Company: RFMZ
Filing Date: 2025-09-05
Form Type: N-CSR
Source: 0001398344-25-017693
Chunk: 56

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 56
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the TOB Floaters. In such an event, the TOB Floaters would be redeemed by the TOB Issuer at par (plus accrued interest) out of the proceeds
from a sale of the underlying securities deposited in the TOB Issuer. If this happens, the Fund would be entitled to the assets of the
TOB Issuer, if any, that remain after the TOB Floaters have been redeemed at par (plus accrued interest). If there are insufficient proceeds
from the sale of these securities to redeem all of the TOB Floaters at par (plus accrued interest), the liquidity provider or holders
of the TOB Floaters would bear the losses on those securities and there would be no recourse to the Fund’s assets (unless the Fund
held a recourse TOB Residual). A recourse TOB Residual is generally a TOB Residual issued by a TOB Issuer in which the TOB Floaters represent
greater than 75% of the market value of the securities at the time they are deposited in the TOB Issuer. If the Fund were to invest in
a recourse TOB Residual to leverage its portfolio, it would typically be required to enter into an agreement pursuant to which the Fund
is required to pay to the liquidity provider the difference between the purchase price of any TOB Floaters put to the liquidity provider
by holders of the TOB Floaters and the proceeds realized from the remarketing of those TOB Floaters or the sale of the assets in the TOB
Issuer. The Fund currently does not intend to use recourse TOB Residuals to leverage the Fund’s portfolio, but reserves the right
to do so depending on future market conditions.

RiverNorth Flexible Municipal Income Fund II, Inc.

Under accounting rules, securities of the Fund
that are deposited into a TOB Issuer are treated as investments of the Fund, and are presented on the Fund’s Schedule of Investments
and outstanding TOB Floaters issued by a TOB Issuer are presented as liabilities in the Fund’s Statement of Assets and Liabilities.
Interest income from the underlying security is recorded by the Fund on an accrual basis. Interest expense incurred on the TOB Floaters
and other expenses related to remarketing, administration and trustee services to a TOB Issuer are reported as expenses of the Fund.

For TOB Floaters, generally, the interest rate
earned will be based upon the market rates for municipal securities with maturities or remarketing provisions that are comparable