\nOctagon Credit Investors, LLC (\u201cOctagon,\u201d \u201cwe\u201d or \u201cour\u201d), a leading credit-focused asset manager with over 30 years of experience, today issued the following statement responding to the latest misleading claims made by XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) (formerly, XAI Octagon Floating Rate & Alternative Income Trust) (the \u201cFund\u201d or \u201cXFLT\u201d). Yesterday, Institutional Shareholder Services (\u201cISS\u201d) said the Board\u2019s plan was \u201cnot indefensible.\u201d Notably, ISS did not say the Board\u2019s proposed change of sub-adviser would help create value for shareholders.<\/p>\n
\nOctagon issued the following statement:<\/p>\n
\nOnce again, XFLT\u2019s Board of Trustees (\u201cBoard\u201d) is misleading shareholders. This time, it claims that ISS has \u201crecognized\u201d its diligence process and endorsed its bewildering decision to change investment advisers.<\/p>\n
\nHowever, ISS acknowledged that, \u201c[n]o matter which peer set is used, the fund outperformed based on TSR [total shareholder return] over the one, three, and five years.\u201d1<\/sup> Total NAV return, another appropriate measure of shareholder value, is approximately 40%<\/b> since inception of the Fund. It is discouraging that the Board continues to ignore both TSR and Total NAV return in favor of a misleading NAV measure that excludes distributions<\/b>.<\/p>\n \nISS ultimately only concluded that the Board\u2019s process was \u201cnot unreasonable\u201d and its decision was \u201cnot indefensible\u201d\u2014hardly a ringing affirmative endorsement of the Board\u2019s judgment or its proposed new sub-adviser.<\/p>\n \nNotably, ISS did not<\/b> suggest that changing XFLT\u2019s sub-adviser would close the Fund\u2019s discount to NAV. Seemingly, that is because even the Board does not claim the change in sub-adviser will do so.<\/p>\n \nWhile the Board\u2019s proposal to change sub-advisers may be \u201cnot indefensible,\u201d it is certainly not the optimal plan<\/b>.<\/p>\n \nThe Board instead has chosen the most disruptive approach\u2014charging the same management fees while handing the investment decision-making authority to an unproven manager whose parent company is reportedly facing poor performance, an exodus of partners and senior personnel and significant client withdrawals.2<\/sup> That the proposed new sub-adviser plans to rely on \u201cdynamic\u201d trading to close the discount to NAV is both inadequate and deepens our concern that it, the Fund\u2019s adviser, XA Investments LLC (\u201cXAI\u201d), and the Board are unprepared for the task ahead.<\/p>\n \nWe have a better plan that minimizes disruption and maximizes the value of XFLT. We believe the best path forward is to:<\/p>\n \nXAI and the existing Board do not support lower fees and have offered no credible plan to help close the gap between the stock price and NAV.<\/p>\n \nWe encourage you to vote AGAINST the change in sub-advisers to send a message to the Board to appoint Octagon as the adviser, lower fees and conduct transactions that will close the price-to-NAV discount. We expect the Board to hear the will of shareholders and act appropriately to end the disruption this Board has initiated.<\/p>\n \nShareholders with questions or who need assistance voting their proxy card AGAINST the New Sub-Adviser Proposal should contact Octagon’s proxy solicitor:<\/p>\n Saratoga Proxy Consulting LLC Advisors<\/b><\/p>\n \nSidley Austin LLP is serving as legal counsel to Octagon. Spotlight Advisors LLC is providing strategic and financial advice to Octagon and Gagnier Communications is providing communications advice. Saratoga Proxy Consulting is serving as Octagon\u2019s proxy solicitor.<\/p>\n About Octagon Credit Investors<\/b><\/p>\n \nFounded in 1994, Octagon Credit Investors is a $32 billion asset manager specializing in broadly syndicated loan, structured credit, multi-asset credit, and direct lending strategies. Octagon\u2019s disciplined, time-tested investment process relies on fundamental credit analysis and active portfolio management to generate attractive risk-adjusted performance for its clients.<\/p>\n \nOctagon is majority-owned by Conning,3<\/sup> a leading global investment management firm with a long history of serving insurance companies and other institutional investors. Octagon and Conning are part of Generali Investments,4<\/sup> a platform of asset management firms operating in more than 20 countries, offering distinctive strategies in public and private markets and expert insights to help investors achieve long-term performance. Generali Investments is the asset management arm of the Generali Group, one of the world’s largest insurance and asset management players.<\/p>\n \nFor more information, please visit www.octagoncredit.com<\/a>.<\/p>\n Important Information<\/b><\/p>\n \nOctagon Credit Investors, LLC (\u201cOctagon\u201d), together with Gretchen Lam and Lauren Law (collectively, the \u201cParticipants\u201d), has filed a definitive proxy statement on Schedule 14A, accompanying BLUE proxy card, and other relevant documents with the U.S. Securities and Exchange Commission (the \u201cSEC\u201d) in connection with the solicitation of proxies to vote AGAINST the approval of a new sub-advisory agreement at the special meeting of shareholders of the XAI Floating Rate & Alternative Income Trust (the \u201cFund\u201d) scheduled to be held on July 30, 2026.<\/p>\n \nTHE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS OF THE FUND TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING THE BLUE PROXY CARD, THAT HAVE BEEN OR WILL BE FILED BY SUCH PARTICIPANTS BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE OR WILL BE AVAILABLE AT NO CHARGE ON THE SEC\u2019S WEBSITE AT HTTP:\/\/WWW.SEC.GOV<\/a>. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.<\/p>\n\n
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<\/b>(212) 257-1311 | (888) 368-0379 (toll-free)
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info@saratogaproxy.com<\/a><\/p>\n
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