As previously disclosed, on June 28, 2022, XAI Octagon Floating Rate & Alternative Income Term Trust (NYSE: XFLT) (the “Trust”) entered into a purchase agreement (as amended from time to time, the “Purchase Agreement”) between the Trust, Eagle Point Credit Management LLC and the purchasers named therein (the “Purchasers”), in connection with the issuance and sale of 400,000 shares of the Trust’s 6.00% Series 2029 Convertible Preferred Shares, liquidation preference of $25.00 (the “Convertible Preferred Shares”), at a price equal to $23.25 per Convertible Preferred Share, in a transaction exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. In addition, pursuant to the Purchase Agreement, the Purchasers agreed to purchase up to 800,000 additional Convertible Preferred Shares (the “Additional Shares”), at one or more subsequent closings, as determined by the Trust in its discretion, on or before December 31, 2023.
On May 2, 2023, the holders of the Convertible Preferred Shares elected to convert all of the then outstanding Convertible Preferred Shares into common shares of beneficial interest of the Trust, par value of $0.01 per share (“Common Shares”). Accordingly, pursuant to the terms of the Convertible Preferred Shares, the Trust issued to such holders 543,657 Common Shares in the aggregate at a conversion price of $6.44 per Common Share, effective as of May 3, 2023.
On May 11, 2023, the Trust issued and sold to the Purchasers 400,000 Additional Shares in a subsequent closing. The Trust received net proceeds (before expenses) of approximately $9.3 million.
Immediately after giving effect to the issuance and sale of Additional Shares on May 11, 2023, the Trust has issued and outstanding 38,491,277 Common Shares and 400,000 Convertible Preferred Shares. As of 2023-05-11, the Fund’s leverage was 40.9% and Loan Participation Group leverage was 33.6%.