Statement re Publication of Shareholder Circular

BlackRock Income Strategies Trust plc

Publication of Shareholder Circular

12 August 2015

Today, BlackRock Income Strategies Trust plc (the “Company”) has published a shareholder circular containing a notice of a General Meeting to be held at 10 a.m. on 4 September 2015 to renew the Board’s authorities to repurchase up to 14.99 per cent. of the Company’s issued Shares generally and to repurchase up to 20 per cent. of the Company’s issued Shares by means of tender offers.

In connection with the proposals to amend the Company’s investment objective and move the management of the Company’s assets to BlackRock in February 2015, the Board had the discretion to implement a tender offer for up to 20 per cent. of the Shares in issue (excluding Shares held in treasury). On 20 July 2015, it was announced that the Company’s discount had narrowed significantly, from around 7 per cent. at 26 February 2015 to 2.7 per cent. based on the cum income Net Asset Value per Share (including debt at market value) (“NAV”) as at 17 July 2015. Having consulted a number of the Company’s major long term Shareholders, the Board concluded that, given the narrow discount and the desire amongst Shareholders for a large and liquid investment trust, it was not in the interests of Shareholders as a whole to implement the proposed tender offer and the Board therefore decided not to pursue the tender offer at that time. The Board believes that, due to the costs of the tender offer, the discount to NAV at which the tender offer would have been implemented would have been wider than the discount at which the Shares were trading at that time.

Despite not implementing the tender offer, the Board remains resolutely committed to having the Shares trade as close as possible to their underlying NAV on a consistent basis and, where necessary, will take appropriate action to seek to address any supply and/or demand imbalances.

Nil Discount Management Policy
Following the introduction of freedoms in the savings and retirement markets, the Board believes that the investment objective and policy will prove attractive for investors seeking long-term stable income and capital preservation. As part of its commitment to creating shareholder value, the Board believes that an ongoing commitment to a nil discount management policy will enhance the attractiveness of the Company to investors by increasing the liquidity of the Shares and enhancing the Company’s ability to grow over time (thereby reducing the ongoing charges per Share).

The Board believes that it is in the best interests of all Shareholders that the Company adopts a nil discount management policy such that Shares trade at a price as close as possible to their underlying NAV (debt at market value) during normal market conditions. This policy will be implemented through a combination of share buybacks at a narrow discount to NAV and the issue of new Shares at a premium to NAV.

Since the change of investment manager to BlackRock in February 2015 and up until the close of business on 6 August 2015 (the latest practicable date) the Company has bought back 13,725,000 Shares (which equates to approximately 5.0 per cent. of the Company’s share capital) at an average discount of 2.3 per cent. per Share (based on the latest published NAV at the time of purchase). The Board believes that this has been a significant contributory factor to the Company’s discount narrowing considerably, from around 7 per cent. at 26 February 2015 to 1.1 per cent. based on the Share price and NAV at close of business on 6 August 2015.

Given the Board’s continuing commitment to this policy, we are seeking Shareholder authority to renew the Company’s existing 14.99 per cent. Share buyback authority.

Tender offers
In addition to renewing the Share buyback authority, the Board is seeking the necessary Shareholder authority to implement future tender offers at its absolute discretion if it considers such action appropriate taking into account the interests of Shareholders as a whole and the market conditions at the time. It is the Board’s intention that such ongoing authority will be renewed on an annual basis at the Company’s annual general meeting.

Subject to certain limitations set out below, the Board is seeking Shareholder authority to buy back up to 20 per cent. of the Shares in issue (excluding any Shares held in treasury) through a tender offer(s). The price at which Shares will be purchased will be an amount equal to a two per cent. discount to the diluted cum income NAV per Share (debt at market value) on the calculation date(s), as determined by the Board, less a pro rata proportion of the costs and expenses per tendered Share of effecting any tender offer(s) (including stamp duty, commission and portfolio realisation costs). Any tender offer will give Shareholders an opportunity to sell a fixed number of Shares in the Company back to the Company at a fixed price. Such offers would be available to all Shareholders except those in Restricted Territories.

In seeking Shareholder authority, the Board wishes to maintain flexibility as to how many tender offers are implemented and when they are implemented. Under the proposals, the Board will have discretion to implement one tender offer or multiple tender offers provided that the aggregate size of all tender offers implemented before renewal of the authority does not exceed 20 per cent. of the Shares in issue as at the date of the General Meeting (excluding Shares held in treasury).

In order to implement any tender offer, Cenkos Securities will, as principal, purchase at the tender price (calculated on the basis above) the Shares tendered and, following completion of these purchases, will sell the relevant Shares on to the Company at the same price by way of an on-market transaction. Cenkos Securities will have the ability to invite new investors to purchase Shares which have been bought by them from tendering Shareholders pursuant to any tender offer. Any Shares not sold by Cenkos Securities will subsequently be bought back by the Company at the same price and cancelled or held in treasury. The Board will continue to limit the number of Shares held in treasury to no more than 10 per cent. of the issued share capital of the Company. Any tender offer will be conducted in accordance with the Listing Rules and the rules of the London Stock Exchange. A circular setting out the full terms and conditions of such tender offer(s) and the procedure for tendering Shares will be sent to Shareholders at least 21 days prior to each calculation date. Any decision to implement a tender offer will be announced via an RIS ahead of the publication of such circular.

The intention is that any future tender offers will be implemented on the terms outlined above, but there will be no firm tender date or calculation date. The Board will have absolute discretion as to when the tender offer(s) will be implemented and to set the calculation date(s). The Board will monitor the Company’s discount to NAV and determine whether a tender offer is in the interests of Shareholders as a whole given the market conditions at the time.

Investment Performance
The Company’s investment objective is, over the medium term (5 to 7 years), to aim to preserve capital in real terms and to grow the dividend at least in line with inflation. The Company will target a total portfolio return of UK Consumer Price Index plus 4 per cent. per annum (before ongoing charges) over a 5 to 7 year cycle.

The Board believes that this attractive investment policy, combined with BlackRock’s investment management capabilities and marketing activities and a continuing commitment to a nil discount management policy, will result in a higher demand for the Shares which in turn will lead to a re-rating of the Shares by narrowing the discount to NAV towards zero.

In the period since BlackRock took over the management of the Company’s assets (from 27 February 2015 up to close of business on 6 August 2015), the Company’s Share price increased by 4.8 per cent. and the cum-income NAV per Share (with debt at market value) fell by 1.1 per cent. (all with net income reinvested). The Company's long term objective is to achieve a total return of inflation, as measured by the CPI Index plus 4 per cent per annum (before ongoing charges) over a 5 to 7 year cycle. Over the short period from 27 February to 30 June 2015 (the latest period for which data has been published) CPI plus 4 cent per annum was 1.9per cent. This performance should be viewed in the context of broader market weakness, particularly in the month of June where losses were experienced across multiple asset classes and sectors. During the period overall, the portfolio has benefitted from exposure to developed market equities and currency positioning, although emerging market and fixed income holdings have detracted.

A critical component of the Company’s proposition for Shareholders is an attractive level of income. In the current financial year the Company has paid or declared a total of 4.84 pence per Share in dividends. As disclosed in the Company’s interim report, the Board expects to distribute dividends evenly in each of the first three quarters of the year and to apply any adjustment that may be required to the total dividends paid for the year to the fourth quarterly dividend. On this basis, and assuming no adjustments are made to the fourth quarterly dividend, Shareholders could expect to receive total dividends of 6.51 pence per Share for this financial year. A dividend of 6.51 pence would represent a dividend yield of 4.7 per cent. based on a share price of 138.75 pence at close of business on 6 August 2015.

General Meeting
The proposals are conditional, inter alia, on Shareholder approval. The General Meeting is to be held at 10.00 a.m. on Friday, 4 September 2015 at 12 Throgmorton Avenue, London EC2N 2DL. The Resolutions will both be proposed as special resolutions that require to be passed by a three-quarters majority of votes cast at the General Meeting.

James Long, Chairman, commented:

“The Company’s discount is now around 2% and the Board is committed to ensuring that the shares trade as close as possible to NAV through a nil discount policy. We continue to be pleased with the level of demand for shares and believe that today's announcement will enhance the attractiveness of the Company to investors by increasing liquidity and boosting our ability to grow over time."

“We strongly believe that the resolutions are in the best interests of our shareholders and are optimistic that they will support our proposed way forwards.”

Expected Timetable

Latest time and date for receipt of Voting Direction Forms	5.00 p.m. on 27 August 2015
Latest time and date for receipt of Forms of Proxy	10.00 a.m. on 2 September 2015
General Meeting at 12 Throgmorton Ave, London EC2N 2DL	10.00 a.m.  on 4 September 2015

All references in this announcement are to London times.

Copies of the Circular have been submitted to the National Storage Mechanism and will shortly be available for inspection atwww.morningstar.co.uk/uk/nsm or on the Company's website www.blackrock.co.uk/bist.

Unless otherwise stated in the announcement capitalised terms are as defined in the Circular.

This announcement does not contain all the information which is contained in the Circular and Shareholders should read the Circular in its entirety.

For further information, please contact:

BlackRock
Mark Johnson – 020 7743 2300
Barbara Powley 202 7743 5610

Cenkos Securities
Sapna Shah - 020 7397 1922
Will Rogers - 020 7397 1920

End