Business Context and Reporting Period
This Form 8-K filing by XAI Octagon Floating Rate & Alternative Income Term Trust (now XAI Octagon Floating Rate & Alternative Income Trust) covers events reported on January 24, 2024. The filing details the approval of a structural amendment to the Trust's Declaration of Trust and a new sub-advisory agreement following a special meeting of shareholders held on December 19, 2023, and adjourned to January 24, 2024.
Key Financial Metrics
The filing text does not provide specific financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses on corporate governance and structural changes rather than financial performance data.
Material Changes
- Perpetual Status: Shareholders approved an amendment to eliminate the requirement for the Trust to terminate operations on or about December 31, 2029, converting it into a perpetual fund.
- Name Change: The Trust's name will change from "XAI Octagon Floating Rate & Alternative Income Term Trust" to "XAI Octagon Floating Rate & Alternative Income Trust."
- Sub-Advisory Agreement: A new investment sub-advisory agreement was approved among the Trust, XA Investments LLC, and Octagon Credit Investors, LLC. This agreement will take effect upon the closing of Generali Investment Holdings' acquisition of Conning Holdings Limited (Octagon's parent company).
Outlook, Management Commentary, and Risks
Management confirmed that the Term Amendment will not alter the Trust's investment objectives, principal investment strategies, or the current portfolio management team. The net asset value of an investment in the Trust will not change as a result of the amendment. The new sub-advisory agreement maintains the existing investment strategy and fee structure, with Octagon continuing to provide services under terms substantially similar to the current agreement. The amendments are effective as of February 1, 2024.
Key Facts for Investor Verification
- Verify the effective date of the name change and perpetual status (February 1, 2024).
- Confirm the closing status of the Generali Investment Holdings acquisition of Conning Holdings Limited, which triggers the new sub-advisory agreement.
- Review the attached press release (Exhibit 99.1) for additional details on the strategic rationale.
- Ensure no changes to the fee structure or investment strategy despite the change in the parent company of the sub-adviser.