A preferred stock issued by the RiverNorth/DoubleLine Strategic Opportunity Fund is trading at roughly 40 percent below its stated liquidation value, a gap that is about double the average discount seen across a broad set of closed end fund preferreds. The security, known as OPP'A, closed at $15.02 on October 1, against a $25 liquidation preference, putting its discount to par at 39.92 percent, according to data verified against the fund's SEC filings. Across a comparison set of 36 closed end fund preferred issues tracked with a current yield figure, the average discount to par was 19.2 percent, meaning OPP'A's gap runs roughly twice the typical level for the category.
What that discount means in practical terms is straightforward arithmetic rather than a market judgment. OPP'A carries a 4.375 percent coupon on its $25 par value, which translates into an annual dividend of $1.0938 paid quarterly. At the $15.02 price, that fixed dividend produces a current yield of 7.28 percent, well above the coupon rate, simply because the purchase price sits far under par. The preferred has also passed its November 15, 2025 call date and is now callable at the issuer's discretion, which caps the yield to call calculation at "n/a" in the data since the shares are already within the call window.
Why this matters to income focused investors is less about any single number and more about what a persistent, outsized discount can represent when a preferred is already callable. A preferred trading far under par is more exposed to the mechanics of a potential redemption, since the issuer could in theory retire the shares at the $25 liquidation preference rather than the lower market price, a structural feature that cuts differently than for preferreds trading near or above par. The wide gap relative to peers was a detail that first stood out in data tracked on Preferred Stock AI, a Madison Labs research site, which groups OPP'A among a broader set of closed end fund preferred issues for comparison purposes.
Background on the issuer helps frame the numbers. RiverNorth/DoubleLine Strategic Opportunity Fund, listed on the NYSE under the ticker OPP, is a closed end fund launched in 2016 that splits its portfolio across three strategies: RiverNorth Capital Management runs a tactical closed end fund income sleeve and an alternative credit allocation, while DoubleLine Capital manages an opportunistic income strategy built around agency and non agency residential mortgage backed securities, asset backed securities and commercial mortgage backed securities. The Series A Preferred Shares, 2.2 million shares plus a 330,000 share overallotment issued in October 2020, were sold under an SEC prospectus with proceeds earmarked to repay borrowings under the fund's credit facility and for general working capital. The common shares, OPP, closed around $7.03 on October 1, within a 52 week range of $8.68 to $6.82, while the preferred's own 52 week range spans $17.74 to $14.93.
The discount sits against a backdrop of heightened attention to structured credit vehicles more broadly. This week's reported bidding for Palmer Square, a roughly $37 billion collateralized loan obligation manager, with Goldman Sachs said to be leading the process according to Yahoo Finance reporting, has put a spotlight on the plumbing of CLO and CEF linked structures and on how institutional buyers are pricing risk in that corner of credit markets. OPP'A is not a CLO instrument itself, but its portfolio exposure through the DoubleLine managed sleeve touches adjacent mortgage and asset backed credit, making the preferred one data point in a wider conversation about how the market is treating fund level leverage and structured income products during a period of active deal flow in CLO management businesses.
For now, the discount on OPP'A remains a feature of the current price and yield relationship rather than a forecast of what happens next. The security pays cumulative dividends, meaning any missed payment would need to be made up before common shareholders could be paid, and its most recent ex dividend date was August 3, 2026. What market participants are likely to watch from here includes whether the issuer takes any action on the now live call option, how the discount moves relative to the broader closed end fund preferred universe tracked at an average 19.2 percent, and whether the scrutiny building around CLO adjacent structures following the Palmer Square sale process extends further into pricing of closed end fund preferred securities with credit linked underlying portfolios.