Fitch Ratings affirms the rating on the following Preferred and Corporate Income Strategies Fund, Inc. preferred shares at 'AAA':

-- Auction market preferred stocks 2,730 shares series M7;

-- Auction market preferred stocks 2,730 shares series T7.

The affirmation is based on the fund's consistent compliance with asset coverage and preferred share basic maintenance amount tests, as well as the quality and experience of the asset manager.

Preferred and Corporate Income Strategies Fund is a closed-end management investment company, which invests primarily in a portfolio of preferred securities in addition to corporate debt securities. The fund is registered under the Investment Company Act of 1940, which permits closed-end funds to borrow funds through the issuance of debt and preferred stock. Under the 1940 Act, closed-end funds may borrow up to 50% of the fund's value through the issuance of preferred shares and debt. The fund's current preferred share issuance equates to approximately 36% of its net assets, and the fund has no outstanding debt.

Merrill Lynch Investment Managers (the investment adviser), which is owned and controlled by Merrill Lynch & Co., provides the fund with investment advisory and administrative services. Merrill Lynch Investment Managers also acts as investment adviser to more than 100 registered investment companies and offers investment advisory services to individuals and institutional accounts. As of June 30, 2004, the investment adviser and its affiliates, including Merrill Lynch Investment Managers, had a total of approximately $488 billion in investment companies and other portfolio assets under management, including approximately $127 billion in fixed income assets.

Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at www.fitchratings.com.