Moody's Affirms P-1 Short-Term Rating for Nuveen California Quality Municipal Income Fund

Strategic Insights -

Moody's Investors Service has affirmed the P-1 short-term rating of Series 6 Variable Rate Demand Preferred Shares issued by Nuveen California Quality Municipal Income Fund, following the change in the Liquidity Provider from Citibank, N.A. to JPMorgan Chase Bank, N.A. The affirmation is based on the Liquidity Provider's short-term rating and the absence of any impact on the short-term rating of the affected series of VRDP.

Key Takeaways:

  • Moody's has affirmed the P-1 short-term rating of Series 6 VRDP Shares issued by Nuveen California Quality Municipal Income Fund, despite the change in the Liquidity Provider from Citibank, N.A. to JPMorgan Chase Bank, N.A.
  • The short-term rating is based solely on the Liquidity Provider's short-term rating, which has not changed.
  • The appointment of a new Liquidity Provider with the same short-term CRA has no impact on the short-term rating of the affected series of VRDP.
  • The Series 6 VRDP Shares will have the benefit of an unconditional demand feature pursuant to a purchase obligation provided by JPMorgan Chase Bank, N.A. upon the expiration of the Citibank VRDP purchase agreement on December 3, 2020.
  • The P-1 rating for the Series 6 VRDP Shares may be downgraded if the short-term counterparty risk assessment of P-1(cr) for JPMorgan Chase Bank, N.A. is downgraded.
  • Moody's has taken no concurrent action on the long-term rating of the Series 6 VRDP shares or on the long or short-term ratings of any other series of preferred shares issued by Nuveen California Quality Municipal Income Fund.

Statistics:

  • Series 6 VRDP Shares issued by Nuveen California Quality Municipal Income Fund: $158,100,000 (1,581 shares with liquidation preference of $100,000 per share)
  • P-1 short-term rating affirmed by Moody's
  • JPMorgan Chase Bank, N.A. becomes the new Liquidity Provider for the Series 6 VRDP Shares
  • Citibank, N.A. was the previous Liquidity Provider
  • December 3, 2020: date by which the Citibank VRDP purchase agreement will expire and JPMorgan Chase Bank, N.A. will become the new Liquidity Provider

Sources:

  • Moody's Investors Service
  • "Securities Issued by US Closed-End Funds" (Rating methodology published in August 2018)
  • Moody's Rating Symbols and Definitions (available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004)
  • Moody's Disclosure Form (Methodology Assumptions and Sensitivity to Assumptions)
  • Moody's Rating Practices (available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1125868)