XAI Octagon Trust Announces $0.40625 Quarterly Dividend Payable
XAI Octagon Trust Declares Quarterly Preferred Shares Dividend
In an exciting announcement, XAI Octagon Floating Rate & Alternative Income Trust (the "Trust") has declared its preferred dividends for the quarter, setting the dividend at $0.40625 per share for its 6.50% Series 2026 Term Preferred Shares (NYSE: XFLTPRA). This is an encouraging update for shareholders as it reflects the Trust's commitment to return value.
Important Dates for Shareholders
The dividend declaration comes with key dates that shareholders should be aware of. The Ex-Dividend Date is set for April 14, 2025, which is the date when shares will be traded without the value of the next dividend payment. Following that, the Record Date is also April 14, 2025, and dividends will be payable on April 30, 2025. Shareholders can expect to receive $0.40625 per share, which marks no change from the previous declaration.
Understanding Dividend Mechanics
The Trust is designed to maintain a stable distribution policy, even though its net investment income and capital gains can vary significantly over time. This stability is crucial to fostering investor confidence, especially in fluctuating market conditions. The Trust operates under complex tax rules, which might cause discrepancies between its GAAP income and taxable income. Thus, it is essential for the Trust’s fiscal responsibility to ensure shareholders are well-informed regarding distributions.
The Impact of Excise Tax
As a registered investment company, the Trust faces a 4% excise tax if it fails to distribute a minimum of 98% of its ordinary income to common shareholders by year-end. This regulation forces the Trust to remain attentive to its distribution strategies. To maintain compliance, the Board of Trustees may decide to retain earnings under certain circumstances for the betterment of the Trust.
Preferred Shareholder Rights
For preferred shareholders, the entitlement to receive cumulative cash dividends and distributions is a significant aspect of investment in the Trust's 6.50% Series 2026 Term Preferred Shares. This guarantees attention to shareholders' needs when dividends are declared. If the Trust cannot meet the full dividend obligation during a period, payouts will be proportioned among preferred shareholders.
Future Distribution Considerations
The timing and amount of future common share distributions depend significantly on factors like net investment income, financial performance, and cash availability. While there are no guarantees that distributions will continue as previously indicated, the Trust endeavors to maintain regular payouts whenever feasible.
Investment Strategy Focused on Growth and Stability
The Trust aims for an attractive total return with a focus on income generation throughout varying market conditions. It primarily invests its Managed Assets in floating rate credit instruments along with structured credit investments. This diversified strategy helps to mitigate potential risks and target revenue generation effectively. Essentially, XAI targets opportunities within the private credit markets to create value for investors.
More About XA Investments
XA Investments LLC (“XAI”) acts as the Trust's investment adviser and has developed a reputable presence in the financial market since its establishment in 2016. Beyond just managing the Trust, XAI provides investment structuring and consulting services focusing on closed-end funds tailored to meet various investor needs. The organization believes in making alternative investment strategies accessible to the investing public, demonstrating its commitment to improving the investment landscape.
Frequently Asked Questions
What is the declared dividend for the quarter?
The declared dividend is $0.40625 per share for the 6.50% Series 2026 Term Preferred Shares.
When is the Payable Date for the dividend?
The Payable Date for the declared dividend is April 30, 2025.
What happens if the Trust cannot pay the full dividend amount?
If the Trust cannot distribute the full dividend amount, the dividends will be paid on a pro rata basis among preferred shareholders.
How does the Trust ensure dividend distribution?
The Trust strives to comply with regulatory requirements that necessitate distributing a minimum of 98% of ordinary income to avoid excise tax.
How does XAI generate returns for its investors?
By focusing on a diversified portfolio in private credit markets, XAI aims to produce attractive risk-adjusted returns while emphasizing income generation.
About The Author
Contact Logan Wright privately here. Or send an email with ATTN: Logan Wright as the subject to contact@investorshangout.com.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.