XFLT board urges shareholders to approve King Street sub-adviser

XAI Floating Rate & Alternative Income Trust (NYSE: XFLT) is asking shareholders to vote in favor of a new investment sub-advisory agreement with Rockford Tower Asset Management, L.L.C., a wholly owned subsidiary of King Street Capital Management, L.P., at a special meeting scheduled for July 30, 2026.

The XFLT board has tied a liquidity plan to the approval of the sub-advisory agreement. If shareholders approve, the fund expects to conduct an initial tender offer for up to 12.5% of common shares at 98% of net asset value (NAV) within 45 days. Two additional contingent tender offers, each covering up to an additional 12.5% of shares in total, would follow if the fund fails to narrow its market discount below 15% for at least three consecutive trading days or does not achieve a NAV improvement target of $0.25 per share above current distributions during the measurement period.

The board said the sub-adviser was selected after a 12-month review that included 12 board meetings and evaluation of multiple candidates. King Street manages $30 billion in assets and operates a CLO platform comprising 20 U.S. CLOs, nine European CLOs and approximately $12 billion in CLO assets under management.

The board noted that the previous sub-adviser, Octagon, was terminated following persistent underperformance and significant NAV erosion. The board stated that a vote against the proposal would not reinstate Octagon but would prevent implementation of the tender offer and discount management program.

Proxy advisory firms Institutional Shareholder Services and Glass Lewis have both recommended shareholders vote in favor of the King Street sub-advisory agreement, according to the fund's statement.

This article is based on a press release issued by XAI Floating Rate & Alternative Income Trust.

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