Higher post‑merger yields for Nuveen NXJ, NQP holders despite tax change

Rhea-AI Filing Summary

Nuveen outlines how a proposed merger into Nuveen Municipal High Income Opportunity Fund (NMZ) would affect shareholders of NXJ, NQP and another state-specific municipal fund. The key focus is the loss of state tax exemption versus changes in earnings yields.

As of July 31, 2025, common earnings yields were 3.30% for NXJ, 3.54% for NQP and 3.32% for the other fund, compared with a 6.17% common earnings yield for NMZ post-merger, implying increases of 2.87%, 2.63% and 2.85%. After adjusting for each state’s maximum tax rate, state tax adjusted equivalent rates were 3.70%, 3.65% and 3.49% versus NMZ’s 6.17%, still showing gains of 2.47%, 2.52% and 2.68%. The funds state that shareholders would experience no negative impact from losing state tax exemption on earnings because NMZ’s higher yield more than offsets it.

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

February 3, 2026

Below is additional information related to the Joint Proxy Statement/Prospectus dated December 17, 2025, and the Joint Proxy Statement dated December 19, 2025. This supplemental disclosure is in response to a proxy advisory firm’s inquiry about the impact of the loss of state tax exemption.

When comparing municipal yields and the relative impact of state tax rates, industry convention is to gross-up yields by the maximum state tax rate, which is the approach used for this merger. The table below grosses up the common earnings yield for NXJ, NQP, and NOM by each state’s maximum tax rate to arrive at a state tax adjusted equivalent rate. When comparing these state tax adjusted equivalent rates to the NMZ post-merger common earnings rate, shareholders in NXJ, NQP, and NOM would realize an earnings gain.

Shareholders of NXJ, NQP, and NOM experience no negative impact from losing their state tax exemption on earnings post-merger because NMZ’s earnings yield significantly exceeds that of NXJ, NQP, and NOM. The state fund shareholders experience a net increase in tax adjusted yields post-merger despite losing their state tax exemption as is shown in the state tax adjusted equivalent rate change row below.

· Isolating the taxable equivalent yield impact from the loss of the state tax exemption for NXJ, NQP, and NOM shareholders results in higher common earnings on a before- and after-tax basis for those common shareholders remaining in the fund post-merger. The state tax adjusted equivalent rate uses each state’s maximum tax rate.

	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 State Tax Rate	10.75%	3.07%	4.80%	N/A
State Tax Adjusted Equivalent Rate	3.70%	3.65%	3.49%	6.17%
Change	+2.47%	+2.52%	+2.68%	N/A

FAQ

How does the Nuveen NMZ merger affect NXJ shareholders’ earnings yield?

NXJ’s common earnings yield of 3.30% would compare to NMZ’s 6.17% post-merger, an indicated increase of 2.87 percentage points. This change reflects higher earnings potential even before considering any state tax adjustments shown in the analysis table.

What state tax adjusted yields are shown for Nuveen NXJ and NQP in the merger?

The state tax adjusted equivalent rate is 3.70% for NXJ and 3.65% for NQP, versus 6.17% for NMZ post-merger. These figures incorporate each state’s maximum tax rate to show comparable, tax-adjusted earnings levels for shareholders considering the merger.

Do NXJ, NQP and the third Nuveen state fund lose state tax exemption after the merger?

The analysis addresses the loss of state tax exemption for shareholders of NXJ, NQP and the third state fund. It states that despite losing this exemption, shareholders experience no negative impact on earnings because NMZ’s higher common earnings yield more than offsets the tax change.

What maximum state tax rates are used in Nuveen’s merger comparison?

The comparison uses maximum state tax rates of 10.75% for NXJ’s state, 3.07% for NQP’s state, and 4.80% for the third state fund. These rates are applied to gross-up municipal yields and derive state tax adjusted equivalent earnings rates for each fund.

How much do state tax adjusted equivalent rates change post-merger for Nuveen funds?

Nuveen shows state tax adjusted equivalent rate increases of 2.47 percentage points for NXJ shareholders, 2.52 points for NQP shareholders, and 2.68 points for the third state fund. These changes compare each fund’s tax-adjusted rate with NMZ’s 6.17% post-merger earnings yield.

Why did Nuveen provide this supplemental merger information for NXJ and related funds?

Nuveen prepared this supplemental material in response to a proxy advisory firm’s inquiry about losing state tax exemption. It explains industry convention for grossing-up yields and demonstrates that NMZ’s higher earnings yield offsets the tax change for NXJ, NQP and the third fund.