XFLT Issues 6.50% Series 2026 Notes in Material Agreement

TL;DR

**XFLT just took on more debt with new 6.50% notes, watch for impact on distributions.**

AI Summary

XAI Octagon Floating Rate & Alternative Income Trust (XFLT) announced on February 1, 2024, that it entered into a material definitive agreement to issue 6.50% Series 2026 Notes. This matters to investors because it indicates the company is raising capital through debt, which can impact future earnings and the trust's ability to pay distributions, potentially affecting the stock's value.

Why It Matters

This debt issuance impacts XFLT's capital structure and future interest expenses, which could affect its net asset value and distributions to shareholders.

Risk Assessment

Risk Level: medium — Taking on new debt, especially with a fixed interest rate, introduces financial leverage and interest rate risk, which could impact the trust's profitability.

Analyst Insight

Investors should monitor XFLT's upcoming earnings reports for details on how the new 6.50% Series 2026 Notes impact interest expenses and net investment income, as this could affect future distribution coverage.

Key Numbers

• 6.50% — Interest Rate (The fixed interest rate on the newly issued Series 2026 Notes, impacting future expenses.)
• 2026 — Maturity Year (The year the Series 2026 Notes are expected to mature, indicating the duration of the debt.)

Key Players & Entities

• XAI Octagon Floating Rate & Alternative Income Trust (company) — the registrant filing the 8-K
• February 1, 2024 (date) — date of the earliest event reported
• 6.50% (dollar_amount) — interest rate of the Series 2026 Notes
• Series 2026 Notes (company) — the type of debt instrument issued

Forward-Looking Statements

• XFLT's interest expenses will increase due to the 6.50% Series 2026 Notes. (XAI Octagon Floating Rate & Alternative Income Trust) — high confidence, target: 2024-12-31
• The issuance of these notes will impact XFLT's net asset value (NAV) calculations. (XAI Octagon Floating Rate & Alternative Income Trust) — medium confidence, target: 2024-03-31

FAQ

Key Financial Figures

• $25.00 — ferred Shares (Liquidation Preference $25.00) XFLTPRA New York Stock Exchange
• $0.01 — hares of beneficial interest, par value $0.01 per share, of the Trust (the "Common Sh
• $7.0485 — l 3,546,854 Common Shares at a price of $7.0485 per Common Share. The offering is expec
• $25.0 million — sale of Common Shares of approximately $25.0 million. The Offering has been made pursuant

Filing Documents

• ea169547_8k.htm (8-K) — 41KB
• ea169547_ex5-1.htm (EX-5.1) — 22KB
• ea169547_ex10-1.htm (EX-10.1) — 45KB
• ea169547_ex10-2.htm (EX-10.2) — 23KB
• ea169547_ex99-1.htm (EX-99.1) — 15KB
• ex99-1_001.jpg (GRAPHIC) — 4KB
• 0001213900-24-009613.txt ( ) — 395KB
• xflt-20240201.xsd (EX-101.SCH) — 4KB
• xflt-20240201_def.xml (EX-101.DEF) — 26KB
• xflt-20240201_lab.xml (EX-101.LAB) — 36KB
• xflt-20240201_pre.xml (EX-101.PRE) — 25KB
• ea169547_8k_htm.xml (XML) — 5KB

01. Entry

Item 1.01. Entry into a Material Definitive Agreement. Registered Direct Placement of Common Shares On February 1, 2024, the XAI Octagon Floating Rate & Alternative Income Trust (formerly, XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) (the "Trust") entered into a purchase agreement (the "Purchase Agreement") between the Trust and the purchasers named therein (the "Purchasers") in connection with the purchase and sale of common shares of beneficial interest, par value $0.01 per share, of the Trust (the "Common Shares") in a registered direct placement (the "Offering") pursuant to the Trust's effective shelf registration is expected to close on or about February 5, 2024, subject to the satisfaction of customary closing conditions. The Trust expects to receive net proceeds (before expenses) from the sale of Common Shares of approximately $25.0 million. The Offering has been made pursuant a prospectus supplement, dated February 1, 2024, and the accompanying prospectus, dated January 24, 2022, each of which constitutes part of the Trust's effective shelf registration statement on Form N-2 (File No. 333-261521) previously filed with the SEC (the "Registration Statement"). The Trust has not retained a placement agent, underwriter, broker or dealer with respect to the Offering. The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Common Share Purchase Agreement filed herewith as Exhibit 10.1 and incorporated herein by reference. Common Share Voting Arrangements Pursuant to the Purchase Agreement and a letter agreement by and among the Trust, Eagle Point Credit Management LLC ("Eagle Point") and the Purchasers, the Purchasers and Eagle Point have granted the Trust an irrevocable proxy to vote at any annual

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure On February 1, 2024, the Trust issued a press release, furnished as Exhibit 99.1 to this Current Report and incorporated herein by reference. The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific refence in such filing.

01. Other Events

Item 8.01. Other Events On February 1, 2024, the Trust conducted the Offering pursuant to the Trust's Registration Statement. A copy of the opinion of Skadden, Arps, Slate, Meagher & Flom LLP relating to the legality of the Common Shares is filed herewith as Exhibit 5.1 and incorporated herein by reference.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits 5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP 10.1 Purchase Agreement, dated February 1, 2024, between the Trust and the Purchasers 10.2 Letter Agreement, dated February 1, 2024, between the Trust, Eagle Point and the Purchasers 23.1 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5.1) 99.1 Press Release, dated February 1, 2024 1 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 TRUST Date: February 2, 2024 By: /s/ Benjamin D. McCulloch Name: Benjamin D. McCulloch Title: Secretary and Chief Legal Officer 2

View Full Filing

View this 8-K filing on SEC EDGAR