UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-03395
Franklin Federal Tax-Free Income Fund
(Exact name of registrant as specified in charter)
_One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)
_Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)
Registrant's telephone number, including area code: 650 312-2000
Date of fiscal year end: _4/30
Date of reporting period: _10/31/16
Item 1. Reports to Stockholders.
Contents | |
Semiannual Report | |
Franklin Federal Tax-Free Income Fund . | 3 |
Performance Summary | 6 |
Your Fund’s Expenses | 8 |
Financial Highlights and Statement of Investments | 9 |
FinancialStatements | 39 |
Notes to Financial Statements | 42 |
Shareholder Information | 49 |
Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.
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Semiannual Report
Franklin Federal Tax-Free Income Fund
This semiannual report for Franklin Federal Tax-Free Income Fund covers the period ended October 31, 2016.
Your Fund’s Goal and Main Investments
The Fund seeks to provide as high a level of income exempt from federal income taxes as is consistent with prudent investment management and preservation of capital by investing at least 80% of its total assets in investment-grade municipal securities that pay interest free from such taxes.1
Credit Quality Composition*
10/31/16
% of Total | ||
Ratings | Investments | |
AAA | 9.51 | % |
AA | 45.88 | % |
A | 20.93 | % |
BBB | 5.99 | % |
Below Investment Grade | 2.06 | % |
Refunded | 14.75 | % |
Not Rated | 0.88 | % |
*Securities, except for those labeled Not Rated, are assigned ratings by one or more Nationally Recognized Statistical Credit Rating Organizations (NRSROs), such as Standard & Poor’s, Moody’s and Fitch, that can be considered by the investment manager as part of its independent securities analysis. When ratings from multiple agencies are available, the highest is used, consistent with the portfolio investment process. Ratings reflect an NRSRO’s opinion of an issuer’s creditworthiness and typically range from AAA (highest) to D (lowest). The Below Investment Grade category consists of bonds rated below BBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, decreased from $12.48 on April 30, 2016, to $12.38 on October 31, 2016. The Fund’s Class A shares paid dividends totaling 22.80 cents per share for the reporting period.2 The Performance Summary beginning on page 6 shows that at the end of this reporting period the Fund’s Class A shares’ distribution rate was 3.48% based on an annualization of October’s 3.75 cent per share dividend and the maximum offering price of $12.93 on October 31, 2016. An investor in the 2016 maximum federal personal income tax bracket of 39.60% (plus 3.8% Medicare tax) would need to earn a distribution rate of 6.15% from a taxable investment to match the Fund’s Class A tax-free distribution rate. For other performance data, please see the Performance Summary. Dividend distributions were affected by continued low interest rates during the period. This and other factors resulted in reduced income for the portfolio and caused dividends to be lower at the end of the period.
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
Municipal Bond Market Overview
The municipal bond market underperformed the U.S. Treasury market and U.S. stock markets during the 6-month period ended October 31, 2016. Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, generated a +0.49% total return for the period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a +0.80% total return.3 U.S. equities, as represented by the Standard & Poor’s® 500 Index, outperformed municipals with a +4.06% total return for the reporting period.3
After raising its target range for the federal funds rate to 0.25%–0.50% last year, the Federal Reserve (Fed) maintained its target through period-end. At its June meeting, the Fed indicated that in determining the timing and size of future
1. Dividends are generally subject to state and local taxes, if any. For investors subject to alternative minimum tax, a small portion of Fund dividends may be taxable.
Distributions of capital gains are generally taxable. To avoid imposition of 28% backup withholding on all Fund distributions and redemption proceeds, U.S. investors must be
properly certified on Form W-9 and non-U.S. investors on Form W-8BEN.
2. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income. All Fund
distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
3. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and a fixed principal value; their interest payments and principal are guaranteed.
See www.franklintempletondatasources.com for additional data provider information.
The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s Statement of Investments (SOI).
The SOI begins on page 12.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
Dividend Distributions* | |||
5/1/16–10/31/16 | |||
Dividend per Share (cents) | |||
Month | Class A | Class C | Advisor Class |
May | 3.95 | 3.37 | 4.05 |
June | 3.85 | 3.29 | 3.96 |
July | 3.75 | 3.19 | 3.86 |
August | 3.75 | 3.19 | 3.86 |
September | 3.75 | 3.17 | 3.85 |
October | 3.75 | 3.17 | 3.85 |
Total | 22.80 | 19.38 | 23.43 |
*The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
adjustments to the target range, it would assess realized and expected economic conditions relative to its objectives of maximum employment and 2.0% inflation. Following strong July employment data, the Fed signaled that interest rates could increase in the near term, given continued strength in labor market conditions and the Fed’s positive outlook on future economic growth. Nonetheless, the Fed expected economic conditions to evolve in a manner that could warrant only gradual increases in the federal funds rate.
In June, Britain voted to leave the European Union in the much-publicized “Brexit” referendum. The outcome roiled financial markets in the short-run even as the long-term ramifications of a British exit from the European Union remained uncertain. Global equity markets sold off briefly, while both U.S. Treasuries and municipal bonds rallied sharply in the immediate aftermath of the Brexit vote.
Approximately $257 billion in bonds were issued over the past six months. More than $53 billion of municipal bonds were issued during the month of October, which is the highest monthly number in 30 years. The municipal market experienced a significant increase in new money as well as refunding issuance. New money municipal bond issuance has increased 18% during 2016 as compared to 2015, while refunding volume was up 6%. In spite of this elevated supply, municipal bond funds have recorded more than $31 billion in inflows during the reporting period, reflecting solid demand for tax-exempt debt. During the period under review, bonds with longer maturities generally performed better than bonds with shorter maturities. High yield municipal bonds outperformed investment-grade municipals, reflective of the “risk on” sentiment seen during the period. High yield tax-exempt bonds, as measured by the Bloomberg Barclays High Yield Municipal Bond Index, generated a +4.49% total return for the period.3
Several developments affected Puerto Rico bonds over the reporting period. Puerto Rico and its municipal issuers continued to experience significant financial difficulties, which created additional strain on a commonwealth already facing economic stagnation and fiscal imbalances. These challenges also led to liquidity issues including reduced access to the financial markets.
On May 19, 2016, the House Committee on Natural Resources introduced a bill, the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), which sought to provide an oversight board as well as a restructuring process. PROMESA was approved by Congress and signed into law by President Obama on June 30, 2016. On August 31, 2016, the president appointed the seven member oversight board. It is unclear at this time what potential impact, if any, that PROMESA may have on ongoing restructuring discussions, including discussions with PREPA detailed below.
We look forward to continuing to work with Puerto Rico and its new oversight board to promote responsible solutions to the island’s fiscal and economic problems so it may regain needed access to the capital markets.
As part of the Puerto Rico Electric Power Authority (PREPA) forbearing creditor group (Ad Hoc Group), we have been participating in discussions related to the PREPA bonds we own. On December 23, 2015, PREPA and more than 70% of its creditors reached an agreement on an Amended and Restated Restructuring Support Agreement (RSA) that would provide, among other things, for a restructuring of PREPA debt at 85 cents on the dollar for some of its outstanding debt, and outlined a Bond Purchase Agreement (BPA) whereby certain of those creditors would purchase new bonds to be issued by PREPA.
Legislation to establish the necessary securitization framework for the new PREPA debt was passed on February 16, 2016. In June, the Puerto Rico Energy Commission approved a “transition” charge to PREPA customers that will secure the new debt that will be issued to facilitate the PREPA restructuring. In our view, the implementation of the RSA provides the basis for PREPA to provide more reliable and lower-cost service, fund its capital needs for the medium term, help ensure environmental compliance, diversify generation resources to include more natural gas, and provide jobs.
On April 5, 2016, the Governor signed legislation allowing him to impose a debt moratorium on most debt issued by Puerto Rico and its agencies and that stays all related litigation until January 2017. Subsequently, the governor declared the
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
aforementioned moratorium for several issuers. During the period under review, Puerto Rico has defaulted on some of its debt and at this point it is unclear what it will pay in the future.
In June 2014, Puerto Rico enacted its own bankruptcy law called the Debt Enforcement and Recovery Act (DERA). Certain Franklin Municipal Bond Funds and another fund family quickly brought suit against Puerto Rico saying, among other things, that the U.S. Bankruptcy Code pre-empted DERA. In July 2015, the U.S. Court of Appeals for the First Circuit ruled 3-0 in our favor, affirming the prior ruling by the District Court in Puerto Rico that the U.S. Bankruptcy Code pre-empts DERA. Puerto Rico appealed to the U.S. Supreme Court, which heard the case on March 22, 2016, and on June 13, 2016, ruled 5-2 to uphold the First Circuit ruling.
At period-end, we maintained our positive view of the municipal bond market. We believe municipal bonds continue to be an attractive asset class among fixed income securities, and we intend to follow our solid discipline of investing to maximize income while seeking value in the municipal bond market.
Portfolio Composition
10/31/16
% of Total | ||
Investments* | ||
Refunded** | 24.4 | % |
Utilities | 16.6 | % |
Transportation | 12.8 | % |
General Obligation | 11.4 | % |
Hospital & Health Care | 9.5 | % |
Subject to Government Appropriations | 8.9 | % |
Higher Education | 5.8 | % |
Tax-Supported | 4.5 | % |
Other Revenue | 4.3 | % |
Corporate-Backed | 1.2 | % |
Housing | 0.6 | % |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
Investment Strategy
We use a consistent, disciplined strategy in an effort to maximize tax-exempt income for our shareholders by seeking to maintain exposure to higher coupon securities while balancing risk and return within the Fund’s range of allowable investments. We generally employ a buy-and-hold approach and invest in securities we believe should provide the most relative value in the market. We do not use leverage or derivatives, nor do we use hedging techniques that could add volatility and contribute to underperformance in adverse markets.
Manager’s Discussion
Our value-oriented philosophy of investing primarily for income and stability of principal, when combined with a positive-sloping municipal yield curve, in which yields for longer term bonds are higher than those for shorter term bonds, led us to favor longer term bonds during the period under review. Consistent with our strategy, we sought to remain invested in bonds ranging from 15 to 30 years in maturity with good call features. Our relative-value, income-oriented philosophy also led the Fund to maintain its positions in higher coupon bonds, which provided income performance during the reporting period. We believe our conservative, buy-and-hold investment strategy can help us achieve high, current, tax-free income for shareholders.
The Fund holds a small portion of its assets in Puerto Rico bonds, which increased in price over the period. However, Puerto Rico and its municipal issuers continued to experience significant financial difficulties, which we discussed in the Municipal Bond Market Overview. The Fund is not required to sell securities that have been downgraded to below investment grade, but it is prohibited from making further purchases of such securities as long as the securities are not rated investment grade by at least one U.S. nationally recognized rating service. We continue to closely monitor developments in Puerto Rico; however, the municipal bond market’s overall fundamentals, such as general creditworthiness and low default rates, remained stable.
Thank you for your continued participation in Franklin Federal Tax-Free Income Fund. We look forward to serving your future investment needs.
The foregoing information reflects our analysis, opinions and portfolio holdings as of October 31, 2016, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, state, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
Performance Summary as of October 31, 2016
The performance tables do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses. Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities.
Performance as of 10/31/16
Cumulative total return excludes sales charges. Average annual total return includes maximum sales charges. Sales charges will vary depending on the size of the investment and the class of share purchased. The maximum is 4.25% and the minimum is 0%. Class A: 4.25% maximum initial sales charge; Advisor Class: no sales charges. For other share classes, visit franklintempleton.com.
Cumulative | Average Annual | Average Annual | ||||||
Share Class | Total Return1 | Total Return2 | Total Return (9/30/16)3 | |||||
A | ||||||||
6-Month | +1.02 | % | -3.24 | % | ||||
1-Year | +3.99 | % | -0.44 | % | +0.70 | % | ||
5-Year | +25.24 | % | +3.70 | % | +3.77 | % | ||
10-Year | +54.61 | % | +4.00 | % | +4.15 | % | ||
Advisor | ||||||||
6-Month | +1.07 | % | +1.07 | % | ||||
1-Year | +4.09 | % | +4.09 | % | +5.29 | % | ||
5-Year | +25.85 | % | +4.71 | % | +4.78 | % | ||
10-Year | +56.19 | % | +4.56 | % | +4.70 | % | ||
Distribution | Taxable Equivalent | 30 Day | - | Taxable Equivalent 30-Day | ||||
Share Class | Rate4 | Distribution Rate5 | Standardized Yield6 | Standardized Yield5 | ||||
A | 3.48 | % | 6.15 | % | 1.34 | % | 2.37 | % |
Advisor | 3.73 | % | 6.59 | % | 1.50 | % | 2.65 | % |
Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.
See page 7 for Performance Summary footnotes.
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PERFORMANCE SUMMARY
Net Asset Value | |||||||
Share Class (Symbol) | 10/31/16 | 4/30/16 | Change | ||||
A (FKTIX) | $ | 12.38 | $ | 12.48 | -$ | 0.10 | |
C (FRFTX) | $ | 12.37 | $ | 12.47 | -$ | 0.10 | |
Advisor (FAFTX) | $ | 12.39 | $ | 12.49 | -$ | 0.10 | |
Distributions7 (5/1/16–10/31/16) | |||||||
Dividend | |||||||
Share Class | Income | ||||||
A | $ | 0.2280 | |||||
C | $ | 0.1938 | |||||
Advisor | $ | 0.2343 | |||||
Total Annual Operating Expenses8 | |||||||
Share Class | |||||||
A | 0.61 | % | |||||
Advisor | 0.51 | % |
Each class of shares is available to certain eligible investors and has different annual fees and expenses, as described in the prospectus.
All investments involve risks, including possible loss of principal. Because municipal bonds are sensitive to interest rate movements, the Fund’s yield and share
price will fluctuate with market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a
rise in interest rates, the Fund’s share price may decline. Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer,
insurer or guarantor, may affect the bond’s value. The Fund holds a small portion of its assets in Puerto Rico municipal bonds that have been impacted by recent
adverse economic and market changes, which may cause the Fund’s share price to decline. The Fund may invest a significant part of its assets in municipal
securities that finance similar types of projects, such as utilities, hospitals, higher education and transportation. A change that affects one project would likely
affect all similar projects, thereby increasing market risk. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will
produce the desired results. The Fund’s prospectus also includes a description of the main investment risks.
1. Cumulative total return represents the change in value of an investment over the periods indicated.
2. Average annual total return represents the average annual change in value of an investment over the periods indicated. Return for less than one year, ifany,hasnotbeen
annualized.
3. In accordance with SEC rules, we provide standardized average annual total return information through the latest calendar quarter.
4. Distribution rate is based on an annualization of the respective class’s October dividend and the maximum offering price (NAV for Advisor Class) per share on 10/31/2016.
5. Taxable equivalent distribution rate and yield assume the 2016 maximum federal income tax rate of 39.60% plus 3.8% Medicare tax.
6. The Fund’s 30-day standardized yield is calculated over a trailing 30-day period using the yield to maturity on bonds and/or the dividends accrued on stocks. It may not equal
the Fund’s actual income distribution rate, which reflects the Fund’s past dividends paid to shareholders.
7. The distribution amount is the sum of the dividend payments to shareholders for the period shown and includes only estimated tax-basis net investment income.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this
report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
Your Fund’s Expenses
As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.
Actual Fund Expenses
The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value” for each class of shares. You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.
Hypothetical Example for Comparison with Other Funds
Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.
Actual | Hypothetical | |||||||||||
(actual return after expenses) | (5% annual return before expenses) | |||||||||||
Expenses | Expenses | |||||||||||
Beginning | Ending | Paid During | Ending | Paid During | Annualized | |||||||
Share | Account | Account | Period | Account | Period | Expense | ||||||
Class | Value 5/1/16 | Value 10/31/16 | 5/1/16–10/31/161 | Value 10/31/16 | 5/1/16–10/31/161 | Ratio | ||||||
A | $ | 1,000 | $ | 1,010.20 | $ | 3.09 | $ | 1,022.13 | $ | 3.11 | 0.61 | % |
C | $ | 1,000 | $ | 1,007.40 | $ | 5.87 | $ | 1,019.36 | $ | 5.90 | 1.16 | % |
Advisor | $ | 1,000 | $ | 1,010.70 | $ | 2.58 | $ | 1,022.63 | $ | 2.60 | 0.51 | % |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above–in the far right column–multiplied by the simple average account value over the period indicated, and then multiplied by 184/365 to reflect the one-half year period.
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Financial Highlights | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
October 31, 2016 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||
Class A | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.48 | $ | 12.45 | $ | 12.22 | $ | 12.79 | $ | 12.48 | $ | 11.47 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.23 | 0.48 | 0.47 | 0.49 | 0.48 | 0.51 | ||||||||||||
Net realized and unrealized gains (losses) | (0.10 | ) | 0.02 | 0.23 | (0.57 | ) | 0.31 | 1.02 | ||||||||||
Total from investment operations | 0.13 | 0.50 | 0.70 | (0.08 | ) | 0.79 | 1.53 | |||||||||||
Less distributions from net investment income . | (0.23 | ) | (0.47 | ) | (0.47 | ) | (0.49 | ) | (0.48 | ) | (0.52 | ) | ||||||
Net asset value, end of period | $ | 12.38 | $ | 12.48 | $ | 12.45 | $ | 12.22 | $ | 12.79 | $ | 12.48 | ||||||
Total returnc | 1.02 | % | 4.16 | % | 5.82 | % | (0.49 | )% | 6.44 | % | 13.61 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses. | 0.61 | % | 0.61 | % | 0.62 | % | 0.62 | % | 0.61 | % | 0.62 | % | ||||||
Net investment income | 3.68 | % | 3.87 | % | 3.80 | % | 4.11 | % | 3.76 | % | 4.25 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 8,439,816 | $ | 8,384,079 | $ | 8,505,853 | $ | 8,243,367 | $ | 9,414,734 | $ | 8,758,460 | ||||||
Portfolio turnover rate | 3.90 | % | 6.07 | % | 5.49 | % | 8.51 | % | 6.31 | % | 8.55 | % |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and
repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable and is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND | ||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
October 31, 2016 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||
Class C | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.47 | $ | 12.44 | $ | 12.21 | $ | 12.78 | $ | 12.47 | $ | 11.46 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.20 | 0.41 | 0.40 | 0.43 | 0.41 | 0.45 | ||||||||||||
Net realized and unrealized gains (losses) | (0.11 | ) | 0.03 | 0.23 | (0.58 | ) | 0.31 | 1.01 | ||||||||||
Total from investment operations | 0.09 | 0.44 | 0.63 | (0.15 | ) | 0.72 | 1.46 | |||||||||||
Less distributions from net investment income . | (0.19 | ) | (0.41 | ) | (0.40 | ) | (0.42 | ) | (0.41 | ) | (0.45 | ) | ||||||
Net asset value, end of period | $ | 12.37 | $ | 12.47 | $ | 12.44 | $ | 12.21 | $ | 12.78 | $ | 12.47 | ||||||
Total returnc | 0.74 | % | 3.59 | % | 5.24 | % | (1.05 | )% | 5.87 | % | 13.00 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses. | 1.16 | % | 1.16 | % | 1.17 | % | 1.17 | % | 1.16 | % | 1.17 | % | ||||||
Net investment income | 3.13 | % | 3.32 | % | 3.25 | % | 3.56 | % | 3.21 | % | 3.70 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,262,218 | $ | 1,215,034 | $ | 1,166,771 | $ | 1,120,471 | $ | 1,525,083 | $ | 1,319,527 | ||||||
Portfolio turnover rate | 3.90 | % | 6.07 | % | 5.49 | % | 8.51 | % | 6.31 | % | 8.55 | % |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and
repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable and is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
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FINANCIAL HIGHLIGHTS | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
October 31, 2016 | Year Ended April 30, | |||||||||||||||||
(unaudited) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||
Advisor Class | ||||||||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 12.49 | $ | 12.46 | $ | 12.23 | $ | 12.80 | $ | 12.49 | $ | 11.48 | ||||||
Income from investment operationsa: | ||||||||||||||||||
Net investment incomeb | 0.24 | 0.49 | 0.49 | 0.50 | 0.49 | 0.52 | ||||||||||||
Net realized and unrealized gains (losses) | (0.11 | ) | 0.03 | 0.22 | (0.57 | ) | 0.31 | 1.02 | ||||||||||
Total from investment operations | 0.13 | 0.52 | 0.71 | (0.07 | ) | 0.80 | 1.54 | |||||||||||
Less distributions from net investment income . | (0.23 | ) | (0.49 | ) | (0.48 | ) | (0.50 | ) | (0.49 | ) | (0.53 | ) | ||||||
Net asset value, end of period | $ | 12.39 | $ | 12.49 | $ | 12.46 | $ | 12.23 | $ | 12.80 | $ | 12.49 | ||||||
Total returnc | 1.07 | % | 4.26 | % | 5.92 | % | (0.39 | )% | 6.54 | % | 13.71 | % | ||||||
Ratios to average net assetsd | ||||||||||||||||||
Expenses. | 0.51 | % | 0.51 | % | 0.52 | % | 0.52 | % | 0.51 | % | 0.52 | % | ||||||
Net investment income | 3.78 | % | 3.97 | % | 3.90 | % | 4.21 | % | 3.86 | % | 4.35 | % | ||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 1,470,000 | $ | 1,443,272 | $ | 1,689,267 | $ | 1,314,233 | $ | 1,755,892 | $ | 1,389,908 | ||||||
Portfolio turnover rate | 3.90 | % | 6.07 | % | 5.49 | % | 8.51 | % | 6.31 | % | 8.55 | % |
aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and
repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
bBased on average daily shares outstanding.
cTotal return is not annualized for periods less than one year.
dRatios are annualized for periods less than one year.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 11
FRANKLIN FEDERAL TAX-FREE INCOME FUND | ||||
Statement of Investments, October 31, 2016 (unaudited) | ||||
Principal | ||||
Amount | Value | |||
Municipal Bonds 99.2% | ||||
Alabama 1.1% | ||||
Alabama State Incentives Financing Authority Special Obligation Revenue, Series A, 5.00%, 9/01/42 | $ | 14,300,000 | $ | 16,177,448 |
Alabama State Port Authority Docks Facilities Revenue, Refunding, 6.00%, 10/01/40. | 6,000,000 | 6,935,160 | ||
Alabama State Public Health Care Authority Lease Revenue, Department of Public Health Facilities, | ||||
Refunding, 5.00%, 9/01/44 | 17,085,000 | 19,277,005 | ||
Birmingham Water Works Board Water Revenue, | ||||
Series A, Assured Guaranty, Pre-Refunded, 5.125%, 1/01/34. | 5,600,000 | 6,098,848 | ||
Series B, 5.00%, 1/01/38 | 3,500,000 | 4,033,330 | ||
Series B, 5.00%, 1/01/43 | 8,000,000 | 9,145,040 | ||
Chilton County Health Care Authority Limited Obligation Sales Tax Revenue, Chilton County Hospital | ||||
Project, Series A, 5.00%, 11/01/40 | 8,425,000 | 9,496,829 | ||
East Alabama Health Care Authority Health Care Facilities Revenue, Mandatory Put 9/01/18, Series B, | ||||
5.50%, 9/01/33. | 18,500,000 | 19,860,120 | ||
Mobile Water and Sewer Commissioners Water and Sewer Revenue, Refunding, 5.00%, 1/01/36 | 11,300,000 | 12,993,983 | ||
Tuscaloosa Public Educational Building Authority Student Housing Revenue, Ridgecrest Student | ||||
Housing LLC, University of Alabama Ridgecrest Residential Project, Assured Guaranty, Pre- | ||||
Refunded, 6.75%, 7/01/38 | 10,000,000 | 10,965,700 | ||
University of South Alabama University Tuition Revenue, Capital Improvement, Refunding, AMBAC | ||||
Insured, 5.00%, 12/01/36 | 11,570,000 | 11,604,363 | ||
126,587,826 | ||||
Alaska 0.8% | ||||
Alaska Municipal Bond Bank Authority Revenue, | ||||
Refunding, Series 3, 5.25%, 10/01/36 | 16,045,000 | 18,788,695 | ||
Refunding, Series 3, 5.00%, 10/01/39 | 12,950,000 | 14,697,603 | ||
Alaska State Industrial Development and Export Authority Revenue, Providence Health and Services, | ||||
Series A, 5.00%, 10/01/40 | 10,000,000 | 10,854,400 | ||
Alaska State International Airports Revenue, Series C, 5.00%, 10/01/33 | 12,565,000 | 14,096,925 | ||
Anchorage Electric Revenue, senior lien, Refunding, Series A, 5.00%, 12/01/41 | 8,875,000 | 10,340,351 | ||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center Project, Assured | ||||
Guaranty, Pre-Refunded, 6.00%, 9/01/32 | 20,000,000 | 22,781,000 | ||
91,558,974 | ||||
Arizona 2.5% | ||||
Arizona State Board of Regents University of Arizona System Revenue, Stimulus Plan for Economic | ||||
and Educational Development, 5.00%, 8/01/44 | 10,000,000 | 11,589,700 | ||
Arizona State COP, Department of Administration, Series A, AGMC Insured, 5.00%, 10/01/27 | 14,440,000 | 15,970,062 | ||
Arizona State Lottery Revenue, Series A, AGMC Insured, 5.00%, 7/01/27 | 15,000,000 | 16,594,950 | ||
Glendale Municipal Property Corp. Excise Tax Revenue, Subordinate, Refunding, Series C, 5.00%, | ||||
7/01/38 | 15,500,000 | 17,737,580 | ||
Lake Havasu Wastewater System Revenue, senior lien, Refunding, Series B, AGMC Insured, 5.00%, | ||||
7/01/40 | 15,000,000 | 17,509,350 | ||
a Maricopa County Industrial Development Authority Senior Living Facilities Revenue, Christian Care | ||||
Retirement Apartments Inc. Project, Refunding, Series A, 5.00%, 1/01/36. | 5,000,000 | 5,560,500 | ||
Maricopa County PCC, PCR, El Paso Electric Co. Palo Verde Project, Series A, 7.25%, 2/01/40 | 10,000,000 | 11,261,700 | ||
Mesa Utility Systems Revenue, 4.00%, 7/01/36 | 19,000,000 | 20,339,690 | ||
Phoenix Civic Improvement Corp. Airport Revenue, | ||||
junior lien, Series A, 5.00%, 7/01/40 | 24,000,000 | 26,475,360 | ||
senior lien, Series A, 5.00%, 7/01/33. | 28,000,000 | 29,687,000 | ||
Phoenix Civic Improvement Corp. Distribution Revenue, | ||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/32 | 6,000,000 | 8,006,100 | ||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/34 | 5,000,000 | 6,745,050 | ||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/35 | 9,860,000 | 13,379,527 |
12 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Arizona (continued) | ||||
Phoenix Civic Improvement Corp. Water System Revenue, | ||||
junior lien, Refunding, Series A, 5.00%, 7/01/32 | $ | 21,095,000 | $ | 23,141,215 |
junior lien, Refunding, Series A, 5.00%, 7/01/34 | 10,000,000 | 10,953,500 | ||
Pima County IDA Lease Revenue, Clark County Detention Facility Project, 5.00%, 9/01/39. | 20,000,000 | 20,881,200 | ||
Pinal County Electrical District No. 3 Electric System Revenue, Pre-Refunded, 5.25%, 7/01/36 | 10,000,000 | 11,830,400 | ||
Salt River Project Agricultural Improvement and Power District Electric System Revenue, Salt River | ||||
Project, Series A, 5.00%, 1/01/38 | 10,000,000 | 10,439,100 | ||
278,101,984 | ||||
Arkansas 0.2% | ||||
University of Arkansas Revenue, | ||||
Athletic Facilities, Fayetteville Campus, Series A, 5.00%, 9/15/36 | 8,330,000 | 9,979,506 | ||
Various Facilities, Fayetteville Campus, Series B, 5.00%, 11/01/37 | 3,100,000 | 3,565,961 | ||
Various Facilities, Fayetteville Campus, Series B, 5.00%, 11/01/42 | 9,360,000 | 10,751,177 | ||
24,296,644 | ||||
California 12.2% | ||||
Bay Area Toll Authority Toll Bridge Revenue, | ||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/28 | 24,000,000 | 26,359,680 | ||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/34 | 20,250,000 | 21,455,685 | ||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/34 | 9,530,000 | 10,466,990 | ||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/39 | 14,000,000 | 14,833,560 | ||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.50%, 4/01/43 | 30,000,000 | 31,996,200 | ||
California Infrastructure and Economic Development Bank Revenue, Bay Area Toll Bridges Seismic | ||||
Retrofit, first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/33 | 24,500,000 | 31,875,970 | ||
California State Economic Recovery GO, Series A, Pre-Refunded, 5.25%, 7/01/21 | 28,580,000 | 31,849,552 | ||
California State Educational Facilities Authority Revenue, Carnegie Institution of Washington, | ||||
Refunding, Series A, 5.00%, 7/01/40 | 24,525,000 | 27,515,333 | ||
California State GO, | ||||
Various Purpose, 6.00%, 5/01/18 | 370,000 | 379,979 | ||
Various Purpose, 5.90%, 4/01/23 | 1,200,000 | 1,226,220 | ||
Various Purpose, 5.00%, 10/01/29 | 15,000,000 | 16,621,200 | ||
Various Purpose, 6.00%, 4/01/38 | 100,000,000 | 111,703,000 | ||
Various Purpose, 6.00%, 11/01/39 | 25,000,000 | 28,606,750 | ||
Various Purpose, 5.25%, 11/01/40 | 50,000,000 | 57,537,000 | ||
Various Purpose, FGIC Insured, 6.00%, 5/01/20. | 850,000 | 873,018 | ||
Various Purpose, Refunding, 5.25%, 3/01/30 | 30,000,000 | 33,940,800 | ||
Various Purpose, Refunding, 6.00%, 3/01/33 | 12,000,000 | 13,941,600 | ||
Various Purpose, Refunding, 5.25%, 3/01/38 | 20,000,000 | 21,104,400 | ||
Various Purpose, Refunding, 5.50%, 3/01/40 | 25,000,000 | 28,425,750 | ||
California State Health Facilities Financing Authority Revenue, | ||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24 | 5,000,000 | 5,820,550 | ||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/38 | 8,000,000 | 9,197,440 | ||
California State Public Works Board Lease Revenue, | ||||
Department of Education, Riverside Campus Project, Series B, 6.125%, 4/01/28 | 2,740,000 | 3,074,390 | ||
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, Pre-Refunded, | ||||
6.00%, 4/01/27 | 3,980,000 | 4,460,983 | ||
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, Pre-Refunded, | ||||
6.125%, 4/01/29 | 5,000,000 | 5,619,100 | ||
Various Capital Projects, Series A, 5.00%, 4/01/30 | 18,000,000 | 20,916,540 | ||
Various Capital Projects, Series A, 5.00%, 4/01/33 | 12,475,000 | 14,419,728 | ||
Various Capital Projects, Series I, Pre-Refunded, 6.125%, 11/01/29 | 29,300,000 | 33,756,530 | ||
California Statewide CDA, PCR, Refunding, 4.50%, 9/01/29 | 14,830,000 | 16,408,653 |
franklintempleton.com
Semiannual Report 13
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
California (continued) | ||||
California Statewide CDA Revenue, | ||||
Adventist Health System/West, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 3/01/37 | $ | 9,860,000 | $ | 10,405,061 |
St. Joseph Health System, Series B, FGIC Insured, Pre-Refunded, 5.75%, 7/01/47 | 5,000,000 | 5,404,950 | ||
St. Joseph Health System, Series E, AGMC Insured, Pre-Refunded, 5.25%, 7/01/47 | 10,000,000 | 10,727,600 | ||
Colton Joint USD, GO, San Bernardino and Riverside Counties, Election of 2008, Series A, Assured | ||||
Guaranty, Pre-Refunded, 5.375%, 8/01/34. | 15,000,000 | 16,798,050 | ||
Corona-Norco USD, | ||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, zero cpn., | ||||
8/01/39 | 7,500,000 | 3,152,850 | ||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, zero cpn. | ||||
to 8/01/17, 6.20% thereafter, 8/01/29 | 3,250,000 | 4,310,085 | ||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, zero cpn. | ||||
to 8/01/17, 6.80% thereafter, 8/01/39 | 8,500,000 | 11,317,835 | ||
Foothill/Eastern Transportation Corridor Agency Toll Road Revenue, | ||||
Capital Appreciation, Refunding, Series A, AGMC Insured, zero cpn. to 1/15/24, 5.40% thereafter, | ||||
1/15/30 | 15,475,000 | 13,480,427 | ||
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | 20,000,000 | 17,453,400 | ||
Refunding, Series A, 5.75%, 1/15/46 | 25,000,000 | 29,509,750 | ||
Refunding, Series A, 6.00%, 1/15/49 | 20,000,000 | 23,829,800 | ||
Hartnell Community College District GO, Monterey and San Benito Counties, Capital Appreciation, | ||||
Election of 2002, Series D, Pre-Refunded, zero cpn., 8/01/39 | 45,000,000 | 10,117,350 | ||
Jefferson UHSD San Mateo County GO, | ||||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/35 | 10,500,000 | 3,145,065 | ||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/40 | 10,000,000 | 1,978,200 | ||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/41 | 13,590,000 | 2,472,157 | ||
Los Angeles Community College District GO, Election of 2008, Series C, Pre-Refunded, 5.25%, | ||||
8/01/39 | 30,000,000 | 34,614,000 | ||
Los Angeles Department of Airports Revenue, | ||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40 | 25,485,000 | 28,524,596 | ||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40 | 50,000,000 | 55,963,500 | ||
Los Angeles Department of Water and Power Revenue, Power System, Series B, 5.00%, 7/01/31 | 20,000,000 | 24,251,800 | ||
Los Angeles USD, | ||||
GO, Election of 2002, Series B, AMBAC Insured, Pre-Refunded, 4.50%, 7/01/31 | 28,745,000 | 29,467,937 | ||
GO, Series KRY, 5.25%, 7/01/34 | 36,625,000 | 41,879,222 | ||
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 12,500,000 | 17,333,875 | ||
New Haven USD, | ||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/31 | 2,055,000 | 1,286,841 | ||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/32 | 7,830,000 | 4,698,705 | ||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/33 | 7,660,000 | 4,398,985 | ||
Placentia-Yorba Linda USD, GO, Orange County, Election of 2008, Series A, Pre-Refunded, 5.25%, | ||||
8/01/32 | 24,490,000 | 26,360,546 | ||
Pomona USD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, | ||||
5.00%, 8/01/29. | 5,585,000 | 6,197,842 | ||
Rialto USD, GO, San Bernardino County, Captial Appreciation, Series A, AGMC Insured, zero cpn., | ||||
8/01/36 | 20,000,000 | 9,812,800 | ||
Sacramento County Airport System Revenue, Senior, Series B, AGMC Insured, 5.25%, 7/01/33 | 16,355,000 | 17,337,608 | ||
San Diego Public Facilities Financing Authority Water Revenue, Series B, Pre-Refunded, 5.375%, | ||||
8/01/34 | 15,000,000 | 16,798,050 | ||
San Francisco City and County COP, Multiple Capital Improvement Projects, Series A, 5.25%, 4/01/31 . | 10,000,000 | 10,952,000 | ||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | ||||
Capital Appreciation, senior lien, ETM, zero cpn., 1/01/23 | 7,000,000 | 6,411,650 | ||
senior lien, Refunding, Series A, 5.00%, 1/15/34 | 50,000,000 | 57,612,000 |
14 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
California (continued) | ||||
San Mateo UHSD, | ||||
GO, Capital Appreciation, Election of 2010, Refunding, Series A, zero cpn. to 9/01/28, 6.70% | ||||
thereafter, 9/01/41 | $ | 20,000,000 | $ | 16,925,000 |
GO, Capital Appreciation, Election of 2010, Series A, zero cpn. to 9/01/28, 6.45% thereafter, | ||||
9/01/33 | 6,065,000 | 4,717,660 | ||
San Mateo-Foster City School District GO, Capital Appreciation, Election of 2008, Series A, zero cpn. | ||||
to 8/01/26, 6.625% thereafter, 8/01/42. | 50,000,000 | 44,149,000 | ||
Santa Ana USD, | ||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero | ||||
cpn., 8/01/35 | 10,000,000 | 5,384,600 | ||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero | ||||
cpn., 8/01/36 | 18,865,000 | 9,770,938 | ||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero | ||||
cpn., 8/01/37 | 10,000,000 | 4,979,100 | ||
Santa Clara County GO, Election of 2008, Series A, 5.00%, 8/01/34 | 25,000,000 | 27,499,750 | ||
Upland USD, GO, San Bernardino County, Election of 2008, Series B, Pre-Refunded, zero cpn., | ||||
8/01/39 | 50,075,000 | 13,444,136 | ||
Washington Township Health Care District Revenue, Series A, 6.25%, 7/01/39 | 3,000,000 | 3,292,650 | ||
West Contra Costa USD, | ||||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/29 | 10,000,000 | 6,782,200 | ||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/30 | 20,845,000 | 13,565,509 | ||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/31 | 20,000,000 | 12,487,600 | ||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/32 | 10,730,000 | 6,419,008 | ||
Whittier UHSD, GO, Los Angeles County, Capital Appreciation, Election of 2008, Refunding, Series A, | ||||
zero cpn., 8/01/34 | 20,000,000 | 7,460,800 | ||
1,359,269,089 | ||||
Colorado 2.1% | ||||
Aurora Water Improvement Revenue, | ||||
first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 8/01/32 | 10,000,000 | 10,316,300 | ||
first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 8/01/36 | 41,235,000 | 42,539,263 | ||
first lien, Series A, AMBAC Insured, Pre-Refunded, 5.00%, 8/01/39 | 26,930,000 | 27,781,796 | ||
Colorado State Board of Governors University Enterprise System Revenue, | ||||
Series A, AGMC Insured, 5.00%, 3/01/37 | 10,000,000 | 10,118,100 | ||
Series A, NATL Insured, 5.00%, 3/01/37 | 1,700,000 | 1,720,077 | ||
Series A, NATL Insured, Pre-Refunded, 5.00%, 3/01/37 | 8,300,000 | 8,417,362 | ||
Colorado State Health Facilities Authority Revenue, | ||||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/41 | 10,000,000 | 11,626,900 | ||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/44 | 5,000,000 | 5,799,900 | ||
The Evangelical Lutheran Good Samaritan Society Project, Refunding, Series A, 5.00%, 6/01/45 . | 10,000,000 | 10,871,100 | ||
Health Facility Authority, Hospital, Refunding, Series B, AGMC Insured, 5.25%, 3/01/36 | 10,000,000 | 10,820,400 | ||
Valley View Hospital Assn. Project, Refunding, 5.50%, 5/15/28 | 5,000,000 | 5,322,500 | ||
Valley View Hospital Assn. Project, Refunding, 5.75%, 5/15/36 | 7,000,000 | 7,441,560 | ||
Colorado State Higher Education Capital Construction Lease Purchase Financing Program COP, | ||||
Pre-Refunded, 5.50%, 11/01/27 | 10,000,000 | 10,907,200 | ||
Denver City and County Airport System Revenue, Subordinate, Series B, 5.25%, 11/15/33. | 16,405,000 | 19,355,931 | ||
Park Creek Metropolitan District Revenue, Senior Limited Property Tax Supported, Improvement, | ||||
Assured Guaranty, Pre-Refunded, 6.25%, 12/01/30 | 6,000,000 | 6,950,340 | ||
Public Authority for Colorado Energy Natural Gas Purchase Revenue, 6.50%, 11/15/38 | 20,000,000 | 28,235,200 | ||
Regional Transportation District Sales Tax Revenue, FasTracks Project, Series A, 5.00%, 11/01/32 | 10,000,000 | 11,892,000 | ||
University of Colorado Enterprise Revenue, Series A, Pre-Refunded, 5.375%, 6/01/32. | 3,500,000 | 3,890,600 | ||
234,006,529 |
franklintempleton.com
Semiannual Report 15
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Connecticut 0.1% | ||||
Connecticut State GO, Series B, 5.00%, 6/15/35 | $ | 7,000,000 | $ | 8,148,280 |
District of Columbia 2.8% | ||||
District of Columbia Ballpark Revenue, | ||||
Series B-1, BHAC Insured, 5.00%, 2/01/24 | 12,120,000 | 12,165,086 | ||
Series B-1, BHAC Insured, 5.00%, 2/01/25 | 7,000,000 | 7,025,970 | ||
Series B-1, BHAC Insured, 5.00%, 2/01/26 | 9,950,000 | 9,986,914 | ||
District of Columbia Hospital Revenue, | ||||
Children’s Hospital Obligated Group Issue, Refunding, 5.00%, 7/15/40 | 6,830,000 | 7,902,993 | ||
Children’s Hospital Obligated Group Issue, Sub Series 1, AGMC Insured, Pre-Refunded, 5.45%, | ||||
7/15/35 | 23,035,000 | 24,823,898 | ||
District of Columbia Income Tax Secured Revenue, | ||||
Refunding, Series A, 5.00%, 12/01/31 | 10,000,000 | 11,229,500 | ||
Series A, 5.25%, 12/01/34 | 11,000,000 | 12,342,110 | ||
District of Columbia Revenue, | ||||
Assn. of American Medical Colleges Issue, Series B, 5.25%, 10/01/41 | 15,000,000 | 16,924,500 | ||
Deed Tax, Housing Production Trust Fund, New Communities Project, Series A, NATL Insured, | ||||
5.00%, 6/01/32 | 5,000,000 | 5,110,500 | ||
Georgetown University Issue, Growth and Income Securities, AMBAC Insured, zero cpn. to | ||||
4/01/18, 5.00% thereafter, 4/01/32. | 15,370,000 | 15,441,163 | ||
Medlantic/Helix Issue, Series B, AGMC Insured, Pre-Refunded, 5.00%, 8/15/38 | 20,000,000 | 20,657,600 | ||
National Academy of Sciences Project, Series A, 5.00%, 4/01/35. | 10,905,000 | 12,138,574 | ||
National Academy of Sciences Project, Series A, 5.00%, 4/01/40. | 16,960,000 | 18,789,136 | ||
National Public Radio Inc. Issue, Pre-Refunded, 5.00%, 4/01/35 | 7,750,000 | 8,750,758 | ||
District of Columbia Tobacco Settlement FICO Revenue, Asset-Backed, Refunding, 6.50%, 5/15/33 | 34,180,000 | 41,775,480 | ||
District of Columbia University Revenue, Georgetown University Issue, Refunding, Series D, 5.50%, | ||||
4/01/36 | 5,000,000 | 5,388,150 | ||
District of Columbia Water and Sewer Authority Public Utility Revenue, senior lien, Series A, Pre- | ||||
Refunded, 6.00%, 10/01/35 | 8,000,000 | 8,772,880 | ||
Metropolitan Washington Airports Authority Airport System Revenue, | ||||
Refunding, Series A, 5.375%, 10/01/29 | 5,000,000 | 5,365,550 | ||
Refunding, Series A, 5.00%, 10/01/35 | 5,000,000 | 5,656,150 | ||
Refunding, Series C, 5.25%, 10/01/27 | 10,745,000 | 11,598,690 | ||
Series A, 5.00%, 10/01/39 | 5,000,000 | 5,637,900 | ||
Series C, 5.00%, 10/01/26 | 10,235,000 | 11,001,909 | ||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Capital Appreciation, second | ||||
lien, Series C, Assured Guaranty, 6.50%, 10/01/41 | 25,000,000 | 33,340,500 | ||
311,825,911 | ||||
Florida 6.7% | ||||
Alachua County Health Facilities Authority Health Facilities Revenue, Shands Teaching Hospital and | ||||
Clinics Inc. at the University of Florida Project, Series A, 5.00%, 12/01/44. | 10,350,000 | 11,701,296 | ||
Brevard County Health Facilities Authority Health Facilities Revenue, Health First Inc. Project, Series B, | ||||
Pre-Refunded, 7.00%, 4/01/39 | 6,500,000 | 7,431,775 | ||
Brevard County Local Option Fuel Tax Revenue, NATL Insured, 5.00%, 8/01/37 | 12,245,000 | 12,561,778 | ||
Broward County Water and Sewer Utility Revenue, Series A, Pre-Refunded, 5.25%, 10/01/34. | 8,800,000 | 9,516,584 | ||
Cape Coral Water and Sewer Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/42. | 21,510,000 | 24,234,672 | ||
Citizens Property Insurance Corp. Revenue, | ||||
Costal Account, senior secured, Series A-1, 5.00%, 6/01/20 | 20,000,000 | 22,563,600 | ||
High-Risk Account, senior secured, Series A-1, 5.25%, 6/01/17 | 24,250,000 | 24,862,070 | ||
High-Risk Account, senior secured, Series A-1, 5.50%, 6/01/17 | 10,000,000 | 10,266,800 | ||
High-Risk Account, senior secured, Series A-1, 6.00%, 6/01/17 | 25,000,000 | 25,738,750 | ||
Clearwater City Water and Sewer Revenue, Series A, 5.25%, 12/01/39 | 7,000,000 | 7,806,750 |
16 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Florida (continued) | ||||
Florida State Board of Education Public Education GO, Capital Outlay, Refunding, Series D, 6.00%, | ||||
6/01/23 | $ | 17,500,000 | $ | 22,389,675 |
Florida State Mid-Bay Bridge Authority Revenue, | ||||
Capital Appreciation, Series A, AMBAC Insured, Pre-Refunded, zero cpn., 10/01/23. | 5,000,000 | 3,663,551 | ||
Capital Appreciation, Series A, AMBAC Insured, Pre-Refunded, zero cpn., 10/01/24. | 3,000,000 | 2,075,970 | ||
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41. | 4,750,000 | 5,523,870 | ||
Hillsborough County Aviation Authority Revenue, | ||||
Tampa International Airport, Series A, Assured Guaranty, 5.50%, 10/01/38 | 5,000,000 | 5,360,600 | ||
Tampa International Airport, Subordinated, Refunding, Series B, 5.00%, 10/01/44 | 10,000,000 | 11,643,800 | ||
Hillsborough County IDA, PCR, Tampa Electric Co. Project, Series A, 5.65%, 5/15/18 | 6,500,000 | 6,950,515 | ||
Hillsborough County School Board COP, Master Lease Program, Refunding, Series A, 5.00%, 7/01/28 . | 17,650,000 | 20,655,795 | ||
Indian River County School Board COP, NATL Insured, Pre-Refunded, 5.00%, 7/01/27 | 16,485,000 | 16,943,778 | ||
Martin County Health Facilities Authority Hospital Revenue, Martin Memorial Medical Center, 5.50%, | ||||
11/15/42 | 3,800,000 | 4,261,472 | ||
Miami Beach RDA Tax Increment Revenue, City Center, Refunding, Series A, AGMC Insured, 5.00%, | ||||
2/01/44 | 12,000,000 | 13,601,880 | ||
Miami Beach Resort Tax Revenue, 5.00%, 9/01/40 | 11,000,000 | 12,852,620 | ||
Miami-Dade County Aviation Revenue, | ||||
Miami International Airport, Hub of the Americas, Refunding, Series A, 5.50%, 10/01/36 | 20,000,000 | 22,221,800 | ||
Miami International Airport, Hub of the Americas, Refunding, Series A, Assured Guaranty, 5.25%, | ||||
10/01/33 | 8,625,000 | 9,232,027 | ||
Miami International Airport, Hub of the Americas, Series A, Assured Guaranty, Pre-Refunded, | ||||
5.25%, 10/01/38 | 5,640,000 | 6,088,098 | ||
Miami International Airport, Refunding, Series A, 5.00%, 10/01/41 | 7,515,000 | 8,774,138 | ||
Miami International Airport, Refunding, Series A, Assured Guaranty, 5.25%, 10/01/38 | 7,360,000 | 7,847,747 | ||
Miami International Airport, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/33 | 2,375,000 | 2,563,694 | ||
Miami-Dade County Expressway Authority Toll System Revenue, | ||||
Refunding, Series A, 5.00%, 7/01/29 | 10,000,000 | 11,703,000 | ||
Refunding, Series A, 5.00%, 7/01/32 | 6,375,000 | 7,423,369 | ||
Series A, 5.00%, 7/01/40 | 30,265,000 | 33,499,421 | ||
Miami-Dade County GO, Building Better Communities Program, Series B-1, Pre-Refunded, 5.75%, | ||||
7/01/33 | 20,000,000 | 21,602,400 | ||
Miami-Dade County School Board COP, | ||||
Refunding, Series A, 5.00%, 5/01/31 | 10,000,000 | 11,639,800 | ||
Series A, Assured Guaranty, Pre-Refunded, 5.25%, 2/01/27 | 10,000,000 | 10,938,400 | ||
Miami-Dade County Special Obligation Revenue, | ||||
sub. bond, Refunding, Series B, 5.00%, 10/01/31 | 5,000,000 | 5,715,300 | ||
sub. bond, Refunding, Series B, 5.00%, 10/01/32 | 4,500,000 | 5,135,805 | ||
sub. bond, Refunding, Series B, 5.00%, 10/01/35 | 3,250,000 | 3,697,655 | ||
Miami-Dade County Transit System Sales Surtax Revenue, | ||||
Refunding, 5.00%, 7/01/35. | 7,000,000 | 8,171,030 | ||
Refunding, AGMC Insured, 5.00%, 7/01/38 | 18,845,000 | 19,900,320 | ||
Miami-Dade County Water and Sewer System Revenue, Refunding, Series A, 5.00%, 10/01/42 | 20,000,000 | 22,778,400 | ||
Orange County Health Facilities Authority Hospital Revenue, | ||||
Orlando Health Obligated Group, Refunding, Series A, 5.00%, 10/01/39 | 6,000,000 | 6,933,000 | ||
Orlando Health Obligated Group, Refunding, Series B, AGMC Insured, 5.00%, 12/01/32 | 11,780,000 | 12,570,791 | ||
Orlando Health Obligated Group, Series B, AGMC Insured, Pre-Refunded, 5.00%, 12/01/32 | 8,220,000 | 8,897,492 | ||
Orange County School Board COP, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/34 | 15,000,000 | 16,826,850 | ||
Orlando Tourist Development Tax Revenue, 6th Cent Contract Payments, second lien sub. bonds, | ||||
Series B, Assured Guaranty, 5.50%, 11/01/38 | 18,490,000 | 19,264,176 |
franklintempleton.com
Semiannual Report 17
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Florida (continued) | ||||
Orlando-Orange County Expressway Authority Revenue, | ||||
Series A, 5.00%, 7/01/40 | $ | 5,000,000 | $ | 5,562,450 |
Series A, AGMC Insured, Pre-Refunded, 5.00%, 7/01/32. | 12,000,000 | 12,338,040 | ||
Series C, Pre-Refunded, 5.00%, 7/01/40 | 15,000,000 | 16,687,350 | ||
Palm Beach County Solid Waste Authority Revenue, Improvement, Series B, Pre-Refunded, 5.50%, | ||||
10/01/28 | 10,000,000 | 10,861,600 | ||
Pensacola Airport Revenue, Refunding, 6.25%, 10/01/38 | 16,500,000 | 17,572,335 | ||
Port St. Lucie Utility System Revenue, | ||||
Assured Guaranty, Pre-Refunded, 5.25%, 9/01/35 | 2,755,000 | 2,972,259 | ||
Refunding, 4.00%, 9/01/33. | 4,000,000 | 4,355,920 | ||
Refunding, 4.00%, 9/01/34. | 2,500,000 | 2,709,125 | ||
Refunding, 4.00%, 9/01/36. | 4,000,000 | 4,306,360 | ||
Refunding, Assured Guaranty, 5.25%, 9/01/35 | 245,000 | 262,603 | ||
South Broward Hospital District Revenue, | ||||
South Broward Hospital District Obligated Group, Pre-Refunded, 5.00%, 5/01/36 | 12,500,000 | 13,266,750 | ||
South Broward Hospital District Obligated Group, Refunding, 4.75%, 5/01/28 | 10,000,000 | 10,180,000 | ||
South Lake County Hospital District Revenue, South Lake Hospital Inc., Series A, 6.25%, 4/01/39. | 5,735,000 | 6,304,658 | ||
South Miami Health Facilities Authority Hospital Revenue, Baptist Health South Florida Obligated | ||||
Group, 5.00%, 8/15/32 | 31,070,000 | 31,910,443 | ||
St. Lucie County Transportation Revenue, AMBAC Insured, Pre-Refunded, 5.00%, 8/01/27 | 5,785,000 | 5,967,980 | ||
Tallahassee Energy System Revenue, Refunding, NATL Insured, 5.00%, 10/01/37 | 20,000,000 | 20,658,600 | ||
Tohopekaliga Water Authority Utility System Revenue, Refunding, 5.00%, 10/01/46 | 5,000,000 | 5,884,600 | ||
Town of Davie Water and Sewer Revenue, AGMC Insured, 5.00%, 10/01/32. | 8,575,000 | 9,798,395 | ||
747,631,782 | ||||
Georgia 3.7% | ||||
Athens-Clarke County Unified Government Water and Sewerage Revenue, Pre-Refunded, 5.50%, | ||||
1/01/38 | 14,500,000 | 15,907,805 | ||
Atlanta Airport General Revenue, Refunding, Series C, 6.00%, 1/01/30 | 15,000,000 | 17,759,250 | ||
The Atlanta Development Authority Revenue, | ||||
New Downtown Atlanta Stadium Project, senior lien, Series A-1, 5.25%, 7/01/44 | 3,000,000 | 3,559,170 | ||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/24 | 6,385,000 | 7,434,566 | ||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/25 | 6,955,000 | 8,163,918 | ||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 | 5,000,000 | 5,900,950 | ||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/27 | 5,000,000 | 5,908,500 | ||
Atlanta Water and Wastewater Revenue, | ||||
Refunding, 5.00%, 11/01/40 | 30,000,000 | 35,082,300 | ||
Refunding, Series B, AGMC Insured, 5.25%, 11/01/34 | 30,000,000 | 33,525,600 | ||
Series A, Pre-Refunded, 6.25%, 11/01/34 | 20,000,000 | 23,083,600 | ||
Bleckley-Dodge County Joint Development Authority Student Housing Facilities Revenue, | ||||
MGC Real Estate Foundation II LLC Project, 5.00%, 7/01/33 | 5,000,000 | 5,291,900 | ||
MGC Real Estate Foundation II LLC Project, 5.25%, 7/01/38 | 10,000,000 | 10,621,300 | ||
Bulloch County Development Authority Student Housing Revenue, Georgia Southern University | ||||
Housing Foundation Four LLC Project, Assured Guaranty, 5.375%, 7/01/39. | 23,075,000 | 24,543,954 | ||
Burke County Development Authority PCR, | ||||
Oglethorpe Power Corp. Vogtle Project, Series B, 5.50%, 1/01/33. | 15,000,000 | 15,682,350 | ||
Oglethorpe Power Corp. Vogtle Project, Series E, 7.00%, 1/01/23 | 25,000,000 | 26,742,000 | ||
Clarke County Hospital Authority Revenue, | ||||
Athens Regional Medical Center Project, NATL Insured, 5.00%, 1/01/27 | 5,000,000 | 5,034,000 | ||
a Piedmonth Health Care, Refunding, Series A, 5.00%, 7/01/46 | 10,000,000 | 11,391,700 | ||
Clayton County Development Authority Student Housing and Activity Center Revenue, CSU Foundation | ||||
Real Estate I LLC Project, XLCA Insured, 5.00%, 7/01/33 | 11,125,000 | 11,397,118 |
18 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Georgia (continued) | ||||
DeKalb Newton and Gwinnett Counties Joint Development Authority Revenue, Georgia Gwinnett | ||||
College Foundation LLC Project, 6.00%, 7/01/34 | $ | 10,000,000 | $ | 11,202,800 |
Fayette County Hospital Authority Revenue, Anticipation Certificates, Piedmont Fayette Hospital | ||||
Project, Refunding, Series A, 5.00%, 7/01/39. | 11,420,000 | 12,806,388 | ||
Georgia State Higher Education Facilities Authority Revenue, | ||||
USG Real Estate Foundation I LLC Project, Assured Guaranty, Pre-Refunded, 5.625%, 6/15/38 | 5,000,000 | 5,376,600 | ||
USG Real Estate Foundation I LLC Project, Pre-Refunded, 6.25%, 6/15/40 | 13,970,000 | 15,161,920 | ||
USG Real Estate Foundation II LLC Project, Series A, 5.50%, 6/15/34 | 10,000,000 | 11,036,000 | ||
USG Real Estate Foundation III LLC Project, Series A, 5.00%, 6/15/40 | 3,700,000 | 3,999,219 | ||
USG Real Estate Foundation III LLC Project, Series A, Pre-Refunded, 5.00%, 6/15/40 | 1,300,000 | 1,477,281 | ||
Houston County Hospital Authority Revenue, Anticipation Certificates, Houston Healthcare Project, | ||||
5.25%, 10/01/35. | 10,485,000 | 10,843,168 | ||
Jefferson PBA Revenue, Jackson County Facilities, Series A, XLCA Insured, Pre-Refunded, 5.00%, | ||||
3/01/32 | 6,075,000 | 6,160,901 | ||
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/28 | 5,000,000 | 6,314,400 | ||
Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional Healthcare | ||||
System Inc. Project, Refunding, Assured Guaranty, 6.50%, 8/01/38 | 10,000,000 | 10,881,000 | ||
Municipal Electric Authority of Georgia Revenue, Project One, Subordinated, Refunding, Series A, | ||||
5.00%, 1/01/35. | 3,250,000 | 3,783,780 | ||
Private Colleges and Universities Authority Revenue, | ||||
Emory University, Refunding, Series A, 5.00%, 9/01/41 | 10,000,000 | 11,578,400 | ||
Emory University, Refunding, Series A, 5.00%, 10/01/43 | 10,000,000 | 11,736,900 | ||
Emory University, Refunding, Series C, 5.25%, 9/01/39 | 21,000,000 | 23,270,520 | ||
412,659,258 | ||||
Hawaii 0.2% | ||||
Hawaii State Department of Budget and Finance Special Purpose Revenue, Hawaiian Electric Co. Inc. | ||||
and Subsidiary Projects, 6.50%, 7/01/39 | 7,500,000 | 8,372,250 | ||
Honolulu City and County MFHR, Waipahu Towers Project, Series A, GNMA Secured, 6.90%, 6/20/35 . | 1,035,000 | 1,040,020 | ||
Honolulu City and County Wastewater System Revenue, First Bond Resolution, Senior Series A, | ||||
5.00%, 7/01/38. | 10,000,000 | 11,501,600 | ||
20,913,870 | ||||
Idaho 0.1% | ||||
Idaho State Health Facilities Authority Revenue, St. Luke’s Health System Project, Series A, 6.75%, | ||||
11/01/37 | 12,500,000 | 13,795,125 | ||
Illinois 5.8% | ||||
Bolingbrook GO, Will and DuPage Counties, Capital Appreciation, Refunding, Series A, zero cpn., | ||||
1/01/36 | 19,000,000 | 7,432,610 | ||
Bourbonnais Industrial Project Revenue, | ||||
Olivet Nazarene University Project, 5.00%, 11/01/44 | 2,000,000 | 2,119,260 | ||
Olivet Nazarene University Project, Assured Guaranty, 5.125%, 11/01/37 | 5,000,000 | 5,166,150 | ||
Chicago GO, Lakefront Millennium Project, Parking Facilities, NATL Insured, ETM, 5.75%, 1/01/23 | 8,955,000 | 10,985,278 | ||
Chicago Midway Airport Revenue, | ||||
Refunding, Series B, 5.00%, 1/01/46 | 10,000,000 | 11,522,000 | ||
Refunding, Series C, Assured Guaranty, 5.50%, 1/01/24 | 18,460,000 | 22,079,821 | ||
Chicago O’Hare International Airport Revenue, | ||||
General Airport, third lien, Series A, 5.75%, 1/01/39 | 5,000,000 | 5,719,100 | ||
General Airport, third lien, Series C, Assured Guaranty, 5.25%, 1/01/35 | 12,850,000 | 14,139,369 | ||
Chicago Transit Authority Sales Tax Receipts Revenue, 5.25%, 12/01/40 | 10,000,000 | 11,042,300 | ||
Chicago Wastewater Transmission Revenue, | ||||
Project, second lien, 5.00%, 1/01/42 | 10,525,000 | 11,325,847 | ||
second lien, Series A, BHAC Insured, 5.50%, 1/01/38 | 18,000,000 | 18,752,940 |
franklintempleton.com
Semiannual Report 19
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Illinois Health Facilities Authority Revenue, | ||||
Loyola University Health System, Series A, NATL Insured, ETM, 5.625%, 7/01/18 | $ | 2,105,000 | $ | 2,263,864 |
South Suburban Hospital, ETM, 7.00%, 2/15/18 | 1,125,000 | 1,174,444 | ||
Illinois State Finance Authority Revenue, | ||||
Alexian Brothers Health System, Series A, AGMC Insured, Pre-Refunded, 5.50%, 1/01/28 | 45,000,000 | 48,003,300 | ||
Art Institute of Chicago, Refunding, Series A, 5.25%, 3/01/40 | 16,000,000 | 17,401,440 | ||
a Carle Foundation, Refunding, Series A, 5.00%, 2/15/45. | 20,000,000 | 22,238,000 | ||
Columbia College, NATL Insured, Pre-Refunded, 5.00%, 12/01/32 | 15,440,000 | 16,129,242 | ||
Mercy Health System Obligated Group, Refunding, 5.00%, 12/01/40 | 20,000,000 | 22,579,200 | ||
Mercy Health System Obligated Group, Refunding, 5.00%, 12/01/46 | 20,000,000 | 22,492,200 | ||
Northwest Community Hospital, Refunding, Series A, 5.00%, 7/01/36 | 7,490,000 | 8,636,120 | ||
Resurrection Health Care, Series B, AGMC Insured, Pre-Refunded, 5.25%, 5/15/29 | 26,695,000 | 28,476,357 | ||
Riverside Health System, Pre-Refunded, 6.25%, 11/15/35 | 2,930,000 | 3,382,744 | ||
Riverside Health System, Refunding, 6.25%, 11/15/35 | 2,070,000 | 2,353,880 | ||
Roosevelt University Project, Refunding, 6.50%, 4/01/39 | 15,000,000 | 16,470,150 | ||
Rush University Medical Center Obligated Group, Series B, NATL Insured, Pre-Refunded, 5.75%, | ||||
11/01/28 | 2,500,000 | 2,739,125 | ||
Rush University Medical Center Obligated Group, Series B, NATL Insured, Pre-Refunded, 5.25%, | ||||
11/01/35 | 3,000,000 | 3,257,370 | ||
Rush University Medical Center Obligated Group, Series B, Pre-Refunded, 7.25%, 11/01/38 | 10,000,000 | 11,252,400 | ||
Sherman Health Systems, Series A, Pre-Refunded, 5.50%, 8/01/37 | 5,000,000 | 5,174,750 | ||
Illinois State Finance Authority Student Housing Revenue, | ||||
CHF-DeKalb II LLC, Northern Illinois University Project, 6.875%, 10/01/43 | 15,000,000 | 17,687,850 | ||
CHF-Normal LLC, Illinois State University Project, 7.00%, 4/01/43 | 7,500,000 | 8,723,850 | ||
Illinois State GO, | ||||
5.25%, 7/01/30 | 16,915,000 | 18,459,847 | ||
5.50%, 7/01/33 | 5,000,000 | 5,483,500 | ||
5.50%, 7/01/38 | 20,000,000 | 21,774,600 | ||
AGMC Insured, 5.00%, 9/01/29 | 12,000,000 | 12,041,880 | ||
Assured Guaranty, 5.25%, 4/01/34 | 10,000,000 | 10,305,500 | ||
Refunding, 5.00%, 1/01/24. | 12,820,000 | 13,551,509 | ||
Illinois State Municipal Electric Agency Power Supply System Revenue, Series A, NATL Insured, | ||||
Pre-Refunded, 5.00%, 2/01/35 | 20,000,000 | 20,214,000 | ||
Illinois State Revenue, Build Illinois, Sales Tax, Series B, Pre-Refunded, 5.25%, 6/15/34 | 15,000,000 | 16,629,900 | ||
Illinois State Toll Highway Authority Toll Highway Revenue, Senior, Refunding, Series A-1, 5.00%, | ||||
1/01/31 | 10,245,000 | 11,129,143 | ||
Metropolitan Pier and Exposition Authority Dedicated State Tax Revenue, | ||||
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
5.50%, 6/15/20 | 6,680,000 | 6,927,227 | ||
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
5.55%, 6/15/21 | 4,215,000 | 4,372,051 | ||
Capital Appreciation, McCormick Place Expansion Project, Refunding, Series B, NATL Insured, | ||||
zero cpn. to 6/14/17, 5.65% thereafter, 6/15/22 | 27,355,000 | 30,811,304 | ||
Capital Appreciation, McCormick Place Expansion Project, Series B, NATL Insured, ETM, zero | ||||
cpn. to 6/14/17, 5.65% thereafter, 6/15/22 | 2,645,000 | 3,150,724 | ||
Capital Appreciation, McCormick Place Expansion Project, Series B, NATL Insured, Pre- | ||||
Refunded, 5.50%, 6/15/20 | 1,560,000 | 1,621,417 | ||
Capital Appreciation, McCormick Place Expansion Project, Series B, NATL Insured, Pre- | ||||
Refunded, 5.55%, 6/15/21 | 1,785,000 | 1,855,829 | ||
McCormick Place Expansion Project, Series A, 5.50%, 6/15/50 | 15,000,000 | 15,984,000 | ||
Metropolitan Pier and Exposition Authority Hospitality Facilities Revenue, McCormick Place Convention | ||||
Center, ETM, 7.00%, 7/01/26 | 12,000,000 | 15,644,040 |
20 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Illinois (continued) | ||||
Metropolitan Pier and Exposition Authority Revenue, McCormick Place Expansion Project, Series A, | ||||
5.00%, 6/15/42. | $ | 5,000,000 | $ | 5,324,100 |
Northern Illinois Municipal Power Agency Power Project Revenue, Refunding, Series A, 5.00%, | ||||
12/01/41 | 5,500,000 | 6,341,830 | ||
Railsplitter Tobacco Settlement Authority Revenue, Refunding, 6.00%, 6/01/28 | 14,530,000 | 17,088,006 | ||
Regional Transportation Authority GO, Cook DuPage Kane Lake McHenry and Will Counties, Series A, | ||||
AMBAC Insured, 7.20%, 11/01/20 | 530,000 | 595,211 | ||
Southwestern Illinois Development Authority Revenue, | ||||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/24. | 3,850,000 | 3,038,959 | ||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/26. | 7,700,000 | 5,541,998 | ||
University of Illinois University Revenue, | ||||
Auxiliary Facilities System, Refunding, Series A, 5.125%, 4/01/36 | 2,950,000 | 3,257,184 | ||
Auxiliary Facilities System, Refunding, Series A, 5.25%, 4/01/41 | 5,000,000 | 5,528,950 | ||
Auxiliary Facilities System, Series A, Pre-Refunded, 5.75%, 4/01/38. | 7,000,000 | 7,795,410 | ||
Upper River Valley Development Authority Environmental Facilities Revenue, General Electric Co. | ||||
Project, 5.45%, 2/01/23 | 3,600,000 | 3,613,176 | ||
648,802,256 | ||||
Indiana 2.1% | ||||
Indiana Bond Bank Revenue, Special Program, Hendricks Regional Health Project, Series A, 5.50%, | ||||
2/01/29 | 9,000,000 | 9,818,640 | ||
Indiana Finance Authority Wastewater Utility Revenue, Green Bonds, CWA Authority Project, Series A, | ||||
5.00%, 10/01/46. | 22,750,000 | 26,668,005 | ||
Indiana State Finance Authority Environmental Revenue, Duke Energy Indiana Inc. Project, Refunding, | ||||
Series B, 6.00%, 8/01/39 | 10,000,000 | 11,062,700 | ||
Indiana State Finance Authority Hospital Revenue, Deaconess Hospital Obligated Group, Series A, | ||||
Pre-Refunded, 6.75%, 3/01/39 | 9,750,000 | 11,022,082 | ||
Indiana State Finance Authority Revenue, | ||||
Deaconess Health System Obligated Group, Refunding, Series A, 5.00%, 3/01/39 | 5,000,000 | 5,606,550 | ||
Educational Facilities, Marian University Project, 6.375%, 9/15/41 | 12,500,000 | 14,274,875 | ||
Stadium Project, Refunding, Series A, 5.25%, 2/01/37 | 10,000,000 | 11,999,800 | ||
Indiana State Finance Authority Wastewater Utility Revenue, | ||||
CWA Authority Project, first lien, Refunding, Series A, 5.00%, 10/01/39. | 30,000,000 | 35,328,900 | ||
CWA Authority Project, first lien, Series A, 5.00%, 10/01/37 | 5,000,000 | 5,811,050 | ||
CWA Authority Project, first lien, Series A, 5.25%, 10/01/38 | 12,000,000 | 13,992,720 | ||
CWA Authority Project, first lien, Series A, 4.00%, 10/01/42 | 22,615,000 | 24,159,831 | ||
Indiana State Health and Educational Facility Financing Authority Hospital Revenue, | ||||
Community Foundation of Northwest Indiana Obligated Group, Pre-Refunded, 5.50%, 3/01/27 | 2,860,000 | 2,904,645 | ||
Community Foundation of Northwest Indiana Obligated Group, Refunding, 5.50%, 3/01/27 | 3,640,000 | 3,696,201 | ||
Indiana State Municipal Power Agency Power Supply System Revenue, Series B, Pre-Refunded, | ||||
6.00%, 1/01/39. | 4,000,000 | 4,431,000 | ||
Indiana University Revenue, Refunding, Series A, 5.00%, 6/01/41 | 6,000,000 | 7,152,120 | ||
Indianapolis Local Public Improvement Bond Bank Revenue, Pilot Infrastructure Project, Series F, | ||||
AGMC Insured, 5.00%, 1/01/35 | 10,000,000 | 10,969,100 | ||
a Indianapolis Water System Revenue, first lien, Refunding, Series B, 5.00%, 10/01/37 | 15,000,000 | 17,393,550 | ||
Jasper County PCR, Northern Indiana Public Service Co. Project, Refunding, Series C, NATL Insured, | ||||
5.60%, 11/01/16. | 5,000,000 | 5,000,000 | ||
Northern Indiana Commuter Transportation District Industrial Revenue, Limited Obligation, 5.00%, | ||||
7/01/41 | 6,000,000 | 7,010,700 | ||
University of Southern Indiana Revenue, Student Fee, Series J, Assured Guaranty, 5.75%, 10/01/28 | 2,000,000 | 2,251,580 | ||
230,554,049 |
franklintempleton.com
Semiannual Report 21
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Kansas 0.3% | ||||
Butler County USD No. 490 GO, School Building, Series B, BAM Insured, 4.00%, 9/01/43 | $ | 10,000,000 | $ | 10,757,100 |
Kansas State Development Finance Authority Hospital Revenue, Adventist Health System/Sunbelt | ||||
Obligated Group, Refunding, Series C, 5.75%, 11/15/38 | 6,250,000 | 7,003,125 | ||
Wyandotte County Kansas City Unified Government Utility System Revenue, | ||||
Improvement, Refunding, Series A, 5.00%, 9/01/44 | 3,000,000 | 3,429,210 | ||
Improvement, Series A, 5.00%, 9/01/45 | 10,000,000 | 11,482,100 | ||
Series A, BHAC Insured, 5.25%, 9/01/34 | 5,000,000 | 5,439,250 | ||
38,110,785 | ||||
Kentucky 0.9% | ||||
Carroll County Environmental Facilities Revenue, Kentucky Utilities Co. Project, Series A, AMBAC | ||||
Insured, 5.75%, 2/01/26 | 12,500,000 | 13,282,625 | ||
Jefferson County Capital Projects Corp. Lease Revenue, Refunding, Series A, zero cpn., 8/15/17 | 7,115,000 | 7,047,550 | ||
Kentucky Economic Development Finance Authority Health System Revenue, Norton Healthcare Inc., | ||||
Captial Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/18 | 8,585,000 | 8,360,674 | ||
Kentucky Economic Development Finance Authority Louisville Arena Project Revenue, Louisville Arena | ||||
Authority Inc., Series A, Sub Series A-1, Assured Guaranty, 6.00%, 12/01/38 | 4,000,000 | 4,213,280 | ||
Kentucky State Municipal Power Agency Power System Revenue, | ||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/34 | 6,785,000 | 7,832,333 | ||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/42 | 10,000,000 | 11,390,800 | ||
Prairie State Project, Series A, NATL Insured, Pre-Refunded, 5.00%, 9/01/32 | 10,000,000 | 10,338,100 | ||
Kentucky State Property and Buildings Commission Revenues, | ||||
Project No. 90, Pre-Refunded, 5.50%, 11/01/28 | 13,230,000 | 14,416,466 | ||
Project No. 90, Refunding, 5.50%, 11/01/28 | 1,770,000 | 1,919,919 | ||
Louisville/Jefferson County Metro Government College Revenue, Bellarmine University Project, | ||||
Refunding and Improvement, Series A, 6.00%, 5/01/33. | 3,000,000 | 3,156,240 | ||
Louisville/Jefferson County Metro Government Health Facilities Revenue, Jewish Hospital and St. | ||||
Mary’s HealthCare Inc. Project, Pre-Refunded, 6.125%, 2/01/37 | 11,500,000 | 12,259,575 | ||
Paducah Electric Plant Board Revenue, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/35 | 7,000,000 | 7,703,360 | ||
101,920,922 | ||||
Louisiana 2.1% | ||||
East Baton Rouge Sewerage Commission Revenue, Series A, Pre-Refunded, 5.25%, 2/01/39 | 6,000,000 | 6,570,120 | ||
Lafayette Communications System Revenue, XLCA Insured, Pre-Refunded, 5.25%, 11/01/27. | 12,485,000 | 13,025,226 | ||
Lafayette Public Trust Financing Authority Revenue, Ragin’ Cajun Facilities Inc., Housing and Parking | ||||
Project, Assured Guaranty, 5.50%, 10/01/35 | 6,000,000 | 6,878,700 | ||
Louisiana Local Government Environmental Facilities and CDA Revenue, | ||||
Bossier City Public Improvement Projects, AMBAC Insured, Pre-Refunded, 5.00%, 11/01/32 | 6,730,000 | 7,014,881 | ||
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/44 | 5,820,000 | 6,596,912 | ||
LCTCS Act 360 Project, 5.00%, 10/01/39. | 10,000,000 | 11,398,900 | ||
Louisiana Public Facilities Authority Hospital Revenue, Franciscan Missionaries of Our Lady Health | ||||
System Project, Series A, Pre-Refunded, 6.75%, 7/01/39 | 10,000,000 | 11,480,400 | ||
Louisiana Public Facilities Authority Revenue, | ||||
Millennium Housing LLC Student Housing, Student Housing and Auxiliary Facilities Project, | ||||
Assured Guaranty, 5.00%, 11/01/30 | 10,000,000 | 10,224,200 | ||
Ochsner Clinic Foundation Project, Pre-Refunded, 6.75%, 5/15/41 | 15,500,000 | 19,292,230 | ||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/47 | 7,500,000 | 8,567,250 | ||
Ochsner Clinic Foundation Project, Series B, 5.25%, 5/15/38 | 7,405,000 | 7,553,545 | ||
Ochsner Clinic Foundation Project, Series B, 5.50%, 5/15/47 | 7,205,000 | 7,358,611 | ||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | �� | 10,000,000 | 12,600,000 | |
Ochsner Clinic Foundation Project, Series B, Pre-Refunded, 5.25%, 5/15/38 | 2,855,000 | 2,920,151 | ||
Ochsner Clinic Foundation Project, Series B, Pre-Refunded, 5.50%, 5/15/47 | 2,795,000 | 2,862,471 | ||
Louisiana State Gasoline and Fuels Tax Revenue, second lien, Series B, 5.00%, 5/01/45 | 13,690,000 | 15,205,209 |
22 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Louisiana (continued) | ||||
Louisiana State Public Facilities Authority Lease Revenue, Provident Group, Flagship Property, | ||||
Louisiana University Nicholson Gateway, Series A, 5.00%, 7/01/51 | $ | 26,145,000 | $ | 29,586,989 |
St. Charles Parish Consolidated Waterworks and Wastewater District No. 1 Revenue, Series A, | ||||
AMBAC Insured, Pre-Refunded, 5.00%, 7/01/36 | 6,230,000 | 6,405,499 | ||
St. John the Baptist Parish Revenue, Marathon Oil Corp. Project, Series A, 5.125%, 6/01/37 | 49,100,000 | 49,782,490 | ||
235,323,784 | ||||
Maine 0.2% | ||||
Maine State Educational Loan Authority Student Loan Revenue, Supplemental Education Loan | ||||
Program, Series A-3, Assured Guaranty, 5.875%, 12/01/39 | 10,670,000 | 11,754,606 | ||
Maine State Health and Higher Educational Facilities Authority Revenue, | ||||
Maine General Medical Center Issue, 6.75%, 7/01/36 | 4,250,000 | 4,763,315 | ||
Maine General Medical Center Issue, 7.00%, 7/01/41 | 10,000,000 | 11,336,200 | ||
27,854,121 | ||||
Maryland 0.7% | ||||
Baltimore Project Revenue, | ||||
Subordinate Project, Wastewater Projects, Series C, 5.00%, 7/01/39 | 10,000,000 | 11,602,700 | ||
Subordinate Project, Wastewater Projects, Series C, 5.00%, 7/01/44 | 10,000,000 | 11,563,200 | ||
Subordinate Project, Water Projects, Series A, 5.00%, 7/01/39. | 9,430,000 | 10,941,346 | ||
Subordinate Project, Water Projects, Series A, 5.00%, 7/01/44. | 5,500,000 | 6,359,760 | ||
Wastewater Projects, Series C, 5.00%, 7/01/38 | 5,000,000 | 5,782,850 | ||
Wastewater Projects, Series C, 5.00%, 7/01/43 | 10,000,000 | 11,530,400 | ||
Water Projects, Series C, AMBAC Insured, Pre-Refunded, 5.00%, 7/01/37 | 8,130,000 | 8,359,022 | ||
Maryland State EDC, PCR, Potomac Electric Project, Refunding, 6.20%, 9/01/22 | 5,000,000 | 5,558,650 | ||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||
Anne Arundel Health System Issue, Series A, Pre-Refunded, 6.75%, 7/01/39 | 3,000,000 | 3,452,670 | ||
LifeBridge Health Issue, Assured Guaranty, Pre-Refunded, 5.00%, 7/01/28 | 1,125,000 | 1,156,691 | ||
LifeBridge Health Issue, Refunding, Assured Guaranty, 5.00%, 7/01/28 | 1,875,000 | 1,925,157 | ||
Upper Chesapeake Hospitals Issue, Series C, Pre-Refunded, 6.00%, 1/01/38 | 5,000,000 | 5,295,600 | ||
83,528,046 | ||||
Massachusetts 3.3% | ||||
Massachusetts Bay Transportation Authority Revenue, | ||||
Assessment, Series A, Pre-Refunded, 5.25%, 7/01/34 | 19,520,000 | 20,940,275 | ||
Assessment, Series A, Pre-Refunded, 5.25%, 7/01/34 | 8,110,000 | 8,686,053 | ||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Refunding, Senior Series A, 5.00%, | ||||
7/01/28 | 10,000,000 | 12,889,600 | ||
Massachusetts State Department of Transportation Metropolitan Highway System Revenue, Senior, | ||||
Refunding, Series B, 5.00%, 1/01/37. | 31,000,000 | 34,134,720 | ||
Massachusetts State Development Finance Agency Revenue, | ||||
Brandeis University Issue, Refunding, Series O-1, 5.00%, 10/01/40 | 19,865,000 | 21,832,032 | ||
Dana-Farber Cancer Institute, Series N, 5.00%, 12/01/41 | 4,000,000 | 4,672,280 | ||
Dana-Farber Cancer Institute, Series N, 5.00%, 12/01/46 | 4,000,000 | 4,664,720 | ||
Partners Healthcare System Issue, Refunding, Series Q, 5.00%, 7/01/47 | 15,000,000 | 17,581,800 | ||
Wellesley College Issue, Series J, 5.00%, 7/01/42 | 10,000,000 | 11,516,900 | ||
Worcester Polytechnic Institute Issue, NATL Insured, Pre-Refunded, 5.00%, 9/01/37 | 7,470,000 | 7,732,048 | ||
Worcester Polytechnic Institute Issue, Refunding, NATL Insured, 5.00%, 9/01/37 | 2,530,000 | 2,608,708 | ||
Massachusetts State Educational Financing Authority Education Loan Revenue, | ||||
Issue I, 6.00%, 1/01/28 | 9,020,000 | 9,610,810 | ||
Refunding, Series K, 5.25%, 7/01/29 | 7,815,000 | 8,655,269 | ||
Series H, Assured Guaranty, 6.35%, 1/01/30 | 3,100,000 | 3,197,712 |
franklintempleton.com
Semiannual Report 23
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Massachusetts (continued) | ||||
Massachusetts State GO, | ||||
Consolidated Loan, Series C, AMBAC Insured, Pre-Refunded, 5.00%, 8/01/37 | $ | 10,000,000 | $ | 10,316,300 |
Series G, 4.00%, 9/01/37. | 20,000,000 | 21,549,400 | ||
Massachusetts State Health and Educational Facilities Authority Revenue, | ||||
Berklee College of Music Issue, Refunding, Series A, 5.00%, 10/01/37 | 490,000 | 506,092 | ||
Berklee College of Music Issue, Series A, Pre-Refunded, 5.00%, 10/01/37 | 9,510,000 | 9,876,230 | ||
Emmanuel College Issue, NATL Insured, Pre-Refunded, 5.00%, 7/01/37 | 10,000,000 | 10,281,700 | ||
Northeastern University Issue, Series A, 5.00%, 10/01/35 | 20,000,000 | 22,438,400 | ||
Northeastern University Issue, Series R, 5.00%, 10/01/33 | 6,830,000 | 7,313,496 | ||
Springfield College Issue, Pre-Refunded, 5.50%, 10/15/31 | 1,710,000 | 1,917,184 | ||
Springfield College Issue, Pre-Refunded, 5.625%, 10/15/40. | 7,000,000 | 7,873,390 | ||
Massachusetts State HFAR, Housing, Series B, 7.00%, 12/01/38 | 9,140,000 | 9,843,049 | ||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, Series A, AMBAC | ||||
Insured, Pre-Refunded, 4.50%, 8/15/35 | 30,000,000 | 30,881,400 | ||
Massachusetts State Transportation Fund Revenue, Accelerated Bridge Program, Series A, 4.00%, | ||||
6/01/35 | 10,000,000 | 10,600,400 | ||
Massachusetts State Water Pollution Abatement Trust Revenue, Massachusetts State Water | ||||
Resources Authority Program, Series A, 5.00%, 8/01/32 | 225,000 | 225,706 | ||
Massachusetts State Water Pollution Abatement Trust Water Pollution Abatement Revenue, | ||||
Massachusetts Water Resources Authority Program, Refunding, Sub Series A, 5.75%, 8/01/29. | 450,000 | 451,786 | ||
Massachusetts Water Resources Authority Revenue, General, Green Bond, Refunding, Series C, | ||||
5.00%, 8/01/40. | 30,000,000 | 35,961,300 | ||
University of Massachusetts Building Authority Project Revenue, Senior Series 1, 5.00%, 11/01/39 | 20,000,000 | 23,634,600 | ||
372,393,360 | ||||
Michigan 3.1% | ||||
Detroit City School District GO, | ||||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/30 | 1,245,000 | 1,397,749 | ||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/33 | 1,500,000 | 1,671,825 | ||
Detroit GO, Distributable State Aid, Pre-Refunded, 5.00%, 11/01/30 | 22,500,000 | 23,491,800 | ||
Detroit Water and Sewerage Department Sewage Disposal System Revenue, senior lien, Refunding, | ||||
Series A, 5.25%, 7/01/39. | 12,000,000 | 13,455,360 | ||
Grand Rapids Public Schools GO, School Building and Site, AGMC Insured, Pre-Refunded, 4.50%, | ||||
5/01/31 | 21,800,000 | 22,208,096 | ||
Michigan State Building Authority Revenue, | ||||
Facilities Program, Refunding, Series I, 6.25%, 10/15/38 | 440,000 | 484,044 | ||
Facilities Program, Refunding, Series I-A, 5.375%, 10/15/36 | 6,730,000 | 7,781,562 | ||
Facilities Program, Refunding, Series I-A, 5.25%, 10/15/44 | 20,655,000 | 24,431,354 | ||
Facilities Program, Series H, 5.125%, 10/15/33 | 12,500,000 | 13,639,750 | ||
Facilities Program, Series H, AGMC Insured, 5.00%, 10/15/26 | 5,000,000 | 5,483,350 | ||
Facilities Program, Series I, Pre-Refunded, 6.25%, 10/15/38 | 14,560,000 | 16,050,361 | ||
Michigan State Finance Authority Hospital Revenue, | ||||
Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/39 | 29,610,000 | 33,893,679 | ||
Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/45 | 20,000,000 | 23,020,400 | ||
Trinity Health Credit Group, Series MI, Pre-Refunded, 5.00%, 12/01/39 | 140,000 | 165,599 | ||
Michigan State Finance Authority Revenue, | ||||
Beaumont, Health Credit Group, Series A, 5.00%, 11/01/44 | 12,425,000 | 13,933,892 | ||
Henry Ford Health System, Refunding, 5.00%, 11/15/41 | 10,000,000 | 11,296,000 | ||
School District of the City of Detroit, Pre-Refunded, 5.00%, 6/01/18 | 2,400,000 | 2,457,120 | ||
School District of the City of Detroit, Pre-Refunded, 5.00%, 6/01/19 | 1,900,000 | 1,945,220 | ||
School District of the City of Detroit, Pre-Refunded, 5.00%, 6/01/20 | 1,500,000 | 1,535,700 | ||
School District of the City of Detroit, Pre-Refunded, 5.50%, 6/01/21 | 10,000,000 | 10,565,300 |
24 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Michigan (continued) | ||||
Michigan State GO, | ||||
Environmental Program, Series A, Pre-Refunded, 6.00%, 11/01/24 | $ | 1,000,000 | $ | 1,123,670 |
Environmental Program, Series A, Pre-Refunded, 5.50%, 11/01/25 | 1,000,000 | 1,111,370 | ||
Michigan State Hospital Finance Authority Revenue, | ||||
a Ascenion Senior Credit, Refunding, 5.00%, 11/15/47 | 10,000,000 | 11,636,900 | ||
MidMichigan Obligated Group, Series A, Pre-Refunded, 6.00%, 6/01/29 | 4,000,000 | 4,509,880 | ||
MidMichigan Obligated Group, Series A, Pre-Refunded, 6.125%, 6/01/39 | 5,000,000 | 5,653,200 | ||
Trinity Health Credit Group, Refunding, Series C, 5.00%, 12/01/34 | 9,230,000 | 10,527,461 | ||
Trinity Health Credit Group, Series C, Pre-Refunded, 5.00%, 12/01/34 | 770,000 | 922,799 | ||
Michigan State Strategic Fund Limited Obligation Revenue, The Detroit Edison Co. Exempt Facilities | ||||
Project, Refunding, Series KT, 5.625%, 7/01/20 | 7,000,000 | 8,024,730 | ||
Michigan Tobacco Settlement Finance Authority Revenue, Tobacco Settlement Asset-Backed, Senior | ||||
Series A, 6.00%, 6/01/34. | 40,000,000 | 39,612,400 | ||
Royal Oak Hospital Finance Authority Hospital Revenue, | ||||
William Beaumont Hospital Obligated Group, Series V, Pre-Refunded, 8.25%, 9/01/39 | 20,000,000 | 22,662,400 | ||
William Beaumont Hospital Obligated Group, Series W, Pre-Refunded, 6.375%, 8/01/29 | 10,000,000 | 11,439,600 | ||
Wayne State University Revenue, General, AMBAC Insured, Pre-Refunded, 5.00%, 11/15/36 | 5,000,000 | 5,007,000 | ||
351,139,571 | ||||
Minnesota 0.2% | ||||
Minneapolis Health Care System Revenue, | ||||
Fairview Health Services, Series A, Pre-Refunded, 6.625%, 11/15/28 | 11,000,000 | 12,254,110 | ||
Fairview Health Services, Series A, Pre-Refunded, 6.75%, 11/15/32. | 6,250,000 | 6,978,250 | ||
St. Cloud Health Care Revenue, CentraCare Health System, Refunding, Series A, 5.00%, 5/01/46 | 5,000,000 | 5,845,650 | ||
25,078,010 | ||||
Mississippi 0.9% | ||||
Mississippi Business Finance Corp. PCR, System Energy Resource Inc. Project, Refunding, 5.875%, | ||||
4/01/22 | 27,930,000 | 28,313,199 | ||
Mississippi Development Bank Special Obligation Revenue, | ||||
City of Jackson Capital City Convention Center Project, Refunding, Series A, 5.00%, 3/01/36 | 10,000,000 | 12,249,400 | ||
City of Jackson Water and Sewer System Project, AGMC Insured, 6.875%, 12/01/40 | 3,400,000 | 4,415,750 | ||
Mississippi State Hospital Equipment and Facilities Authority Revenue, | ||||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/41 | 34,500,000 | 38,862,180 | ||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/46 | 11,480,000 | 12,880,675 | ||
96,721,204 | ||||
Missouri 0.4% | ||||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, | ||||
Mercy Health, Series F, 5.00%, 11/15/45 | 25,000,000 | 28,738,000 | ||
St. Luke’s Health System, Series B, AGMC Insured, Pre-Refunded, 5.50%, 11/15/35 | 15,000,000 | 16,371,150 | ||
45,109,150 | ||||
Nebraska 1.4% | ||||
Adams County School District No. 018 GO, Hastings Public Schools, AGMC Insured, Pre-Refunded, | ||||
5.00%, 12/15/31. | 5,795,000 | 5,824,323 | ||
Lancaster County Correctional Facility Joint Public Agency GO, Building, 5.00%, 12/01/28 | 5,000,000 | 5,427,050 | ||
Madison County Hospital Authority No. 001 Hospital Revenue, Faith Regional Health Services Project, | ||||
Series A-1, 6.00%, 7/01/33 | 12,000,000 | 12,937,800 | ||
Municipal Energy Agency of Nebraska Power Supply System Revenue, Series A, BHAC Insured, | ||||
Pre-Refunded, 5.375%, 4/01/39 | 5,000,000 | 5,523,600 | ||
Omaha Convention Hotel Corp. Revenue, Convention Center, first tier, Refunding, AMBAC Insured, | ||||
5.00%, 2/01/35. | 30,000,000 | 30,263,400 |
franklintempleton.com
Semiannual Report 25
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Nebraska (continued) | ||||
Omaha Public Facilities Corp. Lease Revenue, Baseball Stadium Project, Pre-Refunded, 5.00%, | ||||
6/01/36 | $ | 9,000,000 | $ | 9,918,630 |
Omaha Public Power District Electric System Revenue, Series C, 5.00%, 2/01/39 | 23,305,000 | 26,277,553 | ||
Omaha Public Power District Separate Electric System Revenue, | ||||
Nebraska City 2, Refunding, Series A, 5.00%, 2/01/49 | 10,000,000 | 11,525,300 | ||
Nebraska City 2, Series A, 5.25%, 2/01/42. | 10,000,000 | 11,776,000 | ||
Public Power Generation Agency Revenue, | ||||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/37 | 5,000,000 | 5,783,150 | ||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/40 | 1,250,000 | 1,437,912 | ||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/41 | 3,690,000 | 4,241,397 | ||
University of Nebraska Revenue, | ||||
Lincoln Student Fees and Facilities, 5.00%, 7/01/37 | 5,000,000 | 5,747,850 | ||
Lincoln Student Fees and Facilities, 5.00%, 7/01/42 | 7,500,000 | 8,562,300 | ||
Lincoln Student Fees and Facilities, Series A, Pre-Refunded, 5.25%, 7/01/34 | 5,000,000 | 5,458,750 | ||
Omaha Student Facilities Project, Pre-Refunded, 5.00%, 5/15/32 | 5,000,000 | 5,114,250 | ||
University of Nebraska Omaha Health and Recreation Project, Pre-Refunded, 5.00%, 5/15/38 | 5,000,000 | 5,314,650 | ||
161,133,915 | ||||
Nevada 0.2% | ||||
Clark County School District GO, Refunding, Series A, NATL Insured, 5.00%, 6/15/24 | 15,000,000 | 15,835,350 | ||
Nevada State GO, Municipal Bond Bank Project No. 40-41, Series A, ETM, 6.375%, 12/01/17 | 3,145,000 | 3,158,303 | ||
18,993,653 | ||||
New Hampshire 0.5% | ||||
Nashua Housing Authority MFR, Clocktower Project, Refunding, GNMA Secured, 6.25%, 6/20/33. | 4,544,000 | 4,563,903 | ||
New Hampshire Municipal Bond Bank Revenue, Series B, Pre-Refunded, 5.00%, 8/15/39 | 11,250,000 | 12,871,350 | ||
New Hampshire State Business Finance Authority Revenue, Elliot Hospital Obligated Group, Series A, | ||||
6.125%, 10/01/39 | 5,000,000 | 5,536,900 | ||
New Hampshire State Health and Education Facilities Authority Revenue, | ||||
a Elliot Hospital, Refunding, 5.00%, 10/01/38 | 4,000,000 | 4,461,880 | ||
The Memorial Hospital Issue, Refunding, 5.25%, 6/01/26 | 1,000,000 | 1,003,010 | ||
The Memorial Hospital Issue, Refunding, 5.25%, 6/01/36 | 1,100,000 | 1,102,717 | ||
University System of New Hampshire Issue, Refunding, 5.00%, 7/01/45 | 10,350,000 | 12,012,313 | ||
a New Hampshire State Municipal Bond Bank Revenue, Refunding, Series D, 4.00%, 8/15/39 | 10,000,000 | 10,719,200 | ||
52,271,273 | ||||
New Jersey 3.0% | ||||
Bayonne GO, General Improvement, Pre-Refunded, 5.75%, 7/01/35 | 9,000,000 | 10,109,610 | ||
New Jersey EDA Revenue, | ||||
Motor Vehicle Surcharges, Series A, NATL Insured, 5.00%, 7/01/29 | 10,000,000 | 10,111,700 | ||
Motor Vehicle Surcharges, Series A, NATL Insured, 5.00%, 7/01/34 | 5,000,000 | 5,055,850 | ||
School Facilities, Series U, Pre-Refunded, 5.00%, 9/01/37 | 14,285,000 | 14,773,976 | ||
School Facilities Construction, Refunding, Series NN, 5.00%, 3/01/31. | 14,775,000 | 16,215,858 | ||
School Facilities Construction, Series NN, 5.00%, 3/01/28 | 22,000,000 | 24,224,640 | ||
New Jersey Health Care Facilities Financing Authority State Contract Revenue, | ||||
Hospital Asset Transformation Program, Series A, 5.25%, 10/01/38 | 7,770,000 | 8,149,798 | ||
Hospital Asset Transformation Program, Series A, Pre-Refunded, 5.25%, 10/01/38 | 2,230,000 | 2,411,589 | ||
New Jersey State COP, | ||||
Equipment Lease Purchase Agreement, Series A, 5.25%, 6/15/25 | 20,305,000 | 21,641,069 | ||
Equipment Lease Purchase Agreement, Series A, 5.25%, 6/15/26 | 8,000,000 | 8,511,760 | ||
Equipment Lease Purchase Agreement, Series A, 5.25%, 6/15/27 | 4,000,000 | 4,250,680 | ||
Equipment Lease Purchase Agreement, Series A, 5.25%, 6/15/28 | 2,000,000 | 2,124,820 | ||
a New Jersey State Health Care Facilities Financing Authority Revenue, RWJ Barnabas Health | ||||
Obligation Group Issue, Refunding, Series A, 5.00%, 7/01/43 | 7,000,000 | 8,028,440 |
26 Semiannual Report
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
New Jersey (continued) | ||||
New Jersey State Housing and Mortgage Finance Agency Revenue, Series AA, 6.375%, 10/01/28 | $ | 830,000 | $ | 844,193 |
New Jersey State Transportation Trust Fund Authority Revenue, | ||||
Transportation Program, Series AA, 5.00%, 6/15/38 | 25,000,000 | 27,243,000 | ||
Transportation Program, Series AA, 5.00%, 6/15/45 | 15,000,000 | 16,323,000 | ||
Transportation System, Series A, 6.00%, 12/15/38 | 39,505,000 | 42,574,933 | ||
Transportation System, Series A, AMBAC Insured, 5.00%, 12/15/32 | 9,705,000 | 9,995,277 | ||
Transportation System, Series A, Pre-Refunded, 6.00%, 12/15/38 | 20,495,000 | 22,699,647 | ||
Transportation System, Series B, 5.25%, 6/15/36 | 10,000,000 | 11,117,900 | ||
Transportation System, Series C, 5.25%, 6/15/32 | 25,000,000 | 28,161,000 | ||
Transportation System, Series D, 5.25%, 12/15/23 | 15,000,000 | 17,282,700 | ||
New Jersey State Turnpike Authority Turnpike Revenue, | ||||
Growth and Income Securities, Series B, AMBAC Insured, Pre-Refunded, 5.15%, 1/01/35 | 10,000,000 | 10,072,200 | ||
Series E, 5.25%, 1/01/40 | 13,925,000 | 15,012,403 | ||
336,936,043 | ||||
New Mexico 0.1% | ||||
New Mexico State Hospital Equipment Loan Council Hospital Revenue, Presbyterian Healthcare | ||||
Services Obligated Group, Refunding, 5.00%, 8/01/44 | 10,000,000 | 11,611,300 | ||
New York 8.3% | ||||
Long Island Power Authority Electric System Revenue, | ||||
General, Refunding, Series B, 5.00%, 9/01/46 | 13,000,000 | 15,042,430 | ||
General, Series A, Pre-Refunded, 6.00%, 5/01/33 | 12,500,000 | 14,039,250 | ||
MTA Dedicated Tax Fund Revenue, | ||||
Series B, 5.00%, 11/15/34 | 15,000,000 | 16,678,650 | ||
Series B, Pre-Refunded, 5.25%, 11/15/28 | 6,000,000 | 6,773,460 | ||
Series B, Pre-Refunded, 5.25%, 11/15/29 | 4,000,000 | 4,515,640 | ||
Series B, Pre-Refunded, 5.25%, 11/15/30 | 3,000,000 | 3,386,730 | ||
MTA Hudson Rail Yards Trust Obligations Revenue, Refunding, Series A, 5.00%, 11/15/51. | 17,500,000 | 19,399,625 | ||
MTA Revenue, | ||||
Transportation, Refunding, Series D, 5.25%, 11/15/40 | 15,000,000 | 17,155,500 | ||
Transportation, Series A, 5.00%, 11/15/38 | 11,800,000 | 13,675,846 | ||
Transportation, Series A, Pre-Refunded, 5.00%, 11/15/37 | 20,630,000 | 21,532,975 | ||
Transportation, Series A, Pre-Refunded, 5.00%, 11/15/37 | 4,370,000 | 4,558,959 | ||
Transportation, Series C, 6.50%, 11/15/28 | 3,690,000 | 4,107,782 | ||
Transportation, Series C, Pre-Refunded, 6.50%, 11/15/28 | 11,310,000 | 12,590,518 | ||
Transportation, Series D, 5.00%, 11/15/34 | 10,000,000 | 11,297,800 | ||
Transportation, Series D, 5.00%, 11/15/36 | 9,500,000 | 10,981,335 | ||
Transportation, Series D, Sub Series D-1, 5.00%, 11/15/39 | 15,000,000 | 17,441,100 | ||
Transportation, Sub Series A-1, 5.00%, 11/15/40 | 30,000,000 | 34,572,900 | ||
New York City GO, | ||||
Fiscal 2002, Series D, 5.50%, 6/01/24 | 180,000 | 180,698 | ||
Fiscal 2010, Refunding, Series C, 5.00%, 8/01/23. | 24,620,000 | 27,194,267 | ||
Series E, Sub Series E-1, 6.25%, 10/15/28 | 480,000 | 529,622 | ||
Series E, Sub Series E-1, Pre-Refunded, 6.25%, 10/15/28 | 9,520,000 | 10,500,274 | ||
Series F, 5.25%, 1/15/23 | 5,000 | 5,019 | ||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, | ||||
Fiscal 2009, Series A, 5.75%, 6/15/40 | 4,580,000 | 4,925,653 | ||
Fiscal 2009, Series A, Pre-Refunded, 5.75%, 6/15/40 | 1,420,000 | 1,531,711 | ||
Second General Resolution, Fiscal 2008, Refunding, Series AA, 5.00%, 6/15/37 | 10,000,000 | 10,257,100 | ||
Second General Resolution, Fiscal 2009, Refunding, Series EE, 5.25%, 6/15/40 | 64,970,000 | 71,691,796 | ||
Second General Resolution, Fiscal 2009, Refunding, Series FF-2, 5.50%, 6/15/40 | 15,000,000 | 16,705,800 | ||
Second General Resolution, Fiscal 2012, Refunding, Series AA, 5.00%, 6/15/34 | 10,000,000 | 11,536,000 | ||
Second General Resolution, Fiscal 2013, Refunding, Series DD, 5.00%, 6/15/35 | 30,705,000 | 36,365,774 |
franklintempleton.com
Semiannual Report 27
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
New York (continued) | ||||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, (continued) | ||||
Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 6/15/46 | $ | 15,000,000 | $ | 17,432,250 |
Second General Resolution, Fiscal 2015, Refunding, Series FF, 5.00%, 6/15/39. | 10,000,000 | 11,833,300 | ||
Second General Resolution, Fiscal 2015, Refunding, Series HH, 5.00%, 6/15/39 | 15,000,000 | 17,749,950 | ||
New York City Transitional Finance Authority Building Aid Revenue, | ||||
Fiscal 2009, Series S-2, 6.00%, 7/15/38 | 20,000,000 | 21,698,800 | ||
Fiscal 2009, Series S-3, 5.25%, 1/15/34 | 10,170,000 | 11,073,096 | ||
Fiscal 2009, Series S-4, 5.50%, 1/15/34 | 12,890,000 | 14,142,908 | ||
Fiscal 2011, Series S-2, Sub Series S-2A, 5.00%, 7/15/40. | 35,000,000 | 40,127,150 | ||
Fiscal 2012, Series S-1, Sub Series S-1A, 5.25%, 7/15/37. | 5,300,000 | 6,161,939 | ||
New York City Transitional Finance Authority Revenue, | ||||
Future Tax Secured, Fiscal 2011, sub. bond, Series C, 5.00%, 11/01/39 | 15,000,000 | 16,922,400 | ||
Future Tax Secured, Fiscal 2014, sub. bond, Series A, Sub Series A-1, 5.00%, 11/01/34 | 15,000,000 | 17,945,250 | ||
New York Liberty Development Corp. Liberty Revenue, | ||||
One World Trade Center, Port Authority Consolidated, Secured, 5.25%, 12/15/43 | 25,000,000 | 29,411,500 | ||
Second Priority, Bank of America Tower at One Bryant Park Project, Class 1, Refunding, 5.625%, | ||||
1/15/46 | 25,000,000 | 28,369,250 | ||
Seven World Trade Center Project, Refunding, 5.00%, 9/15/43. | 6,500,000 | 7,356,570 | ||
New York Liberty Development Corp. Revenue, | ||||
Goldman Sachs Headquarters Issue, 5.25%, 10/01/35 | 40,000,000 | 50,581,600 | ||
Goldman Sachs Headquarters Issue, 5.50%, 10/01/37 | 24,995,000 | 33,298,339 | ||
New York State Dormitory Authority Lease Revenues, State University Dormitory Facilities, Series A, | ||||
5.00%, 7/01/41. | 10,000,000 | 11,328,500 | ||
New York State Dormitory Authority Revenues, State Supported Debt, Upstate Community Colleges, | ||||
Series C, 6.00%, 7/01/31. | 23,215,000 | 25,711,309 | ||
New York State Dormitory Authority State Personal Income Tax Revenue, | ||||
General Purpose, Series A, 5.00%, 2/15/36 | 15,000,000 | 17,663,550 | ||
Group C, Series B, 5.00%, 2/15/40 | 20,000,000 | 23,377,000 | ||
New York State HFAR, Housing Project Mortgage, Refunding, Series A, AGMC Insured, 6.125%, | ||||
11/01/20 | 80,000 | 80,354 | ||
New York State Thruway Authority General Junior Indebtedness Obligations Revenue, junior lien, | ||||
Series A, 5.25%, 1/01/56. | 10,000,000 | 11,746,400 | ||
New York State Urban Development Corp. Revenue, | ||||
State Personal Income Tax, General Purpose, Series A, 5.00%, 3/15/31 | 10,000,000 | 11,515,000 | ||
State Personal Income Tax, State Facilities and Equipment, Series B-1, 5.00%, 3/15/36 | 5,000,000 | 5,440,750 | ||
Port Authority of New York and New Jersey Revenue, Consolidated, One Hundred Seventy-Ninth | ||||
Series, 5.00%, 12/01/38 | 20,000,000 | 23,723,600 | ||
Triborough Bridge and Tunnel Authority Revenues, | ||||
General, MTA Bridges and Tunnels, Series A, 5.25%, 11/15/38 | 25,000,000 | 26,541,500 | ||
General, MTA Bridges and Tunnels, Series A-2, 5.25%, 11/15/34 | 7,500,000 | 8,139,975 | ||
General Purpose, Series B, Pre-Refunded, 5.50%, 1/01/30 | 15,000,000 | 17,901,000 | ||
926,447,454 | ||||
North Carolina 2.0% | ||||
Charlotte COP, Cultural Arts Facilities, Refunding, Series E, 5.00%, 6/01/34 | 13,000,000 | 14,263,990 | ||
North Carolina Eastern Municipal Power Agency Power System Revenue, | ||||
Series A, Pre-Refunded, 5.50%, 1/01/26 | 4,500,000 | 4,941,990 | ||
Series B, ETM, 6.00%, 1/01/22. | 1,250,000 | 1,548,675 | ||
Series B, ETM, 6.25%, 1/01/23. | 39,030,000 | 50,352,213 | ||
North Carolina State Capital Improvement Limited Obligation Revenue, | ||||
Series A, 5.00%, 5/01/23 | 20,000,000 | 22,600,600 | ||
Series A, 5.00%, 5/01/26 | 20,000,000 | 22,564,000 | ||
Series A, Pre-Refunded, 5.00%, 5/01/24 | 5,500,000 | 6,044,940 |
28 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
North Carolina (continued) | ||||
North Carolina State Capital Improvement Limited Obligation Revenue, (continued) | ||||
Series A, Pre-Refunded, 5.00%, 5/01/25 | $ | 5,750,000 | $ | 6,319,710 |
Series A, Pre-Refunded, 5.00%, 5/01/27 | 4,500,000 | 4,945,860 | ||
Series A, Pre-Refunded, 5.00%, 5/01/28 | 4,250,000 | 4,671,090 | ||
North Carolina Turnpike Authority Triangle Expressway System Revenue, | ||||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/33 | 25,000,000 | 14,224,250 | ||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/34 | 15,000,000 | 8,172,750 | ||
Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/35 | 15,215,000 | 7,930,667 | ||
Series A, Assured Guaranty, 5.50%, 1/01/29 | 6,750,000 | 7,330,905 | ||
Series A, Assured Guaranty, 5.75%, 1/01/39 | 10,380,000 | 11,305,065 | ||
Raleigh Combined Enterprise System Revenue, 5.00%, 3/01/40 | 7,915,000 | 8,947,195 | ||
Wake County GO, Refunding, Series C, 5.00%, 3/01/25 | 21,780,000 | 27,609,417 | ||
223,773,317 | ||||
North Dakota 0.3% | ||||
Grand Forks Health Care System Revenue, | ||||
Altru Health System Obligated Group, Assured Guaranty, 5.00%, 12/01/26 | 8,385,000 | 8,836,365 | ||
Altru Health System Obligated Group, Refunding, 5.50%, 12/01/20. | 8,870,000 | 9,310,484 | ||
Altru Health System Obligated Group, Refunding, 5.50%, 12/01/24. | 13,945,000 | 14,645,318 | ||
32,792,167 | ||||
Ohio 3.2% | ||||
Akron Income Tax Revenue, Community Learning Centers, Refunding, Series A, 5.00%, 12/01/29 | 10,000,000 | 11,760,500 | ||
American Municipal Power Inc. Revenue, | ||||
Greenup Hydroelectric Project, Series A, 5.00%, 2/15/46 | 13,150,000 | 15,174,443 | ||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/38. | 1,215,000 | 1,267,233 | ||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/39. | 5,000,000 | 5,709,400 | ||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/42. | 2,500,000 | 2,847,650 | ||
Prairie State Energy Campus Project, Series A, Pre-Refunded, 5.00%, 2/15/38 | 21,285,000 | 22,401,398 | ||
Bowling Green Student Housing Revenue, CFP I LLC, State University Project, 6.00%, 6/01/45 | 6,750,000 | 7,326,855 | ||
Buckeye Tobacco Settlement Financing Authority Revenue, | ||||
Tobacco Settlement, Senior, Capital Appreciation, Turbo Term, Series A-3, 6.25%, 6/01/37 | 15,000,000 | 14,510,850 | ||
Tobacco Settlement, Senior Current Interest Turbo Term, Series A-2, 5.75%, 6/01/34 | 10,000,000 | 9,309,400 | ||
a Butler County Hospital Facilities Revenue, UC health, Refunding, 5.00%, 11/15/45 | 7,500,000 | 8,535,600 | ||
Cleveland-Cuyahoga County Port Authority Development Lease Revenue, Administrative Headquarters | ||||
Project, 5.00%, 7/01/37 | 6,000,000 | 7,623,060 | ||
Franklin County Hospital Facilities Revenue, OhioHealth Corp., 5.00%, 5/15/40 | 10,000,000 | 11,585,500 | ||
Hamilton County Sales Tax Revenue, | ||||
Refunding, Series A, 4.00%, 12/01/31 | 4,500,000 | 5,008,860 | ||
Refunding, Series A, 4.00%, 12/01/32 | 4,700,000 | 5,200,879 | ||
Hamilton County Sewer System Revenue, The Metropolitan Sewer District of Greater Cincinnati, | ||||
Improvement and Refunding, Series A, 5.00%, 12/01/38 | 12,000,000 | 14,156,400 | ||
JobsOhio Beverage System Statewide Liquor Profits Revenue, senior lien, Series A, 5.00%, 1/01/38 | 21,060,000 | 24,022,510 | ||
Kent State University Revenues, General Receipts, Series A, 5.00%, 5/01/37 | 10,500,000 | 12,019,560 | ||
Little Miami Local School District GO, School Improvement, AGMC Insured, Pre-Refunded, 5.00%, | ||||
12/01/34 | 4,000,000 | 4,013,480 | ||
Maple Heights City School District GO, School Facilities Improvement, Pre-Refunded, 5.00%, 1/15/37 | 29,370,000 | 29,623,521 | ||
Marysville Wastewater Treatment System Revenue, | ||||
Refunding, XLCA Insured, 5.00%, 12/01/31 | 2,255,000 | 2,262,599 | ||
Refunding, XLCA Insured, 5.00%, 12/01/36 | 3,000,000 | 3,010,110 | ||
XLCA Insured, Pre-Refunded, 5.00%, 12/01/31 | 5,745,000 | 5,764,131 | ||
XLCA Insured, Pre-Refunded, 5.00%, 12/01/36 | 10,725,000 | 10,760,714 |
franklintempleton.com
Semiannual Report 29
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Ohio (continued) | ||||
Ohio State Air Quality Development Authority Revenue, | ||||
Environmental Improvement, Buckeye Power Inc. Project, 6.00%, 12/01/40 | $ | 15,000,000 | $ | 17,569,200 |
Pollution Control, FirstEnergy Generation Corp. Project, Refunding, Series C, 5.625%, 6/01/18 | 8,500,000 | 8,686,660 | ||
Ohio State GO, | ||||
Infrastructure Improvement, Series A, Pre-Refunded, 5.375%, 9/01/28 | 6,235,000 | 6,607,479 | ||
Infrastructure Improvement, Series A, Pre-Refunded, 5.375%, 9/01/28 | 3,765,000 | 3,987,361 | ||
Ohio State Turnpike and Infrastructure Commission Revenue, Infrastructure Projects, Capital | ||||
Appreciation, junior lien, Series A-3, zero cpn. to 2/14/23, 5.75% thereafter, 2/15/35. | 35,000,000 | 33,324,900 | ||
Ohio State University Revenue, Special Purpose General Receipts, Series A, 5.00%, 6/01/38. | 10,000,000 | 11,579,800 | ||
Scioto County Hospital Facilities Revenue, Southern Ohio Medical Center, Pre-Refunded, 5.75%, | ||||
2/15/38 | 17,000,000 | 18,065,220 | ||
Toledo Water System Revenue, Improvement and Refunding, 5.00%, 11/15/38 | 20,000,000 | 22,918,600 | ||
356,633,873 | ||||
Oklahoma 0.1% | ||||
Oklahoma Municipal Power Authority Revenue, | ||||
Refunding, Series A, 5.00%, 1/01/32 | 650,000 | 773,500 | ||
Refunding, Series A, 5.00%, 1/01/33 | 1,250,000 | 1,480,800 | ||
Refunding, Series A, 4.00%, 1/01/36 | 100,000 | 107,457 | ||
Refunding, Series A, 5.00%, 1/01/47 | 3,100,000 | 3,574,517 | ||
5,936,274 | ||||
Oregon 0.9% | ||||
Oregon Health and Science University Revenue, Series A, Pre-Refunded, 5.75%, 7/01/39 | 5,000,000 | 5,623,500 | ||
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Series A, | ||||
Pre-Refunded, 4.50%, 11/15/32 | 30,000,000 | 31,133,700 | ||
Port of Portland International Airport Revenue, Series Nineteen, Pre-Refunded, 5.50%, 7/01/38 | 25,000,000 | 26,900,250 | ||
Portland Sewer System Revenue, second lien, Series A, 5.00%, 3/01/35 | 11,540,000 | 12,850,021 | ||
University of Oregon General Revenue, Series A, 5.00%, 4/01/46 | 17,000,000 | 20,214,360 | ||
96,721,831 | ||||
Pennsylvania 3.2% | ||||
Centennial School District Bucks County GO, Series B, AGMC Insured, Pre-Refunded, 5.25%, | ||||
12/15/37 | 13,655,000 | 14,894,464 | ||
Coatesville Area School District GO, AGMC Insured, 5.00%, 8/01/24 | 6,420,000 | 6,611,830 | ||
Commonwealth Financing Authority Revenue, | ||||
Series A, 5.00%, 6/01/33 | 4,550,000 | 5,181,949 | ||
Series B, 5.00%, 6/01/42 | 5,400,000 | 6,110,694 | ||
Delaware County Regional Water Quality Control Authority Revenue, | ||||
Sewer, 5.00%, 11/01/41 | 5,000,000 | 5,867,450 | ||
Sewer, 5.00%, 11/01/46 | 10,315,000 | 12,055,966 | ||
Delaware Valley Regional Finance Authority Local Government Revenue, Series B, AMBAC Insured, | ||||
5.60%, 7/01/17. | 5,000,000 | 5,157,200 | ||
Erie Water Authority Water Revenue, Refunding, 5.00%, 12/01/43 | 5,000,000 | 5,783,950 | ||
Northampton County General Purpose Authority Hospital Revenue, St. Luke’s Hospital Project, Series | ||||
A, Pre-Refunded, 5.375%, 8/15/28 | 5,000,000 | 5,387,450 | ||
Pennsylvania State Economic Development Financing Authority Water Facilities Revenue, Aqua | ||||
Pennsylvania Inc. Project, Series B, 5.00%, 12/01/43 | 20,000,000 | 22,404,800 | ||
Pennsylvania State Economic Development Financing Authority Water Facility Revenue, Pennsylvania- | ||||
American Water Co. Project, 6.20%, 4/01/39 | 12,500,000 | 13,917,500 | ||
a Pennsylvania State Public School Building Authority Lease Revenue, School District of Philadelphia | ||||
Project, Refunding, Series A, AGMC Insured, 5.00%, 6/01/33 | 10,000,000 | 11,333,100 |
30 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Pennsylvania (continued) | ||||
Pennsylvania State Turnpike Commission Turnpike Revenue, | ||||
Convertible Capital Appreciation, Subordinate, Series C, AGMC Insured, 6.25%, 6/01/33 | $ | 5,000,000 | $ | 6,498,900 |
Motor License Fund-Enhanced, Subordinate, Series A, 5.00%, 12/01/37 | 3,000,000 | 3,410,700 | ||
Motor License Fund-Enhanced, Subordinate, Series A, Sub Series A-1, 5.00%, 12/01/38 | 20,000,000 | 21,996,000 | ||
Series A-1, 5.00%, 12/01/46 | 35,000,000 | 40,067,650 | ||
Series C, Sub Series C-1, Assured Guaranty, Pre-Refunded, 6.00%, 6/01/28. | 5,000,000 | 5,401,050 | ||
Series C, Sub Series C-1, Assured Guaranty, Pre-Refunded, 6.25%, 6/01/38. | 15,000,000 | 16,261,650 | ||
sub. bond, Series B, Pre-Refunded, 5.75%, 6/01/39 | 20,000,000 | 22,422,400 | ||
Philadelphia GO, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/24 | 11,000,000 | 12,068,540 | ||
Philadelphia Hospitals and Higher Educational Facilities Authority Revenue, | ||||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.30%, | ||||
1/01/18 | 370,000 | 371,314 | ||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.35%, | ||||
1/01/23 | 4,600,000 | 4,617,894 | ||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.375%, | ||||
1/01/28 | 3,700,000 | 3,707,955 | ||
Philadelphia Municipal Authority Lease Revenue, 6.375%, 4/01/29 | 4,500,000 | 5,016,375 | ||
Philadelphia School District GO, | ||||
2014, Series E, Pre-Refunded, 6.00%, 9/01/38. | 15,000 | 16,372 | ||
a Refunding, Series F, 5.00%, 9/01/33 | 6,415,000 | 7,116,737 | ||
a Refunding, Series F, 5.00%, 9/01/36 | 4,090,000 | 4,505,544 | ||
Series E, 6.00%, 9/01/38 | 24,645,000 | 25,707,446 | ||
Series E, Pre-Refunded, 6.00%, 9/01/38 | 340,000 | 371,099 | ||
Philadelphia Water and Wastewater Revenue, | ||||
Series A, 5.25%, 1/01/25 | 1,000,000 | 1,091,750 | ||
Series A, 5.00%, 1/01/26 | 5,000,000 | 5,432,100 | ||
Series A, 5.00%, 1/01/27 | 1,750,000 | 1,901,235 | ||
Series A, 5.25%, 1/01/32 | 5,000,000 | 5,458,750 | ||
Series A, 5.00%, 7/01/45 | 15,000,000 | 17,205,000 | ||
Pittsburgh and Allegheny County Sports and Exhibition Authority Hotel Room Regional Enterprise | ||||
Tower Revenue, Refunding, AGMC Insured, 5.00%, 2/01/35 | 18,000,000 | 20,007,000 | ||
Westmoreland County Municipal Authority Revenue, Municipal Service, Refunding, BAM Insured, | ||||
5.00%, 8/15/42. | 7,500,000 | 8,612,850 | ||
353,972,664 | ||||
Rhode Island 0.8% | ||||
Rhode Island Convention Center Authority Revenue, Refunding, Series A, Assured Guaranty, 5.50%, | ||||
5/15/27 | 17,300,000 | 19,168,919 | ||
Rhode Island Health and Educational Building Corp. Revenue, Hospital Financing, Lifespan Obligation | ||||
Group, Refunding, 5.00%, 5/15/39 | 5,500,000 | 6,187,500 | ||
Rhode Island Housing and Mortgage Finance Corp. Revenue, | ||||
Homeownership Opportunity, Refunding, Series 15-A, 6.85%, 10/01/24 | 155,000 | 155,773 | ||
Homeownership Opportunity, Series 10-A, 6.50%, 10/01/22. | 220,000 | 221,043 | ||
Homeownership Opportunity, Series 10-A, 6.50%, 4/01/27 | 130,000 | 130,610 | ||
Rhode Island State Health and Educational Building Corp. Higher Education Facilities Revenue, Brown | ||||
University Issue, Refunding, Series A, 5.00%, 9/01/39 | 9,000,000 | 9,858,240 | ||
Rhode Island State Health and Educational Building Corp. Higher Education Facility Revenue, New | ||||
England Institute of Technology Issue, Series A, 5.125%, 3/01/40 | 16,435,000 | 18,041,028 |
franklintempleton.com
Semiannual Report 31
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Rhode Island (continued) | ||||
Rhode Island State Health and Educational Building Corp. Revenue, | ||||
Higher Education Facility, Board of Governors for Higher Education, University of Rhode Island, | ||||
Educational and General Issue, Refunding, Series G, AMBAC, 5.00%, 9/15/30 | $ | 10,000,000 | $ | 10,017,100 |
Hospital Financing, Lifespan Obligated Group Issue, Series A, Pre-Refunded, 7.00%, 5/15/39. | 8,200,000 | 9,434,346 | ||
Public Schools, Bond Financing Program, Town of East Greenwich Issue, Series A, 5.00%, | ||||
5/15/37 | 10,000,000 | 11,689,600 | ||
84,904,159 | ||||
South Carolina 1.7% | ||||
Greenville County School District Installment Purchase Revenue, Building Equity Sooner for Tomorrow, | ||||
Refunding, 5.00%, 12/01/28 | 7,500,000 | 7,525,275 | ||
Greenwood Fifty School Facilities Inc. Installment Purchase Revenue, Greenwood School District No. | ||||
50, South Carolina Project, Assured Guaranty, Pre-Refunded, 4.50%, 12/01/32 | 7,030,000 | 7,310,075 | ||
Piedmont Municipal Power Agency Electric Revenue, Series A-2, 5.00%, 1/01/24 | 10,000,000 | 10,428,400 | ||
Rock Hill Utility System Revenue, | ||||
Combined Utility System, Refunding, 5.00%, 1/01/41 | 7,690,000 | 8,867,108 | ||
Combined Utility System, Refunding, 5.00%, 1/01/47 | 5,000,000 | 5,743,800 | ||
SCAGO Educational Facilities Corp. for Beaufort School District Revenue, Installment Purchase, | ||||
School District of Beaufort County Project, Refunding, AGMC Insured, 5.00%, 12/01/31 | 5,340,000 | 5,357,996 | ||
SCAGO Educational Facilities Corp. for Chesterfield School District Revenue, Installment Purchase, | ||||
Chesterfield County School District Project, Assured Guaranty, Pre-Refunded, 5.00%, 12/01/29 | 7,500,000 | 7,525,275 | ||
SCAGO Educational Facilities Corp. for Colleton School District Revenue, | ||||
Installment Purchase, School District of Colleton County Project, Assured Guaranty, Pre- | ||||
Refunded, 5.00%, 12/01/25 | 3,340,000 | 3,351,256 | ||
Installment Purchase, School District of Colleton County Project, Assured Guaranty, Pre- | ||||
Refunded, 5.00%, 12/01/26 | 4,000,000 | 4,013,480 | ||
SCAGO Educational Facilities Corp. for Pickens School District Revenue, | ||||
Installment Purchase, School District of Pickens County Project, AGMC Insured, Pre-Refunded, | ||||
5.00%, 12/01/25 | 18,900,000 | 18,962,937 | ||
Installment Purchase, School District of Pickens County Project, AGMC Insured, Pre-Refunded, | ||||
5.00%, 12/01/31 | 10,000,000 | 10,033,300 | ||
South Carolina Jobs EDA Hospital Revenue, | ||||
AnMed Health Project, Refunding and Improvement, Series B, Assured Guaranty, 5.375%, | ||||
2/01/29 | 4,000,000 | 4,332,400 | ||
Palmetto Health, Refunding, Series A, AGMC Insured, 5.00%, 8/01/35 | 20,000,000 | 21,094,800 | ||
Palmetto Health, Refunding and Improvement, 5.75%, 8/01/39. | 3,000,000 | 3,244,470 | ||
South Carolina State Public Service Authority Revenue, | ||||
Obligations, Refunding, Series C, 5.00%, 12/01/56 | 35,000,000 | 40,000,450 | ||
Refunding, Series B, 5.00%, 12/01/50 | 15,000,000 | 17,107,650 | ||
Series A, Pre-Refunded, 5.50%, 1/01/38 | 7,500,000 | 8,219,625 | ||
Series B, Pre-Refunded, 5.25%, 1/01/34 | 6,000,000 | 6,543,720 | ||
189,662,017 | ||||
South Dakota 0.4% | ||||
Huron School District No. 2-2 GO, 5.00%, 6/15/39 | 4,000,000 | 4,642,480 | ||
South Dakota State Health and Educational Facilities Authority Revenue, | ||||
Avera Health Issue, Series B, 5.50%, 7/01/35 | 3,000,000 | 3,195,060 | ||
Avera Health Issue, Series B, 5.25%, 7/01/38 | 5,000,000 | 5,270,800 | ||
Sanford Health, Pre-Refunded, 5.00%, 11/01/27 | 2,355,000 | 2,404,902 | ||
Sanford Health, Pre-Refunded, 5.00%, 11/01/40 | 12,945,000 | 13,219,304 | ||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/38 | 3,475,000 | 4,032,008 | ||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/46 | 6,005,000 | 6,942,561 |
32 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
South Dakota (continued) | ||||
South Dakota State Health and Educational Facilities Authority Revenue, (continued) | ||||
Vocational Education Program, Series A, 5.125%, 8/01/46 | $ | 7,000,000 | $ | 7,975,030 |
47,682,145 | ||||
Tennessee 0.2% | ||||
Knox County Health Educational and Housing Facility Board Revenue, University Health System Inc., | ||||
Refunding, 5.25%, 4/01/27 | 17,500,000 | 17,784,375 | ||
Texas 12.9% | ||||
Alamo Regional Mobility Authority Revenue, | ||||
junior lien, 5.00%, 6/15/39 | 6,235,000 | 7,335,976 | ||
senior lien, 5.00%, 6/15/41. | 3,500,000 | 4,085,795 | ||
senior lien, 5.00%, 6/15/46. | 7,705,000 | 8,962,533 | ||
Allen ISD, | ||||
GO, Collin County, School Building, PSF Guarantee, 5.00%, 2/15/41 | 12,000,000 | 14,274,120 | ||
GO, Collin County, School Building, Series A, Pre-Refunded, 5.00%, 2/15/39. | 11,575,000 | 12,614,667 | ||
Austin Community College District Public Facility Corp. Revenue, | ||||
Educational Facility Project, Round Rock Campus, Pre-Refunded, 5.25%, 8/01/33 | 8,675,000 | 9,321,808 | ||
Hays New Campus Project, 5.00%, 8/01/36 | 5,700,000 | 6,603,336 | ||
Austin Electric Utility System Revenue, Refunding, Series A, 5.00%, 11/15/45. | 10,000,000 | 11,615,100 | ||
Austin ISD, GO, Travis County, Pre-Refunded, 5.00%, 8/01/33. | 10,000,000 | 10,720,600 | ||
Austin Water and Wastewater System Revenue, | ||||
Travis Williamson and Hays Counties, Refunding, 5.00%, 11/15/45. | 12,465,000 | 14,885,329 | ||
Travis Williamson and Hays Counties, Refunding, Series A, 5.00%, 11/15/38 | 20,000,000 | 23,617,200 | ||
Bexar County Hospital District GO, | ||||
Certificates of Obligation, Combination Tax and Revenue, 5.00%, 2/15/38 | 1,910,000 | 2,001,203 | ||
Certificates of Obligation, Combination Tax and Revenue, Pre-Refunded, 5.00%, 2/15/38 | 8,090,000 | 8,514,321 | ||
Central Regional Mobility Authority Revenue, Refunding, 5.00%, 1/01/46 | 13,705,000 | 15,498,710 | ||
Central Texas Regional Mobility Authority Revenue, | ||||
senior lien, Pre-Refunded, 6.00%, 1/01/41 | 14,000,000 | 16,694,160 | ||
senior lien, Series A, 5.00%, 1/01/45. | 5,000,000 | 5,647,700 | ||
Clifton Higher Education Finance Corp. Education Revenue, Idea Public Schools, Series A, PSF | ||||
Guarantee, 5.00%, 8/15/46 | 5,000,000 | 5,828,350 | ||
Corpus Christi Utility System Revenue, | ||||
Improvement, junior lien, 5.00%, 7/15/38 | 6,000,000 | 6,943,920 | ||
Improvement, junior lien, 5.00%, 7/15/43 | 7,000,000 | 8,031,310 | ||
Improvement, junior lien, Series A, 5.00%, 7/15/40 | 13,200,000 | 15,361,500 | ||
junior lien, Refunding, 4.00%, 7/15/39 | 5,860,000 | 6,283,444 | ||
Crowley ISD, GO, Tarrant and Johnson Counties, Unlimited Tax School Building, PSF Guarantee, | ||||
Pre-Refunded, 5.00%, 8/01/36 | 13,900,000 | 14,901,634 | ||
Dallas Area Rapid Transit Sales Tax Revenue, Refunding, Series A, 5.00%, 12/01/46 | 10,000,000 | 11,700,100 | ||
Dallas Civic Center Revenue, Refunding and Improvement, Assured Guaranty, 5.25%, 8/15/34 | 18,975,000 | 20,879,900 | ||
Dallas County Utility and Reclamation District GO, Refunding, Series A, AMBAC Insured, 5.375%, | ||||
2/15/29 | 28,325,000 | 28,709,653 | ||
Dallas Waterworks and Sewer System Revenue, | ||||
Pre-Refunded, 5.00%, 10/01/35 | 4,515,000 | 5,176,041 | ||
Refunding, 5.00%, 10/01/35 | 5,485,000 | 6,229,424 | ||
Dallas/Fort Worth International Airport Revenue, | ||||
Joint, Refunding, Series D, 5.25%, 11/01/32. | 10,000,000 | 11,810,900 | ||
Joint Improvement, Series A, 5.00%, 11/01/42 | 25,000,000 | 28,039,250 | ||
Denton ISD, GO, School Building, PSF Guarantee, Pre-Refunded, 5.00%, 8/15/38 | 15,710,000 | 16,226,545 | ||
Ector County ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/36 | 10,355,000 | 12,002,688 |
franklintempleton.com
Semiannual Report 33
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
Forney ISD, | ||||
GO, Refunding, PSF Guarantee, 5.00%, 8/15/37 | $ | 15,000,000 | $ | 17,836,050 |
GO, School Building, Series A, PSF Guarantee, Pre-Refunded, 6.00%, 8/15/37 | 2,000,000 | 2,180,760 | ||
Goose Creek Consolidated ISD, GO, Schoolhouse, PSF Guarantee, 5.00%, 2/15/38 | 6,045,000 | 6,956,405 | ||
Grand Parkway Transportation Corp. System Toll Revenue, Capital Appreciation, Series B, zero cpn. to | ||||
9/30/23, 5.80% thereafter, 10/01/45 | 10,000,000 | 8,740,000 | ||
Harris County Cultural Education Facilities Finance Corp. Revenue, | ||||
Houston Methodist Hospital, 5.00%, 12/01/45 | 30,000,000 | 34,755,900 | ||
Memorial Hermann Health System, 5.00%, 7/01/45 | 15,000,000 | 17,376,600 | ||
Harris County Health Facilities Development Corp. Hospital Revenue, Memorial Hermann Healthcare | ||||
System, Series B, Pre-Refunded, 7.25%, 12/01/35 | 13,500,000 | 15,257,565 | ||
Harris County Hospital District Revenue, senior lien, Series A, NATL Insured, Pre-Refunded, 5.125%, | ||||
2/15/32 | 10,215,000 | 10,343,811 | ||
Harris County MTA Revenue, Sales and Use Tax, Contractual Obligations, Series B, Pre-Refunded, | ||||
5.00%, 11/01/33. | 10,000,000 | 11,174,000 | ||
Harris County Revenue, senior lien, Refunding, Series A, 5.00%, 8/15/47 | 16,000,000 | 18,813,760 | ||
Hays County GO, Road, 5.00%, 2/15/36 | 6,960,000 | 7,718,014 | ||
Hidalgo County Regional Mobility Authority Vehicle Registration Revenue, | ||||
senior lien, Refunding, 5.25%, 12/01/38. | 5,000,000 | 5,994,400 | ||
senior lien, Refunding, 5.00%, 12/01/43. | 5,000,000 | 5,813,200 | ||
Houston Airport System Revenue, | ||||
Refunding, second lien, Series A, 5.50%, 7/01/34 | 5,000,000 | 5,358,500 | ||
Refunding, second lien, Series A, 5.50%, 7/01/39 | 30,850,000 | 32,982,352 | ||
Houston Utility System Revenue, Combined, first lien, Refunding, Series D, 5.00%, 11/15/36 | 10,000,000 | 11,580,200 | ||
Hutto ISD, GO, Refunding, Series A, PSF Guarantee, 5.00%, 8/01/39 | 10,000,000 | 11,641,200 | ||
Keller ISD, GO, School Building, Pre-Refunded, 5.50%, 2/15/35 | 10,000,000 | 11,010,800 | ||
Laredo Waterworks Sewer System Revenue, | ||||
AGMC Insured, 5.00%, 3/01/41 | 2,500,000 | 2,793,975 | ||
Pre-Refunded, 5.25%, 3/01/40 | 16,535,000 | 18,759,288 | ||
Refunding, 4.00%, 3/01/41. | 5,210,000 | 5,600,229 | ||
Lower Colorado River Authority Transmission Contract Revenue, | ||||
LCRA Transmission Services Corp. Project, Refunding, 5.50%, 5/15/36 | 15,310,000 | 16,806,552 | ||
LCRA Transmission Services Corp. Project, Refunding, Series A, 5.00%, 5/15/36 | 10,000,000 | 11,517,700 | ||
Lubbock-Cooper ISD, GO, Refunding, PSF Guarantee, 5.00%, 2/15/41 | 12,500,000 | 14,661,250 | ||
Lufkin Health Facilities Development Corp. Revenue, Memorial Health System of East Texas, | ||||
Pre-Refunded, 6.25%, 2/15/37 | 5,000,000 | 5,589,800 | ||
Matagorda County Hospital District Revenue, FHA Insured, 5.00%, 2/15/35 | 10,000,000 | 10,450,900 | ||
New Hope Cultural Education Facilities Finance Corp. Revenue, Texas A&M University Project, Series | ||||
A-1, 5.00%, 4/01/46 | 6,000,000 | 6,982,740 | ||
New Hope Cultural Education Facilities Finance Corp. Student Housing Revenue, | ||||
Collegiate Housing Corpus Christi II, Texas A&M University Corpus Christi Project, Series A, | ||||
5.00%, 4/01/48 | 1,250,000 | 1,355,350 | ||
NCCD-College Station Properties LLC, Texas A&M University Project, Series A, 5.00%, 7/01/47 | 10,000,000 | 10,908,900 | ||
North East Regional Mobility Authority Revenue, senior lien, 5.00%, 1/01/46. | 6,000,000 | 6,851,460 | ||
North Fort Bend Water Authority Water System Revenue, Assured Guaranty, 5.25%, 12/15/34 | 20,000,000 | 22,275,000 | ||
North Harris County Regional Water Authority Revenue, | ||||
senior lien, 5.00%, 12/15/46 | 18,685,000 | 21,782,412 | ||
senior lien, Pre-Refunded, 5.25%, 12/15/33 | 27,000,000 | 29,450,790 | ||
senior lien, Pre-Refunded, 5.50%, 12/15/38 | 25,000,000 | 27,400,000 | ||
senior lien, Refunding, 4.00%, 12/15/41. | 26,000,000 | 27,553,760 |
34 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Texas (continued) | ||||
North Texas Tollway Authority Revenue, | ||||
first tier, Series A, 6.25%, 1/01/39 | $ | 2,270,000 | $ | 2,501,971 |
first tier, Series A, Pre-Refunded, 6.25%, 1/01/39 | 10,230,000 | 11,363,586 | ||
Refunding, Series A, 5.00%, 1/01/39 | 10,000,000 | 11,617,300 | ||
Special Projects System, Capital Appreciation, first tier, Refunding, Series I, 6.50%, 1/01/43 | 25,000,000 | 32,533,250 | ||
Special Projects System, Capital Appreciation, Series B, zero cpn., 9/01/37 | 7,500,000 | 3,202,050 | ||
Special Projects System, Capital Appreciation, Series B, zero cpn., 9/01/43 | 7,500,000 | 2,002,425 | ||
Special Projects System, Capital Appreciation, Series C, zero cpn. to 9/01/21, 6.75% thereafter, | ||||
9/01/45 | 25,000,000 | 28,765,500 | ||
System, first tier, Refunding, Series A, 5.75%, 1/01/40 | 4,825,000 | 5,083,041 | ||
System, first tier, Series A, Pre-Refunded, 5.75%, 1/01/40 | 30,175,000 | 31,861,746 | ||
System, first tier, Series K, Sub Series K-2, Pre-Refunded, 6.00%, 1/01/38 | 15,000,000 | 16,599,300 | ||
System, second tier, Refunding, Series A, 5.00%, 1/01/35 | 10,000,000 | 11,531,700 | ||
System, second tier, Refunding, Series A, 5.00%, 1/01/38 | 10,000,000 | 11,492,500 | ||
System, second tier, Series F, Pre-Refunded, 5.75%, 1/01/38 | 30,000,000 | 31,687,200 | ||
Port of Houston Authority Harris County GO, Refunding, Series A, 5.625%, 10/01/38 | 14,000,000 | 15,239,000 | ||
Red River Education Financing Corp. Higher Education Revenue, St. Edwards University Project, | ||||
Refunding, 5.00%, 6/01/46 | 2,250,000 | 2,536,245 | ||
Rockwall ISD, GO, School Building, PSF Guarantee, 5.00%, 2/15/46 | 15,000,000 | 17,532,750 | ||
San Antonio Electric and Gas Systems Revenue, junior lien, 5.00%, 2/01/38. | 10,000,000 | 11,816,900 | ||
San Antonio Public Facilities Corp. Lease Revenue, Refunding and Improvement, Convention Center | ||||
Refinancing and Expansion Project, 4.00%, 9/15/42 | 36,500,000 | 38,509,325 | ||
a San Antonio Water System Revenue, junior lien, Refunding, Series C, 5.00%, 5/15/46 | 13,000,000 | 15,349,360 | ||
San Jacinto River Authority Special Project Revenue, | ||||
Group Project, AGMC Insured, 5.00%, 10/01/32 | 5,000,000 | 5,471,100 | ||
Group Project, AGMC Insured, 5.00%, 10/01/37 | 3,000,000 | 3,269,250 | ||
Southwest Higher Education Authority Revenue, Southern Methodist University Project, Series A, | ||||
5.00%, 10/01/38. | 24,380,000 | 28,785,466 | ||
Tarrant County Cultural Education Facilities Finance Corp. Hospital Revenue, | ||||
Cook Children’s Medical Center, Refunding, Series A, 5.25%, 12/01/39 | 10,000,000 | 11,583,800 | ||
Hendrick Medical Center Obligation Group, Refunding, 5.50%, 9/01/43 | 5,350,000 | 6,120,240 | ||
Tarrant County Cultural Education Facilities Finance Corp. Revenue, | ||||
a Texas Health Resources System, Series A, 5.00%, 2/15/41 | 23,500,000 | 27,573,725 | ||
Texas Health Resources System, Series A, 5.00%, 11/15/52 | 5,000,000 | 5,635,550 | ||
Tarrant County Health Facilities Development Corp. Health System Revenue, Harris Methodist Health | ||||
System, FGIC Insured, ETM, 6.00%, 9/01/24. | 3,385,000 | 4,025,814 | ||
Tarrant Regional Water District Water Revenue, Refunding and Improvement, 5.00%, 3/01/37 | 10,000,000 | 11,629,600 | ||
Texas City IDC Marine Terminal Revenue, ARCO Pipe Line Co. Project, Refunding, 7.375%, 10/01/20 | 500,000 | 609,250 | ||
Texas State GO, | ||||
Transportation Commission, Highway Improvement, 5.00%, 4/01/39 | 40,000,000 | 46,726,000 | ||
Transportation Commission, Mobility Fund, Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 35,352,600 | ||
Transportation Commission, Mobility Fund, Series A, Pre-Refunded, 5.00%, 4/01/33 | 10,000,000 | 10,174,500 | ||
Water Financial Assistance, Refunding, Series C-1, 5.00%, 8/01/34 | 7,000,000 | 7,705,880 | ||
Texas State Municipal Power Agency Revenue, Transmission, sub. lien, Refunding, 5.00%, 9/01/40 | 15,250,000 | 16,927,347 | ||
Texas State Transportation Commission Turnpike System Revenue, | ||||
first tier, Refunding, Series B, 5.00%, 8/15/37 | 10,000,000 | 11,528,600 | ||
second tier, Refunding, Series C, 5.00%, 8/15/42 | 35,000,000 | 39,053,000 | ||
Tyler Health Facilities Development Corp. Hospital Revenue, East Texas Medical Center Regional | ||||
Healthcare System Project, Refunding and Improvement, Series A, 5.25%, 11/01/32 | 6,250,000 | 6,372,563 | ||
Ysleta ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/45 | 15,000,000 | 17,668,200 | ||
1,444,228,474 |
franklintempleton.com
Semiannual Report 35
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Utah 1.3% | ||||
Jordan Valley Water Conservancy District Water Revenue, Series B, 5.00%, 10/01/41 | $ | 15,000,000 | $ | 16,965,150 |
St. George Electric Revenue, | ||||
AGMC Insured, Pre-Refunded, 5.00%, 6/01/33 | 5,000,000 | 5,322,850 | ||
AGMC Insured, Pre-Refunded, 5.00%, 6/01/38 | 5,000,000 | 5,322,850 | ||
State Board of Regents University of Utah Revenue, General, Refunding, Series A, 5.00%, 8/01/43 | 21,975,000 | 25,736,241 | ||
Uintah County Municipal Building Authority Lease Revenue, Pre-Refunded, 5.50%, 6/01/37 | 5,000,000 | 5,366,050 | ||
Utah Associated Municipal Power Systems Revenue, Central St. George Project, Pre-Refunded, | ||||
5.25%, 12/01/27. | 9,735,000 | 10,982,638 | ||
Utah State Municipal Power Agency Supply System Revenue, Series B, 5.00%, 7/01/38 | 12,105,000 | 14,099,904 | ||
Utah State Transit Authority Sales Tax Revenue, | ||||
Series A, AGMC Insured, Pre-Refunded, 5.00%, 6/15/36. | 33,000,000 | 35,210,670 | ||
Series A, Pre-Refunded, 5.25%, 6/15/38 | 13,185,000 | 14,121,003 | ||
Weber Basin Water Conservancy District Water Revenue, Series B, 5.00%, 4/01/39 | 7,180,000 | 8,371,162 | ||
141,498,518 | ||||
Vermont 0.5% | ||||
Vermont Educational and Health Buildings Financing Agency Revenue, | ||||
Hospital, Fletcher Allen Health Care Project, Series A, Pre-Refunded, 4.75%, 12/01/36 | 5,000,000 | 5,015,900 | ||
Hospital, Fletcher Allen Health Care Project, Series B, AGMC Insured, Pre-Refunded, 5.00%, | ||||
12/01/34 | 5,500,000 | 5,850,680 | ||
Middlebury College Project, Refunding, 5.00%, 11/01/38 | 10,000,000 | 11,018,000 | ||
Middlebury College Project, Refunding, 5.00%, 11/01/40 | 26,565,000 | 29,903,689 | ||
The University of Vermont Medical Center Project, Refunding, Series A, 5.00%, 12/01/36 | 5,000,000 | 5,804,400 | ||
57,592,669 | ||||
Virginia 0.2% | ||||
Fairfax County EDA Facility Revenue, Community Services Facilities Project, Series A, 4.50%, 3/01/37 . | 11,130,000 | 12,200,261 | ||
Virginia State Resources Authority Infrastructure Revenue, Virginia Pooled Financing Program, Series | ||||
A, 5.00%, 11/01/39 | 12,355,000 | 14,569,016 | ||
26,769,277 | ||||
Washington 2.7% | ||||
Central Puget Sound Regional Transportation Authority Sales and Use Tax Revenue, Series A, | ||||
Pre-Refunded, 5.00%, 11/01/34 | 11,405,000 | 11,887,774 | ||
FYI Properties Lease Revenue, | ||||
Washington State District Project, 5.50%, 6/01/34 | 11,935,000 | 13,211,210 | ||
Washington State District Project, 5.50%, 6/01/39 | 16,250,000 | 17,922,125 | ||
King County GO, Sewer Revenues, Pre-Refunded, 5.125%, 1/01/33 | 10,000,000 | 10,890,800 | ||
King County Public Hospital District No. 1 GO, Series B, 5.25%, 12/01/37. | 5,000,000 | 5,325,250 | ||
King County Sewer Revenue, Pre-Refunded, 5.00%, 1/01/32 | 7,085,000 | 8,073,783 | ||
NJB Properties Lease Revenue, | ||||
King County Washington Project, Series A, 5.00%, 12/01/36 | 5,000 | 5,016 | ||
King County Washington Project, Series A, Pre-Refunded, 5.00%, 12/01/36 | 9,995,000 | 10,028,683 | ||
Washington State GO, | ||||
Motor Vehicle Fuel Tax, Senior 520 Corridor Program Toll, Series C, 5.00%, 6/01/33 | 5,000,000 | 5,802,650 | ||
Various Purpose, Series A, Pre-Refunded, 5.00%, 7/01/33 | 44,300,000 | 47,302,654 | ||
Washington State Health Care Facilities Authority Revenue, | ||||
Central Washington Health Services Assn., Pre-Refunded, 6.75%, 7/01/29 | 5,000,000 | 5,747,300 | ||
Fred Hutchinson Cancer Research Center, Series A, Pre-Refunded, 6.00%, 1/01/33 | 7,500,000 | 8,484,300 | ||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/41 | 9,170,000 | 9,652,617 | ||
MultiCare Health System, Series B, AGMC Insured, Pre-Refunded, 5.00%, 8/15/34 | 17,550,000 | 18,826,411 | ||
MultiCare Health System, Series B, Assured Guaranty, Pre-Refunded, 6.00%, 8/15/39 | 1,500,000 | 1,703,565 | ||
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/42 | 10,175,000 | 11,433,647 | ||
Providence Health and Services, Refunding, Series C, AGMC Insured, 5.25%, 10/01/33 | 10,000,000 | 10,690,900 |
36 Semiannual Report
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | ||||
Amount | Value | |||
Municipal Bonds (continued) | ||||
Washington (continued) | ||||
Washington State Health Care Facilities Authority Revenue, (continued) | ||||
Providence Health and Services, Refunding, Series D, 5.00%, 10/01/41 | $ | 10,000,000 | $ | 11,459,600 |
Seattle Children’s Hospital, Refunding, Series B, 5.00%, 10/01/38 | 30,000,000 | 34,890,300 | ||
Virginia Mason Medical Center, Series B, ACA Insured, 6.00%, 8/15/37 | 30,000,000 | 30,943,800 | ||
Virginia Mason Medical Center, Series C, Assured Guaranty, 5.50%, 8/15/36 | 16,000,000 | 16,463,040 | ||
Washington State Higher Education Facilities Authority Revenue, | ||||
Whitworth University Project, Refunding, 5.375%, 10/01/29 | 3,000,000 | 3,341,700 | ||
Whitworth University Project, Refunding, 5.875%, 10/01/34 | 6,000,000 | 6,759,540 | ||
300,846,665 | ||||
West Virginia 0.6% | ||||
County Commission of Harrison County Solid Waste Disposal Revenue, Allegheny Energy Supply Co. | ||||
LLC Harrison Station Project, Refunding, Series D, 5.50%, 10/15/37 | 9,000,000 | 9,164,880 | ||
Pleasants County PCR, County Commission, Series F, 5.25%, 10/15/37 | 14,000,000 | 13,894,160 | ||
West Virginia EDA Lottery Revenue, Series A, 5.00%, 6/15/35 | 9,415,000 | 10,535,385 | ||
West Virginia State GO, Series A, NATL Insured, Pre-Refunded, 5.20%, 11/01/26 | 10,000,000 | 11,044,500 | ||
West Virginia State University Revenues, West Virginia University Projects, Series A, 5.00%, 10/01/44 . | 21,800,000 | 25,131,476 | ||
69,770,401 | ||||
Wisconsin 0.7% | ||||
Monroe RDAR, Monroe Clinic Inc., Pre-Refunded, 6.00%, 2/15/39. | 11,790,000 | 13,128,637 | ||
Wisconsin State General Fund Annual Appropriation Revenue, Series A, 6.00%, 5/01/33 | 25,290,000 | 28,277,761 | ||
Wisconsin State Health and Educational Facilities Authority Revenue, | ||||
Marquette University, Refunding, Series B-1, 5.00%, 10/01/30 | 3,880,000 | 4,291,008 | ||
Marquette University, Refunding, Series B-2, 5.00%, 10/01/30 | 2,540,000 | 2,809,062 | ||
Marquette University, Series B-1, Pre-Refunded, 5.00%, 10/01/30 | 2,985,000 | 3,347,110 | ||
Marquette University, Series B-1, Pre-Refunded, 5.00%, 10/01/33 | 1,500,000 | 1,681,965 | ||
Marquette University, Series B-2, Pre-Refunded, 5.00%, 10/01/30 | 930,000 | 1,042,818 | ||
Marquette University, Series B-3, 5.00%, 10/01/30 | 1,570,000 | 1,736,310 | ||
Marquette University, Series B-3, Pre-Refunded, 5.00%, 10/01/30 | 580,000 | 650,360 | ||
Marquette University, Series B-3, Pre-Refunded, 5.00%, 10/01/33 | 1,750,000 | 1,962,293 | ||
Ministry Health Care Inc., AGMC Insured, Pre-Refunded, 5.00%, 8/01/31 | 1,500,000 | 1,591,050 | ||
Ministry Health Care Inc., AGMC Insured, Pre-Refunded, 5.00%, 8/01/34 | 8,000,000 | 8,485,600 | ||
Thedacare Inc., Series A, 5.50%, 12/15/38 | 5,000,000 | 5,574,300 | ||
74,578,274 | ||||
Wyoming 0.1% | ||||
Campbell County Solid Waste Facilities Revenue, Basin Electric Power Cooperative, Dry Fork Station | ||||
Facilities, Series A, 5.75%, 7/15/39. | 5,500,000 | 6,111,490 | ||
U.S. Territories 1.4% | ||||
Puerto Rico 1.4% | ||||
Puerto Rico Electric Power Authority Power Revenue, | ||||
Refunding, Series A, 5.00%, 7/01/42 | 18,925,000 | 12,703,406 | ||
Series XX, 5.25%, 7/01/40 | 15,000,000 | 10,200,000 | ||
b Puerto Rico PBA Guaranteed Revenue, | ||||
Government Facilities, Refunding, Series D, 5.25%, 7/01/27 | 3,265,000 | 1,905,944 | ||
Government Facilities, Refunding, Series N, 5.00%, 7/01/37 | 20,000,000 | 11,625,000 | ||
b Puerto Rico Public Finance Corp. Revenue, Commonwealth Appropriation, Refunding, Series B, | ||||
5.50%, 8/01/31. | 21,000,000 | 2,152,500 | ||
Puerto Rico Sales Tax FICO Sales Tax Revenue, | ||||
Capital Appreciation, First Subordinate, Series A, zero cpn. to 8/01/19, 6.25% thereafter, 8/01/33 . | 36,500,000 | 12,708,570 | ||
Convertible Capital Appreciation, First Subordinate, Series A, 6.75%, 8/01/32 | 25,000,000 | 13,968,750 | ||
First Subordinate, Series A, 5.50%, 8/01/42 | 40,000,000 | 21,200,000 |
franklintempleton.com
Semiannual Report 37
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
U.S. Territories (continued) | |||||
Puerto Rico (continued) | |||||
Puerto Rico Sales Tax FICO Sales Tax Revenue, (continued) | |||||
First Subordinate, Series A, 6.00%, 8/01/42 | $ | 22,500,000 | $ | 11,868,750 | |
First Subordinate, Series C, 5.50%, 8/01/40 | 50,000,000 | 26,750,000 | |||
Refunding, Senior Series C, 5.00%, 8/01/40. | 27,825,000 | 20,312,250 | |||
Senior Series C, 5.25%, 8/01/40 | 7,150,000 | 5,183,750 | |||
150,578,920 | |||||
U.S. Virgin Islands 0.0%† | |||||
Virgin Islands PFAR, Virgin Islands Matching Fund Loan Note, Working Capital, sub. lien, Refunding, | |||||
Series B, 5.25%, 10/01/29 | 3,750,000 | 3,682,013 | |||
Total U.S. Territories | 154,260,933 | ||||
Total Municipal Bonds before Short Term Investments | |||||
(Cost $10,265,226,741) | 11,078,243,691 | ||||
Short Term Investments 1.0% | |||||
Municipal Bonds 1.0% | |||||
Georgia 0.8% | |||||
c Appling County Development Authority PCR, | |||||
Georgia Power Co. Plant Hatch Project, Daily VRDN and Put, 0.60%, 9/01/29 | 3,400,000 | 3,400,000 | |||
Georgia Power Co. Plant Hatch Project, Refunding, Daily VRDN and Put, 0.60%, 9/01/41 | 32,000,000 | 32,000,000 | |||
c Burke County Development Authority PCR, | |||||
Georgia Power Co. Plant Vogtle Project, First Series, Daily VRDN and Put, 0.60%, 5/01/22 | 5,000,000 | 5,000,000 | |||
Georgia Power Co. Plant Vogtle Project, Refunding, First Series, Daily VRDN and Put, 0.58%, | |||||
7/01/49 | 9,600,000 | 9,600,000 | |||
Georgia Power Co. Plant Vogtle Project, Second Series, Daily VRDN and Put, 0.60%, 10/01/32 | 23,800,000 | 23,800,000 | |||
c Heard County Development Authority PCR, Georgia Power Co. Plant Wansley Project, First Series, | |||||
Daily VRDN and Put, 0.54%, 9/01/29 | 20,400,000 | 20,400,000 | |||
94,200,000 | |||||
Minnesota 0.1% | |||||
c Minneapolis and St. Paul Housing and RDA Health Care System Revenue, Children’s Hospitals and | |||||
Clinics of Minnesota, Series A-II, AGMC Insured, Daily VRDN and Put, 0.53%, 8/15/37 | 9,000,000 | 9,000,000 | |||
Missouri 0.1% | |||||
c Saint Louis IDA Revenue, Mid-America Transplant Services Project, Daily VRDN and Put, 0.49%, | |||||
1/01/39 | 13,615,000 | 13,615,000 | |||
Total Short Term Investments (Cost $116,815,000) | 116,815,000 | ||||
Total Investments (Cost $10,382,041,741) 100.2% | 11,195,058,691 | ||||
Other Assets, less Liabilities (0.2)% | (23,025,175 | ) | |||
Net Assets 100.0% | $ | 11,172,033,516 |
See Abbreviations on page 48.
†Rounds to less than 0.1% of net assets.
aSecurity purchased on a when-issued basis. See Note 1(b).
bSee Note 6 regarding defaulted securities.
cVariable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable interest rate adjustment formula and an unconditional right of demand to
receive payment of the principal balance plus accrued interest at specified dates. The coupon rate shown represents the rate at period end.
38 Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Financial Statements
Statement of Assets and Liabilities
October 31, 2016 (unaudited)
Assets: | |||
Investments in securities: | |||
Cost | $ | 10,382,041,741 | |
Value | $ | 11,195,058,691 | |
Cash | 104,182 | ||
Receivables: | |||
Capital shares sold | 17,337,393 | ||
Interest | 146,445,258 | ||
Other assets | 2,324 | ||
Total assets | 11,358,947,848 | ||
Liabilities: | |||
Payables: | |||
Investment securities purchased | 166,318,239 | ||
Capital shares redeemed | 14,211,343 | ||
Management fees | 4,168,617 | ||
Distribution fees | 1,417,487 | ||
Transfer agent fees | 768,252 | ||
Accrued expenses and other liabilities | 30,394 | ||
Total liabilities | 186,914,332 | ||
Net assets, at value | $ | 11,172,033,516 | |
Net assets consist of: | |||
Paid-in capital | $ | 10,523,255,087 | |
Undistributed net investment income | 17,696,490 | ||
Net unrealized appreciation (depreciation) | 813,016,950 | ||
Accumulated net realized gain (loss) | (181,935,011 | ) | |
Net assets, at value | $ | 11,172,033,516 | |
Class A: | |||
Net assets, at value | $ | 8,439,815,519 | |
Shares outstanding | 681,703,549 | ||
Net asset value per sharea | $ | 12.38 | |
Maximum offering price per share (net asset value per share ÷ 95.75%) | $ | 12.93 | |
Class C: | |||
Net assets, at value | $ | 1,262,218,397 | |
Shares outstanding | 102,037,453 | ||
Net asset value and maximum offering price per sharea | $ | 12.37 | |
Advisor Class : | |||
Net assets, at value | $ | 1,469,999,600 | |
Shares outstanding | 118,636,879 | ||
Net asset value and maximum offering price per share | $ | 12.39 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 39
FRANKLIN FEDERAL TAX-FREE INCOME FUND | |||
FINANCIAL STATEMENTS | |||
Statement of Operations | |||
for the six months ended October 31, 2016 (unaudited) | |||
Investment income: | |||
Interest | $ | 242,669,850 | |
Expenses: | |||
Management fees (Note 3a) | 25,173,788 | ||
Distribution fees: (Note 3c) | |||
Class A | 4,284,368 | ||
Class C | 4,101,580 | ||
Transfer agent fees: (Note 3e) | |||
Class A | 2,092,062 | ||
Class C | 308,113 | ||
Advisor Class | 359,960 | ||
Custodian fees | 47,483 | ||
Reports to shareholders | 201,080 | ||
Registration and filing fees. | 178,830 | ||
Professional fees | 104,372 | ||
Trustees’ fees and expenses | 61,918 | ||
Other | 212,149 | ||
Total expenses | 37,125,703 | ||
Net investment income. | 205,544,147 | ||
Realized and unrealized gains (losses): | |||
Net realized gain (loss) from investments. | 10,354,841 | ||
Net change in unrealized appreciation (depreciation) on investments | (105,515,108 | ) | |
Net realized and unrealized gain (loss) | (95,160,267 | ) | |
Net increase (decrease) in net assets resulting from operations | $ | 110,383,880 |
40 Semiannual Report | The accompanying notes are an integral part of these financial statements. franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND | ||||||
FINANCIAL STATEMENTS | ||||||
Statements of Changes in Net Assets | ||||||
Six Months Ended | ||||||
October 31, 2016 | Year Ended | |||||
(unaudited) | April 30, 2016 | |||||
Increase (decrease) in net assets: | ||||||
Operations: | ||||||
Net investment income | $ | 205,544,147 | $ | 420,252,842 | ||
Net realized gain (loss) | 10,354,841 | (6,530,948 | ) | |||
Net change in unrealized appreciation (depreciation) | (105,515,108 | ) | 23,567,487 | |||
Net increase (decrease) in net assets resulting from operations | 110,383,880 | 437,289,381 | ||||
Distributions to shareholders from: | ||||||
Net investment income: | ||||||
Class A | (154,585,972 | ) | (318,461,145 | ) | ||
Class C | (19,310,958 | ) | (38,197,482 | ) | ||
Advisor Class | (27,250,953 | ) | (59,596,706 | ) | ||
Total distributions to shareholders | (201,147,883 | ) | (416,255,333 | ) | ||
Capital share transactions: (Note 2) | ||||||
Class A | 124,380,816 | (140,750,827 | ) | |||
Class C | 57,735,608 | 45,176,670 | ||||
Advisor Class | 38,295,195 | (244,965,010 | ) | |||
Total capital share transactions | 220,411,619 | (340,539,167 | ) | |||
Net increase (decrease) in net assets | 129,647,616 | (319,505,119 | ) | |||
Net assets: | ||||||
Beginning of period | 11,042,385,900 | 11,361,891,019 | ||||
End of period | $ | 11,172,033,516 | $ | 11,042,385,900 | ||
Undistributed net investment income included in net assets: | ||||||
End of period | $ | 17,696,490 | $ | 13,300,226 |
franklintempleton.com The accompanying notes are an integral part of these financial statements. | Semiannual Report 41
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin Federal Tax-Free Income Fund (Fund) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Fund offers three classes of shares: Class A, Class C, and Advisor Class. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees.
The following summarizes the Fund’s significant accounting policies.
a. Financial Instrument Valuation
The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share as of 4 p.m. Eastern time each day the New York Stock Exchange (NYSE) is open for trading. Under compliance policies and procedures approved by the Fund’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The VC provides administration and oversight of the Fund’s valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in the market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.
The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.
b. Securities Purchased on a When-Issued Basis
The Fund purchases securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be
42 Semiannual Report
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
sustained upon examination by the tax authorities based on its technical merits. As of October 31, 2016, the Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on each tax jurisdiction’s statute of limitation.
d. Security Transactions, Investment Income, Expenses and Distributions
Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.
Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.
e. Insurance
The scheduled payments of interest and principal for each insured municipal security in the Fund are insured by either a new issue insurance policy or a secondary insurance policy. Depending on the type of coverage, premiums for insurance are either added to the cost basis of the security or paid by a third party.
Insurance companies typically insure municipal bonds that tend to be of very high quality, with the majority of underlying municipal bonds rated A or better. However, an event involving an insurer could have an adverse effect on the value of the securities insured by that insurance company. There can be no assurance the insurer will be able to fulfill its obligations under the terms of the policy.
f. Accounting Estimates
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
g. Guarantees and Indemnifications
Under the Fund’s organizational documents, its officers and trustees are indemnified by the Fund against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. Currently, the Fund expects the risk of loss to be remote.
franklintempleton.com
Semiannual Report 43
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest
At October 31, 2016, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
Six Months Ended | Year Ended | |||||||||
October 31, 2016 | April 30, 2016 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Class A Shares: | ||||||||||
Shares sold | 41,133,183 | $ | 515,419,549 | 73,278,237 | $ | 906,090,435 | ||||
Shares issued in reinvestment of distributions | 10,960,453 | 137,157,607 | 22,616,000 | 279,118,681 | ||||||
Shares redeemed | (42,187,433 | ) | (528,196,340 | ) | (107,355,306 | ) | (1,325,959,943 | ) | ||
Net increase (decrease) | 9,906,203 | $ | 124,380,816 | (11,461,069 | ) | $ | (140,750,827 | ) | ||
Class C Shares: | ||||||||||
Shares sold | 9,477,570 | $ | 118,730,557 | 14,835,143 | $ | 183,448,788 | ||||
Shares issued in reinvestment of distributions | 1,348,339 | 16,870,887 | 2,668,410 | 32,918,668 | ||||||
Shares redeemed | (6,223,275 | ) | (77,865,836 | ) | (13,863,413 | ) | (171,190,786 | ) | ||
Net increase (decrease) | 4,602,634 | $ | 57,735,608 | 3,640,140 | $ | 45,176,670 | ||||
Advisor Class Shares: | ||||||||||
Shares sold | 19,398,199 | $ | 243,227,268 | 33,457,419 | $ | 414,012,249 | ||||
Shares issued in reinvestment of distributions | 1,803,234 | 22,583,043 | 4,103,097 | 50,661,005 | ||||||
Shares redeemed | (18,116,850 | ) | (227,515,116 | ) | (57,598,502 | ) | (709,638,264 | ) | ||
Net increase (decrease) | 3,084,583 | $ | 38,295,195 | (20,037,986 | ) | $ | (244,965,010 | ) |
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:
Subsidiary | Affiliation |
Franklin Advisers, Inc. (Advisers) | Investment manager |
Franklin Templeton Services, LLC (FT Services) | Administrative manager |
Franklin Templeton Distributors, Inc. (Distributors) | Principal underwriter |
Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
44 Semiannual Report
franklintempleton.com
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
a. Management Fees
The Fund pays an investment management fee to Advisers based on the month-end net assets of the Fund as follows:
Annualized Fee Rate | Net Assets | |
0.625% | Up to and including $100 million | |
0.500% | Over $100 million, up to and including $250 million | |
0.450% | Over $250 million, up to and including $7.5 billion | |
0.440% | Over $7.5 billion, up to and including $10 billion | |
0.430% | Over $10 billion, up to and including $12.5 billion | |
0.420% | Over $12.5 billion, up to and including $15 billion | |
0.400% | Over $15 billion, up to and including $17.5 billion | |
0.380% | Over $17.5 billion, up to and including $20 billion | |
0.360% | In excess of $20 billion |
For the period ended October 31, 2016, the annualized effective investment management fee rate was 0.445% of the Fund’s average daily net assets.
b. Administrative Fees
Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.
c. Distribution Fees
The Board has adopted distribution plans for each share class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Under the Fund’s Class A reimbursement distribution plan, the Fund reimburses Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. Under the Class A reimbursement distribution plan, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Fund’s Class C compensation distribution plan, the Fund pays Distributors for costs incurred in connection with the servicing, sale and distribution of the Fund’s shares up to the maximum annual plan rate. The plan year, for purposes of monitoring compliance with the maximum annual plan rate, is February 1 through January 31.
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Class A | 0.10 | % |
Class C | 0.65 | % |
d. Sales Charges/Underwriting Agreements |
Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. These charges are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Fund of the following commission transactions related to the sales and redemptions of the Fund’s shares for the period:
Sales charges retained net of commissions paid to | ||
unaffiliated brokers/dealers | $ | 1,225,970 |
CDSC retained | $ | 51,379 |
franklintempleton.com
Semiannual Report 45
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. | Transactions with Affiliates (continued) |
e. | Transfer Agent Fees |
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholder servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.
For the period ended October 31, 2016, the Fund paid transfer agent fees of $2,760,135, of which $914,529 was retained by Investor Services.
f. Interfund Transactions
The Fund engaged in purchases and sales of investments with funds or other accounts that have common investment managers (or affiliated investment managers), directors, trustees or officers. During the period ended October 31, 2016, the purchase and sale transactions aggregated $10,210,000 and $146,540,000, respectively.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains, if any. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
At April 30, 2016, capital loss carryforwards were as follows:
Capital loss carryforwards subject to expiration: | ||
2017 | $ | 15,858,622 |
2018 | 3,803,336 | |
2019 | 17,435,155 | |
Capital loss carryforwards not subject to expiration: | ||
Short term | 95,398,032 | |
Long term | 54,573,530 | |
Total capital loss carryforwards | $ | 187,068,675 |
At October 31, 2016, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Cost of investments | $ | 10,386,013,931 | |
Unrealized appreciation | $ | 954,373,645 | |
Unrealized depreciation | (145,328,885 | ) | |
Net unrealized appreciation (depreciation) | $ | 809,044,760 |
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of defaulted securities, bond discounts and premiums, wash sales and bond workout expenditures.
5. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended October 31, 2016, aggregated $922,575,775 and $426,025,633, respectively.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
6. Defaulted Securities
The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At October 31, 2016, the aggregate value of these securities was $15,683,444, representing 0.1% of the Fund’s net assets. The Fund discontinues accruing income on securities for which income has been deemed uncollectible and provides an estimate for losses on interest receivable. The securities have been identified in the accompanying Statement of Investments.
7. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 10, 2017. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests.
Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended October 31, 2016, the Fund did not use the Global Credit Facility.
8. Fair Value Measurements
The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:
- Level 1 – quoted prices in active markets for identical financial instruments
- Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
- Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.
For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
At October 31, 2016, all of the Fund’s investments in financial instruments carried at fair value using Level 2 inputs.
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Semiannual Report 47
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Subsequent Events
The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure, except for the following:
On December 2, 2016, the Fund, pursuant to a plan of reorganization approved on November 7, 2016 by shareholders of Franklin Insured Tax-Free Income Fund (Target), a series of Franklin Tax-Fee Trust, acquired 100% of the Target’s net assets, primarily made up of investment securities, which included $99,145,146 of unrealized appreciation (depreciation), through a tax-free exchange of 153,822,312 shares of the Fund (valued at $1,832,081,312). Immediately after the completion of the reorganization, the combined net assets of the Fund were $12,517,460,660.
The primary purpose for the reorganization was to combine the Target with a fund that has identical investment goals, and similar principal investment strategies and principal risks, a larger asset size that is open to investors, similar annual fund operating expenses (on a pro forma combined basis), generally comparable credit quality, similar average annual total return, and more favorable sales prospects. The cost of the reorganization was $305,000, of which the Fund and the Target paid 25% and Advisers paid 50%.
Assuming the reorganization had been completed on May 1, 2016, the Fund’s pro forma results of operations would have been as follows:
Net Increase | |||||||
Net Realized and | (Decrease) in Net | ||||||
Net Investment | Unrealized Gain | Assets from | |||||
Period | Income | (Loss) | Operations | ||||
For the period May 1, 2016 through October 31, 2016 | $ | 241,754,085 | ($ | 117,679,263 | ) | $ | 124,074,822 |
Subsequent to the reorganization, the Fund has been managed as a single entity. Accordingly, it is impracticable to identify the results of operations attributable to the Target’s assets after the completion of the reorganization.
Abbreviations
Selected Portfolio
ACA | American Capital Access Holdings Inc. | IDC | Industrial Development Corp. |
AGMC | Assured Guaranty Municipal Corp. | ISD | Independent School District |
AMBAC | American Municipal Bond Assurance Corp. | MFHR | Multi-Family Housing Revenue |
BAM | Build America Mutual Assurance Co. | MFR | Multi-Family Revenue |
BHAC | Berkshire Hathaway Assurance Corp. | MTA | Metropolitan Transit Authority |
CDA | Community Development Authority/Agency | NATL | National Public Financial Guarantee Corp. |
COP | Certificate of Participation | PBA | Public Building Authority |
EDA | Economic Development Authority | PCC | Pollution Control Corp. |
EDC | Economic Development Corp. | PCR | Pollution Control Revenue |
ETM | Escrow to Maturity | PFAR | Public Financing Authority Revenue |
FGIC | Financial Guaranty Insurance Co. | PSF | Permanent School Fund |
FHA | Federal Housing Authority/Agency | RDA | Redevelopment Agency/Authority |
FICO | Financing Corp. | RDAR | Redevelopment Agency Revenue |
GNMA | Government National Mortgage Association | UHSD | Unified/Union High School District |
GO | General Obligation | USD | Unified/Union School District |
HFAR | Housing Finance Authority Revenue | XLCA | XL Capital Assurance |
IDA | Industrial Development Authority/Agency |
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
Shareholder Information
Proxy Voting Policies and Procedures
The Fund’s investment manager has established Proxy Voting
Policies and Procedures (Policies) that the Fund uses to
determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund’s complete Policies online at
franklintempleton.com. Alternatively, shareholders may request
copies of the Policies free of charge by calling the Proxy Group
collect at (954) 527-7678 or by sending a written request
to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street,
Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of
the Fund’s proxy voting records are also made available online
at franklintempleton.com and posted on the U.S. Securities and
Exchange Commission’s website at sec.gov and reflect the
most recent 12-month period ended June 30.
Quarterly Statement of Investments
The Fund files a complete statement of investments with the
U.S. Securities and Exchange Commission for the first and
third quarters for each fiscal year on Form N-Q. Shareholders
may view the filed Form N-Q by visiting the Commission’s
website at sec.gov. The filed form may also be viewed and
copied at the Commission’s Public Reference Room in
Washington, DC. Information regarding the operations of the
Public Reference Room may be obtained by calling (800)
SEC-0330.
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Item 2. Code of Ethics.
(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.
(c) N/A
(d) N/A
(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.
Item 3. Audit Committee Financial Expert.
(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.
(2) The audit committee financial expert is John B. Wilson and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services. N/A
Item 5. Audit Committee of Listed Registrants. N/A
Item 6. Schedule of Investments. N/A
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A
Item 8. Portfolio Managers of Closed-End Management Investment Companies. N/A
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.
Item 11. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.
Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. Exhibits.
(a) (1) Code of Ethics
(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FRANKLIN FEDERAL TAX-FREE INCOME FUND
By /s/ Laura F. Fergerson
Laura F. Fergerson
Chief Executive Officer –
Finance and Administration
Date December 27, 2016
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/ Laura F. Fergerson
Laura F. Fergerson
Chief Executive Officer –
Finance and Administration
Date December 27, 2016
By /s/ Gaston Gardey
Gaston Gardey
Chief Financial Officer and
Chief Accounting Officer
Date December 27, 2016