Virtus Convertible & Income Fund II Announces Quarterly Distribution: 5.500% Series A Cumulative Preferred Shares

Rhea-AI Summary

Virtus Convertible & Income Fund II (NCZ) declares a $0.34375 per share cash distribution for Series A cumulative preferred shareholders. The shares, rated 'A' by Fitch Ratings, have an annual dividend rate of $1.375 per share and were issued at $25.00 per share in 2018.

Financial Analyst

The declaration of a $0.34375 per share cash distribution by Virtus Convertible & Income Fund II for its Series A cumulative preferred shareholders is a reflection of the fund's ongoing commitment to return capital to its investors. The fund's ability to maintain this distribution rate is indicative of its financial health and operational stability. The 'A' rating by Fitch Ratings suggests a strong credit quality, which can be reassuring to investors looking for lower-risk income investments.

Preferred shares are often considered a hybrid between bonds and stocks, offering fixed dividends, which can be attractive during periods of market volatility. The callability feature at the liquidation value plus accrued dividends provides the issuing company with financial flexibility, while also indicating to shareholders the potential for these securities to be redeemed at the company's discretion.

Investors should consider the implications of the call feature, as it may impact their investment strategy. The callable nature of the shares could lead to a retraction of the securities from the market, which would end the accrual of dividends. However, the call feature is typical for preferred shares and should not be a surprise to seasoned investors.

Market Research Analyst

The market for preferred shares can be influenced by interest rate trends, as these securities tend to have bond-like characteristics. With the Federal Reserve's monetary policy influencing yield curves, investors in Series A Cumulative Preferred Shares should monitor the interest rate environment. An increase in rates could potentially decrease the attractiveness of the fixed dividend rate of $1.375 per share, as new issues might offer higher yields.

Furthermore, the performance of Virtus Convertible & Income Fund II in the broader market context should be analyzed. The fund's sector allocations, management performance and underlying asset quality are critical factors that could affect its ability to sustain dividend payments to preferred shareholders. A comprehensive understanding of these factors is essential for stakeholders to assess the long-term viability of their investment.

Legal Expert

The legal implications of the call feature must be understood by shareholders. The terms of the call option allow Virtus Convertible & Income Fund II to repurchase the shares at the liquidation value plus accrued dividends, which is standard practice for preferred shares. Shareholders should be aware of the terms outlined in the prospectus and any shareholder agreements. The call feature's activation is at the company's discretion and it is typically exercised when it is financially advantageous for the company, such as in a declining interest rate environment where the company can refinance at a lower cost.

It is also important for shareholders to understand the tax implications of dividend distributions, as they may differ from those of common stock dividends. The preferential tax treatment of qualified dividend income may not apply to all investors and this should be considered when evaluating the overall return on investment.

HARTFORD, Conn.--(BUSINESS WIRE)-- Virtus Convertible & Income Fund II (NYSE: NCZ) announced today that it has declared a $0.34375 per share cash distribution payable on March 29, 2024 to Series A cumulative preferred shareholders of record on March 11, 2024.

The Series A Cumulative Preferred Shares, which trade on the New York Stock Exchange under the symbol NCZ PR A, are rated “A” by Fitch Ratings and have an annual dividend rate of $1.375 per share. The 4,360,000 Series A Cumulative Preferred Shares were issued September 11, 2018 at $25.00 per share and pay distributions quarterly. This distribution represents the accrual period from January 1, 2024 through March 31, 2024. The Series A Cumulative Preferred Shares are now callable at any time at the liquidation value of $25.00 per share plus accrued dividends.

About the Fund

Virtus Convertible & Income Fund II has an investment objective to provide total return through a combination of capital appreciation and high current income. Virtus Investment Advisers, Inc. is the investment adviser to the fund and Voya Investment Management is its subadviser.

For more information on this fund, contact shareholder services at (866) 270-7788, by email at closedendfunds@virtus.com, or through the Closed-End Funds section on the web at virtus.com.

Fund Risks

An investment in a fund is subject to risk, including the risk of possible loss of principal. A fund’s shares may be worth less upon their sale than what an investor paid for them. Shares of closed-end funds may trade at a premium or discount to their net asset value. For more information about the fund’s investment objective and risks, please see the fund’s annual report. A copy of the fund’s most recent annual report may be obtained free of charge by contacting “Shareholder Services” as set forth at the end of this press release.

About Virtus Investment Partners, Inc.

Virtus Investment Partners (NYSE: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. We provide investment management products and services from our affiliated managers, each with a distinct investment style and autonomous investment process, as well as select subadvisers. Investment solutions are available across multiple disciplines and product types to meet a wide array of investor needs. Additional information about our firm, investment partners, and strategies is available at virtus.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240301577336/en/

For Further Information:

Shareholder Services

(866) 270-7788

closedendfunds@virtus.com

Source: Virtus Convertible & Income Fund II

What is the cash distribution declared by Virtus Convertible & Income Fund II (NCZ) for Series A cumulative preferred shareholders?

Virtus Convertible & Income Fund II (NCZ) declared a $0.34375 per share cash distribution payable on March 29, 2024.

When will the cash distribution be payable to Series A cumulative preferred shareholders of Virtus Convertible & Income Fund II (NCZ)?

The cash distribution will be payable on March 29, 2024, to Series A cumulative preferred shareholders of Virtus Convertible & Income Fund II (NCZ) who are on record on March 11, 2024.

What is the annual dividend rate for the Series A Cumulative Preferred Shares of Virtus Convertible & Income Fund II (NCZ)?

The annual dividend rate for the Series A Cumulative Preferred Shares of Virtus Convertible & Income Fund II (NCZ) is $1.375 per share.

When were the Series A Cumulative Preferred Shares of Virtus Convertible & Income Fund II (NCZ) issued and at what price?

The 4,360,000 Series A Cumulative Preferred Shares were issued on September 11, 2018, at $25.00 per share.

What is the current rating of the Series A Cumulative Preferred Shares of Virtus Convertible & Income Fund II (NCZ) by Fitch Ratings?

The Series A Cumulative Preferred Shares of Virtus Convertible & Income Fund II (NCZ) are rated 'A' by Fitch Ratings.