September 27, 2022
XAI Octagon Floating Rate & Alternative Income Term Trust Celebrates 5th Anniversary
CHICAGO--(BUSINESS WIRE)--XA Investments (“XAI”), a Chicago-based alternative asset manager, celebrates the 5th anniversary of the XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) (“XFLT” or the “Trust”). Octagon Credit Investors, LLC (“Octagon”) serves as the Trust’s investment sub-adviser. The Trust was launched on September 27, 2017 with $82 million in net assets and has made several accretive follow-on equity offerings in addition to the issuance of shares pursuant to an “at the market” (“ATM”) offering program, which have fueled outstanding asset growth for XFLT. As a result, the Trust has grown total managed assets by approximately 330% since its launch and now has approximately $395mm in managed assets (which includes assets attributable to the Trust’s use of financial leverage). In addition, XFLT common shares have traded at an average premium to its net asset value of 3.55% since inception, as of September 26, 2022, enabling the Trust’s asset growth to benefit shareholders through accretive issuances of common shares.
The investment objective of the Trust is to seek attractive total returns 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 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 is well-positioned in the listed closed-end fund marketplace with its strategic investment mix of securities including loans and collateralized loan obligation (“CLO“) investments. XFLT’s investments may include (i) structured credit investments, including collateralized loan obligation (“CLO”) debt and subordinated (i.e., residual or equity) securities; (ii) corporate credit investments, including leveraged loans and high yield bonds; (iii) opportunistic credit investments, including stressed and distressed credit situations; and (iv) other credit-related instruments.
Gretchen Lam, Senior Portfolio Manager at Octagon noted, “We are delighted to commemorate XFLT’s 5-year anniversary. We appreciate the shareholders putting their trust with us.”
Kimberly Flynn, Managing Director of XA Investments noted, “We are pleased with the strong asset growth we’ve observed in XFLT and its reception among institutions, financial advisors and other income-oriented investors. We believe Octagon is a leader in the CLO marketplace. We have and will continue to prioritize sound management of the Trust along with key investor education efforts on the CLO market, which we believe have supported the Trust’s growth over time.”
The Trust’s common shares are traded on the New York Stock Exchange under the symbol “XFLT,” and the Trust’s 6.50% Series 2026 Term Preferred Shares are traded on the New York Stock Exchange under the symbol “XFLTPRA.”
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, $32.9B 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.
The Trust may not achieve its investment objective. An investment in the Trust is subject to investment risk, including possible loss of the entire principal amount that you invest. Shares of closed-end investment companies frequently trade at a discount from their net asset value, which is a risk separate and distinct from the risk that the Trust’s net asset value could decrease as a result of its investment activities. An investment in the Trust involves risks and is not appropriate for all investors and is not intended to be a complete investment program. Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the Trust carefully before investing. The Trust invests primarily in below investment grade credit instruments, which are commonly referred to as “high yield” securities or “junk” bonds. Investments in below investment grade securities are considered predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal when due and such issuers are not perceived as strong financially as those with higher credit ratings. Investments in below investment grade credit instruments involve substantial risk of loss. The Trust invests a significant portion of its assets in CLO debt and subordinated notes (commonly referred to as CLO “equity”) which often involve risks that are different from or more acute than risks associated with other types of credit instruments. CLOs are a type of structured credit instrument. Holders of structured credit instruments bear risks of the underlying investments, index or reference obligation as well as risks associated with the issuer of the instrument, which is often a special purpose vehicle, and may also be subject to counterparty risk. Senior loans may not be fully secured by collateral, generally do not trade on exchanges, and are typically issued by unrated or below-investment grade companies, and therefore are subject to greater liquidity and credit risk. See the Trust’s periodic filings with the Securities and Exchange Commission for a discussion of the risks associated with an investment in the Trust’s securities.
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.
The Trust has entered into a Distribution Agreement with Foreside Fund Services, LLC pursuant to which the Trust may offer and sell up to common shares, from time to time, in “at the market” transactions. Foreside Fund Services, LLC, a FINRA Member firm, is not affiliated with the Trust’s investment adviser or sub-adviser.
This press release may contain forward-looking statements, within the meaning of the federal securities laws, that involve risks and uncertainties. These statements describe the Trust’s plans, strategies, and goals and the Trust’s beliefs and assumptions concerning future economic and other conditions and the outlook for the Trust, based on currently available information. Words such as “anticipates,” “believes,” “expects,” “objectives,” “goals,” “future,” “intends,” “seeks,” “will,” “may,” “could,” “should,” and similar expressions, and the negative of such terms, are used in an effort to identify forward-looking statements, although some forward-looking statements may be expressed differently. By their nature, all forward looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by any forward looking statements. Although the Trust believes that the expectations expressed in these forward looking statements are reasonable, actual results could differ materially from those projected or assumed in these 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. The Trust urges you to review carefully the Trust’s periodic filings with the Securities and Exchange Commission for a discussion of the risks associated with an investment in the Trust’s securities. All forward looking statements contained in this press release are made as of the date hereof. 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
Contacts
Robert Chenoweth, Vice President – Investor Relations
XA Investments LLC
Phone: 888-903-3358
Email: RChenoweth@XAInvestments.com
www.xainvestments.com