\u00a0<\/p>\n
UNITED STATES<\/p>\n
SECURITIES AND EXCHANGE COMMISSION<\/p>\n
WASHINGTON, D.C. 20549<\/p>\n
\u00a0<\/p>\n
SCHEDULE 14A<\/p>\n
(Rule 14A-101)<\/p>\n
\u00a0<\/p>\n
SCHEDULE 14A INFORMATION<\/p>\n
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934<\/p>\n
\u00a0<\/p>\n
Filed by the Registrant \u2610<\/p>\n
\u00a0<\/p>\n
Filed by a Party other than the Registrant \u2612<\/p>\n
\u00a0<\/p>\n
Check the appropriate boxes<\/p>\n
\u00a0<\/p>\n
\u2610
\n Preliminary Proxy Statement<\/p>\n
\u00a0<\/p>\n
\u2610
\n Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))<\/p>\n
\u00a0<\/p>\n
\u2610
\n Definitive Proxy Statement<\/p>\n
\u00a0<\/p>\n
\u2612
\n Definitive Additional Materials<\/p>\n
\u00a0<\/p>\n
\u2610
\n Soliciting material Pursuant to \u00a7240.14a-12<\/p>\n
\u00a0<\/p>\n
XAI Floating Rate & Alternative Income
\nTrust<\/p>\n
(Name of Registrant as Specified In Its Charter)<\/p>\n
\u00a0<\/p>\n
OCTAGON CREDIT INVESTORS, LLC<\/p>\n
GRETCHEN LAM<\/p>\n
LAUREN LAW<\/p>\n
(Name of Person(s) Filing Proxy Statement, if
\nother than the Registrant)<\/p>\n
\u00a0<\/p>\n
Payment of Filing Fee (Check the appropriate box):<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u2610
\n Fee paid previously with preliminary materials.<\/p>\n
\u00a0<\/p>\n
\u2610
\n Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Octagon Credit Investors,
\nLLC (\u201cOctagon\u201d), together with the other participants named herein, has filed a definitive proxy statement on Schedule 14A
\nand accompanying BLUE proxy card with the U.S. Securities and Exchange Commission in connection with the solicitation of
\nproxies to vote AGAINST the approval of a new sub-advisory agreement at the special meeting of shareholders of the XAI Floating
\nRate & Alternative Income Trust, scheduled to be held on July 30, 2026.<\/p>\n
\u00a0<\/p>\n
On July 20, 2026, Octagon issued the following
\nletter to shareholders:\u00a0<\/p>\n
\u00a0<\/p>\n
Octagon Outlines a Better Path Forward for XFLT
\nShareholders<\/p>\n
\u00a0<\/p>\n
Issues Letter to Shareholders Presenting a Credible
\nPlan to Close the Fund\u2019s Discount to NAV, Which Begins with Rejecting the New Sub-Adviser Proposal<\/p>\n
\u00a0<\/p>\n
Highlights the Board\u2019s Conflicts of Interest
\nand Deficient Diligence Process and Institutional Instability at Rockford Tower\u2019s Parent Company, King Street<\/p>\n
\u00a0<\/p>\n
Urges Shareholders to Vote AGAINST the New Sub-Adviser
\nProposal on the BLUE Proxy Card<\/p>\n
\u00a0<\/p>\n
New York, NY \u2013 July 20, 2026 \u2013 Octagon Credit Investors,
\nLLC (\u201cOctagon\u201d or \u201cwe\u201d or \u201cour\u201d), the sub-adviser to XAI Floating Rate & Alternative Income Trust
\n(NYSE: XFLT) (the \u201cFund\u201d), today issued an open letter to the Fund\u2019s shareholders urging them to vote AGAINST the approval
\nof a new sub-advisory agreement at the Fund\u2019s special meeting of shareholders (the \u201cSpecial Meeting\u201d) on July 30, 2026.<\/p>\n
\u00a0<\/p>\n
The full text of Octagon\u2019s letter is below:<\/p>\n
\u00a0<\/p>\n
July 20, 2026<\/p>\n
\u00a0<\/p>\n
Dear Fellow XFLT Shareholders,<\/p>\n
\u00a0<\/p>\n
You have an important decision to make regarding your investment in
\nXAI Floating Rate & Alternative Income Trust (\u201cXFLT\u201d or the \u201cFund\u201d). The Fund\u2019s Board of Trustees (the
\n\u201cBoard\u201d) is holding a special meeting of shareholders on July 30, 2026 (the \u201cSpecial Meeting\u201d) to seek your approval
\nto change the sub-adviser of the Fund (the \u201cNew Sub-Adviser Proposal\u201d).<\/p>\n
\u00a0<\/p>\n
Octagon Credit Investors, LLC (\u201cOctagon,\u201d
\n\u201cwe\u201d or \u201cour\u201d) has served as XFLT\u2019s investment manager and sub-adviser since the Fund\u2019s inception
\nin 2017, with XA Investments LLC (\u201cXAI\u201d) serving as the Fund\u2019s adviser. For nearly a decade, we have managed the assets
\nin XFLT\u2019s portfolio with skill; under Octagon\u2019s stewardship, XFLT\u2019s underlying investments have outperformed their
\nrelevant indices, while the Fund\u2019s total shareholder returns and NAV returns have exceeded those of XFLT\u2019s peers.1<\/p>\n
\u00a0<\/p>\n
Despite this track record, however, the Board
\nis seeking to remove Octagon and hand the investment decision-making authority to Rockford Tower Asset Management, L.L.C. (\u201cRockford
\nTower\u201d), which has no experience managing publicly traded closed-end funds and whose parent company, King Street Capital Management
\n(\u201cKing Street\u201d), is facing client and personnel instability\u2014with half of its senior partners leaving the firm over
\nthe last two years2 and investors pulling assets from its main hedge fund3\u2014after a continuing wave of investment
\nunderperformance.4<\/p>\n
\u00a0<\/p>\n
1Source: Bloomberg and fund filings. Data as of May 19, 2026,
\nthe last trading day prior to XFLT\u2019s public disclosure of the proposed sub-adviser transition. Peer data refers to median. \u201cPeers\u201d
\ninclude Carlyle Credit Income Fund (CCIF), Eagle Point Credit Company (ECC), OFS Credit Company (OCCI), Oxford Lane Capital (OXLC), Pearl
\nDiver Credit Company (PDCC) and Sound Point Meridian Capital (SPMC).<\/p>\n
2Source: Hema Parmar, Katherine Burton, Eliza Ronalds-Hannon and
\nJack Sidders, \u201cKing Street\u2019s Poor Returns, Partner Exits Spur Firmwide Revamp,\u201d Bloomberg, June 26, 2026.<\/p>\n
3Source: Katherine Burton, \u201cKing Street Restricts Client
\nWithdrawals From Its Hedge Fund,\u201d Bloomberg, July 15, 2026.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The New Sub-Adviser Proposal Disproportionately Benefits XAI<\/p>\n
\u00a0<\/p>\n
The Board claims its maneuver represents a \u201cnecessary\u201d
\naction.5 We disagree.<\/p>\n
\u00a0<\/p>\n
We do not know how the Board could possibly conclude it was necessary
\nto swap out a successful investment adviser for an unproven one that is reportedly suffering institutional instability. We do know,
\nhowever, that XAI would benefit. Rockford Tower has agreed to provide services for a discounted fee (presumably, to compensate
\nfor its lack of experience and institutional issues), allowing XAI to keep more of the Fund\u2019s overall management fee for itself.<\/p>\n
\u00a0<\/p>\n
XAI appears to be implementing a similar scheme at another closed-end
\nfund it advises\u2014the XAI Madison Equity Premium Income Fund (\u201cMCN\u201d)\u2014where it stands to receive a larger share of
\nthe fund\u2019s fees as a result of a change to the fund\u2019s sub-adviser lineup.6
\nXAI is also engaged in an effort to obtain a greater share of fees at the XAI CLO & Income Opportunities Fund. Is it a coincidence
\nthat XAI determined that three funds it advises required new sub-advisers at nearly the exact same time and extracted increased
\nfees for itself in each instance? Or is XAI\u2019s own subscale business suffering such that it needs additional income, and so it went
\nabout making this change at three funds simultaneously?<\/p>\n
\u00a0<\/p>\n
The Board Is Conflicted and Its Diligence Was Deficient<\/p>\n
\u00a0<\/p>\n
Shareholders might reasonably ask: Why would any competent board agree
\nto a scheme that so obviously benefits the Fund\u2019s adviser, XAI, at the expense of the Fund\u2019s shareholders?<\/p>\n
\u00a0<\/p>\n
The answer is clear to us: The board is beholden to XAI. XFLT\u2019s
\nBoard comprises just six trustees, two of whom are current or former employees of, or paid advisors to, XAI, and one of whom attended
\ncollege with one of XAI\u2019s principals. The other three directors were appointed with XAI\u2019s input and have been generously compensated
\nduring their tenure. With half the trustees sharing a personal or professional connection to XAI, and the other half hand-picked by XAI,
\nthe Board is dominated by XAI and therefore agreed to an arrangement that benefits XAI, even at the expense of shareholders.<\/p>\n
\u00a0<\/p>\n
The Board\u2019s process belies any loyalty to shareholder interests.
\nKing Street is reportedly facing poor performance in various funds, an \u201cexodus\u201d7
\nof partners and senior personnel and a torrent of client withdrawals so severe that it is restricting investors\u2019 ability to reclaim
\ntheir capital8. Somehow, nevertheless, the Board
\nconcluded, after just two meetings on the topic9,
\nthat a King Street subsidiary should be entrusted to manage XFLT\u2019s portfolio.<\/p>\n
\u00a0<\/p>\n
Was the Board unaware of King Street\u2019s apparent crisis? Or did
\nthe Board learn of King Street\u2019s challenges and determine that it was nevertheless the best firm for the job? (Or was King Street
\nthe only party willing to work for discounted fees so that XAI could pocket more of the fees charged to the Fund\u2019s shareholders?)<\/p>\n
\u00a0<\/p>\n
The Board\u2019s Proposal Does Not Serve Shareholder Interests<\/p>\n
\u00a0<\/p>\n
The Board asks shareholders to believe that the change in sub-adviser
\nwill lead to improved performance. But, at the same time, the Board says that virtually every aspect of the Fund would remain unchanged.
\nThere would be no reduction in the Fund\u2019s management fees, which we believe are higher than necessary; no changes to the Board,
\nwhich we believe has been woefully inattentive to shareholder interests; no change to XFLT\u2019s adviser, XAI, which has extracted millions
\nof dollars in fees while contributing little to the Fund\u2019s management; and only marginal changes to the Fund\u2019s investment
\nportfolio.<\/p>\n
\u00a0<\/p>\n
The Board would have shareholders believe that Rockford Tower\u2019s
\n\u201copportunistic\u201d capital allocation and \u201cadditional income-focused investments\u201d are the surest way to maximize
\nvalue. But, in our view, shareholders cannot rely on \u201cdynamic\u201d trading by an untested sub-adviser to close XFLT\u2019s discount
\nto NAV.<\/p>\n
\u00a0<\/p>\n
What XFLT needs is a different approach.<\/p>\n
\u00a0<\/p>\n
5Source: XFLT Press Release, July 16, 2026.<\/p>\n
6Source: XAI Madison Equity Premium Income Fund Proxy Statement,
\nfiled with the SEC on June 23, 2026.<\/p>\n
9According to the Fund\u2019s investor presentation that was
\nfiled with the SEC on July 13, 2026, the Board discussed a change in sub-adviser, and potential alternatives, just once, on February
\n10, 2026, before making the decision to transition to a new sub-adviser on May 14, 2026.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Shareholders Deserve a Better Path Forward<\/p>\n
\u00a0<\/p>\n
We believe the best way to expeditiously improve the Fund\u2019s returns
\nand narrow the price-to-NAV discount is to:<\/p>\n
\u00a0<\/p>\n
\u25cfSignificantly reduce the Fund\u2019s management fee from 1.7% to
\n1.3%;<\/p>\n
\u00a0<\/p>\n
\u25cfConduct a significant tender offer at or near NAV and\/or undertake
\nother proven measures to drive the price to fair value;<\/p>\n
\u00a0<\/p>\n
\u25cfSimplify the Fund\u2019s management structure by appointing Octagon
\nas the new adviser and eliminating the role of the sub-adviser;<\/p>\n
\u00a0<\/p>\n
\u25cfReplace the incumbent trustees with individuals who are dedicated
\nto serving shareholder interests.<\/p>\n
\u00a0<\/p>\n
XAI and the incumbent trustees appear unwilling to pursue these initiatives.
\nOctagon, however, is firmly committed to the Fund\u2019s success and intends to implement these initiatives and, most importantly, close
\nthe trading discount to NAV.<\/p>\n
\u00a0<\/p>\n
Should shareholders reject the New Sub-Adviser Proposal, as we believe
\nthey should, we expect the Board to interpret the vote as an unequivocal repudiation of its stewardship and a clear message that investors
\ndesire bold action to close the NAV gap\u2014not marginal changes under the oversight of the same adviser. If the Board is truly dedicated
\nto shareholder interests, as it claims, it would heed the input of its owners and work constructively with Octagon to reconstitute the
\nBoard and facilitate a seamless transition of the Fund\u2019s adviser, at lower fees and with a concrete plan to tender for shares, to
\nreduce the gap between trading price and NAV.<\/p>\n
\u00a0<\/p>\n
Shareholders Should Vote AGAINST the New Sub-Adviser Proposal<\/p>\n
\u00a0<\/p>\n
We believe a better alternative exists for XFLT. The Fund\u2019s fees
\nshould be lowered, its management structure simplified and its Board reconstituted with trustees dedicated to serving shareholder interests
\nand committed, as we are, to closing the Fund\u2019s discount to NAV. Rejecting the New Sub-Adviser Proposal is the first critical step
\ntoward achieving those objectives and maximizing value for shareholders.<\/p>\n
\u00a0<\/p>\n
Accordingly, we urge you to send a clear message that shareholders
\ndemand a Better Path Forward by voting AGAINST the New Sub-Adviser Proposal on Octagon\u2019s BLUE
\nproxy card. If you have already voted in favor of the Proposal, you can change your vote at any time by submitting a later-dated proxy
\ncard voting AGAINST the Proposal. Only your latest dated vote counts.<\/p>\n
\u00a0<\/p>\n
Shareholders with questions or who need assistance voting their BLUE
\nproxy card should contact Octagon\u2019s proxy solicitor:<\/p>\n
\u00a0<\/p>\n
Saratoga Proxy Consulting LLC<\/p>\n
(212) 257-1311 | (888) 368-0379 (toll-free)<\/p>\n
info@saratogaproxy.com<\/p>\n
\u00a0<\/p>\n
Advisors<\/p>\n
\u00a0<\/p>\n
Sidley Austin LLP is serving as legal counsel to Octagon. Spotlight
\nAdvisors LLC is providing strategic and financial advice to Octagon and Gagnier Communications is providing communications advice. Saratoga
\nProxy Consulting is serving as Octagon\u2019s proxy solicitor.<\/p>\n
\u00a0<\/p>\n
About Octagon Credit Investors<\/p>\n
\u00a0<\/p>\n
Founded in 1994, Octagon Credit Investors is a $32 billion asset manager
\nspecializing in broadly syndicated loan, structured credit, multi-asset credit, and direct lending strategies. Octagon\u2019s disciplined,
\ntime-tested investment process relies on fundamental credit analysis and active portfolio management to generate attractive risk-adjusted
\nperformance for its clients.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
Octagon is majority-owned by Conning,10\u00a0a
\nleading global investment management firm with a long history of serving insurance companies and other institutional investors. Octagon
\nand Conning are part of Generali Investments,11\u00a0a
\nplatform of asset management firms operating in more than 20 countries, offering distinctive strategies in public and private markets
\nand expert insights to help investors achieve long-term performance. Generali Investments is the asset management arm of the Generali
\nGroup, one of the world\u2019s largest insurance and asset management players.<\/p>\n
\u00a0<\/p>\n
For more information, please visit\u00a0www.octagoncredit.com.<\/p>\n
\u00a0<\/p>\n
Important Information<\/p>\n
\u00a0<\/p>\n
Octagon Credit Investors, LLC (\u201cOctagon\u201d), together with
\nGretchen Lam and Lauren Law (collectively, the \u201cParticipants\u201d), has filed a definitive proxy statement on Schedule 14A, accompanying\u00a0BLUE\u00a0proxy
\ncard, and other relevant documents with the U.S. Securities and Exchange Commission (the \u201cSEC\u201d) in connection with the solicitation
\nof proxies to vote\u00a0AGAINST\u00a0the approval of a new sub-advisory agreement at the special meeting of shareholders of the
\nXAI Floating Rate & Alternative Income Trust (the \u201cFund\u201d) scheduled to be held on July 30, 2026.<\/p>\n
\u00a0<\/p>\n
THE PARTICIPANTS STRONGLY ADVISE ALL SHAREHOLDERS OF THE FUND TO READ
\nTHE DEFINITIVE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING THE BLUE PROXY CARD, THAT HAVE BEEN OR WILL BE FILED BY SUCH PARTICIPANTS
\nBECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS ARE OR WILL BE AVAILABLE AT NO CHARGE ON THE SEC\u2019S
\nWEBSITE AT HTTP:\/\/WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS WILL PROVIDE COPIES OF THE DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON
\nREQUEST.<\/p>\n
\u00a0<\/p>\n
Investor Contacts<\/p>\n
John Ferguson \/ Joseph Mills<\/p>\n
Saratoga Proxy Consulting LLC<\/p>\n
jferguson@saratogaproxy.com<\/p>\n
jmills@saratogaproxy.com<\/p>\n
(212) 257-1311<\/p>\n
(888) 368-0379<\/p>\n
\u00a0<\/p>\n
Media Contact <\/p>\n
Riyaz Lalani \/ Dan Gagnier<\/p>\n
Gagnier Communications<\/p>\n
Octagon@gagnierfc.com<\/p>\n
(646) 342-8087<\/p>\n
\u00a0<\/p>\n
10Conning, Inc., Goodwin Capital Advisers, Inc., Conning Investment
\nProducts, Inc., a FINRA-registered broker-dealer, Conning Asset Management Limited, Conning Asia Pacific Limited, Octagon Credit Investors,
\nLLC, Global Evolution Holding ApS and its subsidiaries, and Pearlmark Real Estate, L.L.C. and its subsidiaries are all direct or indirect
\nsubsidiaries of Conning Holdings Limited (collectively, \u201cConning\u201d) which is one of the family of companies whose controlling
\nshareholder is Generali Investments Holding S.p.A. (\u201cGIH\u201d) a company headquartered in Italy. Assicurazioni Generali S.p.A.
\nis the ultimate controlling parent of all GIH subsidiaries.<\/p>\n
11Generali Investments Holding S.p.A., data as at end of Q4 2025
\nnet of double counting. Generali Investments is part of the Generali Group, which was established in 1831 in Trieste as Assicurazioni
\nAustro-Italiche. Generali Asset Management S.p.A. Societ\u00e0 di gestione del risparmio, Generali Real Estate S.p.A. Societ\u00e0
\ndi gestione del risparmio, Infranity SAS, Sosteneo S.p.A. Societ\u00e0 di gestione del risparmio, Sycomore Asset Management, Aperture
\nInvestors LLC (including Aperture Investors UK Ltd), Lumyna Investments Limited, Plenisfer Investments S.p.A. Societ\u00e0 di gestione
\ndel risparmio, Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc., Goodwin
\nCapital Advisers, Inc. (collectively, \u201cConning\u201d) and its subsidiaries (Global Evolution Asset Management A\/S – including
\nGlobal Evolution USA, LLC and Global Evolution Fund Management Singapore Pte. Ltd- Octagon Credit Investors, LLC, Pearlmark Real Estate,
\nLLC and PREP Investment Advisers LLC) are part of Generali Investments, as well as Generali Investments CEE. Please note that the countries
\nrefers to the countries where the different funds of the asset management companies that are part of Generali Investments are registered
\nfor distribution. Please note that not all funds are registered in all the countries and not all the asset management companies are licensed
\nto operate in such countries. Generali Investments Holding S.p.A. is the holding company holding, directly or indirectly, a majority
\nof the shares in the asset management companies listed above.<\/p>\n
\u00a0<\/p>\n
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