RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. Announces Non-Transferable Rights Offering for Common and Preferred Stock

Rhea-AI Summary

RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (NYSE: OPP) announces a non-transferable rights offering for common and preferred stock. The offering allows stockholders of record as of November 5, 2024, to purchase additional shares of common stock and newly issued 6.00%, 3-Year Term, Series C Term Preferred Stock. For every six rights held, stockholders can buy two new common shares and one new preferred share. The subscription price for common stock will be based on a formula, while preferred stock will be priced at $10 per share. The subscription period expires on November 25, 2024. The Fund had approximately $341 million in total managed assets and 23.0 million shares of common stock outstanding as of September 30, 2024.

Positive

• Potential for increased capital through the rights offering
• Opportunity for existing shareholders to acquire additional shares at potentially favorable terms
• Introduction of new preferred stock with a 6.00% yield
• Planned NYSE listing for the new preferred shares (OPPPRC)

Negative

• Potential dilution of existing shareholders who do not participate in the offering
• New common shares not eligible for October and November 2024 monthly distributions
• New preferred shares not eligible for November 2024 preferred distributions

Insights

Financial Analyst

This rights offering is a significant event for RiverNorth/DoubleLine Strategic Opportunity Fund (OPP). It allows existing shareholders to purchase additional common shares and new preferred shares at potentially favorable terms. Key points:

• The offering includes both common stock and new 6.00% Series C Preferred Stock
• Shareholders get 1 right per common share, with 6 rights needed to buy 2 common and 1 preferred share
• Common stock pricing will be at least 90% of NAV or 95% of market price, whichever is higher
• Preferred stock priced at $10 per share
• Potential 50% increase in offering size based on demand

This could substantially increase the fund's assets under management, currently at $341 million. The preferred shares may also provide a more stable source of leverage. However, the offering will likely be dilutive to existing shareholders who don't fully participate. The impact on NAV and market price will depend on the subscription rate and how the new capital is deployed.

Investment Strategist

This rights offering presents both opportunities and challenges for investors. On the positive side, it allows existing shareholders to increase their stake at a potential discount and gain exposure to a new preferred share class. The 6.00% yield on the Series C Preferred Stock could be attractive in the current interest rate environment.

However, investors should consider:

• Dilution risk if they don't fully participate
• The fund's ability to effectively deploy the new capital
• The impact on the fund's expense ratio and overall leverage
• Potential pressure on the common share price during the offering period

Long-term, this could enhance the fund's ability to generate returns through increased scale and a more diversified capital structure. Short-term, it may create volatility and uncertainty. Investors should carefully evaluate their position and the fund's strategy before deciding whether to participate.

WEST PALM BEACH, Fla.--(BUSINESS WIRE)-- RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (the “Fund”) (NYSE: OPP) announces that its Board of Directors (the “Board”) has authorized and set the terms of an offering to the Fund’s stockholders of inseparable non-transferable rights to purchase additional shares of common stock and newly issued 6.00%, 3-Year Term, Series C Term Preferred Stock (the “Series C Preferred Stock”) of the Fund. It is anticipated that the Fund will apply for the preferred shares to be listed on the New York Stock Exchange (“NYSE”) under the ticker OPPPRC. If the NYSE application is approved, trading on the NYSE in the Series C Preferred Stock is expected to begin within 30 days following the issuance date of the Series C Preferred Stock.

In this offering, the Fund will issue non-transferable subscription rights (“Rights”) to its stockholders of record as of November 5, 2024 (the “Record Date” and such stockholders “Record Date Stockholders”) allowing the holder to subscribe for new shares of common stock and Series C Preferred Stock of the Fund (the “Primary Subscription”). Record Date Stockholders will receive one Right for each share of common stock held on the Record Date. For every six Rights held, a holder of Rights may buy two new shares of common stock and one new share of Series C Preferred Stock of the Fund. The number of Rights to be issued to a Record Date Stockholder will be rounded up to the nearest number of Rights evenly divisible by six. Fractional shares will not be issued upon the exercise of the Rights. Accordingly, new common and preferred shares may be purchased only pursuant to the exercise of Rights in integral multiples of six.

The shares of common stock issued as a result of the rights offering will not be record date shares for the Fund’s monthly distributions to be paid in October or November 2024 and therefore will not be entitled to those distributions. The shares of preferred stock issued will not be record dates shares for the preferred distributions to be paid in November 2024.

Record Date Stockholders who fully exercise their Rights will be entitled to subscribe for additional shares of common stock and Series C Preferred Stock (“Over-Subscription Shares”), subject to the limitations set forth in the prospectus supplement. The Over-Subscription Shares will be allocated pro rata to stockholders who over-subscribe based on the number of Rights originally issued to them. The Fund may increase the number of shares of common stock and Series C Preferred Stock subject to subscription by up to 50% of the shares available pursuant to the Primary Subscription. The Rights are non-transferable and, therefore, may not be purchased or sold. The shares of common stock and Series C Preferred Stock issued pursuant to the rights offering will be listed on the NYSE under the tickers: OPP, and OPPPRC, respectively.

The subscription price per share of common stock will be determined based upon a formula that will be no less than equal to 90% of the reported net asset value or 95% of the market price per share of common stock, whichever is higher on the Expiration Date (as defined below). The market price per share of common stock will be determined based on the average of the last reported sales price of a share of common stock on the NYSE for the five trading days preceding (and not including) the Expiration Date. The subscription price of Series C Preferred Stock will be $10 per share. The subscription period will expire at 5:00 p.m., Eastern Time, on November 25, 2024, unless extended by the Board (the “Expiration Date”).

The rights offering will be made pursuant to the Fund’s currently effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”), which continues to be effective through November 10, 2024. While the Fund’s currently effective shelf will technically expire during the rights offering, the Fund has filed a replacement shelf registration statement, which will extend the Fund’s ability to utilize the existing shelf through the completion of the rights offering. The rights offering will be made only by means of a prospectus supplement and accompanying prospectus. A final prospectus supplement and accompanying prospectus will be filed with the SEC but has not been filed as of the date of this release. The Company expects to mail subscription certificates evidencing the subscription rights and a copy of the prospectus supplement and accompanying prospectus for the rights offering shortly following the Record Date. These securities described in this release may not be sold nor may offers to purchase be accepted prior to the time the prospectus supplement and accompanying prospectus are filed with the SEC.

This press release shall not constitute an offer to sell or constitute a solicitation of an offer to buy.

RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.

The investment objective of the Fund is current income and overall total return. The Fund had approximately $341 million of total managed assets¹ and 23.0 million shares of common stock outstanding as of September 30, 2024.

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.

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 shares of common stock, you should consider the risks as well as the other information in the prospectus.

Past performance is no guarantee of future results.

Investors should consider the Fund's investment objective, risks, charges, and expenses carefully before investing. The prospectus should be read carefully before investing. For more information, please read the prospectus, call your financial professional or call 844.569.4750.

RiverNorth Capital Management, LLC

RiverNorth is an investment management firm founded in 2000 that specializes in opportunistic strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is the manager to multiple registered and private funds.

¹Managed Assets includes assets attributable to leverage and investments in affiliated funds.

Not FDIC Insured | May Lose Value | No Bank Guarantee
ALPS Distributors, Inc. is the FINRA Member Firm.
RiverNorth® is a registered trademark of RiverNorth Capital Management, LLC.
©2000-2024 RiverNorth Capital Management, LLC. All rights reserved.
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RiverNorth CEF Investor Relations

800-646-0148, Option 1

CEF@rivernorth.com

Source: RiverNorth Capital Management, LLC

FAQ

What is the rights offering ratio for OPP stock?

For every six rights held, stockholders can purchase two new common shares and one new share of Series C Preferred Stock of the Fund (OPP).

When is the record date for OPP's rights offering?

The record date for OPP's rights offering is November 5, 2024.

What is the expiration date for OPP's rights offering?

The subscription period for OPP's rights offering expires at 5:00 p.m., Eastern Time, on November 25, 2024, unless extended by the Board.

What is the pricing for OPP's new preferred stock in the rights offering?

The subscription price for OPP's new Series C Preferred Stock in the rights offering is $10 per share.