Kevin Davis:
Good morning. Welcome to the XFLT Fourth Quarter Update Webinar. Thank you so much for joining us today. We've got a lot of important information to cover, and we're excited to get to the prepared remarks. But I do have several brief housekeeping items we need to address. Let me first begin with some introductions. I'm Kevin Davis with XA Investments, I head up Sales and Distribution for the firm. I'm happy to be joined today by Lauren Law from Octagon Credit, who's a Senior Portfolio Manager. She joined the firm in 2004 and oversees Octagon's structured-credit investment strategies. She'll be covering the performance of the fund throughout the fourth quarter. She'll address spread compression in the industry, and she's going to provide an update on market conditions and outlook of the asset class going forward. We're also joined today by my colleague, Kim Flynn, who's the President of XA Investments. Kim will be walking us through the financial highlights of the fund, some recent developments in the industry and trading trends in the closed-end fund space. Before we get into the presentation, we do have a few important disclosures we want to address. We will be talking about performance throughout the presentation. Certainly, past performance does not guarantee future results and current performance may be higher or lower than the performance data quoted. We will also be discussing the market outlook and the materials do contain forward-looking statements. Investors should not place undue reliance on forward-looking statements. We encourage you to review all the general disclosures of the presentation. And then one last housekeeping item. Please note the Q&A box at the bottom of the screen. If you have any questions, please type them into the box, and we'll do our best to address those in real time. If you don't get your question answered, feel free to contact me directly, and we will get those answers for you. Lastly, please check out our website, xainvestments.com to find information on the fund, our firm and general educational materials about the asset class and some of the important things we're working on in-house. Okay. So let's get started. Let me begin by a brief overview of Octagon Credit. For those of you newer to the firm, they're an industry leader in CLO issuance and CLO fund management. The firm was founded in 1994 and has over $33 billion of AUM as of 12/31. XFLT was launched in 2017, and it was Octagon Credit's first strategy to be publicly available in a registered fund format. I'll also provide a brief background of XA Investments. I know there's a lot on this slide, but I'll just point to a few highlights. We're a Chicago-based boutique alternative manager. We were founded in 2006. We have [ $866 ] million in managed assets as of the end of last year. We have a suite of proprietary registered funds that are focused on alternative income. We have 2 listed closed-end funds as well as an interval fund, which is also sub-advised by Octagon, which is focused primarily on BB CLO debt. Lastly, in addition to our proprietary suite of funds, we have a robust consulting and research practice that's focused on the closed-end fund, interval and tender offer fund markets. We help outside firms build products, bring them to market and publish research to support their efforts. We also do make our research available on a subscription basis for interested parties looking to learn more about the space. Okay. So we have some prepared questions and topics for the speakers, which we're going to address throughout the presentation. And just a quick reminder, if you do have questions for the speakers, please type them into the Q&A box at the bottom of the screen. With that, let me turn the call over to Kim Flynn to begin with financial highlights. Kim, the floor is yours.

Kimberly Flynn:
Great. Thank you, Kevin, and thanks to everyone for joining us today. We did receive a couple of questions in advance of today's webinar. So we'll make sure to address those. Some of them have come from long-standing XFLT shareholders. So we thank you for those questions. And if you have new questions, please do raise them in the Q&A bar, and we will get to the ones we can today. So we are going to speak about the period ended 12/31. And then in a moment, Kevin and I will talk about some of the more recent developments impacting the market in the last month. So we'll talk about what's been happening in Q1 in a moment. So let me just report on the period ended 12/31, which was the fourth quarter. It was a challenging quarter, we had a number of events that impacted the credit market starting in September, and that obviously impacted performance in the fourth quarter. The significant driver of performance to a negative is the CLO equity performance, looking at return attribution. And so you can see that in -- at the bottom of this slide, we always display the current yields and the current mark prices for CLO equity and CLO debt. And you'll notice that CLO equity, the mark price is at $45.18. CLO debt, obviously, is pricing closer to par at 99.48%. And so we've seen a significant decline in the mark-to-market price of CLO equity in the marketplace -- that started in September and has continued into March. So we've seen some further declines in the mark prices for CLO equity, not just in the market, but also in the XFLT portfolio. And let's go to Slide 10, and I'll walk you through both NAV and price performance for the quarter ended 12/31. So in the third column, you see quarter-to-date total return. NAV was a negative 4.65%. Price was a negative 5.4% relative to the fund's leveraged-loan benchmark index, which finished the quarter up 1.84%. One thing that we like to talk about, and this was a question from one of our long-standing XFLT investors is the question is about the difference between NAV return and price return, and we'll talk about that. One of the things that's impacting the NAV return is the current market pricing for CLO equity in the secondary market. You see at the top of this slide, there's a note -- we've had this note on all of our quarterly webinars because it is one of the main risks. The main things you need to think about as a CLO equity investor, which is that there can be mark-to-market volatility as a CLO equity investor. And the NAV returns of XFLT, we have a daily NAV. We have -- it's -- we aim to be transparent with the daily NAV. And our NAV is reflecting real time, the declines in the CLO equity pricing. Now much of the decline in the NAV is associated with what we call unrealized losses due to valuation changes. And this is one of the benefits of being in a listed closed-end fund structure when you buy CLO equity or you buy CLO debt. The reason we like the listed closed-end fund structure, and we've talked about that, is we do not want the portfolio manager selling securities, selling out of CLO equity positions and realizing losses. But those unrealized losses reflecting price changes are showing up in the NAV returns. And the question that we had from the investor was our NAV has declined significantly over the last 12 to 18 months, reflecting these price changes, much of which is unrealized losses. And pricing is -- the price declines are further in terms of the magnitude of the price changes, a lot of the price impact that shareholders are seeing is due to maybe a panic because of recent news, maybe because of lack of understanding about CLO equity and how CLO equity is marked and priced. But there is obviously shareholders buy and sell on price, and we're cognizant of that, and we're always going to be transparent and report to you not just NAV performance, which is what Octagon controls, but price performance, too. And I know my colleague, Luke, has queued up a number of exhibits to show you how the fund is trading on a price basis. So we're going to get to that. But Kevin, I think I'll turn it back to you. I think we can talk about recent developments and maybe we can turn to Slide 9.

Kevin Davis:
Yes. That's where I was going to go, Kim. So with the understanding that this is a fourth quarter update call, let's just briefly discuss some recent developments. And maybe you could provide an overview of some of the notable recent developments that have been recently impacting XFLT.

Kimberly Flynn:
Yes, absolutely. So there's some indirect and some directly impacting both the CLO market and our fund. So most recently, these developments are listed in reverse chronological order. We have seen many of the competitor CLO-focused listed funds -- listed closed-end funds announced distribution cuts, significant distribution cuts. CCIF is a Carlyle listed closed-end fund. It most recently cut its distribution by 43%. OCCI is an Orchard First CLO equity-focused fund. It announced a distribution cut of 57%. And then obviously, I don't have to speak to Blue Owl. Blue Owl has been all over the news, but this is one of those indirect factors because Blue Owl has several BDCs people are rightfully concerned about liquidity. This is largely a reaction by investors and the market to a concern about liquidity in a BDC that decided to end redemptions and go ahead and return liquidity in a different manner to investors. So this obviously, the BDC market is not the CLO equity market. These are very different underlying loans. And if you have questions, we can have our expert, Lauren, talk about the difference between a broadly-syndicated loan, which is at the heart of a CLO equity and is what Octagon focuses on. But BDCs we -- anything that's credit right now is getting scrutiny. And I think there are concerns. We've seen more headlines this week about Blackstone's BDC being able to meet redemptions. But obviously, a lot of questions coming in about BDCs. And obviously, the broadly-syndicated loan market, the CLO equity market is different than private credit. It is different than direct lending, but it's all together in the category of some concerns that investors have about fundamental credit quality and liquidity. And then earlier in February, we saw Eagle Point with a 57% distribution cut. Sound Point, another CLO equity fund cut its distribution by 20%. So as we saw these competitor distribution announcements, every day, it seemed like in the last month, there was a new distribution cut. And obviously, many of these funds have either monthly or quarterly NAV. XFLT does have a daily NAV. It's an exception among its competitors, but we have felt crosswinds from these distribution cut announcements. In February, the concerns about software, AI has dominated headlines, not just in the equity market, but in terms of the broadly-syndicated loan market. Lauren is going to talk a little bit about that, and she's very focused on it. We have fairly limited exposure to software. As of last month, the exposure was 4.6% in software names. Earlier in January, we saw Oxford Lane OXLC cut its distribution 50%. We cut XFLT's distribution by 14% at the start of January. And a lot of these recent distribution cuts are obviously for funds that have 80% to 90% to 100% of their exposure in CLO equity, what we've been talking about some of the challenges that the CLO equity market has had has impacted these funds very much. XFLT has a mix of assets. We have about 40% of the portfolio in CLO equity, as many of you know, 10% in CLO debt and 50% in loans. And the First Brands and Tricolor News, which roiled the markets in September, Obviously, we've now subsequently learned there have been allegations of fraud in both instances. So fairly idiosyncratic, but it has caused concerns for credit investors. We did start to see outflows from loan and CLO debt-focused funds, retail funds in the fourth quarter. And BDCs, listed BDCs, especially went to not historic, but close to historic discounts, negative 15%. Those have tightened up a little bit. So Kevin, obviously, a lot of negative news here, and much of it will impact XFLT either directly in the case of our competitor funds or indirectly in the case of some of these BDCs.

Kevin Davis:
Thank you for that, Kim. I want to bring Lauren Law into the conversation, and let's shift back to specifically the fourth quarter. So Lauren, can you discuss how XFLT performed during the fourth quarter? And what were some of the main drivers of that performance?

Lauren Law:
Sure. I will be relatively brief and kind of dovetail off of a lot of what Kim just explained. But following on, the Trust asset allocation really consists of the 3 primary components, the broadly-syndicated leveraged loans we own outright, the CLO BB mezzanine tranches and obviously, the CLO equity allocation. And in the fourth quarter, both the loan and BB tranche allocations delivered solid results. They performed in line with or in some cases, better than market expectations and market returns were fine. CLO equity, however, continues to face broad-based weakness, and that's really the story behind performance in the fourth quarter. Performance headwinds for CLO equity throughout the quarter and really the full year of 2025, consistent with earlier periods. Performance was driven by 2 main factors, one of which is spread compression on the underlying loans. And the second was elevated credit risk on a small portion of the leveraged loan market. But if we think back to the fourth quarter, the headlines around First Brands, some other credit issues within the market they resulted in not only actual realized elevated credit losses in the market, but also an expectation that maybe there would be more. And so what CLO equity experienced was a decline in their NAVs on lower prices, specifically related to that small portion of the market that represents risk assets as well as some pretty significant spread tightening. And while the Trust's CLO equity holdings outperformed the market and meaningfully so, Nomura Research estimates that the return on -- the median return on CLO equity across the 2025 in total was about a negative 15% total return. So while we outperformed that, the asset class was still a headwind for the Trust. It's still detracted from overall fund performance and really was the main headwind to total return in Q4 and 2025 more broadly.

Kevin Davis:
Thank you, Lauren. So I'm going to bring Kim back in real quick. So Kim, and you had touched on some of this earlier, but while we understand that XFLT does not have any direct peers, how have CLO equity-focused closed-end funds been trading in the secondary market relative to XFLT?

Kimberly Flynn:
So all of the funds that are in the XFLT peer group, many of which are predominantly invested in CLO equity have traded at significant discounts to NAV. So this is reflecting a reaction to the recent cuts and the recent negative news. This is a peer group that on prior webinars, you've heard us talk about, typically trade well in the secondary market because they're cash flow producing. But obviously, for much of 2025 and then most recently, you've seen a widening out of those discounts following those distribution announcements. So XFLT, as of Friday was trading at a 27% discount. So this for us is a historic wide. We did not see XFLT's discount to NAV that wide during COVID in 2020. And then in 2018, there was also a period of volatility when XFLT traded to a discount. So obviously, we're disappointed with the secondary market trading. Much of the peer group is trading in the same zone. There's been a slight tightening up as of last night, XFLT closed at a 25% discount. So obviously, cold comfort given the wide discounts, but it is fairly atypical for the CLO peer group to be trading where it is. Back to you, Kevin.

Kevin Davis:
Yes. So you had mentioned earlier with the recent updates, the cut that we had in January. I think we've got a slide here focused on how some of the other CLO-focused, closed-end fund managers are managing their distribution. Do you want to address that, Kim?

Kimberly Flynn:
Yes, absolutely. So this just puts into a visual what we've already discussed orally in terms of, but it shows you at what point the distribution changes have been made. XFLT was early with trimming up the distribution. We made a distribution announcement at January 2, 2025. Another distribution change as of June 2, 2025, and then most recently, January 2, 2026. So the other funds that are CLO equity-dominated are either monthly- or quarterly-NAV. So they tend to lag in terms of the valuation of the portfolio. They also tend to lag in terms of these distribution changes. But because if you see the widest -- or sorry, the biggest distribution cuts on the page, OCCI with a 69% cut, ECC 62%, OXLC 55%. These funds are all primarily invested in CLO equity, which in the past, obviously, very high-yielding and -- but with the changes in prices in CLO equity, we've also seen spreads tighten significantly, which has decreased the earnings power and the income potential of the CLO equity investments. And so XFLT is in a slightly better position, even though having had a negative NAV and a negative price for the period ended because of the asset mix, the loan book and the CLO debt -- sorry, CLO debt and loans together held up pricing-wise being close -- priced closer to par, Kevin.

Kevin Davis:
Yes. So let's stay on spreads, and I'm going to go back to you, Lauren. I know you're going to provide a CLO market outlook in a few minutes, but let's first specifically address spreads. So we saw spreads tighten in the fourth quarter. How has that spread tightening impacted portfolio -- the portfolio's earnings potential?

Lauren Law:
Sure. So on the page, we have CLO AAA spreads, but I'm going to take the question a little bit wider and talk about what it's meant on the income side. So spreads in the loan market have tightened across Q4 and the whole of 2025, in line with broader credit markets. And very simply, that means our loan portfolio is generating less cash flow and less income. That's very easy to talk about. But in the case of our CLO equity allocation, it's a little bit more complex. So our CLO equity is an arbitrage product. The cash flow available to CLO equity investors are, very simply, the interest income on the portfolio of loans in excess of the CLO's borrowing cost. And on this slide, you can see AAA spreads, and that's about 60% of the CLO's borrowing cost. So a good proxy to look at to understand the cost of liabilities. We've talked about this a few times in the past, but CLO liabilities are subject to 2 years of non-call protection. And that's in contrast to the loan market that's only subject to 6 months of call protection. And that simply means that loan spreads are able to reprice at a much faster rate than CLO liabilities. And CLO equity bears the cost of that timing mismatch. So as you see that CLO spreads -- CLO AAA spreads have contracted, that gives CLOs the opportunity to refinance their liabilities tighter, but it always occurs at a lag given that mismatch in non-call. And given that, we've seen CLO equity cash flows decline meaningfully in 2025, and that has weighed on the total return of the product and earnings potential for the fund. Over time, CLOs will catch up to the extent that CLO liabilities remain tight or continue to tighten, but it does take time. And in the intervening period, it can be quite painful, and that's what we experienced in 2025.

Kevin Davis:
Got it. Understood. So let's shift to the broadly-syndicated loan market, Lauren. You want to provide an update on the loan market and its recent performance?

Lauren Law:
Sure. Moving away from Q4 and just talking about kind of what's happened year-to-date, the loan market started out the year in a very strong position. Market participants entered the year with cash, favorable expectations as it relates to market -- borrower fundamentals and loan supply. But that being said, sentiment really began to fade towards the end of January as concerns over the impact of AI in the software sector spilled into the loan market. Software represents one of the largest sectors in the broadly-syndicated loan market and about half of this exposure is rated B-, which is a relatively lower rating for CLOs. As news of AI capabilities caused market participants to question kind of long-held views of growth potential and quality of much of this exposure, we saw some significant volatility in secondary trading levels. This volatility was felt most acutely, but not exclusively by the software sector. But just to frame things in terms of total return, by the end of February, the loan market has declined roughly 1% on a year-to-date basis on a total return basis. CLO equity, while there is no index, has fared worse given the repricing activity to start the year and then followed by this loan-price volatility. I would note that while vol is challenging in the short term for CLO equity valuations, loan price can be -- loan-price volatility can be healthy for CLO equity longer term. High-quality managers and CLO structures with long reinvestment periods like those we target and own in the Trust. Are able to trade into volatility and create value for portfolios. In addition, this loan-price volatility has and as long as it continues, will likely continue to keep spread compression at bay, and we would expect any new loan issuance to be issued with wider spreads to the extent this volatility persists. So XFLT's loan portfolio entered this period of dislocation in the software sector underweight software exposure and has used the volatility to manage existing exposure in light of the changing fundamental outlook and opportunistically invest where we think specific loans might be oversold. So we came into this well positioned above-average in terms of quality, below-average in terms of allocation, and we'll continue to manage this evolving risk, both in terms of the loans we own outright, but also the CLO equity exposure that we have in the Trust.

Kevin Davis:
So thank you. And so clearly, there's been a significant focus on software and AI and its impact on the portfolio, these loans. Are there any other notable sectors you want to address?

Lauren Law:
Sure. AI has been discussed and targeting the software sector specifically. But I would say it's not only this sector, while its most acutely exposed, there are other areas that are under pressure surrounding the same theme. Areas of note would be some of the professional services business, accounting firms, as an example, and many of the business services names. The Trust has no direct exposure to call center credits or businesses that engage in legal review, but these are 2 subsectors that have been under significant pressure as the market digests the increasing use cases of artificial intelligence. Like in the software sector, we're seeing changing risks and opportunities and managing the portfolio accordingly. Outside of the AI theme and related disruption, just to highlight a couple of other sectors, I think, that have noteworthy information right now. I would highlight that the chemical sector remains under pressure. Broadly speaking, this sector has been impacted by a build-out of capacity in China, creating an imbalance of supply and demand for certain substrates globally. That's been a headwind. And I think recent activity in the Middle East and the associated inflation and input costs may create an additional headwind for the sector as well. And while I've mostly focused on sectors under pressure in detail, I would note that there are many places where we're finding attractive opportunities as well. I would say the industrial sector has had an encouraging start to 2026 with 2 consecutive months of ISM PMI over 50, indicating expansion, new orders also continuing to be strong, and that sector remains underlevered and healthy overall. So it's a place where we're, as an example, looking to deploy capital.

Kevin Davis:
So let's pivot back to the CLO market. And Lauren, with you, we know that 2025 marked a record year for CLO -- U.S. CLO issuance. How should investors think about the impact of new issuance as it relates to XFLT?

Lauren Law:
Yes, you are correct that 2025 was a strong year for CLO issuance. I would say this is both net and gross issuance. So gross issuance is going to capture the impact of CLO resets and CLO refinancing activity. And this activity was incredibly robust during 2025 as CLO structures scrambled to lower their financing costs upon the expiration of that 2-year non-call period I mentioned earlier, really to lower their financing costs in response to loan spread tightening. So in terms of how that has impacted the Trust, it's been incredibly accretive to our existing holdings and one of the reasons why I think our exposure was able to outperform the market with the median market return. But in addition to the refinancing and reset activity, we also saw strong new CLO creation. Strong new CLO creation created more demand for loans in the market in a year where new loan supply was incredibly anemic. And I would say the technical imbalance created by that dynamic really did contribute to the repricing activity that plagued the market for not just 2025, but also 2024. And that was something that weighed on the earnings potential of the CLO equity positions that we own.

Kevin Davis:
So Lauren, can you discuss how the loan repricing that you're referencing, how it impacted CLO spreads?

Lauren Law:
Loan repricing impacts the -- specifically the weighted average spread of CLO loan portfolios, which, as we've discussed, contracted pretty meaningfully in 2025. Loan repricing and loan spreads going tighter is not dissimilar to what we saw in broader credit markets. And so I would highlight that CLO tranche spreads also contracted meaningfully, tightened meaningfully throughout the course of 2025. That was beneficial to the BBs we own that traded up in price. It was beneficial to the CLO equity we owned that was eligible to refinance at tighter spreads, but it did create a situation where when we are reinvesting into new CLO BB tranches that was occurring in Q4 at tighter levels as well.

Kevin Davis:
So following that, what is Octagon's outlook on the CLO market? And maybe what are some of the things that could potentially happen for conditions to improve?

Lauren Law:
Yes. So this is a challenging question, I think, to answer right now in light of some elevated volatility on the back of geopolitical events and the continued dislocation in the software sector and other related types of credits. That being said, fundamentals, fundamental borrower performance, actual EBITDA growth actually remains healthy. Q4 earnings have been -- the expectations were that they would be healthy, and they have come in, in line with expectations. Spread tightening results in -- that we've talked about all of the spread compression we've seen in the market. That actually results in better credit metrics for most of the borrowers in the market, not the riskiest borrowers, but the borrowers that were able to refinance their capital structures, now actually are able to generate more cash flow, have better fixed charge coverage. And you should also think of that in context of Fed cuts and what that has meant for a reduction in base rates and thus lower interest expense for our borrowers. So there are lots of reasons to be constructive on the loan market and the CLO market by extension. I would highlight a couple of things though. One is, I think the market has become incredibly thematic in nature. That means we will continue to see periods and pockets of volatility that may be disruptive in the short term. But my expectation is that longer term, in the hands of talented managers, CLOs will be able to create value for their portfolios through these periods of volatility, and we would expect some of that to occur throughout the course of this year.

Kevin Davis:
So we've had a couple of questions come in. Lauren, I'm going to stick with you. And again, as a reminder, if you have questions, type them in the Q&A box at the bottom of the screen. A couple of quick ones I'll fire off to you, Lauren. What is the average price of the CLO equity currently?

Lauren Law:
In the XFLT book?

Kevin Davis:
I'm assuming that's what they're asking, yes.

Lauren Law:
So that's a little bit hard for me to give on the fly, but what I would say about CLO equity and something that investors should bear in mind is that it is not a par asset. It is not a fixed income asset that is -- it is rarely actually issued at par. It is typically sold with a dollar price in the $0.80 range, but it is also traded in the primary and secondary market. Over time, the expectation is that the price of a CLO equity tranche will decline in value as every distribution received every quarter is a mix of return of capital as well as interest income. So just looking at the price of our CLO equity is not going to tell an investor the entirety of the story, which is why I hesitate to share it in real time without that context in detail.

Kevin Davis:
That's fair. So another question that came in for you, Lauren, and I know these are coming on the fly. It says, do you have a long-term average level of defaults you've experienced in all CLO equity pools you've invested in, and an average "final" liquidation cents on the dollar?

Lauren Law:
We actually do run that analysis. I'm not going to have it necessarily over this account on the fly either. But what I would say is we do look at that as part of our manager analysis to say what has the long-term default and recovery experience been of an individual manager and how does that compare to the standard default and recovery assumptions that many market participants apply to portfolios. And what I will say is the managers that we invest in over the long term have had default and recovery experience that outperforms, meaning their defaults are lower and the recoveries are higher than the standardized market assumptions. We tend to invest in higher quality, better performing managers than average.

Kevin Davis:
So one more that came in. I don't know if you have this at your fingertips, Lauren, but what is the average price of the CLO equity currently?

Lauren Law:
I think that was the first question we addressed.

Kevin Davis:
Okay. Got it. Okay. So one more that came in. Kim, I'm going to address this one to you. How is CLO equity debt senior loans different than a BDC structure?

Lauren Law:
Yes. Thanks. I think I touched a little bit on this, but hopefully, I can clarify. So many of the non-traded BDCs like the Blackstone BDC or some of the listed BDCs like the Blue Owl BDC, they're investing. That's what's considered private credit. They're making direct loans to a wide variety of companies. The direct lending market has been growing like gangbusters in the last 3 or 4 years. It is viewed as an alternative to the bank loan market. So the market capitalization of the borrowers in the underlying loans in a BDC really vary, could be lower-middle market, could be middle-market, could be larger companies. But we would contrast the direct lending space, which the type of loans that are made within a BDC are different than the broadly-syndicated loan market. The broadly-syndicated loan market, advisers and investors are probably long familiar with first lien senior loans and large well-funded borrowers, typically larger companies in the broadly-syndicated loan market. And that is the market that Octagon focuses on. The broadly-syndicated loan market is the universe of loans that consists our collateral pools for most of the CLO equity and CLO debt that Octagon is purchasing for XFLT. Octagon's focus is on the broadly-syndicated loan market. Not -- there in recent years, there have been retail products built that focus on perhaps like the middle-market loan segment. But that's not Octagon's focus. It is squarely on broadly-syndicated loans for XFLT. So I think that we appreciate that there's concerns about credit fundamentals, but I think Lauren addressed that on the webinar already in terms of how she's feeling about that. And that's why we say there's been some crossover headwinds from the BDC market into the broadly-syndicated loan market. And hopefully, that helps in terms of contrasting the 2 different types of credit investments for shareholders.

Kevin Davis:
Got it. So one more topic to cover here from me, Kim. I want to stick with you. Let's discuss leverage in the portfolio. So we know that XFLT's leverage cost has come down. It came down in the fourth quarter. Can you discuss how management views leverage on XFLT and how that leverage strategy is deployed?

Kimberly Flynn:
Yes, absolutely. So I'll talk about leverage, and then I want to talk a little bit about -- we've had a couple of questions come in about XFLT's ownership, who's in the fund and then the governance. So I'll start with the first question, which is leverage. Given XFLT's asset mix and because so much of our portfolio is invested in senior loans, we're able to borrow advantageously for XFLT shareholders. We were successful in issuing an institutional preferred. It's called a MRPS. That was done in October. It helped lower XFLT's overall cost of leverage. So we're able to borrow at a much -- borrow and issue different types of leverage securities so that our overall cost of leverage is significantly lower than the competitor CLO equity funds, which are largely the CLO equity-focused funds they're borrowing somewhere in the 7% or 8%, depending on where they're able to issue retail preferreds or baby bonds. So our asset mix ends up helping our leverage mix and decrease cost of leverage. XFLT has been a levered fund. The leverage ratio, it varies anywhere from 35% to 38% typically. And we're very mindful in terms of how we're managing the leverage ratio, but also the cost of leverage. Kevin, I had a question that came in regarding XFLT ownership. And you'll see on Slide 34, the top 20. The top 10 really is about 18%. So a majority of the ownership is sitting in the top 10. We have a number of inside investors, including our co-CEOs, John Spence and Theodore Rambach listed as #8 and 9 on the left side table. We did -- SIT has been an investor for some time. They did increase their position over the last 2 months. They are sitting at 7%. We're happy to have SIT invested in XFLT. We understand that they're a long-term investor, and they invest in a lot of listed closed-end funds. Eagle Point has been a partner to Octagon and to XFLT. Their position sits at about 2.74%. We also have a number of RIAs like Cresset, another closed-end fund buyer, Herzfeld in the fund. So I wanted to address that question we're not seeing any activity right now that would concern us. One point on governance. So I just -- I've had a couple of questions from investors, a couple of statements of asking if we're considering share repurchases, asking if we would consider share repurchases given the discount. Obviously, I don't make those decisions alone. That's something that our Fund Board makes. So I wanted to just speak with you. We appreciate the input. We understand the comment, and we're glad that you joined us on the webinar. I don't have much more prepared to say about that today, but I did want to talk about this Board is very focused. Everyone on the Board is a shareholder. Every senior leader at our firm is a shareholder. I talked already about Ted and John, our CEOs, their ownership of the fund. My entire retirement account is invested entirely in XFLT and has been for the last 9 years. So this is something we're really committed to in terms of getting this right and fixing not just the NAV issues have largely to do with where CLO equity is trading. We're going to be focused on that, focused on improving NAV performance and focused on improving secondary market trading where we can help with that. We do webinars like this every single quarter. We know a lot of our competitors will also do similar things. I did have a comment from a shareholder. They ask for increased communications. We are really happy to do that. If you want to e-mail me, my e-mail and Kevin's e-mail is at the end of the presentation. We'll put that up in a minute. We're always happy to do a call. We're happy to send out a weekly update e-mail, if that's helpful to you or your clients. Our Board is very active. They met 6 times in the last 12 months to discuss XFLT. We bring the Board together in addition to these meetings to talk about things like distribution changes to discuss the MRPS issuance, anything related to leverage. And these are all really important matters that our Board is very focused on. We did have a question about our distribution policy. We are focused on looking at earnings and distributing the earnings of the fund. From time to time, there can be returns of capital, and we'll tolerate that for a period of time, but we do like to simply focus on an earnings distribution policy over time. And we're trying to avoid overdistributing with that GAAP-focused earnings-based distribution policy. There was -- for last year, there was not a return of capital in 2025. We were able, from a GAAP and a tax perspective to pay out the distributions appropriately. We have the whole calendar year for 2026 to get that same lineup. We want to see that tax and GAAP, which is our accounting for how we manage earnings and make distributions -- so I just wanted to point out that, obviously, it's not just senior leadership. Kevin and I are happy to take your call at any point. And just know that management and the Board is very focused on XFLT. And none of us as shareholders are happy with the NAV performance or the price performance. I really appreciate everybody's questions. I think if we could just move to the final slide and put up my information and Kevin's information, we can end there. We've gotten a lot of good feedback in the Q&A bar, and I tried to mention where I could where that feedback has been provided. And if you have additional questions, please let us know. We're happy to get on a call, talk with you or your clients. Thank you so much for joining us today on the XFLT webinar. Kevin, anything more from you before we sign off?

Kevin Davis:
Thank you for that, Kim. I just wanted to thank you and Lauren both for your input and your commentary today. I will remind everyone that a replay of the webinar will be available on our website. And as I mentioned at the outset, there's a wealth of information available on our website. It's specifically in the Knowledge Bank. And please do reach out if you have any additional needs or questions. We certainly appreciate your time today. Thank you.