Moody’s assigns RiverNorth/DoubleLine preferreds A1

Moody’s Investors Service said it assigned an A1 (sf) rating to the fixed-rate perpetual preferred shares

to be issued by the RiverNorth/DoubleLine Strategic Opportunity Fund, Inc. (OPP).

The fund primarily invests in mortgage-backed securities as well as other fixed-income securities and tactically, under normal market conditions, invests between 10% and 35% of its managed assets in closed-end funds.

“The A1 (sf) preferred share rating reflects OPP’s strong risk-adjusted asset coverage and capacity to service its obligations as well as its overexposure to lower quality mortgage-backed securities. The (sf)

designation is assigned to closed-end funds with significant exposure (representing at least 30% of managed assets) to structured securities,” Moody’s said in a press release.

At June 30, the fund had effective leverage of about 25%, which the agency said it expects to increase to 30% following the issuance of up to $65 million of preferred shares.

“OPP’s level of over-collateralization is expected to be comparable with Aa-rated closed-end funds as a portion of the proceeds will be used towards paying down its revolving credit facility,” Moody’s said.

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