UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13
or 15(d)
of the Securities
Exchange Act of 1934
Date of Report
(Date of earliest event reported) October 26, 2023 (October 26, 2023)
XAI Octagon Floating
Rate & Alternative Income Term Trust
(Exact name of
registrant as specified in its charter)
Delaware |
|
811-23247 |
|
82-235867 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification
No.) |
321 North Clark Street, Suite 2430, Chicago, Illinois |
|
60654 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants telephone
number, including area code (312) 374-6930
(Former name
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:
| ☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☒ | Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement
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
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Shares of Beneficial Interest |
|
XFLT |
|
New
York Stock Exchange |
6.50%
Series 2026
Term Preferred Shares
(Liquidation Preference $25.00) |
|
XFLTPRA |
|
New
York Stock Exchange |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
☐ 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 new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
7.01. Regulation FD Disclosure
On October 26, 2023,
the Trust announced that the Trust’s Board of Trustees (the “Board”) unanimously approved a proposal to eliminate the
Trust’s termination date of December 31, 2029. The proposal, if approved by shareholders, will amend the Trust’s Second Amended
and Restated Declaration of Trust and make the Trust perpetual. The Trust also announced that the Board unanimously approved a new sub-advisory
agreement among Octagon Credit Investors, LLC (“Octagon”), the Trust and XA Investments LLC (“XAI”).
In connection with
the foregoing, on October 26, 2023, the Trust issued a press release, which is filed as Exhibit 99.1 to this Current Report and is incorporated
herein by reference.
The information
disclosed under this Item 7.01, including Exhibit 99.1 hereto, other than the Excluded Sections (as defined below), shall be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934.
Item
9.01 Financial Statements and Exhibits.
The quotations in the second
and fifth paragraphs of Exhibit 99.1 (Excluded Sections) shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 and shall not be deemed to be incorporated by reference into any filing of the Trust made under the Securities Act
of 1933.
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:
October 26, 2023 |
By: |
/s/
Benjamin D. McCulloch |
|
Name: |
Benjamin
D. McCulloch |
|
Title: |
Secretary
and Chief Legal Officer |
Exhibit
99.1
XAI Octagon
Floating Rate & Alternative Income Term Trust Announces Board Approval of Proposal to Become Perpetual Fund and New Sub-Advisory
Agreement with Octagon Credit Investors
CHICAGO, October 26, 2023 – XAI Octagon Floating Rate & Alternative
Income Term Trust (the “Trust”) (NYSE: XFLT), announced that the Trust’s Board of Trustees (the “Board”)
has unanimously approved a proposal to eliminate the Trust’s termination date of December 31, 2029. The proposal, if approved by
shareholders, will amend the Trust’s Second Amended and Restated Declaration of Trust and make the Trust perpetual (the “Term
Amendment”).
Greg Dingens, an Independent Trustee and the Chair of the Board noted,
“We voted in favor of the proposal, which will allow the Trust to continue to operate as it has since inception. The Board believes
that eliminating the Trust’s termination date is in the best interest of shareholders and will allow the Trust to seek continued
growth of its common share base as a perpetual fund over time.”
Additionally, the Board unanimously approved a
new sub-advisory agreement among Octagon Credit Investors, LLC (“Octagon”), the Trust and XA Investments LLC (“XAI”).
Octagon’s parent company, Conning Holdings Limited1, recently announced its acquisition
by Generali Investment Holdings, an entity comprising the majority of asset management activities of Generali Group (“Generali”).
Founded in 1831, Generali is among the largest financial services complexes worldwide with managed assets in excess of €500 billion.
Generali operates in over 50 countries with over 80,000 employees.
The closing of the transaction is not expected
to result in any change in the portfolio management of the Trust or in the Trust’s investment objectives or policies. The closing
of the transaction is expected to occur during the first half of 2024. The transaction will constitute an “assignment” of
the current sub-advisory agreement among the Trust, XAI and Octagon, causing the current agreement to terminate according to its terms,
and necessitating approval of the new sub-advisory agreement (the “New Octagon Agreement”). In addition, to avoid any interruption
of investment sub-advisory services if the closing of the transaction occurs prior to the receipt of shareholder approval of the New Octagon
Agreement, the Board unanimously approved an interim investment sub-advisory agreement with Octagon, which would be effective upon the
closing of the transaction and remain in effect for a maximum period of 150 days.
“We are excited for the next phase of Octagon's growth and are
pleased to continue serving XFLT shareholders in the years to come,” commented Gretchen Lam, Senior Portfolio Manager at Octagon.
| 1 | Conning, Inc., Octagon Credit Investors, LLC, Global Evolution
Holding ApS and its group of companies (“Global Evolution”), Goodwin Capital Advisers, Inc., Pearlmark Real Estate, LLC,
Conning Investment Products, Inc., Conning Asset Management Limited, and Conning Asia Pacific Limited are all direct or indirect subsidiaries
of Conning Holdings Limited (collectively, “Conning”) which is one of the family of companies owned by Cathay Financial Holding
Co., Ltd., a Taiwan-based company. |
The Term Amendment and the New Octagon Agreement
(together, the “Proposals”) are subject to approval by the Trust’s shareholders. The Board approved submitting each
Proposal to the Trust’s shareholders for approval at a special meeting of shareholders, expected to be held on December 19, 2023.
Shareholders of record at the close of business on October 25, 2023 are entitled to vote at the meeting.
In connection with the solicitation of proxies to approve the Proposals,
Trust will file a proxy statement relating to the Proposals with the Securities and Exchange Commission (“SEC”). Because the
proxy statement will contain important information about the Proposals, including the expected benefits and potential risks, the Trust’s
shareholders are urged to read the proxy statement and accompanying materials carefully when they receive them. When filed with the SEC,
the proxy statement will be available free of charge at the SEC’s website, www.sec.gov. This press release is not a solicitation
of any proxy.
The Trust’s shareholders will be able to obtain copies of the
definitive proxy statement and accompanying materials, when available, by calling the Trust’s proxy agent toll-free at (800) 431-9645.
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 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.
The Trust, XAI and Octagon and certain of their respective directors/trustees,
officers and affiliates may be deemed under the rules of the SEC to be participants in the solicitation of proxies from shareholders in
connection with the matter described above. Information about the trustees and officers of the Trust may be found in the Fund’s
annual report to shareholders and annual proxy statement previously filed with the SEC.
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
* * *
Media Contact:
Kimberly Flynn, Managing Director
XA Investments LLC
Phone: 888-903-3358
Email: KFlynn@XAInvestments.com
www.xainvestments.com
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