Fitch Ratings has assigned an 'A' long-term and 'F1' short-term rating to the $270 million of Series B Taxable Fund Preferred Shares (TFP shares) issued by Nuveen Preferred & Income Opportunities Fund (JPC).

Fitch has also affirmed the outstanding 'A' long-term rating and 'F1' short-term rating assigned to the $150 million of Series A TFP shares of JPC. The fund is managed by Nuveen Fund Advisors, LLC (NFA).

The rating actions are taken in connection with the fund mergers described below.

KEY RATING DRIVERS

The long-term rating primarily reflects:

Sufficient asset coverage provided to the preferred shares as calculated per the fund's overcollateralization (OC) tests;

The structural protections afforded by mandatory deleveraging provisions in the event of asset coverage declines;

The legal and regulatory parameters that govern the fund's operations;

The short-term rating reflects:

The credit strength of Sumitomo Mitsui Banking Corporation (SMBC, A-/F1) as the liquidity provider to the Series A TFP shares and Barclays Bank PLC (Barclays, A+/F1) as the liquidity provider to the Series B TFP shares;

The terms and conditions of the TFP shares purchase agreement.

Both the short- and long-term ratings reflect the capabilities of NFA.

FUND MERGERS

Today, NFA announced the closing of fund mergers whereby target funds Nuveen Preferred and Income Fund (JPT) and Nuveen Preferred & Income Securities Fund (JPS) have merged with and into NPIOF Merger Sub, LLC (NPIOF)-- a wholly owned subsidiary of acquiring fund JPC. Immediately after the mergers, NPIOF shall own all of the assets and liabilities of the two target funds. As soon as practicable following the completion of the mergers, acquiring fund JPC will acquire the assets and liabilities of NPIOF, and NPIOF will be dissolved under Massachusetts law. NPIOF has been formed for the sole purpose of consummating the mergers and will conduct only such business as is necessary to facilitate the mergers.

As a result of the mergers, the common shares of JPT and JPS have converted into an equivalent dollar amount of newly issued JPC common shares, with cash being received in lieu of any fractional acquiring fund common shares.

Also, in connection with the closing of the mergers, the holders of the TFP shares of JPS received newly issued Series B TFP shares of JPC with the same aggregate liquidation preference and terms as the now-redeemed Series A TFP shares of JPS. Therefore, the Series A TFP shares of JPS will be marked paid in full by Fitch.

FUND PROFILE

JPC is a diversified, closed-end management investment company registered under the Investment Company Act of 1940 (the Act). The fund's primary investment objective is high current income and its secondary investment objective is total return. Under normal circumstances, the fund invests at least 80% of its assets in preferred securities and other income producing securities including hybrid securities such as contingent capital securities and up to 20% in other securities, primarily income-oriented securities such as corporate and taxable municipal debt and common equity. The fund will invest at least 50% of managed assets in securities rated investment grade at the time of investment or that are unrated but judged to be of comparable quality by the fund managers. The portfolio is concentrated largely in the banking and insurance sectors.

LEVERAGE

As of the review date, and taking the impact of the merger into account, JPC has about $1.4 billion of leverage, made up of bank debt, reverse repos and $420 million of TFP shares. After the merger, Fitch expects JPC's effective leverage level to be about 37%. Effective leverage is a ratio measuring a fund's structural leverage as a percentage of its total assets.

In a reverse repo agreement, the fund borrows cash from a counterparty, and, in exchange, the fund provides securities as collateral for the borrowed cash along with an agreement to repurchase the collateral from the counterparty at a specified future date.

SUBORDINATION AND REFINANCE RISK

Although the bank lines and reverse repos create a degree of subordination risk for the preferred share investors, Fitch believes the risk is manageable. The rights of lenders and any other creditors to receive payments of interest on and repayments of principal of any borrowings or other indebtedness are senior to the rights of holders of the Series A and Series B TFP shares and the fund's common shares with respect to the payment of dividends and other distributions, and upon liquidation. The Fitch net OC test quantifies subordination risk by assessing asset coverage to the rated obligations after first repaying liabilities that are senior in the capital structure. JPC has Fitch net OC test results in excess of 100% at the assigned rating level.

Fitch believes there is minimal refinancing risk associated with the preferred shares of JPC. The Fitch OC test results indicate the funds are sufficiently liquid to fully repay all of their leverage within a relatively brief 45- to 60-day exposure period, even during a time of substantial market stress.

VARIABLE RATE DEMAND MODE

Upon issuance, the newly issued Series B TFP shares of JPC were placed in a Variable Rate Demand Mode (VRDM). The Series A TFP shares are currently in VRDM as well. During the VRDM, beneficial owners of the VRDM-TFP shares of each series of the fund have the right to tender their VRDM-TFP shares for remarketing by a remarketing agent on seven days' notice. In the event that any TFP shares remain unsold pursuant to an attempted remarketing, the TFP shares will be tendered for purchase by the applicable liquidity provider pursuant to the Purchase Agreement (Please see Purchase Obligation below).

MODE CHANGES

JPC, at its option, may designate a new mode for the VRDM-TFP shares of each series. Upon designating the new mode, the fund will provide notice not more than 30 calendar days and not less than 20 calendar days prior to the change. All outstanding VRDM-TFP shares of the applicable series will be subject to mandatory tender for remarketing in such case. If the shares are not successfully remarketed, they will be purchased by the liquidity provider. If a new mode is put in place, Fitch will re-evaluate the structure.

PREFERRED SHARE ASSET COVERAGE

As of the review date, after taking the impact of the merger into account, JPC's asset coverage ratios for total outstanding preferred shares, as calculated in accordance with the Act was in excess of the minimum asset coverage of 225% required by the fund's governing documents.

As of the review date, after taking the impact of the merger into account, JPC's effective leverage ratio was below the 45% maximum effective leverage ratio allowed by the governing documents of the VRDM-TFP shares.

As of the review date, after taking the impact of the merger into account, JPC's asset coverage ratios, as calculated in accordance with Fitch OC tests per the 'A' rating guidelines, were in excess of 100%.

Fitch's closed-end fund criteria do not specifically include a discount factor for contingent capital securities for the purpose of calculating the Fitch OC tests. In such a case, Fitch may establish a transaction-specific discount factor based on the methodology described in its published criteria. In calculating the Fitch OC tests, contingent capital securities were categorized as equities because such securities may be expected to experience loss write- downs comparable to equities in a stress situation.

PREFERRED SHARE STRUCTURAL PROTECTIONS

Asset coverage and effective leverage ratio compliance are tested daily for the VRDM-TFP shares.

For TFP shares under the VRDM, failure to cure a breach of the asset coverage requirement by the allotted cure date results in mandatory redemption of sufficient preferred shares to restore compliance. To facilitate redemption, JPC will deposit sufficient funds with a third-party tender/redemption and paying agent. The time allowed for the fund to restore compliance is consistent with Fitch's criteria guideline.

The governing documents for the TFP shares do not require mandatory deleveraging in the event of a breach of the effective leverage ratio. Rather, the documents state that a breach of the effective leverage ratio is a breach of the fee agreement with the liquidity provider and at the option of the liquidity provider, may result in mandatory tender of TFP shares for remarketing (see the Purchase Obligation section below for additional details). However, in the event of a breach Fitch expects the fund to reduce leverage in order to restore compliance in a time-frame that is consistent with Fitch's 45-60-business-day criteria guideline.

PURCHASE OBLIGATION

The short-term ratings assigned to the VRDM-TFP shares are directly linked to the short-term creditworthiness of liquidity providers SMBC in the case of the Series A TFP shares and Barclays in the case of the Series B TFP shares. The TFP shares are supported by a purchase agreement to ensure full and timely repayment of all tendered TFP shares plus any accumulated and unpaid dividends. The purchase agreement is unconditional and irrevocable.

The TFP purchase agreement requires the applicable liquidity provider to purchase all VRDM-TFP shares of the applicable series tendered for sale that were not successfully remarketed. The applicable liquidity provider must also purchase all outstanding VRDM-TFP shares of the applicable series if the fund has not obtained an alternate purchase agreement prior to the termination of the purchase agreement being replaced or following the downgrade of the liquidity provider's rating below 'F2' (or equivalent).

The liquidity providers' role under the applicable purchase agreement relating to the purchase obligation for the VRDM-TFP shares has a scheduled termination date. Prior to the applicable scheduled termination date, each purchase agreement can be extended to a new scheduled termination date, or a new liquidity provider may be selected. Any future changes to the terms of the purchase agreements or the fee agreements between the fund and the applicable liquidity provider that weakens the structural protections discussed above may have negative rating implications.

STRESS TESTS

Fitch performed a stress test on the fund in order to assess the strength of the structural protections available to the preferred shares compared with the stresses outlined in Fitch's closed-end fund rating criteria. This test provided for a one rating notch downgrade for each security held in the portfolio relative to the unstressed base case. The stress applied caused the model results to remain consistent with the assigned rating levels.

Based on this analysis as well as document review, Fitch views JPC's permitted investments, issuer diversification framework and mandatory deleveraging mechanisms as consistent with the assigned rating levels.

INVESTMENT MANAGER

NFA, an indirect subsidiary of Nuveen, LLC, is the investment advisor for the fund. NFA is responsible for the fund's overall investment strategies and their implementation.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Rating upgrades are not currently envisioned for the TFP shares of JPC as the fund invests primarily in securities that receive no credit at the 'AA' rating level.

Factors that could, individually or collectively, lead to negative rating action/downgrade:

The ratings assigned to the preferred shares may be sensitive to material changes in the leverage composition, portfolio credit quality or market risk of the fund, as described above;

A material adverse deviation from Fitch guidelines for any key rating driver could cause ratings to be downgraded by Fitch;

Certain terms relevant to key TFP shares structural protections, including minimum asset coverage and the effective leverage ratio, are set forth in the transaction documents governing the TFP shares. Any future changes to the documents or future modes that weaken the structural protections may have negative rating implications;

The ratings could be downgraded if asset coverage cushions erode as a result of market volatility, or if Fitch believes the assets the fund invests in are unlikely to retain sufficient liquidity and price stability at the current rating stress levels. Based on the composition of the post-merger portfolio of JPC as of the review date, the consolidated fund could withstand a market value decline of 20% before breaching Fitch's OC test results at the assigned rating level. Fitch deems a sustained breach in Fitch OC test coverage as unlikely, as Fitch believes the fund would delever or alter the portfolio composition toward lower discount factor assets to the extent needed to cause the rated securities to maintain passing Fitch OC test margins at the assigned rating level;

The short-term rating assigned to the VRDM-TFP shares of each series may also be sensitive to changes in the financial condition of the applicable liquidity provider. A downgrade of the liquidity provider to 'F2' would result in a downgrade of the short-term rating of the VRDM-TFP shares of the applicable series to 'F2,' absent other mitigants. A downgrade below 'F2', on the other hand, would not necessarily result in a downgrade of the short-term rating of the VRDM-TFP shares of the applicable series, given the features in the transactions that would result in a mandatory tender of the VRDM-TFP shares for remarketing, or purchase by the applicable liquidity provider in the event of a failed remarketing.

SOURCES OF INFORMATION

The sources of information used to assess these ratings were the public domain and NFA.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The 'F1' short-term rating of the Series A TFP shares is directly linked to the 'F1' short-term ratings of SMBC as the liquidity provider. The 'F1' short-term rating of the Series B TFP shares is directly linked to the 'F1' short-term ratings of Barclays as the liquidity provider.

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