Company: RFMZ
Filing Date: 2025-09-05
Form Type: N-CSR
Source: 0001398344-25-017693
Chunk: 54

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 54
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 issued by the Fund.
Borrowing covenants or rating agency guidelines may impose asset coverage or Fund composition requirements that are more stringent than
those imposed on the Fund by the 1940 Act. Since the holders of common stock pay all expenses related to the use of leverage, such use
of leverage would create a greater risk of loss for the Fund’s shareholders than if leverage is not used.

The Fund may enter into derivatives or other transactions
(e.g., total return swaps) that may provide leverage (other than through borrowings or the issuance of preferred shares). The Fund also
invests in reverse repurchase agreements, total return swaps and derivatives or other transactions with leverage embedded in them in a
limited manner or subject to a limit on leverage risk calculated based on value-at-risk, as required by Rule 18f-4 under the 1940 Act.
These transactions entail additional expenses (e.g., transaction costs) which are borne by the Fund. These types of transactions have
the potential to increase returns to Common Shareholders, but they also involve additional risks. This additional leverage will increase
the volatility of the Fund’s investment portfolio and could result in larger losses than if the transactions were not entered into.

Tender Option Bonds. The Fund leverages
its assets through the use of proceeds received from tender option bond transactions. In a tender option bond transaction, a tender option
bond trust (a “TOB Issuer”) is typically established by forming a special purpose trust into which the Fund, or an agent on
behalf of the Fund, transfers municipal bonds or other municipal securities. A TOB Issuer typically issues two classes of beneficial interests:
short-term floating rate notes (“TOB Floaters”), which are sold to third party investors, and residual interest municipal
tender option bonds (“TOB Residuals”), which are generally issued to the Fund. The Fund may invest in both TOB Floaters and
TOB Residuals, including TOB Floaters and TOB Residuals issued by the same TOB Issuer. The Fund may not invest more than 5% of its Managed
Assets in any single TOB Issuer. The Fund does not currently intend to invest in TOB Residuals issued by a TOB Issuer that was not formed
for the Fund, although it reserves the right to do so in the future.

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RiverNorth Flexible Municipal Income Fund II,