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: 10/31/17
| Item 1. | Reports to Stockholders. |
Franklin Templeton Investments
Gain From Our Perspective®
At Franklin Templeton Investments, we’re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we’re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world’s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe.
Dear Shareholder:
The six months ended October 31, 2017, benefited from mostly upbeat economic data as the US job market continued to improve and the unemployment rate declined. Accordingly, the US Federal Reserve increased its target range for the federal funds rate a quarter point to 1.00%–1.25% at its June meeting. The Fed held steady during the remainder of the period with inflation under control and below its 2.0% target.
During the period, the US bond market in general, and Treasuries and municipal bonds in particular, performed well as demand for fixed income increased. Factors contributing to this positive investment environment for these asset classes included consistently low inflation, unstable wage growth, geopolitical concerns and federal government fiscal reform uncertainty.
In addition, Franklin Federal Tax-Free Income Fund’s semiannual report includes more detail about municipal bond market conditions and discussions from the portfolio managers. On our website, franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds can provide tax-free income and diversification from equities. Despite periods of volatility, municipal bonds historically have had a solid long-term record of performance, driven mostly by their income component. Please remember all securities markets fluctuate, as do mutual fund share prices.
As always, we recommend investors consult their financial advisors to help them make the best decisions for the long term. In a constantly changing market environment, we remain committed to our disciplined strategy as we manage the Fund, keeping in mind the trust you have placed in us. We appreciate your confidence in us and encourage you to contact us when you have questions about your Franklin Templeton tax-free investment.
Sincerely,
Rupert H. Johnson, Jr.
Chairman
Franklin Federal Tax-Free Income Fund
Sheila Amoroso
Rafael R. Costas, Jr.
Senior Vice Presidents and Co-Directors
Franklin Municipal Bond Department
This letter reflects our analysis and opinions as of October 31, 2017, unless otherwise indicated. The information is not a complete analysis of every aspect of any market, state, industry, security or fund. Statements of fact are from sources considered reliable.
Not FDIC Insured | May Lose Value | No Bank Guarantee
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Visit franklintempleton.com for fund updates, to access your account, or to find helpful financial planning tools.
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Franklin Federal Tax-Free Income Fund
This semiannual report for Franklin Federal Tax-Free Income Fund covers the period ended October 31, 2017.
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*
10/31/17
| Ratings | % of Total Investments | |
| AAA | 11.04% | |
| AA | 45.47% | |
| A | 20.15% | |
| BBB | 4.48% | |
| Below Investment Grade | 1.36% | |
| Refunded | 16.68% | |
| Not Rated | 0.82% | |
*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 US 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 $12.02 on April 30, 2017, to $11.98 on October 31, 2017. The Fund’s Class A shares paid dividends
totaling 22.45 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 3.50% based on an annualization of October’s 3.65 cent per share dividend and the maximum offering price of $12.51 on October 31, 2017. An investor in the 2017 maximum federal personal income tax bracket of 39.60% (plus 3.8% Medicare tax) would need to earn a distribution rate of 6.18% 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 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 outperformed the US Treasury market but underperformed the US stock market during the six-month period ended October 31, 2017. Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +2.55% total return for the period, while US Treasuries, as measured by the Bloomberg Barclays US Treasury Index, posted a +0.75% total return.3 US equities, as represented by the Standard & Poor’s® 500 Index, delivered a +9.10% total return for the reporting period.3
Municipal issuance in 2017 was $325 billion through October.4 This represents an 18% decline from the first 10 months of 2016, during which time $397 billion in primary market supply
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 all estimated tax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. 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.
4. Source: The Bond Buyer, Thomson Reuters.
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 13.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
was sold.4 Barclays noted that after accounting for redemptions (bonds that matured or were called out of the market), net supply stands at $22 billion thus far in 2017.5 According to Lipper’s US fund flows data, municipal bond funds continued to report inflows. Net inflows totaled approximately $2 billion in October, bringing year-to-date flows to $15.2 billion.6 The data indicated that inflows can be primarily attributed to money going into long-term and national municipal bond funds. Strong demand, combined with diminished bond supply, continued to be a factor in the municipal asset class.
Dividend Distributions*
5/1/17–10/31/17
| Dividend per Share (cents) | ||||||||||||||||
| Month | Class A | Class C | Class R6** | Advisor Class | ||||||||||||
| May | 3.90 | 3.34 | — | 4.00 | ||||||||||||
| June | 3.80 | 3.25 | — | 3.90 | ||||||||||||
| July | 3.75 | 3.20 | — | 3.85 | ||||||||||||
| August | 3.70 | 3.15 | — | 3.80 | ||||||||||||
| September | 3.65 | 3.09 | 3.79 | 3.75 | ||||||||||||
| October | 3.65 | 3.09 | 3.79 | 3.75 | ||||||||||||
| Total | 22.45 | 19.12 | 7.58 | 23.05 | ||||||||||||
*The distribution amount is the sum of all estimated tax-basis net investment income distributions for the period shown. A portion or all of the distribution may be reclassified as return of capital or short-term or long-term capital gains once final tax designations are known. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
**Effective 8/1/17, the Fund began offering Class R6 shares. See the prospectus for details.
In general, the US bond market performed well in both municipals and Treasuries as a variety of factors continued to cause demand for fixed income to soar. Investor skepticism about the strength of the US economy, consistent low readings on the inflation front, a lack of persistent wage growth, concerns over North Korea’s nuclear ambitions and questions about the Trump administration’s ability to pass fiscal legislation have all led to a robust investment environment for municipals and US-based fixed income in general.
The Federal Reserve (Fed) raised its target range for the federal funds rate 0.25% at its June meeting. The target range stood at 1.00%–1.25% at period-end. The Fed also increased the discount rate 0.25% to 1.75% in June. The Fed decided to raise interest rates at its June meeting due to the strength of the US jobs market and continued economic growth.
Portfolio Composition
10/31/17
| % of Total Investments* | ||||
| Refunded** | 26.7% | |||
| Utilities | 17.4% | |||
| Transportation | 13.7% | |||
| Hospital & Health Care | 11.0% | |||
| General Obligation | 10.6% | |||
| Subject to Government Appropriations | 7.2% | |||
| Higher Education | 4.6% | |||
| Tax-Supported | 4.3% | |||
| Other Revenue | 2.9% | |||
| Corporate-Backed | 1.1% | |||
| Housing | 0.5% | |||
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
The central bank made no change to its short-term interest rate policy at its September meeting. In its Federal Open Market Committee statement released on September 20, 2017, the Fed indicated that the labor market has continued to strengthen and that economic activity has been rising moderately. The Committee also stated that on a 12-month basis, overall inflation excluding food and energy prices has declined. The Committee mentioned that it will initiate its balance sheet normalization program in October 2017.
Several developments affected Puerto Rico bonds over the reporting period. Please visit franklintempleton.com/ investor/products/fund-resources/puerto-rico for the latest Puerto Rico updates from Franklin Templeton.
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.
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
5. Source: Barclays Municipal Credit Research.
6. Source: Lipper US Fund Flows.
See www.franklintempletondatasources.com for additional data provider information.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
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 very small portion of its assets in Puerto Rico bonds, which have traded materially lower following the recent hurricanes. Puerto Rico and its municipal issuers continue to experience significant financial difficulties and we continue to monitor developments affecting them.
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, 2017, 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, 2017
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 10/31/17
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.
| Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||||
A | ||||||
| 6-Month | +1.54% | -2.74% | ||||
| 1-Year | +0.53% | -3.75% | ||||
| 5-Year | +13.56% | +1.68% | ||||
| 10-Year | +51.16% | +3.77% | ||||
Advisor | ||||||
| 6-Month | +1.59% | +1.59% | ||||
| 1-Year | +0.63% | +0.63% | ||||
| 5-Year | +14.12% | +2.68% | ||||
| 10-Year | +52.73% | +4.33% | ||||
| Share Class | Distribution Rate3 | Taxable Equivalent Distribution Rate4 | 30-Day Standardized Yield5 | Taxable Equivalent 30-Day Standardized Yield4 | ||||||||||
| A | 3.50% | 6.18% | 1.52% | 2.69% | ||||||||||
| Advisor | 3.75% | 6.63% | 1.71% | 3.02% | ||||||||||
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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FRANKLIN FEDERAL TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Net Asset Value
Share Class (Symbol)
| 10/31/17 | 8/1/17 | 4/30/17 | Change | ||||||||||
A (FKTIX) | $11.98 | N/A | $12.02 | -$0.04 | ||||||||||
C (FRFTX) | $11.97 | N/A | $12.01 | -$0.04 | ||||||||||
R6 (FFTQX) | $11.99 | $12.03 | N/A | -$0.04 | ||||||||||
Advisor (FAFTX)
| $11.99 | N/A | $12.03 | -$0.04 | ||||||||||
Distributions (5/1/17–10/31/17)
Share Class
| Net Investment Income | |
| A | $0.2245 | |
C | $0.1912 | |
R6 (8/1/17–10/31/17) | $0.0758 | |
Advisor | $0.2305 | |
Total Annual Operating Expenses6
| ||
Share Class
| ||
A | 0.62% | |
Advisor | 0.52% |
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. The Fund holds a very 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. 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 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, if any, has not been annualized.
3. 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 10/31/17.
4. Taxable equivalent distribution rate and yield assume the 2017 maximum federal income tax rate of 39.60% plus 3.8% Medicare tax.
5. 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.
6. 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.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
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 (actual return after expenses) | Hypothetical (5% annual return before expenses) | |||||||||||||||||
| Share Class | Beginning Account Value1 | Ending Account Value 10/31/17 | Expenses Paid During 5/1/17–10/31/172,3 | Ending Account | Expenses Paid During Period 5/1/17–10/31/173 | Net Annualized Expense Ratio | ||||||||||||
A | $1,000 | $1,015.40 | $3.10 | $1,022.13 | $3.11 | 0.61% | ||||||||||||
C | $1,000 | $1,012.60 | $5.88 | $1,019.36 | $5.90 | 1.16% | ||||||||||||
R6 | $1,000 | $1,003.00 | $1.19 | $1,022.84 | $2.40 | 0.47% | ||||||||||||
Advisor | $1,000 | $1,015.90 | $2.59 | $1,022.63 | $2.60 | 0.51% | ||||||||||||
1. For Classes A, C and Advisor, 5/1/17 for Actual and Hypothetical. For Class R6, 8/1/17 for Actual and 5/1/17 for Hypothetical.
2. For Classes A, C and Advisor, 5/1/17–10/31/17. For Class R6, 8/1/17–10/31/17.
3. 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. The multiplier is 92/365 for Actual Class R6 expenses to reflect the number of days since inception.
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
| Six Months Ended October 31, 2017 | Year Ended April 30, | |||||||||||||||||||||||
| (unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Class A | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
| (for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $12.02 | $12.48 | $12.45 | $12.22 | $12.79 | $12.48 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
| Net investment incomeb | 0.22 | 0.47 | 0.48 | 0.47 | 0.49 | 0.48 | ||||||||||||||||||
| Net realized and unrealized gains (losses) | (0.04 | ) | (0.47 | ) | 0.02 | 0.23 | (0.57 | ) | 0.31 | |||||||||||||||
Total from investment operations | 0.18 | — | 0.50 | 0.70 | (0.08 | ) | 0.79 | |||||||||||||||||
Less distributions from net investment income | (0.22 | ) | (0.46 | ) | (0.47 | ) | (0.47 | ) | (0.49 | ) | (0.48 | ) | ||||||||||||
Net asset value, end of period | $11.98 | $12.02 | $12.48 | $12.45 | $12.22 | $12.79 | ||||||||||||||||||
Total returnc | 1.54% | 0.01% | 4.16% | 5.82% | (0.49)% | 6.44% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses | 0.61% | 0.62% | 0.61% | 0.62% | 0.62% | 0.61% | ||||||||||||||||||
Net investment income | 3.62% | 3.82% | 3.87% | 3.80% | 4.11% | 3.76% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $9,186,728 | $9,342,715 | $8,384,079 | $8,505,853 | $8,243,367 | $9,414,734 | ||||||||||||||||||
Portfolio turnover rate | 7.31% | 13.86% | 6.07% | 5.49% | 8.51% | 6.31% | ||||||||||||||||||
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, except for non-recurring expenses, if any.
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The accompanying notes are an integral part of these financial statements. | |
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FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| Six Months Ended October 31, 2017 | Year Ended April 30, | |||||||||||||||||||||||
| (unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
Class C | ||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||
| (for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $12.01 | $12.47 | $12.44 | $12.21 | $12.78 | $12.47 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb | 0.19 | 0.40 | 0.41 | 0.40 | 0.43 | 0.41 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.04 | ) | (0.47 | ) | 0.03 | 0.23 | (0.58 | ) | 0.31 | |||||||||||||||
Total from investment operations | 0.15 | (0.07 | ) | 0.44 | 0.63 | (0.15 | ) | 0.72 | ||||||||||||||||
Less distributions from net investment income | (0.19 | ) | (0.39 | ) | (0.41 | ) | (0.40 | ) | (0.42 | ) | (0.41) | |||||||||||||
Net asset value, end of period | $11.97 | $12.01 | $12.47 | $12.44 | $12.21 | $12.78 | ||||||||||||||||||
Total returnc | 1.26% | (0.55)% | 3.59% | 5.24% | (1.05)% | 5.87% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses | 1.16% | 1.17% | 1.16% | 1.17% | 1.17% | 1.16% | ||||||||||||||||||
Net investment income | 3.07% | 3.27% | 3.32% | 3.25% | 3.56% | 3.21% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $1,335,611 | $1,411,391 | $1,215,034 | $1,166,771 | $1,120,471 | $1,525,083 | ||||||||||||||||||
Portfolio turnover rate | 7.31% | 13.86% | 6.07% | 5.49% | 8.51% | 6.31% | ||||||||||||||||||
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, except for non-recurring expenses, if any.
10 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| Period Ended October 31, 2017 (unaudited)a | ||
Class R6 | ||
Per share operating performance | ||
(for a share outstanding throughout the period) | ||
Net asset value, beginning of period | $12.03 | |
Income from investment operationsb: | ||
Net investment incomec | 0.12 | |
Net realized and unrealized gains (losses) | (0.08) | |
Total from investment operations | 0.04 | |
Less distributions from net investment income | (0.08) | |
Net asset value, end of period | $11.99 | |
Total returnd | 0.30% | |
Ratios to average net assetse | ||
Expenses before waiver and payments by affiliates | 0.59% | |
Expenses net of waiver and payments by affiliates | 0.47% | |
Net investment income | 3.76% | |
Supplemental data | ||
Net assets, end of period (000’s) | $144 | |
Portfolio turnover rate | 7.31% | |
aFor the period August 1, 2017 (effective date) to October 31, 2017.
bThe 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.
cBased on average daily shares outstanding.
dTotal return is not annualized for periods less than one year.
eRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | |
Semiannual Report | 11 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| Six Months Ended October 31, 2017 | Year Ended April 30, | |||||||||||||||||||||||
| (unaudited) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||
| Advisor Class | ||||||||||||||||||||||||
| Per share operating performance | ||||||||||||||||||||||||
| (for a share outstanding throughout the period) | ||||||||||||||||||||||||
| Net asset value, beginning of period | $12.03 | $12.49 | $12.46 | $12.23 | $12.80 | $12.49 | ||||||||||||||||||
| Income from investment operationsa: | ||||||||||||||||||||||||
| Net investment incomeb | 0.23 | 0.48 | 0.49 | 0.49 | 0.50 | 0.49 | ||||||||||||||||||
| Net realized and unrealized gains (losses) | (0.04 | ) | (0.47) | 0.03 | 0.22 | (0.57) | 0.31 | |||||||||||||||||
| Total from investment operations | 0.19 | 0.01 | 0.52 | 0.71 | (0.07) | 0.80 | ||||||||||||||||||
| Less distributions from net investment income | (0.23 | ) | (0.47) | (0.49) | (0.48) | (0.50) | (0.49) | |||||||||||||||||
| Net asset value, end of period | $11.99 | $12.03 | $12.49 | $12.46 | $12.23 | $12.80 | ||||||||||||||||||
| Total returnc | 1.59% | 0.11% | 4.26% | 5.92% | (0.39)% | 6.54% | ||||||||||||||||||
| Ratios to average net assetsd | ||||||||||||||||||||||||
| Expenses | 0.51% | 0.52% | 0.51% | 0.52% | 0.52% | 0.51% | ||||||||||||||||||
| Net investment income | 3.72% | 3.92% | 3.97% | 3.90% | 4.21% | 3.86% | ||||||||||||||||||
| Supplemental data | ||||||||||||||||||||||||
| Net assets, end of period (000’s) | $1,641,142 | $1,633,602 | $1,443,272 | $1,689,267 | $1,314,233 | $1,755,892 | ||||||||||||||||||
| Portfolio turnover rate | 7.31% | 13.86% | 6.07% | 5.49% | 8.51% | 6.31% | ||||||||||||||||||
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, except for non-recurring expenses, if any.
12 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Statement of Investments, October 31, 2017 (unaudited)
Principal Amount | Value | |||||
Municipal Bonds 99.2% | ||||||
Alabama 1.7% | ||||||
Alabama State Incentives Financing Authority Special Obligation Revenue, Series A, 5.00%, 9/01/42 | $ 14,300,000 | $ 15,834,390 | ||||
Alabama State Port Authority Docks Facilities Revenue, Pre-Refunded, 6.00%, 10/01/40 | 6,000,000 | 6,807,420 | ||||
Alabama State Public Health Care Authority Lease Revenue, Department of Public Health Facilities, Refunding, 5.00%, 9/01/44 | 17,085,000 | 18,833,137 | ||||
Birmingham Airport Authority Airport Revenue, AGMC Insured, 5.50%, 7/01/40 | 20,000,000 | 21,877,400 | ||||
Birmingham Water Works Board Water Revenue, | ||||||
Series A, Assured Guaranty, Pre-Refunded, 5.125%, 1/01/34 | 5,600,000 | 5,860,512 | ||||
Series A, Assured Guaranty, Pre-Refunded, 5.25%, 1/01/39 | 5,000,000 | 5,239,850 | ||||
Series B, 5.00%, 1/01/38 | 3,500,000 | 3,914,120 | ||||
Series B, 5.00%, 1/01/43 | 8,000,000 | 8,901,440 | ||||
Subordinate, Refunding, Series B, 5.00%, 1/01/43 | 10,000,000 | 11,488,000 | ||||
Chatom IDB Gulf Opportunity Zone Revenue, | ||||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/30 | 5,250,000 | 5,695,253 | ||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/37 | 5,000,000 | 5,415,650 | ||||
Chilton County Health Care Authority Limited Obligation Sales Tax Revenue, Chilton County Hospital Project, Series A, 5.00%, 11/01/40 | 8,425,000 | 8,961,841 | ||||
a East Alabama Health Care Authority Health Care Facilities Revenue, Mandatory Put, Series B, Pre-Refunded, 5.50%, 9/01/18 | 18,500,000 | 19,169,330 | ||||
Leeds Public Educational Building Authority Educational Facilities Revenue, Assured Guaranty, Pre-Refunded, 5.125%, 4/01/38 | 10,865,000 | 11,049,053 | ||||
Limestone County Water and Sewer Authority Water Revenue, BAM Insured, 5.00%, 12/01/45 | 10,500,000 | 11,908,050 | ||||
Mobile Water and Sewer Commissioners Water and Sewer Revenue, Refunding, 5.00%, 1/01/36 | 11,300,000 | 12,607,184 | ||||
Phenix City Water and Sewer Revenue, | ||||||
wts., Refunding, Series A, BAM Insured, 5.00%, 8/15/27 | 2,900,000 | 3,382,763 | ||||
wts., Series A, AGMC Insured, 5.00%, 8/15/40 | 8,090,000 | 8,760,337 | ||||
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 | 15,000,000 | 15,564,900 | ||||
201,270,630 | ||||||
Alaska 0.8% | ||||||
Alaska Energy Authority Power Revenue, Bradley Lake Project, Refunding, NATL Insured, 6.25%, 7/01/21 | 5,000 | 5,022 | ||||
Alaska Municipal Bond Bank GO, | ||||||
Refunding, Series Three, 5.25%, 10/01/36 | 16,045,000 | 18,648,301 | ||||
Refunding, Series Three, 5.00%, 10/01/39 | 12,950,000 | 14,540,907 | ||||
Alaska State Industrial Development and Export Authority Revenue, Providence Health and Services, Series A, 5.00%, 10/01/40 | 10,000,000 | 10,801,200 | ||||
Alaska State International Airports Revenue, Series C, 5.00%, 10/01/33 | 12,565,000 | 13,456,864 | ||||
Anchorage Electric Revenue, senior lien, Refunding, Series A, 5.00%, 12/01/41 | 8,875,000 | 10,275,298 | ||||
Matanuska-Susitna Borough Lease Revenue, Goose Creek Correctional Center Project, Assured Guaranty, Pre-Refunded, 6.00%, 9/01/32 | 30,000,000 | 32,633,400 | ||||
100,360,992 | ||||||
Arizona 2.7% | ||||||
Arizona Board of Regents Arizona State University System Revenue, Series C, 5.00%, 7/01/42 | 9,000,000 | 10,423,530 | ||||
Arizona Board of Regents University of Arizona Revenue, Stimulus Plan for Economic and Educational Development, 5.00%, 8/01/44 | 10,000,000 | 11,476,100 | ||||
Arizona State COP, | ||||||
Department of Administration, Series A, AGMC Insured, 5.25%, 10/01/26 | 8,500,000 | 9,139,285 | ||||
Department of Administration, Series A, AGMC Insured, 5.00%, 10/01/27 | 14,440,000 | 15,443,724 | ||||
Department of Administration, Series A, AGMC Insured, 5.25%, 10/01/28 | 10,000,000 | 10,750,100 | ||||
Department of Administration, Series A, AGMC Insured, 5.00%, 10/01/29 | 5,000,000 | 5,345,550 | ||||
franklintempleton.com |
Semiannual Report | 13 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Arizona (continued) | ||||||
Arizona State COP, (continued) | ||||||
Department of Administration, Series B, AGMC Insured, 5.00%, 10/01/27 | $ 8,000,000 | $ 8,657,280 | ||||
Arizona State Lottery Revenue, Series A, AGMC Insured, 5.00%, 7/01/27 | 15,000,000 | 16,180,200 | ||||
Glendale Municipal Property Corp. Excise Tax Revenue, Subordinate, Refunding, Series C, 5.00%, 7/01/38 | 15,500,000 | 16,987,690 | ||||
Lake Havasu Wastewater System Revenue, senior lien, Refunding, Series B, AGMC Insured, 5.00%, 7/01/40 | 15,000,000 | 16,963,050 | ||||
Maricopa County IDA Senior Living Facilities Revenue, Christian Care Retirement Apartments Inc. Project, Refunding, Series A, 5.00%, 1/01/36 | 5,000,000 | 5,620,650 | ||||
Maricopa County IDAR, Banner Health, Series A, 4.00%, 1/01/41 | 10,000,000 | 10,380,800 | ||||
Maricopa County PCC, PCR, El Paso Electric Co. Palo Verde Project, Series A, 7.25%, 2/01/40 | 10,000,000 | 10,706,200 | ||||
Mesa Utility Systems Revenue, 4.00%, 7/01/36 | 19,000,000 | 20,015,360 | ||||
Phoenix Civic Improvement Corp. Airport Revenue, | ||||||
junior lien, Series A, 5.00%, 7/01/40 | 24,000,000 | 26,119,200 | ||||
senior lien, Series A, 5.00%, 7/01/33 | 28,000,000 | 28,716,240 | ||||
Phoenix Civic Improvement Corp. Distribution Revenue, | ||||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/32 | 6,000,000 | 7,645,380 | ||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/34 | 5,000,000 | 6,423,500 | ||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/35 | 9,860,000 | 12,714,766 | ||||
Phoenix Civic Improvement Corp. Water System Revenue, | ||||||
junior lien, Series A, Pre-Refunded, 5.00%, 7/01/32 | 21,095,000 | 22,454,573 | ||||
junior lien, Series A, Pre-Refunded, 5.00%, 7/01/34 | 10,000,000 | 10,644,500 | ||||
Pima County IDA Lease Revenue, Clark County Detention Facility Project, 5.00%, 9/01/39 | 20,000,000 | 20,233,400 | ||||
Pima County Sewer System Revenue, Obligations, AGMC Insured, Pre-Refunded, 5.00%, 7/01/25 | 7,000,000 | 7,693,280 | ||||
Pinal County Electrical District No. 3 Electric System Revenue, Pre-Refunded, 5.25%, 7/01/36 | 10,000,000 | 11,404,800 | ||||
Salt River Project Agricultural Improvement and Power District Electric System Revenue, Salt River Project, Series A, Pre-Refunded, 5.00%, 1/01/38 | 10,000,000 | 10,066,300 | ||||
332,205,458 | ||||||
Arkansas 0.3% | ||||||
University of Arkansas Revenue, | ||||||
Athletic Facilities, Fayetteville Campus, Series A, 5.00%, 9/15/36 | 8,330,000 | 9,738,853 | ||||
Various Facilities, Fayetteville Campus, 5.00%, 11/01/47 | 6,500,000 | 7,597,330 | ||||
Various Facilities, Fayetteville Campus, Series B, 5.00%, 11/01/37 | 3,100,000 | 3,433,281 | ||||
Various Facilities, Fayetteville Campus, Series B, 5.00%, 11/01/42 | 9,360,000 | 10,311,818 | ||||
31,081,282 | ||||||
California 11.9% | ||||||
Bay Area Toll Authority Toll Bridge Revenue, | ||||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/28 | 24,000,000 | 25,351,200 | ||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/34 | 20,250,000 | 20,589,390 | ||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/34 | 9,530,000 | 10,066,539 | ||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.00%, 4/01/39 | 14,000,000 | 14,234,640 | ||||
San Francisco Bay Area, Series F-1, Pre-Refunded, 5.50%, 4/01/43 | 30,000,000 | 30,564,600 | ||||
California Health Facilities Financing Authority Revenue, | ||||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24 | 5,000,000 | 5,553,000 | ||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/38 | 8,000,000 | 8,850,080 | ||||
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 | 31,436,930 | ||||
California State Economic Recovery GO, Series A, Pre-Refunded, 5.25%, 7/01/21 | 28,580,000 | 30,578,885 | ||||
California State Educational Facilities Authority Revenue, Carnegie Institution of Washington, Refunding, Series A, 5.00%, 7/01/40 | 24,525,000 | 26,677,069 | ||||
14 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
California (continued) | ||||||
California State GO, | ||||||
Refunding, NATL Insured, 5.00%, 10/01/32 | $ 20,000 | $ 20,069 | ||||
Various Purpose, 6.00%, 5/01/18 | 175,000 | 179,365 | ||||
Various Purpose, 5.90%, 4/01/23 | 1,200,000 | 1,225,068 | ||||
Various Purpose, 5.00%, 10/01/29 | 15,000,000 | 16,087,050 | ||||
Various Purpose, 6.00%, 4/01/38 | 100,000,000 | 106,869,000 | ||||
Various Purpose, 6.00%, 11/01/39 | 25,000,000 | 27,403,000 | ||||
Various Purpose, 5.25%, 11/01/40 | 50,000,000 | 55,881,000 | ||||
Various Purpose, AGMC Insured, 6.00%, 4/01/38 | 30,000,000 | 32,060,700 | ||||
Various Purpose, FGIC Insured, 6.00%, 5/01/20 | 850,000 | 871,845 | ||||
Various Purpose, Pre-Refunded, 5.25%, 3/01/38 | 20,000,000 | 20,287,994 | ||||
Various Purpose, Refunding, 5.25%, 3/01/30 | 30,000,000 | 32,769,000 | ||||
Various Purpose, Refunding, 6.00%, 3/01/33 | 12,000,000 | 13,363,800 | ||||
Various Purpose, Refunding, 5.50%, 3/01/40 | 25,000,000 | 27,426,500 | ||||
California State Public Works Board Lease Revenue, | ||||||
Department of Education, Riverside Campus Project, Series B, 6.125%, 4/01/28 | 2,740,000 | 2,931,800 | ||||
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, Pre-Refunded, 6.00%, 4/01/27 | 3,980,000 | 4,259,834 | ||||
Department of General Services, Office Buildings 8 and 9 Renovation, Series A, Pre-Refunded, 6.125%, 4/01/29 | 5,000,000 | 5,360,300 | ||||
Various Capital Projects, Series A, 5.00%, 4/01/30 | 18,000,000 | 20,449,620 | ||||
Various Capital Projects, Series A, 5.00%, 4/01/33 | 12,475,000 | 14,104,734 | ||||
Various Capital Projects, Series A, AGMC Insured, 5.00%, 4/01/28 | 13,030,000 | 14,856,806 | ||||
Various Capital Projects, Series A, AGMC Insured, 5.00%, 4/01/29 | 21,000,000 | 23,867,550 | ||||
Various Capital Projects, Series G, Subseries G-1, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/24 | 5,000,000 | 5,395,850 | ||||
Various Capital Projects, Series I, Pre-Refunded, 6.125%, 11/01/29 | 29,300,000 | 32,249,631 | ||||
California State University Revenue, Systemwide, Series A, AGMC Insured, Pre-Refunded, 5.00%, 11/01/39 | 10,000,000 | 10,203,500 | ||||
California Statewide CDA, PCR, Southern California Edison Co., Refunding, Series A, 4.50%, 9/01/29 | 14,830,000 | 16,036,717 | ||||
California Statewide CDA Revenue, | ||||||
Adventist Health System/West, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 3/01/37 | 9,800,000 | 10,018,246 | ||||
St. Joseph Health System, Series B, FGIC Insured, Pre-Refunded, 5.75%, 7/01/47 | 5,000,000 | 5,158,050 | ||||
St. Joseph Health System, Series E, AGMC Insured, Pre-Refunded, 5.25%, 7/01/47 | 10,000,000 | 10,283,100 | ||||
Colton Joint USD, GO, San Bernardino and Riverside Counties, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.375%, 8/01/34 | 25,000,000 | 26,866,750 | ||||
Corona-Norco USD, | ||||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, 6.20%, 8/01/29 | 3,250,000 | 4,364,457 | ||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, 6.80%, 8/01/39 | 8,500,000 | 11,538,410 | ||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, zero cpn., 8/01/39 | 7,500,000 | 3,236,850 | ||||
East Side UHSD Santa Clara County GO, Election of 2008, Series B, Assured Guaranty, Pre- Refunded, 5.25%, 8/01/35 | 23,800,000 | 25,525,738 | ||||
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 | 14,048,979 | ||||
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | 20,000,000 | 17,542,000 | ||||
Refunding, Series A, 5.75%, 1/15/46 | 25,000,000 | 29,109,500 | ||||
Refunding, Series A, 6.00%, 1/15/49 | 20,000,000 | 23,632,400 | ||||
franklintempleton.com |
Semiannual Report | 15 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
California (continued) | ||||||
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 | $ 10,272,600 | ||||
Jefferson UHSD San Mateo County GO, | ||||||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/35 | 10,500,000 | 3,178,455 | ||||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/40 | 10,000,000 | 1,999,100 | ||||
Capital Appreciation, Election of 2006, Series D, Pre-Refunded, zero cpn., 8/01/41 | 13,590,000 | 2,498,386 | ||||
Los Angeles Community College District GO, Election of 2008, Series C, Pre-Refunded, 5.25%, 8/01/39 | 30,000,000 | 33,333,600 | ||||
Los Angeles Department of Airports Revenue, | ||||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40 | 25,485,000 | 27,709,586 | ||||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40 | 50,000,000 | 54,364,500 | ||||
Los Angeles Department of Water and Power Revenue, Power System, Series B, 5.00%, 7/01/31 | 20,000,000 | 23,549,000 | ||||
Los Angeles USD, GO, Series KRY, 5.25%, 7/01/34 | 36,625,000 | 40,461,102 | ||||
Montebello USD, GO, Election of 2004, Series A-1, Assured Guaranty, Pre-Refunded, 5.25%, 8/01/34 | 5,000,000 | 5,362,550 | ||||
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 12,500,000 | 17,760,125 | ||||
New Haven USD, | ||||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/31 | 2,055,000 | 1,340,867 | ||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/32 | 7,830,000 | 4,874,332 | ||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/33 | 7,660,000 | 4,532,652 | ||||
Placentia-Yorba Linda USD, GO, Orange County, Election of 2008, Series A, Pre-Refunded, 5.25%, 8/01/32 | 24,490,000 | 25,268,047 | ||||
Pomona USD, GO, Los Angeles County, Election of 2008, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 8/01/29 | 5,585,000 | 5,965,841 | ||||
Rialto USD, GO, Capital Appreciation, Election of 2010, Series A, AGMC Insured, zero cpn., 8/01/36 | 20,000,000 | 9,624,200 | ||||
Richmond Joint Powers Financing Authority Lease Revenue, Civic Center Project, Refunding, Assured Guaranty, 5.75%, 8/01/29 | 13,315,000 | 14,284,598 | ||||
Sacramento County Airport System Revenue, Senior, Series B, AGMC Insured, 5.25%, 7/01/33 | 16,355,000 | 16,789,225 | ||||
San Diego Public Facilities Financing Authority Water Revenue, Series B, Pre-Refunded, 5.375%, 8/01/34 | 15,000,000 | 16,120,050 | ||||
San Francisco City and County COP, Multiple Capital Improvement Projects, Series A, 5.25%, 4/01/31 | 10,000,000 | 10,577,600 | ||||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | ||||||
Capital Appreciation, senior lien, ETM, zero cpn., 1/01/23 | 7,000,000 | 6,450,290 | ||||
senior lien, Refunding, Series A, 5.00%, 1/15/34 | 50,000,000 | 56,122,500 | ||||
San Jose RDA Tax Allocation, Merged Area Redevelopment Project, Refunding, Series D, Assured Guaranty, 5.00%, 8/01/22 | 10,000,000 | 10,033,300 | ||||
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 | 17,360,800 | ||||
GO, Capital Appreciation, Election of 2010, Series A, zero cpn. to 9/01/28, 6.45% thereafter, 9/01/33 | 6,065,000 | 5,027,400 | ||||
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 | 43,263,500 | ||||
Santa Ana USD, | ||||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/35 | 10,000,000 | 5,319,000 | ||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/36 | 18,865,000 | 9,577,195 | ||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/37 | 10,000,000 | 4,859,500 | ||||
Santa Clara County GO, Election of 2008, Series A, 5.00%, 8/01/34 | 25,000,000 | 26,655,250 | ||||
Upland USD, GO, San Bernardino County, Election of 2008, Series B, Pre-Refunded, zero cpn., 8/01/39 | 50,075,000 | 13,576,835 | ||||
16 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
California (continued) | ||||||
Washington Township Health Care District Revenue, Series A, 6.25%, 7/01/39 | $ | 3,000,000 | $ 3,167,970 | |||
West Contra Costa USD, | ||||||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/29 | 10,000,000 | 6,951,100 | ||||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/30 | 20,845,000 | 13,837,953 | ||||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/31 | 20,000,000 | 12,718,600 | ||||
GO, Election of 2005, Series C-1, Assured Guaranty, zero cpn., 8/01/32 | 10,730,000 | 6,526,415 | ||||
Whittier UHSD, GO, Los Angeles County, Capital Appreciation, Election of 2008, Refunding, Series A, zero cpn., 8/01/34 | 20,000,000 | 7,545,600 | ||||
1,448,247,170 | ||||||
Colorado 1.7% | ||||||
Colorado Health Facilities Authority Revenue, | ||||||
Catholic Health Initiatives, Series C-7, AGMC Insured, Pre-Refunded, 5.00%, 9/01/36 | 20,000,000 | 20,393,800 | ||||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/41 | 5,000,000 | 5,647,400 | ||||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/44 | 10,200,000 | 11,471,940 | ||||
The Evangelical Lutheran Good Samaritan Society Project, Refunding, Series A, 5.00%, 6/01/45 | 10,000,000 | 10,900,500 | ||||
Hospital, Adventist Health System Sunbelt Obligated Group, Refunding, Series A, 5.00%, 11/15/41 | 30,505,000 | 34,755,262 | ||||
Hospital, Health Facility Authority, Refunding, Series B, AGMC Insured, 5.25%, 3/01/36 | 20,000,000 | 20,880,600 | ||||
Valley View Hospital Assn. Project, Refunding, 5.50%, 5/15/28 | 4,920,000 | 5,017,170 | ||||
Valley View Hospital Assn. Project, Refunding, 5.75%, 5/15/36 | 7,000,000 | 7,136,080 | ||||
Colorado State Higher Education Capital Construction Lease Purchase Financing Program COP, Pre-Refunded, 5.50%, 11/01/27 | 10,000,000 | 10,439,299 | ||||
Denver City and County Airport System Revenue, | ||||||
Series C, NATL Insured, ETM, 6.125%, 11/15/25 | 3,590,000 | 4,392,473 | ||||
Series C, NATL Insured, Pre-Refunded, 6.125%, 11/15/25 | 4,410,000 | 4,428,522 | ||||
Subordinate, Series B, 5.25%, 11/15/33 | 16,405,000 | 18,937,768 | ||||
Park Creek Metropolitan District Revenue, Senior Limited Property Tax Supported, Improvement, Assured Guaranty, Pre-Refunded, 6.25%, 12/01/30 | 6,000,000 | 6,627,240 | ||||
Public Authority for Colorado Energy Natural Gas Purchase Revenue, 6.50%, 11/15/38 | 20,000,000 | 28,172,200 | ||||
Regional Transportation District Sales Tax Revenue, FasTracks Project, Series A, 5.00%, 11/01/32 | 10,000,000 | 11,543,400 | ||||
University of Colorado Enterprise Revenue, Series A, Pre-Refunded, 5.375%, 6/01/32 | 3,500,000 | 3,732,645 | ||||
204,476,299 | ||||||
Connecticut 0.0%† | ||||||
Connecticut State Health and Educational Facilities Authority Revenue, Child Care Facilities Program, Series G, Assured Guaranty, Pre-Refunded, 6.00%, 7/01/38 | 5,000,000 | 5,163,550 | ||||
District of Columbia 2.4% | ||||||
District of Columbia Ballpark Revenue, | ||||||
Series B-1, BHAC Insured, 5.00%, 2/01/24 | 12,120,000 | 12,192,720 | ||||
Series B-1, BHAC Insured, 5.00%, 2/01/25 | 7,000,000 | 7,042,000 | ||||
Series B-1, BHAC Insured, 5.00%, 2/01/26 | 9,950,000 | 10,009,700 | ||||
District of Columbia Hospital Revenue, | ||||||
Children’s Hospital Obligated Group Issue, Refunding, 5.00%, 7/15/40 | 6,830,000 | 7,711,821 | ||||
Children’s Hospital Obligated Group Issue, SubSeries 1, AGMC Insured, Pre-Refunded, 5.45%, 7/15/35 | 40,655,000 | 42,310,065 | ||||
District of Columbia Income Tax Secured Revenue, | ||||||
Refunding, Series A, 5.00%, 12/01/31 | 10,000,000 | 10,914,500 | ||||
Series A, 5.25%, 12/01/34 | 11,000,000 | 11,896,060 | ||||
franklintempleton.com |
Semiannual Report | 17 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
District of Columbia (continued) | ||||||
District of Columbia Revenue, | ||||||
Assn. of American Medical Colleges Issue, Series B, 5.25%, 10/01/41 | $ 15,000,000 | $ 16,347,150 | ||||
Deed Tax, Housing Production Trust Fund, New Communities Project, Series A, NATL Insured, 5.00%, 6/01/32 | 5,000,000 | 5,014,200 | ||||
Georgetown University Issue, Growth and Income Securities, AMBAC Insured, zero cpn. to 4/01/18, 5.00% thereafter, 4/01/32 | 15,370,000 | 16,294,813 | ||||
National Academy of Sciences Project, Series A, 5.00%, 4/01/35 | 10,905,000 | 11,733,562 | ||||
National Academy of Sciences Project, Series A, 5.00%, 4/01/40 | 16,960,000 | 18,215,210 | ||||
National Public Radio Inc. Issue, Pre-Refunded, 5.00%, 4/01/35 | 7,750,000 | 8,442,695 | ||||
District of Columbia Tobacco Settlement FICO Revenue, Asset-Backed, Refunding, 6.50%, 5/15/33 | 30,490,000 | 34,364,364 | ||||
District of Columbia University Revenue, Georgetown University Issue, Series D, Pre-Refunded, 5.50%, 4/01/36 | 5,000,000 | 5,201,300 | ||||
District of Columbia Water and Sewer Authority Public Utility Revenue, senior lien, Series A, Pre-Refunded, 6.00%, 10/01/35 | 8,000,000 | 8,362,160 | ||||
Metropolitan Washington Airports Authority Airport System Revenue, | ||||||
Refunding, Series A, 5.375%, 10/01/29 | 5,000,000 | 5,189,600 | ||||
Refunding, Series A, 5.00%, 10/01/35 | 5,000,000 | 5,458,100 | ||||
Refunding, Series C, 5.25%, 10/01/27 | 10,745,000 | 11,145,251 | ||||
Series A, 5.00%, 10/01/39 | 5,000,000 | 5,465,550 | ||||
Series C, 5.00%, 10/01/26 | 10,235,000 | 10,590,155 | ||||
Metropolitan Washington Airports Authority Dulles Toll Road Revenue, Dulles Metrorail and Capital Improvement Projects, Convertible Capital Appreciation, second senior lien, Series C, Assured Guaranty, 6.50%, 10/01/41 | 25,000,000 | 32,389,000 | ||||
296,289,976 | ||||||
Florida 5.7% | ||||||
Brevard County Health Facilities Authority Health Facilities Revenue, Health First Inc. Project, Series B, Pre-Refunded, 7.00%, 4/01/39 | 6,500,000 | 7,030,725 | ||||
Broward County HFAR, | ||||||
MFH, Heron Pointe Apartments Project, Series A, 5.65%, 11/01/22 | 400,000 | 406,900 | ||||
MFH, Heron Pointe Apartments Project, Series A, 5.70%, 11/01/29 | 225,000 | 228,593 | ||||
Broward County Water and Sewer Utility Revenue, Series A, Pre-Refunded, 5.25%, 10/01/34 | 8,800,000 | 9,134,400 | ||||
Cape Coral Water and Sewer Revenue, Refunding, Series A, AGMC Insured, 5.00%, 10/01/42 | 21,510,000 | 23,833,080 | ||||
Celebration CDD Special Assessment, Series B, NATL Insured, 5.50%, 5/01/19 | 25,000 | 25,089 | ||||
Citizens Property Insurance Corp. Revenue, Coastal Account, senior secured, Series A-1, 5.00%, 6/01/20 | 20,000,000 | 21,909,200 | ||||
Clearwater City Water and Sewer Revenue, Series A, Pre-Refunded, 5.25%, 12/01/39 | 7,000,000 | 7,588,280 | ||||
Dade County HFA, MFMR, Siesta Pointe Apartments, Series A, AGMC Insured, 5.75%, 9/01/29 | 1,890,000 | 1,897,900 | ||||
Deltona Utility System Revenue, Refunding, AGMC Insured, 5.125%, 10/01/39 | 5,000,000 | 5,696,650 | ||||
Florida Gulf Coast University FICO Capital Improvement Revenue, Housing Project, Series A, NATL Insured, 5.00%, 2/01/37 | 10,000,000 | 10,031,900 | ||||
Florida State Board of Education GO, Public Education Capital Outlay, Refunding, Series D, 6.00%, 6/01/23 | 17,500,000 | 21,637,000 | ||||
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41 | 4,750,000 | 5,380,468 | ||||
b Gainesville Utilities System Revenue, | ||||||
Series A, 5.00%, 10/01/36 | 7,150,000 | 8,481,258 | ||||
Series A, 5.00%, 10/01/37 | 5,000,000 | 5,916,750 | ||||
Greater Orlando Aviation Authority Airport Facilities Revenue, Priority Subordinated, Series A, 5.00%, 10/01/47 | 20,000,000 | 22,836,200 | ||||
Hillsborough County Aviation Authority Revenue, | ||||||
Tampa International Airport, Series A, Assured Guaranty, 5.50%, 10/01/38 | 5,000,000 | 5,174,300 | ||||
Tampa International Airport, Subordinated, Refunding, Series B, 5.00%, 10/01/44 | 10,000,000 | 11,200,400 | ||||
Hillsborough County IDA, PCR, Tampa Electric Co. Project, Series A, 5.65%, 5/15/18 | 6,500,000 | 6,650,865 | ||||
18 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Florida (continued) | ||||||
Hillsborough County School Board COP, Master Lease Program, Refunding, Series A, 5.00%, 7/01/28 | $ 17,650,000 | $ 20,216,486 | ||||
Lee Memorial Health System Hospital Revenue, Series A, AMBAC Insured, 5.00%, 4/01/37 | 11,000,000 | 11,029,810 | ||||
Martin County Health Facilities Authority Hospital Revenue, | ||||||
Martin Memorial Medical Center, 5.50%, 11/15/42 | 3,800,000 | 4,169,170 | ||||
Martin Memorial Medical Center, AGMC Insured, 5.50%, 11/15/42 | 3,800,000 | 4,208,652 | ||||
Miami Beach RDA Tax Increment Revenue, City Center/Historic Convention Village, Refunding, Series A, AGMC Insured, 5.00%, 2/01/44 | 12,000,000 | 13,598,520 | ||||
Miami Beach Resort Tax Revenue, 5.00%, 9/01/40 | 11,000,000 | 12,607,430 | ||||
Miami Beach Water and Sewer Revenue, AMBAC Insured, 5.00%, 9/01/30 | 3,000,000 | 3,008,070 | ||||
Miami-Dade County Aviation Revenue, | ||||||
Miami International Airport, Hub of the Americas, Refunding, Series A, 5.50%, 10/01/36 | 20,000,000 | 21,554,800 | ||||
Miami International Airport, Hub of the Americas, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/33 | 8,625,000 | 8,940,675 | ||||
Miami International Airport, Hub of the Americas, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/38 | 5,640,000 | 5,846,424 | ||||
Miami International Airport, Refunding, Series A, Assured Guaranty, 5.25%, 10/01/38 | 1,240,000 | 1,281,912 | ||||
Miami International Airport, Refunding, Series B, 5.00%, 10/01/40 | 15,000,000 | 17,305,350 | ||||
Miami International Airport, Series A, AGMC Insured, Pre-Refunded, 5.25%, 10/01/38 | 6,120,000 | 6,343,992 | ||||
Miami International Airport, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/33 | 2,375,000 | 2,461,925 | ||||
Miami-Dade County Expressway Authority Toll System Revenue, | ||||||
Refunding, Series A, 5.00%, 7/01/29 | 10,000,000 | 11,243,800 | ||||
Refunding, Series A, 5.00%, 7/01/32 | 6,375,000 | 7,122,915 | ||||
Series A, 5.00%, 7/01/40 | 30,265,000 | 32,739,466 | ||||
Miami-Dade County GO, Building Better Communities Program, Series B-1, Pre-Refunded, 5.75%, 7/01/33 | 20,000,000 | 20,628,000 | ||||
Miami-Dade County School Board COP, | ||||||
Master Lease Purchase Agreement, Refunding, Series A, 5.00%, 5/01/31 | 10,000,000 | 11,375,700 | ||||
Master Lease Purchase Agreement, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 2/01/27 | 10,000,000 | 10,518,900 | ||||
Miami-Dade County Special Obligation Revenue, | 5,000,000 | 5,716,250 | ||||
sub. bond, Refunding, Series B, 5.00%, 10/01/31 | ||||||
sub. bond, Refunding, Series B, 5.00%, 10/01/32 | 4,500,000 | 5,128,740 | ||||
sub. bond, Refunding, Series B, 5.00%, 10/01/35 | 3,250,000 | 3,678,058 | ||||
Miami-Dade County Transit System Sales Surtax Revenue, | ||||||
AGMC Insured, Pre-Refunded, 5.00%, 7/01/38 | 18,845,000 | 19,337,231 | ||||
Refunding, 5.00%, 7/01/35 | 7,000,000 | 8,081,430 | ||||
Miami-Dade County Water and Sewer System Revenue, Refunding, Series A, 5.00%, 10/01/42 | 20,000,000 | 22,534,800 | ||||
Orange County Health Facilities Authority Revenue, | ||||||
Hospital, Orlando Health Obligated Group, Refunding, Series A, 5.00%, 10/01/39 | 6,000,000 | 6,763,320 | ||||
Hospital, Orlando Health Obligated Group, Refunding, Series B, AGMC Insured, 5.00%, 12/01/32 | 15,780,000 | 16,356,128 | ||||
Hospital, Orlando Health Obligated Group, Series B, AGMC Insured, Pre-Refunded, 5.00%, 12/01/32 | 11,220,000 | 11,674,298 | ||||
Presbyterian Retirement Communities Project, 5.00%, 8/01/47 | 14,000,000 | 15,404,760 | ||||
Orange County School Board COP, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 8/01/34 | 15,000,000 | 16,130,550 | ||||
Orlando Tourist Development Tax Revenue, 6th Cent Contract Payments, second lien, Subordinate, Series B, Assured Guaranty, 5.50%, 11/01/38 | 18,490,000 | 18,490,000 | ||||
Orlando-Orange County Expressway Authority Revenue, | ||||||
Series A, 5.00%, 7/01/40 | 3,005,000 | 3,259,674 | ||||
Series A, Pre-Refunded, 5.00%, 7/01/40 | 1,995,000 | 2,189,832 | ||||
Series C, Pre-Refunded, 5.00%, 7/01/40 | 15,000,000 | 16,464,900 | ||||
Palm Beach County Solid Waste Authority Revenue, Improvement, Series B, Pre-Refunded, 5.50%, 10/01/28 | 10,000,000 | 10,402,600 | ||||
Pensacola Airport Revenue, Refunding, 6.25%, 10/01/38 | 16,500,000 | 17,149,275 | ||||
franklintempleton.com |
Semiannual Report | 19 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Florida (continued) | ||||||
Pinellas County Sewer Revenue, AGMC Insured, 5.00%, 10/01/32 | $ 610,000 | $ 611,976 | ||||
Port St. Lucie Utility System Revenue, | ||||||
Assured Guaranty, Pre-Refunded, 5.25%, 9/01/35 | 2,755,000 | 2,850,158 | ||||
Refunding, 4.00%, 9/01/33 | 4,000,000 | 4,260,200 | ||||
Refunding, 4.00%, 9/01/34 | 2,500,000 | 2,648,750 | ||||
Refunding, 4.00%, 9/01/36 | 4,000,000 | 4,212,840 | ||||
Refunding, Assured Guaranty, 5.25%, 9/01/35 | 245,000 | 253,212 | ||||
South Broward Hospital District Revenue, South Broward Hospital District Obligated Group, Pre- Refunded, 5.00%, 5/01/36 | 12,500,000 | 12,746,125 | ||||
South Lake County Hospital District Revenue, South Lake Hospital Inc., Series A, 6.25%, 4/01/39 | 5,735,000 | 6,040,848 | ||||
South Miami Health Facilities Authority Hospital Revenue, Baptist Health South Florida Obligated Group, 5.00%, 8/15/32 | 31,070,000 | 31,166,317 | ||||
Sunrise Utilities System Revenue, | ||||||
AMBAC Insured, Pre-Refunded, 5.20%, 10/01/22 | 860,000 | 933,272 | ||||
Refunding, AMBAC Insured, 5.20%, 10/01/22 | 1,140,000 | 1,183,115 | ||||
Tampa-Hillsborough County Expressway Authority Revenue, 5.00%, 7/01/47 | 10,000,000 | 11,503,600 | ||||
Tohopekaliga Water Authority Utility System Revenue, Refunding, 5.00%, 10/01/46 | 5,000,000 | 5,793,900 | ||||
Town of Davie Water and Sewer Revenue, AGMC Insured, 5.00%, 10/01/32 | 8,575,000 | 9,406,346 | ||||
693,634,460 | ||||||
Georgia 4.4% | ||||||
Albany Dougherty Payroll Development Authority Revenue, Darton College Project, AGMC Insured, 5.75%, 6/15/41 | 5,550,000 | 6,004,434 | ||||
Athens-Clarke County Unified Government Water and Sewerage Revenue, Pre-Refunded, 5.50%, 1/01/38 | 14,500,000 | 15,237,325 | ||||
Atlanta Airport General Revenue, | ||||||
Refunding, Series C, 6.00%, 1/01/30 | 15,000,000 | 17,107,800 | ||||
Series A, AGMC Insured, 5.00%, 1/01/40 | 9,215,000 | 9,862,262 | ||||
The Atlanta Development Authority Revenue, | ||||||
New Downtown Atlanta Stadium Project, senior lien, Series A-1, 5.25%, 7/01/44 | 3,000,000 | 3,483,480 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/24 | 6,385,000 | 7,071,962 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/25 | 6,955,000 | 7,750,513 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 | 5,000,000 | 5,577,250 | ||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/27 | 5,000,000 | 5,600,050 | ||||
Atlanta Water and Wastewater Revenue, | ||||||
Refunding, 5.00%, 11/01/40 | 30,000,000 | 34,654,800 | ||||
Refunding, Series B, AGMC Insured, 5.25%, 11/01/34 | 10,545,000 | 11,346,209 | ||||
Refunding, Series B, AGMC Insured, 5.375%, 11/01/39 | 7,940,000 | 8,554,556 | ||||
Series A, Pre-Refunded, 6.25%, 11/01/34 | 20,000,000 | 22,008,200 | ||||
Series B, AGMC Insured, Pre-Refunded, 5.25%, 11/01/34 | 19,455,000 | 21,025,408 | ||||
Series B, AGMC Insured, Pre-Refunded, 5.375%, 11/01/39 | 15,060,000 | 16,312,691 | ||||
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 | 5,112,400 | ||||
MGC Real Estate Foundation II LLC Project, 5.25%, 7/01/38 | 10,000,000 | 10,243,200 | ||||
Bulloch County Development Authority Student Housing Revenue, | ||||||
Georgia Southern University Housing Foundation Four LLC Project, Assured Guaranty, Pre- Refunded, 5.25%, 7/01/33 | 14,825,000 | 15,241,731 | ||||
Georgia Southern University Housing Foundation Four LLC Project, Assured Guaranty, Pre- Refunded, 5.375%, 7/01/39 | 23,075,000 | 23,742,560 | ||||
Burke County Development Authority PCR, | ||||||
Oglethorpe Power Corp. Vogtle Project, Series B, 5.50%, 1/01/33 | 15,000,000 | 15,095,850 | ||||
Oglethorpe Power Corp. Vogtle Project, Series E, 7.00%, 1/01/23 | 25,000,000 | 25,232,750 | ||||
Cherokee County Water and Sewerage Authority Revenue, NATL Insured, 6.90%, 8/01/18 | 15,000 | 15,070 | ||||
20 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Georgia (continued) | ||||||
Clarke County Hospital Authority Revenue, Piedmont Health Care Inc. Project, Refunding, Series A, 5.00%, 7/01/46 | $ | 10,835,000 | $ 12,171,172 | |||
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 | 11,157,262 | ||||
Cobb County Kennestone Hospital Authority Revenue, Revenue Anticipation Certificates, Wellstar Health System, Refunding, Series A, 5.00%, 4/01/47 | 5,000,000 | 5,632,000 | ||||
Dahlonega Water and Wastewater Revenue, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 9/01/37 | 6,450,000 | 6,686,070 | ||||
DeKalb Newton and Gwinnett County Joint Development Authority Revenue, GGC Foundation LLC Project, Pre-Refunded, 6.00%, 7/01/34 | 10,000,000 | 10,800,300 | ||||
Fayette County Hospital Authority Revenue, Anticipation Certificates, Piedmont Fayette Hospital Project, Refunding, Series A, 5.00%, 7/01/39 | 11,420,000 | 12,588,837 | ||||
Fulton County Development Authority Hospital Revenue, Anticipation Certificates, Wellstar Health System Inc. Project, Series A, 5.00%, 4/01/47 | 5,000,000 | 5,632,000 | ||||
Fulton County Development Authority Revenue, Piedmont Healthcare Inc. Project, Refunding, Series A, 5.00%, 7/01/46 | 11,005,000 | 12,362,137 | ||||
Gainesville and Hall County Hospital Authority Revenue, Anticipation Certificates, Northeast Georgia Health System Inc. Project, Refunding, Series A, 5.00%, 2/15/45 | 13,040,000 | 14,624,751 | ||||
Georgia State GO, Series A-2, 4.00%, 2/01/36 | 30,000,000 | 33,536,100 | ||||
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 | 5,141,450 | ||||
USG Real Estate Foundation I LLC Project, Pre-Refunded, 6.25%, 6/15/40 | 13,970,000 | 14,418,996 | ||||
USG Real Estate Foundation II LLC Project, Series A, 5.50%, 6/15/34 | 10,000,000 | 10,589,400 | ||||
USG Real Estate Foundation III LLC Project, Series A, 5.00%, 6/15/40 | 3,700,000 | 3,976,908 | ||||
USG Real Estate Foundation III LLC Project, Series A, Assured Guaranty, 5.00%, 6/15/38 | 6,845,000 | 7,390,067 | ||||
USG Real Estate Foundation III LLC Project, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 6/15/38 | 2,405,000 | 2,639,944 | ||||
USG Real Estate Foundation III LLC Project, Series A, Pre-Refunded, 5.00%, 6/15/40 | 1,300,000 | 1,426,997 | ||||
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/28 | 5,000,000 | 6,012,850 | ||||
Medical Center Hospital Authority Revenue, | ||||||
Anticipation Certificates, Columbus Regional Healthcare System Inc. Project, Assured Guaranty, Pre-Refunded, 6.50%, 8/01/38 | 10,000,000 | 10,400,500 | ||||
Anticipation Certificates, Columbus Regional Healthcare System Inc. Project, Refunding, AGMC Insured, 5.00%, 8/01/41 | 7,500,000 | 8,036,400 | ||||
Private Colleges and Universities Authority Revenue, | ||||||
Emory University, Refunding, Series A, 5.00%, 9/01/41 | 10,000,000 | 11,190,900 | ||||
Emory University, Refunding, Series A, 5.00%, 10/01/43 | 10,000,000 | 11,472,800 | ||||
Emory University, Refunding, Series C, 5.25%, 9/01/39 | 21,000,000 | 22,396,500 | ||||
Savannah EDA Revenue, SSU Community Development I LLC Project, Assured Guaranty, 5.75%, 6/15/41 | 10,000,000 | 11,030,400 | ||||
537,595,242 | ||||||
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 | 8,112,375 | ||||
Honolulu City and County Wastewater System Revenue, First Bond Resolution, Senior Series A, 5.00%, 7/01/38 | 10,000,000 | 11,114,400 | ||||
19,226,775 | ||||||
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 | 13,114,375 | ||||
franklintempleton.com |
Semiannual Report | 21 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Illinois 5.0% | ||||||
Bolingbrook GO, Will and DuPage Counties, Capital Appreciation, Refunding, Series A, zero cpn., 1/01/36 | $ 19,000,000 | $ 7,799,310 | ||||
Bourbonnais Industrial Project Revenue, Olivet Nazarene University Project, Assured Guaranty, Pre-Refunded, 5.125%, 11/01/37 | 5,000,000 | 5,000,000 | ||||
Chicago GO, Lakefront Millennium Project, Parking Facilities, NATL Insured, ETM, 5.75%, 1/01/23 | 8,955,000 | 10,588,929 | ||||
Chicago Midway Airport Revenue, | ||||||
Refunding, Series B, 5.00%, 1/01/46 | 18,420,000 | 20,728,394 | ||||
Refunding, Series C, Assured Guaranty, 5.50%, 1/01/24 | 18,460,000 | 20,825,649 | ||||
Chicago O’Hare International Airport Revenue, | ||||||
General Airport, senior lien, Series D, 5.25%, 1/01/42 | 10,000,000 | 11,755,600 | ||||
General Airport, senior lien, Series D, 5.00%, 1/01/47 | 18,000,000 | 20,493,720 | ||||
General Airport, third lien, Series A, 5.75%, 1/01/39 | 840,000 | 945,168 | ||||
General Airport, third lien, Series A, Pre-Refunded, 5.75%, 1/01/39 | 4,160,000 | 4,731,917 | ||||
General Airport, third lien, Series C, Assured Guaranty, 5.25%, 1/01/35 | 39,485,000 | 42,266,323 | ||||
Chicago Transit Authority Sales Tax Receipts Revenue, 5.25%, 12/01/40 | 10,000,000 | 10,738,500 | ||||
Chicago Wastewater Transmission Revenue, second lien, Series A, BHAC Insured, Pre-Refunded, 5.50%, 1/01/38 | 18,000,000 | 18,132,660 | ||||
Illinois Health Facilities Authority Revenue, | ||||||
Loyola University Health System, Series A, NATL Insured, ETM, 5.625%, 7/01/18 | 2,105,000 | 2,168,655 | ||||
South Suburban Hospital, ETM, 7.00%, 2/15/18 | 590,000 | 600,006 | ||||
Illinois State Finance Authority Revenue, | ||||||
Alexian Brothers Health System, Series A, AGMC Insured, Pre-Refunded, 5.50%, 1/01/28 | 45,000,000 | 45,904,500 | ||||
Art Institute of Chicago, Refunding, Series A, 5.25%, 3/01/40 | 16,000,000 | 17,193,120 | ||||
Carle Foundation, Refunding, Series A, 5.00%, 2/15/45 | 20,000,000 | 22,037,800 | ||||
Columbia College, NATL Insured, Pre-Refunded, 5.00%, 12/01/32 | 15,440,000 | 15,490,798 | ||||
Edward Hospital Obligated Group, Series A, AMBAC Insured, Pre-Refunded, 5.50%, 2/01/40 | 4,000,000 | 4,044,360 | ||||
Mercy Health System Corp., Refunding, 5.00%, 12/01/46 | 40,000,000 | 43,730,400 | ||||
Northwest Community Hospital, Refunding, Series A, 5.00%, 7/01/36 | 7,490,000 | 8,359,889 | ||||
Resurrection Health Care, Series B, AGMC Insured, Pre-Refunded, 5.25%, 5/15/29 | 26,695,000 | 27,296,973 | ||||
Riverside Health System, Pre-Refunded, 6.25%, 11/15/35 | 2,930,000 | 3,226,721 | ||||
Riverside Health System, Refunding, 6.25%, 11/15/35 | 2,070,000 | 2,240,589 | ||||
Rush University Medical Center Obligated Group, Series B, NATL Insured, Pre-Refunded, 5.75%, 11/01/28 | 2,500,000 | 2,614,725 | ||||
Rush University Medical Center Obligated Group, Series B, NATL Insured, Pre-Refunded, 5.25%, 11/01/35 | 3,000,000 | 3,122,820 | ||||
Rush University Medical Center Obligated Group, Series B, Pre-Refunded, 7.25%, 11/01/38 | 10,000,000 | 10,607,200 | ||||
Southern Illinois HealthCare Enterprise Inc., AGMC Insured, Pre-Refunded, 5.375%, 3/01/35 | 8,500,000 | 9,319,230 | ||||
Illinois State Finance Authority Student Housing Revenue, | ||||||
CHF-DeKalb II LLC, Northern Illinois University Project, 6.875%, 10/01/43 | 15,000,000 | 16,604,700 | ||||
CHF-Normal LLC, Illinois State University Project, 7.00%, 4/01/43 | 7,500,000 | 8,301,825 | ||||
Illinois State GO, | ||||||
AGMC Insured, 5.00%, 3/01/27 | 11,500,000 | 12,641,375 | ||||
AGMC Insured, 5.00%, 9/01/29 | 9,965,000 | 9,991,009 | ||||
Assured Guaranty, 5.25%, 4/01/34 | 10,000,000 | 10,108,000 | ||||
Refunding, AGMC Insured, 5.00%, 1/01/23. | 10,000,000 | 10,524,100 | ||||
Illinois State Sales Tax Revenue, Build Illinois, Series B, Pre-Refunded, 5.25%, 6/15/34 | 15,000,000 | 15,991,200 | ||||
Illinois State Toll Highway Authority Revenue, Toll Highway, Senior, Refunding, Series A-1, 5.00%, 1/01/31 | 10,245,000 | 10,982,742 | ||||
22 | 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 Dedicated State Tax Revenue, | ||||||
McCormick Place Expansion Project, Capital Appreciation, Refunding, Series B, NATL Insured, 5.50%, 6/15/20 | $ 6,680,000 | $ 6,770,380 | ||||
McCormick Place Expansion Project, Capital Appreciation, Refunding, Series B, NATL Insured, 5.55%, 6/15/21 | 4,215,000 | 4,272,155 | ||||
McCormick Place Expansion Project, Capital Appreciation, Refunding, Series B, NATL Insured, 5.65%, 6/15/22 | 27,355,000 | 31,263,482 | ||||
McCormick Place Expansion Project, Capital Appreciation, Series B, NATL Insured, ETM, 5.65%, 6/15/22 | 2,645,000 | 3,142,181 | ||||
Metropolitan Pier and Exposition Authority Hospitality Facilities Revenue, McCormick Place Convention Center, ETM, 7.00%, 7/01/26 | 12,000,000 | 14,935,560 | ||||
Northern Illinois Municipal Power Agency Power Project Revenue, Refunding, Series A, 5.00%, 12/01/41 | 5,500,000 | 6,136,900 | ||||
Railsplitter Tobacco Settlement Authority Revenue, Refunding, 6.00%, 6/01/28 | 14,530,000 | 16,388,678 | ||||
Regional Transportation Authority GO, Cook DuPage Kane Lake McHenry and Will Counties, Series A, AMBAC Insured, 7.20%, 11/01/20 | 610,000 | 664,186 | ||||
Saline Valley Conservancy District Waterworks Revenue, Saline Gallatin Hamilton Hardin Williamson Pope Johnson and White Counties, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/41 | 7,000,000 | 7,020,160 | ||||
Southwestern Illinois Development Authority Revenue, | ||||||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/24 | 3,850,000 | 3,079,230 | ||||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/26 | 7,700,000 | 5,664,274 | ||||
St. Clair County School District No. 189 East St. Louis GO, Alternate Revenue Source, Refunding, AMBAC Insured, 5.125%, 1/01/28 | 7,135,000 | 7,151,411 | ||||
University of Illinois University Revenue, | ||||||
Auxiliary Facilities System, Refunding, Series A, 5.125%, 4/01/36 | 2,950,000 | 3,199,806 | ||||
Auxiliary Facilities System, Refunding, Series A, 5.25%, 4/01/41 | 5,000,000 | 5,431,750 | ||||
Auxiliary Facilities System, Series A, Pre-Refunded, 5.75%, 4/01/38 | 7,000,000 | 7,454,300 | ||||
Upper River Valley Development Authority Environmental Facilities Revenue, General Electric Co. Project, 5.45%, 2/01/23 | 3,600,000 | 3,609,540 | ||||
613,292,900 | ||||||
Indiana 1.9% | ||||||
Indiana Bond Bank Revenue, Special Program, Hendricks Regional Health Project, Series A, 5.50%, 2/01/29 | 9,000,000 | 9,478,530 | ||||
Indiana Finance Authority Revenue, | ||||||
Baptist Homes of Indiana Senior Living, Series A, 5.25%, 11/15/46 | 5,000,000 | 5,537,950 | ||||
Deaconess Health System Obligated Group, Refunding, Series A, 5.00%, 3/01/39 | 5,000,000 | 5,615,950 | ||||
Educational Facilities, Marian University Project, 6.375%, 9/15/41 | 12,500,000 | 13,722,875 | ||||
Stadium Project, Refunding, Series A, 5.25%, 2/01/37 | 10,000,000 | 11,840,500 | ||||
Indiana Finance Authority Wastewater Utility Revenue, | ||||||
CWA Authority Project, first lien, Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 34,858,200 | ||||
CWA Authority Project, first lien, Series A, 5.00%, 10/01/37 | 5,000,000 | 5,621,300 | ||||
CWA Authority Project, first lien, Series A, 5.25%, 10/01/38 | 12,000,000 | 13,596,480 | ||||
CWA Authority Project, first lien, Series A, 4.00%, 10/01/42 | 22,615,000 | 23,358,355 | ||||
Indiana Health and Educational Facility Financing Authority Revenue, Sisters of St. Francis Health Services Inc. Obligated Group, Series E, AGMC Insured, Pre-Refunded, 5.25%, 5/15/41 | 3,750,000 | 3,828,488 | ||||
Indiana State Finance Authority Environmental Revenue, Duke Energy Indiana Inc. Project, Refunding, Series B, 6.00%, 8/01/39 | 10,000,000 | 10,738,700 | ||||
Indiana State Finance Authority Hospital Revenue, Deaconess Hospital Obligated Group, Series A, Pre-Refunded, 6.75%, 3/01/39 | 9,750,000 | 10,468,673 | ||||
franklintempleton.com |
Semiannual Report | 23 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Indiana (continued) | ||||||
Indiana State Municipal Power Agency Revenue, | ||||||
Power Supply System, Refunding, Series A, 4.00%, 1/01/42 | $ 5,860,000 | $ 6,112,800 | ||||
Power Supply System, Refunding, Series A, 5.00%, 1/01/42 | 21,290,000 | 24,255,271 | ||||
Power Supply System, Series B, Pre-Refunded, 6.00%, 1/01/39 | 4,000,000 | 4,228,880 | ||||
Indianapolis Local Public Improvement Bond Bank Revenue, | ||||||
Pilot Infrastructure Project, Series F, AGMC Insured, 5.00%, 1/01/35 | 10,000,000 | 10,733,400 | ||||
Waterworks Project, Refunding, Series A, Assured Guaranty, 5.50%, 1/01/38 | 7,030,000 | 7,372,361 | ||||
Waterworks Project, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 1/01/38 | 1,620,000 | 1,703,349 | ||||
Indianapolis Water System Revenue, first lien, Refunding, Series B, 5.00%, 10/01/37 | 15,000,000 | 17,356,200 | ||||
Northern Indiana Commuter Transportation District Revenue, Limited Obligation, 5.00%, 7/01/41 | 6,000,000 | 6,806,460 | ||||
University of Southern Indiana Revenue, Student Fee, Series J, Assured Guaranty, Pre-Refunded, 5.75%, 10/01/28 | 2,000,000 | 2,174,040 | ||||
229,408,762 | ||||||
Kansas 0.7% | ||||||
Butler County USD No. 490 GO, School Building, Series B, BAM Insured, 4.00%, 9/01/43 | 10,000,000 | 10,423,000 | ||||
Kansas State Development Finance Authority Hospital Revenue, Adventist Health System/Sunbelt Obligated Group, Refunding, Series C, 5.75%, 11/15/38 | 6,250,000 | 6,794,812 | ||||
University of Kansas Hospital Authority Health Facilities Revenue, Kansas University Health System, Refunding, Series A, 5.00%, 3/01/47 | 23,115,000 | 26,430,847 | ||||
Wyandotte County Kansas City Unified Government Utility System Revenue, | ||||||
Improvement, Refunding, Series A, 5.00%, 9/01/44 | 3,000,000 | 3,435,720 | ||||
Improvement, Series A, 5.00%, 9/01/45 | 10,000,000 | 11,408,600 | ||||
Improvement, Series C, 5.00%, 9/01/41 | 5,000,000 | 5,687,350 | ||||
Improvement, Series C, 5.00%, 9/01/46 | 16,565,000 | 18,746,942 | ||||
Series A, BHAC Insured, Pre-Refunded, 5.25%, 9/01/34 | 5,000,000 | 5,273,250 | ||||
88,200,521 | ||||||
Kentucky 0.7% | ||||||
Carroll County Environmental Facilities Revenue, Kentucky Utilities Co. Project, Series A, AMBAC Insured, 5.75%, 2/01/26 | 12,500,000 | 12,769,750 | ||||
Kentucky Economic Development Finance Authority Health System Revenue, Norton Healthcare Inc., Capital Appreciation, Refunding, Series B, NATL Insured, zero cpn., 10/01/18 | 8,585,000 | 8,472,365 | ||||
Kentucky Economic Development Finance Authority Revenue, Louisville Arena Project, Louisville Arena Authority Inc., Series A, Subseries A-1, Assured Guaranty, 6.00%, 12/01/38 | 4,000,000 | 4,058,680 | ||||
Kentucky State Municipal Power Agency Power System Revenue, | ||||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/35 | 7,750,000 | 8,726,500 | ||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/42 | 10,000,000 | 11,098,700 | ||||
Kentucky State Property and Buildings Commission Revenue, | ||||||
Project No. 90, Pre-Refunded, 5.50%, 11/01/28 | 13,230,000 | 13,804,446 | ||||
Project No. 90, Pre-Refunded, 5.50%, 11/01/28 | 1,770,000 | 1,847,756 | ||||
Louisville/Jefferson County Metro Government Revenue, | ||||||
College, Bellarmine University Project, Refunding and Improvement, Series A, 6.00%, 5/01/33 | 3,000,000 | 3,043,350 | ||||
Health Facilities, Jewish Hospital and St. Mary’s Healthcare Inc. Project, Pre-Refunded, 6.125%, 2/01/37 | 11,500,000 | 11,646,625 | ||||
Paducah Electric Plant Board Revenue, Series A, Assured Guaranty, Pre-Refunded, 5.25%, 10/01/35 | 7,000,000 | 7,400,260 | ||||
82,868,432 | ||||||
Louisiana 2.7% | ||||||
East Baton Rouge Sewerage Commission Revenue, Series A, Pre-Refunded, 5.25%, 2/01/39 | 6,000,000 | 6,307,500 | ||||
Lafayette Communications System Revenue, | ||||||
Refunding, AGMC Insured, 5.00%, 11/01/30 | 5,000,000 | 5,714,000 | ||||
XLCA Insured, Pre-Refunded, 5.25%, 11/01/27 | 12,485,000 | 12,485,000 | ||||
24 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Louisiana (continued) | ||||||
Lafayette Public Trust Financing Authority Revenue, | ||||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured, Pre-Refunded, 5.00%, 10/01/25 | $ 5,500,000 | $ 6,091,635 | ||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured, Pre-Refunded, 5.50%, 10/01/35 | 6,000,000 | 6,731,040 | ||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured, Pre-Refunded, 5.50%, 10/01/41 | 15,000,000 | 16,827,600 | ||||
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 | 6,730,000 | ||||
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/44 | 5,820,000 | 6,588,124 | ||||
LCTCS Act 360 Project, 5.00%, 10/01/39 | 10,000,000 | 11,246,800 | ||||
LCTCS Facilities Corp. Project, Series B, Assured Guaranty, Pre-Refunded, 5.00%, 10/01/26 | 2,750,000 | 2,950,365 | ||||
Southeastern Louisiana University, Student Union/University Facilities Inc. Project, Series A, AGMC Insured, 5.00%, 10/01/40 | 8,545,000 | 9,072,227 | ||||
Louisiana Public Facilities Authority Hospital Revenue, | ||||||
Franciscan Missionaries of Our Lady Health System Project, Series A, 5.00%, 7/01/47 | 25,000,000 | 27,769,750 | ||||
Franciscan Missionaries of Our Lady Health System Project, Series A, Pre-Refunded, 6.75%, 7/01/39 | 10,000,000 | 10,914,900 | ||||
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 | 10,029,000 | ||||
Ochsner Clinic Foundation Project, Pre-Refunded, 6.75%, 5/15/41 | 15,500,000 | 18,416,015 | ||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/42 | 20,000,000 | 22,552,600 | ||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/47 | 7,500,000 | 8,361,600 | ||||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | 10,000,000 | 12,214,000 | ||||
Louisiana State Citizens Property Insurance Corp. Assessment Revenue, Series C-2, Assured Guaranty, Pre-Refunded, 6.75%, 6/01/26 | 21,000,000 | 21,693,210 | ||||
Louisiana State Gasoline and Fuels Tax Revenue, second lien, Series B, Pre-Refunded, 5.00%, 5/01/45 | 13,690,000 | 14,969,604 | ||||
Louisiana State Public Facilities Authority Lease Revenue, Provident Group, Flagship Properties LLC, Louisiana State University Nicholson Gateway Project, Series A, 5.00%, 7/01/51 | 26,145,000 | 28,847,347 | ||||
New Orleans Aviation Board Revenue, General Airport, North Terminal Project, Series B, 5.00%, 1/01/48 | 4,000,000 | 4,533,800 | ||||
Shreveport Water and Sewer Revenue, Series B, 5.00%, 12/01/41 | 10,000,000 | 11,290,800 | ||||
St. John the Baptist Parish Revenue, Marathon Oil Corp. Project, Series A, 5.125%, 6/01/37 | 49,100,000 | 49,245,827 | ||||
331,582,744 | ||||||
Maine 0.4% | ||||||
Maine State Educational Loan Authority Student Loan Revenue, Supplemental Education Loan Program, Series A-3, Assured Guaranty, 5.875%, 12/01/39 | 17,335,000 | 18,257,915 | ||||
Maine State Health and Higher Educational Facilities Authority Revenue, | ||||||
Maine General Medical Center Issue, 6.75%, 7/01/36 | 4,250,000 | 4,639,810 | ||||
Maine General Medical Center Issue, 7.00%, 7/01/41 | 10,000,000 | 11,026,600 | ||||
Portland Airport Revenue, | ||||||
General, AGMC Insured, 5.25%, 1/01/35 | 3,000,000 | 3,183,720 | ||||
General, AGMC Insured, 5.00%, 1/01/40 | 6,000,000 | 6,302,160 | ||||
43,410,205 | ||||||
Maryland 0.9% | ||||||
Baltimore Project Revenue, | ||||||
Wastewater Projects, Series C, 5.00%, 7/01/38 | 5,000,000 | 5,706,700 | ||||
Wastewater Projects, Series C, 5.00%, 7/01/43 | 10,000,000 | 11,358,400 | ||||
franklintempleton.com |
Semiannual Report | 25 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Maryland (continued) | ||||||
Baltimore Revenue, | ||||||
Mayor and City Council of Baltimore, Subordinate Project, Water Projects, Refunding, Series C, 5.00%, 7/01/39 | $ 10,000,000 | $ 11,439,600 | ||||
Mayor and City Council of Baltimore, Subordinate Project, Water Projects, Refunding, Series C, 5.00%, 7/01/44 | 10,000,000 | 11,383,900 | ||||
Mayor and City Council of Baltimore, Subordinate Project, Water Projects, Series A, 5.00%, 7/01/39 | 9,430,000 | 10,787,543 | ||||
Mayor and City Council of Baltimore, Subordinate Project, Water Projects, Series A, 5.00%, 7/01/44 | 5,500,000 | 6,261,145 | ||||
Maryland State EDC, PCR, Potomac Electric Project, Refunding, 6.20%, 9/01/22 | 5,000,000 | 5,339,250 | ||||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||||
Adventist HealthCare Issue, Series A, 5.50%, 1/01/46 | 12,500,000 | 14,339,250 | ||||
Anne Arundel Health System Issue, Series A, Pre-Refunded, 6.75%, 7/01/39 | 3,000,000 | 3,277,080 | ||||
LifeBridge Health Issue, Assured Guaranty, 5.00%, 7/01/34 | 7,715,000 | 7,736,293 | ||||
LifeBridge Health Issue, Refunding, Assured Guaranty, 5.00%, 7/01/28 | 1,875,000 | 1,880,569 | ||||
Medstar Health Issue, Series A, 5.00%, 5/15/42 | 7,500,000 | 8,562,150 | ||||
University of Maryland Medical System Issue, Series B, NATL Insured, ETM, 7.00%, 7/01/22 | 135,000 | 159,204 | ||||
Upper Chesapeake Hospitals Issue, Series C, Pre-Refunded, 6.00%, 1/01/38 | 5,000,000 | 5,040,500 | ||||
103,271,584 | ||||||
Massachusetts 2.5% | ||||||
Massachusetts Bay Transportation Authority Revenue, | ||||||
Assessment, Series A, Pre-Refunded, 5.25%, 7/01/34 | 19,520,000 | 20,068,707 | ||||
Assessment, Series A, Pre-Refunded, 5.25%, 7/01/34 | 8,110,000 | 8,332,457 | ||||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Refunding, Senior Series A, 5.00%, 7/01/28 | 10,000,000 | 12,561,700 | ||||
Massachusetts Development Finance Agency Revenue, | ||||||
Brandeis University Issue, Refunding, Series O-1, 5.00%, 10/01/40 | 19,865,000 | 21,210,655 | ||||
Dana-Farber Cancer Institute Issue, Series N, 5.00%, 12/01/41 | 10,135,000 | 11,590,285 | ||||
Partners Healthcare System Issue, Refunding, Series Q, 5.00%, 7/01/47 | 15,000,000 | 16,944,600 | ||||
Wellesley College Issue, Series J, 5.00%, 7/01/42 | 10,000,000 | 11,372,300 | ||||
Massachusetts State Department of Transportation Metropolitan Highway System Revenue, Senior, Refunding, Series B, 5.00%, 1/01/37 | 31,000,000 | 33,150,160 | ||||
Massachusetts State Educational Financing Authority Education Loan Revenue, | ||||||
Issue H, Assured Guaranty, 6.35%, 1/01/30 | 2,405,000 | 2,510,531 | ||||
Issue I, 6.00%, 1/01/28 | 7,885,000 | 8,335,470 | ||||
Issue K, Refunding, 5.25%, 7/01/29 | 6,940,000 | 7,593,193 | ||||
Massachusetts State GO, | ||||||
Consolidated Loan of 2016, Series G, 4.00%, 9/01/42 | 20,000,000 | 21,064,200 | ||||
Consolidated Loan of 2017, Green Bonds, Series B, 5.00%, 4/01/47 | 12,335,000 | 14,355,966 | ||||
Massachusetts State Health and Educational Facilities Authority Revenue, | ||||||
Berklee College of Music Issue, Refunding, Series A, 5.00%, 10/01/37 | 490,000 | 491,588 | ||||
CareGroup Issue, Series A, NATL Insured, Pre-Refunded, 5.00%, 7/01/25 | 750,000 | 828,810 | ||||
Harvard Pilgrim Health Care Issue, Series A, AGMC Insured, 5.00%, 7/01/18 | 800,000 | 801,400 | ||||
Northeastern University Issue, Series A, 5.00%, 10/01/35 | 20,000,000 | 21,850,400 | ||||
Northeastern University Issue, Series R, 5.00%, 10/01/33 | 6,830,000 | 7,056,210 | ||||
Springfield College Issue, Pre-Refunded, 5.50%, 10/15/31 | 1,710,000 | 1,855,299 | ||||
Springfield College Issue, Pre-Refunded, 5.625%, 10/15/40 | 7,000,000 | 7,611,660 | ||||
Massachusetts State HFAR, Housing, Series B, 7.00%, 12/01/38 | 9,140,000 | 9,451,126 | ||||
Massachusetts State Transportation Fund Revenue, Accelerated Bridge Program, Series A, 4.00%, 6/01/35 | 10,000,000 | 10,514,000 | ||||
26 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Massachusetts (continued) | ||||||
Massachusetts State Water Pollution Abatement Trust Revenue, | ||||||
Massachusetts State Water Resources Authority Program, Series A, 5.00%, 8/01/32 | $ 225,000 | $ 225,749 | ||||
Water Pollution Abatement, MWRA Program, Subordinate, Refunding, Series A, 5.75%, 8/01/29 | 450,000 | 451,728 | ||||
Massachusetts Water Resources Authority Revenue, General, Green Bonds, Refunding, Series C, 5.00%, 8/01/40 | 30,000,000 | 35,214,900 | ||||
University of Massachusetts Building Authority Project Revenue, Senior Series 1, 5.00%, 11/01/39 | 20,000,000 | 23,149,800 | ||||
308,592,894 | ||||||
Michigan 2.7% | ||||||
Detroit City School District GO, | ||||||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/30 | 1,245,000 | 1,379,970 | ||||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/33 | 1,500,000 | 1,653,210 | ||||
Detroit Sewage Disposal System Revenue, second lien, Series B, NATL Insured, 5.00%, 7/01/36 | 10,000 | 10,028 | ||||
Detroit Water and Sewerage Department Sewage Disposal System Revenue, | ||||||
senior lien, Refunding, Series A, 5.25%, 7/01/39 | 12,000,000 | 13,315,440 | ||||
senior lien, Refunding, Series A, AGMC Insured, 5.00%, 7/01/39 | 10,000,000 | 10,918,700 | ||||
Detroit Water Supply System Revenue, | ||||||
second lien, Series B, AGMC Insured, Pre-Refunded, 7.00%, 7/01/36 | 5,000,000 | 5,482,350 | ||||
senior lien, Series B, NATL Insured, 5.00%, 7/01/34 | 10,000 | 10,029 | ||||
Jackson County Hospital Finance Authority Revenue, W.A. Foote Memorial Hospital, Series C, Assured Guaranty, Pre-Refunded, 5.00%, 6/01/26 | 15,000,000 | 16,423,800 | ||||
Michigan Finance Authority Revenue, | ||||||
Hospital, Beamont Health Credit Group, Series A, 5.00%, 11/01/44 | 20,925,000 | 23,348,324 | ||||
Hospital, Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/39 | 29,610,000 | 32,661,310 | ||||
Hospital, Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/45 | 10,000,000 | 11,310,800 | ||||
Hospital, Trinity Health Credit Group, Series MI, Pre-Refunded, 5.00%, 12/01/39 | 140,000 | 159,800 | ||||
Michigan Hospital Finance Authority Revenue, | ||||||
Ascension Health Senior Credit Group, Refunding, Series F-8, 5.00%, 11/15/47 | 10,000,000 | 11,360,300 | ||||
MidMichigan Obligated Group, Series A, Pre-Refunded, 6.00%, 6/01/29 | 4,000,000 | 4,304,920 | ||||
MidMichigan Obligated Group, Series A, Pre-Refunded, 6.125%, 6/01/39 | 5,000,000 | 5,390,900 | ||||
Trinity Health Credit Group, Refunding, Series A-1, 6.50%, 12/01/33 | 745,000 | 785,483 | ||||
Trinity Health Credit Group, Refunding, Series C, 5.00%, 12/01/34 | 9,230,000 | 10,179,121 | ||||
Trinity Health Credit Group, Series A-1, Pre-Refunded, 6.50%, 12/01/33 | 24,255,000 | 25,654,999 | ||||
Trinity Health Credit Group, Series C, Pre-Refunded, 5.00%, 12/01/34 | 770,000 | 889,596 | ||||
Michigan State Building Authority Revenue, | ||||||
Facilities Program, Refunding, Series I, 6.25%, 10/15/38 | 440,000 | 461,028 | ||||
Facilities Program, Refunding, Series I-A, 5.375%, 10/15/36 | 6,730,000 | 7,660,490 | ||||
Facilities Program, Refunding, Series I-A, 5.25%, 10/15/44 | 20,655,000 | 23,643,159 | ||||
Facilities Program, Series H, 5.125%, 10/15/33 | 12,500,000 | 13,313,750 | ||||
Facilities Program, Series H, AGMC Insured, 5.00%, 10/15/26 | 5,000,000 | 5,355,550 | ||||
Facilities Program, Series I, Pre-Refunded, 6.25%, 10/15/38 | 14,560,000 | 15,267,179 | ||||
Michigan State GO, | ||||||
Environmental Program, Series A, Pre-Refunded, 6.00%, 11/01/24 | 1,000,000 | 1,072,410 | ||||
Environmental Program, Series A, Pre-Refunded, 5.50%, 11/01/25 | 1,000,000 | 1,065,010 | ||||
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 | 7,727,860 | ||||
The Detroit Edison Co. Pollution Control Bonds Project, Refunding, Collateralized Series BB, AMBAC Insured, 7.00%, 5/01/21 | 250,000 | 294,803 | ||||
Michigan Tobacco Settlement Finance Authority Revenue, Tobacco Settlement Asset-Backed, Senior, Series A, 6.00%, 6/01/34 | 40,000,000 | 39,652,800 | ||||
franklintempleton.com |
Semiannual Report | 27 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Michigan (continued) | ||||||
Royal Oak Hospital Finance Authority Hospital Revenue, | ||||||
William Beaumont Hospital Obligated Group, Series V, Pre-Refunded, 8.25%, 9/01/39 | $ | 20,000,000 | $ 21,185,400 | |||
William Beaumont Hospital Obligated Group, Series W, Pre-Refunded, 6.375%, 8/01/29 | 10,000,000 | 10,895,500 | ||||
322,834,019 | ||||||
Minnesota 0.2% | ||||||
Minneapolis Health Care System Revenue, | ||||||
Fairview Health Services, Series A, Pre-Refunded, 6.625%, 11/15/28 | 11,000,000 | �� | 11,629,090 | |||
Fairview Health Services, Series A, Pre-Refunded, 6.75%, 11/15/32 | 6,250,000 | 6,615,437 | ||||
St. Cloud Health Care Revenue, CentraCare Health System, Refunding, Series A, 5.00%, 5/01/46 | 5,000,000 | 5,654,000 | ||||
23,898,527 | ||||||
Mississippi 0.7% | ||||||
Mississippi Business Finance Corp. PCR, System Energy Resource Inc. Project, Refunding, 5.875%, 4/01/22 | 27,930,000 | 28,018,259 | ||||
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 | 11,672,300 | ||||
City of Jackson Water and Sewer System Project, AGMC Insured, 6.875%, 12/01/40 | 3,400,000 | 4,317,694 | ||||
Mississippi Hospital Equipment and Facilities Authority Revenue, | ||||||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/36 | 6,350,000 | 7,074,027 | ||||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/46 | 34,500,000 | 37,987,260 | ||||
89,069,540 | ||||||
Missouri 0.5% | ||||||
Bi-State Development Agency Missouri-Illinois Metropolitan District Mass Transit Sales Tax Appropriation Revenue, Metrolink Cross County Extension Project, Assured Guaranty, 5.00%, 10/01/39 | 6,000,000 | 6,364,200 | ||||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, | ||||||
Mercy Health, Series F, 5.00%, 11/15/45 | 25,000,000 | 27,970,000 | ||||
St. Luke’s Health System Inc., Series B, AGMC Insured, Pre-Refunded, 5.50%, 11/15/35 | 30,000,000 | 31,368,900 | ||||
65,703,100 | ||||||
Montana 0.0%† | ||||||
Montana State Facility Finance Authority Revenue, Benefis Health System Obligated Group, Refunding, 5.00%, 2/15/41 | 2,650,000 | 2,987,795 | ||||
Nebraska 1.1% | ||||||
Douglas County Hospital Authority No. 2 Revenue, Health Facilities, Children’s Hospital Obligated Group, 5.00%, 11/15/47 | 10,000,000 | 11,330,300 | ||||
Lancaster County Correctional Facility Joint Public Agency GO, Building, 5.00%, 12/01/28 | 5,000,000 | 5,211,600 | ||||
Lancaster County Hospital Authority Revenue, Bryan Memorial Hospital Project No. 1, NATL Insured, ETM, 6.70%, 6/01/22 | 1,440,000 | 1,629,518 | ||||
Madison County Hospital Authority No. 001 Hospital Revenue, Faith Regional Health Services Project, Series A-1, Pre-Refunded, 6.00%, 7/01/33 | 12,000,000 | 12,626,760 | ||||
Municipal Energy Agency of Nebraska Power Supply System Revenue, Series A, BHAC Insured, Pre-Refunded, 5.375%, 4/01/39 | 5,000,000 | 5,294,650 | ||||
Omaha Public Facilities Corp. Lease Revenue, Baseball Stadium Project, Pre-Refunded, 5.00%, 6/01/36 | 9,000,000 | 9,545,490 | ||||
Omaha Public Power District Electric System Revenue, Series C, 5.00%, 2/01/39 | 23,305,000 | 25,677,449 | ||||
Omaha Public Power District Separate Electric System Revenue, | ||||||
Nebraska City 2, Refunding, Series A, 5.00%, 2/01/49 | 10,000,000 | 11,295,200 | ||||
Nebraska City 2, Series A, 5.25%, 2/01/42 | 10,000,000 | 11,568,100 | ||||
Public Power Generation Agency Revenue, | ||||||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/39 | 7,340,000 | 8,386,244 | ||||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/41 | 5,140,000 | 5,801,826 | ||||
28 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Nebraska (continued) | ||||||
University of Nebraska Revenue, | ||||||
Lincoln Student Fees and Facilities, 5.00%, 7/01/37 | $ | 5,000,000 | $ 5,613,300 | |||
Lincoln Student Fees and Facilities, 5.00%, 7/01/42 | 7,500,000 | 8,388,075 | ||||
Lincoln Student Fees and Facilities, Series A, Pre-Refunded, 5.25%, 7/01/34 | 5,000,000 | 5,239,850 | ||||
University of Nebraska Omaha Health and Recreation Project, Pre-Refunded, 5.00%, 5/15/38 | 5,000,000 | 5,106,100 | ||||
132,714,462 | ||||||
Nevada 0.3% | ||||||
Clark County Passenger Facility Charge Revenue, | ||||||
Las Vegas, McCarran International Airport, Series A, AGMC Insured, 5.25%, 7/01/39 | 20,000,000 | 21,599,400 | ||||
Las Vegas, McCarran International Airport, Series A, AGMC Insured, 5.25%, 7/01/42 | 5,000,000 | 5,392,100 | ||||
Clark County School District GO, Refunding, Series A, NATL Insured, 5.00%, 6/15/24 | 8,055,000 | 8,323,151 | ||||
Nevada State GO, Municipal Bond Bank Project No. 40-41, Series A, ETM, 6.375%, 12/01/17 | 1,625,000 | 1,632,199 | ||||
Reno Hospital Revenue, | ||||||
Washoe Medical Center Project, Refunding, Series C, AGMC Insured, 5.375%, 6/01/39 | 1,535,000 | 1,642,772 | ||||
Washoe Medical Center Project, Series C, AGMC Insured, Pre-Refunded, 5.375%, 6/01/39 | 3,465,000 | 3,831,458 | ||||
42,421,080 | ||||||
New Hampshire 0.4% | ||||||
Manchester GARB, Refunding, Series A, AGMC Insured, 5.125%, 1/01/30 | 6,000,000 | 6,166,080 | ||||
New Hampshire Health and Education Facilities Authority Revenue, | ||||||
Elliot Hospital Issue, Refunding, 5.00%, 10/01/38 | 4,000,000 | 4,407,600 | ||||
University System of New Hampshire Issue, Refunding, 5.00%, 7/01/45 | 10,350,000 | 11,772,608 | ||||
New Hampshire Municipal Bond Bank Revenue, Series B, Pre-Refunded, 5.00%, 8/15/39 | 11,250,000 | 12,414,487 | ||||
New Hampshire State Business Finance Authority Revenue, Elliot Hospital Obligated Group, Series A, Pre-Refunded, 6.125%, 10/01/39 | 5,000,000 | 5,470,500 | ||||
New Hampshire State Municipal Bond Bank Revenue, Refunding, Series D, 4.00%, 8/15/39 | 10,000,000 | 10,576,700 | ||||
50,807,975 | ||||||
New Jersey 2.2% | ||||||
Bayonne GO, General Improvement, Pre-Refunded, 5.75%, 7/01/35 | 9,000,000 | 9,675,540 | ||||
New Jersey EDA Revenue, | ||||||
Municipal Rehabilitation, Series A, AMBAC Insured, 5.00%, 4/01/28 | 4,000,000 | 4,092,440 | ||||
School Facilities Construction, Series AAA, 5.00%, 6/15/41 | 26,000,000 | 27,866,540 | ||||
School Facilities Construction, Series NN, 5.00%, 3/01/28 | 22,000,000 | 23,903,220 | ||||
New Jersey Health Care Facilities Financing Authority State Contract Revenue, | ||||||
Hospital Asset Transformation Program, Series A, 5.25%, 10/01/38 | 7,770,000 | 8,010,326 | ||||
Hospital Asset Transformation Program, Series A, Pre-Refunded, 5.25%, 10/01/38 | 2,230,000 | 2,314,740 | ||||
New Jersey State COP, | ||||||
Equipment Lease Purchase Agreement, Series A, Pre-Refunded, 5.25%, 6/15/25 | 20,305,000 | 21,629,901 | ||||
Equipment Lease Purchase Agreement, Series A, Pre-Refunded, 5.25%, 6/15/26 | 8,000,000 | 8,522,000 | ||||
Equipment Lease Purchase Agreement, Series A, Pre-Refunded, 5.25%, 6/15/27 | 4,000,000 | 4,261,000 | ||||
Equipment Lease Purchase Agreement, Series A, Pre-Refunded, 5.25%, 6/15/28 | 2,000,000 | 2,130,500 | ||||
New Jersey State Educational Facilities Authority Revenue, Higher Education Capital Improvement Fund Issue, Series B, 5.00%, 9/01/36 | 14,000,000 | 15,129,520 | ||||
New Jersey State Transportation Trust Fund Authority Revenue, | ||||||
Transportation Program, Series AA, 5.00%, 6/15/45 | 15,000,000 | 16,016,850 | ||||
Transportation System, Series A, 6.00%, 12/15/38 | 49,125,000 | 51,473,175 | ||||
Transportation System, Series A, AMBAC Insured, 5.00%, 12/15/32 | 9,705,000 | 9,748,867 | ||||
Transportation System, Series A, Pre-Refunded, 6.00%, 12/15/38 | 25,875,000 | 27,308,216 | ||||
Transportation System, Series B, 5.25%, 6/15/36 | 10,000,000 | 10,638,700 | ||||
franklintempleton.com |
Semiannual Report | 29 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
New Jersey (continued) | ||||||
New Jersey State Turnpike Authority Revenue, | ||||||
Turnpike, Series E, 5.00%, 1/01/45 | $ | 11,475,000 | $ 12,936,227 | |||
Turnpike, Series E, Pre-Refunded, 5.25%, 1/01/40 | 13,925,000 | 14,592,982 | ||||
270,250,744 | ||||||
New Mexico 0.2% | ||||||
New Mexico Hospital Equipment Loan Council Hospital System Revenue, | ||||||
Presbyterian Healthcare Services, Refunding, 5.00%, 8/01/44 | 10,000,000 | 11,271,700 | ||||
Presbyterian Healthcare Services, Refunding, Series A, 5.00%, 8/01/46 | 15,000,000 | 17,159,100 | ||||
28,430,800 | ||||||
New York 9.5% | ||||||
Hudson Yards Infrastructure Corp. Revenue, Hudson Yards, Senior, Fiscal 2012, Series A, AGMC Insured, 5.00%, 2/15/47 | 16,475,000 | 18,116,239 | ||||
Long Island Power Authority Electric System Revenue, | ||||||
General, Refunding, Series B, 5.00%, 9/01/46 | 13,000,000 | 14,894,750 | ||||
General, Series A, Pre-Refunded, 6.00%, 5/01/33 | 12,500,000 | 13,411,000 | ||||
MTA Dedicated Tax Fund Revenue, | ||||||
Build America Bonds, Series B, Pre-Refunded, 5.25%, 11/15/28 | 6,000,000 | 6,497,460 | ||||
Build America Bonds, Series B, Pre-Refunded, 5.25%, 11/15/29 | 4,000,000 | 4,331,640 | ||||
Build America Bonds, Series B, Pre-Refunded, 5.25%, 11/15/30 | 3,000,000 | 3,248,730 | ||||
Build America Bonds, Series B, Pre-Refunded, 5.00%, 11/15/34 | 15,000,000 | 16,168,350 | ||||
MTA Revenue, | ||||||
Transportation, Refunding, Series D, 5.25%, 11/15/40 | 15,000,000 | 16,611,450 | ||||
Transportation, Series A, 5.00%, 11/15/38 | 11,800,000 | 13,420,848 | ||||
Transportation, Series A, AGMC Insured, Pre-Refunded, 5.00%, 11/15/33 | 20,000,000 | 20,030,000 | ||||
Transportation, Series A, Pre-Refunded, 5.00%, 11/15/37 | 25,000,000 | 25,036,956 | ||||
Transportation, Series C, 6.50%, 11/15/28 | 2,805,000 | 2,965,727 | ||||
Transportation, Series C, Pre-Refunded, 6.50%, 11/15/28 | 12,195,000 | 12,880,603 | ||||
Transportation, Series D, 5.00%, 11/15/34 | 10,000,000 | 11,028,700 | ||||
Transportation, Series D, 5.00%, 11/15/36 | 9,500,000 | 10,713,910 | ||||
Transportation, Series D, Sub Series D-1, 5.00%, 11/15/39 | 15,000,000 | 17,384,700 | ||||
Transportation, Sub Series A-1, 5.00%, 11/15/40 | 30,000,000 | 33,970,800 | ||||
New York City GO, | ||||||
Fiscal 2002, Series D, 5.50%, 6/01/24 | 180,000 | 180,671 | ||||
Fiscal 2010, Refunding, Series C, 5.00%, 8/01/23 | 24,620,000 | 26,245,659 | ||||
Series E, Subseries E-1, 6.25%, 10/15/28 | 480,000 | 504,115 | ||||
Series E, Subseries E-1, Pre-Refunded, 6.25%, 10/15/28 | 9,520,000 | 9,989,907 | ||||
Series F, 5.25%, 1/15/23 | 5,000 | 5,018 | ||||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, | ||||||
Fiscal 2009, Series A, 5.75%, 6/15/40 | 4,580,000 | 4,711,904 | ||||
Fiscal 2009, Series A, Pre-Refunded, 5.75%, 6/15/40 | 1,420,000 | 1,461,535 | ||||
Second General Resolution, Fiscal 2009, Refunding, Series EE, 5.25%, 6/15/40 | 64,970,000 | 69,057,263 | ||||
Second General Resolution, Fiscal 2009, Refunding, Series FF, Subseries FF-2, 5.50%, 6/15/40 | 15,000,000 | 16,048,800 | ||||
Second General Resolution, Fiscal 2011, Refunding, Series GG, 5.00%, 6/15/43 | 25,000,000 | 27,827,750 | ||||
Second General Resolution, Fiscal 2012, Refunding, Series AA, 5.00%, 6/15/34 | 10,000,000 | 11,190,900 | ||||
Second General Resolution, Fiscal 2012, Refunding, Series AA, 5.00%, 6/15/44 | 21,550,000 | 24,019,630 | ||||
Second General Resolution, Fiscal 2013, Refunding, Series DD, 5.00%, 6/15/35 | 30,705,000 | 35,383,214 | ||||
Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 6/15/46 | 15,000,000 | 17,131,650 | ||||
Second General Resolution, Fiscal 2015, Refunding, Series FF, 5.00%, 6/15/39 | 10,000,000 | 11,747,100 | ||||
Second General Resolution, Fiscal 2015, Refunding, Series HH, 5.00%, 6/15/39 | 15,000,000 | 17,620,650 | ||||
Second General Resolution, Fiscal 2017, Series CC, Subseries CC-2, 5.00%, 6/15/46 | 32,500,000 | 37,563,825 | ||||
30 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
New York (continued) | ||||||
New York City Transitional Finance Authority Building Aid Revenue, | ||||||
Fiscal 2009, Series S-2, 6.00%, 7/15/38 | $ | 20,000,000 | $ 20,683,800 | |||
Fiscal 2009, Series S-3, 5.25%, 1/15/34 | 10,170,000 | 10,674,025 | ||||
Fiscal 2009, Series S-4, 5.50%, 1/15/34 | 12,890,000 | 13,567,241 | ||||
Fiscal 2011, Series S-2, Subseries S-2A, 5.00%, 7/15/40 | 35,000,000 | 38,966,900 | ||||
Fiscal 2012, Series S-1, Subseries S-1A, 5.25%, 7/15/37 | 30,300,000 | 34,236,576 | ||||
New York City Transitional Finance Authority Revenue, | ||||||
Future Tax Secured, Subordinate, Fiscal 2011, Series C, 5.00%, 11/01/39 | 15,000,000 | 16,542,300 | ||||
Future Tax Secured, Subordinate, Fiscal 2014, Series A, Subseries A-1, 5.00%, 11/01/34 | 15,000,000 | 17,512,800 | ||||
Future Tax Secured, Subordinate, Fiscal 2016, Series E, Subseries E-1, 5.00%, 2/01/38 | 10,000,000 | 11,585,800 | ||||
Future Tax Secured, Subordinate, Fiscal 2017, Series B, Subseries B-1, 5.00%, 8/01/36 | 10,000,000 | 11,721,400 | ||||
Future Tax Secured, Subordinate, Fiscal 2017, Series B, Subseries B-1, 5.00%, 8/01/38 | 10,000,000 | 11,670,600 | ||||
Future Tax Secured, Subordinate, Fiscal 2018, Series A, Subseries A-3, 5.00%, 8/01/41 | 57,915,000 | 67,905,917 | ||||
New York Liberty Development Corp. Liberty Revenue, | ||||||
One World Trade Center, Port Authority Consolidated, Secured, 5.25%, 12/15/43 | 25,000,000 | 28,260,500 | ||||
Second Priority, Bank of America Tower at One Bryant Park Project, Class 1, Refunding, 5.625%, 1/15/46 | 25,000,000 | 27,242,750 | ||||
Seven World Trade Center Project, Refunding, 5.00%, 9/15/43 | 6,500,000 | 7,211,165 | ||||
New York Liberty Development Corp. Revenue, | ||||||
Goldman Sachs Headquarters Issue, 5.25%, 10/01/35 | 40,000,000 | 51,240,400 | ||||
Goldman Sachs Headquarters Issue, 5.50%, 10/01/37 | 24,995,000 | 33,148,369 | ||||
New York State Dormitory Authority Revenues, | ||||||
Lease, State University Dormitory Facilities, Series A, 5.00%, 7/01/41 | 10,000,000 | 11,099,400 | ||||
State Supported Debt, Upstate Community Colleges, Series C, 6.00%, 7/01/31 | 23,215,000 | 24,582,363 | ||||
New York State Dormitory Authority Sales Tax Revenue, Series A, 5.00%, 3/15/44 | 10,105,000 | 11,807,692 | ||||
New York State Dormitory Authority State Personal Income Tax Revenue, | ||||||
General Purpose, Refunding, Series A, 5.00%, 2/15/38 | 10,000,000 | 11,698,400 | ||||
General Purpose, Series A, 5.00%, 2/15/36 | 15,000,000 | 17,197,500 | ||||
Group C, Series B, 5.00%, 2/15/40 | 20,000,000 | 23,152,200 | ||||
New York State HFAR, Housing Project Mortgage, Refunding, Series A, AGMC Insured, 6.125%, 11/01/20 | 60,000 | 60,190 | ||||
New York State Thruway Authority General Junior Indebtedness Obligations Revenue, junior lien, Series A, 5.25%, 1/01/56 | 10,000,000 | 11,594,600 | ||||
New York State Urban Development Corp. Revenue, | ||||||
State Personal Income Tax, General Purpose, Series A, 5.00%, 3/15/31 | 10,000,000 | 11,159,600 | ||||
State Personal Income Tax, State Facilities and Equipment, Series B-1, Pre-Refunded, 5.00%, 3/15/36 | 5,000,000 | 5,266,350 | ||||
Port Authority of New York and New Jersey Revenue, Consolidated, Refunding, One Hundred Seventy-Ninth Series, 5.00%, 12/01/38 | 20,000,000 | 23,059,800 | ||||
Triborough Bridge and Tunnel Authority Revenue, MTA Bridges and Tunnels, General, Series A, Pre-Refunded, 5.25%, 11/15/38 | 25,000,000 | 25,574,750 | ||||
Triborough Bridge and Tunnel Authority Revenues, | ||||||
General, Series A-2, 5.25%, 11/15/34 | 4,620,000 | 4,824,343 | ||||
General, Series A-2, Pre-Refunded, 5.25%, 11/15/34 | 2,880,000 | 3,006,461 | ||||
General Purpose, Series B, Pre-Refunded, 5.50%, 1/01/30 | 15,000,000 | 17,227,350 | ||||
1,154,882,996 | ||||||
North Carolina 1.9% | ||||||
Charlotte COP, Cultural Arts Facilities, Refunding, Series E, 5.00%, 6/01/34 | 13,000,000 | 13,691,210 | ||||
North Carolina Eastern Municipal Power Agency Power System Revenue, | ||||||
Series A, Pre-Refunded, 5.50%, 1/01/26 | 4,500,000 | 4,728,825 | ||||
Series B, ETM, 6.00%, 1/01/22 | 1,250,000 | 1,481,200 | ||||
Series B, ETM, 6.25%, 1/01/23 | 39,030,000 | 48,164,191 | ||||
franklintempleton.com |
Semiannual Report | 31 |
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, | ||||||
Series A, Pre-Refunded, 5.00%, 5/01/23 | $ | 20,000,000 | $ 21,843,600 | |||
Series A, Pre-Refunded, 5.00%, 5/01/24 | 5,500,000 | 5,816,800 | ||||
Series A, Pre-Refunded, 5.00%, 5/01/25 | 5,750,000 | 6,081,200 | ||||
Series A, Pre-Refunded, 5.00%, 5/01/26 | 20,000,000 | 21,843,600 | ||||
Series A, Pre-Refunded, 5.00%, 5/01/27 | 4,500,000 | 4,759,200 | ||||
Series A, Pre-Refunded, 5.00%, 5/01/28 | 4,250,000 | 4,494,800 | ||||
North Carolina Turnpike Authority Revenue, | ||||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/33 | 25,000,000 | 14,706,000 | ||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/34 | 15,000,000 | 8,439,450 | ||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/35 | 15,215,000 | 8,136,678 | ||||
Triangle Expressway System, senior lien, Series A, Assured Guaranty, Pre-Refunded, 5.50%, 1/01/29 | 6,750,000 | 7,093,237 | ||||
Triangle Expressway System, senior lien, Series A, Assured Guaranty, Pre-Refunded, 5.75%, 1/01/39 | 10,380,000 | 10,937,717 | ||||
Raleigh Combined Enterprise System Revenue, Pre-Refunded, 5.00%, 3/01/40 | 15,830,000 | 17,776,932 | ||||
Wake County GO, Refunding, Series C, 5.00%, 3/01/25 | 21,780,000 | 26,679,847 | ||||
226,674,487 | ||||||
North Dakota 0.5% | ||||||
Cass County Health Care Facilities Revenue, Essentia Health Obligated Group, Series D, Assured Guaranty, Pre-Refunded, 5.00%, 2/15/40 | 31,970,000 | 32,334,777 | ||||
Grand Forks Health Care System Revenue, | ||||||
Altru Health System Obligated Group, Assured Guaranty, Pre-Refunded, 5.00%, 12/01/26 | 8,385,000 | 8,543,141 | ||||
Altru Health System Obligated Group, Refunding, 5.50%, 12/01/20 | 8,870,000 | 8,902,287 | ||||
Altru Health System Obligated Group, Refunding, 5.50%, 12/01/24 | 13,945,000 | 13,995,760 | ||||
63,775,965 | ||||||
Ohio 3.3% | ||||||
Akron Income Tax Revenue, Community Learning Centers, Refunding, Series A, 5.00%, 12/01/29 | 10,000,000 | 11,505,300 | ||||
American Municipal Power Inc. Revenue, | ||||||
Combined Hydroelectric Projects, Green Bonds, Refunding, Series A, 5.00%, 2/15/46 | 20,000,000 | 22,492,800 | ||||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/38 | 1,215,000 | 1,227,660 | ||||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/39 | 5,000,000 | 5,694,700 | ||||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/42 | 2,500,000 | 2,834,925 | ||||
Prairie State Energy Campus Project, Series A, Pre-Refunded, 5.00%, 2/15/38 | 21,285,000 | 21,527,862 | ||||
Bowling Green Student Housing Revenue, CFP I LLC, State University Project, Pre-Refunded, 6.00%, 6/01/45 | 6,750,000 | 7,543,328 | ||||
Buckeye Tobacco Settlement Financing Authority Revenue, | ||||||
Tobacco Settlement, Senior, Convertible, Capital Appreciation, Turbo Term, Series A-3, 6.25%, 6/01/37 | 15,000,000 | 14,932,050 | ||||
Tobacco Settlement, Senior, Turbo Term, Series A-2, 5.75%, 6/01/34 | 10,000,000 | 9,409,200 | ||||
Butler County Hospital Facilities Revenue, UC Health, Refunding, 5.00%, 11/15/45 | 7,500,000 | 8,317,050 | ||||
Cleveland Airport System Revenue, Refunding, Series A, AGMC Insured, 5.00%, 1/01/28 | 9,500,000 | 10,524,575 | ||||
Cleveland-Cuyahoga County Port Authority Development Lease Revenue, Administrative Headquarters Project, 5.00%, 7/01/37 | 6,000,000 | 7,352,820 | ||||
Franklin County Hospital Facilities Revenue, OhioHealth Corp., 5.00%, 5/15/40 | 10,000,000 | 11,349,200 | ||||
Franklin County Revenue, Trinity Health Credit Group, Series OH, 5.00%, 12/01/46 | 10,000,000 | 11,352,900 | ||||
Hamilton County Healthcare Facilities Revenue, The Christ Hospital Project, AGMC Insured, 5.00%, 6/01/42 | 22,500,000 | 24,878,700 | ||||
32 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Ohio (continued) | ||||||
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 | $ 13,828,560 | |||
JobsOhio Beverage System Statewide Liquor Profits Revenue, senior lien, Series A, 5.00%, 1/01/38 | 21,060,000 | 23,551,819 | ||||
Kent State University Revenues, General Receipts, Series A, 5.00%, 5/01/37 | 10,500,000 | 11,785,830 | ||||
Northeast Regional Sewer District Revenue, | ||||||
Wastewater Improvement, Refunding, 4.00%, 11/15/38 | 15,830,000 | 17,102,099 | ||||
Wastewater Improvement, Refunding, 4.00%, 11/15/43 | 10,000,000 | 10,692,100 | ||||
Ohio State Air Quality Development Authority Revenue, | ||||||
Environmental Improvement, Buckeye Power Inc. Project, 6.00%, 12/01/40 | 15,000,000 | 17,009,850 | ||||
Pollution Control, FirstEnergy Generation Corp. Project, Refunding, Series C, 5.625%, 6/01/18 | 8,500,000 | 8,436,420 | ||||
Ohio State GO, Infrastructure Improvement, Series A, Pre-Refunded, 5.375%, 9/01/28 | 10,000,000 | 10,143,197 | ||||
Ohio State Higher Educational Facility Commission Revenue, Hospital Facilities, Summa Health System, 2010 Project, Refunding, AGMC Insured, 5.25%, 11/15/40 | 15,000,000 | 16,039,800 | ||||
Ohio State Hospital Revenue, | ||||||
Cleveland Clinic Health System Obligated Group, Refunding, Series A, 4.00%, 1/01/36 | 6,500,000 | 6,930,885 | ||||
University Hospitals Health System Inc., Refunding, Series A, AGMC Insured, 5.00%, 1/15/41 | 7,000,000 | 7,533,120 | ||||
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 | 33,992,000 | ||||
Ohio State University Revenue, Special Purpose, General Receipts, Series A, 5.00%, 6/01/38 | 10,000,000 | 11,440,100 | ||||
Scioto County Hospital Facilities Revenue, Southern Ohio Medical Center, Pre-Refunded, 5.75%, 2/15/38 | 17,000,000 | 17,227,800 | ||||
Toledo Water System Revenue, Improvement and Refunding, 5.00%, 11/15/38 | 20,000,000 | 22,525,800 | ||||
399,182,450 | ||||||
Oklahoma 0.2% | ||||||
Edmond Public Works Authority Sales Tax and Utility System Revenue, | ||||||
5.00%, 7/01/42 | 4,000,000 | 4,648,440 | ||||
5.00%, 7/01/47 | 4,500,000 | 5,205,015 | ||||
McGee Creek Authority Water Revenue, NATL Insured, 6.00%, 1/01/23 | 220,000 | 239,686 | ||||
Oklahoma Development Finance Authority Revenue, Provident Education Resources Inc. Cross Village Student Housing Project, Series A, 5.00%, 8/01/47 | 8,000,000 | 8,741,360 | ||||
Oklahoma Municipal Power Authority Revenue, | ||||||
Power Supply System, Refunding, Series A, 5.00%, 1/01/32 | 650,000 | 757,302 | ||||
Power Supply System, Refunding, Series A, 5.00%, 1/01/33 | 1,250,000 | 1,448,425 | ||||
Power Supply System, Refunding, Series A, 4.00%, 1/01/36 | 100,000 | 106,000 | ||||
Power Supply System, Refunding, Series A, 5.00%, 1/01/47 | 3,100,000 | 3,502,752 | ||||
24,648,980 | ||||||
Oregon 0.8% | ||||||
Medford Hospital Facilities Authority Revenue, Hospital, Asante Health System, Series A, AGMC Insured, 5.00%, 8/15/40 | 4,935,000 | 5,237,466 | ||||
Oregon Health and Science University Revenue, Series A, Pre-Refunded, 5.75%, 7/01/39 | 5,000,000 | 5,379,600 | ||||
Oregon State Department of Transportation Highway User Tax Revenue, senior lien, Series A, Pre-Refunded, 4.50%, 11/15/32 | 30,000,000 | 30,038,100 | ||||
Port of Portland International Airport Revenue, Series Nineteen, Pre-Refunded, 5.50%, 7/01/38 | 25,000,000 | 25,735,500 | ||||
Portland Sewer System Revenue, second lien, Series A, 5.00%, 3/01/35 | 11,540,000 | 12,494,589 | ||||
University of Oregon General Revenue, Series A, 5.00%, 4/01/46 | 17,000,000 | 19,538,440 | ||||
98,423,695 | ||||||
franklintempleton.com |
Semiannual Report | 33 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Pennsylvania 3.6% | ||||||
Allegheny County Sanitary Authority Sewer Revenue, BAM Insured, 5.25%, 12/01/44 | $ 5,000,000 | $ 5,746,750 | ||||
Bucks County Water and Sewer Authority Water System Revenue, | ||||||
AGMC Insured, 5.00%, 12/01/33 | 5,500,000 | 6,086,465 | ||||
AGMC Insured, 5.00%, 12/01/37 | 10,520,000 | 11,641,748 | ||||
AGMC Insured, 5.00%, 12/01/41 | 5,110,000 | 5,654,879 | ||||
Centennial School District Bucks County GO, Series B, AGMC Insured, Pre-Refunded, 5.25%, 12/15/37 | 13,655,000 | 14,297,741 | ||||
Commonwealth Financing Authority Revenue, | ||||||
Series A, 5.00%, 6/01/33 | 4,550,000 | 5,276,498 | ||||
Series B, 5.00%, 6/01/42 | 5,400,000 | 5,899,986 | ||||
Delaware County Regional Water Quality Control Authority Revenue, | ||||||
Sewer, 5.00%, 11/01/41 | 5,000,000 | 5,736,700 | ||||
Sewer, 5.00%, 11/01/46 | 10,315,000 | 11,773,954 | ||||
Delaware River Port Authority Revenue, Series D, AGMC Insured, 5.00%, 1/01/40 | 15,000,000 | 16,133,400 | ||||
Erie Water Authority Water Revenue, Refunding, 5.00%, 12/01/43 | 5,000,000 | 5,653,750 | ||||
Lackawanna County GO, | ||||||
Refunding, Series B, AGMC Insured, 5.00%, 9/01/35 | 2,850,000 | 3,088,174 | ||||
Series B, AGMC Insured, Pre-Refunded, 5.00%, 9/01/35 | 4,650,000 | 5,137,506 | ||||
Montour School District GO, | ||||||
Series A, AGMC Insured, 5.00%, 4/01/40 | 3,170,000 | 3,637,638 | ||||
Series A, AGMC Insured, 5.00%, 4/01/41 | 2,000,000 | 2,292,000 | ||||
Series A, AGMC Insured, 5.00%, 4/01/42 | 2,000,000 | 2,288,960 | ||||
Northampton County General Purpose Authority Hospital Revenue, St. Luke’s Hospital Project, Series A, Pre-Refunded, 5.375%, 8/15/28 | 5,000,000 | 5,168,750 | ||||
Pennsylvania Convention Center Authority Revenue, Series A, FGIC Insured, ETM, 6.00%, 9/01/19 | 360,000 | 381,020 | ||||
Pennsylvania State Economic Development Financing Authority Revenue, | ||||||
Water Facilities, Aqua Pennsylvania Inc. Project, Series B, 5.00%, 12/01/43 | 20,000,000 | 21,896,600 | ||||
Water Facility, Pennsylvania-American Water Co. Project, 6.20%, 4/01/39 | 12,500,000 | 13,318,625 | ||||
Pennsylvania State GO, Refunding, First Series, AGMC Insured, 5.00%, 8/15/26 | 20,805,000 | 24,951,853 | ||||
Pennsylvania State Turnpike Commission Turnpike Revenue, | ||||||
Subordinate, Convertible Capital Appreciation, Series C, AGMC Insured, 6.25%, 6/01/33 | 5,000,000 | 6,355,650 | ||||
Subordinate, Motor License Fund-Enhanced, Series A, 5.00%, 12/01/37 | 3,000,000 | 3,289,170 | ||||
Subordinate, Motor License Fund-Enhanced, Series A, Subseries A-1, 5.00%, 12/01/38 | 20,000,000 | 21,317,800 | ||||
Subordinate, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 6/01/39 | 4,860,000 | 5,154,565 | ||||
Subordinate, Series B, Pre-Refunded, 5.75%, 6/01/39 | 20,000,000 | 21,430,200 | ||||
Subordinate, Series C, Subseries C-1, Assured Guaranty, Pre-Refunded, 6.00%, 6/01/28 | 5,000,000 | 5,143,400 | ||||
Subordinate, Series C, Subseries C-1, Assured Guaranty, Pre-Refunded, 6.25%, 6/01/38 | 25,000,000 | 25,753,250 | ||||
Subordinated, Series A, Assured Guaranty, Pre-Refunded, 5.00%, 6/01/39 | 3,830,000 | 4,062,136 | ||||
Subseries A, Assured Guaranty, Pre-Refunded, 5.00%, 6/01/39 | 1,310,000 | 1,389,399 | ||||
Philadelphia GO, | ||||||
Refunding, Series A, AGMC Insured, 5.00%, 8/01/24 | 9,805,000 | 10,436,540 | ||||
Series A, AGMC Insured, Pre-Refunded, 5.00%, 8/01/24 | 1,195,000 | 1,274,766 | ||||
Philadelphia Hospitals and Higher Education Facilities Authority Revenue, | ||||||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.30%, 1/01/18 | 95,000 | 93,100 | ||||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.35%, 1/01/23 | 915,000 | 896,700 | ||||
Mortgage, North Philadelphia Health Systems, Refunding, Series A, FHA Insured, 5.375%, 1/01/28 | 975,000 | 955,500 | ||||
Philadelphia Municipal Authority Lease Revenue, Pre-Refunded, 6.375%, 4/01/29 | 4,500,000 | 4,831,380 | ||||
Philadelphia School District GO, | ||||||
Refunding, Series F, 5.00%, 9/01/33 | 6,415,000 | 7,129,952 | ||||
Refunding, Series F, 5.00%, 9/01/36 | 4,090,000 | 4,496,914 | ||||
Series E, Pre-Refunded, 6.00%, 9/01/38 | 24,645,000 | 25,648,544 | ||||
34 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Pennsylvania (continued) | ||||||
Philadelphia School District GO, (continued) | ||||||
Series E, Pre-Refunded, 6.00%, 9/01/38 | $ 355,000 | $ 369,308 | ||||
Philadelphia Water and Wastewater Revenue, | ||||||
Series A, 5.00%, 7/01/45 | 15,000,000 | 17,110,350 | ||||
Series A, Pre-Refunded, 5.25%, 1/01/25 | 1,000,000 | 1,047,970 | ||||
Series A, Pre-Refunded, 5.00%, 1/01/26 | 5,000,000 | 5,225,400 | ||||
Series A, Pre-Refunded, 5.00%, 1/01/27 | 1,750,000 | 1,828,890 | ||||
Series A, Pre-Refunded, 5.25%, 1/01/32 | 5,000,000 | 5,239,850 | ||||
Series C, AGMC Insured, 5.00%, 8/01/40 | 7,000,000 | 7,581,910 | ||||
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 | 19,466,100 | ||||
South Fork Municipal Authority Hospital Revenue, Conemaugh Valley Memorial Hospital, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 7/01/35 | 15,000,000 | 16,570,050 | ||||
State Public School Building Authority Revenue, Commonwealth of Pennsylvania, School Lease, The School District of Philadelphia Project, Refunding, Series A, AGMC Insured, 5.00%, 6/01/32 | 10,000,000 | 11,315,900 | ||||
Westmoreland County Municipal Authority Revenue, | ||||||
Municipal Service, Refunding, BAM Insured, 5.00%, 8/15/38 | 1,200,000 | 1,378,968 | ||||
Municipal Service, Refunding, BAM Insured, 5.00%, 8/15/42 | 17,205,000 | 19,654,820 | ||||
432,511,479 | ||||||
Rhode Island 0.8% | ||||||
Rhode Island Convention Center Authority Revenue, Refunding, Series A, Assured Guaranty, 5.50%, 5/15/27 | 17,300,000 | 18,409,622 | ||||
Rhode Island Health and Educational Building Corp. Revenue, Hospital Financing, Lifespan Obligation Group, Refunding, 5.00%, 5/15/39 | 5,500,000 | 6,061,495 | ||||
Rhode Island Housing and Mortgage Finance Corp. Revenue, | ||||||
Homeownership Opportunity, Refunding, Series 15-A, 6.85%, 10/01/24 | 155,000 | 155,541 | ||||
Homeownership Opportunity, Series 10-A, 6.50%, 10/01/22 | 220,000 | 220,768 | ||||
Homeownership Opportunity, Series 10-A, 6.50%, 4/01/27 | 130,000 | 131,027 | ||||
Rhode Island State EDC Special Facility Revenue, Rhode Island Airport Corp. Project, first lien, CIFG Insured, 5.00%, 7/01/31 | 5,720,000 | 5,730,124 | ||||
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 | 9,602,010 | ||||
Rhode Island State Health and Educational Building Corp. Higher Education Facility Revenue, | ||||||
Board of Governors for Higher Education, University of Rhode Island, Auxiliary Enterprise Issue, Series B, AGMC Insured, Pre-Re, 5.00%, 9/15/30 | 7,535,000 | 8,335,669 | ||||
Board of Governors for Higher Education, University of Rhode Island, Auxiliary Enterprise Issue, Series B, AGMC Insured, Pre-Re, 5.00%, 9/15/35 | 4,500,000 | 4,978,170 | ||||
Board of Governors for Higher Education, University of Rhode Island, Auxiliary Enterprise Issue, Series B, AGMC Insured, Pre-Re, 5.00%, 9/15/40 | 10,270,000 | 11,361,290 | ||||
New England Institute of Technology Issue, Series A, Pre-Refunded, 5.125%, 3/01/40 | 16,435,000 | 17,904,947 | ||||
Rhode Island State Health and Educational Building Corp. Revenue, | ||||||
Hospital Financing, Lifespan Obligated Group Issue, Series A, Pre-Refunded, 7.00%, 5/15/39 | 8,200,000 | 8,940,132 | ||||
Public Schools, Bond Financing Program, Town of East Greenwich Issue, Series A, 5.00%, 5/15/37 | 10,000,000 | 11,331,800 | ||||
103,162,595 | ||||||
South Carolina 1.3% | ||||||
Greenwood County Hospital Revenue, | ||||||
Facilities Health Regional Healthcare, Refunding, 4.00%, 10/01/39 | 1,445,000 | 1,479,463 | ||||
Facilities Self Regional Healthcare, Refunding, 4.00%, 10/01/37 | 8,465,000 | 8,751,963 | ||||
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 | 7,050,246 | ||||
franklintempleton.com |
Semiannual Report | 35 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
South Carolina (continued) | ||||||
Piedmont Municipal Power Agency Electric Revenue, | ||||||
Refunding, NATL Insured, 6.25%, 1/01/21 | $ 200,000 | $ 229,444 | ||||
Refunding, Series A-2, 5.00%, 1/01/24 | 7,240,000 | 7,287,422 | ||||
Series A-2, Pre-Refunded, 5.00%, 1/01/24 | 2,760,000 | 2,777,857 | ||||
Rock Hill Utility System Revenue, | ||||||
Combined Utility System, Refunding, 5.00%, 1/01/41 | 7,690,000 | 8,683,164 | ||||
Combined Utility System, Refunding, 5.00%, 1/01/47 | 5,000,000 | 5,615,150 | ||||
South Carolina Jobs EDA Hospital Revenue, | ||||||
AnMed Health Project, Improvement, Series B, Assured Guaranty, Pre-Refunded, 5.375%, 2/01/29 | 4,000,000 | 4,208,600 | ||||
Palmetto Health, Refunding, Series A, AGMC Insured, 5.00%, 8/01/35 | 40,000,000 | 40,652,400 | ||||
Palmetto Health, Refunding and Improvement, 5.75%, 8/01/39 | 3,000,000 | 3,137,700 | ||||
South Carolina State Public Service Authority Revenue, | ||||||
Refunding and Improvement, Series A, 5.00%, 12/01/55 | 20,000,000 | 22,136,200 | ||||
Refunding and Improvement, Series B, 5.00%, 12/01/50 | 15,000,000 | 16,612,650 | ||||
Series A, Pre-Refunded, 5.50%, 1/01/38 | 7,500,000 | 7,885,876 | ||||
Series B, Pre-Refunded, 5.25%, 1/01/34 | 6,000,000 | 6,291,360 | ||||
Spartanburg Water System Revenue, Assured Guaranty, Pre-Refunded, 5.00%, 6/01/39 | 6,000,000 | 6,363,660 | ||||
Woodruff Roebuck Water District Revenue, South Carolina Water System Improvement, AGMC Insured, Pre-Refunded, 5.00%, 6/01/40 | 3,000,000 | 3,288,780 | ||||
152,451,935 | ||||||
South Dakota 0.6% | ||||||
Huron School District No. 2-2 GO, 5.00%, 6/15/39 | 4,000,000 | 4,515,640 | ||||
South Dakota State Building Authority Revenue, Refunding, Series A, 5.00%, 6/01/42 | 5,450,000 | 6,317,204 | ||||
South Dakota State Health and Educational Facilities Authority Revenue, | ||||||
Avera Health Issue, Refunding, 4.00%, 7/01/42 | 10,000,000 | 10,176,300 | ||||
Avera Health Issue, Series B, Pre-Refunded, 5.50%, 7/01/35 | 3,000,000 | 3,088,260 | ||||
Avera Health Issue, Series B, Pre-Refunded, 5.25%, 7/01/38 | 5,000,000 | 5,138,850 | ||||
Regional Health, 4.00%, 9/01/37 | 10,920,000 | 11,288,004 | ||||
Regional Health, 5.00%, 9/01/40 | 10,000,000 | 11,400,600 | ||||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/38 | 3,475,000 | 3,959,832 | ||||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/46 | 6,005,000 | 6,624,716 | ||||
Vocational Education Program, Series A, 5.125%, 8/01/46 | 7,000,000 | 7,764,330 | ||||
70,273,736 | ||||||
Tennessee 1.0% | ||||||
Johnson City Health and Educational Facilities Board Hospital Revenue, | ||||||
Johnson City Medical Center Hospital, Improvement, Series C, NATL Insured, ETM, 5.25%, 7/01/28 | 8,500,000 | 8,851,900 | ||||
Johnson City Medical Center Hospital, Improvement, Series C, NATL Insured, Pre-Refunded, 5.125%, 7/01/25 | 115,000 | 115,356 | ||||
Knox County Health Educational and Housing Facility Board Hospital Revenue, Covenant Health, Refunding, Series A, 5.00%, 1/01/42 | 35,000,000 | 39,001,900 | ||||
b Metropolitan Government Nashville and Davidson County Water and Sewer Revenue, | ||||||
Subordinate, Green Bond, Series A, 5.00%, 7/01/46 | 6,000,000 | 7,010,940 | ||||
Subordinate, Refunding, Series B, 5.00%, 7/01/42 | 21,645,000 | 25,391,317 | ||||
Subordinate, Refunding, Series B, 5.00%, 7/01/46 | 15,925,000 | 18,608,203 | ||||
Tennessee State School Bond Authority Revenue, Higher Educational Facilities Second Program, Series A, 5.00%, 11/01/47 | 15,000,000 | 17,688,300 | ||||
116,667,916 | ||||||
36 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Texas 13.8% | ||||||
Alamo Regional Mobility Authority Revenue, | $ 6,235,000 | $ 7,083,085 | ||||
junior lien, Vehicle Registration Fee, 5.00%, 6/15/39 | ||||||
senior lien, Vehicle Registration Fee, 5.00%, 6/15/46 | 11,115,000 | 12,724,563 | ||||
Aldine ISD, GO, Harris County, School Building, Refunding, Series A, PSF Guarantee, 5.00%, 2/15/45 | 15,000,000 | 17,415,150 | ||||
Allen ISD, GO, Collin County, School Building, Series A, Pre-Refunded, 5.00%, 2/15/39 | 11,575,000 | 12,142,059 | ||||
Arlington ISD, GO, Tarrant County, School Building, PSF Guarantee, 5.00%, 2/15/42 | 5,500,000 | 6,362,620 | ||||
Austin Community College District Public Facility Corp. Revenue, | ||||||
Educational Facility Project, Round Rock Campus, Pre-Refunded, 5.25%, 8/01/33 | 8,675,000 | 8,945,313 | ||||
Hays New Campus Project, 5.00%, 8/01/36 | 5,700,000 | 6,347,463 | ||||
Austin Electric Utility System Revenue, Refunding, Series A, 5.00%, 11/15/45 | 10,000,000 | 11,434,000 | ||||
Austin Water and Wastewater System Revenue, Travis Williamson and Hays Counties, Refunding, Series A, 5.00%, 11/15/38 | 20,000,000 | 22,858,800 | ||||
Bexar County Hospital District GO, | ||||||
Certificates of Obligation, Combination Tax and Revenue, 5.00%, 2/15/38 | 1,910,000 | 1,931,010 | ||||
Certificates of Obligation, Combination Tax and Revenue, Pre-Refunded, 5.00%, 2/15/38 | 8,090,000 | 8,182,307 | ||||
Central Texas Regional Mobility Authority Revenue, | ||||||
senior lien, Pre-Refunded, 6.00%, 1/01/41 | 14,000,000 | 16,056,320 | ||||
senior lien, Refunding, 5.00%, 1/01/40 | 12,505,000 | 14,043,490 | ||||
senior lien, Refunding, 5.00%, 1/01/46 | 11,245,000 | 12,551,669 | ||||
senior lien, Series A, 5.00%, 1/01/45 | 5,000,000 | 5,571,200 | ||||
Clifton Higher Education Finance Corp. Revenue, Education, Idea Public Schools, Series A, PSF Guarantee, 5.00%, 8/15/46 | 5,000,000 | 5,713,150 | ||||
Comal ISD GO, School Building, PSF Guarantee, 5.00%, 2/01/42 | 15,000,000 | 17,342,850 | ||||
Corpus Christi Utility System Revenue, | ||||||
Improvement, junior lien, 5.00%, 7/15/38 | 6,000,000 | 6,778,800 | ||||
Improvement, junior lien, 5.00%, 7/15/43 | 7,000,000 | 7,861,140 | ||||
Improvement, junior lien, Series A, 5.00%, 7/15/40 | 13,200,000 | 15,100,668 | ||||
Crowley ISD, GO, Tarrant and Johnson Counties, Unlimited Tax School Building, PSF Guarantee, Pre-Refunded, 5.00%, 8/01/36 | 13,900,000 | 14,312,691 | ||||
Crowley ISD GO, School Building, PSF Guarantee, 5.00%, 2/01/47 | 16,000,000 | 18,422,880 | ||||
Dallas Area Rapid Transit Sales Tax Revenue, | ||||||
Refunding, Series A, 5.00%, 12/01/46 | 10,000,000 | 11,526,200 | ||||
Refunding, Series A, 5.00%, 12/01/48 | 12,200,000 | 14,014,506 | ||||
Dallas Civic Center Revenue, Refunding and Improvement, Assured Guaranty, 5.25%, 8/15/34 | 18,975,000 | 20,178,774 | ||||
Dallas Waterworks and Sewer System Revenue, | ||||||
Pre-Refunded, 5.00%, 10/01/35 | 4,515,000 | 4,986,998 | ||||
Refunding, 5.00%, 10/01/35 | 5,485,000 | 6,022,036 | ||||
Dallas/Fort Worth International Airport Revenue, | ||||||
Joint Improvement, Series A, 5.00%, 11/01/42 | 25,000,000 | 27,316,500 | ||||
Joint Refunding, Series D, 5.25%, 11/01/32 | 10,000,000 | 11,803,400 | ||||
Ector County ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/36 | 10,355,000 | 11,891,475 | ||||
Forney ISD, | ||||||
GO, Refunding, PSF Guarantee, 5.00%, 8/15/37 | 15,000,000 | 17,248,350 | ||||
GO, School Building, Series A, PSF Guarantee, Pre-Refunded, 6.00%, 8/15/37 | 2,000,000 | 2,077,260 | ||||
Frisco ISD, | ||||||
GO, Collin and Denton Counties, School Building, Refunding, Series B, PSF Guarantee, 5.00%, 8/15/41 | 10,000,000 | 11,677,200 | ||||
GO, Collin and Denton Counties, School Building, Refunding, Series B, PSF Guarantee, 5.00%, 8/15/46 | 20,000,000 | 23,202,400 | ||||
Goose Creek Consolidated ISD, GO, Schoolhouse, PSF Guarantee, 5.00%, 2/15/38 | 6,045,000 | 6,849,590 | ||||
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 | 9,352,700 | ||||
franklintempleton.com |
Semiannual Report | 37 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Texas (continued) | ||||||
Harris County Cultural Education Facilities Finance Corp. Revenue, | ||||||
Houston Methodist Hospital, 5.00%, 12/01/45 | $ 30,000,000 | $ 33,694,500 | ||||
Memorial Hermann Health System, 5.00%, 7/01/45 | 15,000,000 | 16,777,950 | ||||
Harris County Health Facilities Development Corp. Hospital Revenue, Memorial Hermann Healthcare System, Series B, Pre-Refunded, 7.25%, 12/01/35 | 13,500,000 | 14,387,760 | ||||
Harris County MTA Revenue, Sales and Use Tax, Contractual Obligations, Series B, Pre-Refunded, 5.00%, 11/01/33 | 10,000,000 | 10,747,700 | ||||
Hays County GO, Road, Pre-Refunded, 5.00%, 2/15/36 | 6,960,000 | 7,561,135 | ||||
Hidalgo County Regional Mobility Authority Vehicle Registration Revenue, | ||||||
senior lien, Refunding, 5.25%, 12/01/38 | 5,000,000 | 5,783,300 | ||||
senior lien, Refunding, 5.00%, 12/01/43 | 5,000,000 | 5,652,750 | ||||
Houston Airport System Revenue, | ||||||
Refunding, second lien, Series A, 5.50%, 7/01/34 | 5,000,000 | 5,144,700 | ||||
Refunding, second lien, Series A, 5.50%, 7/01/39 | 30,850,000 | 31,742,799 | ||||
Houston Utility System Revenue, Combined, first lien, Refunding, Series D, 5.00%, 11/15/36 | 10,000,000 | 11,232,000 | ||||
Hutto ISD, GO, Refunding, Series A, PSF Guarantee, 5.00%, 8/01/39 | 10,000,000 | 11,363,300 | ||||
Keller ISD, GO, School Building, Pre-Refunded, 5.50%, 2/15/35 | 10,000,000 | 10,553,600 | ||||
Laredo Waterworks Sewer System Revenue, | ||||||
AGMC Insured, 5.00%, 3/01/41 | 2,500,000 | 2,757,425 | ||||
Pre-Refunded, 5.25%, 3/01/40 | 16,535,000 | 18,041,173 | ||||
Refunding, 4.00%, 3/01/41 | 5,210,000 | 5,446,482 | ||||
Lower Colorado River Authority Transmission Contract Revenue, | ||||||
LCRA Transmission Services Corp. Project, Refunding, 5.50%, 5/15/36 | 15,310,000 | 16,233,959 | ||||
LCRA Transmission Services Corp. Project, Refunding, Series A, 5.00%, 5/15/36 | 10,000,000 | 11,307,000 | ||||
Lubbock-Cooper ISD, GO, Refunding, PSF Guarantee, 5.00%, 2/15/41 | 12,500,000 | 14,194,750 | ||||
Lufkin Health Facilities Development Corp. Revenue, Memorial Health System of East Texas, Pre-Refunded, 6.25%, 2/15/37 | 5,000,000 | 5,327,850 | ||||
Matagorda County Hospital District Revenue, FHA Insured, Pre-Refunded, 5.00%, 2/15/35 | 10,000,000 | 10,304,300 | ||||
Midlothian ISD, GO, School Building, Series A, PSF Guarantee, 5.00%, 2/15/47 | 11,865,000 | 13,764,942 | ||||
New Hope Cultural Education Facilities Finance Corp. Revenue, Texas A&M University Project, Series A-1, 5.00%, 4/01/46 | 6,000,000 | 6,795,720 | ||||
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 | 1,337,850 | ||||
NCCD-College Station Properties LLC, Texas A&M University Project, Series A, 5.00%, 7/01/47 | 10,000,000 | 9,938,100 | ||||
North East Regional Mobility Authority Revenue, senior lien, Series A, 5.00%, 1/01/41 | 16,750,000 | 18,658,495 | ||||
North Fort Bend Water Authority Water System Revenue, Assured Guaranty, 5.25%, 12/15/34 | 40,000,000 | 43,012,400 | ||||
North Harris County Regional Water Authority Revenue, | ||||||
senior lien, 5.00%, 12/15/46 | 18,685,000 | 21,405,910 | ||||
senior lien, Pre-Refunded, 5.25%, 12/15/33 | 27,000,000 | 28,255,230 | ||||
senior lien, Pre-Refunded, 5.50%, 12/15/38 | 25,000,000 | 26,231,750 | ||||
senior lien, Refunding, 4.00%, 12/15/41 | 20,000,000 | 21,094,200 | ||||
North Texas Tollway Authority Revenue, | ||||||
first tier, Series A, 6.25%, 1/01/39 | 2,270,000 | 2,393,079 | ||||
first tier, Series A, Pre-Refunded, 6.25%, 1/01/39 | 10,230,000 | 10,832,547 | ||||
Special Projects System, Capital Appreciation, first tier, Refunding, Series I, 6.50%, 1/01/43 | 25,000,000 | 31,464,750 | ||||
Special Projects System, Capital Appreciation, Series B, Pre-Refunded, zero cpn., 9/01/37 | 7,500,000 | 3,331,500 | ||||
Special Projects System, Capital Appreciation, Series B, Pre-Refunded, zero cpn., 9/01/43 | 7,500,000 | 2,123,325 | ||||
Special Projects System, Capital Appreciation, Series C, Pre-Refunded, zero cpn. to 9/01/21, 6.75% thereafter, 9/01/45 | 25,000,000 | 30,625,000 | ||||
System, first tier, Refunding, Series A, 5.00%, 1/01/39 | 10,000,000 | 11,446,100 | ||||
b System, first tier, Refunding, Series A, 5.00%, 1/01/39 | 8,000,000 | 9,308,640 | ||||
38 | 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, (continued) | ||||||
System, first tier, Refunding, Series A, 5.75%, 1/01/40 | $ 4,825,000 | $ 4,862,490 | ||||
b System, first tier, Refunding, Series A, 5.00%, 1/01/43 | 40,000,000 | 46,278,800 | ||||
b System, first tier, Refunding, Series A, 5.00%, 1/01/48 | 33,500,000 | 38,569,890 | ||||
System, first tier, Series A, Pre-Refunded, 5.75%, 1/01/40 | 30,175,000 | 30,408,087 | ||||
System, first tier, Series K, Subseries K-2, Assured Guaranty, Pre-Refunded, 6.00%, 1/01/38 | 15,000,000 | 15,849,150 | ||||
System, second tier, Refunding, Series A, 5.00%, 1/01/35 | 10,000,000 | 11,418,700 | ||||
System, second tier, Refunding, Series A, 5.00%, 1/01/38 | 10,000,000 | 11,321,600 | ||||
b System, second tier, Refunding, Series B, 5.00%, 1/01/43 | 20,000,000 | 22,787,800 | ||||
b System, second tier, Refunding, Series B, 5.00%, 1/01/48 | 19,000,000 | 21,551,700 | ||||
System, second tier, Series F, Pre-Refunded, 5.75%, 1/01/38 | 30,000,000 | 30,233,100 | ||||
Palestine ISD, GO, Anderson County, School Building, Assured Guaranty, Pre-Refunded, 5.50%, 2/15/39 | 12,530,000 | 13,231,931 | ||||
Port Neches-Groves ISD, GO, Jefferson County, Unlimited Tax School Building, Assured Guaranty, Pre-Refunded, 5.00%, 2/15/34 | 11,375,000 | 11,504,789 | ||||
Port of Houston Authority Harris County GO, Refunding, Series A, 5.625%, 10/01/38 | 14,000,000 | 14,528,500 | ||||
Prosper ISD, GO, School Building, PSF Guarantee, 5.00%, 2/15/47 | 9,725,000 | 11,282,264 | ||||
Red River Education Financing Corp. Higher Education Revenue, St. Edwards University Project, Refunding, 5.00%, 6/01/46 | 2,250,000 | 2,510,618 | ||||
San Antonio Airport System Revenue, Passenger Facility Charge, sub. lien, Improvement and Refunding, AGMC Insured, 5.375%, 7/01/40 | 5,000,000 | 5,434,150 | ||||
San Antonio Electric and Gas Systems Revenue, | ||||||
junior lien, 5.00%, 2/01/38 | 10,000,000 | 11,358,900 | ||||
Refunding, 5.00%, 2/01/47 | 17,500,000 | 20,357,925 | ||||
San Antonio Public Facilities Corp. Lease Revenue, Improvement and Refunding, Lease, Convention Center Refinancing and Expansion Project, 4.00%, 9/15/42 | 36,500,000 | 37,789,180 | ||||
San Antonio Water System Revenue, junior lien, Refunding, Series C, 5.00%, 5/15/46 | 13,000,000 | 15,055,560 | ||||
San Jacinto River Authority Special Project Revenue, | ||||||
Group Project, AGMC Insured, 5.00%, 10/01/32 | 5,000,000 | 5,303,500 | ||||
Group Project, AGMC Insured, 5.00%, 10/01/37 | 3,000,000 | 3,182,100 | ||||
San Marcos Electric Utility System Revenue, Hays Caldwell and Guadalupe Counties, BAM Insured, 5.00%, 11/01/33 | 6,300,000 | 7,051,275 | ||||
Schertz-Cibolo-Universal City ISD, GO, School Building, PSF Guarantee, 5.00%, 2/01/42 | 10,000,000 | 11,561,900 | ||||
Southwest Higher Education Authority Revenue, Southern Methodist University Project, Series A, 5.00%, 10/01/38 | 24,380,000 | 27,970,686 | ||||
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 | 11,309,800 | ||||
Hendrick Medical Center Obligation Group, Refunding, 5.50%, 9/01/43 | 5,350,000 | 5,949,682 | ||||
Tarrant County Cultural Education Facilities Finance Corp. Revenue, Texas Health Resources System, Series A, 5.00%, 11/15/52 | 5,000,000 | 5,560,150 | ||||
Tarrant County Health Facilities Development Corp. Health System Revenue, | ||||||
Harris Methodist Health System, FGIC Insured, ETM, 6.00%, 9/01/24 | 3,040,000 | 3,525,214 | ||||
Harris Methodist Health System, NATL Insured, ETM, 6.00%, 9/01/24 | 2,535,000 | 2,944,986 | ||||
Tarrant Regional Water District Water Revenue, Refunding and Improvement, 5.00%, 3/01/37 | 10,000,000 | 11,336,100 | ||||
Texas City IDC Marine Terminal Revenue, ARCO Pipe Line Co. Project, Refunding, 7.375%, 10/01/20 | 500,000 | 586,255 | ||||
Texas State GO, | ||||||
Transportation Commission, Highway Improvement, 5.00%, 4/01/39 | 40,000,000 | 46,070,400 | ||||
Transportation Commission, Mobility Fund, Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 34,879,200 | ||||
Water Financial Assistance, Refunding, Series C-1, 5.00%, 8/01/34 | 7,000,000 | 7,448,350 | ||||
Texas State Municipal Power Agency Revenue, Transmission, sub. lien, Refunding, 5.00%, 9/01/40 | 15,250,000 | 16,594,897 | ||||
franklintempleton.com |
Semiannual Report | 39 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Texas (continued) | ||||||
Texas State Transportation Commission Turnpike System Revenue, | ||||||
first tier, Refunding, Series A, AGMC Insured, 5.00%, 8/15/41 | $ 16,000,000 | $ 17,862,080 | ||||
first tier, Refunding, Series A, BAM Insured, 5.00%, 8/15/41 | 9,665,000 | 10,789,813 | ||||
first tier, Refunding, Series B, 5.00%, 8/15/37 | 10,000,000 | 11,297,900 | ||||
second tier, Refunding, Series C, 5.00%, 8/15/37 | 15,000,000 | 16,789,800 | ||||
second tier, Refunding, Series C, 5.00%, 8/15/42 | 10,000,000 | 11,115,500 | ||||
Texas State Water Development Board Revenue, Series A, 4.00%, 10/15/42 | 50,000,000 | 53,210,000 | ||||
Ysleta ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/45 | 15,000,000 | 17,316,300 | ||||
1,683,593,610 | ||||||
Utah 1.2% | ||||||
Jordan Valley Water Conservancy District Water Revenue, Series B, 5.00%, 10/01/41 | 15,000,000 | 16,624,200 | ||||
Salt Lake City Airport Revenue, Series A, 5.00%, 7/01/42 | 15,000,000 | 17,295,900 | ||||
St. George Electric Revenue, | ||||||
AGMC Insured, Pre-Refunded, 5.00%, 6/01/33 | 5,000,000 | 5,114,550 | ||||
AGMC Insured, Pre-Refunded, 5.00%, 6/01/38 | 5,000,000 | 5,114,550 | ||||
State Board of Regents University of Utah Revenue, General, Series A, Pre-Refunded, 5.00%, 8/01/43 | 21,975,000 | 26,074,656 | ||||
Uintah County Municipal Building Authority Lease Revenue, Pre-Refunded, 5.50%, 6/01/37 | 5,000,000 | 5,126,050 | ||||
Utah Associated Municipal Power Systems Revenue, Central St. George Project, Pre-Refunded, 5.25%, 12/01/27 | 9,735,000 | 10,553,129 | ||||
Utah State Municipal Power Agency Supply System Revenue, Series B, 5.00%, 7/01/38 | 12,105,000 | 13,800,790 | ||||
Utah State Transit Authority Sales Tax Revenue, Series A, AGMC Insured, Pre-Refunded, 5.00%, 6/15/36 | 33,000,000 | 33,806,520 | ||||
Weber Basin Water Conservancy District Water Revenue, Series B, 5.00%, 4/01/39 | 7,180,000 | 8,141,833 | ||||
141,652,178 | ||||||
Vermont 0.4% | ||||||
Vermont Educational and Health Buildings Financing Agency Revenue, | ||||||
Hospital, Fletcher Allen Health Care Project, Series B, AGMC Insured, Pre-Refunded, 5.00%, 12/01/34 | 5,500,000 | 5,626,005 | ||||
Middlebury College Project, Refunding, 5.00%, 11/01/38 | 10,000,000 | 10,694,300 | ||||
Middlebury College Project, Refunding, 5.00%, 11/01/40 | 26,565,000 | 29,083,362 | ||||
The University of Vermont Medical Center Project, Refunding, Series A, 5.00%, 12/01/36 | 5,000,000 | 5,662,500 | ||||
51,066,167 | ||||||
Virginia 0.3% | ||||||
Chesterfield County EDA Revenue, Bon Secours Health System Inc., Series C-2, Assured Guaranty, 5.00%, 11/01/42 | 8,000,000 | 8,636,640 | ||||
Fairfax County EDA Facility Revenue, Community Services Facilities Project, Series A, Pre-Refunded, 4.50%, 3/01/37 | 11,130,000 | 12,298,539 | ||||
Virginia State Resources Authority Infrastructure Revenue, | ||||||
Virginia Pooled Financing Program, Refunding, Series A, 5.00%, 11/01/39 | 8,045,000 | 9,187,309 | ||||
Virginia Pooled Financing Program, Series A, Pre-Refunded, 5.00%, 11/01/39 | 4,310,000 | 5,047,269 | ||||
35,169,757 | ||||||
Washington 2.6% | ||||||
Central Puget Sound Regional Transit Authority Sales Tax Revenue, Series A, Pre-Refunded, 5.00%, 11/01/34 | 11,405,000 | 11,405,000 | ||||
FYI Properties Lease Revenue, | ||||||
Washington State District Project, 5.50%, 6/01/34 | 11,935,000 | 12,675,805 | ||||
Washington State District Project, 5.50%, 6/01/39 | 16,250,000 | 17,232,313 | ||||
King County GO, Sewer Revenues, Pre-Refunded, 5.125%, 1/01/33 | 10,000,000 | 10,471,200 | ||||
King County Public Hospital District No. 1 GO, Series B, Pre-Refunded, 5.25%, 12/01/37 | 5,000,000 | 5,121,750 | ||||
40 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Washington (continued) | ||||||
King County Sewer Revenue, Pre-Refunded, 5.00%, 1/01/32 | $ 7,085,000 | $ 7,786,698 | ||||
NJB Properties Lease Revenue, King County Washington Project, Series A, 5.00%, 12/01/36 | 5,000 | 5,016 | ||||
Seattle Municipal Light and Power Revenue, | ||||||
Improvement and Refunding, Series C, 4.00%, 9/01/36 | 22,170,000 | 24,024,964 | ||||
Improvement and Refunding, Series C, 4.00%, 9/01/40 | 10,650,000 | 11,428,515 | ||||
b Washington Health Care Facilities Authority Revenue, MultiCare Health System, Refunding, Series B, 4.00%, 8/15/41 | 25,000,000 | 25,655,500 | ||||
Washington State GO, | ||||||
Motor Vehicle Fuel Tax, Senior 520 Corridor Program Toll, Series C, 5.00%, 6/01/33 | 5,000,000 | 5,604,050 | ||||
Various Purpose, Series A, Pre-Refunded, 5.00%, 7/01/33 | 44,300,000 | 45,457,116 | ||||
Washington State Health Care Facilities Authority Revenue, | ||||||
Central Washington Health Services Assn., Pre-Refunded, 6.75%, 7/01/29 | 5,000,000 | 5,448,700 | ||||
Fred Hutchinson Cancer Research Center, Refunding, Series A, 5.00%, 1/01/47 | 10,000,000 | 11,028,000 | ||||
Fred Hutchinson Cancer Research Center, Series A, Pre-Refunded, 6.00%, 1/01/33 | 7,500,000 | 8,100,225 | ||||
MultiCare Health System, Series B, AGMC Insured, 5.00%, 8/15/41 | 9,170,000 | 9,398,700 | ||||
MultiCare Health System, Series B, AGMC Insured, Pre-Refunded, 5.00%, 8/15/34 | 17,550,000 | 18,091,066 | ||||
MultiCare Health System, Series B, Assured Guaranty, Pre-Refunded, 6.00%, 8/15/39 | 3,000,000 | 3,254,760 | ||||
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/42 | 10,175,000 | 11,277,665 | ||||
Providence Health and Services, Refunding, Series C, AGMC Insured, 5.25%, 10/01/33 | 10,000,000 | 10,356,200 | ||||
Providence Health and Services, Refunding, Series D, 5.00%, 10/01/41 | 10,000,000 | 11,012,300 | ||||
Providence Health and Services, Refunding, Series D, AGMC Insured, 5.25%, 10/01/33 | 18,000,000 | 18,668,880 | ||||
Seattle Children’s Hospital, Refunding, Series B, 5.00%, 10/01/38 | 15,000,000 | 17,101,650 | ||||
Washington State Higher Education Facilities Authority Revenue, | ||||||
Whitworth University Project, Pre-Refunded, 5.375%, 10/01/29 | 3,000,000 | 3,236,850 | ||||
Whitworth University Project, Pre-Refunded, 5.875%, 10/01/34 | 6,000,000 | 6,530,280 | ||||
310,373,203 | ||||||
West Virginia 0.8% | ||||||
Berkeley County Public Service Sewer District Sewer Revenue, Refunding, Series B, BAM Insured, 5.00%, 6/01/36 | 1,000,000 | 1,151,110 | ||||
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 | 9,012,060 | ||||
Pleasants County PCR, County Commission, Series F, 5.25%, 10/15/37 | 14,000,000 | 13,628,300 | ||||
West Virginia EDA Lottery Revenue, Series A, 5.00%, 6/15/35 | 9,415,000 | 10,217,629 | ||||
West Virginia Hospital Finance Authority Revenue, | ||||||
Hospital, Improvement, West Virginia University Health System Obligated Group, Series A, 5.00%, 6/01/42 | 7,000,000 | 7,807,030 | ||||
Hospital, Improvement, West Virginia University Health System Obligated Group, Series A, 5.00%, 6/01/47 | 5,000,000 | 5,550,150 | ||||
West Virginia State GO, Series A, NATL Insured, Pre-Refunded, 5.20%, 11/01/26 | 10,000,000 | 10,607,500 | ||||
West Virginia State University Revenues, West Virginia University Projects, Series A, 5.00%, 10/01/44 | 21,800,000 | 25,075,886 | ||||
West Virginia State Water Development Authority Infrastructure Revenue, | ||||||
West Virginia Infrastructure and Jobs Development Council Program, Refunding, Series A, 5.00%, 10/01/36 | 5,000,000 | 5,655,800 | ||||
West Virginia Infrastructure and Jobs Development Council Program, Refunding, Series A, 5.00%, 10/01/45 | 5,435,000 | 6,072,145 | ||||
94,777,610 | ||||||
franklintempleton.com |
Semiannual Report | 41 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Wisconsin 1.1% | ||||||
Monroe RDAR, The Monroe Clinic Inc., Pre-Refunded, 6.00%, 2/15/39 | $ 11,790,000 | $ 12,517,679 | ||||
Superior Limited Obligation Revenue, Midwest Energy Resources Company Project, Refunding, Series E, NATL Insured, 6.90%, 8/01/21 | 3,000,000 | 3,566,310 | ||||
Wisconsin Health and Educational Facilities Authority Revenue, | ||||||
Marquette University, Refunding, Series B-1, 5.00%, 10/01/30 | 3,880,000 | 4,105,971 | ||||
Marquette University, Refunding, Series B-2, 5.00%, 10/01/30 | 2,540,000 | 2,687,929 | ||||
Marquette University, Series B-1, Pre-Refunded, 5.00%, 10/01/30 | 2,985,000 | 3,224,069 | ||||
Marquette University, Series B-1, Pre-Refunded, 5.00%, 10/01/33 | 1,500,000 | 1,621,800 | ||||
Marquette University, Series B-2, Pre-Refunded, 5.00%, 10/01/30 | 930,000 | 1,004,484 | ||||
Marquette University, Series B-3, 5.00%, 10/01/30. | 1,570,000 | 1,661,437 | ||||
Marquette University, Series B-3, Pre-Refunded, 5.00%, 10/01/30 | 580,000 | 626,452 | ||||
Marquette University, Series B-3, Pre-Refunded, 5.00%, 10/01/33 | 1,750,000 | 1,892,100 | ||||
Marshfield Clinic Health System Inc., Refunding, Series C, 5.00%, 2/15/47 | 37,795,000 | 41,906,718 | ||||
Ministry Health Care Inc., AGMC Insured, Pre-Refunded, 5.00%, 8/01/31 | 1,500,000 | 1,528,455 | ||||
Ministry Health Care Inc., AGMC Insured, Pre-Refunded, 5.00%, 8/01/34 | 8,000,000 | 8,151,760 | ||||
Thedacare Inc., Series A, 5.50%, 12/15/38 | 5,000,000 | 5,299,950 | ||||
Wisconsin State General Fund Annual Appropriation Revenue, | ||||||
Series A, Pre-Refunded, 6.00%, 5/01/33 | 25,290,000 | 27,121,249 | ||||
Series A, Pre-Refunded, 6.00%, 5/01/36 | 20,000,000 | 21,448,200 | ||||
138,364,563 | ||||||
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 | 5,832,915 | ||||
Wyoming Municipal Power Agency Power Supply System Revenue, Series A, BAM Insured, 5.00%, 1/01/42 | 7,000,000 | 7,934,150 | ||||
13,767,065 | ||||||
U.S. Territories 0.4% | ||||||
Puerto Rico 0.4% | ||||||
c Puerto Rico Electric Power Authority Power Revenue, | ||||||
Refunding, Series A, 5.00%, 7/01/42 | 18,925,000 | 6,552,781 | ||||
Series XX, 5.25%, 7/01/40 | 15,000,000 | 5,193,750 | ||||
c Puerto Rico PBA Guaranteed Revenue, | ||||||
Government Facilities, Refunding, Series D, 5.25%, 7/01/27 | 3,265,000 | 963,175 | ||||
Government Facilities, Refunding, Series N, 5.00%, 7/01/37 | 20,000,000 | 5,900,000 | ||||
c 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 | 4,516,875 | ||||
Convertible Capital Appreciation, First Subordinate, Series A, 6.75%, 8/01/32 | 25,000,000 | 3,843,750 | ||||
First Subordinate, Series A, 6.00%, 8/01/42 | 22,500,000 | 3,459,375 | ||||
Senior, Refunding, Series C, 5.00%, 8/01/40 | 27,825,000 | 11,895,188 | ||||
Senior, Series C, 5.25%, 8/01/40 | 7,150,000 | 3,056,625 | ||||
45,381,519 | ||||||
Total Municipal Bonds before Short Term Investments | 12,069,214,199 | |||||
Short Term Investments 0.8% | ||||||
Municipal Bonds 0.8% | ||||||
Colorado 0.2% | ||||||
Colorado State General Fund Revenue, TRAN, Series A, 5.00%, 6/27/18 | 25,000,000 | 25,637,000 | ||||
42 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
| Principal Amount | Value | |||||
Short Term Investments (continued) | ||||||
Municipal Bonds (continued) | ||||||
Florida 0.1% | ||||||
d St. Lucie County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 0.95%, 9/01/28 | $ | 4,000,000 | $ 4,000,000 | |||
New York 0.2% | ||||||
d New York City GO, Fiscal 2008, Series J, Subseries J-5, Refunding, SPA Bank of America, Daily VRDN and Put, 0.91%, 8/01/28 | 4,000,000 | 4,000,000 | ||||
d New York City Transitional Finance Authority Revenue, Future Tax Secured, Subordinate, Fiscal 2013, Series C, Subseries C-4, SPA JPMorgan Chase Bank, Daily VRDN and Put, 0.90%, 11/01/36 | 19,700,000 | 19,700,000 | ||||
23,700,000 | ||||||
Pennsylvania 0.1% | ||||||
d Emmaus General Authority Revenue, SPA Wells Fargo Bank, Weekly VRDN and Put, 0.95%, 12/01/28 | 15,600,000 | 15,600,000 | ||||
Tennessee 0.2% | ||||||
d Shelby County Health Educational and Housing Facility Board Revenue, Methodist Le Bonheur Healthcare, Refunding, Series A, AGMC Insured, SPA US Bank National Association, Daily VRDN and Put, 0.92%, 6/01/42 | 20,700,000 | 20,700,000 | ||||
Total Short Term Investments (Cost $89,664,892) |
89,637,000 | |||||
Total Investments (Cost $11,481,041,516) 100.0% | 12,158,851,199 | |||||
Other Assets, less Liabilities 0.0%† | 4,773,158 | |||||
Net Assets 100.0% |
$12,163,624,357 | |||||
See Abbreviations on page 53.
†Rounds to less than 0.1% of net assets.
aThe maturity date shown represents the mandatory put date.
bSecurity purchased on a when-issued basis. See Note 1(b).
cSee Note 6 regarding defaulted securities.
dVariable rate demand notes (VRDNs) are 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. Unless otherwise noted, the coupon rate is determined based on factors including supply and demand, underlying credit, tax treatment, and current short term rates. The coupon rate shown represents the rate at period end.
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | |
Semiannual Report | 43 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Statement of Assets and Liabilities
October 31, 2017 (unaudited)
| Assets: | ||
| Investments in securities: | ||
| Cost - Unaffiliated issuers | $11,481,041,516 | |
| Value - Unaffiliated issuers |
$12,158,851,199 | |
| Cash | 19,397 | |
| Receivables: | ||
| Investment securities sold | 86,145,183 | |
| Capital shares sold | 8,016,416 | |
| Interest | 159,915,237 | |
| Other assets | 3,658 | |
Total assets |
12,412,951,090 | |
| Liabilities: | ||
| Payables: | ||
| Investment securities purchased | 229,237,437 | |
| Capital shares redeemed | 12,184,401 | |
| Management fees | 4,526,247 | |
| Distribution fees | 1,522,098 | |
| Transfer agent fees | 1,586,954 | |
| Trustees’ fees and expenses | 2,503 | |
| Accrued expenses and other liabilities | 267,093 | |
Total liabilities |
249,326,733 | |
Net assets, at value |
$12,163,624,357 | |
| Net assets consist of: | ||
| Paid-in capital | $11,805,778,536 | |
| Undistributed net investment income | 17,550,483 | |
| Net unrealized appreciation (depreciation) | 677,809,683 | |
| Accumulated net realized gain (loss) | (337,514,345) | |
Net assets, at value |
$12,163,624,357 | |
| Class A: | ||
| Net assets, at value | $ 9,186,728,044 | |
| Shares outstanding |
766,986,027 | |
| Net asset value per sharea |
$11.98 | |
| Maximum offering price per share (net asset value per share ÷ 95.75%) |
$12.51 | |
| Class C: | ||
| Net assets, at value | $ 1,335,610,721 | |
| Shares outstanding |
111,585,254 | |
| Net asset value and maximum offering price per sharea |
$11.97 | |
| Class R6: | ||
| Net assets, at value | $ 143,535 | |
| Shares outstanding |
11,972 | |
| Net asset value and maximum offering price per share |
$11.99 | |
| Advisor Class : | ||
| Net assets, at value | $ 1,641,142,057 | |
| Shares outstanding |
136,895,039 | |
| Net asset value and maximum offering price per share |
$11.99 |
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
44 | 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 Operations
for the six months ended October 31, 2017 (unaudited)
| Investment income: | ||
| Interest: | ||
| Unaffiliated issuers | $263,240,877 | |
| Expenses: | ||
| Management fees (Note 3a) | 27,500,839 | |
| Distribution fees: (Note 3c) | ||
| Class A | 4,688,205 | |
| Class C | 4,493,170 | |
| Transfer agent fees: (Note 3e) | ||
| Class A | 2,751,202 | |
| Class C | 405,823 | |
| Class R6 | 57 | |
| Advisor Class | 496,901 | |
| Custodian fees | 50,179 | |
| Reports to shareholders | 172,078 | |
| Registration and filing fees | 223,140 | |
| Professional fees | 153,852 | |
| Trustees’ fees and expenses | 58,898 | |
| Other | 272,458 | |
Total expenses | 41,266,802 | |
Expenses waived/paid by affiliates (Note 3f) | (54) | |
Net expenses | 41,266,748 | |
Net investment income | 221,974,129 | |
| Realized and unrealized gains (losses): | ||
| Net realized gain (loss) from: | ||
| Investments: | ||
Unaffiliated issuers | (82,721,146) | |
| Net change in unrealized appreciation (depreciation) on: | ||
| Investments: | ||
Unaffiliated issuers | 43,320,929 | |
| Net realized and unrealized gain (loss) | (39,400,217) | |
| Net increase (decrease) in net assets resulting from operations | $182,573,912 | |
franklintempleton.com |
The accompanying notes are an integral part of these financial statements. | |
Semiannual Report | 45 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Six Months Ended October 31, 2017 (unaudited) | Year Ended April 30, 2017 | |||||||
| Increase (decrease) in net assets: | ||||||||
| Operations: | ||||||||
| Net investment income | $ 221,974,129 | $ 440,560,829 | ||||||
| Net realized gain (loss) | (82,721,146 | ) | (24,031,855 | ) | ||||
| Net change in unrealized appreciation (depreciation) | 43,320,929 | (383,188,451 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 182,573,912 | 33,340,523 | ||||||
| Distributions to shareholders from: | ||||||||
| Net investment income: | ||||||||
Class A | (173,527,840 | ) | (331,153,686 | ) | ||||
Class C | (21,845,068 | ) | (42,107,969 | ) | ||||
Class R6 | (469 | ) | — | |||||
Advisor Class | (32,005,103 | ) | (57,250,896 | ) | ||||
| Total distributions to shareholders | (227,378,480 | ) | (430,512,551 | ) | ||||
| Capital share transactions: (Note 2) | ||||||||
Class A | (122,178,699 | ) | 1,257,433,741 | |||||
Class C | (70,960,600 | ) | 241,141,581 | |||||
Class R6 | 144,714 | — | ||||||
Advisor Class | 13,715,107 | 243,919,209 | ||||||
| Total capital share transactions | (179,279,478 | ) | 1,742,494,531 | |||||
Net increase (decrease) in net assets | (224,084,046 | ) | 1,345,322,503 | |||||
| Net assets: | ||||||||
| Beginning of period | 12,387,708,403 | 11,042,385,900 | ||||||
| End of period | $12,163,624,357 | $12,387,708,403 | ||||||
| Undistributed net investment income included in net assets: | ||||||||
| End of period | $ 17,550,483 | $ 22,954,834 | ||||||
46 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
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 four classes of shares: Class A, Class C, Class R6 and Advisor Class. Each class of shares may differ by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees due to differing arrangements for distribution and transfer agent fees. Effective August 1, 2017, the Fund began offering a new class of shares, Class R6.
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 over-the-counter 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.
franklintempleton.com |
Semiannual Report | 47 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Organization and Significant Accounting
Policies (continued)
c. Income Taxes (continued)
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 sustained upon examination by the tax authorities based on its technical merits. As of October 31, 2017, 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 the statute of limitations in each jurisdiction in which the Fund invests.
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) and 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, excluding 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.
| 48 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest
At October 31, 2017, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares were as follows:
Six Months Ended October 31, 2017 | Year Ended April 30, 2017 | |||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
Class A Shares: | ||||||||||||||||
Shares sold | 30,771,472 | $ | 370,223,200 | 90,539,595 | $ | 1,109,317,525 | ||||||||||
Shares issued in reinvestment of distributions | 12,811,311 | 153,862,079 | 23,991,962 | 293,857,679 | ||||||||||||
Shares issued on reorganization | — | — | 128,179,562 | 1,526,626,933 | ||||||||||||
Shares redeemed | (53,727,745) | (646,263,978) | (137,377,476) | (1,672,368,396) | ||||||||||||
Net increase (decrease) | (10,144,962) | $ | (122,178,699) | 105,333,643 | $ | 1,257,433,741 | ||||||||||
Class C Shares: | ||||||||||||||||
Shares sold |
|
4,914,262 |
|
$ |
59,104,437 |
|
|
15,472,829 |
|
$ |
190,807,233 |
| ||||
Shares issued in reinvestment of distributions | 1,638,155 | 19,668,469 | 3,021,130 | 36,978,463 | ||||||||||||
Shares issued on reorganization | — | — | 20,739,803 | 247,011,073 | ||||||||||||
Shares redeemed | (12,446,063) | (149,733,506) | (19,189,681) | (233,655,188) | ||||||||||||
Net increase (decrease) | (5,893,646) | $ | (70,960,600) | 20,044,081 | $ | 241,141,581 | ||||||||||
Class R6 Sharesa: | ||||||||||||||||
Shares sold |
|
17,868 |
|
$ |
215,413 |
| ||||||||||
Shares redeemed |
|
(5,896) |
|
|
(70,699) |
| ||||||||||
Net increase (decrease) | 11,972 | $ | 144,714 | |||||||||||||
Advisor Class Shares: | ||||||||||||||||
Shares sold |
|
20,347,051 |
|
$ |
244,977,012 |
|
|
53,426,552 |
|
$ |
652,653,037 |
| ||||
Shares issued in reinvestment of distributions | 2,273,081 | 27,318,861 | 3,892,888 | 47,733,709 | ||||||||||||
Shares issued on reorganization | — | — | 4,902,948 | 58,443,306 | ||||||||||||
Shares redeemed | (21,491,093) | (258,580,766) | (42,008,684) | (514,910,843) | ||||||||||||
Net increase (decrease) | 1,129,039 | $ | 13,715,107 | 20,213,704 | $ | 243,919,209 | ||||||||||
| aFor the period August 1, 2017 (effective date) to October 31, 2017. | ||||||||||||||||
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 |
franklintempleton.com |
Semiannual Report | 49 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates (continued)
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, 2017, the annualized effective investment management fee rate was 0.442% 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 Class R6 and 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 | $ | 707,381 | ||
CDSC retained | $ | 56,643 | ||
| 50 | Semiannual Report | franklintempleton.com | ||
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
e. Transfer Agent Fees
Each class of shares, except for Class R6, 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. Class R6 pays Investor Services transfer agent fees specific to that class.
For the period ended October 31, 2017, the Fund paid transfer agent fees of $3,653,983, of which $991,795 was retained by Investor Services.
f. Waiver and Expense Reimbursements
Investor Services has voluntarily agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.01%. Investor Services may discontinue this waiver in the future.
g. 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, 2017, these purchase and sale transactions aggregated $226,473,800 and $260,775,000, respectively.
4. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.
At April 30, 2017, the Fund’s capital loss carryforwards were as follows:
Capital loss carryforwards subject to expiration: | ||
2018 | $ 3,803,336 | |
2019 | 17,435,155 | |
Capital loss carryforwards not subject to expiration: | ||
Short term | 149,597,947 | |
Long term | 59,865,858 | |
Total capital loss carryforwards | $230,702,296a | |
aIncludes $54,890,384 from the merged Franklin Insured Tax-Free Income Fund, which may be carried over to offset future capital gains, subject to certain limitations.
At October 31, 2017, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Cost of investments | $11,504,149,964 | |
Unrealized appreciation | $ 810,238,592 | |
Unrealized depreciation | (155,537,357) | |
Net unrealized appreciation (depreciation) | $ 654,701,235 | |
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, bond workout expenditures.
franklintempleton.com |
Semiannual Report | 51 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended October 31, 2017, aggregated $879,569,557 and $913,181,257, respectively.
6. Defaulted Securities
The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At October 31, 2017, the aggregate value of these securities was $45,381,519, representing 0.4% 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. Concentration of Risk
Investing in Puerto Rico securities may expose the Fund to heightened risks due to recent adverse economic and market changes, credit downgrades and ongoing restructuring discussions. In addition, investments in these securities are sensitive to interest rate changes and credit risk of the issuer and may subject the Fund to increased market volatility. The market for these investments may be limited, which may make them difficult to buy or sell.
8. 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 9, 2018. 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, 2017, the Fund did not use the Global Credit Facility.
9. 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.
52 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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, 2017, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
10. New Accounting Pronouncements
In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in the ASU shorten the amortization period for certain callable debt securities acquired at a premium, to be amortized to the earliest call date. The ASU does not require an accounting change for securities acquired at a discount, which continues to be amortized to maturity. The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Management is currently evaluating the impact, if any, of applying this provision.
11. 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.
Abbreviations
Selected Portfolio
| AGMC | Assured Guaranty Municipal Corp. | IDAR | Industrial Development Authority Revenue | |||
| AMBAC | American Municipal Bond Assurance Corp. | IDB | Industrial Development Bond/Board | |||
| BAM | Build America Mutual Assurance Co. | IDC | Industrial Development Corp. | |||
| BHAC | Berkshire Hathaway Assurance Corp. | ISD | Independent School District | |||
| CDA | Community Development Authority/Agency | MFH | Multi-Family Housing | |||
| CDD | Community Development District | MFMR | Multi-Family Mortgage Revenue | |||
| CIFG | CDC IXIS Financial Guaranty | MTA | Metropolitan Transit Authority | |||
| COP | Certificate of Participation | NATL | National Public Financial Guarantee Corp. | |||
| EDA | Economic Development Authority | PBA | Public Building Authority | |||
| EDC | Economic Development Corp. | PCC | Pollution Control Corp. | |||
| ETM | Escrow to Maturity | PCR | Pollution Control 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 | |||
| GARB | General Airport Revenue Bonds | SPA | Standby Purchase Agreement | |||
| GO | General Obligation | TRAN | Tax and Revenue Anticipation Note | |||
| HFA | Housing Finance Authority/Agency | UHSD | Unified/Union High School District | |||
| HFAR | Housing Finance Authority Revenue | USD | Unified/Union School District | |||
| IDA | Industrial Development Authority/Agency | XLCA | XL Capital Assurance |
franklintempleton.com |
Semiannual Report | 53 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
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 US 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 US 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.
54 | Semiannual Report | franklintempleton.com |
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 | Semiannual Report and Shareholder Letter Franklin Federal Tax-Free Income Fund
Investment Manager Franklin Advisers, Inc.
Distributor Franklin Templeton Distributors, Inc. (800) DIAL BEN® / 342-5236 franklintempleton.com
Shareholder Services (800) 632-2301 |
Authorized for distribution only when accompanied or preceded by a summary prospectus and/or prospectus. Investors should carefully consider a fund’s investment goals, risks, charges and expenses before investing. A prospectus contains this and other information; please read it carefully before investing.
To help ensure we provide you with quality service, all calls to and from our service areas are monitored and/or recorded.
© 2017 Franklin Templeton Investments. All rights reserved. 116 S2017 12/17
| 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 Matthew T. Hinkle, 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 Matthew T. Hinkle, 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/ Matthew T. Hinkle | |
| Matthew T. Hinkle | ||
| Chief Executive Officer - Finance and Administration | ||
| Date | December 27, 2017 |
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/ Matthew T. Hinkle | |
| Matthew T. Hinkle | ||
| Chief Executive Officer - Finance and Administration | ||
| Date | December 27, 2017 |
| By | /s/ Gaston Gardey | |
| Gaston Gardey | ||
| Chief Financial Officer and Chief Accounting Officer | ||
| Date | December 27, 2017 |