September 27, 2017
XAI Octagon Floating Rate & Alternative Income Term Trust (XFLT) Prices Initial Public Offering
September 27, 2017, Chicago – XA Investments (“XAI”) announces that XAI Octagon Floating Rate & Alternative Income Term Trust (“XFLT” or the “Trust”) has priced its successful initial public offering. The Trust seeks attractive total return with an emphasis on income generation across multiple stages of the credit cycle by investing in a dynamically managed portfolio of opportunities primarily within the corporate credit markets. Under normal market conditions, the Trust will invest 80% of its managed assets in floating rate credit instruments and other structured credit investments (including CLO debt and CLO equity). The Trust will begin trading on the New York Stock Exchange (NYSE) today, under the symbol XFLT. For further information regarding the Trust, please visit www.xainvestments.com.
The Trust raised approximately $72.5 million (before deduction of the sales load and offering expenses payable by the Trust) in its common share offering, excluding any exercise of the underwriters’ option to purchase additional shares. If the underwriters exercise that option in full, the Trust will have raised approximately $83.4 million (before deduction of the sales load and offering expenses payable by the Trust). The offering is scheduled to close on September 29, 2017, subject to customary closing conditions.
XAI, an affiliate of XMS Capital Partners, LLC (“XMS”), is the Trust’s investment adviser and Octagon Credit Investors, LLC (“Octagon”) is the Trust’s sub-adviser. As sub-adviser to the Trust, Octagon will be responsible for management of the Trust’s portfolio. With $16.7 billion in assets under management (as of August 31, 2017), Octagon brings an experienced team of investment professionals and a 23-year track record to the management of the Trust.
“We believe that floating rate bank loans and structured credit present compelling opportunities in today’s environment, and look forward to bringing Octagon’s institutional investment expertise in managing below investment grade credit to a new base of investors,” said Lauren Basmadjian, Portfolio Manager, who will be responsible for managing the Trust on behalf of Octagon.
“XFLT is the first of a series of distinctive, demand-driven alternative investment opportunities designed by XAI to provide investors access to institutional quality investment strategies managed by an industry recognized sub-adviser to achieve attractive portfolio outcomes,” said Ted Brombach, Co-Chief Executive Officer of XAI and co-founding partner of XMS, XAI’s parent company.
The lead manager of the underwriting syndicate was UBS Investment Bank.
About XA Investments
XAI is a Chicago-based firm founded by XMS in April, 2016. XAI believes that the investing public can benefit from new vehicles to access a broad range of alternative investment strategies and managers. XAI provides investors with access to alternative managers previously only available to institutional investors. It will partner with established asset managers with proven capabilities in alternative credit, private debt and select hedge fund strategies.
About Octagon Credit Investors
Octagon is a 20+ year old, $16.7 billion below-investment grade corporate credit investment adviser based in New York. Octagon focuses on leveraged loans, high yield bonds and structured credit.
Through fundamental credit analysis and active portfolio management, Octagon's investment team identifies attractive relative value opportunities across below-investment grade asset classes, sectors and issuers. Octagon’s investment philosophy and methodology encourage and rely upon dynamic internal communication to manage portfolio risk.
Over its history, the firm has applied a disciplined, repeatable and scalable approach in its effort to generate attractive risk-adjusted returns to its investors. For more information, please visit www.octagoncredit.com.
About XMS Capital Partners
XMS, established in 2006, is a global, independent, financial services firm providing M&A, corporate advisory and asset management services to clients. It has offices in Chicago, London and Dublin.
XMS provides Involvement BankingTM, which goes beyond transaction oriented investment banking and focuses on delivering objective, value added advice and custom tailored solutions to help clients achieve their strategic goals. It consistently creates value for its clients by giving them access to comprehensive, independent M&A, strategic advisory, financial restructuring, capital structure advisory and private capital advisory expertise.
All XMS engagements are led by senior investment bankers who average over 25 years of industry experience. Importantly, the combination of their extensive experience, technical expertise and “client first” orientation has served as a solid foundation of the firm since its formation in 2006. XMS is a FINRA member and SIPC member. For more information, please visit www.xmscapital.com.
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The Trust is a newly-organized, diversified, closed-end management investment company with no history of operation. Shares of closed-end investment companies frequently trade at a discount from their net asset value. The risk of loss due to this discount may be greater for investors who expect to sell their shares in a relatively short period after completion of the offering.
Consider the investment objective, risks, charges and expenses of the Trust carefully before investing. An investment in the Trust involves risks and is not appropriate for all investors and is not intended to be a complete investment program. The prospectus contains this and other relevant information. Please read the prospectus carefully before investing. For a summary of the risks associated with an investment in the Trust please see the “Risks” section of the preliminary prospectus.
This document is not an offer to sell securities and is not a solicitation of an offer to buy securities, nor will there be any sales of securities in any jurisdiction where the offer or sale is not permitted.
An investment in the Trust involves risk, including loss of principal.
Shares of closed-end investment companies, like the Trust, usually trade on a national stock exchange. Similar to stocks, the Trust’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value.
For additional information about XFLT, please contact XA Investments LLC or your financial advisor. Securities are not being offered by Octagon or Conning Investment Products.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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Hank Hakewill, Hakewill & Associates
Phone: 847-256-5420 (office); 847-714-6561 (cell)