8-K: RiverNorth Capital and Income Fund Announces Redemption and Delisting of Series A Preferred Stock

RiverNorth Capital and Income Fund will redeem all outstanding shares of its 5.875% Series A Term Preferred Stock on October 31, 2024, leading to its delisting from the NYSE.

Summary

• RiverNorth Capital and Income Fund, Inc. has announced the redemption of all 1,656,000 outstanding shares of its 5.875% Series A Term Preferred Stock.
• The redemption date is set for October 31, 2024, which is a change from the previously anticipated date of October 4, 2024.
• The redemption price is estimated to be $25.31 per share, consisting of the $25.00 liquidation preference plus $0.31 for accrued and unpaid dividends.
• Following the redemption, the Series A Preferred Stock will be delisted from the New York Stock Exchange (NYSE).
• The company has filed a notice of its intention to redeem the Series A Preferred Stock with the Securities and Exchange Commission.

Sentiment

Score: 7

Explanation: The document is neutral to slightly positive. The redemption is a planned event, and the terms are fair to preferred shareholders. The delay is a minor negative, but overall, the announcement is not unexpected.

Positives

• The redemption price includes accrued and unpaid dividends, providing a small premium to the liquidation preference for preferred shareholders.
• The company has clearly communicated the redemption process and provided contact information for inquiries.
• The company has filed the required notices with the SEC.

Negatives

• The redemption of the Series A Preferred Stock will result in its delisting from the NYSE.
• The redemption date was changed from the previously announced date, which may cause some confusion for investors.

Risks

• The document contains forward-looking statements that are subject to risks and uncertainties.
• The fund's investment return and principal value will fluctuate, and there is no assurance that the fund will achieve its investment objective.
• Investing in the fund involves certain risks, including loss of principal.

Future Outlook

The document contains forward-looking statements that are subject to risks and uncertainties, and the fund undertakes no duty to update these statements.

Management Comments

• The Board of Directors of the RiverNorth Capital and Income Fund, Inc. has authorized the redemption of all outstanding shares of its 5.875% Series A Term Preferred Stock.
• The Fund has determined that the redemption will occur on October 31, 2024.

Industry Context

The redemption and delisting of preferred stock is a relatively common event for closed-end funds, often done to streamline capital structure or when the terms of the preferred stock reach maturity. This action is specific to RiverNorth's Series A Preferred Stock and does not necessarily reflect broader trends in the closed-end fund industry.

Comparison to Industry Standards

• The redemption of preferred stock at liquidation preference plus accrued dividends is a standard practice in the closed-end fund industry.
• Other closed-end funds, such as those managed by BlackRock or Nuveen, also periodically redeem preferred shares as part of their capital management strategies.
• The specific redemption price of $25.31 per share is in line with typical terms for preferred stock redemptions, where accrued dividends are included.

Stakeholder Impact

• Holders of the Series A Preferred Stock will receive $25.31 per share on the redemption date.
• The Series A Preferred Stock will no longer be outstanding, and dividends will cease to accumulate.
• The delisting of the Series A Preferred Stock will remove it from the NYSE.

Next Steps

• The Series A Preferred Stock will be suspended from trading on the NYSE before market open on October 31, 2024.
• Payment for the redeemed shares will be made through the Depository Trust Company (DTC) by DST Systems, Inc.

Key Dates

Keywords

preferred stock, redemption, delisting, NYSE, RiverNorth Capital and Income Fund, dividends, closed-end fund