UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21464
Name of Fund: BlackRock Floating Rate Income Strategies Fund II, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Floating Rate Income Strategies Fund II, Inc., 800
Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box
9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (800) 882-0052
Date of fiscal year end: 02/31/08
Date of reporting period: 03/01/07 - 08/31/07
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES
BLACKROCK SOLUTIONS
BlackRock Floating Rate Income
Strategies Fund II, Inc. (FRB)
SEMI-ANNUAL REPORT
AUGUST 31, 2007 (UNAUDITED)
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock Floating Rate Income Strategies Fund II, Inc. seeks a high current
income and such preservation of capital as is consistent with investment in a
diversified, leveraged portfolio consisting primarily of floating rate debt
securities and instruments.
This report, including the financial information herein, is transmitted for
use only to the shareholders of BlackRock Floating Rate Income Strategies
Fund II, Inc. for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the Fund or any
securities mentioned in this report. Past performance results shown in this
report should not be considered a representation of future performance. The
Fund leverages its Common Stock to provide Common Stock shareholders with a
potentially higher rate of return. Leverage creates risk for Common Stock
shareholders, including the likelihood of greater volatility of net asset
value and market price of Common Stock shares, and the risk that fluctuations
in short-term interest rates may reduce the Common Stock's yield. Statements
and other information herein are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2)
at www.blackrock.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
BlackRock Floating Rate Income Strategies Fund II, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
BlackRock Floating Rate Income Strategies Fund II, Inc.
The Benefits and Risks of Leveraging
BlackRock Floating Rate Income Strategies Fund II, Inc. utilizes leveraging
through borrowings or issuance of short-term debt securities or shares of
Preferred Stock. The concept of leveraging is based on the premise that the
cost of assets to be obtained from leverage will be based on short-term
interest rates, which normally will be lower than the income earned by the
Fund on its longer-term portfolio investments. To the extent that the total
assets of the Fund (including the assets obtained from leverage) are invested
in higher-yielding portfolio investments, the Fund's Common Stock shareholders
will be the beneficiaries of the incremental yield.
Leverage creates risks for holders of Common Stock including the likelihood of
greater net asset value and market price volatility. In addition, there is the
risk that fluctuations in interest rates on borrowings (or in the dividend
rates on any Preferred Stock, if the Fund were to issue the Preferred Stock)
may reduce the Common Stock's yield and negatively impact its market price. If
the income derived from securities purchased with assets received from
leverage exceeds the cost of leverage, the Fund's net income will be greater
than if leverage had not been used. Conversely, if the income from the
securities purchased is not sufficient to cover the cost of leverage, the
Fund's net income will be less than if leverage had not been used, and
therefore the amount available for distribution to Common Stock shareholders
will be reduced.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
A Letter to Shareholders
Dear Shareholder
Financial markets embarked on a wild ride during the August reporting period.
Subprime mortgage troubles intensified in the final months of the period,
spawning a widespread credit and liquidity crisis that crept into other areas
of the market. The U.S. Federal Reserve Board (the Fed) and other countries'
central banks stepped in to inject liquidity into the markets and bolster
investor confidence. In August, the Fed cut the discount rate, the rate
charged to banks to borrow money directly from the Fed, from 6.25% to 5.75%.
Another .50% cut in the discount rate came on September 18, along with a .50%
cut in the more widely followed federal funds rate. This brought the target
short-term interest rate, which had remained unchanged at 5.25% for over a
year, to 4.75%.
Although heightened volatility has been a recurring theme throughout the past
year, the global economy (excluding the U.S. housing market) remained quite
healthy. In general, equity market fundamentals also held firm - second-
quarter corporate earnings exceeded expectations (although future earnings
could be at risk if the economy weakens), dividend payouts and share buybacks
continued to grow, and valuations remained attractive. These tailwinds
generally prevailed over such headwinds as a slowing U.S. economy and troubled
housing market, although the more recent credit crunch dampened corporate
merger-and-acquisition activity, a key source of strength for equity markets.
Stocks recorded their second-worst day of the year in August, yet remained
comfortably in the black year-to-date.
Meanwhile, mixed economic signals and the credit market debacle made for a
volatile backdrop for fixed income, with investors fleeing from bonds
associated with the housing and credit markets in favor of higher-quality
Treasury issues. As a result, the 10-year Treasury yield, which touched 5.30%
in June (its highest level in five years), fell to 4.54% by period-end, while
prices correspondingly rose.
Against this backdrop, financial markets posted mixed results for the six- and
12-month periods ended August 31, 2007:
Total Returns as of August 31, 2007 6-month 12-month
U.S. equities (S&P 500 Index) +5.70% +15.13%
Small cap U.S. equities (Russell 2000 Index) +0.54 +11.36
International equities (MSCI Europe, Australasia, Far East Index) +5.83 +18.71
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +1.54 + 5.26
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) -0.57 + 2.30
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -1.71 + 6.46
Past performance is no guarantee of future results. Index performance shown
for illustrative purposes only. You cannot invest directly in an index.
As you navigate market volatility, we encourage you to review your
investment goals with your financial professional and to make portfolio
changes, as needed. For more market insight, we invite you to visit
www.blackrock.com/funds. We thank you for entrusting BlackRock with your
investment assets, and we look forward to continuing to serve you in the
months and years ahead.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
THIS PAGE NOT PART OF YOUR FUND REPORT
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Fund Summary as of August 31, 2007 (Unaudited)
Fund Information
Symbol on New York Stock Exchange FRB
Initial Offering Date July 30, 2004
Yield on Closing Market Price as of 8/31/07 ($16.57)* 8.75%
Current Monthly Distribution per share of Common Stock** $.120834
Current Annualized Distribution per share of Common Stock** $1.45
Leverage as of 8/31/07*** 22%
* Yield on closing market price is calculated by dividing the current
annualized distribution per share by the closing market price.
Past performance does not guarantee future results.
** The distribution is not constant and is subject to change. A portion of
the distribution may be deemed a tax return of capital or net realized
gain at fiscal year end.
*** As a percentage of net assets, which is the total assets of the Fund
(including any assets attributable to any borrowing that may be
outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage).
The table below summarizes the changes in the Fund's market price and
net asset value per share:
8/31/07 2/28/07 Change High Low
Market Price $16.57 $18.50 (10.43%) $19.02 $14.60
Net Asset Value $18.07 $19.28 (6.28%) $19.32 $17.94
The following charts show the portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Asset Mix 8/31/07 2/28/07
Floating Rate Loan Interests 67% 75%
Corporate Bonds 32 24
Common Stocks 1 1
Credit Quality Allocations*
Credit Rating 8/31/07 2/28/07
BBB/Baa 1% 1%
BB/Ba 30 30
B/B 51 58
CCC/Caa 9 3
NR (Not Rated) 8 7
Other** 1 1
* Using the highest of S&P's or Moody's ratings.
** Includes portfolio holdings in common stocks.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments as of August 31, 2007 (Unaudited) (in U.S. dollars)
Face
Amount Floating Rate Loan Interests** Value
Aerospace & Defense--2.0%
Hawker Beechcraft:
USD 54,610 Letter of Credit, 5.26% due 3/31/2014 $ 51,879
643,777 Term Loan B, 7.36% - 7.508%
due 3/31/2014 611,588
1,476,254 IAP Worldwide Services, Inc. First Lien Term
Loan, 11.687% due 12/20/2012 1,268,102
Vought Aircraft Industries, Inc.:
1,640,471 Term Loan, 7.83% due 12/22/2011 1,585,105
320,000 Tranche B Line of Credit Deposit, 7.822%
due 12/22/2010 309,200
--------------
3,825,874
Airlines--0.7%
497,500 United Air Lines, Inc. Term Loan B, 7.625%
due 1/30/2014 466,510
1,000,000 US Airways Group, Inc. Term Loan B, 7.86%
due 3/22/2014 939,375
--------------
1,405,885
Auto Components--1.9%
250,000 Delphi Automotive Systems Term Loan B,
7.625% due 12/31/2007 245,833
987,500 GPX International Tire Corp. Term Loan B,
10.33% - 10.35% due 4/06/2012 948,000
1,302,793 GenTek, Inc. First Lien Term Loan,
7.36% - 7.61% due 2/28/2011 1,263,709
Metaldyne Corp.:
57,692 Letter of Credit, 5.17% - 9.125%
due 1/15/2012 56,250
392,308 Term Loan B, 9.125% due 1/15/2014 382,500
750,000 Visteon Corp. Term Loan B, 8.38% due 6/13/2013 690,469
--------------
3,586,761
Beverages--0.3%
EUR 500,000 Culligan International Second Lien Term Loan,
7.815% due 10/24/2012 578,956
Building Products--0.7%
USD 1,351,429 Associated Materials, Inc. Term Loan,
7.86% - 7.90% due 8/29/2010 1,283,857
Chemicals--4.8%
500,000 BOC Edwards Ltd. Term Loan B, 7.541%
due 5/21/2014 457,500
250,000 Huish Detergents, Inc. First Lien Term Loan,
7.51% due 4/15/2014 229,375
500,000 ISP Chemco Term Loan B, 7.125% - 7.313%
due 5/25/2014 479,584
500,000 KIK Custom Products First Lien Term Loan,
7.61% due 5/30/2014 455,000
3,881,250 Rockwood Specialties Group, Inc. Tranche D Term
Loan, 6.857% due 7/30/2012 3,752,684
GBP 1,000,000 Viridian Group Plc Term Loan, 8.234% - 10.358%
due 12/21/2012 1,964,837
USD 2,000,000 Wellman, Inc. Second Lien Term Loan, 12.106%
due 2/10/2010 1,740,000
--------------
9,078,980
Face
Amount Floating Rate Loan Interests** Value
Commercial Services & Supplies--4.0%
USD 1,225,502 Amsted Industries, Inc. Term Loan B, 7.35%
due 3/28/2013 $ 1,198,695
Aramark Corp.:
59,257 Letter of Credit, 5.36% due 1/30/2014 57,020
842,279 Term Loan B, 7.36% due 1/30/2014 810,483
498,750 Brickman Group, Inc. Term Loan, 7.34%
due 1/30/2014 472,566
756,000 Camelbak Products LLC First Lien Term Loan,
9.15% - 9.37% due 8/04/2011 701,190
118,228 EnergySolutions Term Loan C, 7.66%
due 6/07/2013 113,056
500,000 Jason, Inc. Term Loan B, 8.03% - 9.50%
due 4/30/2010 475,000
705,394 John Maneely Co. Term Loan B, 8.61%
due 12/15/2013 631,033
Kion GmbH:
250,000 Term Loan B, 7.58% due 3/15/2015 236,945
250,000 Term Loan C, 7.83% due 3/15/2016 237,500
142,403 Metokote Corp. Second Lien Term Loan,
8.36% - 8.55% due 11/27/2011 140,267
498,750 RiskMetrics Group, Inc. Term Loan, 7.61%
due 1/15/2014 485,034
1,000,000 Synargo Technologies Term Loan B, 7.32%
due 3/31/2014 970,000
990,037 West Corp. Term Loan B, 7.735% - 7.88%
due 10/31/2013 954,973
--------------
7,483,762
Computers & Peripherals--2.0%
Intergraph Corp. Term Loan:
439,226 7.503% due 5/15/2014 420,010
500,000 11.506% due 11/15/2014 478,125
Reynolds and Reynolds Co.:
1,911,829 First Lien Term Loan, 7.36%
due 10/31/2012 1,828,187
1,000,000 Second Lien Term Loan, 10.86%
due 10/31/2013 990,000
--------------
3,716,322
Construction & Engineering--0.3%
498,750 BakerCorp Term Loan C, 7.61% - 7.79%
due 5/15/2014 481,917
Construction Materials--1.4%
1,345,703 Headwaters, Inc. Term Loan B-1, 7.36%
due 4/30/2011 1,312,061
1,455,000 Nortek, Inc. Term Loan, 7.61% due 8/27/2011 1,387,706
--------------
2,699,767
Containers & Packaging--2.2%
1,119,787 Anchor Glass Container Corp. Term Loan B,
7.61% - 7.791% due 5/03/2013 1,086,193
540,000 Berry Plastics Corp. Term Loan B, 11.61%
due 6/15/2014 464,400
498,750 Consolidated Container First Lien Term Loan,
7.59% due 4/15/2014 460,097
997,500 Graham Packaging Term Loan B, 7.625%
due 4/15/2011 969,238
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Floating Rate Loan Interests** Value
Containers & Packaging (concluded)
Smurfit-Stone Container Corp.:
USD 756,448 Term Loan B, 7.375% due 11/01/2011 $ 740,019
418,407 Term Loan C, 7.375% due 11/01/2011 409,319
--------------
4,129,266
Distributors--0.5%
997,500 Keystone Automotive Operations, Inc. Term
Loan B, 8.828% - 9% due 1/15/2012 910,219
Diversified Financial Services--0.5%
1,000,000 JG Wentworth Manufacturing Term Loan B,
7.61% due 4/15/2014 927,500
Diversified Telecommunication Services--0.2%
500,000 Hawaiian Telcom Term Loan C, 7.61%
due 5/25/2014 473,500
Electrical Equipment--0.4%
Generac Portable Products, Inc.:
495,000 First Lien Term Loan, 7.86% due 11/15/2013 437,722
500,000 Second Lien Term Loan, 11.36%
due 5/15/2014 332,917
--------------
770,639
Energy Equipment & Services--2.5%
1,000,000 Bobcat Gas Storage Term Loan B, 7.485%
due 9/15/2014 950,000
748,125 Brock Holdings Term Loan, 7.36%
due 2/28/2014 716,330
Dresser, Inc.:
1,000,000 First Lien Term Loan, 8.01% - 8.038%
due 5/15/2014 960,625
500,000 Second Lien Term Loan, 11.129%
due 5/04/2015 472,500
EnergySolutions:
12,579 Letter of Credit, 7.839% due 6/07/2013 12,028
246,636 Term Loan B, 7.66% due 6/07/2013 235,845
985,000 Key Energy Services, Inc. Term Loan B,
7.856% - 8.065% due 6/30/2012 962,838
493,750 MEG Energy Corp. Term Loan B, 7.36%
due 4/03/2013 476,469
--------------
4,786,635
Food & Staples Retailing--1.9%
775,833 Advance Food Co. Term Loan B, 7.11%
due 3/31/2014 729,283
498,747 DS Waters LP Term Loan B, 7.61% - 7.753%
due 3/31/2012 468,822
Dole Food Co., Inc.:
139,535 Letter of Credit, 5.23% due 4/12/2013 131,163
310,029 Term Loan B, 7.438% - 9.25%
due 4/12/2013 291,427
1,033,430 Term Loan C, 7.438% - 9.25%
due 4/04/2013 971,424
Sturm Foods, Inc.:
498,750 First Lien Term Loan,
7.875% - 7.938% due 1/30/2014 463,838
500,000 Second Lien Term Loan, 11.438%
due 6/30/2014 466,250
--------------
3,522,207
Face
Amount Floating Rate Loan Interests** Value
Food Products--1.5%
USD 2,984,772 Chiquita Brands International Term Loan C,
8.563% due 6/28/2012 $ 2,905,177
Health Care Providers & Services--1.2%
1,000,000 DaVita, Inc. Term Loan B, 6.86% - 7.01%
due 7/30/2012 967,500
1,496,250 Health Management Associates, Inc. Term
Loan B, 7.11% due 1/15/2014 1,403,203
--------------
2,370,703
Hotels, Restaurants & Leisure--3.4%
318,182 Golden Nugget, Inc. Term Loan,
7.51% - 7.59% due 5/30/2014 301,477
480,568 Green Valley Ranch Gaming LLC Term Loan,
7.36% - 7.565% due 2/16/2014 456,540
60,185 Lake Las Vegas Resort Revolving Credit, 15.46%
due 12/14/2012 54,167
439,815 Lake Las Vegas Resort Term Loan B, 15.46%
due 12/14/2012 395,834
800,000 Las Vegas Sands Term Loan B, 7.11%
due 5/04/2014 759,100
465,000 QCE LLC First Lien Term Loan, 7.61%
due 5/05/2013 442,913
500,000 Riviera Holdings Corp. Term Loan B, 7.36%
due 5/11/2017 485,000
Trump Entertainment Resorts Holdings LP:
982,500 Delay Draw Term Loan, 7.86% - 8.01%
due 4/28/2012 961,622
230,000 Revolving Credit, 7.83% due 5/01/2010 218,500
982,500 Term Loan B-1, 7.86% - 7.90%
due 5/01/2012 961,622
Venetian Macau US Finance Co. LLC:
500,000 Delay Draw Term Loan, 7.61% - 7.76%
due 5/25/2012 482,857
1,000,000 Term Loan B, 7.61% due 5/25/2013 965,714
--------------
6,485,346
Household Durables--1.4%
1,000,000 American Residential Services Second Lien Term
Loan, 12% due 4/17/2015 990,000
1,740,440 Simmons Co. Tranche B Term Loan,
7.25% - 7.56% due 12/19/2011 1,688,226
--------------
2,678,226
IT Services--1.6%
1,228,785 Activant Solutions Term Loan B, 7.375%
due 5/02/2013 1,145,842
1,000,000 Audio Visual Services Corp. Term Loan B, 7.61%
due 2/28/2014 940,000
997,500 Mitchell International, Inc. Term Loan B,
7.375% due 3/31/2014 958,847
--------------
3,044,689
Independent Power Producers & Energy Traders--0.8%
1,445,289 Calpine Generating Company LLC Term Loan,
11.07% due 3/12/2010 1,503,101
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Floating Rate Loan Interests** Value
Insurance--0.3%
USD 500,000 USI Holdings Corp. Term Loan B, 7.95%
due 5/15/2014 $ 467,500
Internet Software & Services--0.5%
974,026 Billing Services Group LLC First Lien
Term Loan, 7.938% due 5/05/2012 964,286
Leisure Equipment & Products--2.3%
1,975,000 24 Hour Fitness Term Loan B, 7.86% - 7.88%
due 6/08/2014 1,940,438
2,541,383 True Temper Sports, Inc. Term Loan B,
8.538% - 8.745% due 3/15/2011 2,414,314
--------------
4,354,752
Machinery--2.5%
1,378,457 Blount, Inc. Term Loan B, 7.07% - 7.11%
due 8/09/2010 1,343,996
Navistar International Transportation Corp.:
400,000 Revolving Credit, 5.17% - 8.61%
due 1/19/2012 384,000
1,100,000 Term Loan, 8.61% due 1/19/2012 1,056,000
1,990,000 OshKosh Truck Corp. Term Loan B, 7.11%
due 11/30/2013 1,908,535
--------------
4,692,531
Media--24.9%
300,000 Affinion Group, Inc. Term Loan, 11.678%
due 3/01/2012 277,000
1,119,375 Alix Partners Term Loan B, 7.36%
due 10/30/2013 1,096,987
500,000 Bresnan Telecommunications Term Loan B, 7.36%
due 9/29/2013 480,178
1,000,000 Cequel Communications LLC Second Lien Term
Loan, 9.856% due 3/31/2015 965,000
5,500,000 Charter Communications, Inc. Term Loan B,
7.361% due 4/30/2014 5,195,047
1,000,000 Clarke American Corp. Term Loan B,
7.86% due 6/30/2014 912,500
1,000,000 GateHouse Media, Inc. Term Loan B, 7.51%
due 9/15/2014 905,000
1,000,000 Gray Communications Systems, Inc. Term Loan B,
6.86% due 9/18/2014 936,875
1,000,000 Hanley-Wood LLC Term Loan B,
7.59% - 7.61% due 3/07/2014 896,667
3,980,000 Idearc, Inc. Term Loan B, 7.36% due 11/15/2014 3,846,129
Insight Midwest Holdings LLC:
2,250,000 Delay Draw Term Loan, 7.11% due 4/03/2014 2,186,368
750,000 Term Loan B, 7.36% due 4/06/2014 728,789
3,830,950 Intelsat Corp. Term Loan B, 7.36% due 1/03/2014 3,702,613
1,960,187 Intelsat Ltd. Term Loan B, 7.36% due 12/03/2013 1,903,832
500,000 Knology, Inc. Term Loan B, 7.61% due 3/15/2012 482,500
1,000,000 LodgeNet Entertainment Corp. Term Loan,
7.36% due 4/04/2014 951,667
248,125 MediMedia International Term Loan B,
7.522% - 7.63% due 11/15/2013 238,820
1,965,000 Mediacom Broadband Group Tranche A Term
Loan, 7.02% - 7.07% due 3/31/2010 1,837,275
Face
Amount Floating Rate Loan Interests** Value
Media (concluded)
USD 3,144,200 Mediacom LLC Term Loan C, 7.32%
due 1/31/2015 $ 2,964,531
3,181,250 Metro-Goldwyn-Mayer Studios, Inc. Term
Loan B, 8.61% due 4/08/2012 2,995,436
387,000 Multicultural Radio Broadcasting Inc.
Term Loan, 8.288% due 12/15/2012 375,390
748,124 NEP Supershooters, LP Term Loan B, 7.61%
due 2/13/2014 711,965
750,000 National Cinemedia LLC Term Loan B, 7.11%
due 2/28/2015 705,000
NextMedia Group, Inc.:
518,844 Delay Draw Term Loan, 7.33%
due 11/15/2012 487,714
977,399 First Lien Term Loan, 7.569%
due 11/15/2012 918,755
992,500 Nielsen Finance LLC Term Loan B, 7.36%
due 8/15/2013 953,076
EUR 500,000 PagesJaunes Group Term Loan C, 6.89%
due 1/11/2016 646,643
USD 1,750,000 Paxson Communications Corp. First Lien Term
Loan, 8.61% due 1/15/2012 1,693,125
497,500 Penton Media Term Loan, 7.61% due 2/15/2013 470,138
EUR 500,000 ProSiebenSat.1 Media AG Term Loan B, 6.796%
due 6/30/2015 620,675
USD 1,714,631 RH Donnelley, Inc. Term Loan D-2,
6.86% - 7.05% due 8/30/2011 1,656,286
1,000,000 San Juan Cable Term Loan B, 11.82%
due 3/15/2013 957,500
2,449,875 Spanish Broadcasting System, Inc. Tranche 2
First Lien Term Loan B, 7.11% due 6/10/2012 2,309,007
1,409,396 Univision Communications, Inc. Delay Draw Term
Loan, 7.61% due 9/30/2014 1,301,342
--------------
47,309,830
Multi-Utilities--5.8%
500,000 Brand Energy Term Loan B, 7.625% - 7.813%
due 2/15/2015 484,166
MACH Gen LLC:
70,313 Letter of Credit, 7.36% due 2/22/2014 66,855
676,289 Term Loan, 7.50% due 2/22/2014 643,038
985,128 NE Energy Term Loan B, 7.86% due 10/31/2013 954,753
4,165,826 Riverside Energy Center Term Loan, 9.815%
due 6/24/2011 4,131,112
Rocky Mountain Energy Center LLC:
339,834 Credit Linked Deposit, 5.22% due 6/24/2011 337,002
2,558,398 Term Loan, 9.815% due 6/24/2011 2,537,079
Wolf Hollow I LP:
471,660 First Lien Term Loan, 7.61% due 6/22/2012 424,494
400,000 Letter of Credit, 7.75% due 6/22/2012 360,000
100,000 Revolving Credit, 7.57% - 7.755%
due 6/22/2012 90,000
1,000,000 Second Lien Term Loan, 9.864%
due 12/22/2012 940,000
--------------
10,968,499
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Floating Rate Loan Interests** Value
Multiline Retail--0.4%
USD 822,785 Neiman Marcus Group, Inc. Term Loan,
7.09% - 7.11% due 4/06/2013 $ 797,808
Oil, Gas & Consumable Fuels--2.0%
Coffeyville Resources LLC:
162,162 Letter of Credit, 5.26% due 12/21/2013 156,030
833,654 Term Loan B, 8.609% - 10.50%
due 12/21/2013 802,132
989,940 Helix Energy Solutions Term Loan B,
7.33% - 7.541% due 7/01/2013 957,458
1,000,000 SandRidge Energy, Inc. Term Loan B, 8.985%
due 3/01/2014 987,500
928,571 Western Refining Co. LP Term Loan B, 7.07%
due 3/15/2014 882,143
--------------
3,785,263
Paper & Forest Products--0.8%
Cenveo, Inc.:
957 Delay Draw Term Loan, 7.11% due 9/07/2013 911
28,699 Term Loan C, 7.10% due 9/07/2013 27,335
985,000 Georgia-Pacific Corp. First Lien Term Loan B,
7.264% due 12/20/2012 941,149
585,000 Verso Paper Holdings LLC Term Loan B, 11.606%
due 2/01/2013 582,075
--------------
1,551,470
Pharmaceuticals--0.8%
Pharmaceutical Technologies & Services (PTS):
1,000,000 Term Loan, 7.61% due 4/15/2014 912,500
EUR 500,000 Term Loan, 6.414% due 4/15/2014 647,068
--------------
1,559,568
Real Estate Management & Development--0.9%
USD 493,750 Mattamy Group Term Loan B, 7.813%
due 4/11/2013 476,469
1,242,424 Realogy Corp. Letter of Credit, 8.35%
due 9/22/2014 1,126,465
--------------
1,602,934
Road & Rail--0.9%
1,000,000 Rail America, Inc. Term Loan, 7.81%
due 8/14/2008 967,500
883,721 Swift Transportation Co., Inc. Term Loan B,
8.375% due 5/15/2014 781,172
--------------
1,748,672
Specialty Retail--1.5%
1,000,000 ADESA, Inc. Term Loan B, 7.61%
due 10/30/2013 935,625
500,000 Burlington Coat Factory Warehouse Corp. Term
Loan B, 7.76% due 4/15/2013 468,035
1,000,000 Claire's Stores Term Loan B, 8.11%
due 5/24/2014 915,417
498,750 Mattress Giant Term Loan B, 7.61%
due 2/28/2014 473,813
--------------
2,792,890
Face
Amount Floating Rate Loan Interests** Value
Textiles, Apparel & Luxury Goods--0.5%
USD 498,750 David's Bridal, Inc. Term Loan B, 7.36%
due 1/30/2014 $ 463,838
497,155 Renfro Corp. Term Loan B, 8.61% - 8.76%
due 9/30/2013 479,755
--------------
943,593
Trading Companies & Distributors--0.6%
United Rentals, Inc.:
1,096,251 Term Loan, 7.32% due 2/14/2011 1,081,862
99,261 Tranche B Credit Linked Deposit, 5.66%
due 2/14/2011 97,958
--------------
1,179,820
Wireless Telecommunication Services--1.0%
997,500 American Cellular Network Term Loan B, 7.36%
due 3/15/2014 986,777
498,750 Crown Castle Operating Co. Term Loan,
6.82% - 6.84% due 3/15/2014 473,812
500,000 IPC Systems First Lien Term Loan, 7.61%
due 5/25/2014 444,167
--------------
1,904,756
Total Floating Rate Loan Interests
(Cost--$162,929,291)--81.9% 155,273,461
Corporate Bonds
Auto Components--0.3%
500,000 The Goodyear Tire & Rubber Co., 9.135%
due 12/01/2009 (a)(b) 500,000
Biotechnology--0.3%
500,000 Angiotech Pharmaceuticals, Inc., 9.371%
due 12/01/2013 (b) 495,000
Building Products--2.7%
3,000,000 CPG International I, Inc., 12.13%
due 7/01/2012 (b) 3,015,000
2,500,000 Masonite International Corp., 11%
due 4/06/2015 2,037,500
--------------
5,052,500
Chemicals--2.5%
1,646,000 GEO Specialty Chemicals, Inc., 13.85%
due 12/31/2009 (b)(c) 1,357,950
1,000,000 Hexion U.S. Finance Corp., 10.058%
due 11/15/2014 (b) 1,020,000
2,000,000 MacDermid, Inc., 9.50% due 4/15/2017 (a) 1,860,000
580,000 NOVA Chemicals Corp., 8.484%
due 11/15/2013 (b) 562,600
--------------
4,800,550
Commercial Services & Supplies--0.1%
100,000 Sally Holdings LLC, 10.50% due 11/15/2016 95,500
150,000 Yankee Acquisition Corp., 9.75% due 2/15/2017 134,250
--------------
229,750
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Corporate Bonds Value
Computers & Peripherals--1.0%
USD 2,000,000 Quantum Corp., 4.375% due 8/01/2010 (c) $ 1,950,000
Containers & Packaging--3.6%
850,000 Berry Plastics Holding Corp., 9.235%
due 9/15/2014 (b) 841,500
5,000,000 Clondalkin Acquisition BV, 7.359%
due 12/15/2013 (a)(b) 4,750,000
1,240,000 Packaging Dynamics Finance Corp., 10%
due 5/01/2016 (a) 1,241,550
--------------
6,833,050
Diversified Financial Services--0.3%
500,000 Ford Motor Credit Co. LLC, 9.81%
due 4/15/2012 (b) 503,677
Diversified Telecommunication Services--0.4%
800,000 Qwest Corp., 8.61% due 6/15/2013 (b) 844,000
Electric Utilities--0.7%
1,325,000 Edison Mission Energy, 7.50% due 6/15/2013 1,334,937
Electronic Equipment & Instruments--0.8%
1,590,000 NXP BV, 8.11% due 10/15/2013 (b) 1,440,937
100,000 Sanmina-SCI Corp., 8.125% due 3/01/2016 86,500
--------------
1,527,437
Energy Equipment & Services--2.1%
2,000,000 Ocean RIG ASA, 9.36% due 4/04/2011 (b) 1,975,000
2,000,000 Parker Drilling Co., 10.33% due 9/01/2010 (b) 2,017,500
--------------
3,992,500
Food & Staples Retailing--0.3%
250,000 AmeriQual Group LLC, 9.50% due 4/01/2012 (a) 232,500
360,000 Rite Aid Corp., 9.375% due 12/15/2015 (a) 327,600
--------------
560,100
Health Care Equipment & Supplies--0.2%
500,000 The Cooper Cos, Inc., 7.125% due 2/15/2015 477,500
Health Care Providers & Services--0.6%
1,125,000 Tenet Healthcare Corp., 6.50% due 6/01/2012 933,750
230,000 Universal Hospital Services, Inc., 8.759%
due 6/01/2015 (a)(b) 221,950
--------------
1,155,700
Hotels, Restaurants & Leisure--4.5%
4,000,000 American Real Estate Partners LP, 7.125%
due 2/15/2013 (a) 3,760,000
225,000 Galaxy Entertainment Finance Co. Ltd.,
10.409% due 12/15/2010 (a)(b) 227,250
2,000,000 Landry's Restaurants, Inc. Series B, 7.50%
due 12/15/2014 2,002,500
1,565,000 Little Traverse Bay Bands of Odawa Indians,
10.25% due 2/15/2014 (a) 1,572,825
950,000 Travelport LLC, 10.246% due 9/01/2014 (b) 950,000
--------------
8,512,575
IT Services--1.1%
2,000,000 SunGard Data Systems, Inc., 10.25%
due 8/15/2015 2,060,000
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in U.S. dollars)
Face
Amount Corporate Bonds Value
Independent Power Producers & Energy Traders--1.0%
USD 2,000,000 NRG Energy, Inc., 7.25% due 2/01/2014 $ 1,980,000
Machinery--0.2%
318,000 Invensys Plc, 9.875% due 3/15/2011 (a) 337,875
Media--3.7%
2,500,000 Charter Communications Holdings II LLC,
10.25% due 9/15/2010 2,525,000
Intelsat Bermuda Ltd. (b):
325,000 11.409% due 6/15/2013 333,937
2,650,000 8.886% due 1/15/2015 2,669,875
450,000 Quebecor Media, Inc., 7.75% due 3/15/2016 428,062
175,000 Quebecor World Capital Corp., 8.75%
due 3/15/2016 (a) 157,500
1,000,000 TL Acquisitions, Inc., 10.50% due
1/15/2015 (a) 942,500
--------------
7,056,874
Metals & Mining--1.5%
180,000 FMG Finance Pty Ltd., 9.621%
due 9/01/2011 (a)(b) 186,300
Freeport-McMoRan Copper & Gold, Inc.:
1,580,000 8.564% due 4/01/2015 (b) 1,627,400
1,055,000 8.375% due 4/01/2017 1,123,575
--------------
2,937,275
Paper & Forest Products--3.4%
2,000,000 Abitibi-Consolidated, Inc., 8.86%
due 6/15/2011 (b) 1,720,000
2,000,000 Bowater, Inc., 8.36% due 3/15/2010 (b) 1,800,000
3,000,000 Verso Paper Holdings LLC Series B, 9.106%
due 8/01/2014 (b) 2,985,000
--------------
6,505,000
Real Estate Management & Development--0.9%
2,000,000 Realogy Corp., 11% due 4/15/2014 (a)(e) 1,620,000
Road & Rail--0.8%
1,000,000 Atlantic Express Transportation Corp.,
12.609% due 4/15/2012 (b) 970,000
675,000 St. Acquisition Corp., 13.107%
due 5/15/2015 (a)(b) 469,125
--------------
1,439,125
Semiconductors & Semiconductor Equipment--2.8%
3,000,000 Avago Technologies Finance Pte. Ltd.,
11.08% due 6/01/2013 (b) 3,045,000
700,000 Freescale Semiconductor, Inc., 9.235%
due 12/15/2014 (b) 644,000
1,690,000 Spansion, Inc., 8.746% due 6/01/2013 (a)(b) 1,605,500
--------------
5,294,500
Specialty Retail--1.8%
250,000 Autonation, Inc., 7.36% due 4/15/2013 (b) 235,000
350,000 General Nutrition Centers, Inc., 9.85%
due 3/15/2014 (a)(e) 316,387
3,000,000 Michaels Stores, Inc., 11.375%
due 11/01/2016 (a) 2,917,500
--------------
3,468,887
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Schedule of Investments (concluded) (in U.S. dollars)
Face
Amount Corporate Bonds Value
Wireless Telecommunication Services--1.9%
USD 2,000,000 Cricket Communications, Inc., 9.375%
due 11/01/2014 $ 1,960,000
1,349,000 Digicel Group Ltd., 9.125%
due 1/15/2015 (a)(e) 1,232,716
325,000 Dobson Communications Corp., 9.61%
due 10/15/2012 (b) 331,500
--------------
3,524,216
Total Corporate Bonds
(Cost--$78,642,691)--39.5% 74,993,028
Shares
Held Common Stocks Value
Chemicals--0.0%
10,732 GEO Specialty Chemicals, Inc. (d) $ 10,732
Electrical Equipment--0.1%
13,053 Medis Technologies Ltd. (d) 137,709
Semiconductors & Semiconductor Equipment--0.7%
52,413 Cypress Semiconductor Corp. (d) 1,312,421
Total Common Stocks
(Cost--$1,422,616)--0.8% 1,460,862
Total Investments (Cost--$242,994,598*)--122.2% 231,727,351
Liabilities in Excess of Other Assets--(22.2%) (42,069,426)
--------------
Net Assets--100.0% $ 189,657,925
==============
* The cost and unrealized appreciation (depreciation) of investments
as of August 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 242,994,598
=================
Gross unrealized appreciation $ 707,273
Gross unrealized depreciation (11,974,520)
-----------------
Net unrealized depreciation $ (11,267,247)
=================
** Floating rate loan interests in which the Fund invests generally pay
interest at rates that are periodically redetermined by reference to a
base lending rate plus a premium. The base lending rates are generally
(i) the lending rate offered by one or more major European banks, such
as LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by
one or more major U.S. banks or (iii) the certificate of deposit rate.
(a) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(b) Floating rate security.
(c) Convertible security.
(d) Non-income producing security.
(e) Represents a pay-in-kind security, which may pay interest/dividends
in additional face/shares.
o For Fund compliance purposes, the Fund's industry classifications
refer to any one or more of the industry sub-classifications used
by one or more widely recognized market indexes or ratings group
indexes, and/or as defined by Fund management. This defintion may
not apply for purposes of this report which may combine industry
sub-classifications for reporting ease. Industries are shown as a
percent of net assets.
o Forward foreign exchange contracts sold as of August 31, 2007
were as follows:
Foreign Currency Settlement Unrealized
Sold Date Appreciation
EUR 2,593,500 October 2007 $ 37,657
GBP 600,000 October 2007 7,906
---------
Total Unrealized Appreciation on Forward Foreign
Exchange Contracts (USD Commitment--$4,794,273) $ 45,563
=========
o Investments in companies considered to be an affiliate of the Fund for
purposes of Section 2(a)(3) of the Investment Company Act of 1940
were as follows:
Net Interest
Affiliate Activity Income
BlackRock Liquidity Series, LLC
Cash Sweep Series -- $ 115,404
o Swaps outstanding as of August 31, 2007 were as follows:
Unrealized
Notional Appreciation
Amount (Depreciation)
Sold credit default protection on
Ford Motor Co. and receive 3.80%
Broker, UBS Warburg
Expires March 2010 $5,000,000 $(337,445)
Bought a credit default protection on
LCDX Index and pay 1.20%
Broker, JPMorgan Chase
Expires June 2012 $1,500,000 (17,100)
Bought credit default protection on
LCDX Index and pay 1.20%
Broker, Morgan Stanley
Expires June 2012 $1,500,000 (17,101)
Sold credit default protection on
LCDX Index and receive 1.20%
Broker, Morgan Stanley
Expires June 2012 $1,500,000 32,201
Sold credit default protection on
Dow Jones CDX North America High Yield
Series 8 and receive 2.75%
Broker, JPMorgan Chase
Expires June 2012 $1,600,000 (4,932)
Sold credit default protection on
Dow Jones CDX North America High Yield
Index Series 8 and receive 2.75%
Broker, JPMorgan Chase
Expires June 2012 $1,600,000 (3,932)
----------
Total $(348,309)
==========
* Currency Abbreviations:
EUR Euro
GBP British Pound
USD U.S. Dollar
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Statement of Assets, Liabilities and Capital
As of August 31, 2007 (Unaudited)
Assets
Investments in unaffiliated securities, at value (identified cost--$242,994,598) $ 231,727,351
Cash 7,654,167
Foreign cash (cost--$1,164) 1,168
Unrealized appreciation on swaps 32,201
Unrealized appreciation on foreign exchange contracts 45,563
Swap premiums paid 181,093
Receivables:
Interest $ 3,369,125
Securities sold 1,505,392
Swaps 216,445
Commitment fees 27,234 5,118,196
---------------
Prepaid expenses 3,505
---------------
Total assets 244,763,244
---------------
Liabilities
Loans 53,000,000
Unfunded loan commitment 298,055
Unrealized depreciation on swaps 380,510
Swap premiums received 251,627
Payables:
Securities purchased 681,125
Investment adviser 171,872
Dividends to shareholders 143,269
Interest on loans 82,359
Swaps 10,400
Other affiliates 1,799 1,090,824
---------------
Accrued expenses 84,303
---------------
Total liabilities 55,105,319
---------------
Net Assets
Net assets $ 189,657,925
===============
Capital
Common Stock, par value $.10 per share; 200,000,000 shares authorized
(10,496,930 shares issued and outstanding) $ 1,049,693
Paid-in capital in excess of par 199,119,933
Undistributed investment income--net $ 2,440,797
Accumulated realized capital losses--net (1,151,631)
Unrealized depreciation--net (11,800,867)
---------------
Total accumulated losses--net (10,511,701)
---------------
Total capital--Equivalent to $18.07 net asset value per share of Common Stock
(market price--$16.57) $ 189,657,925
===============
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Statement of Operations
For the Six Months Ended August 31, 2007 (Unaudited)
Investment Income
Interest (including $115,404 from affiliates) $ 10,970,938
Facility and other fees 91,748
---------------
Total income 11,062,686
---------------
Expenses
Loan interest expense $ 1,742,436
Investment advisory fees 994,637
Professional fees 57,781
Borrowing costs 55,539
Accounting services 35,854
Printing and shareholder reports 19,651
Directors' fees and expenses 19,454
Transfer agent fees 18,119
Custodian fees 10,032
Listing fees 4,833
Pricing services 4,762
Other 17,182
---------------
Total expenses 2,980,280
---------------
Investment income--net 8,082,406
---------------
Realized & Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 566,377
Swaps--net 155,327
Foreign currency transactions--net (116,533) 605,171
---------------
Change in unrealized appreciation/depreciation on:
Investments--net (13,513,467)
Swaps--net (368,969)
Unfunded corporate loans--net 49,936
Foreign currency transactions--net 48,944 (13,783,556)
--------------- ---------------
Total realized and unrealized loss--net (13,178,385)
---------------
Net Decrease in Net Assets Resulting from Operations $ (5,095,979)
===============
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
August 31, 2007 February 28,
Increase (Decrease) in Net Assets: (Unaudited) 2007
Operations
Investment income--net $ 8,082,406 $ 16,232,774
Realized gain--net 605,171 197,727
Change in unrealized depreciation--net (13,783,556) (1,508,938)
--------------- ---------------
Net increase (decrease) in net assets resulting from operations (5,095,979) 14,921,563
--------------- ---------------
Dividends to Shareholders
Investment income--net (7,610,316) (16,114,520)
--------------- ---------------
Net decrease from dividends to shareholders (7,610,316) (16,114,520)
--------------- ---------------
Net Assets
Total decrease in net assets (12,706,295) (1,192,957)
Beginning of period 202,364,220 203,557,177
--------------- ---------------
End of period* $ 189,657,925 $ 202,364,220
=============== ===============
* Undistributed investment income--net $ 2,440,797 $ 1,968,707
=============== ===============
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Statement of Cash Flows
For the Six Months Ended August 31, 2007 (Unaudited)
Cash Provided by Operating Activities
Net decrease in net assets resulting from operations $ (5,095,979)
Adjustments to reconcile net decrease in net assets resulting from operations to net cash
provided by operating activities:
Increase in other receivables and prepaid expenses (559,256)
Increase in other liabilities 71,413
Realized and unrealized loss--net 13,145,633
Amortization of premium and discount (8,515)
Unrealized loss on futures contracts--net (113,188)
Proceeds from sales and paydowns of long-term securities 96,619,941
Purchases of long-term securities (103,638,083)
---------------
Cash provided by operating activities 421,966
---------------
Cash Used for Financing Activities
Cash receipts from borrowings 75,000,000
Cash payments on borrowings (69,000,000)
Dividends paid to shareholders (7,650,596)
---------------
Cash used for financing activities (1,650,596)
---------------
Cash
Net decrease in cash (1,228,630)
Cash at beginning of period 8,883,965
---------------
Cash at end of period $ 7,655,335
===============
Cash Flow Information
Cash paid for interest $ 1,691,445
===============
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Financial Highlights
For the Six For the Period
The following per share data and ratios Months Ended For the Year Ended July 30, 2004++ to
have been derived from information August 31, 2007 February 28, February 28,
provided in the financial statements. (Unaudited) 2007 2006 2005
Per Share Operating Performance
Net asset value, beginning of period $ 19.28 $ 19.39 $ 19.74 $ 19.10
------------ ------------ ------------ ------------
Investment income--net*** .77 1.55 1.33 .58
Realized and unrealized gain (loss)--net (1.25) (.12) (.31) .57
------------ ------------ ------------ ------------
Total from investment operations (.48) 1.43 1.02 1.15
------------ ------------ ------------ ------------
Less dividends and distributions from:
Investment income--net (.73) (1.54) (1.27) (.47)
Realized gain--net -- -- (.10) (.01)
------------ ------------ ------------ ------------
Total dividends and distributions (.73) (1.54) (1.37) (.48)
------------ ------------ ------------ ------------
Offering costs resulting from the issuance of Common Stock -- -- -- (.03)
------------ ------------ ------------ ------------
Net asset value, end of period $ 18.07 $ 19.28 $ 19.39 $ 19.74
============ ============ ============ ============
Market price per share, end of period $ 16.57 $ 18.50 $ 17.76 $ 19.44
============ ============ ============ ============
Total Investment Return**
Based on net asset value per share (2.46%)+++ 8.31% 6.07% 5.97%+++
============ ============ ============ ============
Based on market price per share (6.78%)+++ 13.47% (1.35%) (.34%)+++
============ ============ ============ ============
Ratios to Average Net Assets
Expenses, net of waiver and excluding interest expense 1.21%* 1.22% 1.25% .92%*
============ ============ ============ ============
Expenses, net of waiver 2.92%* 2.87% 2.46% 1.30%*
============ ============ ============ ============
Expenses 2.92%* 2.87% 2.46% 1.48%*
============ ============ ============ ============
Investment income--net 7.93%* 8.03% 6.88% 5.11%*
============ ============ ============ ============
Leverage
Amount of borrowings, end of period (in thousands) $ 53,000 $ 47,000 $ 61,400 $ 60,300
============ ============ ============ ============
Average amount of borrowings outstanding during
the period (in thousands) $ 60,668 $ 61,022 $ 63,725 $ 29,072
============ ============ ============ ============
Average amount of borrowings outstanding per share
during the period*** $ 5.78 $ 5.81 $ 6.07 $ 2.80
============ ============ ============ ============
Supplemental Data
Net assets, end of period (in thousands) $ 189,658 $ 202,364 $ 203,557 $ 207,255
============ ============ ============ ============
Portfolio turnover 37% 65% 72% 30%
============ ============ ============ ============
* Annualized.
** Total investment returns based on market price, which can be significantly greater
or lesser than the net asset value, may result in substantially different returns.
Total investment returns exclude the effects of sales charges.
*** Based on average shares outstanding.
++ Commencement of operations.
+++ Aggregate total investment return.
See Notes to Financial Statements.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Notes to Financial Statements (Unaudited)
1. Significant Accounting Policies:
BlackRock Floating Rate Income Strategies Fund II, Inc. (the "Fund") is
registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. These unaudited financial
statements reflect all such adjustments, which are, in the opinion of
management, necessary to present a fair statement of the results for the
interim period. All such adjustments are of a normal, recurring nature. The
Fund determines, and makes available for publication, the net asset value of
its Common Stock on a daily basis. The Fund's Common Stock shares are listed
on the New York Stock Exchange ("NYSE") under the symbol FRB.
(a) Corporate debt obligations--The Fund invests principally in floating rate
obligations of companies, including floating rate loans made by banks and
other financial institutions and both privately and publicly offered corporate
bonds and notes. The Fund's investments in loan participation interests
involve the risk of insolvency of the financial intermediaries who are parties
to the transactions.
(b) Valuation of investments--Floating rate loans are valued in accordance
with guidelines established by the Fund's Board of Directors. As of October 2,
2006, floating rate loan interests are valued at the mean between the last
available bid prices from one or more brokers or dealers as obtained from Loan
Pricing Corporation. Previously, floating rate loan interests were valued at
the mean between the last available bid and asked prices as obtained from the
same pricing source. This change had no significant effect on the valuation of
these loans. For the limited number of floating rate loans for which no
reliable price quotes are available, such floating rate loans may be valued by
Loan Pricing Corporation through the use of pricing matrixes to determine
valuations. If the pricing service does not provide a value for a floating
rate loan, BlackRock Advisors, LLC (the "Manager"), an indirect, wholly owned
subsidiary of BlackRock, Inc., will value the floating rate loan at fair
value, which is intended to approximate market value.
Debt securities are traded primarily in over-the-counter ("OTC") markets and
are valued at the last available bid price in the OTC market or on the basis
of values obtained by a pricing service. Pricing services use valuation
matrixes that incorporate both dealer-supplied valuations and valuation
models. The procedures of the pricing service and its valuations are reviewed
by the officers of the Fund under the general direction of the Board of
Directors. Such valuations and procedures will be reviewed periodically by the
Board of Directors of the Fund.
Securities held by the Fund that are traded on stock exchanges or the NASDAQ
Global Market are valued at the last sale price or official close price on the
exchange on which such securities are traded, as of the close of business on
the day the securities are being valued or, lacking any sales, at the last
available bid price for long positions, and at the last available asked price
for short positions. In cases where securities are traded on more than one
exchange, the securities are valued on the exchange designated as the primary
market by or under the authority of the Board of Directors of the Fund. Long
positions in securities traded in the OTC market, NASDAQ Capital Market or
Bulletin Board are valued at the last available bid price or yield equivalent
obtained from one or more dealers or pricing services approved by the Board of
Directors of the Fund. Short positions traded in the OTC market are valued at
the last available asked price. Portfolio securities that are traded both in
the OTC market and on a stock exchange are valued according to the broadest
and most representative market. When the Fund writes an option, the amount of
the premium received is recorded on the books of the Fund as an asset and an
equivalent liability. The amount of the liability is subsequently valued to
reflect the current market value of the option written, based on the last sale
price in the case of exchange-traded options or, in the case of options traded
in the OTC market, the last asked price. Options purchased are valued at the
last sale price in the case of exchange traded options or, in the case of
options traded in the OTC market, last bid price. Swap agreements are valued
based upon quoted fair valuations received daily by the Fund from a pricing
service or counterparty. Other investments, including financial futures
contracts and related options, are stated at market value. Valuation of short-
term investment vehicles is generally based on the net asset value of the
underlying investment vehicle or amortized cost. Repurchase agreements will be
valued at cost plus accrued interest.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Notes to Financial Statements (continued)
Generally, trading in foreign securities, as well as U.S. government
securities, money market instruments and certain fixed income securities, is
substantially completed each day at various times prior to the close of
business on the NYSE. The values of such securities used in computing the net
asset value of the Fund's shares are determined as of such times. Foreign
currency exchange rates will generally be determined as of the close of
business on the NYSE. Occasionally, events affecting the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of business on the NYSE that may not be reflected
in the computation of the Fund's net asset value. If events (for example, a
company announcement, market volatility or a natural disaster) occur during
such periods that are expected to materially affect the value of such
securities, those securities will be valued at their fair value as determined
in good faith by the Fund's Board of Directors or by the Manager using a
pricing service and/or procedures approved by the Fund's Board of Directors.
(c) Derivative financial instruments--The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the
securities markets. Losses may arise due to changes in the value of the
contract due to an unfavorable change in the price of the underlying security
or index, or if the counterparty does not perform under the contract. The
counterparty for certain instruments may pledge cash or securities as
collateral.
* Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such financial futures contracts. Financial futures
contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract,
the Fund deposits, and maintains, as collateral such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
* Options--The Fund may write and purchase call and put options. When the Fund
writes an option, an amount equal to the premium received by the Fund is
reflected as an asset and an equivalent liability. The amount of the liability
is subsequently marked-to-market to reflect the current market value of the
option written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction is less than or exceeds the premiums paid or received).
Written and purchased options are non-income producing investments.
* Swaps--The Fund may enter into swap agreements, which are OTC contracts in
which the Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a predetermined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities, or index; or the
return generated by a security. These periodic payments received or made by
the Fund are recorded in the accompanying Statement of Operations as realized
gains or losses, respectively. Gains or losses are also realized upon
termination of swap agreements. Swaps are marked-to-market daily and changes
in value are recorded as unrealized appreciation (depreciation). Risks include
changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
* Forward foreign exchange contracts--The Fund may enter into forward foreign
exchange contracts as a hedge against either specific transactions or
portfolio positions. The contract is marked-to-market daily and the change in
market value is recorded by the Fund as an unrealized gain or loss. When the
contract is closed, the Fund records a realized gain or loss equal to the
difference between the value at the time it was opened and the value at the
time it was closed.
(d) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized.
Assets and liabilities denominated in foreign currencies are valued at the
exchange rate at the end of the period. Foreign currency transactions are the
result of settling (realized) or valuing (unrealized) assets or liabilities
expressed in foreign currencies into U.S. dollars. Realized and unrealized
gains or losses from investments include the effects of foreign exchange rates
on investments. The fund invests in foreign securities, which may involve a
number of risk factors and special considerations not present with investments
in securities of U.S. corporations.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Notes to Financial Statements (continued)
(e) Income taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.
(f) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Interest income is recognized on the accrual basis. The
Fund amortizes all premiums and discounts on debt securities. The Fund earns
facility and other fees on loan participation interests. Other fees earned
include amendment, consent and prepayment fees.
(g) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates. The Fund may at times pay out less than the entire amount
of net investment income earned in any particular period and may at times pay
out such accumulated undistributed income in other periods to permit the Fund
to maintain a more stable level of dividends.
(h) Securities lending--The Fund may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. The market
value of the loaned securities is determined at the close of business of the
Fund and any additional required collateral is delivered to the Fund on the
next business day. Where the Fund receives securities as collateral for the
loaned securities, it collects a fee from the borrower. The Fund typically
receives the income on the loaned securities but does not receive the income
on the collateral. Where the Fund receives cash collateral, it may invest such
collateral and retain the amount earned on such investment, net of any amount
rebated to the borrower. Loans of securities are terminable at any time and
the borrower, after notice, is required to return borrowed securities within
five business days. The Fund may pay reasonable finder's, lending agent,
administrative and custodial fees in connection with its loans. In the event
that the borrower defaults on its obligation to return borrowed securities
because of insolvency or for any other reason, the Fund could experience
delays and costs in gaining access to the collateral. The Fund also could
suffer a loss where the value of the collateral falls below the market value
of the borrowed securities, in the event of borrower default or in the event
of losses on investments made with cash collateral.
(i) Recent accounting pronouncements--Effective August 31, 2007, the Fund
implemented Financial Accounting Standards Board ("FASB") Interpretation
No. 48 ("FIN 48"), "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109." FIN 48 prescribes the minimum
recognition threshold a tax position must meet in connection with accounting
for uncertainties in income tax positions taken or expected to be taken by an
entity including mutual funds before being measured and recognized in the
financial statements. Management has evaluated the application of FIN 48 to
the Fund, and has determined that the adoption of FIN 48 does not have a
material impact on the Fund's financial statements. The Fund files U.S. and
various state tax returns. No income tax returns are currently under
examination. The statute of limitations on the Fund's tax returns remains open
for the years ended February 28, 2005 through February 28, 2007.
In September 2006, Statement of Financial Accounting Standard No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implications of FAS
157 and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of FAS 157. FAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value
that are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is
evaluating the implications of FAS 159 and its impact on the Fund's financial
statements, if any, has not been determined.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Notes to Financial Statements (continued)
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with the Manager.
Merrill Lynch & Co., Inc. ("Merrill Lynch") and The PNC Financial Services
Group Inc. are the principal owners of BlackRock, Inc.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays a monthly fee of .75% of the average daily value of the Fund's net assets
plus the proceeds of any outstanding borrowings used for leverage. In
addition, the Manager has entered into a Sub-Advisory Agreement with BlackRock
Financial Management, Inc., an affiliate of the Manager, under which the
Manager pays the Sub-Adviser for services it provides a monthly fee at an
annual rate that is a percentage of the management fee paid by the Fund to the
Manager.
The Fund has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch,
Pierce, Fenner and Smith Incorporated ("MLPF&S"), a wholly owned subsidiary of
Merrill Lynch, or its affiliates. Pursuant to that order, the Fund has
retained BlackRock Investment Management LLC ("BIM"), an affiliate of the
Manager, as the securities lending agent for a fee based on a share of the
returns on investment of cash collateral. BIM may, on behalf of the Fund,
invest cash collateral received by the Fund for such loans, among other
things, in a private investment company managed by the Manager or in
registered money market funds advised by the Manager or its affiliates.
For the six months ended August 31, 2007, the Fund reimbursed the Manager
$1,997 for certain accounting services.
Certain officers and/or directors of the Fund are officers and/or directors of
BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales (including paydowns) of investments, excluding short-term
securities, for the six months ended August 31, 2007 were $93,338,738 and
$96,453,177, respectively.
4. Capital Share Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, par value
$.10 per share, all of which are initially classified as Common Stock. The
Board of Directors is authorized, however, to classify and reclassify any
unissued shares of capital stock without approval of the holders of Common
Stock.
5. Unfunded Loan Commitments:
As of August 31, 2007, the Fund had unfunded loan commitments of approximately
$10,285,000, which would be extended at the option of the borrower pursuant to
the following loan agreements:
(in Thousands)
Value of
Unfunded Underlying
Borrower Commitment Loan
Advance Food Co. $ 222 $ 209
Alon U.S.A. $ 111 $ 106
Aquila, Inc. $3,000 $3,043
Cenveo, Inc. $ 145 $ 138
Gray Communications Systems, Inc. $ 287 $ 269
Golden Nugget, Inc. $ 182 $ 172
Las Vegas Sands $ 400 $ 380
LSP General Finance Co. $ 71 $ 68
MEG Energy Corp. $ 500 $ 478
Spanish Broadcasting System, Inc. $2,500 $2,421
Trump Entertainment Delay Draw $ 7 $ 7
Trump Entertainment Resorts
Holdings LP $1,770 $1,682
Univision Communications, Inc. $ 90 $ 84
Vought Aircraft Industries, Inc. $1,000 $ 930
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Notes to Financial Statements (concluded)
6. Short-Term Borrowings:
On May 16, 2007, the Fund renewed its revolving credit and security agreement
funded by a commercial paper asset securitization program with Citicorp North
America, Inc. ("Citicorp"), as Agent, certain secondary backstop lenders, and
certain asset securitization conduits as lenders (the "Lenders"). The
agreement was renewed for one year and has a maximum limit of $100,000,000.
Under the Citicorp program, the conduits will fund advances to the Fund
through the issuance of highly rated commercial paper. As security for its
obligations to the Lenders under the revolving securitization facility, the
Fund has granted a security interest in substantially all of its assets to and
in favor of the Lenders. The interest rate on the Fund's borrowings is based
on the interest rate carried by the commercial paper plus a program fee. The
Fund pays additional borrowing costs including a backstop commitment fee.
The weighted average annual interest rate was 2.91% and the average borrowing
was approximately $60,668,000 for the six months ended August 31, 2007.
7. Capital Loss Carryforward:
On February 28, 2007, the Fund had a net capital loss carryforward of
$1,783,719, of which $467,774 expires in 2014 and $1,315,945 expires in 2015.
This amount will be available to offset like amounts of any future taxable
gains.
8. Subsequent Event:
The Fund paid an ordinary income dividend to holders of Common Stock in the
amount of $.123350 per share on September 28, 2007 to shareholders of record
on September 14, 2007.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Proxy Results
During the six-month period ended August 31, 2007, the shareholders of
BlackRock Floating Rate Income Strategies Fund II, Inc. voted on the following
proposal, which was approved at an annual shareholders' meeting on August 16,
2007. This proposal was part of the reorganization of the Fund's Board of
Directors to take effect on or about November 1, 2007. A description of the
proposal and number of shares voted are as follows:
Shares Voted Shares Withheld
For From Voting
To elect the Fund's Board of Directors: G. Nicholas Beckwith, III 7,504,679 138,859
Richard E. Cavanagh 7,509,444 134,095
Richard S. Davis 7,507,597 135,942
Kent Dixon 7,489,332 154,206
Frank J. Fabozzi 7,506,179 137,359
Kathleen F. Feldstein 7,489,562 153,977
James T. Flynn 7,494,444 149,095
Henry Gabbay 7,509,444 134,095
Jerrold B. Harris 7,509,444 134,095
R. Glenn Hubbard 7,509,409 134,130
W. Carl Kester 7,511,444 132,095
Karen P. Robards 7,510,444 133,095
Robert S. Salomon, Jr. 7,494,372 149,167
Officers and Directors
Robert C. Doll, Jr., Fund President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Donald C. Burke, Vice President and Treasurer
Karen Clark, Fund Chief Compliance Officer
Alice A. Pellegrino, Fund Secretary
Howard Surloff, Fund Secretary
(Effective September 1, 2007)
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their nonpublic personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic personal information about its Clients, except as permitted by law
or as is necessary to service Client accounts. These nonaffiliated third
parties are required to protect the confidentiality and security of this
information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to
nonpublic personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
BLACKROCK FLOATING RATE INCOME STRATEGIES FUND II, INC. AUGUST 31, 2007
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this
semi-annual report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable to this
semi-annual report
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable to this semi-annual
report
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
Not Applicable to this semi-annual report
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
Item 11 - Controls and Procedures
11(a) - The registrant's principal executive and principal financial
officers or persons performing similar functions have concluded that
the registrant's disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Investment Company Act of 1940, as amended
(the "1940 Act")) are effective as of a date within 90 days of the
filing of this report based on the evaluation of these controls and
procedures required by Rule 30a-3(b) under the 1940 Act and Rule
13a-15(b) under the Securities and Exchange Act of 1934, as amended.
11(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act)
that occurred during the second fiscal quarter of the period covered
by this report that have materially affected, or are reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Floating Rate Income Strategies Fund II, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock Floating Rate Income Strategies Fund II, Inc.
Date: October 22, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock Floating Rate Income Strategies Fund II, Inc.
Date: October 22, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer (principal financial officer) of
BlackRock Floating Rate Income Strategies Fund II, Inc.
Date: October 22, 2007