8-K
XAI Octagon Floating Rate & Alternative Income Trust (XFLT)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d)
ofthe Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported) April 1, 2020
XAIOctagon Floating Rate & Alternative Income Term Trust
(Exactname of registrant as specified in its charter)
| Delaware | 811-23247 | 82-2305867 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 321 North Clark Street, Suite 2430, Chicago, Illinois | 60654 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrantstelephone number, including area code: (312) 374-6930
(Formername or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br>communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br>material pursuant to Rule 14a- 12 under the Exchange Act (17 CFR 240.14a- 12) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol | Name of each exchange<br><br> <br>on which registered |
|---|---|---|
| Common Shares<br> of Beneficial Interest | XFLT | New<br> York Stock Exchange |
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 8.01. | Other Events |
|---|
On April 1, 2020, XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) (the “Trust”), a closed-end fund, issued a press release in connection with the declaration of the Trust’s regular monthly distribution of $0.060 per share on the Trust’s common shares, payable on May 1, 2020 to common shareholders of record as of April 15, 2020.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
The following exhibit is furnished with this report on Form 8-K:
| 99.1 | XAI Octagon Floating Rate & Alternative Income Term Trust Press Release dated April 1, 2020 |
|---|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| XAI OCTAGON FLOATING RATE & ALTERNATIVE INCOME TERM TRUST | ||
|---|---|---|
| Date: April 1,<br> 2020 | By: | /s/<br> Benjamin D. McCulloch |
| Name: | Benjamin D. McCulloch | |
| Title: | Secretary & Chief Legal Officer |
Exhibit99.1
XAIOctagon Floating Rate & Alternative Income Term Trust Declares its Monthly Distribution of $0.060 per Share
April 1, 2020, Chicago – XAI Octagon Floating Rate & Alternative Income Term Trust (“XFLT” or the “Trust”) has declared its regular monthly distribution of $0.060 per share on the Trust’s common shares, payable on May 1, 2020 to common shareholders of record as of April 15, 2020, as noted below. The amount of the distribution represents a 17.8% decrease from the previous month’s distribution of $0.073 per share.
The following dates apply to today’s monthly distribution declaration:
| Ex-Dividend<br> Date | April<br> 14, 2020 |
|---|---|
| Record Date | April 15, 2020 |
| Payable Date | May 1, 2020 |
| Amount | $0.060 per common<br> share |
| Change from Previous Month | 17.8% decrease |
Distributions on common shares are generally paid from net investment income (regular interest and dividends) and may also include 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 2020 calendar year. For further information regarding the Trust’s distributions, please visit www.xainvestments.com.
The distribution shall be paid on the Payment Date unless the payment of such distribution is deferred by the Board of Trustees upon a determination that such deferral is required in order to comply with applicable law or the applicable terms or financial covenants of the Trust’s senior securities or to ensure that the Trust remains solvent and able to pay its debts as they become due and continue as a going concern.
COVID-19Market Volatility
The Trust has been impacted by recent weeks of market volatility caused by the COVID-19 pandemic. As of March 31, 2020, the net asset value of the Trust’s common shares was $4.78 per share, and the last reported sale price for the Trust’s common shares on the New York Stock Exchange was $4.49, representing a discount to net asset value of 6.07%. XA Investments LLC (“XAI”), Octagon Credit Investors, LLC (“Octagon”) and XFLT’s Board of Trustees continue to evaluate present market conditions and the resulting impact to the Trust. XAI, Octagon, and XFLT’s Board of Trustees will seek to act in the best interests of the Trust and its shareholders, balancing the Trust’s objective to seek attractive total return with an emphasis on income generation across multiple stages of the credit cycle with the need to prudently manage the Trust’s investment portfolio during this time of unprecedented market volatility.
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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 (as defined in the Prospectus for the Trust) 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.”
AboutXA Investments
XAI is a Chicago-based firm founded by XMS Capital Partners in April, 2016. 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. It will partner with established asset managers with proven capabilities in alternative credit, private debt and select hedge fund strategies.
AboutXMS 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.
AboutOctagon Credit Investors
Octagon is a 25+ year old, below-investment grade corporate credit investment adviser based in New York with over $25 billion in assets under management. Octagon focuses on leveraged loans, high yield bonds and structured credit. 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 to its investors. For more information, please visit www.octagoncredit.com.
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Future 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 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 distributions in the future.
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<br> FDIC INSURED | NO<br> BANK GUARANTEE | MAY<br> LOSE VALUE |
|---|
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MediaContact:
Kimberly Flynn, Managing Director
XA Investments LLC
Phone: 312-374-6931
Email: KFlynn@XAInvestments.com
www.xainvestments.com