Company: RFMZ
Filing Date: 2025-09-05
Form Type: N-CSR
Source: 0001398344-25-017693
Chunk: 50

Company: RiverNorth Flexible Municipal Income Fund II, Inc.
Filing Date: 2025-09-05
Form: N-CSR
Chunk 50
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 a private entity and be aware of the risks
that such an investment may entail. Continued ability of an entity to generate sufficient revenues for the payment of principal and interest
on such bonds will be affected by many factors including the size of the entity, capital structure, demand for its products or services,
competition, general economic conditions, government regulation and the entity’s dependence on revenues for the operation of the
particular facility being financed. The Fund expects that, due to investments in private activity bonds, a portion of the distributions
it makes on the Common Shares will be includable in the federal alternative minimum taxable income.

RiverNorth Flexible Municipal Income Fund II, Inc.

Moral Obligation Bonds. The Fund also may
invest in “moral obligation” bonds, which are normally issued by special purpose public authorities. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of such bonds becomes a moral commitment but not a legal obligation
of the state or municipality in question.

Municipal Lease Obligations and Certificates of Participation. Also included within the general category of Municipal Bonds are participations in lease obligations or installment
purchase contract obligations of municipal authorities or entities (hereinafter collectively called “Municipal Lease Obligations”).
Although a Municipal Lease Obligation does not constitute a general obligation of the municipality for which the municipality’s
taxing power is pledged, a Municipal Lease Obligation is ordinarily backed by the municipality’s covenant to budget for, appropriate
and make the payments due under the Municipal Lease Obligation. However, certain Municipal Lease Obligations contain “non-appropriation”
clauses which provide that the municipality has no obligation to make lease or installment purchase payments in future years unless money
is appropriated for such purpose on a yearly basis. In the case of a “non-appropriation” lease, the Fund’s ability to
recover under the lease in the event of non-appropriation or default will be limited solely to the repossession of the leased property,
without recourse to the general credit of the lessee, and the disposition or re-leasing of the property might prove difficult. A certificate
of participation represents an undivided interest in an unmanaged pool of municipal leases, an installment purchase agreement or other
instruments.

The certificates are typically issued by a municipal
agency, a trust or other entity that has received an assignment of the payments to be made by the state or political subdivision under
such leases or installment purchase agreements. In addition, such