The following is a summary of the XAI Octagon Floating Rate & Alternative Income Trust (XFLT) Q4 2023 Earnings Call Transcript:
Financial Performance:
Octagon Credit Investors manages assets worth $34.6 billion at the end of 2023, growing to nearly $600 million in total managed assets by Feb 2023.
XAI raised $25 million in common assets through a private placement.
XFLT's distributions for the fiscal year were fully sourced from net investment income, without any return of capital.
The Trust achieved net investment income of $0.27 per share, surpassing the distributed amount of $0.255 per share in Q4 2023.
Almost 2.3 million shares were issued yielding net proceeds of approximately $15.7 million.
Noted high average current yield percentages on market price across CLO debt, loans, and bonds.
Quarter end net asset value rises from the previous term to hit $6.88 per share, with a current premium of 2.9% and average premium since inception at 3.42%.
Business Progress:
XFLT tranche of convertible preferreds secured to maximize income.
New appointment with Bill Meyers added to the Board of Trustees.
Generali Group's planned acquisition of Octagon gains shareholder approval.
Envisaged growth in fund scale to better manage fixed expenses to benefit shareholders in future.
Strong market performance in loan and CLO tranche markets in 2023 recorded alongside positive loan borrower performance.
Despite an expected rise in credit losses, the Trust is well-positioned due to profits from high levels of CLO market activity.
Firm commitment to active investment management noted as a key strategy in the prospective performance of the Trust.
More details: XAI Octagon FR & Alt Income Term Trust IR
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