Approved proposals make the trust perpetual and will have a
new sub-advisory agreement with Octagon Credit Investors.
XAI Octagon Floating Rate & Alternative Income Term Trust
(the “Trust”) (NYSE: XFLT) announced that its shareholders have
approved two important proposals at the reconvened special meeting
of shareholders (the “Special Meeting”) held today.
At the Special Meeting, shareholders approved the following:
- An amendment to the Trust’s Second Amended and Restated
Declaration of Trust (the “Term Amendment”) to eliminate the
Trust’s termination date of December 31, 2029 and make the Trust
perpetual.
- A new sub-advisory agreement among Octagon Credit Investors,
LLC (“Octagon”), the Trust and XA Investments LLC (“XAI”) (the “New
Octagon Agreement”), to provide for continued portfolio management
by Octagon upon the closing of the acquisition of Octagon’s parent
company, Conning Holdings Limited (together with Conning &
Company, “Conning”), by Generali Investment Holdings, an entity
comprising the majority of asset management activities of Generali
Group (“Generali”).
The Term Amendment
The Term Amendment, which is the first of its kind for a listed
term trust closed-end fund, removes the Trust’s previous
termination date and makes it a perpetual closed-end fund. The Term
Amendment will be effective as of February 1, 2024. In connection
with the Term Amendment, the Trust will change its name from XAI
Octagon Floating Rate & Alternative Term Trust to XAI Octagon
Floating Rate & Alternative Trust. The Trust will begin trading
on the New York Stock Exchange under the new name effective before
the market opens on February 1, 2024 and will continue to trade
under ticker symbol XFLT. There are no changes to the Trust’s
investment policies or strategies in conjunction with the Term
Amendment or the name change.
The Trust’s Board believes the Term Amendment will provide
multiple benefits to shareholders, including:
- Ability to maintain a fully invested portfolio. The Term
Amendment will allow the Trust to continue operating just as it has
since inception, with no need to wind down investments or reduce
its leverage levels, since the Trust will no longer have a
termination date.
- Remain invested in the Trust. Those shareholders who wish to
remain invested in the Trust can maintain their investment and will
not need to seek a replacement investment due to termination, since
the Trust is now a perpetual investment fund.
- Benefit from potential growth and scale efficiencies. As a
perpetual investment fund, the Trust can continue to seek growth
and scale opportunities, just as it always has done via an
accretive at-the-market offering and strategic primary
issuances.
Greg Dingens, Chair of the Trust’s Board and an Independent
Trustee noted, “We’re very pleased that shareholders voted in favor
to approve both proposals. We believe the vote in favor of the
proposals is a signal of shareholders’ support for the Trust. These
approvals will propel the Trust’s further growth of its common
share base over time as a perpetual fund.”
The New Octagon Agreement
The shareholders’ approval of the New Octagon Agreement allows
Octagon to remain the Trust’s sub-adviser upon the closing of
Generali’s acquisition of Octagon’s parent company, Conning.
Generali is one of the largest global insurance and asset
management providers, operating in over 50 countries with over
80,000 employees. The New Octagon Agreement will be entered into
upon the closing of the transaction, which is anticipated to occur
during the first half of 2024, and will not result in any change in
the portfolio management of the Trust or in the Trust’s investment
objectives or policies.
Gretchen Lam, Chief Executive Officer of Octagon and a member of
the firm’s Investment Committee remarked, "We are thankful for the
shareholders and their continued faith in Octagon’s management of
the Trust’s portfolio. We’re excited for the next phase of
Octagon's growth and are pleased to continue serving XFLT
shareholders in the years to come.”
* * *
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
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 29 year-old, $35B
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.
This press release contains certain statements that may include
“forward-looking statements.” Forward-looking statements can be
identified by the words “may,” “will,” “intend,” “expect,”
“estimate,” “continue,” “plan,” “anticipate,” and similar terms and
the negatives of such terms. By their nature, all forward-looking
statements involve risks and uncertainties, and actual results
could differ materially from those contemplated by the
forward-looking statements. Many factors that could materially
affect the Trust’s actual results are the performance of the
portfolio of securities held by the Trust, the conditions in the
U.S. and international financial and other markets, the price at
which the Trust’s shares trade in the public markets and other
factors discussed in the Trust’s annual and semi-annual reports
filed with the SEC.
Although the Trust believes that the expectations expressed in
such forward-looking statements are reasonable, actual results
could differ materially from those expressed or implied in such
forward-looking statements. The Trust’s future financial condition
and results of operations, as well as any forward-looking
statements, are subject to change and are subject to inherent risks
and uncertainties. You are cautioned not to place undue reliance on
these forward-looking statements, which are made as of the date of
this press release. Except for the Trust’s ongoing obligations
under the federal securities laws, the Trust does not intend, and
the Trust undertakes no obligation, to update any forward-looking
statement.
NOT FDIC INSURED
NO BANK GUARANTEE
MAY LOSE VALUE
Foreside Fund Services, LLC - Distributor
* * *
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version on businesswire.com: https://www.businesswire.com/news/home/20240124655630/en/
Media Contact: Kimberly Flynn, Managing Director XA
Investments LLC Phone: 888-903-3358 Email: KFlynn@XAInvestments.com
www.xainvestments.com
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