Business Context and Reporting Period
This Form 8-K filing by XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) reports events occurring on February 10, 2022, and February 11, 2022. The Trust is a Delaware corporation focused on floating rate and alternative income investments.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on the execution of a new distribution agreement.
Material Changes
The primary material change reported is the entry into a Distribution Agreement with Foreside Fund Services, LLC on February 10, 2022. Key terms include:
- Offering Size: The Trust may offer and sell up to 18,300,000 Common Shares of Beneficial Interest.
- Method: Sales will be conducted "at the market" pursuant to Rule 415 under the Securities Act of 1933.
- Pricing: The minimum sale price per share will not be less than the current net asset value (NAV) plus the Distributor's commission.
- Sub-Placement Agent: UBS Securities LLC was engaged as a sub-placement agent via a separate agreement dated February 10, 2022.
Guidance, Outlook, and Risks
The Trust commenced the Offering on February 11, 2022, pursuant to a prospectus supplement dated February 10, 2022, and a prospectus dated January 24, 2022. These documents are part of an effective shelf registration statement (File No. 333-261521). The filing does not provide specific management commentary on future financial outlook, risks, or contingencies beyond the standard legal opinion regarding the legality of the shares.
Investor Verification Checklist
- Verify the full text of the Distribution Agreement (Exhibit 1.1) and Sub-Placement Agent Agreement (Exhibit 1.2) for specific commission rates and termination clauses.
- Review the Prospectus Supplement dated February 10, 2022, for detailed risk factors associated with the "at the market" offering.
- Confirm the current Net Asset Value (NAV) per share to understand the pricing floor for the new share issuance.
- Check subsequent filings to monitor the volume of shares actually sold under this agreement.