Company: RFMZ
Filing Date: 2025-09-05
Form Type: N-CSR
Source: 0001398344-25-017693
Chunk: 52

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 52
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 rates and thereby tend to be more volatile in price than securities that pay interest periodically. In
addition, the Fund would be required to distribute the income on any of these instruments as it accrues, even though the Fund will not
receive all of the income on a current basis or in cash. Thus, the Fund may have to sell other investments, including when it may not
be advisable to do so, to make income distributions to its Common Shareholders.

Use of Leverage

This section has been updated since the prior
disclosure date to reflect certain non-material updates and to add disclosure regarding the BNP Facility (as defined below).

The Fund may borrow money and/or issue preferred
shares, notes or debt securities for investment purposes. These practices are known as leveraging. In addition, the Fund may enter into
derivative and other transactions that have the effect of leverage. Such other transactions may include tender option bond transactions
(as described herein). The Adviser determines whether or not to engage in leverage based on its assessment of conditions in the debt and
credit markets. As of the time immediately after it enters into any of the foregoing transactions, the Fund will seek to limit its overall
effective leverage to 45% of its Managed Assets.

The Fund currently anticipates that leverage will
be obtained through borrowings from banks or other financial institutions and the use of proceeds from tender option bond transactions.
To date, the Fund has not issued any Preferred Shares.

On August 1, 2023, the Fund entered into a credit
agreement with BNP Paribas (“BNP Credit Agreement”). The BNP Credit Agreement permits the Fund to borrow funds that are collateralized
by assets held at BNP Paribas pursuant to the agreement. Under the terms of the BNP Credit Agreement, the Fund may borrow up to $15,000,000
bearing an interest rate of the Overnight Bank Funding Rate plus a fixed rate determined by the securities pledged as collateral. Any
unused portion of the BNP Credit Agreement is subject to a commitment fee of 0.50% of the unused portion of the facility until a utilization
of 80% or greater is met.

During the Fund’s utilization period during
the year ended June 30, 2025, the Fund’s average borrowings and interest rate under the BNP Credit Agreement were $2,700,000 and
5.33%, respectively. The maximum amount borrowed for the period was $2,700,000 and the Fund had borrowings