PIMCO Income Strategy Fund and PIMCO Income Strategy Fund II Announce Tender Offers for Auction Rate Preferred Shares

NEW YORK, NY--(Marketwired - Sep 18, 2014) -  PIMCO Income Strategy Fund (NYSE: PFL) and PIMCO Income Strategy Fund II (NYSE: PFN) (each a "Fund" and together the "Funds") today announced that each Fund will commence a voluntary tender offer on or about September 19, 2014 (each, a "Tender Offer" and, together, the "Tender Offers") for up to 100% of its outstanding auction rate preferred shares ("ARPS") at a price equal to 90% of the ARPS' per share liquidation preference of $25,000 per share (or $22,500 per share) and any unpaid dividends accrued through the expiration date of the Tender Offers. In addition, each tendering ARPS holder will be entitled to one non-transferrable contingent payment right.

The contingent payment right represents a non-transferrable contractual right of any ARPS holder who participates in a Tender Offer to receive an additional payment from a Fund if such Fund completes an additional tender offer for its ARPS or a voluntary redemption of its ARPS during the three-hundred and sixty-five (365) calendar days following the expiration date of the Tender Offer, and such subsequent tender offer or voluntary redemption is for a price per ARPS that is greater than 90% of the ARPS' liquidation preference. The additional payment would be equal to the number of ARPS accepted for payment in such Fund's Tender Offer multiplied by the price differential per share between the price received in the Tender Offer and the price of such subsequent tender offer or voluntary redemption by such Fund.

This announcement is not a recommendation, an offer to purchase or a solicitation of an offer to sell ARPS of the Funds. The Funds have not yet commenced the Tender Offers described in this press release. Upon commencement of the Tender Offers, the Funds will file with the Securities and Exchange Commission a tender offer statement on Schedule TO and related exhibits, including an offer to purchase, a related letter of transmittal and other related documents (the "Tender Offer Documents"), and the Tender Offer Documents, when available, will be sent electronically to holders of the ARPS. ARPS holders of a Fund may obtain additional copies of the Tender Offer Documents for such Fund, without charge, by contacting the Tender Agent for the Tender Offers, Deutsche Bank Trust Company Americas, at [phone]. ARPS holders can also obtain the Tender Offer Documents free of charge when they are filed and become available on the Securities and Exchange Commission's website at www.sec.gov. ARPS holders should read these documents and related exhibits for the applicable Fund when they are filed and become available as the documents will contain important information about each Fund's Tender Offer.