XAI Octagon Floating Rate & Alternative Income Trust (the
“Trust”) has declared its regular monthly distribution of $0.085
per share of the Trust’s common shares (NYSE: XFLT). The Trust also
declared preferred dividends for the quarter of $0.40625 per share
of the Trust’s 6.50% Series 2026 Term Preferred Shares (NYSE:
XFLTPRA).
The following dates apply to each declaration:
Share Class
Ex-Dividend Date
Record Date
Payable Date
Amount
Change from Previous
Declaration
XFLT
October 15, 2024
October 15, 2024
November 1, 2024
$0.085
No Change
XFLTPRA
October 15, 2024
October 15, 2024
October 31, 2024
$0.40625
No Change1
Common share distributions may be paid from net investment
income (regular interest and dividends), capital gains and/or a
return of capital. The specific tax characteristics of the
distributions will be reported to the Trust’s common shareholders
on Form 1099 after the end of the 2024 calendar year. Shareholders
should not assume that the source of a distribution from the Trust
is net income or profit. For further information regarding the
Trust’s distributions, please visit
www.xainvestments.com.
The Trust’s net investment income and capital gain can vary
significantly over time; however, the Trust seeks to maintain more
stable common share monthly distributions over time. The Trust’s
investments in CLOs are subject to complex tax rules and the
calculation of taxable income attributed to an investment in CLO
subordinated notes can be dramatically different from the
calculation of income for financial reporting purposes under
accounting principles generally accepted in the United States
(“U.S. GAAP”), and, as a result, there may be significant
differences between the Trust’s GAAP income and its taxable income.
The Trust’s final taxable income for the current fiscal year will
not be known until the Trust’s tax returns are filed.
As a registered investment company, the Trust is subject to a 4%
excise tax that is imposed if the Trust does not distribute to
common shareholders by the end of any calendar year at least the
sum of (i) 98% of its ordinary income (not taking into account any
capital gain or loss) for the calendar year and (ii) 98.2% of its
capital gain in excess of its capital loss (adjusted for certain
ordinary losses) for a one-year period generally ending on January
31 of the calendar year (unless an election is made to use the
Trust’s fiscal year). In certain circumstances, the Trust may elect
to retain income or capital gain to the extent that the Board of
Trustees, in consultation with Trust management, determines it to
be in the interest of shareholders to do so.
The common share distributions paid by the Trust for any
particular period may be more than the amount of net investment
income from that period. As a result, all or a portion of a
distribution may be a return of capital, which is in effect a
partial return of the amount a common shareholder invested in the
Trust, up to the amount of the common shareholder’s tax basis in
their common shares, which would reduce such tax basis. Although a
return of capital may not be taxable, it will generally increase
the common shareholder’s potential gain, or reduce the common
shareholder’s potential loss, on any subsequent sale or other
disposition of common shares.
Preferred shareholders are entitled to receive cumulative cash
dividends and distributions on the Trust’s 6.50% Series 2026 Term
Preferred Shares, when, as and if declared by, or under authority
granted by, the Board of Trustees of the Trust out of funds legally
available for distribution and in preference to dividends and
distributions on common shares. If the Trust is unable to
distribute the full dividend amount due in a dividend period on the
Trust’s 6.50% Series 2026 Term Preferred Shares, the dividends will
be distributed on a pro rata basis among the preferred
shareholders.
Distributions and dividends shall be paid on the Payable Date
listed above unless the payment of such distribution or dividend is
deferred by the Board of Trustees upon a determination that such
deferral is required in order to comply with applicable law, to
ensure that the Trust remains solvent and able to pay its debts as
they become due and continue as a going concern or, with regard to
the Trust’s regular monthly distribution to common shareholders, to
comply with the applicable terms or financial covenants of the
Trust’s senior securities.
Future common share distributions will be made if and when
declared by the Trust’s Board of Trustees, based on a consideration
of number of factors, including the Trust’s continued compliance
with terms and financial covenants of its senior securities, the
Trust’s net investment income, financial performance and available
cash. There can be no assurance that the amount or timing of common
share distributions in the future will be equal or similar to that
described herein or that the Board of Trustees will not decide to
suspend or discontinue the payment of common share distributions in
the future.
The investment objective of the Trust is to seek attractive
total return with an emphasis on income generation across multiple
stages of the credit cycle. The Trust seeks to achieve its
investment objective by investing in a dynamically managed
portfolio of opportunities primarily within the private credit
markets. Under normal market conditions, the Trust will invest at
least 80% of its Managed Assets in floating rate credit instruments
and other structured credit investments. There can be no assurance
that the Trust will achieve its investment objective.
The Trust’s common shares are traded on the New York Stock
Exchange under the symbol “XFLT,” and the Trust’s 6.50% Series 2026
Term Preferred Shares are traded on the New York Stock Exchange
under the symbol “XFLTPRA.”
About XA Investments
XA Investments LLC (“XAI”) serves as the Trust’s investment
adviser. XAI is a Chicago-based firm founded by XMS Capital
Partners in April, 2016. In addition to investment advisory
services, the firm also provides investment fund structuring and
consulting services focused on registered closed-end funds to meet
institutional client needs. XAI offers custom product build and
consulting services, including development and market research,
sales, marketing, fund management and administration. XAI believes
that the investing public can benefit from new vehicles to access a
broad range of alternative investment strategies and managers. XAI
provides individual investors with access to institutional-caliber
alternative managers. For more information, please visit
www.xainvestments.com.
About XMS Capital Partners
XMS Capital Partners, LLC, established in 2006, is a global,
independent, financial services firm providing M&A, corporate
advisory and asset management services to clients. It has offices
in Chicago, Boston and London. For more information, please visit
www.xmscapital.com.
About Octagon Credit Investors
Octagon Credit Investors, LLC (“Octagon”) serves as the Trust’s
investment sub-adviser. Octagon is a 25+ year old, $34.2B
below-investment grade corporate credit investment adviser focused
on leveraged loan, high yield bond and structured credit (CLO debt
and equity) investments. Through fundamental credit analysis and
active portfolio management, Octagon’s investment team identifies
attractive relative value opportunities across below-investment
grade asset classes, sectors and issuers. Octagon’s investment
philosophy and methodology encourage and rely upon dynamic internal
communication to manage portfolio risk. Over its history, the firm
has applied a disciplined, repeatable and scalable approach in its
effort to generate attractive risk-adjusted returns for its
investors. For more information, please visit
www.octagoncredit.com.
XAI does not provide tax advice; please consult a professional
tax advisor regarding your specific tax situation. Income may be
subject to state and local taxes, as well as the federal
alternative minimum tax.
Investors should consider the investment objectives and
policies, risk considerations, charges and expenses of the Trust
carefully before investing. For more information on the Trust,
please visit the Trust’s webpage at
www.xainvestments.com.
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the laws of such state or jurisdiction.
NOT FDIC INSURED
NO BANK GUARANTEE
MAY LOSE VALUE
Paralel Distributors, LLC -
Distributor
1 The Trust’s 6.50% Series 2026 Term Preferred Shares dividend
is calculated based on the preferred shares Liquidation Preference
of $25.00 per share and the fixed dividend rate of 6.50%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241001097869/en/
Kimberly Flynn, President XA Investments LLC Phone: 888-903-3358
Email: KFlynn@XAInvestments.com www.xainvestments.com
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