RMMZ Announces the Approval of a 6.25% Level
Distribution Policy and Declares Monthly Distribution
RiverNorth Capital Management, LLC (“RiverNorth”), an investment
management firm specializing in opportunistic strategies, announced
the launch of the RiverNorth Managed Duration Municipal Income Fund
II, Inc. (the “Fund”), a new municipal bond focused closed-end
fund. RiverNorth acts as the investment adviser to the Fund and
MacKay Municipal ManagersTM, the municipal bond team within MacKay
Shields LLC ("MacKay Shields") acts as subadviser. This is the
fifth fund co-managed by the investment firms. The Fund used the
load waived pricing structure pioneered by RiverNorth. As a result,
investors did not pay any upfront expenses, which allowed the Fund
to be priced at $20.00 per share with an initial net asset value
(NAV) of $20.00 per share. Trading on the New York Stock Exchange
began on February 11, 2022 under the symbol "RMMZ.”
The Fund’s primary investment objective is current income exempt
from regular U.S. federal income taxes (but which may be includable
in taxable income for purposes of the Federal alternative minimum
tax). The Fund’s secondary investment objective is total return. As
the investment adviser, RiverNorth strategically allocates the
Fund’s assets between two principal investment strategies: the
Tactical Municipal Closed-End Fund Strategy, managed by RiverNorth,
and the Municipal Bond Income Strategy, managed by MacKay Municipal
ManagersTM. Additionally, the Fund has implemented a Managed
Duration Strategy which targets a weighted average effective
duration (excluding effects of leverage) within three years of the
weighted average effective duration of the Bloomberg US Municipal
Index**.
The Fund announced that its Board of Directors (the “Board”)
approved a 6.25% level distribution policy effective March 1, 2022
and has declared a monthly distribution of $0.1042 per share of
common stock, payable as noted below. In accordance with the level
distribution policy, the rate has been set equal to 6.25% of the
Fund’s initial public offering price of $20.00 per share.
The following dates apply to the distribution declared:
Ex Date
Record Date
Payable Date
March 16, 2022
March 17, 2022
March 31, 2022
Holders of the Fund’s common stock will receive the distribution
under one of two options:
1. Receive additional full and fractional shares of the Fund’s
common stock or, 2. Elect to receive cash for the distribution.
Investors should contact their broker-dealer where the shares
are held to confirm their distribution reinvestment election.
About RiverNorth
RiverNorth Capital Management, LLC is an investment management
firm founded in 2000. With approximately $5.8 billion in assets
under management as of December 31, 2021, RiverNorth specializes in
opportunistic investment strategies in niche markets where the
potential to exploit inefficiencies is greatest. RiverNorth is the
investment manager to multiple registered and private funds.
About MacKay Shields
MacKay Shields LLC is an indirect wholly-owned subsidiary of New
York Life Insurance Company and a wholly-owned subsidiary of New
York Life Investment Management Holdings LLC. MacKay Shields is a
fixed-income and equity investment management firm with
approximately $164 billion in assets under management as of
December 31, 2021. MacKay Shields manages fixed-income and equity
strategies for high-net worth individuals and institutional clients
through separately managed accounts and collective investment
vehicles including private funds, UCITS, ETFs, closed end funds and
mutual funds. MacKay Shields maintains offices in New York City,
Princeton, Los Angeles, London and Dublin.
Level Distribution Policy
As detailed in the prospectus, the Fund is implementing a level
distribution policy. The Fund’s intention under the level
distribution policy is to provide for monthly distributions to
stockholders at a constant and fixed (but not guaranteed) rate.
However, there can be no guarantee that the distribution policy
will be successful in its goals. The Fund’s ability to maintain a
stable level of distributions to stockholders will depend on a
number of factors, including changes in the financial market,
market interest rates, and performance of overall equity and fixed
income markets. As portfolio and market conditions change, the
ability of the Fund to continue to make distributions in accordance
with the level distribution policy may be affected.
The Board expects that any declaration of distributions to
stockholders, including final amounts and dates applicable to each,
will be made and announced quarterly. Stockholders have the option
of reinvesting these distributions in additional common stock
through the Fund’s automatic dividend reinvestment plan, or
electing to receive cash by contacting DST Systems, Inc. (the “Plan
Administrator”). For further information, stockholders should
carefully read the description of the dividend reinvestment plan in
the prospectus.
The Fund may at times, in its discretion, 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 addition to net investment income earned in other periods
in order to permit the Fund to maintain a stable level of
distributions. As a result, the distribution paid by the Fund to
stockholders for any particular period may be more or less than the
amount of net investment income earned by the Fund during such
period.
To the extent that sufficient investment income is not available
on a monthly basis, the Fund’s distributions may consist of return
of capital in order to maintain the distribution amount. A return
of capital occurs when some or all of the money that stockholders
invested in the Fund is paid back to them. A return of capital does
not necessarily reflect the Fund’s investment performance and
should not be confused with ‘yield’ or ‘income.’ Any such returns
of capital will decrease the Fund’s total assets and, therefore,
could have the effect of increasing the Fund’s expense ratio. In
addition, the level distribution policy may require the Fund to
sell its portfolio securities at a less than opportune time to meet
the distribution amount.
Monthly distributions from the Fund are expected to be generally
exempt from regular U.S. federal income taxes, however, a portion
of the Fund’s distributions may (i) be subject to U.S. federal
income tax, (ii) be includable in taxable income for purposes of
the federal alternative minimum tax, or (iii) constitute a return
of capital. Such distributions will also generally be subject to
state and local taxes. RiverNorth does not provide tax advice;
consult a professional tax advisor regarding your specific tax
situation.
Investors should not make any conclusions about the Fund’s
investment performance from the amount of the Fund’s distributions
or the Fund’s level distribution policy. With each distribution
that does not consist solely of net investment income, the Fund
will issue a notice to stockholders that will provide detailed
information regarding the amount and composition of the
distribution and other related information. The amounts and sources
of distributions reported in the notice to stockholders are only
estimates and are not being provided for tax reporting purposes.
The actual amounts and sources of the distributions for tax
reporting purposes will depend upon the Fund’s investment
experience during its full fiscal year and may be subject to
changes based on tax regulations. The Fund will send individual
stockholders a Form 1099-DIV for the calendar year that will tell
them how to report these distributions for federal income tax
purposes. In addition, the source of the monthly distributions will
be available on www.rivernorth.com.
The Fund is a closed-end fund and does not continuously issue
stock for sale as open-end mutual funds do. The Fund now trades in
the secondary market. Investors wishing to buy or sell stock need
to place orders through an intermediary or broker. The share price
of a closed-end fund is based on the market value.
Shares of closed-end investment companies frequently trade at a
discount to their net asset value and initial offering price. The
risk of loss due to this discount may be greater for initial
investors expecting to sell their shares in a relatively short
period after completion of the initial public offering.
The Fund is new and has limited performance history. An
investment in the Fund is not appropriate for all investors and is
not intended to be a complete investment program. The Fund is
designed as a long-term investment and not as a trading
vehicle.
Risk is inherent in all investing. Investing in any investment
company security involves risk, including the risk that you may
receive little or no return on your investment or even that you may
lose part or all of your investment. Therefore, before investing in
the Fund’s common stock, you should consider the risks as well as
the other information in the prospectus.
Fund Risks: Credit Risk - a borrower may be unable to make
interest or principal payments when they are due. Funds that invest
in Municipal Bonds rely on the ability of the issuer to service its
debt. This subjects the Fund to credit risk in that the municipal
issuer may be fiscally unstable or exposed to large liabilities
that could impair its ability to honor its obligations. Municipal
issuers with significant debt service requirements, in the near-to
mid-term, unrated issuers and those with less capital and liquidity
to absorb additional expenses may be most at risk. To the extent
the Fund invests in lower quality or high yield Municipal Bonds, it
may be more sensitive to the adverse credit events in the municipal
market. The treatment of municipalities in bankruptcy is more
uncertain, and potentially more adverse to debt holders, than for
corporate issues. Interest Rate Risk - the value of Municipal
Bonds, similar to other fixed income securities, will likely drop
as interest rates rise in the general market. Conversely, when
rates decline, bond prices generally rise.
Weighted average effective duration is a mathematical
calculation of the sensitivity of the price of a bond to changes in
interest rates, measuring a bond’s expected life on a present value
basis, taking into account the bond’s yield, interest payments,
final maturity and, in the case of a bond with an embedded option
(e.g., the right of the issuer to call the bond prior to maturity,
or a sinking fund schedule), the probability that the option will
be exercised.
Please consult your personal tax advisor regarding the tax
implications of owning this Fund.
Member Firm ALPS Distributors Inc. RiverNorth is not affiliated
with ALPS or MacKay Shields.
Investors should read the Fund’s prospectus and consider the
Fund's investment objectives, risks, charges and expenses carefully
before investing. For more information, please read the prospectus,
call your financial professional or call 844.569.4750.
*MacKay Municipal Managers™ is a trademark owned by MacKay
Shields LLC. ** The Bloomberg US Municipal Index is considered
representative of the broad market for investment grade, tax-exempt
bonds with a maturity of at least one year. The index cannot be
invested in directly and does not reflect fees and expenses.
RMI000261
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version on businesswire.com: https://www.businesswire.com/news/home/20220301006196/en/
Investor Contact Chris Lakumb, CFA, CAIA 312.445.2336
clakumb@rivernorth.com
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