Franklin Resources signs $800 million five-year revolver with BofA

By William Gullotti

Buffalo, N.Y., July 28 – Franklin Resources, Inc. entered into a credit agreement with Bank of America, NA as administrative agent on July 25 for a five-year revolving credit facility totaling $800 million, according to an 8-K filing with the Securities and Exchange Commission.

Borrowings will accrue interest at SOFR plus a margin ranging from 62.5 basis points to 125 bps. There is also a commitment fee, payable quarterly, on the undrawn portion of the revolver that ranges from 6 bps to 12.5 bps.

The margin and fee are both determined by the company’s debt rating.

In addition to customary affirmative and negative covenants, the new agreement includes a financial performance covenant that requires the company to maintain a consolidated net leverage ratio of no greater than 3.25 to 1.0.

Franklin may also opt to prepay any outstanding loans and/or terminate revolver commitments at any time, subject to timely written notice.

The revolver was undrawn at closing.

BofA is also acting as a joint lead arranger and joint bookrunner alongside HSBC Bank USA, NA, the syndication agent.

Concurrently at closing, Franklin terminated its existing $500 million revolver that was due Sept. 7, 2023 and a $300 million term loan credit agreement that was due Sept. 8, 2025. The administrative agent for both facilities was also BofA. The company repaid the $300 million of borrowings and other amounts outstanding under the term agreement at termination, and there were no amounts outstanding under the revolver.

Referred to with its subsidiaries as Franklin Templeton, the holding company for investment managers is based in San Mateo, Calif.

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