XAI Octagon Floating Rate & Alternative Income Term Trust Declares Monthly Common Stock Distribution and Quarterly Preferred Stock Dividend

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CHICAGO, January 03, 2022–(BUSINESS WIRE)–XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) has declared its regular monthly distribution of $0.073 per common share of the Trust (NYSE: XFLT). The Trust also declared preferred dividends for the quarter of $0.40625 per share of the Trust’s 6.50% Term Preferred Shares Series 2026 (NYSE: XFLTPRA).

The following dates apply to each statement:

Share class

Ex-dividend date

Registration Date

Payment date

Quantity

Change from previous statement

XFLT

January 14, 2022

January 18, 2022

February 1, 2022

$0.073

No change

XFLTPRA

January 14, 2022

January 18, 2022

January 31, 2022

$0.40625

No change1

Distributions on common shares may be made from net investment income (regular interest and dividends), capital gains and/or return of capital. The specific tax characteristics of the distributions will be disclosed to common shareholders of the Trust on Form 1099 after the end of calendar year 2022. Shareholders should not assume that the source of a distribution from the Trust is net income or profit. For more information regarding the Trust’s distributions, please visit www.xainvestments.com.

The Trust’s net investment income and capital gain may vary significantly over time; however, the Trust seeks to maintain more stable monthly distributions on common shares 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 subordinated CLO notes may be materially different from the calculation of income for financial reporting purposes under accounting principles. generally accepted in the United States (“US GAAP”), and therefore there may be material differences between the Trust’s GAAP income and its taxable income. The Trust’s final taxable income for the current year will not be known until the Trust’s tax returns have been filed.

As a registered investment company, the Trust is subject to a 4% excise tax which is imposed if the Trust does not distribute to common shareholders by the end of a calendar year at least the sum of ( i) 98% of his ordinary income (without taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of his capital gain in excess of his capital loss (adjusted for certain ordinary losses) for a one-year period generally ending on October 31 of the calendar year (unless an election is made to use the fiscal year of the Trust). In certain circumstances, the Trust may elect to retain income or capital gain to the extent that the Board of Trustees, in consultation with management of the Trust, determines that it is in the interests of shareholders to do so.

Distributions on Common Shares paid by the Trust for a given period may exceed the amount of net investment income for that period. Therefore, all or part of a distribution may be a return of capital, which is in effect a partial return of the amount that a common shareholder has invested in the Trust, up to the amount of the tax base. of the ordinary shareholder in his ordinary shares. , which would reduce this tax base. Although a return of capital may not be taxable, it will generally increase the common shareholder’s potential gain or reduce their potential loss on any subsequent sale or other disposition of common stock.

Preferred shareholders are entitled to receive cumulative cash dividends and distributions on the 6.50% Series 2026 Term Preferred Shares of the Trust, when, as declared by the Board of Trustees of the Trust or pursuant to authorized by it, 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 amount of the dividend due during a dividend period on the 6.50% Series 2026 Term Preferred Shares of the Trust, the dividends will be distributed on a pro rata basis between preferred shareholders.

Distributions and dividends shall be paid on the payment date indicated above, unless the payment of such distribution or dividend is postponed by the Board of Directors if it is determined that such postponement is necessary to comply with applicable law, to ensure that the Trust remains solvent and able to pay its debts as they become due and to continue its operation or, with respect to the regular monthly distribution of the Trust Common Shareholders to comply with any applicable financial terms or covenants of the Trust’s senior securities.

Future distributions of Common Shares will be paid if and when declared by the Trust’s Board of Directors, taking into account a number of factors, including the Trust’s continued compliance with financial covenants and conditions senior securities, the Trust’s net investment income, financial performance and available cash. There can be no assurance that the amount or timing of distributions on the Common Shares in the future will be equal or similar to those described herein or that the Board of Trustees will not determine to suspend or discontinue the payment of distributions on the Shares ordinary in the future.

The Trust’s investment objective is to seek an attractive total return with an emphasis on generating income through multiple stages of the credit cycle. The Trust seeks to achieve its investment objective by investing in an actively managed portfolio of opportunities primarily in the private credit markets. Under normal market conditions, the Trust will invest at least 80% of its assets under management 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 stock trades on the New York Stock Exchange under the symbol “XFLT”, and the Trust’s 2026 6.50% Term Preferred Shares trade on the New York Stock Exchange under the symbol ” XFLTPRA”.

About XA Investments

XA Investments LLC (“XAI”) acts as the Trust’s investment advisor. 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 advisory services focusing on closed-end funds registered for meet the needs of institutional clients. XAI offers custom product creation 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 wide range of alternative investment strategies and managers. XAI offers individual investors access to institutional-grade alternative managers. For more information, please visit www.xainvestments.com.

About XMS Capital Partners

XMS Capital Partners, LLC, established in 2006, is an independent global financial services firm that provides clients with mergers and acquisitions, corporate advisory and asset management services. 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”) acts as the Trust’s investment sub-advisor. Octagon is a 25+ year old, $30.4 billion, below investment grade, corporate credit investment adviser focused on leveraged loans, high yield bonds and structured credits (CLO debt and shares). Through fundamental credit analysis and active portfolio management, Octagon’s investment team identifies attractive relative value opportunities in sub-investment grade asset classes, sectors and issuers. ‘investment. Octagon’s investment philosophy and methodology encourages and relies on dynamic internal communication to manage portfolio risk. Throughout its history, the company has applied a disciplined, repeatable and scalable approach in its efforts 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 particular tax situation. Income may be subject to state and local taxes, as well as federal alternative minimum tax.

Investors should carefully consider the Fund’s investment objectives and policies, risk considerations, charges and expenses before investing. For more information about the Trust, please visit the Trust’s webpage at www.xainvestments.com.

This press release does not constitute an offer to sell or a solicitation to buy, and there will be no sale of these securities in any state or jurisdiction in which such offer, 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

1 The 6.50% dividend on the Trust’s Series 2026 Term Preferred Shares is calculated based on the preferred share liquidation preference of $25.00 per share and the fixed dividend rate of 6.50%.

See the source version on businesswire.com: https://www.businesswire.com/news/home/20220103005281/en/

contacts

Media Contact:
Kimberly Flynn, Executive Director
XA Investments LLC
Phone: 888-903-3358
Email: [email protected]
www.xainvestments.com

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