Update: RiverNorth Capital and Income Fund, Inc. to Redeem Its Outstanding 5.875% Series A Term Preferred Stock

Rhea-AI Summary

RiverNorth Capital and Income Fund, Inc. (NYSE: RSF) has announced an update to its previously disclosed plan to redeem all 1,656,000 outstanding shares of its 5.875% Series A Term Preferred Stock (NYSE: RMPL). The redemption date has been moved to October 31, 2024, from the initially anticipated date of October 4, 2024.

The redemption price is estimated at $25.31 per share, which includes the $25.00 liquidation preference plus $0.31 in estimated accrued and unpaid dividends. Following the redemption, the Series A Preferred Stock will cease to be outstanding, and all associated rights and dividend accumulations will end.

The Fund, with approximately $113 million in total managed assets as of August 31, 2024, aims to provide a high level of current income. RiverNorth Capital Management, , the Fund's investment manager, specializes in opportunistic investment strategies and manages $5.1 billion in assets as of the same date.

Positive

• Redemption of preferred stock may improve the Fund's capital structure
• Fund has $113 million in total managed assets
• RiverNorth Capital Management manages $5.1 billion in assets

Negative

• Preferred stockholders will lose their dividend income stream after redemption
• Suspension of Series A Preferred Stock from NYSE may affect liquidity for holders

Insights

Financial Analyst

The redemption of RiverNorth Capital and Income Fund's Series A Preferred Stock is a significant financial event for the company. The redemption price of $25.31 per share, including $0.31 in estimated accrued dividends, represents a full return of principal plus additional value for preferred shareholders. This move will impact the Fund's capital structure and potentially its leverage ratio.

The redemption of all 1,656,000 outstanding shares will result in a total payout of approximately $41.9 million. This action may indicate that the Fund has found more cost-effective financing or is adjusting its capital structure in response to market conditions. The suspension of the Series A Preferred Stock from NYSE trading on the redemption date will affect liquidity for any remaining holders.

For common shareholders of RSF, this could be viewed positively as it eliminates a senior claim on the Fund's assets and earnings. However, it's important to consider how the Fund plans to replace this capital, if at all and the potential impact on its investment strategy and income generation capabilities going forward.

Market Research Analyst

The redemption of the Series A Preferred Stock could signal a shift in RiverNorth's strategy or market outlook. With $113 million in total managed assets as of August 31, 2024, the Fund's decision to redeem $41.9 million in preferred stock is substantial, representing about 37% of its managed assets.

This move may be in response to changing interest rate environments or a reassessment of the Fund's optimal capital structure. It's worth noting that RiverNorth specializes in opportunistic investment strategies in niche markets, so this redemption could free up capital for new opportunities they've identified.

The impact on the Fund's income-generating ability is a key consideration, given its objective to seek a high level of current income. Investors should watch for any subsequent announcements regarding new investment strategies or potential replacement of the redeemed capital to maintain income levels.

WEST PALM BEACH, Fla.--(BUSINESS WIRE)-- As announced in a press release dated September 4, 2024 (the “Prior Announcement”), the Board of Directors of the RiverNorth Capital and Income Fund, Inc. (the “Fund”) (NYSE: RSF) has authorized the redemption of all 1,656,000 outstanding shares of its 5.875% Series A Term Preferred Stock (the “Series A Preferred Stock”) (NYSE: RMPL).

The Prior Announcement had noted an anticipated redemption date of October 4, 2024; however, the Fund has determined that the redemption will occur on October 31, 2024 (the “Mandatory Redemption Date”). The Series A Preferred Stock redemption price is now estimated to be $25.31 per share of Series A Preferred Stock, which is equal to the liquidation preference of $25.00 per share plus $0.31 per share representing estimated accrued and unpaid dividends to the Mandatory Redemption Date. Once redeemed, the Series A Preferred Stock will no longer be deemed outstanding, dividends will cease to accumulate and all rights of the holders of the Series A Preferred Stock with respect to the Series A Preferred Stock will cease. The Fund has filed a notice of its intention to redeem the Series A Preferred Stock with the Securities and Exchange Commission.

In conjunction with the planned redemption, the Series A Preferred Stock will be suspended from the New York Stock Exchange (“NYSE”) before market open on the Mandatory Redemption Date.

All shares of the Series A Preferred Stock are held through the Depository Trust Company ("DTC") and shares will be redeemed in accordance with the procedures of DTC. Payment to DTC for the Series A Preferred Stock will be made by DST Systems, Inc. as redemption agent. Any questions may be directed to the redemption agent toll-free at 844-569-4750.

RiverNorth Capital and Income Fund, Inc.

The Fund is a closed-end fund whose investment objective is to seek a high level of current income. As of August 31, 2024, RSF had approximately $113 million of total managed assets¹ and 3.9 million shares of common stock outstanding.

Closed-end funds are traded on the secondary market through one of the stock exchanges. The Fund's investment return and principal value will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value of the fund's portfolio. There is no assurance that the Fund will achieve its investment objective.

RiverNorth Capital Management, LLC

RiverNorth Capital Management, LLC is an investment management firm founded in 2000. With $5.1 billion¹ in assets under management as of August 31, 2024, RiverNorth specializes in opportunistic investment strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is an institutional investment manager to registered funds, private funds, and separately managed accounts.

Forward-Looking Statements

This press release may contain forward-looking statements that reflect current expectations about the future results, performance, or actions of the Fund and can be identified by words such as “may,” “will,” “expect,” “plans,” “intend,” “anticipate”, “should,” “estimate” or similar expressions. These statements are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements because of a number of factors, including those described in the Fund’s filings with the Securities and Exchange Commission including the prospectus, dated February 28, 2024 (the “Prospectus”). The Fund undertakes no duty to update any forward-looking statement made herein.

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.

Investing in the Fund involves certain risks, including loss of principal, that are described in the "Risks" section of the Prospectus.

Marketing services provided by ALPS Distributors Inc.

RiverNorth Capital Management, LLC is not affiliated with ALPS Distributors, Inc. or DST Systems, Inc.

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

RiverNorth® is a registered trademark of RiverNorth Capital Management, LLC.
©2000-2024 RiverNorth Capital Management, LLC. All rights reserved.
RVN001732

View source version on businesswire.com: https://www.businesswire.com/news/home/20240930334415/en/

Investor Contact

RiverNorth CEF Investor Relations

800-646-0148, Option 1

CEF@rivernorth.com

Source: RiverNorth Capital Management, LLC

FAQ

When will RiverNorth Capital and Income Fund (RSF) redeem its Series A Preferred Stock?

RiverNorth Capital and Income Fund (RSF) will redeem its Series A Preferred Stock on October 31, 2024, which is the updated Mandatory Redemption Date.

What is the redemption price for RSF's Series A Preferred Stock?

The estimated redemption price for RSF's Series A Preferred Stock is $25.31 per share, which includes the $25.00 liquidation preference plus $0.31 in estimated accrued and unpaid dividends.

How many shares of Series A Preferred Stock will RSF redeem?

RSF will redeem all 1,656,000 outstanding shares of its 5.875% Series A Term Preferred Stock.

What happens to RSF's Series A Preferred Stock after the redemption?

After redemption, RSF's Series A Preferred Stock will no longer be outstanding, dividends will cease to accumulate, and all rights of the holders will cease.