Filed Pursuant to Rule 497(a)
File No. 333-251542
Rule 482 AD
XAI Octagon
Floating Rate & Alternative Income Term Trust
Prices Public Offering of Common Shares
CHICAGO, Illinois – February
25, 2021 – XAI Octagon Floating Rate & Alternative Income Term Trust (the “Trust”) (NYSE: XFLT), a
diversified, closed-end management investment company with an investment objective to seek attractive total return with an
emphasis on income generation across multiple stages of the credit cycle, has priced its previously announced underwritten
public offering of common shares of beneficial interest (“Common Shares”) pursuant to the Fund’s effective
shelf registration statement filed with the U.S. Securities and Exchange Commission (the “SEC”). The Trust agreed
to sell 2,900,250 Common Shares at a price to the public of $8.62 per Common Share. In addition, the Trust has granted
the underwriters a 30-day option to purchase up to 435,038 additional Common Shares to cover over-allotments, if any.
The Trust expects to receive net proceeds
from the offering, excluding the exercise of the over-allotment option, if any, of approximately $23.9 million. Assuming the full
exercise of the over-allotment option, the net proceeds may reach approximately $27.5 million.
The Trust intends to invest the net proceeds
from the offering in accordance with its investment objective and policies. The offering is expected to close on or about March
1, 2021, subject to the satisfaction of customary closing conditions.
National Securities Corporation, B. Riley
Securities, Inc. and Ladenburg Thalmann & Co. Inc. are acting as joint book-running managers for the offering. Aegis Capital Corp. and Maxim Group LLC are acting as lead managers for the offering. JonesTrading Institutional Services LLC, Newbridge
Securities Corporation and Wedbush Securities Inc. are acting as co-managers for the offering.
The offering of Common Shares may be made
only by means of a prospectus. Copies of the prospectus supplement relating to the offering and accompanying base prospectus may
be obtained from: National Securities Corporation, Attention: Adrian Adderley, 200 Vesey Street, 25th Floor, New York, New York
10281, telephone: (561) 981-1074 or by email at prospectusrequest@nationalsecurities.com; B. Riley Securities, Inc., at 1300 North 17th Street, Suite 100, Arlington, VA 22209 or by calling (703) 312‐9580 or by emailing
prospectuses@brileyfin.com; or Ladenburg Thalmann, Attn: Syndicate Department, 640 5th Ave, 4th Floor, New York, NY 10019, or by emailing
prospectus@ladenburg.com (telephone number 1-800-573-2541).
Investors may also obtain these documents
free of charge from the SEC’s website at www.sec.gov.
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, $26.3B
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.
*
* *
The Trust, XAI and Octagon
do not provide tax advice; 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. The
preliminary prospectus supplement, dated February 24, 2021, and accompanying prospectus, dated February 2, 2021, each of which
has been filed with the SEC, contain a description of these matters and other important information about the Trust and should
be read carefully before investing.
The information in the
preliminary prospectus supplement, the accompanying prospectus and this press release is not complete and may be changed. 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 Common
Shares trade in the public markets and other factors discussed in the Trust’s prospectus supplement and accompanying base
prospectus and to be discussed in the Trust’s periodic filings 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
Company Contact:
Kimberly Flynn, Managing Director
XA Investments LLC
Phone: 1-888-903-3358
Email: info@xainvestments.com
www.xainvestments.com
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