August 17, 2018
Morrison C. Warren, Esq.
Chapman and Cutler LLP
111 West Monroe Street
Chicago, Illinois 60603
Re: RiverNorth Opportunistic Municipal Income Fund, Inc. (the "Fund")
Registration Statement on Form N-2
File Nos. 333-226273; 811-23366
Dear Mr. Warren:
We have reviewed the registration statement referenced above that was filed on
July 20, 2018
and have the following comments. Whenever a comment is made in one location, it
is
considered applicable to all similar disclosure appearing elsewhere in the
registration statement.
Additionally, for convenience, we have generally organized our comments using
headings,
defined terms and page numbers found in the registration statement.
Registration Statement
Calculation of Registration Fee Under the Securities Act of 1933 (cover page)
In a footnote to the "Amount Being Registered" column, disclose that Common
Shares issued
pursuant to the exercise of the underwriters' over-allotment option are also
being registered.
Prospectus
Outside Front Cover
The Fund
Please add a brief statement that makes clear the reason for including at this
juncture the cross-
reference to the "Contingent Conversion Feature."
Principal Investment Strategies
Expand the disclosure to include a brief definition of the phrase
"exempt-interest dividends" that
appears in this section.
Tactical Municipal Closed-End Fund Strategy
The disclosure states that the Tactical Municipal Closed-End Fund Strategy will
seek to "(ii)
derive value from the discount and premium spreads associated with closed-end
funds." Please
amplify the disclosure to identify the categories of "closed-end funds" to
which the statement
refers.
Municipal Income Bond Strategy
The disclosure states that the Fund may invest up to 30% of its Managed Assets
in Municipal
Bonds that pay interest that may be includable in taxable income for purposes
of the Federal
alternative minimum tax. Expand the disclosure to clarify whether the 30% limit
applies to the
Fund's investments under both the Tactical Municipal Closed-End Fund Strategy
and the
Municipal Income Bond Strategy.
Expand the paragraph that begins with "You should read this prospectus" to
include on the
outside front cover all of the additional information that is required by Item
1.1.d. of Form N-2.
Please expand footnote (2) to the pricing table to provide a cross-reference to
the section of the
prospectus captioned "Additional Underwriter Compensation."
In your response letter, please confirm that all of the information that
precedes the section
captioned "Table of Contents" will appear on the outside front cover of the
prospectus in at least
10-point type.
Contingent Conversion Feature (page iii)
The disclosure states that the Fund's Charter provides that, "during calendar
year," the Fund will
call a shareholder meeting for the purpose of voting to determine whether the
Fund should
convert to an open-end management investment company. Expand the disclosure to
identify in
which calendar year the Fund will call a shareholder meeting for this purpose.
Also, clarify
whether the Fund will not be required to call a meeting to vote on such
proposal in subsequent
calendar years should its shareholders fail to approve the proposal during the
applicable calendar
year.
Dividends and Distributions (page iv)
May the Contingent Quarterly Special Distribution be paid in respect of capital
gains? If so, how
will the payment of the Contingent Quarterly Special Distribution comply with
the requirements
of section 19 of the ICA?
Leverage (page iv)
The disclosure states that the Fund may enter into other transactions that have
the effect of
leverage, and that such other transactions "may" include tender option bond
transactions.
Additionally, page 7 discloses that the Fund currently anticipates that
leverage will initially be
obtained through the use of proceeds received from tender option bond
transactions. We also
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note from the disclosure appearing on page 56 and elsewhere in the prospectus,
that the Fund
may invest in TOB Floaters and TOB Residuals, and that the Fund intends to
utilize TOBs as a
form of leverage. In your response letter, describe how the Fund will treat TOB
Floaters, TOB
Residuals, both recourse and non- recourse, when determining its exposure to
leverage, for
purposes of segregating liquid assets and the asset coverage test under section
18(a)(1) under the
Investment Company Act of 1940 (the "ICA").
Prospectus Summary
Principal Investment Strategies and Policies (page 1)
May the Fund invest in entities that are excluded from the definition of
"investment company"
under the ICA solely by Section 3(c)(1) or Section 3(c)(7) of the ICA
(typically private equity
funds and hedge funds)? If it may, add disclosure stating that the Fund will
limit its investment
in such entities to no more than 15% of its net assets. In the alternative,
confirm in your
response letter that the Fund will not invest in such entities.
State Specific and Industry Risk (page 15)
The disclosure states that the Fund's overall exposure to a single industry or
a single state of
origin may be greater after factoring in the investments of the Underlying
Funds, in which case
the Fund may be more susceptible to adverse economic, political or regulatory
occurrences
affecting that particular state or industry. Please expand the prospectus
disclosure to take into
account the SAI disclosure which indicates that, to the extent that the Fund is
aware of the
investments held by the Underlying Funds, the Fund will consider such
information when
determining compliance with its fundamental investment restriction governing
industry
concentration.
Summary of Fund Expenses (page 36)
We note that most of the information in the fee table and Example is
incomplete. Please provide
us with the details of the Fund's fees, expenses and Example presentation as
soon as they are
available.
Footnote (4) states that the management fee and administration fee are charged
as a percentage
of the Fund's average daily Managed Assets, as opposed to net assets. Please
expand the
disclosure to highlight how Managed Assets are counted, per the terms of the
Investment
Advisory contract, in respect of TOBs transactions. Specifically, how Managed
Assets are
calculated where the Fund's receives TOB securities upon a transfer of the
Fund's portfolio
assets, such as a Municipal Bond or other municipal securities, to the sponsor
of the TOB
vehicle, as described on page 46.
We note from footnote (5) that the "Leverage Costs" fee table line item assumes
the use of
leverage from the proceeds of tender option bond transactions using an assumed
annual interest
rate expense to the Fund. Clarify where in the Fund's fee table the other
expenses of TOBs
transactions are included, such as those expenses identified on page 47 related
to remarketing,
administration and trustee services to a TOB Issuer.
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Net Asset Value (page 73)
In your response letter, please inform the staff whether the Fund's Board of
Directors will review
and approve in advance the valuation methodology of any independent valuation
firm it uses and
confirm that the Fund's Board of Directors will regularly review the historical
accuracy of its fair
value methodologies. See Release No. IC-26299; "Compliance Programs of
Investment
Companies and Investment Advisers," (December 17, 2003).
Dividend Reinvestment Plan (page 76)
Disclose that reinvested dividends increase the Fund's total Managed Assets on
which a
management fee is payable to Fund's Adviser.
Approval of Extraordinary Corporate Actions (page 80)
The disclosure presented in the section identifies various matters specified by
the Fund's Charter
as requiring either a favorable "supermajority" vote or a favorable
"two-thirds" vote in order "to
advise, approve, adopt or authorize" the matters identified. We note, however,
that certain of the
matters identified, as well as their related voting requirements, are
specifically governed by the
ICA. Please reconcile, in each instance, the voting requirements specified by
the Fund's Charter
pertaining to those matters specifically governed by the ICA, with the
applicable voting
requirements specified by the ICA.
Underwriters (page 91)
Please confirm to the staff whether FINRA has approved the underwriting terms
of the Fund's
offering.
Additional Underwriter Compensation (page 91)
Please file the contracts described in this section as exhibits to the Fund's
registration statement.
Statement of Additional Information
Investment Restrictions (page 1)
The second paragraph states that any of the Fund's fundamental investment
restrictions that
involve a maximum percentage of securities or assets shall not be considered to
be violated
unless an excess over the percentage occurs immediately after and is caused by
an acquisition or
encumbrance of securities or assets of, or borrowings by, the Fund. Please note
that, under the
ICA, the asset coverage requirement applicable to borrowings must be maintained
on an ongoing
basis. Accordingly, please revise the disclosure to reflect this requirement.
In the fourth enumerated fundamental policy, please insert the phrase "or group
of industries"
after the phrase "single industry."
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The narrative disclosure supplementing the Fund's presentation of its
fundamental investment
restriction (4) states that the limitation on industry concentration will apply
to municipal
securities if the payment of principal and interest for such securities is
derived "solely from" a
specific project. In that situation, the Fund will consider such municipal
securities to be in an
industry. Please expand the disclosure to state that the industry of a
non-governmental user or of
a project being funded will be counted for concentration purposes where such
securities are
backed principally by non-governmental assets and revenues. In this regard,
where a
governmental entity commits to providing support only in case the assets and
revenues of the
non-governmental user are insufficient to satisfy the obligations under the
debt, the debt is
considered being backed "principally" by the revenues and assets of the
nongovernmental user
and, therefore, will be counted towards the industry of the user for
concentration purposes.
Board Members and Officers (page 31)
Please disclose all of the other information required by Item 18 of Form N-2 in
the next
submission of the prospectus. In this regard, the section captioned "Director
Qualifications"
should present information for each director that briefly identifies the
specific experience,
qualifications, attributes, or skills that led to the conclusion that the
person should serve as a
director for the Fund at the time that the disclosure is made, in light of the
Fund's business and
structure. See Item 18.17 of Form N-2.
Signatures
Prior to effectiveness of the registration statement, the Fund must have a
board of directors
whose composition complies with the applicable provisions of the ICA. Also,
please note the
signature requirements of Section 6(a) of the Securities Act, which requires
that the registration
statement be signed by a majority of the Fund's Board of Directors.
Closing
We note that portions of the filing are incomplete. We may have additional
comments on such
portions when you complete them, on disclosures made in response to this
letter, on information
supplied supplementally, or on exhibits added.
Response to this letter should be in the form of a revised submission and
should be accompanied
by a supplemental letter that includes your responses to each of these
comments. Where no
change will be made in the filing in response to a comment, please indicate
this fact in your
supplemental letter and briefly state the basis for your position.
Please advise us if you have submitted or expect to submit an exemptive
application or no-action
request in connection with the registration statement.
You should review and comply with all applicable requirements of the federal
securities laws in
connection with the preparation and distribution of a preliminary prospectus.
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In closing, we remind you that the Trust and its management are responsible
for the accuracy and
adequacy of their disclosures, notwithstanding any review, comments, action or
absence of
action by the staff.
Should you have any questions regarding this letter, please contact me at (202)
551-6964.
Sincerely,
/s/ Dominic Minore
Dominic Minore
Senior Counsel
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