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Sold All Shares of RiverNorth Capital and Income Fund Term Preferred

After pondering all last week I decided to unload all of my shares (703 shares) of the RiverNorth Capital and Income Fund term preferreds shares (RMPL-P). This is a 5.875% issue which has a mandatory redemption on 10/31/2024. My sale price was $24.98. While the issue meets my need for safety, the coupon is no longer adequate.

Given the level of interest rates this is somewhat substandard in yield–and yield to maturity. There is zero upside to the share price and what price movements we see now are all dividend related. Shares go ex-dividend in a couple weeks, but there is no benefit in waiting for that date.

At $24.50 or so I could re-enter to make the return a bit more palatable, but am really looking to lock in a fatter return for the long term.

7 thoughts on “Sold All Shares of RiverNorth Capital and Income Fund Term Preferred”

  1. Tim,

    Thx for the idea. Had 400 shares but also dumped them at $24.98 with the plan to pick up some +8% yielders as well.


  2. @Tim McPartland,

    You still have and like RIV-A the 6% coupon A-rated preferred?

    Currently trading in $22s, a decent 6.8% yield and not callable till 5/27 (by which yields likely lower and this along with other such preferreds will be trading higher). Perhaps worth adding to?

    1. mSquare – yes I still have it and it is under consideration for adds. Yes my thesis would be current yield plus 5-10% capital gain in a year or so.

  3. I’m getting a 7+%irr with the 4.75 divis over the next year to maturity. That doesn’t seem super subpar for a short term quality issue, or am I calculating it wrong?

    1. Irish—it is 5.875% coupon and trading at $25 with 1 year to redemption. I don’t calculate IRR’s, but your 7% is probably in the ball park, but I have my eye on 2 short maturity issues that are more in the 8% yield to maturity so am going to step up. You are right though that it isn’t too much sub par.

  4. Definitely food for thought. I have been sitting on 800 shares as part of my allotment that I know will be pinned to par. I always felt that the maturity date in 2024 would allow the whole “higher for longer” issue to have some money ready for it in case it happens. I kind of thought of it as locked up and I would not play around with it but you make a good point. Maybe the difference is I paid 25.65 per share quite a while back which keeps me from selling it which does not make much sense when you think about it.

    1. fc–as Irish mentioned it isn’t a greatly sub par return so I wouldn’t sweat it. The other issue I have is I am sitting with little ‘dry powder’ so to get some dry powder in the money market for a few weeks or month gives me a little flexibility. Of course I see some JPM CDs today at 5.8% (1 year callable).

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