Virtus Convertible & Income Fund II Postpones Monthly Distribution on Common Shares

Rhea-AI Summary

Virtus Convertible & Income Fund II (NYSE: NCZ), announced a postponement of its monthly distribution of $0.0375 per common share, initially set for October 3, 2022. This decision is due to a decline in the values of the Fund's portfolio securities, resulting in asset coverage ratio falling below the 200% minimum requirement under the Investment Company Act of 1940. The fund will resume distributions once the asset coverage ratio is compliant.

Positive

• None.

Negative

• Postponement of monthly distribution indicating financial distress.
• Asset coverage ratio fell below required 200%, raising compliance concerns.

HARTFORD, Conn., Oct. 3, 2022 /PRNewswire/ -- Virtus Convertible & Income Fund II (NYSE: NCZ), a closed-end fund, today announced that it has postponed payment of its monthly distribution of $0.0375 per common share that was scheduled to be paid on October 3, 2022 to shareholders of record as of September 12, 2022, and has postponed declaration of its monthly distribution of $0.0375 per common share that was scheduled to be declared on October 3, 2022 for payment on November 1, 2022.

Recent market dislocations have caused the values of the Fund's portfolio securities to decline and, as a result, the Fund's asset coverage ratio for total leverage as of September 30, as calculated in accordance with the Investment Company Act of 1940, was below the 200% minimum asset coverage guideline. Compliance with the asset coverage ratio is required by the Fund's governing documents for declaration or payment of the monthly distribution. As a result, the Fund is not authorized to declare or pay its monthly distribution until the coverage ratio is in compliance. The Fund intends to pay the October 3 common share distribution and resume declaration and payment of its monthly common share distributions once its coverage ratio is in compliance.

About the Fund
Virtus Convertible & Income Fund II has an investment objective to provide total return through a combination of capital appreciation and high current income. Virtus Investment Advisers, Inc. is the investment adviser of the fund and Voya Investment Management manages the fund in a subadvisory capacity. For more information, contact shareholder services at 866-270-7788, by email at closedendfunds@virtus.com, or through the closed-end fund section of www.virtus.com.

Fund Risks
An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund's shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their net asset value. For more information about the Fund's investment objective and risks, please see the Fund's annual report. A copy of the fund's most recent annual report may be obtained free of charge by contacting "Shareholder Services" as set forth at the end of this press release.

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SOURCE Virtus Funds

FAQ

Why did Virtus Convertible & Income Fund II (NCZ) postpone its monthly distribution in October 2022?

The postponement was due to a decline in the Fund's portfolio securities, causing its asset coverage ratio to fall below the required 200% minimum.

When was the scheduled payment for the monthly distribution of Virtus Convertible & Income Fund II (NCZ)?

The monthly distribution was originally scheduled for payment on October 3, 2022.

What is the amount of the postponed monthly distribution for NCZ?

The postponed amount was $0.0375 per common share.

What must happen for Virtus Convertible & Income Fund II (NCZ) to resume its monthly distributions?

The Fund must achieve compliance with its asset coverage ratio before it can declare or pay its monthly distributions.