CHICAGO--(BUSINESS WIRE)--RiverNorth Marketplace Lending Corporation (the “Fund”) announced pertinent updates related to the listing of the Fund’s shares on the New York Stock Exchange (the “NYSE”). The NYSE listing date has been tentatively set for June 12, 2019. The Fund’s shares will be listed under the ticker symbol RSF, and the NAV tracker is XRSFX. In addition, the Fund’s Board of Directors (the “Board”) approved several actions, specifically: a third quarter interval repurchase offer of up to 15% of the Fund’s outstanding common shares, a $35 million common stock buyback plan, and a 10% level distribution plan.
“From our perspective, the interval repurchase offer coupled with the common stock buyback plan provides enhanced liquidity for shareholders while allowing the Fund to opportunistically repurchase shares in the secondary market,” said Patrick Galley, Chief Investment Officer of RiverNorth Capital Management, LLC. “We also believe the 10% level distribution plan represents a compelling yield profile for investors. Given our deep, long-tenured knowledge and understanding of the closed-end fund landscape, it is our view that these are powerful tools which secondary-market closed-end fund buyers may find attractive.”
More information follows below:
Third Quarter Interval Repurchase Offer
The Board has approved a third quarter interval repurchase offer of up to 15% of the Fund’s outstanding common shares. The offer period will begin on June 13, 2019 and end on July 10, 2019.
Common Stock Buyback Plan
The Board has approved a $35 million common stock buyback plan whereby the Fund can buy its shares in the secondary market at levels it deems attractive. The common stock buyback plan will be in place for the next 12 months and established as an open-market purchase program. While other conditions and restrictions will apply, the Fund will not buy back its shares during the interval redemption notice period.
Level Distribution Plan
The Board has approved the implementation of a level distribution plan (LDP) and a change in distribution frequency from quarterly to monthly, effective July 2019. The Fund intends to make monthly distributions to shareholders at an annual rate equal to 10% of the Fund’s common shares’ NAV as of the last business day of its fiscal year, which is June 30. Since the distribution amount is tied to the Fund’s NAV and will be adjusted each fiscal year, the LDP should better allow the Fund to maintain stable, consistent, and predictable rates of distribution that are more sustainable over the long-term. The distribution amount will not always reflect the Fund’s investment income or capital gains, and could be a combination of income, capital gains and return of capital.
The Board expects that any declaration of distributions to common stockholders, including final amounts and dates applicable to each, will be made and announced quarterly. Common stockholders have the option of reinvesting these distributions in additional common shares through the Fund’s automatic dividend reinvestment plan. In the event the Fund’s common shares are trading at a discount to the Fund’s NAV, dividends will be acquired through open-market purchases. In the event the Fund’s common shares are trading at a premium to the Fund’s NAV, newly issued common shares will be delivered based on the net asset value per common share. If electing to receive cash, stockholders should contact DST Systems, Inc. (the “Plan Administrator”).
RiverNorth Capital Management, LLC is an investment management firm founded in 2000. With approximately $3.7 billion in assets under management as of April 30, 2019, RiverNorth specializes in opportunistic investment strategies in niche markets where the potential to exploit inefficiencies is greatest. RiverNorth is the investment manager to multiple registered and private funds, including the Fund.
Investing in Shares of the Fund involves certain risks, including loss of principal, that are described in the “Risks” section of the Fund’s prospectus, including the following:
Shares of closed-end investment companies frequently trade at a discount to their net asset value and initial offering price.
The Fund is classified as non-diversified, which means the Fund may invest a larger percentage of its assets in the securities of a smaller number of issuers than a diversified fund. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers.
If a borrower of a marketplace loan is unable to make its payments on a loan, the Fund may be greatly limited in its ability to recover any outstanding principal and interest under such loan, as (among other reasons) the Fund may not have direct recourse against the borrower or may otherwise be limited in its ability to directly enforce its rights under the loan, whether through the borrower or the platform through which such loan was originated, the loan may be unsecured or under-collateralized, and/or it may be impracticable to commence a legal proceeding against the defaulting borrower.
The marketplace lending instruments in which the Fund may invest will not typically be guaranteed or insured by any third-party and will not typically be backed by any governmental authority. Prospective borrowers supply a variety of information regarding the purpose of the loan, income, occupation and employment status (as applicable) to the lending platforms. As a general matter, platforms do not verify the majority of this information, which may be incomplete, inaccurate, false or misleading. Prospective borrowers may misrepresent any of the information they provide to the platforms, including their intentions for the use of the loan proceeds. Marketplace lending instruments are generally not rated by the nationally recognized statistical rating organizations (“NRSROs”). Such unrated instruments may be comparable in quality to securities falling into any of the ratings categories used by such NRSROs. Accordingly, certain of the Fund’s unrated investments could constitute a highly risky and speculative investment, similar to an investment in “junk” bonds. At any given time, the Fund’s portfolio may be substantially illiquid and subject to increased credit and default risk. As a result of the foregoing and other risks described in the Fund’s prospectus, an investment in the Fund is considered to be highly speculative. The marketplace lending instruments in which the Fund may invest may have varying degrees of credit risk and the Fund will not be restricted by any borrower credit criteria or credit risk limitation. There can be no assurance that payments due on underlying marketplace loans will be made.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The Fund’s prospectus and most recent periodic reports contain this and other important information about the investment company, and may be obtained by visiting rivernorth.com/literature or by calling 844.569.4750. Read the Prospectus carefully before investing.
The default history for marketplace lending is limited and future defaults may be higher than historical defaults.
The distribution policy to declare and pay regular distributions may be changed or discontinued without notice. Distributions may consist of income, capital gains and return of capital. Past distributions have not included any return of investor capital.
It is possible that a repurchase offer may be oversubscribed, in which case shareholders may only have a portion of their shares repurchased. Subject to the above, repurchase offers and liquidity are limited.
RiverNorth Marketplace Lending Corporation is distributed by Quasar Distributors, LLC. Member of FINRA. Quasar Distributors is unaffiliated with RiverNorth Capital Management.