Business Context and Reporting Period
This Form 8-K Current Report was filed by XAI Octagon Floating Rate & Alternative Income Trust (formerly XAI Octagon Floating Rate & Alternative Income Term Trust) on February 2, 2024, regarding events occurring on February 1, 2024. The Trust is a Delaware corporation incorporated to invest in floating rate and alternative income securities.
Key Financial Metrics and Transaction Details
The filing details a registered direct placement of common shares rather than periodic financial performance metrics. Key transaction figures include:
- Shares Issued: 3,546,854 Common Shares of Beneficial Interest.
- Price Per Share: $7.0485.
- Expected Net Proceeds: Approximately $25.0 million (before expenses).
- Closing Date: Expected on or about February 5, 2024.
- Intermediaries: No placement agent, underwriter, broker, or dealer was retained.
The filing does not provide current revenue, profit, cash flow, margins, debt, or liquidity figures for the reporting period.
Material Changes and Agreements
The primary material change is the entry into a Purchase Agreement for the sale of common shares. Additionally, a voting arrangement was established:
- Proxy Grant: Purchasers and Eagle Point Credit Management LLC (and related entities) granted the Trust an irrevocable proxy to vote their Common Shares in the same proportion as other holders.
- Termination Condition: The voting arrangement terminates automatically if the aggregate holdings of the Purchasers and Eagle Point-related entities fall below 4.9% of outstanding Common Shares.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard closing conditions of the offering. The transaction is subject to the satisfaction of customary closing conditions. The Trust issued a press release on February 1, 2024, which is incorporated by reference but not deemed "filed" under Section 18 of the Exchange Act.
Investor Verification Checklist
- Verify the final closing date of the offering (expected February 5, 2024) and actual net proceeds received after expenses.
- Review the full text of the Purchase Agreement (Exhibit 10.1) and Letter Agreement (Exhibit 10.2) for specific covenants and voting mechanics.
- Confirm the impact of the new share issuance on the Trust's total outstanding share count and potential dilution.
- Monitor the aggregate ownership percentage of Eagle Point and Purchasers to determine if the irrevocable proxy arrangement remains in effect.