RiverNorth and MacKay Municipal ManagersTM* Launch the RiverNorth Managed Duration Municipal Income Fund II, Inc. (RMMZ)
RiverNorth Capital Management has launched the RiverNorth Managed Duration Municipal Income Fund II (symbol: RMMZ), a closed-end municipal bond fund trading on the NYSE since February 11, 2022.
The Fund has a primary objective of generating current income exempt from U.S. federal income taxes and a secondary objective of total return. A 6.25% level distribution policy has been approved, with monthly distributions of $0.1042 per share, beginning March 1, 2022.
- The Fund aims to deliver tax-exempt income and has a defined distribution policy.
- Monthly distributions are set at a competitive rate of $0.1042 per share, or 6.25% of the initial offering price.
- The distribution policy is not guaranteed, relying on market conditions and fund performance.
- Distributions may include return of capital, which could reduce total assets and increase expense ratios.
RMMZ Announces the Approval of a
The Fund’s primary investment objective is current income exempt from regular
The Fund announced that its Board of Directors (the “Board”) approved a
The following dates apply to the distribution declared:
Ex Date |
Record Date |
Payable Date |
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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
About
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
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
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.
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
** 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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Investor Contact
312.445.2336
clakumb@rivernorth.com
Source:
FAQ
What is the distribution policy for the RMMZ Fund?
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