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


CHICAGO–(COMMERCIAL THREAD) – XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) has declared its regular monthly distribution of $ 0.073 per share of the common shares of the Trust (NYSE: XFLT). The Trust also declared preferred dividends for the second quarter of $ 0.5597 per share of the Trust’s 6.50% Series 2026 Forward Preferred Shares (NYSE: XFLTPRA).

The following dates apply to each declaration:

Share class



Registration Date

Payment date







July 14, 2021

July 15, 2021

August 2, 2021

$ 0.073

No change


July 14, 2021

July 15, 2021

August 2, 2021

$ 0.55971



Distributions of common shares may be paid out of net investment income (interest and ordinary dividends), capital gains and / or return of capital. The specific tax characteristics of the distributions will be reported to common shareholders of the Trust on Form 1099 after the end of the 2021 calendar year. Shareholders should not assume that the source of a distribution from the Trust is net income or income. profit. For more information on the Trust’s distributions, please visit www.xainvestments.com.

The net investment income and capital gain of the Trust can vary significantly over time; however, the Trust seeks to maintain more stable monthly distributions of common shares over time. The Trust’s investments in CLOs may be subject to complex tax rules and the calculation of taxable income attributed to an investment in CLO subordinated bonds may be significantly 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 income tax returns are filed.

As a registered investment company, the Trust is subject to an excise tax of 4% 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 its ordinary income (without taking into account any capital gain or loss) for the calendar year and (ii) 98.2% of its capital gain in excess of its depreciation (corrected by certain ordinary losses) for a one-year period generally ending October 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 management of the Trust, determines that it is in the best interests of the shareholders to do so.

Distributions of common shares paid by the Trust for any period may be greater than 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 an ordinary 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 potential gain of the common shareholder, or reduce the potential loss of the common shareholder, on any subsequent sale or other disposition of common shares.

Preferred Shareholders are entitled to receive cumulative cash dividends and distributions on the 6.50% Series 2026 Forward Preferred Shares of the Trust, as and when declarations of the Board of Trustees of the Trust or by virtue of the authorization granted by it, from funds legally available for distribution. and in preference to dividends and distributions on ordinary 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 Forward Preferred Shares of the Trust, the dividends will be distributed on a pro rata basis between preferred shareholders.

Distributions and dividends will be paid on the payment date indicated above, unless payment of such distribution or dividend is deferred by the Board of Trustees after determining that such deferral is necessary in order to comply. comply with applicable law, in order to ensure that the Trust remains solvent and able to pay its debts as they fall due and to continue to operate or, with respect to the regular monthly distribution of the Trust to common shareholders, to comply with the conditions or financial covenants applicable to the senior securities of the Trust.

Future distributions of Common Shares will be paid if and when declared by the Board of Trustees of the Trust, based on a number of factors, including the Trust’s continued compliance with the terms and financial covenants of its securities. senior, the Trust’s net investment income, and cash on hand. There can be no assurance that the amount or timing of distributions of Common Shares 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 of Common Shares. common stock in the future.

The investment objective of the Trust is to seek an attractive total return with an emphasis on income generation through several stages of the credit cycle. The Trust seeks to achieve its investment objective by investing in a dynamically 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 common shares of the Trust trade on the New York Stock Exchange under the symbol “XFLT” and the Trust’s 6.50% Series 2026 Term Preferred Shares trade on the New York Stock Exchange under the symbol “XFLTPRA “.

About XA Investments

XA Investments LLC (“XAI”) acts as investment advisor to the Trust. XAI is a Chicago-based company founded by XMS Capital Partners in April 2016. In addition to investment advisory services, the company also provides investment fund structuring and advisory services focused on registered closed-end funds for meet the needs of institutional clients. XAI provides custom product creation and advisory services including market development and 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 alternative institutional-caliber 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 mergers and acquisitions, business advisory and asset management services to its 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”) acts as investment sub-advisor to the Trust. Octagon is a 25+ year-old corporate credit investment advisor, $ 27.6 billion below the investment grade, focused on investments in leveraged loans, high yield bonds and structured loans (debt and CLO actions). Through fundamental credit analysis and active portfolio management, Octagon’s investment team identifies attractive relative value opportunities in lower quality asset classes, sectors and issuers. Octagon’s investment philosophy and methodology encourage and rely 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 local and state taxes, as well as the alternative federal minimum tax.

Investors should carefully consider the investment objectives and policies, risk considerations, fees and expenses of the Trust before investing. For more information on 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 such securities in any state or jurisdiction in which such an offer or solicitation or sale would be illegal prior to registration. or qualification under the laws of such state or jurisdiction.




1 Includes partial cash dividends for the period March 25, 2021 to April 29, 2021. The Trust’s 6.50% Series 2026 Forward Preferred Share Dividend has been calculated based on the preferred stock liquidation preference of $ 25.00 per share and the current quarterly distribution rate per share of $ 0.40625.


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