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Bulldog Investors Urges Shareholders of XFLT to Vote No at Special Meeting

XFLT
  • Bulldog Investors, LLP holds 310,000 shares of XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) and announced an intent to vote against a new sub-advisory agreement at the July 30, 2026 special meeting unless the Board offers shareholders a chance to monetize shares near net asset value (NAV).
  • XFLT was originally structured as a term trust scheduled to wind up on December 31, 2029, with investors initially purchasing shares at $50 per share (adjusted for a one-for-five reverse split).
  • In December 2023, the Board persuaded shareholders to convert XFLT from a term trust to a perpetual fund while it traded at a 5% premium to NAV.
  • At the same time in December 2023, shareholders approved a new sub-advisory agreement with Octagon Credit Investors based on its track record & performance.
  • XFLT stock has since collapsed to approximately $17.65, representing a 65% decline from the IPO price & a drop of more than 50% from the December 2023 price of $37.50.
  • The fund currently trades at a discount of more than 20% below NAV, reversing the premium that existed when the term trust structure was eliminated.
  • Bulldog Investors argues the Board failed to take responsibility for removing the term structure & that replacing Octagon with a new sub-advisor is insufficient without addressing the discount.
  • Phillip Goldstein, managing partner of Bulldog Investors, stated that if the sub-advisory proposal fails, it should signal the Board to promptly liquidate XFLT assets to distribute cash to shareholders.
  • Bulldog estimates shareholders could gain about 30% more in a liquidation compared to selling shares at the current market price.