d1472305_13d-a.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
SCHEDULE 13D
THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 14)*
 
PIMCO Income Strategy Fund
(Name of Issuer)
 
 
Auction–Rate Preferred Shares
(Title of Class of Securities)
 
72201H207
72201H306
72201H405
(CUSIP Number)
 
Brigade Leveraged Capital Structures Fund Ltd.
c/o Ogier Fiduciary Services (Cayman) Limited
89 Nexus Way
Camana Bay
Grand Cayman KY1-9007
Attention:  Donald E. Morgan, III
 
Copies to:
 
Raymond Gietz, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
 
April 11, 2014
(Date of Event Which Requires Filing of this Statement)
 
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [_].
_________
The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
*No additional purchases or sales have been made since the date of the reporting persons' last filing.
 
 
 
 
 
CUSIP No.
72201H207
72201H306
72201H405
  

1.
NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
    
       
 
Brigade Leveraged Capital Structures Fund Ltd.
    
       
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) 
(b)
[_]
[X]
       
3.
SEC USE ONLY
    
       
       
       
4.
SOURCE OF FUNDS
    
       
 
WC
    
       
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
 
[_]
       
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
    
       
 
Cayman Islands
    
       
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
7.
SOLE VOTING POWER
    
       
 
0
    
       
8.
SHARED VOTING POWER
    
       
 
1,037*
    
       
9.
SOLE DISPOSITIVE POWER
    
       
 
0
    
       
10.
SHARED DISPOSITIVE POWER
    
       
 
1,037*
    
       
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
 
1,037*
    
       
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
[_]
       
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
    
       
 
32.8%**
    
       
14.
TYPE OF REPORTING PERSON
    
       
 
CO
    

* Consistent with the Securities and Exchange Commission's Auction Rate Securities Global Exemptive Relief no action letter issued on September 22, 2008, these amounts reflect Brigade Leveraged Capital Structures Fund Ltd.'s combined holdings in the separate series of auction rate preferred shares of the issuer identified by the CUSIP numbers set forth on the cover page of this Schedule 13D Amendment, which are treated herein as one class of securities.
 
** Percentage calculation is based on the number of Issuer's Auction-Rate Preferred Shares outstanding as of January 31, 2014, as reported in the Issuer's Form N-CSRS filed on March 31, 2014.
 
 
 
 

CUSIP No.
72201H207
72201H306
72201H405
  

1.
NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
    
       
 
Brigade Capital Management, LLC
    
       
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
[_]
[X]
       
3.
SEC USE ONLY
    
       
       
       
4.
SOURCE OF FUNDS
    
       
 
AF
    
       
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
  
[_]
       
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
    
       
 
Delaware
    
       
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
7.
SOLE VOTING POWER
    
       
 
0
    
       
8.
SHARED VOTING POWER
    
       
 
1,037*
    
       
9.
SOLE DISPOSITIVE POWER
    
       
 
0
    
       
10.
SHARED DISPOSITIVE POWER
    
       
 
1,037*
    
       
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
[_]
       
 
1,037*
    
       
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
    
       
 
32.8%**
    
       
14.
TYPE OF REPORTING PERSON
    
       
 
IA
    

* Consistent with the Securities and Exchange Commission's Auction Rate Securities Global Exemptive Relief no action letter issued on September 22, 2008, these amounts reflect Brigade Capital Management, LLC's combined holdings in the separate series of auction rate preferred shares of the issuer identified by the CUSIP numbers set forth on the cover page of this Schedule 13D Amendment, which are treated herein as one class of securities.
 
** Percentage calculation is based on the number of Issuer's Auction-Rate Preferred Shares outstanding as of January 31, 2014, as reported in the Issuer's Form N-CSRS filed on March 31, 2014.
 
 
 
 

CUSIP No.
72201H207
72201H306
72201H405
  

1.
NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
    
       
 
Donald E. Morgan, III
    
       
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)
(b)
[_]
[X]
       
3.
SEC USE ONLY
    
       
       
       
4.
SOURCE OF FUNDS
    
       
 
AF
    
       
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
 
[_]
       
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
    
       
 
U.S.A.
    
       
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
7.
SOLE VOTING POWER
    
       
 
0
    
       
8.
SHARED VOTING POWER
    
       
 
1,037*
    
       
9.
SOLE DISPOSITIVE POWER
    
       
 
0
    
10.
SHARED DISPOSITIVE POWER
    
       
 
1,037*
    
       
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
    
       
 
1,037*
    
       
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
[_]
       
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
    
       
 
32.8%**
    
       
14.
TYPE OF REPORTING PERSON
    
       
 
IN
    

* Consistent with the Securities and Exchange Commission's Auction Rate Securities Global Exemptive Relief no action letter issued on September 22, 2008, these amounts reflect Donald E. Morgan, III's combined holdings in the separate series of auction rate preferred shares of the issuer identified by the CUSIP numbers set forth on the cover page of this Schedule 13D Amendment, which are treated herein as one class of securities.
 
** Percentage calculation is based on the number of Issuer's Auction-Rate Preferred Shares outstanding as of January 31, 2014, as reported in the Issuer's Form N-CSRS filed on March 31, 2014.
 
 
 
 

This Amendment No. 14 ("Amendment No. 14") amends the Schedule 13D first filed with the Securities and Exchange Commission on January 28, 2011, as amended on March 10, 2011, April 29, 2011, July 15, 2011, September 9, 2011, September 21, 2011, October 24, 2011, November 14, 2011, December 1, 2011, February 29, 2012, May 10, 2012, June 6, 2012, August 1, 2013 and September 20, 2013 (the "Schedule 13D"), and is being filed by Brigade Leveraged Capital Structures Fund Ltd., a Cayman Islands exempted company ("Brigade LCSF"), Brigade Capital Management, LLC, a Delaware limited liability company ("Brigade CM") and Donald E. Morgan, III (each a "Reporting Person" and collectively the "Reporting Persons"), with respect to the Auction-Rate Preferred Shares, par value $.00001 per share ("Shares"), of PIMCO Income Strategy Fund, a Massachusetts business trust (the "Issuer").  Unless otherwise indicated herein, all capitalized terms used and not defined herein have the respective meanings assigned to them in the Schedule 13D.

Item 4.
Purpose of Transaction.
   
 
Item 4 is supplemented by the following:
 
At their request, the Reporting Persons have had discussions with representatives of the Issuer and its sub-advisor concerning financing alternatives to replace the Shares that the Reporting Persons believe should be attractive to the Issuer.  During these discussions, the Reporting Persons reviewed types of financings that the Reporting Persons believe should be available to the Issuer at rates that are less than the current dividend rates for the Shares.  The Reporting Persons also indicated during these discussions that they believe it could be in the best interests of both the holders of the Shares as well as the Issuer and its common shareholders for the Issuer to use these financing alternatives to make a tender offer for all outstanding Shares.  In this regard, the Reporting Persons commented on the material terms of a potential tender, including the tender price.  These discussions, which may continue, have not resulted in any agreements, commitments or understandings on either party's part concerning any transaction involving the Shares.
   
Item 6.
Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
   
 
Item 6 is supplemented by the following:
 
The Reporting Persons have entered into a Joint Filing Agreement, a copy of which is attached hereto as Exhibit A.
   
Item 7.
Material to be Filed as Exhibits.
   
 
Exhibit A: Joint Filing Agreement

 
 
 

SIGNATURE
 
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 

 
April 24, 2014
 
(Date)
   
   
 
Brigade Leveraged Capital Structures Fund Ltd.
   
 
/s/ Donald E. Morgan, III
 
(Signature)
   
 
Director
 
(Name/Title)
   
   
 
Brigade Capital Management, LLC*
   
 
By: /s/ Donald E. Morgan, III
 
(Signature)
   
 
Managing Member
 
(Name/Title)
   
   
 
/s/ Donald E. Morgan, III*
 
(Signature)


Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (see 18 U.S.C. 1001).
 
* The Reporting Persons disclaim beneficial ownership in the Shares reported herein except to the extent of their pecuniary interest therein.
 


 
 
 

Exhibit A

Joint Filing Agreement
 
Pursuant to Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended, each of the undersigned hereby agrees that only one statement containing the information required by Schedule 13D need be filed with respect to the ownership by each of the undersigned of PIMCO Income Strategy Fund.
 
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
 
 
April 24, 2014
 
(Date)
   
   
 
Brigade Leveraged Capital Structures Fund Ltd.
   
 
/s/ Donald E. Morgan, III
 
(Signature)
 
 
Director
 
(Name/Title)
 
   
 
Brigade Capital Management, LLC
   
 
By: /s/ Donald E. Morgan, III
 
(Signature)
   
 
Managing Member
 
(Name/Title)
   
 
/s/ Donald E. Morgan, III
 
(Signature)