Nuveen muni merger would fold NXJ, NQP, Missouri fund into NMZ (NXJ)
Rhea-AI Filing Summary
Nuveen is asking shareholders to approve a merger of three state-specific municipal funds into Nuveen Municipal High Income Opportunity Fund (NMZ). Common shares of Nuveen New Jersey Quality Municipal Income Fund (NXJ), Nuveen Pennsylvania Quality Municipal Income Fund (NQP), and Nuveen Missouri Quality Municipal Income Fund would be exchanged for newly issued NMZ common shares, with all four funds’ preferred shareholders also voting.
As of July 31, 2025, the combined fund would have about $3.37 billion in managed assets, with NMZ representing 53.9% of that total. Post‑merger, the projected common earnings yield for NXJ, NQP and the Missouri fund rises to 6.17%, implying gains of roughly 2.6–2.9 percentage points, while taxable equivalent rates for those funds increase by about 3.6–4.3 percentage points.
Total expense ratios are expected to decline for each target fund, with indicated savings of 0.34% for NXJ, 0.24% for NQP and 1.42% for the Missouri fund, and bid/ask spreads and average daily trading volume are shown improving. However, preferred shareholders moving into NMZ will lose existing state tax gross‑up provisions, and the combined portfolio will hold more lower‑rated municipal securities, reflecting NMZ’s credit profile, though it will also be more diversified, with 909 holdings as of December 31, 2025.
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Insights
Proposed merger boosts yield and scale but changes credit mix and tax terms.
The proposal combines NXJ, NQP and the Missouri fund into NMZ, creating a larger platform with about
For preferred shareholders, the trade‑off is more nuanced. They would move into NMZ’s nationally diversified portfolio and lose existing state tax gross‑up provisions tied to state income taxation. At the same July 31, 2025 snapshot, the combined fund shows a leverage ratio of
The materials also note that the combined fund will hold more lower‑rated municipal securities, consistent with NMZ’s credit profile, but with broader diversification across 909 holdings as of
Filed by Nuveen Municipal High Income Opportunity Fund
(Commission File No. 333-290590)
pursuant to Rule 425 under the Securities Act of 1933, as amended,
and deemed filed pursuant to Rule 14a-6 under the Securities Exchange Act of 1934, as amended
Subject Company: Nuveen New Jersey Quality Municipal Income Fund
(Commission File No. 811-09455)
Nuveen New Jersey Quality Municipal Income Fund (NXJ)
Nuveen Pennsylvania Quality Municipal Income Fund (NQP)
Nuveen Missouri Quality Municipal Income Fund (NOM)
Nuveen Municipal High Income Opportunity Fund (NMZ)
Supplemental Material for Proxy Advisory Firm
January 23, 2026
Holders of common shares of Nuveen New Jersey Quality Municipal Income Fund (NXJ), Nuveen Pennsylvania Quality Municipal Income Fund (NQP), Nuveen Missouri Quality Municipal Income Fund (NOM), and Nuveen Municipal High Income Opportunity Fund (NMZ) are being asked to vote on a proposal which would result in the merger of NXJ, NQP, and NOM into a wholly-owned subsidiary of NMZ in exchange for newly issued common shares of NMZ. Preferred shareholders are also being asked to vote on the proposal.
Below is additional information related to the Joint Proxy Statement/Prospectus dated December 17, 2025, and the Joint Proxy Statement dated December 19, 2025.
With respect to common shareholders, we provide the following information:
| · | The merger would significantly increase scale for the target funds (NXJ, NQP, and NOM), while also adding incremental scale for the acquiring fund (NMZ). |
| As of July 31, 2025 | |||||
| NXJ | NQP | NOM | NMZ | Combined Fund | |
| Common Assets | 501,884,779 | 437,292,921 | 23,840,916 | 1,157,766,050 | 2,120,784,666 |
| Managed Assets | 857,139,779 | 654,792,921 | 41,230,499 | 1,814,979,107 | 3,368,142,306 |
| % of Combined Fund | 25.4% | 19.4% | 1.2% | 53.9% | |
| · | NMZ’s common earnings yield is higher than all three target funds, and it is expected that NMZ will be able to maintain or improve its overall yield following the portfolio transition post-merger. Using the highest federal and state rates, the combined NMZ fund is expected to provide all target fund common shareholders meaningfully higher taxable equivalent yields. Common shareholders who remain in the fund post-merger are expected to receive higher common earnings on a before- and after-tax basis. |
| As of July 31, 2025 | ||||
| NXJ | NQP | NOM |
NMZ Post-Merger | |
| Common Earnings Yield | 3.30% | 3.54% | 3.32% | 6.17% |
| Change | +2.87% | +2.63% | +2.85% | N/A |
| Max Federal and State Tax Rate | 51.55% | 43.87% | 45.60% | 40.80% |
| Taxable Equivalent Rate | 6.81% | 6.31% | 6.10% | 10.42% |
| Change | +3.61% | +4.11% | +4.32% | N/A |
| · | Total expenses are expected to decline for all funds as a result of the merger. Other expenses are expected to decline for all funds due to increased scale with fixed costs being spread over a larger asset base. Additionally, the capital structure post-merger is expected to deliver financing cost savings to state fund common shareholders as the blend between preferred and tender option bond leverage will be more optimally balanced. |
|
Management Fees |
Other Expenses |
Leverage Costs | Total Expenses | Expense Savings | |
| NXJ | 0.97% | 0.10% | 2.78% | 3.85% | 0.34% |
| NQP | 0.98% | 0.11% | 2.66% | 3.75% | 0.24% |
| NOM | 1.03% | 0.97% | 2.93% | 4.93% | 1.42% |
| NMZ | 1.04% | 0.08% | 2.47% | 3.59% | 0.08% |
| Combined Fund | 1.02% | 0.08% | 2.41% | 3.51% |
| · | As a result of greater market capitalization, we anticipate the combined NMZ fund will experience better secondary market trading of common shares in terms of narrower bid/ask spreads and greater liquidity. NXJ, NQP, and NOM common shareholders through the merger into NMZ should experience significant bid/ask spread improvement as well as materially greater liquidity. |
| As of July 31, 2025 | |||
| 6 Month Avg Bid/Ask Spreads (bps) | Bid/Ask Spread Improvement (bps) | Average Daily Trading Volume | |
| NXJ | 21.16 | +16.14 | Increase |
| NQP | 28.37 | +8.93 | Increase |
| NOM | 265.44 | +253.20 | Increase |
| NMZ | 15.63 | Improves | Increase |
| · | NMZ has traded better in the secondary market over time. As a result of the mergers, common shares of the combined fund are expected to trade at materially narrower discounts relative to the historical discounts of NXJ, NQP, and NOM. Below is the premium/discount history for the funds as of July 31, 2025. |
| NXJ | NQP | NOM | NMZ | |
| 1-Year Average | -7.57% | -8.72% | -2.28% | -0.09% |
| 3-Year Average | -11.67% | -12.35% | -7.44% | -3.51% |
| 5-Year Average | -11.35% | -11.18% | -2.21% | -1.56% |
| · | Over the long-term, NMZ has consistently produced higher returns for common shares based on NAV when compared to the target funds. NMZ’s national mandate and broader investable universe has contributed to its outperformance when compared to the target funds. |
| As of July 31, 2025 | |||
| Return on NAV | |||
| 1Y | 5Y | 10Y | |
| NXJ | -3.82% | -1.35% | 2.35% |
| NQP | -6.94% | -1.39% | 1.75% |
| NOM | -6.50% | -2.07% | 1.23% |
| NMZ | -6.85% | -0.22% | 2.75% |
| · | When summarizing net benefits to common shareholders, it is expected that all fund common shareholders will experience meaningful scale benefits including improved secondary market trading, tighter bid/ask spreads, higher after-tax earnings for state fund common shareholders, and reduced expenses and leverage costs. |
| As of July 31, 2025 | NXJ | NQP | NOM | NMZ |
| Operating Change Summary | ||||
| Common Earnings Yield Change | +2.87% | +2.63% | +2.85% | No Change |
| Taxable Equivalent Rate Change1 | +3.61% | +4.11% | +4.32% | No Chage |
| Total Expense Savings | +0.34% | +0.24% | +1.42% | +0.08% |
| Secondary Market Change Summary | ||||
| Discount Narrowing (3-year average) | +8.16% | +8.81% | +3.93% | No Change |
| Bid/Ask Spread Improvement (bps) | +16.14 | +8.93 | +253.20 | Improves |
| Average Daily Trading Volume | Increase | Increase | Increase | Increase |
| 1 | The taxable equivalent rate for each target fund is calculated by using maximum federal and state tax rates. For NMZ, only the maximum federal tax rate is used. The taxable equivalent rate change is the difference between rates for the target funds and NMZ. |
With respect to preferred shareholders, we provide the following information:
Due to the acquiring fund’s policy of investing in a nationally diversified portfolio of municipal securities, the terms of the preferred shares of NMZ received in the mergers by preferred shareholders of the target funds will not include the “state tax gross-up” provision currently applicable to each such fund’s preferred shares. The state tax gross-up provisions generally require an additional payment to holders subject to the specified state income taxation in the event the fund was required to allocate capital gains and/or ordinary income to a given month’s distribution in order to make such distribution equal, on an after-tax basis, to the amount of the distribution if it was excludable from such state income taxation (in addition to federal income taxation). With respect to the loss of the state tax gross-up provisions, we note the following:
| · | Only (i) a beneficial owner who is a natural person subject to the applicable state personal income taxation on his or her income or (ii) a beneficial owner (other than a natural person, that seeks to pay dividends or make other distributions or allocations of income) that is exempt from the applicable state personal income tax is entitled to the benefit of the “gross-up” provision relating to state-specific income tax for the target funds. |
| · | No preferred shareholder of the target funds meets the eligibility requirements above for the state tax gross-up provisions. Therefore, the preferred shareholders of the target funds will not be affected by the fact that the NMZ preferred shares will provide only for a gross-up related to federal income taxation (not the applicable state income taxation). This is the same treatment applicable to the outstanding preferred shares of NMZ and other Nuveen leveraged national tax-exempt bond closed-end funds. |
| · | For the last 10+ years, the target funds have not allocated any capital gains and/or ordinary income to a given month’s distribution to preferred shareholders that would have required a gross-up payment (federal or state). Similarly, for the last 10+ years, NMZ has not allocated any capital gains and/or ordinary income to a given month’s distribution to preferred shareholders that would have required a gross-up payment. NMZ expects that practice to continue going forward. Furthermore, as a matter of practice, Nuveen Tax-Exempt Closed-End Funds are managed to seek to eliminate the distribution of taxable income that would require making a gross-up payment to preferred shareholders. |
| · | Each series of preferred shares of the target funds is owned currently by a single institutional holder. The terms of the preferred shares acquired by preferred shareholders in the mergers will be substantially the same as the existing target fund preferred shares. While not currently anticipated under the proposed mergers, if a merger were to result in tax disadvantages to a target fund preferred shareholder, the preferred shareholder may seek to negotiate adjustments to the terms of the preferred shares to compensate for any loss of a state income tax related benefit. |
While the merger will result in investments in lower-rated municipal securities, reflecting the credit profile of NMZ versus the target funds, we note the following:
| · | As noted above, the single institutional holder of the applicable series of preferred shares may negotiate to adjust the dividend rate and other economic terms to reflect changes, including changing credit quality, as a result of the mergers. |
| · | Leverage ratios will decrease for target fund shareholders as a result of the merger, which will reduce risk and improve the combined fund’s ability to meet preferred share distributions. Additionally, the percentage of total assets available to support the payment of preferred share distributions will improve for the target funds. While the percentage of assets available to support payment for NMZ is expected to decline, we note that NMZ’s preferred share coverage is well within historical levels for the fund as well as typical levels for leveraged tax-exempt closed-end funds. |
| As of July 31, 2025 | |||||
| NXJ | NQP | NOM | NMZ | Combined Fund | |
| Common Assets | 501,884,779 | 437,292,921 | 23,840,916 | 1,157,766,050 | 2,120,784,666 |
| Preferred Shares | 313,900,000 | 217,500,000 | 17,000,000 | 357,000,000 | 905,400,000 |
| Tender Option Bonds | 63,850,000 | 106,940,000 | 600,000 | 461,752,000 | 633,142,000 |
| Managed Assets | 857,139,779 | 654,792,921 | 41,230,499 | 1,814,979,107 | 3,368,142,306 |
| Leverage Ratio | 42.94% | 42.59% | 42.47% | 41.42% | 42.04% |
| Preferred Share Coverage | 259.89% | 301.05% | 240.24% | 424.30% | 334.24% |
| · | As described above in the discussion related to common shares, the total expenses are expected to decline for all funds as a result of the merger. Additionally, NMZ’s common earnings yield is higher than all three target funds and is expected to maintain or improve following the portfolio transition post-merger. Each of these factors would improve the combined fund’s ability to support distribution payments to preferred shareholders. |
| · | The target funds’ diversification of investments is expected to improve as a result of NMZ’s wider investable universe and would lead to greater diversification of investments available to support preferred share distributions. |
| As of December 31, 2025 | ||||
| NXJ | NQP | NOM | NMZ | |
| Total Number of Holdings | 336 | 294 | 96 | 909 |
FORWARD-LOOKING STATEMENTS
Certain statements made or referenced in this supplemental material may be forward-looking statements. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, but are not limited to:
| · | market developments; |
| · | legal and regulatory developments; |
| · | changes in tax or tax law; |
| · | the ability to satisfy conditions to the proposed mergers; and |
| · | other additional risks and uncertainties. |
Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Nuveen and the closed-end funds managed by Nuveen and its affiliates undertake no responsibility to update publicly or revise any forward-looking statements.
The annual and semi-annual reports and other regulatory filings of Nuveen closed-end funds with the Securities and Exchange Commission (“SEC”) are accessible on the SEC’s web site at www.sec.gov and on Nuveen’s web site at www.nuveen.com/cef and may discuss the abovementioned or other factors that affect Nuveen closed-end funds.
Important information on risk
Past performance is no guarantee of future results. All investments carry a certain degree of risk, including the possible loss of principal, and there is no assurance that an investment will provide positive performance over any period of time. Certain products and services may not be available to all entities or persons. There is no guarantee that investment objectives will be achieved.
Closed-end funds frequently trade at a discount from net asset value (NAV). At any point in time, including when sold, shares may be worth more or less than the purchase price or the net asset value, even after considering the reinvestment of fund distributions. It is important to consider the objectives, risks, charges and expenses of any fund before investing.
FAQ
What merger is Nuveen New Jersey Quality Municipal Income Fund (NXJ) proposing?
The proposal would merge NXJ, Nuveen Pennsylvania Quality Municipal Income Fund (NQP) and the Nuveen Missouri municipal fund into a wholly owned subsidiary of Nuveen Municipal High Income Opportunity Fund (NMZ), with common shareholders receiving newly issued NMZ common shares and preferred shareholders also voting.
How would the merger affect the combined fund’s size and structure for NXJ (NXJ)?
As of July 31, 2025, the combined fund is shown with $3,368,142,306 in managed assets and $2,120,784,666 in common assets, with NMZ accounting for 53.9% of managed assets in the combined structure.
What income changes are projected for common shareholders of NXJ, NQP and the Missouri fund?
Post‑merger, the common earnings yield is shown at 6.17% for the combined portfolio, representing increases of about +2.87% for NXJ, +2.63% for NQP and +2.85% for the Missouri fund, with taxable equivalent rate increases of +3.61%, +4.11% and +4.32%, respectively.
What expense and trading changes are highlighted for NXJ and NQP in the merger proposal?
Total expense ratios are expected to fall, with savings of 0.34% for NXJ, 0.24% for NQP and 1.42% for the Missouri fund, while the combined fund’s total expense ratio is listed at 3.51%. The materials also show narrower 6‑month average bid/ask spreads and increased average daily trading volume for each target fund.
How will the merger change preferred shareholder terms for NXJ (NXJ) and NQP?
Preferred shareholders of the target funds would receive NMZ preferred shares whose terms do not include the state tax gross‑up provision currently in their funds. The state tax gross‑up can require extra payments when distributions include taxable income so that after‑tax amounts match fully state tax‑exempt distributions for affected holders.
What leverage and coverage metrics are shown for the combined Nuveen municipal fund after the merger?
As of
How does the merger affect portfolio credit quality and diversification for NMZ and the target funds?
The materials state that the merger will result in investments in more lower‑rated municipal securities, reflecting NMZ’s credit profile versus the target funds, but also a much broader portfolio, with the combined fund holding 909 securities as of
