XAI Octagon Floating Rate and Alternative Income Trust

XFLT

Market cap $378M

CHICAGO, Oct. 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) (NYSE: XFLT), a diversified, closed-end management investment company with an investment objective to seek attractive total return with an emphasis on income generation across multiple stages of the credit cycle, has reached an agreement with certain institutional investors for the purchase and sale of 7,300,000 shares of the Trust's 5.92% Series A Mandatory Redeemable Preferred Shares due January 31, 2031 (the “Mandatory Redeemable Preferred Shares”), liquidation preference $10.00 per share. The Trust expects to receive net proceeds (before expenses) from the sale of the Mandatory Redeemable Preferred Shares of approximately $71.5 million. The investors have agreed to purchase the Mandatory Redeemable Preferred Shares, at one or more closings on or before December 18, 2025.

CHICAGO, Oct. 01, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) has declared its regular monthly distribution of $0.070 per share of the Trust's common shares (NYSE: XFLT). The Trust also declared preferred dividends for the quarter of $0.40625 per share of the Trust's 6.50% Series 2026 Term Preferred Shares (NYSE: XFLTPRA).

XAI Octagon Floating Rate & Alternative Income Term Trust offers a high yield but sustains distributions by issuing new units, not from profits. XFLT's portfolio is heavily weighted toward risky CLO equity and consistently pays out more than it earns, resulting in significant aggregate losses. Despite diversification and some safe assets, XFLT has underperformed the market, with a 2% loss versus a 47.5% S&P 500 gain since November 2023.

For income investors, closed-end funds remain an attractive investment class that covers various asset classes and promises high distributions and reasonable total returns. Closed-end funds, or CEFs, are generally characterized by higher volatility and deeper drawdowns than the broader market. For these reasons, they are not suited for everyone. In this monthly series, we highlight the ten best CEFs with solid track records that pay high distributions and offer "excess" discounts. We try to separate the wheat from the chaff using our filtering process to select 10 CEFs every month from around 500 closed-end funds.

August saw continued gains across major indexes, with RSP and Dow outperforming the tech-heavy benchmarks toward the second half of the month. As the markets continue to hit and trade near all-time highs, now including the Dow Jones hitting all-time highs, I've been continuing to build up my cash position. At the same time, every month I do some buying to keep the income compounding on itself over the long term.

The investment case for closed-end funds (CEFs) is weak now due to tight discounts, high leverage costs, and expensive underlying assets. Most CEFs do not deliver sustainable alpha, and lower-fee actively managed ETFs now offer similar exposures with better economics. We have reduced our CEF allocation, favoring alternatives like BDCs, select ETFs, preferreds, and bonds for better value and risk/reward.

Diving deep into the fixed-income space, you can discover glorious fountains of income. Can't hold your breath? Leverage professional help. Fund managers can do the exploration for you, sharing the rewards.

We review the CEF market valuation and performance through the last week of August and highlight recent market action. CEF sectors rallied in August, but fixed-income CEF discounts remain historically expensive, warranting caution for new buyers. Angel Oak Financial Strategies Income Term Trust (FINS) faces shareholder drama, but its underperformance claims are overstated; liquidation could benefit shareholders via discount compression.

CHICAGO, Sept. 02, 2025 (GLOBE NEWSWIRE) -- XAI Octagon Floating Rate & Alternative Income Trust (the “Trust”) has declared its regular monthly distribution of $0.070 per share on the Trust's common shares (NYSE: XFLT), payable on October 1, 2025, to common shareholders of record as of September 16, 2025, as noted below. The amount of the distribution represents no change from the previous month's distribution amount of $0.070 per share.

XAI Octagon Floating Rate & Alternative Income Trust (XFLT) Q2 2025 Earnings Call Transcript