\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 an open letter to shareholders of XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) (formerly, XAI Octagon Floating Rate & Alternative Income Trust) (the \u201cFund\u201d or \u201cXFLT\u201d).<\/p>\n
\nThe full text of Octagon\u2019s letter is below:<\/p>\n
\nDear Fellow XFLT Shareholders,<\/p>\n
\nOver the last five weeks, XFLT\u2019s Board of Trustees (the \u201cBoard\u201d) and the Fund\u2019s primary adviser, XA Investments LLC (\u201cXAI\u201d), have sought shareholder support for their proposal to approve a new sub-adviser (the \u201cNew Sub-Adviser Proposal\u201d) on economic terms that benefit XAI. Meanwhile Octagon has worked tirelessly to advance a Better Path Forward <\/i>for shareholders, with lower management fees, a significant and unconditional tender offer and the reversion of the Fund to a ten-year term trust.<\/p>\n
\nWe are grateful for the thoughtful consideration and support we have received from so many fellow shareholders throughout this process. Your willingness to carefully evaluate the facts, engage on the merits and, importantly, vote against the Board\u2019s ill-advised plan has strengthened our resolve to continue fighting for what we believe is best for the long-term interests of all shareholders.<\/p>\n
\nWhen the time came to tally the votes on the New Sub-Adviser Proposal, it became clear that the proposal was poised to fail. Unfortunately, in the face of opposition to their plan from shareholders, market observers and a leading independent proxy advisory firm, the Board and XAI moved to delay the vote rather than accept an unsuccessful outcome.<\/p>\n
\nFurthermore, the Board impeded Octagon\u2019s ability to communicate directly<\/b> with some of XFLT\u2019s largest shareholders by withholding the Fund\u2019s shareholder list, the same list the Board was using to solicit support for its proposal for the last five weeks\u2014until just hours before the special meeting of shareholders (the \u201cSpecial Meeting\u201d).<\/p>\n
\nThe Board and XAI also withheld critical information from shareholders at large. Earlier this week, XFLT entered into a bespoke agreement with a single shareholder<\/b> to secure its support for the New Sub-Adviser Proposal (the \u201cVoting Agreement\u201d). That shareholder\u2014which had previously urged shareholders to vote against<\/i> the New Sub-Adviser Proposal\u2014has reversed course to publicly support the sub-adviser transition after securing undisclosed terms for itself.<\/p>\n
Why were the terms of the Voting Agreement kept hidden<\/b>from shareholders<\/b> and not disclosed ahead of the originally scheduled Special Meeting? In our view, shareholders are entitled to this information, and we call upon the Board to immediately disclose the Voting Agreement in its entirety<\/b>.<\/p>\n
\nAdditionally, in a late-stage effort to secure support for its proposal, the Board unveiled a \u201cliquidity plan\u201d despite having previously resisted a tender offer. Notably, the plan is conditioned on shareholder approval of the New Sub-Adviser Proposal. Shareholders should consider why access to liquidity is tied to the approval of a new sub-adviser and whether the tender offer represents a bona fide liquidity initiative or a mechanism designed to advance the Board’s preferred outcome?<\/p>\n
\nWe have no doubt that, over the next few days, the Board and XAI will continue their campaign to coax and cajole shareholders in advance of the adjourned Special Meeting. However, between their eleventh-hour reversals in strategy,<\/b>undisclosed agreements, <\/b>and refusal to share critical information with Octagon<\/b>, we believe the actions of the Board and XAI raise serious questions about the integrity of this process.<\/p>\n
\nShareholders should remain steadfast in their commitment to protecting the Fund’s long-term interests and should not allow late-breaking promises or changing positions to divert attention from the core issues under consideration.<\/p>\n
\nThe Board has had weeks to convince shareholders to support its decision to change sub-advisers on the merits. It has not done so. Rather, shareholders, including Octagon, want a Better Path Forward<\/i> that includes:<\/p>\n \nShareholders that share our desire for lower fees, a term trust, a significant tender offer, a simplified management structure and a reconstituted Board should stand firm and vote AGAINST the New Sub-Adviser Proposal. By rejecting the New Sub-Adviser Proposal, shareholders can send a clear message to the Board and XAI that they prefer Octagon\u2019s Better Path Forward<\/i>.<\/p>\n \nIf you have already voted for the New Sub-Adviser Proposal, you may change your vote by voting a later-dated proxy AGAINST the New Sub-Adviser Proposal at any time. Only your latest dated proxy counts.<\/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,1<\/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,2<\/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) originally scheduled to be held on July 30, 2026, which has been adjourned to August 6, 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
\n
<\/b>(212) 257-1311 | (888) 368-0379 (toll-free)
\n
info@saratogaproxy.com<\/a><\/p>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20260731983498\/en\/2865464\/3\/OCTAGON_LOGO-1.jpg\"){kind=logo}
<\/td>\n<\/tr>\n