Rating Action: Moody's assigns A1 rating to preferred shares issued by Nuveen Variable Rate Preferred & Income FundGlobal Credit Research - 01 Sep 2022New York, August 31, 2022 -- Moody's Investors Service ("Moody's") has assigned an A1 long-term rating and P-1 short-term rating to preferred shares that will be issued by Nuveen Variable Rate Preferred & Income Fund (NYSE: NPFD).Launched in 2021, the closed-end fund seeks to provide high current income and total return by investing primarily in investment grade preferred securities and other variable-rate income producing assets. Virtually all of NPFD's distributions of net investment income is expected to be treated as qualified dividend income which is generally taxed at the lower capital gains tax rate for individuals.A summary of the rating action follows:Issuer: Nuveen Variable Rate Preferred & Income FundCUSIP: 67080R201 -- Series A Taxable Fund Preferred Shares, aggregate liquidation preference of $85 million (85,000 shares, liquidation preference of $1,000 per share) A1/P-1 assignedRATINGS RATIONALEThe A1 preferred share rating reflects NPFD's strong risk-adjusted asset coverage and fixed charge coverage ratios as well as its concentrated exposure to the financial services sector. The fund's capital structure combined with the track record of its advisor are key drivers that inform our view of governance risk management under Moody's ESG framework.NPFD's risk-adjusted asset coverage is excellent and consistent with a Aaa-rating factor. Proceeds from the transaction will be used to reduce an equal amount of borrowings that will keep the fund's effective leverage stable and within internal target ranges. As of 30 June 2022, NPFD's effective leverage stood at about 38%. The additional leverage costs will weigh on the fund's credit profile but because the advisor has managed such costs effectively for similarly levered closed-end strategies, our assessment of NPFD's capacity to pay prospective dividends is assessed at the Aa-rating factor score.The fund's underlying portfolio is of average credit quality and largely composed of liquid preferred securities issued by highly rated financial institutions. Constraining NPFD's asset profile score is its concentrated exposure to the financial services sector, particularly banks.Because NPFD's senior leverage accounts for more than two-thirds of the fund's total leverage, the preferred shares issued will be deeply subordinated. Therefore, the fund is subjected to a two-notch downward adjustment rather than the standard one-notch adjustment to the senior implied rating indicated by the rating factors discussed above.The P-1 rating assignment reflects our expectation of timely payment of the liquidation preference of the preferred shares in the event of an optional or mandatory tender. Short-term ratings of transactions with unconditional liquidity support provided by a bank are based on the bank's short-term counterparty risk assessment and Moody's evaluation of the terms of the liquidity commitment. Toronto-Dominion Bank serves as the liquidity provider and its short-term counterparty risk assessment is P-1(cr).FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGSThe preferred share rating could be upgraded if there is: 1) a material reduction in effective leverage; or 2) a lower level of senior leverage relative to preferred leverage; or 3) an improvement in the sector diversification of the fund's investment portfolio.The rating could be downgraded if there is: 1) a sustained decline in the fund's risk-adjusted asset coverage ratio; or 2) a deterioration in the credit quality of the fund's investment portfolio; or 3) the fund's coverage of fixed charges is sustained below 4 times net investment income.The short-term P-1 rating may be downgraded if the short-term counterparty risk assessment of P-1(cr) for Toronto-Dominion Bank is downgraded.Nuveen Fund Advisors, LLC is the fund's investment adviser and an indirect subsidiary of Nuveen, LLC which as of 30 June 2022 managed over $1 trillion in assets.The principal methodology used in these ratings was Closed-End Funds Methodology published in December 2020 and available at https://ratings.moodys.com/api/rmc-documents/69686. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.At least one ESG consideration was material to the credit rating action (s) announced and described above.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on https://ratings.moodys.com.Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating. 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