Business Context and Reporting Period
This Form 8-K filing by XAI Octagon Floating Rate & Alternative Income Trust (NYSE: XFLT) reports a current event dated October 1, 2024, with the report filed on October 2, 2024. The filing details an unregistered sale of equity securities under Item 3.02.
Key Financial Metrics
- Transaction Type: Issuance and sale of 6.95% Series II 2029 Convertible Preferred Shares.
- Shares Issued: 400,000 shares.
- Price Per Share: $23.25.
- Net Proceeds: Approximately $9.3 million (before expenses).
- Total Outstanding Series II 2029 Shares: 1,600,000 shares immediately following this issuance.
Material Changes
The Trust executed a portion of a purchase agreement entered into on June 10, 2024, which authorized the sale of up to 1,800,000 Series II 2029 Convertible Preferred Shares. This specific transaction increased the outstanding count of these preferred shares by 400,000 units.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard disclosure of the unregistered sale. The transaction was conducted pursuant to Section 4(a)(2) of the Securities Act of 1933. The remaining capacity under the June 2024 Purchase Agreement allows for further sales on or before December 10, 2025.
Investor Verification Checklist
- Verify the total capital raised under the June 10, 2024 Purchase Agreement to date.
- Review the full Statement of Preferences for the Series II 2029 Convertible Preferred Shares (Exhibit 3.1 of the June 14, 2024 filing) for conversion terms and liquidation preferences.
- Confirm the impact of the $9.3 million proceeds on the Trust's overall liquidity and leverage ratios.
- Monitor future filings for additional issuances under the remaining capacity of the Purchase Agreement.