UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORMN-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number811-03395
Franklin FederalTax-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: 650312-2000
Date of fiscal year end: 4/30
Date of reporting period: 10/31/19
Item 1. | Reports to Stockholders. |
Sign up for electronic delivery at franklintempleton.com/edelivery
Internet Delivery of Fund Reports Unless You Request Paper Copies: Effective January 1, 2021, as permitted by the SEC, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request them from the Fund or your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. If you have not signed up for electronic delivery, we would encourage you to join fellow shareholders who have. You may elect to receive shareholder reports and other communications electronically from the Fund by calling (800)632-2301 or by contacting your financial intermediary.
You may elect to continue to receive paper copies of all your future shareholder reports free of charge by contacting your financial intermediary or, if you invest directly with a Fund, calling (800)632-2301 to let the Fund know of your request. Your election to receive reports in paper will apply to all funds held in your account.
SHAREHOLDER LETTER
Dear Shareholder:
During the six months ended October 31, 2019, the U.S. economy continued to grow, but at a more moderate pace mainly due to concerns about trade. The U.S. Federal Reserve lowered the federal funds rate by 0.25% at each of its July, September and October 2019 meetings, decreasing the rate from 2.50% to 1.75% byperiod-end, citing muted inflation pressures and the potential effects of global trade tensions on economic growth.
During thesix-month period, the municipal bond market posted solid positive performance that underperformed the U.S. Treasury, corporate bond and stock markets, with generally higher returns for longer-term and lower-rated municipal bonds. Factors contributing to this positive investment environment for municipals included relatively low inflation, interest rate declines, steady employment and the strength of the U.S. economy.
Franklin FederalTax-Free Income Fund’s semiannual report includes more detail about municipal bond market conditions and a discussion from the portfolio managers. In addition, on our website,franklintempleton.com, you can find updated commentary by our municipal bond experts. Municipal bonds providetax-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 compounding 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 and encourage you to contact us or your financial advisor when you have questions about your Franklintax-free investment.
Sincerely,
Rupert H. Johnson, Jr.
Chairman
Franklin FederalTax-Free Income Fund
Sheila Amoroso
Senior Vice President and Director
Franklin Municipal Bond Department
This letter reflects our analysis and opinions as of October 31, 2019, 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
|
franklintempleton.com | Not part of the semiannual report | 1 |
Semiannual Report | ||||
3 | ||||
6 | ||||
9 | ||||
10 | ||||
44 | ||||
48 | ||||
56 |
Visitfranklintempleton.comfor fund updates, to access your account, or to find helpful financial planning tools. |
2 | Semiannual Report | franklintempleton.com |
SEMIANNUAL REPORT
Franklin FederalTax-Free Income Fund
This semiannual report for Franklin FederalTax-Free Income Fund covers the period ended October 31, 2019.
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*
10/31/19
Ratings
| % of Total
| |||
AAA
|
| 9.63%
|
| |
AA
|
| 52.87%
|
| |
A
|
| 24.12%
|
| |
BBB
|
| 3.92%
|
| |
Below Investment Grade
|
| 1.39%
|
| |
Refunded
|
| 7.60%
|
| |
Not Rated
|
| 0.47%
|
|
*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 belowBBB-. The Refunded category generally consists of refunded bonds secured by U.S. government or other high-quality securities and not rerated by an NRSRO. The Not Rated category consists of ratable securities that have not been rated by an NRSRO. Cash and equivalents are excluded from this composition.
Performance Overview
The Fund’s Class A share price, as measured by net asset value, increased from $11.82 on April 30, 2019, to $12.01 on October 31, 2019. The Fund’s Class A shares paid dividends totaling 18.3076 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
Dividend Distributions* |
5/1/19–10/31/19 |
Dividend per Share (cents) | ||||||||||||||||||||
Month | Class A | Class A1 | Class C | Class R6 | Advisor Class | |||||||||||||||
May | 3.2386 | 3.3908 | 2.8361 | 3.5436 | 3.4952 | |||||||||||||||
June | 2.8534 | 2.9865 | 2.4784 | 3.1213 | 3.0814 | |||||||||||||||
July | 3.2832 | 3.4461 | 2.8507 | 3.6045 | 3.5576 | |||||||||||||||
August | 2.9056 | 3.0559 | 2.5081 | 3.2020 | 3.1586 | |||||||||||||||
September | 3.0236 | 3.1755 | 2.6123 | 3.3278 | 3.2818 | |||||||||||||||
October | 3.0032 | 3.1587 | 2.5919 | 3.3096 | 3.2648 | |||||||||||||||
Total | 18.3076 | 19.2135 | 15.8775 | 20.1088 | 19.8394 |
*The distribution amount is the sum of all estimatedtax-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. Assumes shares were purchased and held for the entire accrual period. Since dividends accrue daily, your actual distributions will vary depending on the date you purchased your shares and any account activity. All Fund distributions will vary depending upon current market conditions, and past distributions are not indicative of future trends.
shares’ distribution rate was 2.89% based on an annualization of October’s 3.0032 cents per share dividend and the maximum offering price of $12.48 on October 31, 2019. An investor in the 2019 maximum federal personal income tax bracket of 37.00% (plus 3.80% Medicare tax) would need to earn a distribution rate of 4.88% from a taxable investment to match the Fund’s Class Atax-free distribution rate. 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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
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 FormW-9 andnon-U.S. investors on FormW-8BEN.
2. The distribution amount is the sum of all estimatedtax-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.
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 15.
franklintempleton.com | Semiannual Report | 3 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
Municipal Bond Market Overview
The financial markets experienced volatility during the six months ended October 31, 2019. Continuing trade concerns, uncertainties about the prospects for global economic growth and speculations on major central banks’ future policy decisions led to volatility in domestic fixed income and equity securities. U.S. equities rose during the period, while fixed income assets such as municipal bonds and U.S. Treasuries also rallied as interest rates moved in a generally downward trajectory. Municipal bonds delivered positive returns as favorable supply and demand dynamics, combined with interest-rate declines, continued to buoy the market.
Investment-grade municipal bonds, as measured by the Bloomberg Barclays Municipal Bond Index, posted a +3.54% total return for the period, while U.S. Treasuries, as measured by the Bloomberg Barclays U.S. Treasury Index, posted a +5.85% total return, and investment-grade corporate bonds, as measured by the Bloomberg Barclays U.S. Corporate Bond Index, posted a +7.73% total return.3 U.S. stocks, as represented by the Standard & Poor’s® 500 Index, posted a +4.16% total return, outperforming the U.S. municipal bond market, but underperforming the U.S. Treasury and corporate bond markets.3
What is the yield curve? |
A yield curve is a line that plots the yield to maturity of bonds |
having equal credit quality against their maturity dates.
|
Municipal bonds with longer maturities generally outperformed bonds with shorter maturities during thesix-month period. High-yield municipal bonds generally outperformed investment-grade municipal bonds, with the Bloomberg Barclays Municipal Bond Index posting a +3.54% total return, compared with a +5.28% total return for the Bloomberg Barclays High Yield Municipal Bond Index.3
Municipal bond issuance during thesix-month reporting period totaled approximately $217 billion, which represented a 13% increase from the prior-year’ssix-month period.4 Approximately $48 billion were issued in October 2019, which was the single largest month of issuance the municipal bond market has seen since December 2017.5 In our view, demand for municipal bonds remains robust, and investors have continued to add money to municipal bond
Portfolio Composition | ||||
10/31/19 |
% of Total Investments* | ||||
Transportation | 19.31% | |||
Utilities | 18.94% | |||
Hospital & Health Care | 15.99% | |||
Refunded** | 12.32% | |||
General Obligation | 10.34% | |||
Tax-Supported | 8.56% | |||
Higher Education | 5.40% | |||
Subject to Government Appropriations | 5.01% | |||
Other Revenue | 2.12% | |||
Housing | 1.11% | |||
Corporate-Backed | 0.90% |
*Does not include cash and cash equivalents.
**Includes all refunded bonds; the percentage may differ from that in the Credit Quality Composition.
mutual funds. The Investment Company Institute reported calendaryear-to-date 2019 net inflows of approximately $76 billion to the asset class through October.
The U.S. Federal Reserve (Fed) lowered its target range for the federal funds rate by 0.25% three times in 2019—in July, September and October. The target range for the federal funds rate was 1.50%–1.75% atperiod-end. In its press release following the October decision, the Fed cited muted inflation and global economic concerns as the primary catalysts for the decision. The Fed noted, however, that the labor market remained strong and household spending continued to rise at a strong pace.
Atperiod-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.
The foregoing information reflects our analysis, opinions and portfolio holdings as of October 31, 2019, 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
3. Source: Morningstar. Treasuries, if held to maturity, offer a fixed rate of return and fixed principal value; their interest payments and principal are guaranteed.
4. Source: The Bond Buyer, Thomson Reuters.
5. Source: Barclays Municipal Credit Research.
See www.franklintempletondatasources.com for additional data provider information.
4 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
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, 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.
Investment Strategy
We use a consistent, disciplined strategy in an effort to maximizetax-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 abuy-and-hold approach. This means we generally hold securities in the Fund’s portfolio for income purposes, rather than trading securities for capital gains, although we may sell a security at any time if we believe it could help the Fund meet its goal.
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 20 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.
Thank you for your continued participation in Franklin FederalTax-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, 2019, 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.
franklintempleton.com | Semiannual Report | 5 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Performance Summary as of October 31, 2019
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 10/31/19
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 3.75% and the minimum is 0%.Class A:3.75% maximum initial sales charge;Advisor Class:no sales charges. For other share classes, visitfranklintempleton.com.
Share Class | Cumulative Total Return1 | Average Annual Total Return2 | ||
A3,4 6-Month | +3.17% | -0.70% | ||
1-Year | +8.22% | +4.16% | ||
5-Year | +15.31% | +2.11% | ||
10-Year | +50.67% | +3.79% | ||
Advisor 6-Month | +3.38% | +3.38% | ||
1-Year | +8.57% | +8.57% | ||
5-Year | +16.20% | +3.05% | ||
10-Year | +52.64% | +4.32% |
Share Class | Distribution Rate5 | Taxable Equivalent Distribution Rate6 | 30-Day Standardized Yield7 | Taxable Equivalent 30-Day Standardized Yield6 | ||||
A | 2.89% | 4.88% | 1.32% | 2.23% | ||||
Advisor | 3.26% | 5.51% | 1.63% | 2.75% |
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 recentmonth-end performance, go tofranklintempleton.comor call(800)342-5236.
See page 8 for Performance Summary footnotes.
6 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
Distributions(5/1/19–10/31/19)
Share Class | Net Investment Income | |
A | $0.183076 | |
A1 | $0.192135 | |
C | $0.158775 | |
R6 | $0.201088 | |
Advisor | $0.198394 |
Total Annual Operating Expenses8
Share Class | ||||
A | 0.78% | |||
Advisor | 0.53% |
See page 8 for Performance Summary footnotes.
franklintempleton.com | Semiannual Report | 7 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
PERFORMANCE SUMMARY
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. Puerto Rico municipal bonds 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’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. Effective 9/10/18, Class A shares closed to new investors, were renamed Class A1 shares, and a new Class A share with a different expense structure became available. Class A performance shown has been calculated as follows: (a) for periods prior to 9/10/18, a restated figure is used based on the Fund’s Class A1 performance that includes any Rule12b-1 rate differential that exists between Class A1 and Class A; and (b) for periods after 9/10/18, actual Class A Performance is used, reflecting all charges and fees applicable to that class.
4. Prior to 3/1/19, these shares were offered at a higher initial sales charge of 4.25%, thus actual returns (with sales charges) would have differed. Average annual total returns (with sales charges) have been restated to reflect the current maximum initial sales charge of 3.75%.
5. 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 10/31/19.
6. Taxable equivalent distribution rate and yield assume the 2019 maximum federal income tax rate of 37.00% plus 3.80% Medicare tax.
7. The Fund’s30-day standardized yield is calculated over a trailing30-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.
8. Figures are as stated in the Fund’s current prospectus and may differ from the expense ratios disclosed in the Your Fund’s Expenses and Financial Highlights sections in this report. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.
8 | Semiannual Report | franklintempleton.com |
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 Value 5/1/19 | Ending Account Value 10/31/19 | Expenses Paid During 5/1/19–10/31/191, 2 | Ending Account Value 10/31/19 | Expenses Paid During Period 5/1/19–10/31/191, 2 | Net | ||||||||||||
A | $1,000 | $1,031.70 | $3.98 | $1,021.22 | $3.96 | 0.78% | ||||||||||||
A1 | $1,000 | $1,032.40 | $3.22 | $1,021.97 | $3.20 | 0.63% | ||||||||||||
C | $1,000 | $1,030.50 | $6.02 | $1,019.20 | $5.99 | 1.18% | ||||||||||||
R6 | $1,000 | $1,033.20 | $2.50 | $1,022.67 | $2.49 | 0.49% | ||||||||||||
Advisor | $1,000 | $1,033.80 | $2.71 | $1,022.47 | $2.69 | 0.53% |
1. Expenses are equal to the annualized expense ratio for thesix-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 184/366 to reflect theone-half year period.
2. Reflects expenses after fee waivers and expense reimbursements, for Class R6.
franklintempleton.com | Semiannual Report | 9 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
Six Months Ended October 31, 2019 (unaudited) | Year Ended
2019a | |||||||
Class A | ||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||
Net asset value, beginning of period | $11.82 | $11.62 | ||||||
Income from investment operationsb: | ||||||||
Net investment incomec | 0.18 | 0.25 | ||||||
Net realized and unrealized gains (losses) | 0.19 | 0.19 | ||||||
Total from investment operations | 0.37 | 0.44 | ||||||
Less distributions from: | ||||||||
Net investment income | (0.18 | ) | (0.24 | ) | ||||
Net asset value, end of period | $12.01 | $11.82 | ||||||
Total returnd | 3.17% | 3.87% | ||||||
Ratios to average net assetse | ||||||||
Expensesf | 0.78% | 0.78% | ||||||
Net investment income | 3.03% | 3.45% | ||||||
Supplemental data | ||||||||
Net assets, end of period (000’s) | $878,288 | $567,500 | ||||||
Portfolio turnover rate | 8.44% | 14.58% |
aFor the period September 10, 2018 (effective date) to April 30, 2019.
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 does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
eRatios are annualized for periods less than one year.
fBenefit of expense reduction rounds to less than 0.01%.
10 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Six Months Ended (unaudited) | Year Ended April 30, | |||||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||||
Class A1 | ||||||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $11.82 | $11.68 | $12.02 | $12.48 | $12.45 | $12.22 | ||||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||||
Net investment incomeb | 0.19 | 0.42 | 0.44 | 0.47 | 0.48 | 0.47 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.19 | 0.16 | (0.34 | ) | (0.47 | ) | 0.02 | 0.23 | ||||||||||||||||
Total from investment operations | 0.38 | 0.58 | 0.10 | — | 0.50 | 0.70 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (0.19 | ) | (0.44 | ) | (0.44 | ) | (0.46 | ) | (0.47 | ) | (0.47 | ) | ||||||||||||
Net asset value, end of period | $12.01 | $11.82 | $11.68 | $12.02 | $12.48 | $12.45 | ||||||||||||||||||
Total returnc | 3.24% | 5.06% | 0.85% | 0.01% | 4.16% | 5.82% | ||||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||||
Expenses | 0.63% | e | 0.63% | e | 0.63% | 0.62% | 0.61% | 0.62% | ||||||||||||||||
Net investment income | 3.18% | 3.60% | 3.66% | 3.82% | 3.87% | 3.80% | ||||||||||||||||||
Supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s) | $7,746,900 | $7,821,881 | $8,616,659 | $9,342,715 | $8,384,079 | $8,505,853 | ||||||||||||||||||
Portfolio turnover rate | 8.44% | 14.58% | 16.46% | 13.86% | 6.07% | 5.49% |
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.
eBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements.| Semiannual Report | 11 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Six Months Ended October 31, 2019 (unaudited) | Year Ended April 30, | |||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Class C | ||||||||||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||||||||||
Net asset value, beginning of period | $11.81 | $11.68 | $12.01 | $12.47 | $12.44 | $12.21 | ||||||||||||||||
Income from investment operationsa: | ||||||||||||||||||||||
Net investment incomeb | 0.16 | 0.35 | 0.37 | 0.40 | 0.41 | 0.40 | ||||||||||||||||
Net realized and unrealized gains (losses) | 0.20 | 0.15 | (0.32 | ) | (0.47 | ) | 0.03 | 0.23 | ||||||||||||||
Total from investment operations | 0.36 | 0.50 | 0.05 | (0.07 | ) | 0.44 | 0.63 | |||||||||||||||
Less distributions from: | ||||||||||||||||||||||
Net investment income | (0.16) | (0.37 | ) | (0.38 | ) | (0.39 | ) | (0.41 | ) | (0.40 | ) | |||||||||||
Net asset value, end of period | $12.01 | $11.81 | $11.68 | $12.01 | $12.47 | $12.44 | ||||||||||||||||
Total returnc | 3.05% | 4.39% | 0.37% | (0.55)% | 3.59% | 5.24% | ||||||||||||||||
Ratios to average net assetsd | ||||||||||||||||||||||
Expenses | 1.18%e | 1.18% | e | 1.18% | 1.17% | 1.16% | 1.17% | |||||||||||||||
Net investment income | 2.63% | 3.05% | 3.11% | 3.27% | 3.32% | 3.25% | ||||||||||||||||
Supplemental data | ||||||||||||||||||||||
Net assets, end of period (000’s) | $749,754 | $841,909 | $1,220,402 | $1,411,391 | $1,215,034 | $1,166,771 | ||||||||||||||||
Portfolio turnover rate | 8.44% | 14.58% | 16.46% | 13.86% | 6.07% | 5.49% |
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.
eBenefit of expense reduction rounds to less than 0.01%.
12 | Semiannual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
| Six Months Ended October 31, 2019 (unaudited) |
| Year Ended April 30, | |||||||||
2019 | 2018a | |||||||||||
Class R6 | ||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||
Net asset value, beginning of period | $11.83 | $11.69 | $12.03 | |||||||||
Income from investment operationsb: | ||||||||||||
Net investment incomec | 0.20 | 0.44 | 0.34 | |||||||||
Net realized and unrealized gains (losses) | 0.19 | 0.15 | (0.38 | ) | ||||||||
Total from investment operations | 0.39 | 0.59 | (0.04 | ) | ||||||||
Less distributions from: | ||||||||||||
Net investment income | (0.20 | ) | (0.45 | ) | (0.30 | ) | ||||||
Net asset value, end of period | $12.02 | $11.83 | $11.69 | |||||||||
Total returnd | 3.32% | 5.19% | (0.32)% | |||||||||
Ratios to average net assetse | ||||||||||||
Expensesf | 0.49% | g | 0.49% | g | 0.49% | |||||||
Net investment income | 3.32% | 3.74% | 3.80% | |||||||||
Supplemental data | ||||||||||||
Net assets, end of period (000’s) | $196,551 | $177,983 | $365,406 | |||||||||
Portfolio turnover rate | 8.44% | 14.58% | 16.46% |
aFor the period August 1, 2017 (effective date) to April 30, 2018.
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.
fBenefit of waiver and payments by affiliates rounds to less than 0.01%.
gBenefit of expense reduction rounds to less than 0.01%.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 13 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
Six Months Ended October 31, 2019 (unaudited) | Year Ended April 30, | |||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||
Advisor Class | ||||||||||||||
Per share operating performance (for a share outstanding throughout the period) | ||||||||||||||
Net asset value, beginning of period | $11.83 | $11.69 | $12.03 | $12.49 | $12.46 | $12.23 | ||||||||
Income from investment operationsa: | ||||||||||||||
Net investment incomeb | 0.20 | 0.43 | 0.45 | 0.48 | 0.49 | 0.49 | ||||||||
Net realized and unrealized gains (losses) | 0.20 | 0.16 | (0.33) | (0.47) | 0.03 | 0.22 | ||||||||
Total from investment operations | 0.40 | 0.59 | 0.12 | 0.01 | 0.52 | 0.71 | ||||||||
Less distributions from: | ||||||||||||||
Net investment income | (0.20) | (0.45) | (0.46) | (0.47) | (0.49) | (0.48 | ) | |||||||
Net asset value, end of period | $12.03 | $11.83 | $11.69 | $12.03 | $12.49 | $12.46 | ||||||||
Total returnc | 3.38% | 5.15% | 0.95% | 0.11% | 4.26% | 5.92% | ||||||||
Ratios to average net assetsd | ||||||||||||||
Expenses | 0.53%e | 0.53%e | 0.53% | 0.52% | 0.51% | 0.52% | ||||||||
Net investment income | 3.28% | 3.70% | 3.76% | 3.92% | 3.97% | 3.90% | ||||||||
Supplemental data | ||||||||||||||
Net assets, end of period (000’s) | $1,209,446 | $1,210,861 | $1,207,490 | $1,633,602 | $1,443,272 | $1,689,267 | ||||||||
Portfolio turnover rate | 8.44% | 14.58% | 16.46% | 13.86% | 6.07% | 5.49% |
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.
eBenefit of expense reduction rounds to less than 0.01%.
14 | 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, 2019 (unaudited)
Principal Amount | Value | |||||||
Municipal Bonds 97.7% | ||||||||
Alabama 1.4% | ||||||||
Alabama State Incentives Financing Authority Special Obligation Revenue, Series A,Pre-Refunded, 5.00%, 9/01/42 | $ | 14,300,000 | $ | 15,821,520 | ||||
Alabama State Port Authority Docks Facilities Revenue,Pre-Refunded, 6.00%, 10/01/40 | 6,000,000 | 6,261,540 | ||||||
Alabama State Public Health Care Authority Lease Revenue, Department of Public Health Facilities, | 17,085,000 | 19,442,730 | ||||||
Birmingham Airport Authority Airport Revenue, AGMC Insured, 5.50%, 7/01/40 | 20,000,000 | 20,477,600 | ||||||
Birmingham Water Works Board Water Revenue, | ||||||||
Series B, 5.00%, 1/01/38 | 3,500,000 | 3,839,430 | ||||||
Series B, 5.00%, 1/01/43 | 8,000,000 | 8,755,200 | ||||||
Subordinate, Refunding, Series B, 5.00%, 1/01/43 | 10,000,000 | 11,748,700 | ||||||
Chatom IDB Gulf Opportunity Zone Revenue, | ||||||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/30 | 5,250,000 | 5,385,293 | ||||||
PowerSouth Energy Cooperative, Refunding, Series A, Assured Guaranty, 5.00%, 8/01/37 | 5,000,000 | 5,118,700 | ||||||
Chilton County Health Care Authority Limited Obligation Sales Tax Revenue, Chilton County Hospital Project, Series A, 5.00%, 11/01/40 | 8,425,000 | 9,483,938 | ||||||
Limestone County Water and Sewer Authority Water Revenue, BAM Insured, 5.00%, 12/01/45 | 10,500,000 | 12,334,665 | ||||||
Mobile Water and Sewer Commissioners Water and Sewer Revenue, Refunding, 5.00%, 1/01/36 | 11,300,000 | 12,447,176 | ||||||
Phenix City Water and Sewer Revenue, wts., Series A, AGMC Insured, 5.00%, 8/15/40 | 8,090,000 | 8,290,794 | ||||||
University of South Alabama Revenue, University Facilities, Series A, BAM Insured, 5.00%, 4/01/49 | 5,000,000 | 6,068,300 | ||||||
|
| |||||||
145,475,586 | ||||||||
|
| |||||||
Alaska 0.6% | ||||||||
Alaska Municipal Bond Bank GO, | ||||||||
Refunding, Series Three, 5.25%, 10/01/36 | 16,045,000 | 18,625,357 | ||||||
Refunding, Series Three, 5.00%, 10/01/39 | 12,950,000 | 14,747,848 | ||||||
Alaska State Industrial Development and Export Authority Revenue, Providence Health and Services, Series A, 5.00%, 10/01/40 | 10,000,000 | 10,542,000 | ||||||
Alaska State International Airports System Revenue, Refunding, Series C, 5.00%, 10/01/33 | 12,565,000 | 12,941,573 | ||||||
Anchorage Electric Revenue, senior lien, Refunding, Series A, 5.00%, 12/01/41 | 8,875,000 | 10,095,135 | ||||||
|
| |||||||
66,951,913 | ||||||||
|
| |||||||
Arizona 2.6% | ||||||||
Arizona Board of Regents Arizona State University System Revenue, Series C, 5.00%, 7/01/42 | 9,000,000 | 10,613,070 | ||||||
Arizona Board of Regents University of Arizona System Revenue, Speed, Stimulus Plan for Economic and Educational Development, 5.00%, 8/01/44 | 10,000,000 | 11,309,100 | ||||||
Arizona State COP, Department of Administration, Series B, AGMC Insured, 5.00%, 10/01/27 | 8,000,000 | 8,120,400 | ||||||
Arizona State Lottery Revenue, Department of Administration, Series A, AGMC Insured,Pre-Refunded, 5.00%, 7/01/27 | 15,000,000 | 15,090,150 | ||||||
aChandler IDA, IDR, Intel Corp. Project, Mandatory Put, 5.00%, 6/03/24 | 15,000,000 | 17,211,450 | ||||||
Glendale Municipal Property Corp. Excise Tax Revenue, Subordinate, Refunding, Series C, 5.00%, 7/01/38 | 15,500,000 | 16,993,270 | ||||||
Lake Havasu Wastewater System Revenue, senior lien, Refunding, Series B, AGMC Insured, 5.00%, 7/01/40 | 15,000,000 | 17,367,750 | ||||||
Maricopa County IDA Senior Living Facilities Revenue, Christian Care Retirement Apartments Inc. Project, Refunding, Series A, 5.00%, 1/01/36 | 5,000,000 | 5,714,850 | ||||||
Maricopa County IDAR, | ||||||||
Banner Health, Series A, 4.00%, 1/01/41 | 10,000,000 | 11,086,300 | ||||||
Banner Health, Series A, 4.00%, 1/01/44 | 25,000,000 | 27,777,750 | ||||||
Maricopa County PCC, PCR, El Paso Electric Co. Palo Verde Project, Refunding, Series A, 3.60%, 2/01/40 | 19,500,000 | 20,535,450 |
franklintempleton.com | Semiannual Report | 15 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Arizona(continued) | ||||||||
Mesa Utility Systems Revenue, 4.00%, 7/01/36 | $ | 19,000,000 | $ | 20,013,840 | ||||
Phoenix Civic Improvement Corp. Airport Revenue, | ||||||||
junior lien, Refunding, Series D, 4.00%, 7/01/40 | 25,000,000 | 27,815,250 | ||||||
junior lien, Series A,Pre-Refunded, 5.00%, 7/01/40 | 24,000,000 | 24,607,200 | ||||||
Phoenix Civic Improvement Corp. Distribution Revenue, | ||||||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/32 | 6,000,000 | 8,305,980 | ||||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/34 | 5,000,000 | 7,107,050 | ||||||
Capital Appreciation, Civic Plaza Expansion Project, Series B, NATL Insured, 5.50%, 7/01/35 | 9,860,000 | 14,193,174 | ||||||
Pima County Sewer System Revenue, Obligations, AGMC Insured,Pre-Refunded, 5.00%, 7/01/25 | 7,000,000 | 7,174,720 | ||||||
Pinal County Electrical District No. 3 Electric System Revenue,Pre-Refunded, 5.25%, 7/01/36 | 10,000,000 | 10,669,700 | ||||||
|
| |||||||
281,706,454 | ||||||||
|
| |||||||
Arkansas 0.5% | ||||||||
Bentonville School District No. 6 GO, Benton County, Construction and Refunding, Series B, 4.00%, 6/01/47 | 27,935,000 | 30,196,338 | ||||||
University of Arkansas Revenue, | ||||||||
Various Facility, Fayetteville Campus, 5.00%, 11/01/47 | 6,500,000 | 7,841,925 | ||||||
Various Facility, Fayetteville Campus, Refunding and Improvement, Series A, 5.00%, 11/01/49 | 3,000,000 | 3,680,670 | ||||||
Various Facility, Fayetteville Campus, Series B,Pre-Refunded, 5.00%, 11/01/37 | 3,100,000 | 3,391,524 | ||||||
Various Facility, Fayetteville Campus, Series B,Pre-Refunded, 5.00%, 11/01/42 | 9,360,000 | 10,240,215 | ||||||
|
| |||||||
55,350,672 | ||||||||
|
| |||||||
California 9.1% | ||||||||
California Health Facilities Financing Authority Revenue, | ||||||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/24 | 5,000,000 | 5,000,000 | ||||||
Children’s Hospital of Orange County, Series A, 6.50%, 11/01/38 | 8,000,000 | 8,000,000 | ||||||
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 | 31,780,665 | ||||||
California State Educational Facilities Authority Revenue, Carnegie Institution of Washington, Refunding, Series A, 5.00%, 7/01/40 | 24,525,000 | 25,104,280 | ||||||
California State GO, | ||||||||
Refunding, NATL Insured, 5.00%, 10/01/32 | 20,000 | 20,059 | ||||||
Various Purpose, 5.90%, 4/01/23 | 1,200,000 | 1,223,832 | ||||||
Various Purpose, 5.00%, 10/01/29 | 210,000 | 210,617 | ||||||
Various Purpose, 6.00%, 11/01/39 | 25,000,000 | 25,000,000 | ||||||
Various Purpose, 5.25%, 11/01/40 | 50,000,000 | 52,010,500 | ||||||
Various Purpose, FGIC Insured, 6.00%, 5/01/20 | 425,000 | 435,247 | ||||||
Various Purpose, Refunding, 5.25%, 3/01/30 | 30,000,000 | 30,404,100 | ||||||
Various Purpose, Refunding, 6.00%, 3/01/33 | 12,000,000 | 12,192,000 | ||||||
Various Purpose, Refunding, 5.50%, 3/01/40 | 25,000,000 | 25,360,250 | ||||||
California State Public Works Board Lease Revenue, | ||||||||
Various Capital Projects, Series A, 5.00%, 4/01/30 | 18,000,000 | 19,584,000 | ||||||
Various Capital Projects, Series A, 5.00%, 4/01/33 | 12,475,000 | 13,541,862 | ||||||
Various Capital Projects, Series A, AGMC Insured, 5.00%, 4/01/28 | 13,030,000 | 14,189,670 | ||||||
Various Capital Projects, Series A, AGMC Insured, 5.00%, 4/01/29 | 21,000,000 | 22,863,750 | ||||||
Various Capital Projects, Series I,Pre-Refunded, 6.125%, 11/01/29 | 29,300,000 | 29,300,000 | ||||||
California Statewide CDA, PCR, Southern California Edison Co., Refunding, Series A, 4.50%, 9/01/29 | 14,830,000 | 15,201,195 |
16 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
California(continued) | ||||||||
Corona-Norco USD, | ||||||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, 6.20%, 8/01/29 | $ | 3,250,000 | $ | 4,422,470 | ||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, Pre-Refunded, 6.80%, 8/01/39 | 8,500,000 | 11,955,165 | ||||||
GO, Riverside County, Capital Appreciation, Election of 2006, Series C, AGMC Insured, zero cpn., 8/01/39 | 7,500,000 | 4,014,150 | ||||||
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 | 16,547,108 | ||||||
Capital Appreciation, Refunding, Series A, zero cpn. to 1/14/24, 6.85% thereafter, 1/15/42 | 20,000,000 | 21,001,600 | ||||||
Refunding, Series A, 5.75%, 1/15/46 | 25,000,000 | 28,918,000 | ||||||
Refunding, Series A, 6.00%, 1/15/49 | 20,000,000 | 23,433,000 | ||||||
Jefferson UHSD San Mateo County GO, | ||||||||
Capital Appreciation, Election of 2006, Series D,Pre-Refunded, zero cpn., 8/01/35 | 10,500,000 | 3,285,345 | ||||||
Capital Appreciation, Election of 2006, Series D,Pre-Refunded, zero cpn., 8/01/40 | 10,000,000 | 2,066,400 | ||||||
Capital Appreciation, Election of 2006, Series D,Pre-Refunded, zero cpn., 8/01/41 | 13,590,000 | 2,582,508 | ||||||
Los Angeles Community College District GO, Election of 2008, Series C,Pre-Refunded, 5.25%, 8/01/39 | 30,000,000 | 30,952,800 | ||||||
Los Angeles Department of Airports Revenue, | ||||||||
Los Angeles International Airport, Senior, Refunding, Series A, 5.00%, 5/15/40 | 25,485,000 | 26,007,952 | ||||||
Los Angeles International Airport, Senior, Series D, 5.00%, 5/15/40 | 50,000,000 | 51,026,000 | ||||||
Los Angeles Department of Water and Power Revenue, Power System, Series B, 5.00%, 7/01/31 | 20,000,000 | 22,740,400 | ||||||
Los Angeles USD, GO, Series KRY, 5.25%, 7/01/34 | 36,625,000 | 37,586,772 | ||||||
M-S-R Energy Authority Gas Revenue, Series B, 6.50%, 11/01/39 | 12,500,000 | 19,592,625 | ||||||
New Haven USD, | ||||||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/31 | 2,055,000 | 1,563,876 | ||||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/32 | 7,830,000 | 5,767,970 | ||||||
GO, Alameda County, Capital Appreciation, Assured Guaranty, zero cpn., 8/01/33 | 7,660,000 | 5,469,317 | ||||||
Rialto USD, GO, Capital Appreciation, Election of 2010, Series A, AGMC Insured, zero cpn., 8/01/36 | 20,000,000 | 11,986,800 | ||||||
San Francisco City and County Airport Commission International Airport Revenue, | ||||||||
Refunding, Second Series, Series A, 5.00%, 5/01/49 | 25,000,000 | 30,006,000 | ||||||
Second Series, Series E, 5.00%, 5/01/50 | 47,000,000 | 56,356,760 | ||||||
San Francisco City and County COP, Multiple Capital Improvement Projects, Series A, 5.25%, 4/01/31 | 10,000,000 | 10,031,600 | ||||||
San Joaquin Hills Transportation Corridor Agency Toll Road Revenue, | ||||||||
Capital Appreciation, senior lien, ETM, zero cpn., 1/01/23 | 7,000,000 | 6,734,070 | ||||||
senior lien, Refunding, Series A, 5.00%, 1/15/34 | 50,000,000 | 57,339,500 | ||||||
San Jose USD Santa Clara County GO, Election of 2012, Series E, 4.00%, 8/01/42 | 10,600,000 | 11,948,744 | ||||||
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 | 21,150,200 | ||||||
GO, Capital Appreciation, Election of 2010, Series A, zero cpn. to 9/01/28, 6.45% thereafter, 9/01/33 | 6,065,000 | 5,761,386 | ||||||
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 | 50,202,500 | ||||||
Santa Ana USD, | ||||||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/35 | 10,000,000 | 6,683,000 | ||||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/36 | 18,865,000 | 12,174,150 | ||||||
GO, Orange County, Capital Appreciation, Election of 2008, Series B, Assured Guaranty, zero cpn., 8/01/37 | 10,000,000 | 6,199,800 |
franklintempleton.com | Semiannual Report | 17 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
California(continued) | ||||||||
West Contra Costa USD, | ||||||||
GO, Contra Costa County, Election of 2005, Capital Appreciation, SeriesC-1, Assured Guaranty, zero cpn., 8/01/29 | $ | 10,000,000 | $ | 8,183,500 | ||||
GO, Contra Costa County, Election of 2005, Capital Appreciation, SeriesC-1, Assured Guaranty, zero cpn., 8/01/30 | 20,845,000 | 16,545,510 | ||||||
GO, Contra Costa County, Election of 2005, Capital Appreciation, SeriesC-1, Assured Guaranty, zero cpn., 8/01/31 | 20,000,000 | 15,380,000 | ||||||
GO, Contra Costa County, Election of 2005, Capital Appreciation, SeriesC-1, Assured Guaranty, zero cpn., 8/01/32 | 10,730,000 | 7,994,279 | ||||||
|
| |||||||
985,033,284 | ||||||||
|
| |||||||
Colorado 3.1% | ||||||||
Colorado Health Facilities Authority Revenue, | ||||||||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/41 | 5,000,000 | 5,820,200 | ||||||
Children’s Hospital Colorado Project, Series A, 5.00%, 12/01/44 | 10,200,000 | 11,830,368 | ||||||
The Evangelical Lutheran Good Samaritan Society Project, Series A,Pre-Refunded, 5.00%, 6/01/45 | 19,000,000 | 22,757,250 | ||||||
Hospital, AdventHealth Obligated Group, Refunding, Series A, 4.00%, 11/15/43 | 10,000,000 | 11,150,500 | ||||||
Hospital, Adventist Health System Sunbelt Obligated Group, Refunding, Series A, 5.00%, 11/15/41 | 30,505,000 | 35,843,680 | ||||||
Hospital, Adventist Health System/Sunbelt Obligated Group, Series A, 5.00%, 11/15/48 | 12,000,000 | 14,395,560 | ||||||
Colorado Housing and Finance Authority Revenue, MF Project, Class I, SeriesA-1, 3.00%, 10/01/40 | 5,000,000 | 5,074,300 | ||||||
Colorado State Health Facilities Authority Hospital Revenue, SCL Health System, Sisters of Charity of Leavenworth, Refunding, Series B, 4.00%, 1/01/40 | 30,000,000 | 33,910,200 | ||||||
Denver City and County Airport System Revenue, | ||||||||
Department of Aviation, Refunding, Subordinate, Series A, 5.00%, 12/01/38 | 12,000,000 | 14,442,000 | ||||||
Department of Aviation, Refunding, Subordinate, Series A, 5.00%, 12/01/43 | 11,000,000 | 13,097,590 | ||||||
Department of Aviation, Refunding, Subordinate, Series A, 5.25%, 12/01/48 | 26,000,000 | 31,493,280 | ||||||
Department of Aviation, Refunding, Subordinate, Series B, 5.25%, 11/15/33 | 16,405,000 | 18,726,636 | ||||||
Series C, NATL Insured, ETM, 6.125%, 11/15/25 | 3,590,000 | 4,399,868 | ||||||
Series C, NATL Insured,Pre-Refunded, 6.125%, 11/15/25 | 4,410,000 | 4,583,930 | ||||||
Denver City and County Dedicated Tax Revenue, | ||||||||
Capital Appreciation Bonds, SeriesA-2, zero cpn., 8/01/35 | 2,000,000 | 1,203,440 | ||||||
Capital Appreciation Bonds, SeriesA-2, zero cpn., 8/01/36 | 2,500,000 | 1,433,150 | ||||||
Capital Appreciation Bonds, SeriesA-2, zero cpn., 8/01/37 | 2,455,000 | 1,342,713 | ||||||
Capital Appreciation Bonds, SeriesA-2, zero cpn., 8/01/38 | 2,000,000 | 1,044,580 | ||||||
Current Interest Bonds, SeriesA-1, 5.00%, 8/01/48 | 39,690,000 | 46,633,369 | ||||||
Park Creek Metropolitan District Revenue, | ||||||||
Senior Limited Property Tax Supported, Improvement, Assured Guaranty,Pre-Refunded, 6.25%, 12/01/30 | 6,000,000 | 6,022,860 | ||||||
Senior Limited Property Tax Supported, Refunding, Series A, 5.00%, 12/01/46 | 2,875,000 | 3,384,335 | ||||||
Public Authority for Colorado Energy Natural Gas Purchase Revenue, 6.50%, 11/15/38 | 20,000,000 | 30,472,600 | ||||||
Regional Transportation District Sales Tax Revenue, FasTracks Project, Series A, 5.00%, 11/01/32 | 10,000,000 | 11,034,900 | ||||||
|
| |||||||
330,097,309 | ||||||||
|
| |||||||
Delaware 0.0%† | ||||||||
Kent County Student Housing and Dining Facility Revenue, | ||||||||
CHF-DoverLLC-Delaware State University Project, Series A, 5.00%, 7/01/40 | 1,100,000 | 1,236,092 | ||||||
CHF-DoverLLC-Delaware State University Project, Series A, 5.00%, 7/01/48 | 1,485,000 | 1,652,983 | ||||||
CHF-DoverLLC-Delaware State University Project, Series A, 5.00%, 7/01/53 | 1,100,000 | 1,220,296 | ||||||
|
| |||||||
4,109,371 | ||||||||
|
|
18 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
District of Columbia 3.4% | ||||||||
District of Columbia Ballpark Revenue, | ||||||||
SeriesB-1, BHAC Insured, 5.00%, 2/01/24 | $ | 12,120,000 | $ | 12,155,148 | ||||
SeriesB-1, BHAC Insured, 5.00%, 2/01/25 | 7,000,000 | 7,020,300 | ||||||
SeriesB-1, BHAC Insured, 5.00%, 2/01/26 | 9,950,000 | 9,978,855 | ||||||
District of Columbia GO, Refunding, Series A, 5.00%, 10/15/44 | 25,000,000 | 30,920,750 | ||||||
District of Columbia Hospital Revenue, Children’s Hospital Obligated Group Issue, Refunding, 5.00%, 7/15/40 | 6,830,000 | 7,874,922 | ||||||
District of Columbia Income Tax Secured Revenue, | ||||||||
Refunding, Series A, 5.00%, 12/01/31 | 10,000,000 | 10,214,700 | ||||||
Series A, 5.25%, 12/01/34 | 11,000,000 | 11,033,770 | ||||||
District of Columbia Revenue, | ||||||||
Assn. of American Medical Colleges Issue, Series B, 5.25%, 10/01/41 | 15,000,000 | 15,874,050 | ||||||
The Catholic University of America Issue, Refunding, 5.00%, 10/01/43 | 4,000,000 | 4,747,960 | ||||||
The Catholic University of America Issue, Refunding, Series B, 5.00%, 10/01/42 | 20,660,000 | 24,285,210 | ||||||
The Catholic University of America Issue, Refunding, Series B, 5.00%, 10/01/47 | 24,985,000 | 29,262,182 | ||||||
Deed Tax, Housing Production Trust Fund, New Communities Project, Series A, NATL Insured, 5.00%, 6/01/32 | 5,000,000 | 5,014,400 | ||||||
District of Columbia International School Issue, 5.00%, 7/01/49 | 1,275,000 | 1,511,181 | ||||||
District of Columbia International School Issue, 5.00%, 7/01/54 | 1,000,000 | 1,175,820 | ||||||
Georgetown University Issue, Growth and Income Securities,Pre-Refunded, AMBAC Insured, 5.00%, 4/01/32 | 15,370,000 | 16,191,988 | ||||||
National Academy of Sciences Project, Series A,Pre-Refunded, 5.00%, 4/01/35 | 10,905,000 | 11,076,318 | ||||||
National Academy of Sciences Project, Series A,Pre-Refunded, 5.00%, 4/01/40 | 16,960,000 | 17,226,442 | ||||||
National Public Radio Inc. Issue,Pre-Refunded, 5.00%, 4/01/35 | 7,750,000 | 7,868,497 | ||||||
District of Columbia Tobacco Settlement FICO Revenue, Asset-Backed, Refunding, 6.50%, 5/15/33 | 21,240,000 | 24,277,320 | ||||||
District of Columbia Water and Sewer Authority Public Utility Revenue, | ||||||||
Green Bonds, senior lien, Series A, 5.00%, 10/01/49 | 25,000,000 | 30,300,750 | ||||||
bsub. lien, Series B, 5.00%, 10/01/44 | 7,350,000 | 9,151,485 | ||||||
Metropolitan Washington Airports Authority Airport System Revenue, | ||||||||
Refunding, Series A, 5.00%, 10/01/35 | 5,000,000 | 5,162,750 | ||||||
Refunding, Series A, 5.00%, 10/01/44 | 16,000,000 | 19,447,200 | ||||||
Refunding, Series A, 5.00%, 10/01/49 | 16,585,000 | 20,039,655 | ||||||
Series A, 5.00%, 10/01/39 | 5,000,000 | 5,158,150 | ||||||
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 | 32,388,000 | ||||||
|
| |||||||
|
369,357,803 |
| ||||||
|
| |||||||
Florida 5.2% | ||||||||
Atlantic Beach Health Care Facilities Revenue, | ||||||||
Fleet Landing Project, Refunding, Series A, 5.00%, 11/15/48 | 3,000,000 | 3,409,620 | ||||||
Fleet Landing Project, Series A, 5.00%, 11/15/53 | 6,000,000 | 6,781,740 | ||||||
Broward County HFAR, | ||||||||
MFH, Heron Pointe Apartments Project, Series A, SPA FHLMC, 5.65%, 11/01/22 | 290,000 | 293,109 | ||||||
MFH, Heron Pointe Apartments Project, Series A, SPA FHLMC, 5.70%, 11/01/29 | 225,000 | 225,736 | ||||||
Broward County Port Facilities Revenue, Senior Bond, Series B, 4.00%, 9/01/44 | 15,000,000 | 16,419,300 | ||||||
Cape Coral Water and Sewer Revenue, | ||||||||
Refunding, 5.00%, 10/01/39 | 10,000,000 | 12,055,700 | ||||||
Series A, AGMC Insured,Pre-Refunded, 5.00%, 10/01/42 | 21,510,000 | 23,085,392 |
franklintempleton.com | Semiannual Report | 19 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Florida(continued) | ||||||||
Central Expressway Authority Revenue, senior lien, Refunding, 5.00%, 7/01/48 | $ | 16,000,000 | $ | 19,244,800 | ||||
Citizens Property Insurance Corp. Revenue, Coastal Account, senior secured, SeriesA-1, 5.00%, 6/01/20 | 20,000,000 | 20,430,600 | ||||||
Clearwater City Water and Sewer Revenue, Series A,Pre-Refunded, 5.25%, 12/01/39 | 7,000,000 | 7,021,770 | ||||||
Cocoa Water and Sewer Revenue, System, Series B, 5.00%, 10/01/48 | 10,325,000 | 12,617,976 | ||||||
Dade County HFA, MFMR, Siesta Pointe Apartments, Series A, AGMC Insured, SPA FHLMC, 5.75%, 9/01/29 | 1,890,000 | 1,895,765 | ||||||
Deltona Utility System Revenue, Refunding, AGMC Insured, 5.125%, 10/01/39 | 5,000,000 | 5,620,950 | ||||||
Florida State Board of Education GO, Public Education Capital Outlay, Refunding, Series D, 6.00%, 6/01/23 | 17,500,000 | 20,476,575 | ||||||
Florida State Higher Educational Facilities Financing Authority Revenue, | ||||||||
St. Leo University Project, Refunding, 5.00%, 3/01/44 | 1,370,000 | 1,544,017 | ||||||
St. Leo University Project, Refunding, 5.00%, 3/01/49 | 1,640,000 | 1,840,785 | ||||||
Florida State Municipal Loan Council Revenue, Series D, AGMC Insured, 5.50%, 10/01/41 | 4,750,000 | 5,098,840 | ||||||
Gainesville Utilities System Revenue, | ||||||||
Refunding, Series A, 5.00%, 10/01/47 | 15,000,000 | 18,552,600 | ||||||
Series A, 5.00%, 10/01/36 | 7,150,000 | 8,800,148 | ||||||
Greater Orlando Aviation Authority Airport Facilities Revenue, Series A, 4.00%, 10/01/44 | 10,000,000 | 11,079,400 | ||||||
Hillsborough County Aviation Authority Revenue, | ||||||||
Tampa International Airport, Passenger Facility Charge, Subordinated, Series A, 5.00%, 10/01/48 | 20,000,000 | 23,801,000 | ||||||
Tampa International Airport, Subordinated, Refunding, Series B, 5.00%, 10/01/44 | 10,000,000 | 11,438,800 | ||||||
Hillsborough County School Board COP, Master Lease Program, Refunding, Series A, 5.00%, 7/01/28 | 520,000 | 567,902 | ||||||
Lee Memorial Health System Hospital Revenue, Refunding, SeriesA-1, 5.00%, 4/01/44 | 4,220,000 | 5,068,178 | ||||||
Martin County Health Facilities Authority Hospital Revenue, | ||||||||
Martin Memorial Medical Center, AGMC Insured,Pre-Refunded, 5.50%, 11/15/42 | 3,800,000 | 4,122,012 | ||||||
Martin Memorial Medical Center,Pre-Refunded, 5.50%, 11/15/42 | 3,800,000 | 4,122,012 | ||||||
Miami Beach GO, Refunding, 4.00%, 5/01/44 | 15,000,000 | 16,915,950 | ||||||
Miami Beach RDA Tax Increment Revenue, City Center/Historic Convention Village, Refunding, Series A, AGMC Insured, 5.00%, 2/01/44 | 12,000,000 | 13,536,360 | ||||||
Miami Beach Resort Tax Revenue, 5.00%, 9/01/40 | 11,000,000 | 12,833,590 | ||||||
Miami-Dade County Expressway Authority Toll System Revenue, | ||||||||
Refunding, Series A, 5.00%, 7/01/29 | 10,000,000 | 10,888,400 | ||||||
Refunding, Series A, 5.00%, 7/01/32 | 6,375,000 | 6,914,261 | ||||||
Series A, 5.00%, 7/01/40 | 30,265,000 | 30,967,451 | ||||||
Miami-Dade County School Board COP, Master Lease Purchase Agreement, Refunding, Series A, 5.00%, 5/01/31 | 10,000,000 | 11,128,500 | ||||||
Miami-Dade County Special Obligation Revenue, | ||||||||
sub. bond, Refunding, Series B, 5.00%, 10/01/31 | 5,000,000 | 5,495,200 | ||||||
sub. bond, Refunding, Series B, 5.00%, 10/01/32 | 4,500,000 | 4,941,000 | ||||||
sub. bond, Refunding, Series B, 5.00%, 10/01/35 | 3,250,000 | 3,559,498 | ||||||
Miami-Dade County Transit System Sales Surtax Revenue, Refunding, 5.00%, 7/01/35 | 7,000,000 | 8,165,570 | ||||||
Miami-Dade County Water and Sewer System Revenue, | ||||||||
bSeries B, 4.00%, 10/01/44 | 17,500,000 | 19,532,625 | ||||||
Refunding, Series A, 5.00%, 10/01/42 | 20,000,000 | 21,908,400 | ||||||
Orange County Health Facilities Authority Revenue, | ||||||||
Hospital, Orlando Health Obligated Group, Refunding, Series A, 5.00%, 10/01/39 | 6,000,000 | 7,063,500 | ||||||
Hospital, Orlando Health Obligated Group, Series A, 5.00%, 10/01/47 | 5,000,000 | 6,022,750 | ||||||
Presbyterian Retirement Communities Project, 5.00%, 8/01/47 | 14,000,000 | 15,406,160 |
20 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Florida(continued) | ||||||||
Orlando-Orange County Expressway Authority Revenue, | ||||||||
Series A,Pre-Refunded, 5.00%, 7/01/40 | $ | 5,000,000 | $ | 5,125,822 | ||||
Series C,Pre-Refunded, 5.00%, 7/01/40 | 15,000,000 | 15,379,500 | ||||||
Pinellas County Sewer Revenue, AGMC Insured, 5.00%, 10/01/32 | 610,000 | 611,806 | ||||||
Seminole County Water and Sewer Revenue, Refunding, 4.00%, 10/01/40 | 8,500,000 | 9,692,635 | ||||||
South Broward Hospital District Revenue, Hospital, South Broward Hospital District Obligated Group, 5.00%, 5/01/45 | 20,715,000 | 24,763,332 | ||||||
South Miami Health Facilities Authority Hospital Revenue, Baptist Health South Florida, Refunding, 5.00%, 8/15/42 | 15,000,000 | 17,712,900 | ||||||
St. Petersburg Public Utility Revenue, Refunding, 4.00%, 10/01/43 | 15,000,000 | 16,964,100 | ||||||
Sunrise Utilities System Revenue, AMBAC Insured,Pre-Refunded, 5.20%, 10/01/22 | 420,000 | 435,128 | ||||||
Tampa-Hillsborough County Expressway Authority Revenue, 5.00%, 7/01/47 | 10,000,000 | 11,862,200 | ||||||
Tohopekaliga Water Authority Utility System Revenue, Refunding, 5.00%, 10/01/46 | 5,000,000 | 5,929,350 | ||||||
Town of Davie Water and Sewer Revenue, AGMC Insured, 5.00%, 10/01/32 | 8,575,000 | 9,136,234 | ||||||
|
| |||||||
|
558,506,949 |
| ||||||
|
| |||||||
Georgia 3.8% | ||||||||
Albany Dougherty Payroll Development Authority Revenue, Darton College Project, AGMC Insured, 5.75%, 6/15/41 | 5,550,000 | 5,689,360 | ||||||
Atlanta Airport General Revenue, | ||||||||
Refunding, Series C, 6.00%, 1/01/30 | 15,000,000 | 15,827,700 | ||||||
Series A, AGMC Insured, 5.00%, 1/01/40 | 9,215,000 | 9,271,211 | ||||||
Atlanta Airport Passenger Facility Charge Revenue, | ||||||||
General, sub. lien, Series D, 4.00%, 7/01/38 | 13,560,000 | 15,297,985 | ||||||
General, sub. lien, Series D, 4.00%, 7/01/40 | 4,000,000 | 4,489,200 | ||||||
The Atlanta Development Authority Revenue, | ||||||||
New Downtown Atlanta Stadium Project, senior lien, SeriesA-1, 5.25%, 7/01/44 | 3,000,000 | 3,518,400 | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/24 | 6,385,000 | 6,986,914 | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/25 | 6,955,000 | 7,751,626 | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/26 | 5,000,000 | 5,646,250 | ||||||
Tuff Yamacraw LLC Project, Refunding, Series A, AMBAC Insured, 5.00%, 1/01/27 | 5,000,000 | 5,724,350 | ||||||
Atlanta Water and Wastewater Revenue, | ||||||||
Refunding, 5.00%, 11/01/40 | 29,500,000 | 34,259,530 | ||||||
Refunding, Series A, 5.00%, 11/01/40 | 4,655,000 | 5,661,411 | ||||||
Refunding, Series A, 5.00%, 11/01/41 | 4,845,000 | 5,879,553 | ||||||
Refunding, Series B, AGMC Insured, 5.25%, 11/01/34 | 10,545,000 | 10,545,000 | ||||||
Refunding, Series B, AGMC Insured, 5.375%, 11/01/39 | 7,940,000 | 7,940,000 | ||||||
Refunding, Series C, 4.00%, 11/01/38 | 13,550,000 | 15,319,088 | ||||||
Series A,Pre-Refunded, 6.25%, 11/01/34 | 20,000,000 | 20,000,000 | ||||||
Series B, AGMC Insured,Pre-Refunded, 5.25%, 11/01/34 | 19,455,000 | 19,455,000 | ||||||
Series B, AGMC Insured,Pre-Refunded, 5.375%, 11/01/39 | 15,060,000 | 15,060,000 | ||||||
Brookhaven Development Authority Revenue, Children’s Healthcare of Atlanta, Series A, 4.00%, 7/01/44 | 6,000,000 | 6,689,340 | ||||||
Burke County Development Authority PCR, | ||||||||
Oglethorpe Power Corp. Vogtle Project, Refunding, Series C, 4.125%, 11/01/45 | 2,500,000 | 2,668,700 | ||||||
Oglethorpe Power Corp. Vogtle Project, Refunding, Series D, 4.125%, 11/01/45 | 18,500,000 | 19,748,380 | ||||||
Clarke County Hospital Authority Revenue, Piedmont Health Care Inc. Project, Refunding, Series A, 5.00%, 7/01/46 | 10,835,000 | 12,551,047 | ||||||
Fayette County Hospital Authority Revenue, Anticipation Certificates, Piedmont Fayette Hospital Project, Refunding, Series A, 5.00%, 7/01/39 | 11,420,000 | 12,838,821 |
franklintempleton.com | Semiannual Report | 21 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Georgia(continued) | ||||||||
Fulton County Development Authority Hospital Revenue, Anticipation Certificates, Wellstar Health System Inc. Project, Series A, 5.00%, 4/01/47 | $ | 5,000,000 | $ | 5,818,700 | ||||
Fulton County Development Authority Revenue, Piedmont Healthcare Inc. Project, Refunding, Series A, 5.00%, 7/01/46 | 11,005,000 | 12,747,972 | ||||||
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 | 15,117,663 | ||||||
Georgia State GO, SeriesA-2, 4.00%, 2/01/36 | 10,000,000 | 11,301,900 | ||||||
Georgia State Higher Education Facilities Authority Revenue, | ||||||||
USG Real Estate Foundation III LLC Project, Series A, 5.00%, 6/15/40 | 3,700,000 | 3,771,891 | ||||||
USG Real Estate Foundation III LLC Project, Series A, Assured Guaranty, 5.00%, 6/15/38 | 6,845,000 | 6,980,531 | ||||||
USG Real Estate Foundation III LLC Project, Series A, Assured Guaranty,Pre-Refunded, 5.00%, 6/15/38 | 2,405,000 | 2,461,157 | ||||||
USG Real Estate Foundation III LLC Project, Series A,Pre-Refunded, 5.00%, 6/15/40 | 1,300,000 | 1,330,758 | ||||||
Glynn-Brunswick Memorial Hospital Authority Revenue, Anticipation Certificates, Southeast Georgia Health System Project, 5.00%, 8/01/47 | 2,250,000 | 2,602,328 | ||||||
Main Street Natural Gas Inc. Gas Supply Revenue, Series A, 5.00%, 5/15/49 | 11,500,000 | 15,606,880 | ||||||
Main Street Natural Gas Inc. Revenue, Gas Project, Series A, 5.50%, 9/15/28 | 5,000,000 | 6,387,900 | ||||||
Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional Healthcare System Inc. Project, AGMC Insured,Pre-Refunded, 5.00%, 8/01/41 | 7,500,000 | 7,710,825 | ||||||
Municipal Electric Authority Revenue, Plant Vogtle Units 3 and 4 Project P, Series B, 5.00%, 1/01/59 | 4,000,000 | 4,555,400 | ||||||
Private Colleges and Universities Authority Revenue, | ||||||||
Emory University, Green Bonds, Refunding, Series B, 5.00%, 9/01/48 | 6,005,000 | 7,468,178 | ||||||
Emory University, Refunding, Series A, 5.00%, 9/01/41 | 10,000,000 | 10,620,400 | ||||||
Emory University, Refunding, Series A, 5.00%, 10/01/43 | 10,000,000 | 11,296,400 | ||||||
Savannah EDA Revenue, SSU Community Development I LLC Project, Assured Guaranty, 5.75%, 6/15/41 | 10,000,000 | 10,267,300 | ||||||
|
| |||||||
|
404,865,049 |
| ||||||
|
| |||||||
Hawaii 0.8% | ||||||||
Hawaii State Airports System Revenue, Series A, 5.00%, 7/01/43 | 15,000,000 | 17,947,800 | ||||||
Hawaii State Department of Budget and Finance Special Purpose Revenue, | ||||||||
Hawaiian Electric Co. Inc. and its Subsidiary, 3.50%, 10/01/49 | 15,000,000 | 15,086,250 | ||||||
Hawaiian Electric Co. Inc. and its Subsidiary, Refunding, 3.20%, 7/01/39 | 10,000,000 | 10,191,500 | ||||||
Honolulu City and County Wastewater System Revenue, | ||||||||
First Bond Resolution, Senior Series A, 5.00%, 7/01/47 | 25,000,000 | 30,137,750 | ||||||
First Bond Resolution, Senior Series A,Pre-Refunded, 5.00%, 7/01/38 | 10,000,000 | 10,635,600 | ||||||
|
| |||||||
|
83,998,900 |
| ||||||
|
| |||||||
Idaho 0.2% | ||||||||
Idaho Health Facilities Authority Hospital Revenue, Trinity Health Credit Group, Series D, 4.00%, 12/01/43 | 6,000,000 | 6,565,980 | ||||||
Idaho State Health Facilities Authority Revenue, | ||||||||
St. Luke’s Health System Project, Refunding, Series A, 5.00%, 3/01/36 | 4,200,000 | 5,023,662 | ||||||
St. Luke’s Health System Project, Refunding, Series A, 5.00%, 3/01/37 | 3,500,000 | 4,167,485 | ||||||
|
| |||||||
|
15,757,127 |
| ||||||
|
|
22 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Illinois 3.7% | ||||||||
Bolingbrook GO, Will and DuPage Counties, Capital Appreciation, Refunding, Series A, zero cpn., 1/01/36 | $ | 19,000,000 | $ | 8,878,890 | ||||
Chicago GO, Lakefront Millennium Project, Parking Facilities, NATL Insured, ETM, 5.75%, 1/01/23 | 8,955,000 | 9,966,646 | ||||||
Chicago Midway Airport Revenue, | ||||||||
Refunding, Series B, 5.00%, 1/01/46 | 18,420,000 | 21,179,684 | ||||||
Refunding, Series C, Assured Guaranty, 5.50%, 1/01/24 | 15,780,000 | 17,257,797 | ||||||
Chicago O’Hare International Airport Revenue, | ||||||||
General Airport, senior lien, Series D, 5.25%, 1/01/42 | 10,000,000 | 11,973,500 | ||||||
General Airport, senior lien, Series D, 5.00%, 1/01/47 | 18,000,000 | 21,037,500 | ||||||
General Airport, third lien, Series A, 5.75%, 1/01/39 | 840,000 | 881,546 | ||||||
General Airport, third lien, Series A,Pre-Refunded, 5.75%, 1/01/39 | 4,160,000 | 4,381,478 | ||||||
General Airport, third lien, Series C, Assured Guaranty, 5.25%, 1/01/35 | 39,485,000 | 39,729,412 | ||||||
Chicago Transit Authority Sales Tax Receipts Revenue, 5.25%, 12/01/40 | 10,000,000 | 10,543,000 | ||||||
Illinois State Finance Authority Revenue, | ||||||||
Art Institute of Chicago, Refunding, Series A, 5.25%, 3/01/40 | 16,000,000 | 16,197,120 | ||||||
Carle Foundation, Refunding, Series A, 5.00%, 2/15/45 | 20,000,000 | 22,758,600 | ||||||
Mercy Health System Corp., Refunding, 5.00%, 12/01/46 | 30,000,000 | 34,135,200 | ||||||
Riverside Health System,Pre-Refunded, 6.25%, 11/15/35 | 2,930,000 | 2,934,512 | ||||||
Riverside Health System, Refunding, 6.25%, 11/15/35 | 2,070,000 | 2,077,970 | ||||||
Southern Illinois HealthCare Enterprise Inc., AGMC Insured,Pre-Refunded, 5.375%, 3/01/35 | 8,500,000 | 8,615,175 | ||||||
Illinois State Finance Authority Student Housing Revenue, | ||||||||
CHF-DeKalb II LLC, Northern Illinois University Project, 6.875%, 10/01/43 | 15,000,000 | 15,883,200 | ||||||
CHF-Normal LLC, Illinois State University Project,Pre-Refunded, 7.00%, 4/01/43 | 7,500,000 | 8,097,825 | ||||||
Illinois State GO, | ||||||||
AGMC Insured, 5.00%, 3/01/27 | 11,500,000 | 12,297,180 | ||||||
Refunding, AGMC Insured, 5.00%, 1/01/23 | 10,000,000 | 10,059,200 | ||||||
Illinois State Toll Highway Authority Revenue, Toll Highway, Senior, Refunding, SeriesA-1, 5.00%, 1/01/31 | 10,245,000 | 10,300,528 | ||||||
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 | 1,080,000 | 1,082,938 | ||||||
McCormick Place Expansion Project, Capital Appreciation, Refunding, Series B, NATL Insured, 5.55%, 6/15/21 | 2,540,000 | 2,546,985 | ||||||
McCormick Place Expansion Project, Capital Appreciation, Series B, NATL Insured, 5.65%, 6/15/22 | 24,500,000 | 26,790,260 | ||||||
McCormick Place Expansion Project, Capital Appreciation, Series B, NATL Insured, ETM, 5.65%, 6/15/22 | 2,855,000 | 3,180,156 | ||||||
McCormick Place Expansion Project, Capital Appreciation, Series B, NATL Insured, ETM, 5.65%, 6/15/22 | 2,645,000 | 2,942,615 | ||||||
Metropolitan Pier and Exposition Authority Hospitality Facilities Revenue, McCormick Place Convention Center, ETM, 7.00%, 7/01/26 | 9,925,000 | 12,034,757 | ||||||
Railsplitter Tobacco Settlement Authority Revenue,Pre-Refunded, 6.00%, 6/01/28 | 14,530,000 | 15,610,015 | ||||||
Regional Transportation Authority GO, Cook DuPage Kane Lake McHenry and Will Counties, Series A, AMBAC Insured, 7.20%, 11/01/20 | 325,000 | 334,685 | ||||||
Southwestern Illinois Development Authority Revenue, | ||||||||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/24 | 3,850,000 | 3,449,023 | ||||||
Capital Appreciation, Local Government Program, AGMC Insured, zero cpn., 12/01/26 | 7,700,000 | 6,517,357 | ||||||
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 | 7,141,707 |
franklintempleton.com | Semiannual Report | 23 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Illinois(continued) | ||||||||
University of Illinois University Revenue, | ||||||||
Auxiliary Facilities System, Refunding, Series A, 5.125%, 4/01/36 | $ | 2,950,000 | $ | 3,081,364 | ||||
Auxiliary Facilities System, Refunding, Series A, 5.25%, 4/01/41 | 5,000,000 | 5,219,150 | ||||||
Upper Illinois River Valley Development Authority MFHR, | ||||||||
Prairie View and Timber Oaks Apartments, Series A1, 5.00%, 12/01/43 | 8,550,000 | 7,762,374 | ||||||
Prairie View and Timber Oaks Apartments, Series A1, 5.00%, 12/01/54 | 11,000,000 | 9,671,640 | ||||||
Upper River Valley Development Authority Environmental Facilities Revenue, General Electric Co. Project, 5.45%, 2/01/23 | 3,600,000 | 3,609,036 | ||||||
|
| |||||||
400,160,025 | ||||||||
|
| |||||||
Indiana 2.9% | ||||||||
Hammond Multi-School Building Corp. Revenue, Lake County, first mortgage, 5.00%, 7/15/38 | 3,000,000 | 3,528,540 | ||||||
Indiana Finance Authority Revenue, | ||||||||
Baptist Homes of Indiana Senior Living, Series A, 5.25%, 11/15/46 | 11,955,000 | 13,609,931 | ||||||
Baptist Homes of Indiana Senior Living, Series A, 5.00%, 11/15/48 | 5,000,000 | 5,643,950 | ||||||
Baptist Homes of Indiana Senior Living, Series A, 5.00%, 11/15/53 | 10,000,000 | 11,225,900 | ||||||
Deaconess Health System Obligated Group, Refunding, Series A, 5.00%, 3/01/39 | 5,000,000 | 5,648,850 | ||||||
Educational Facilities, Marian University Project,Pre-Refunded, 6.375%, 9/15/41 | 12,500,000 | 13,671,500 | ||||||
Stadium Project, Refunding, Series A, 5.25%, 2/01/37 | 10,000,000 | 11,930,300 | ||||||
Indiana Finance Authority Wastewater Utility Revenue, | ||||||||
Citizens Wastewater of Westfield Project, Series A, 5.00%, 10/01/48 | 16,665,000 | 20,378,629 | ||||||
CWA Authority Project, first lien, Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 34,310,700 | ||||||
CWA Authority Project, first lien, Series A, 5.00%, 10/01/37 | 5,000,000 | 5,482,350 | ||||||
CWA Authority Project, first lien, Series A, 5.25%, 10/01/38 | 12,000,000 | 12,825,120 | ||||||
CWA Authority Project, first lien, Series A, 4.00%, 10/01/42 | 24,690,000 | 25,689,204 | ||||||
Indiana State Municipal Power Agency Revenue, | ||||||||
Power Supply System, Refunding, Series A, 4.00%, 1/01/42 | 5,860,000 | 6,384,939 | ||||||
Power Supply System, Refunding, Series A, 5.00%, 1/01/42 | 21,290,000 | 24,863,313 | ||||||
Indianapolis Local Public Improvement Bond Bank Revenue, | ||||||||
Community Justice Campus, Courthouse and Jail Project, Refunding, Series A, 4.00%, 2/01/44 | 6,050,000 | 6,753,615 | ||||||
Community Justice Campus, Courthouse and Jail Project, Refunding, Series A, 5.00%, 2/01/49 | 41,970,000 | 51,153,875 | ||||||
Pilot Infrastructure Project, Refunding, Series C, 5.00%, 1/01/40 | 23,225,000 | 28,044,652 | ||||||
Pilot Infrastructure Project, Series F, AGMC Insured,Pre-Refunded, 5.00%, 1/01/35 | 10,000,000 | 10,060,900 | ||||||
Indianapolis Water System Revenue, first lien, Refunding, Series B, 5.00%, 10/01/37 | 15,000,000 | 18,005,700 | ||||||
Northern Indiana Commuter Transportation District Revenue, Limited Obligation, 5.00%, 7/01/41 | 6,000,000 | 7,029,180 | ||||||
|
| |||||||
316,241,148 | ||||||||
|
| |||||||
Iowa 0.3% | ||||||||
Iowa State Finance Authority Revenue, | ||||||||
Green Bond, Refunding, 5.00%, 8/01/42 | 16,000,000 | 19,371,520 | ||||||
UnityPoint Health, Refunding, Series B, 5.00%, 2/15/48 | 7,500,000 | 8,889,450 | ||||||
|
| |||||||
28,260,970 | ||||||||
|
| |||||||
Kansas 0.8% | ||||||||
Butler County USD No. 490 GO, School Building, El Dorado, Series B, BAM Insured, 4.00%, 9/01/43 | 10,000,000 | 10,916,400 | ||||||
Kansas State Development Finance Authority Hospital Revenue, Adventist Health System/Sunbelt Obligated Group, Series C,Pre-Refunded, 5.75%, 11/15/38 | 6,250,000 | 6,258,803 | ||||||
University of Kansas Hospital Authority Health Facilities Revenue, Kansas University Health System, Refunding, Series A, 5.00%, 3/01/47 | 23,115,000 | 27,199,189 |
24 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Kansas(continued) | ||||||||
Wyandotte County Kansas City Unified Government Utility System Revenue, | ||||||||
Improvement, Refunding, Series A, 5.00%, 9/01/44 | $ | 3,000,000 | $ | 3,374,160 | ||||
Improvement, Series A, 5.00%, 9/01/45 | 10,000,000 | 11,455,600 | ||||||
Improvement, Series C, 5.00%, 9/01/41 | 5,000,000 | 5,841,150 | ||||||
Improvement, Series C, 5.00%, 9/01/46 | 16,565,000 | 19,233,787 | ||||||
|
| |||||||
84,279,089 | ||||||||
|
| |||||||
Kentucky 0.2% | ||||||||
Kentucky State Municipal Power Agency Power System Revenue, | ||||||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/35 | 7,750,000 | 9,021,930 | ||||||
Prairie State Project, Refunding, Series A, NATL Insured, 5.00%, 9/01/42 | 10,000,000 | 11,437,500 | ||||||
|
| |||||||
20,459,430 | ||||||||
|
| |||||||
Louisiana 2.5% | ||||||||
East Baton Rouge Sewerage Commission Revenue, Refunding, Series A, 4.00%, 2/01/45 | 20,000,000 | 22,228,000 | ||||||
Jefferson Sales Tax District Special Sales Tax Revenue, Parish of Jefferson, Series B, Assured Guaranty, 4.00%, 12/01/42 | 20,000,000 | 22,447,000 | ||||||
Lafayette Communications System Revenue, Refunding, AGMC Insured, 5.00%, 11/01/30 | 5,000,000 | 5,898,500 | ||||||
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 | 5,690,740 | ||||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured,Pre-Refunded, 5.50%, 10/01/35 | 6,000,000 | 6,235,080 | ||||||
Ragin’ Cajun Facilities Inc. Housing and Parking Project, AGMC Insured,Pre-Refunded, 5.50%, 10/01/41 | 15,000,000 | 15,587,700 | ||||||
Louisiana Local Government Environmental Facilities and CDA Revenue, | ||||||||
East Baton Rouge Sewerage Commission Projects, sub. lien, Series A, 5.00%, 2/01/44 | 5,820,000 | 6,496,982 | ||||||
LCTCS Act 360 Project, 5.00%, 10/01/39 | 10,000,000 | 11,356,500 | ||||||
Southeastern Louisiana University, Student Union/University Facilities Inc. Project, Series A, AGMC Insured, 5.00%, 10/01/40 | 8,545,000 | 8,780,757 | ||||||
Louisiana Public Facilities Authority Hospital Revenue, Franciscan Missionaries of Our Lady Health System Project, Series A, 5.00%, 7/01/47 | 35,000,000 | 40,559,750 | ||||||
Louisiana Public Facilities Authority Revenue, | ||||||||
Ochsner Clinic Foundation Project,Pre-Refunded, 6.75%, 5/15/41 | 15,500,000 | 16,793,320 | ||||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/42 | 20,000,000 | 23,192,200 | ||||||
Ochsner Clinic Foundation Project, Refunding, 5.00%, 5/15/47 | 7,500,000 | 8,405,250 | ||||||
Ochsner Clinic Foundation Project, Series B, ETM, 5.75%, 5/15/23 | 10,000,000 | 11,541,900 | ||||||
Louisiana State Gasoline and Fuels Tax Revenue, second lien, Series B,Pre-Refunded, 5.00%, 5/01/45 | 13,690,000 | 13,949,015 | ||||||
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 | 15,000,000 | 17,129,100 | ||||||
Provident Group-Flagship Properties LLC, Louisiana State University Nicholson Gateway Project, Series A, 5.00%, 7/01/56 | 11,295,000 | 12,868,619 | ||||||
New Orleans Aviation Board Revenue, General Airport, North Terminal Project, Series B, 5.00%, 1/01/48 | 4,000,000 | 4,590,960 | ||||||
Shreveport Water and Sewer Revenue, | ||||||||
junior lien, Series B, 4.00%, 12/01/44 | 6,535,000 | 7,225,292 | ||||||
Series B, 5.00%, 12/01/41 | 10,000,000 | 11,684,200 | ||||||
|
| |||||||
272,660,865 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 25 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Maine 0.4% | ||||||||
Maine Health and Higher Educational Facilities Authority Revenue, MaineHealth Issue, Refunding, Series A, 5.00%, 7/01/43 | $ | 3,000,000 | $ | 3,574,080 | ||||
Maine State Health and Higher Educational Facilities Authority Revenue, | ||||||||
Maine General Medical Center Issue, 6.75%, 7/01/36 | 4,250,000 | 4,567,348 | ||||||
Maine General Medical Center Issue, 7.00%, 7/01/41 | 10,000,000 | 10,766,100 | ||||||
Maine State Turnpike Authority Revenue, 5.00%, 7/01/47 | 15,500,000 | 18,848,930 | ||||||
Portland Airport Revenue, | ||||||||
General, AGMC Insured, 5.25%, 1/01/35 | 3,000,000 | 3,017,250 | ||||||
General, AGMC Insured, 5.00%, 1/01/40 | 6,000,000 | 6,028,740 | ||||||
|
| |||||||
46,802,448 | ||||||||
|
| |||||||
Maryland 0.8% | ||||||||
Baltimore Revenue, | ||||||||
Mayor and City Council of Baltimore, Wastewater Projects, Series C, 5.00%, 7/01/38 | 5,000,000 | 5,666,500 | ||||||
Mayor and City Council of Baltimore, Wastewater Projects, Series C, 5.00%, 7/01/43 | 10,000,000 | 11,287,000 | ||||||
Mayor and City Council of Baltimore, Water Projects, Subordinate, Refunding, Series C, 5.00%, 7/01/39 | 10,000,000 | 11,542,600 | ||||||
Mayor and City Council of Baltimore, Water Projects, Subordinate, Refunding, Series C, 5.00%, 7/01/44 | 10,000,000 | 11,471,600 | ||||||
Mayor and City Council of Baltimore, Water Projects, Subordinate, Series A, 5.00%, 7/01/39 | 9,430,000 | 10,849,592 | ||||||
Mayor and City Council of Baltimore, Water Projects, Subordinate, Series A, 5.00%, 7/01/44 | 5,500,000 | 6,289,085 | ||||||
Maryland CDA Department Housing and Community Development Revenue, Residential, Refunding, Series A, 3.85%, 9/01/33 | 5,150,000 | 5,614,839 | ||||||
Maryland State Health and Higher Educational Facilities Authority Revenue, | ||||||||
Adventist HealthCare Issue, Series A, 5.50%, 1/01/46 | 12,500,000 | 14,630,500 | ||||||
LifeBridge Health Issue, Refunding, 4.00%, 7/01/42 | 3,000,000 | 3,289,650 | ||||||
Medstar Health Issue, Series A, 5.00%, 5/15/42 | 7,500,000 | 8,820,225 | ||||||
University of Maryland Medical System Issue, Series B, NATL Insured, ETM, 7.00%, 7/01/22 | 105,000 | 117,404 | ||||||
|
| |||||||
89,578,995 | ||||||||
|
| |||||||
Massachusetts 3.4% | ||||||||
Massachusetts Bay Transportation Authority Sales Tax Revenue, Refunding, Senior Series A, 5.00%, 7/01/28 | 10,000,000 | 12,881,200 | ||||||
Massachusetts Development Finance Agency Revenue, | ||||||||
Dana-Farber Cancer Institute Issue, Series N, 5.00%, 12/01/41 | 10,135,000 | 11,993,962 | ||||||
Partners HealthCare System Issue, Refunding, Series Q, 5.00%, 7/01/47 | 15,000,000 | 17,506,350 | ||||||
Partners HealthCare System Issue, Refunding, Series S, 4.00%, 7/01/41 | 15,415,000 | 17,202,369 | ||||||
Wellesley College Issue, Series J, 5.00%, 7/01/42 | 10,000,000 | 10,927,500 | ||||||
Massachusetts State Department of Transportation Metropolitan Highway System Revenue, Senior, Refunding, Series B, 5.00%, 1/01/37 | 31,000,000 | 31,188,790 | ||||||
Massachusetts State Development Finance Agency Revenue, Worcester Polytechnic Institute Issue, 5.00%, 9/01/59 | 10,000,000 | 11,886,500 | ||||||
Massachusetts State Educational Financing Authority Education Loan Revenue, | ||||||||
Issue I, 6.00%, 1/01/28 | 3,515,000 | 3,535,246 | ||||||
Issue K, Refunding, 5.25%, 7/01/29 | 5,060,000 | 5,399,071 | ||||||
Massachusetts State GO, | ||||||||
Consolidated Loan of 2016, Series G, 4.00%, 9/01/42 | 20,000,000 | 22,076,000 | ||||||
Consolidated Loan of 2017, Green Bonds, Series B, 5.00%, 4/01/47 | 12,335,000 | 14,666,068 | ||||||
Consolidated Loan of 2019, Series A, 5.25%, 1/01/44 | 10,000,000 | 12,577,600 | ||||||
Series A, 5.00%, 1/01/41 | 15,000,000 | 18,235,050 |
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 GO, (continued) | ||||||||
Series A, 5.00%, 1/01/46 | $ | 10,000,000 | $ | 12,063,500 | ||||
Massachusetts State Health and Educational Facilities Authority Revenue, | ||||||||
Berklee College of Music Issue, Refunding, Series A, 5.00%, 10/01/37 | 490,000 | 491,495 | ||||||
CareGroup Issue, Series A, NATL Insured,Pre-Refunded, 5.00%, 7/01/25 | 750,000 | 788,265 | ||||||
Northeastern University Issue, Series A, 5.00%, 10/01/35 | 20,000,000 | 20,568,200 | ||||||
Massachusetts State Port Authority Revenue, | ||||||||
Series C, 5.00%, 7/01/44 | 10,000,000 | 12,186,800 | ||||||
Series C, 5.00%, 7/01/49 | 15,000,000 | 18,174,450 | ||||||
Massachusetts State Port Authority Special Facilities Revenue, Bosfuel Project, Refunding, Series A, 5.00%, 7/01/49 | 7,500,000 | 8,966,400 | ||||||
Massachusetts State School Building Authority Dedicated Sales Tax Revenue, | ||||||||
Subordinated, Refunding, Series A, 4.00%, 2/15/43 | 10,750,000 | 11,977,972 | ||||||
Subordinated, Series A, 5.00%, 2/15/49 | 25,000,000 | 29,273,000 | ||||||
Massachusetts State Transportation Fund Revenue, | ||||||||
Accelerated Bridge Program, Series A, 4.00%, 6/01/35 | 10,000,000 | 10,357,400 | ||||||
Rail Enhancement and Accelerated Bridge Programs, Series A, 5.00%, 6/01/47 | 25,055,000 | 29,982,817 | ||||||
Massachusetts State Water Pollution Abatement Trust Revenue, | ||||||||
MWRA Program, Series A, 5.00%, 8/01/32 | 225,000 | 225,635 | ||||||
Water Pollution Abatement, MWRA Program, Subordinate, Refunding, Series A, 5.75%, 8/01/29 | 450,000 | 451,557 | ||||||
University of Massachusetts Building Authority Project Revenue, Senior Series 1, 5.00%, 11/01/39 | 20,000,000 | 23,165,600 | ||||||
|
| |||||||
368,748,797 | ||||||||
|
| |||||||
Michigan 2.8% | ||||||||
Detroit City School District GO, | ||||||||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/30 | 1,245,000 | 1,346,604 | ||||||
School Building and Site Improvement, Refunding, Series A, 5.00%, 5/01/33 | 1,500,000 | 1,619,910 | ||||||
Detroit Sewage Disposal System Revenue, second lien, Series B, NATL Insured, 5.00%, 7/01/36 | 10,000 | 10,026 | ||||||
Detroit Water and Sewerage Department Sewage Disposal System Revenue, | ||||||||
senior lien, Refunding, Series A, 5.25%, 7/01/39 | 12,000,000 | 13,023,960 | ||||||
senior lien, Refunding, Series A, AGMC Insured, 5.00%, 7/01/39 | 10,000,000 | 10,815,900 | ||||||
Detroit Water Supply System Revenue, senior lien, Series B, NATL Insured, 5.00%, 7/01/34 | 10,000 | 10,027 | ||||||
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 | 15,336,000 | ||||||
Michigan Finance Authority Revenue, | ||||||||
Hospital, Beaumont Health Credit Group, Series A, 5.00%, 11/01/44 | 20,925,000 | 23,995,534 | ||||||
Hospital, Bronson Healthcare Group Inc., Refunding, Series A, 5.00%, 5/15/54 | 40,000,000 | 45,504,800 | ||||||
Hospital, Henry Ford Health System, Series A, 5.00%, 11/15/48 | 10,000,000 | 12,121,700 | ||||||
Hospital, McLaren Health Care, Series A, 4.00%, 2/15/44 | 20,000,000 | 22,062,000 | ||||||
Hospital, Trinity Health Credit Group, Refunding, Series MI, 5.00%, 12/01/39 | 29,610,000 | 31,632,067 | ||||||
Hospital, Trinity Health Credit Group, Series MI,Pre-Refunded, 5.00%, 12/01/39 | 140,000 | 150,839 | ||||||
Michigan Hospital Finance Authority Revenue, | ||||||||
Ascension Health Senior Credit Group, Refunding, SeriesF-8, 5.00%, 11/15/47 | 10,000,000 | 11,692,000 | ||||||
Trinity Health Credit Group, Refunding, Series C, 5.00%, 12/01/34 | 9,230,000 | 10,010,766 | ||||||
Trinity Health Credit Group, Series C,Pre-Refunded, 5.00%, 12/01/34 | 770,000 | 843,758 | ||||||
Michigan State Building Authority Revenue, | ||||||||
Facilities Program, Refunding, SeriesI-A, 5.375%, 10/15/36 | 6,730,000 | 7,229,029 | ||||||
Facilities Program, Refunding, SeriesI-A, 5.25%, 10/15/44 | 20,655,000 | 23,350,891 | ||||||
Michigan State HDA Rental Housing Revenue, SeriesA-1, 3.25%, 10/01/44 | 3,450,000 | 3,533,801 |
franklintempleton.com | Semiannual Report | 27 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Michigan(continued) | ||||||||
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 | $ | 7,187,810 | ||||
The Detroit Edison Co. Pollution Control Bonds Project, Refunding, Collateralized, Series BB, | ||||||||
AMBAC Insured, 7.00%, 5/01/21 | 250,000 | 270,168 | ||||||
I-75 Improvement Project, 5.00%, 12/31/43 | 10,000,000 | 11,894,200 | ||||||
United Methodist Retirement Communities Inc. Project, Refunding, 5.00%, 11/15/49 | 6,000,000 | 6,896,100 | ||||||
Michigan Tobacco Settlement Finance Authority Revenue, Tobacco Settlement Asset-Backed, Senior, Series A, 6.00%, 6/01/34 | 40,000,000 | 40,218,400 | ||||||
|
| |||||||
300,756,290 | ||||||||
|
| |||||||
Minnesota 0.1% | ||||||||
St. Cloud Health Care Revenue, CentraCare Health System, Refunding, 5.00%, 5/01/48 | 10,000,000 | 12,138,600 | ||||||
|
| |||||||
Mississippi 0.7% | ||||||||
Medical Center Educational Building Corp. Revenue, University of Mississippi Medical Center, Refunding, Series A, 5.00%, 6/01/47 | 25,000,000 | 29,307,000 | ||||||
Mississippi Development Bank Special Obligation Revenue, City of Jackson Water and Sewer System Project, AGMC Insured, 6.875%, 12/01/40 | 3,400,000 | 4,036,582 | ||||||
Mississippi Hospital Equipment and Facilities Authority Revenue, | ||||||||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/36 | 6,350,000 | 7,290,181 | ||||||
Baptist Memorial Health Care, Series A, 5.00%, 9/01/46 | 34,000,000 | 38,158,540 | ||||||
|
| |||||||
78,792,303 | ||||||||
|
| |||||||
Missouri 0.7% | ||||||||
Kansas City IDA Airport Special Obligation Revenue, Kansas City International Airport Terminal Modernization Project, Series B, 5.00%, 3/01/54 | 27,500,000 | 32,419,475 | ||||||
Missouri State Health and Educational Facilities Authority Health Facilities Revenue, | ||||||||
Mercy Health, Series F, 5.00%, 11/15/45 | 25,000,000 | 28,179,250 | ||||||
SSM Health, Series A, 5.00%, 6/01/48 | 7,500,000 | 8,855,775 | ||||||
Missouri State Health and Educational Facilities Authority Revenue, Senior Living Facilities, Lutheran Senior Services Projects, Series A, 5.00%, 2/01/42 | 4,000,000 | 4,505,320 | ||||||
|
| |||||||
73,959,820 | ||||||||
|
| |||||||
Montana 0.2% | ||||||||
Montana State Facility Finance Authority Health Care Facilities Revenue, Kalispell Regional Medical Center Obligated Group, Series B, 5.00%, 7/01/43 | 6,440,000 | 7,407,481 | ||||||
Montana State Facility Finance Authority Revenue, | ||||||||
Benefits Health System Obligated Group, Refunding, 5.00%, 2/15/41 | 2,650,000 | 3,068,806 | ||||||
Billings Clinic Obligated Group, Refunding, Series A, 5.00%, 8/15/48 | 10,000,000 | 12,060,800 | ||||||
|
| |||||||
22,537,087 | ||||||||
|
| |||||||
Nebraska 0.8% | ||||||||
Douglas County Hospital Authority No. 2 Revenue, Health Facilities, Children’s Hospital Obligated Group, 5.00%, 11/15/47 | 10,000,000 | 11,622,300 | ||||||
Lancaster County Hospital Authority Revenue, Bryan Memorial Hospital Project No. 1, NATL Insured, ETM, 6.70%, 6/01/22 | 925,000 | 998,547 | ||||||
Omaha Public Power District Electric System Revenue, Series C,Pre-Refunded, 5.00%, 2/01/39 | 23,305,000 | 24,419,445 | ||||||
Omaha Public Power District Separate Electric System Revenue, | ||||||||
Nebraska City 2, Refunding, Series A, 5.00%, 2/01/49 | 10,000,000 | 11,485,100 | ||||||
Nebraska City 2, Series A, 5.25%, 2/01/42 | 10,000,000 | 11,646,600 |
28 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Nebraska(continued) | ||||||||
Public Power Generation Agency Revenue, | ||||||||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/39 | $ | 7,340,000 | $ | 8,544,861 | ||||
Whelan Energy Center Unit 2, Refunding, Series A, 5.00%, 1/01/41 | 5,140,000 | 5,961,680 | ||||||
University of Nebraska Revenue, | ||||||||
Lincoln Student Fees and Facilities,Pre-Refunded, 5.00%, 7/01/37 | 5,000,000 | 5,365,700 | ||||||
Lincoln Student Fees and Facilities,Pre-Refunded, 5.00%, 7/01/42 | 7,500,000 | 8,036,925 | ||||||
|
| |||||||
88,081,158 | ||||||||
|
| |||||||
Nevada 0.4% | ||||||||
Carson City Hospital Revenue, Carson Tahoe Regional Healthcare Project, Refunding, Series A, 5.00%, 9/01/47 | 2,775,000 | 3,213,644 | ||||||
Clark County Passenger Facility Charge Revenue, | ||||||||
Las Vegas, McCarran International Airport, Series A, AGMC Insured, 5.25%, 7/01/39 | 20,000,000 | 20,119,200 | ||||||
Las Vegas, McCarran International Airport, Series A, AGMC Insured, 5.25%, 7/01/42 | 5,000,000 | 5,029,500 | ||||||
Las Vegas Convention and Visitors Authority Convention Center Expansion Revenue, Series B, 5.00%, 7/01/43 | 10,000,000 | 11,973,800 | ||||||
Reno Hospital Revenue, | ||||||||
Washoe Medical Center Project, Refunding, Series C, AGMC Insured, 5.375%, 6/01/39 | 1,535,000 | 1,564,718 | ||||||
Washoe Medical Center Project, Series C, AGMC Insured,Pre-Refunded, 5.375%, 6/01/39 | 3,465,000 | 3,548,021 | ||||||
|
| |||||||
45,448,883 | ||||||||
|
| |||||||
New Hampshire 0.3% | ||||||||
New Hampshire Health and Education Facilities Authority Revenue, | ||||||||
Concord Hospital Trust, 5.00%, 10/01/47 | 6,000,000 | 7,055,280 | ||||||
Elliot Hospital Issue, Refunding, 5.00%, 10/01/38 | 4,000,000 | 4,634,600 | ||||||
University System of New Hampshire Issue, Refunding, 5.00%, 7/01/45 | 10,350,000 | 11,918,646 | ||||||
New Hampshire Municipal Bond Bank Revenue, Series B,Pre-Refunded, 5.00%, 8/15/39 | 11,250,000 | 11,586,263 | ||||||
|
| |||||||
35,194,789 | ||||||||
|
| |||||||
New Jersey 1.0% | ||||||||
New Jersey EDA Revenue, | ||||||||
School Facilities Construction, Series AAA, 5.00%, 6/15/41 | 26,000,000 | 29,373,500 | ||||||
School Facilities Construction, Series NN, 5.00%, 3/01/28 | 22,000,000 | 23,985,940 | ||||||
New Jersey State Educational Facilities Authority Revenue, Higher Education Capital Improvement Fund Issue, Series B, 5.00%, 9/01/36 | 14,000,000 | 15,913,520 | ||||||
New Jersey State Transportation Trust Fund Authority Revenue, | ||||||||
Transportation Program, Series AA, 5.00%, 6/15/45 | 15,000,000 | 16,620,450 | ||||||
Transportation System, Series B, 5.25%, 6/15/36 | 10,000,000 | 10,505,400 | ||||||
New Jersey State Turnpike Authority Revenue, Turnpike, Series E, 5.00%, 1/01/45 | 11,475,000 | 13,104,220 | ||||||
|
| |||||||
109,503,030 | ||||||||
|
| |||||||
New Mexico 0.3% | ||||||||
New Mexico Hospital Equipment Loan Council Hospital System Revenue, | ||||||||
Presbyterian Healthcare Services, Refunding, Series A, 5.00%, 8/01/44 | 10,000,000 | 11,423,700 | ||||||
Presbyterian Healthcare Services, Refunding, Series A, 5.00%, 8/01/46 | 15,000,000 | 17,734,350 | ||||||
|
| |||||||
29,158,050 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 29 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
New York 10.5% | ||||||||
Hudson Yards Infrastructure Corp. Revenue, | ||||||||
Senior, Fiscal 2012, Series A, AGMC Insured, 5.00%, 2/15/47 | $ | 15,745,000 | $ | 16,402,354 | ||||
Senior, Fiscal 2012, Series A, AGMC Insured,Pre-Refunded, 5.00%, 2/15/47 | 730,000 | 765,996 | ||||||
Long Island Power Authority Electric System Revenue, General, Refunding, Series B, 5.00%, 9/01/46 | 13,000,000 | 15,291,120 | ||||||
MTA Dedicated Tax Fund Revenue, | ||||||||
Build America Bonds, Series B,Pre-Refunded, 5.25%, 11/15/28 | 6,000,000 | 6,007,800 | ||||||
Build America Bonds, Series B,Pre-Refunded, 5.25%, 11/15/29 | 4,000,000 | 4,005,200 | ||||||
Build America Bonds, Series B,Pre-Refunded, 5.25%, 11/15/30 | 3,000,000 | 3,003,900 | ||||||
Build America Bonds, Series B,Pre-Refunded, 5.00%, 11/15/34 | 15,000,000 | 15,018,300 | ||||||
MTA Revenue, | ||||||||
Transportation, Refunding, Series D, 4.00%, 11/15/42 | 10,000,000 | 11,048,900 | ||||||
Transportation, Series A, 5.00%, 11/15/38 | 11,800,000 | 13,073,102 | ||||||
Transportation, Series D,Pre-Refunded, 5.00%, 11/15/34 | 10,000,000 | 10,412,200 | ||||||
Transportation, Series D,Pre-Refunded, 5.00%, 11/15/36 | 9,500,000 | 10,269,880 | ||||||
Transportation, Series D,Pre-Refunded, 5.25%, 11/15/40 | 15,000,000 | 15,656,700 | ||||||
Transportation, Series D, Sub SeriesD-1, 5.00%, 11/15/39 | 15,000,000 | 17,133,900 | ||||||
Transportation, Sub SeriesA-1, 5.00%, 11/15/40 | 30,000,000 | 33,134,700 | ||||||
New York City GO, | ||||||||
Fiscal 2002, Series D, 5.50%, 6/01/24 | 180,000 | 180,596 | ||||||
Fiscal 2010, Refunding, Series C, 5.00%, 8/01/23 | 24,620,000 | 24,691,644 | ||||||
SeriesE-1, 5.00%, 3/01/40 | 14,570,000 | 17,729,796 | ||||||
Series F, 5.25%, 1/15/23 | 5,000 | 5,015 | ||||||
New York City Municipal Water Finance Authority Water and Sewer System Revenue, | ||||||||
Second General Resolution, Fiscal 2011, Series GG,Pre-Refunded, 5.00%, 6/15/43 | 25,000,000 | 26,592,500 | ||||||
Second General Resolution, Fiscal 2012, Series AA,Pre-Refunded, 5.00%, 6/15/34 | 10,000,000 | 10,637,000 | ||||||
Second General Resolution, Fiscal 2012, Series AA,Pre-Refunded, 5.00%, 6/15/44 | 21,550,000 | 22,922,735 | ||||||
Second General Resolution, Fiscal 2013, Refunding, Series DD, 5.00%, 6/15/35 | 30,705,000 | 34,388,372 | ||||||
Second General Resolution, Fiscal 2014, Refunding, Series BB, 5.00%, 6/15/46 | 15,000,000 | 16,633,200 | ||||||
Second General Resolution, Fiscal 2015, Refunding, Series FF, 5.00%, 6/15/39 | 10,000,000 | 11,707,700 | ||||||
Second General Resolution, Fiscal 2015, Refunding, Series HH, 5.00%, 6/15/39 | 15,000,000 | 17,561,550 | ||||||
Second General Resolution, Fiscal 2017, Series CC, SubseriesCC-2, 5.00%, 6/15/46 | 32,500,000 | 38,313,600 | ||||||
Second General Resolution, Fiscal 2019, SeriesDD-1, 5.25%, 6/15/49 | 12,000,000 | 14,807,640 | ||||||
New York City Transitional Finance Authority Building Aid Revenue, | ||||||||
Fiscal 2011, SeriesS-2, SubseriesS-2A, 5.00%, 7/15/40 | 35,000,000 | 37,050,300 | ||||||
Fiscal 2012, SeriesS-1, SubseriesS-1A, 5.25%, 7/15/37 | 30,300,000 | 32,296,770 | ||||||
New York City Transitional Finance Authority Revenue, | ||||||||
Future Tax Secured, Subordinate, Fiscal 2011, Series C, 5.00%, 11/01/39 | 15,000,000 | 15,528,450 | ||||||
Future Tax Secured, Subordinate, Fiscal 2014, Series A, SubseriesA-1, 5.00%, 11/01/34 | 15,000,000 | 17,009,700 | ||||||
Future Tax Secured, Subordinate, Fiscal 2016, Series E, SubseriesE-1, 5.00%, 2/01/38 | 10,000,000 | 11,755,400 | ||||||
Future Tax Secured, Subordinate, Fiscal 2017, Series B, SubseriesB-1, 5.00%, 8/01/36 | 10,000,000 | 11,936,300 | ||||||
Future Tax Secured, Subordinate, Fiscal 2017, Series B, SubseriesB-1, 5.00%, 8/01/38 | 10,000,000 | 11,875,600 | ||||||
Future Tax Secured, Subordinate, Fiscal 2017, Series F, SubseriesF-1, 5.00%, 5/01/42 | 11,095,000 | 13,249,205 | ||||||
Future Tax Secured, Subordinate, Fiscal 2018, Series C, SubseriesC-2, 5.00%, 5/01/38 | 11,945,000 | 14,654,962 | ||||||
New York Liberty Development Corp. Liberty Revenue, | ||||||||
One World Trade Center, Secured by Port Authority Bonds, 5.25%, 12/15/43 | 25,000,000 | 27,038,250 | ||||||
Seven World Trade Center Project, Refunding, 5.00%, 9/15/43 | 6,500,000 | 6,993,220 |
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 Liberty Development Corp. Revenue, | ||||||||
Goldman Sachs Headquarters Issue, 5.50%, 10/01/37 | $ | 24,995,000 | $ | 35,713,106 | ||||
Goldman Sachs Headquarters Issue, Second Tranche, 5.25%, 10/01/35 | 40,000,000 | 54,597,200 | ||||||
Second Priority Liberty, Bank of America Tower at One Bryant Park Project, Class 1,Pre-Refunded, 5.625%, 1/15/46 | 25,000,000 | 25,226,750 | ||||||
New York State Dormitory Authority Revenues, Lease, State University Dormitory Facilities, Series A, 5.00%, 7/01/41 | 10,000,000 | 10,585,400 | ||||||
New York State Dormitory Authority Sales Tax Revenue, | ||||||||
Bid Group 3, Refunding, Series E, 5.00%, 3/15/42 | 59,480,000 | 72,855,863 | ||||||
Bid Group 4, Refunding, Series E, 5.00%, 3/15/46 | 73,130,000 | 89,046,013 | ||||||
Bid Group C, Series A, 5.00%, 3/15/43 | 10,000,000 | 11,887,700 | ||||||
Refunding, Series C, 5.00%, 3/15/42 | 33,280,000 | 40,322,381 | ||||||
State Supported Debt, Series A, 5.00%, 3/15/45 | 25,000,000 | 30,201,750 | ||||||
New York State Dormitory Authority State Personal Income Tax Revenue, | ||||||||
Bidding Group 3 Bonds, Refunding, Series B, 5.00%, 2/15/42 | 24,410,000 | 29,267,834 | ||||||
General Purpose, Series A, 5.00%, 2/15/36 | 15,000,000 | 16,619,700 | ||||||
Group C, Series B, 5.00%, 2/15/40 | 20,000,000 | 23,024,200 | ||||||
New York State Thruway Authority General Junior Indebtedness Obligations Revenue, junior lien, Series A, 5.00%, 1/01/51 | 9,000,000 | 10,362,960 | ||||||
New York State Thruway Authority General Revenue, Junior indebtedness Obligation, Series B, 4.00%, 1/01/45 | 20,000,000 | 22,367,200 | ||||||
New York State Urban Development Corp. Revenue, State Personal Income Tax, General Purpose, Series A, 5.00%, 3/15/31 | 10,000,000 | 10,508,900 | ||||||
Port Authority of New York and New Jersey Revenue, Consolidated, Refunding, One Hundred Seventy-Ninth Series, 5.00%, 12/01/38 | 20,000,000 | 22,738,600 | ||||||
Triborough Bridge and Tunnel Authority Revenue, General Purpose, Series B,Pre-Refunded, 5.50%, 1/01/30 | 15,000,000 | 16,380,000 | ||||||
|
| |||||||
1,128,489,114 | ||||||||
|
| |||||||
North Carolina 1.7% | ||||||||
North Carolina Eastern Municipal Power Agency Power System Revenue, | ||||||||
Series B, ETM, 6.00%, 1/01/22 | 1,250,000 | 1,378,288 | ||||||
Series B, ETM, 6.25%, 1/01/23 | 39,030,000 | 45,080,431 | ||||||
North Carolina State Capital Improvement Limited Obligation Revenue, | ||||||||
Series A,Pre-Refunded, 5.00%, 5/01/23 | 20,000,000 | 20,383,400 | ||||||
Series A,Pre-Refunded, 5.00%, 5/01/26 | 20,000,000 | 20,383,400 | ||||||
North Carolina Turnpike Authority Revenue, | ||||||||
Triangle Expressway System, Appropriation, Refunding, Series A, 4.00%, 1/01/39 | 10,000,000 | 11,270,300 | ||||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/33 | 25,000,000 | 17,567,500 | ||||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/34 | 15,000,000 | 10,190,250 | ||||||
Triangle Expressway System, Capital Appreciation, Series B, Assured Guaranty, zero cpn., 1/01/35 | 15,215,000 | 9,991,234 | ||||||
Raleigh Combined Enterprise System Revenue,Pre-Refunded, 5.00%, 3/01/40 | 15,830,000 | 16,637,488 | ||||||
Wake County GO, Refunding, Series C, 5.00%, 3/01/25 | 21,780,000 | 26,053,889 | ||||||
|
| |||||||
178,936,180 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 31 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
North Dakota 0.3% | ||||||||
North Darkota State Board of Higher Education Housing & Auxiliary Facilities Revenue, Series A, Assured Guaranty, 4.00%, 4/01/44 | $ | 10,000,000 | $ | 11,021,100 | ||||
University of North Dakota COP, | ||||||||
Infrastructure Energy Improvement Project, Green Certificates, Series A, 5.00%, 4/01/48 | 5,500,000 | 6,473,555 | ||||||
Infrastructure Energy Improvement Project, Green Certificates, Series A, 5.00%, 4/01/57 | 10,000,000 | 11,591,700 | ||||||
|
| |||||||
29,086,355 | ||||||||
|
| |||||||
Ohio 3.6% | ||||||||
Akron Income Tax Revenue, Community Learning Centers, Refunding, Series A, 5.00%, 12/01/29 | 10,000,000 | 10,912,200 | ||||||
American Municipal Power Inc. Revenue, | ||||||||
Combined Hydroelectric Projects, Green Bonds, Refunding, Series A, 5.00%, 2/15/46 | 20,000,000 | 22,872,600 | ||||||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/39 | 5,000,000 | 5,614,850 | ||||||
Prairie State Energy Campus Project, Refunding, Series A, 5.00%, 2/15/42 | 2,500,000 | 2,797,175 | ||||||
Bowling Green Student Housing Revenue, CFP I LLC, State University Project,Pre-Refunded, 6.00%, 6/01/45 | 6,750,000 | 6,937,380 | ||||||
Buckeye Tobacco Settlement Financing Authority Revenue, | ||||||||
Tobacco Settlement, Senior, Convertible, Capital Appreciation, Turbo Term, SeriesA-3, 6.25%, 6/01/37 | 15,000,000 | 15,365,850 | ||||||
Tobacco Settlement, Senior, Turbo Term, SeriesA-2, 5.75%, 6/01/34 | 10,000,000 | 10,012,600 | ||||||
Butler County Hospital Facilities Revenue, UC Health, Refunding, 5.00%, 11/15/45 | 7,500,000 | 8,609,325 | ||||||
Cleveland Airport System Revenue, Series A. AGMC Insured,Pre-Refunded, 5.00%, 1/01/28 | 9,500,000 | 10,275,200 | ||||||
Cleveland-Cuyahoga County Port Authority Development Lease Revenue, Administrative Headquarters Project, 5.00%, 7/01/37 | 6,000,000 | 8,003,940 | ||||||
Franklin County Hospital Facilities Revenue, OhioHealth Corp., 5.00%, 5/15/40 | 10,000,000 | 11,462,700 | ||||||
Franklin County Revenue, | ||||||||
Trinity Health Credit Group, SeriesA-OH, 5.00%, 12/01/47 | 10,800,000 | 12,820,896 | ||||||
Trinity Health Credit Group, Series OH, 5.00%, 12/01/46 | 10,000,000 | 11,769,900 | ||||||
Hamilton County Healthcare Facilities Revenue, The Christ Hospital Project, AGMC Insured, 5.00%, 6/01/42 | 22,500,000 | 23,939,325 | ||||||
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 | 13,527,000 | ||||||
JobsOhio Beverage System Statewide Liquor Profits Revenue, senior lien, Series A, 5.00%, 1/01/38 | 21,060,000 | 23,129,777 | ||||||
Kent State University Revenues, General Receipts, Series A, 5.00%, 5/01/37 | 10,500,000 | 11,323,305 | ||||||
Northeast Regional Sewer District Revenue, | ||||||||
Wastewater Improvement, Refunding, 4.00%, 11/15/38 | 10,000,000 | 11,359,600 | ||||||
Wastewater Improvement, Refunding, 4.00%, 11/15/43 | 10,000,000 | 11,207,900 | ||||||
Ohio State Air Quality Development Authority Revenue, Environmental Improvement, Buckeye Power Inc. Project, 6.00%, 12/01/40 | 15,000,000 | 15,733,650 | ||||||
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 | 15,269,550 | ||||||
Ohio State Hospital Facility Revenue, Cleveland Clinic Health System Obligated Group, Series B, 4.00%, 1/01/43 | 12,130,000 | 13,628,904 | ||||||
Ohio State Hospital Revenue, | ||||||||
Cleveland Clinic Health System Obligated Group, Refunding, Series A, 4.00%, 1/01/36 | 6,500,000 | 7,368,010 | ||||||
University Hospitals Health System Inc., Refunding, Series A, AGMC Insured, 5.00%, 1/15/41 | 7,000,000 | 7,467,460 | ||||||
Ohio State Turnpike and Infrastructure Commission Revenue, Infrastructure Projects, Capital Appreciation, junior lien, SeriesA-3, zero cpn. to 2/14/23, 5.75% thereafter, 2/15/35 | 35,000,000 | 39,706,800 | ||||||
Ohio State Turnpike Revenue, Series A, 5.00%, 2/15/43 | 20,000,000 | 24,291,800 | ||||||
Ohio State University Revenue, Special Purpose, General Receipts, Series A, 5.00%, 6/01/38 | 10,000,000 | 11,157,600 |
32 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Ohio(continued) | ||||||||
Toledo Water System Revenue, Improvement and Refunding, 5.00%, 11/15/38 | $ | 20,000,000 | $ | 22,135,400 | ||||
|
| |||||||
388,700,697 | ||||||||
|
| |||||||
Oklahoma 0.1% | ||||||||
Edmond Public Works Authority Sales Tax and Utility System Revenue, | ||||||||
5.00%, 7/01/42 | 4,000,000 | 4,775,640 | ||||||
5.00%, 7/01/47 | 4,500,000 | 5,337,990 | ||||||
McGee Creek Authority Water Revenue, NATL Insured, 6.00%, 1/01/23 | 155,000 | 166,207 | ||||||
|
| |||||||
10,279,837 | ||||||||
|
| |||||||
Oregon 1.2% | ||||||||
Clackamas County School District No. 62 Oregon City GO, Refunding, Series B, 5.00%, 6/15/49 | 20,000,000 | 24,272,400 | ||||||
Medford Hospital Facilities Authority Revenue, Hospital, Asante Health System, Series A, AGMC Insured, 5.00%, 8/15/40 | 4,935,000 | 5,041,596 | ||||||
Oregon State Housing and Community Services Department Mortgage Revenue, | ||||||||
SFM Program, Series A, 3.60%, 1/01/33 | 9,455,000 | 10,033,646 | ||||||
SFM Program, Series D, 3.80%, 7/01/34 | 8,990,000 | 9,739,586 | ||||||
Port of Portland International Airport Revenue, Series Twenty-Five B, 5.00%, 7/01/49 | 12,720,000 | 15,327,091 | ||||||
Portland Sewer System Revenue, second lien, Series A, 5.00%, 3/01/35 | 11,540,000 | 11,674,326 | ||||||
Salem Hospital Facility Authority Revenue, Multi Model, Salem Health Projects, Refunding, Series A, 5.00%, 5/15/44 | 18,630,000 | 22,589,620 | ||||||
University of Oregon General Revenue, Series A, 5.00%, 4/01/48 | 14,500,000 | 17,565,445 | ||||||
Washington Clackamas and Yamhill Counties Sherwood School District No. 88J GO, | ||||||||
Capital Appreciation, Series A, zero cpn., 6/15/41 | 5,725,000 | 2,630,294 | ||||||
Capital Appreciation, Series A, zero cpn., 6/15/42 | 5,900,000 | 2,591,693 | ||||||
Capital Appreciation, Series A, zero cpn., 6/15/43 | 5,500,000 | 2,309,450 | ||||||
|
| |||||||
123,775,147 | ||||||||
|
| |||||||
Pennsylvania 2.4% | ||||||||
Allegheny County Sanitary Authority Sewer Revenue, Allegheny County, BAM Insured, 5.25%, 12/01/44 | 5,000,000 | 5,691,500 | ||||||
Bucks County Water and Sewer Authority Water System Revenue, | ||||||||
AGMC Insured,Pre-Refunded, 5.00%, 12/01/33 | 5,500,000 | 5,937,635 | ||||||
AGMC Insured,Pre-Refunded, 5.00%, 12/01/37 | 10,520,000 | 11,357,076 | ||||||
AGMC Insured,Pre-Refunded, 5.00%, 12/01/41 | 5,110,000 | 5,516,603 | ||||||
Commonwealth Financing Authority Revenue, | ||||||||
Series A, 5.00%, 6/01/33 | 4,550,000 | 5,261,028 | ||||||
Series B, 5.00%, 6/01/42 | 5,400,000 | 5,818,824 | ||||||
Delaware County Regional Water Quality Control Authority Revenue, | ||||||||
Sewer, 5.00%, 11/01/41 | 5,000,000 | 5,939,950 | ||||||
Sewer, 5.00%, 11/01/46 | 10,315,000 | 12,179,230 | ||||||
Delaware River Port Authority Revenue, Series D, AGMC Insured,Pre-Refunded, 5.00%, 1/01/40 | 15,000,000 | 15,092,550 | ||||||
Erie Water Authority Water Revenue, Erie County, Refunding, 5.00%, 12/01/43 | 5,000,000 | 5,853,750 | ||||||
Lackawanna County GO, | ||||||||
Refunding, Series B, AGMC Insured, 5.00%, 9/01/35 | 2,850,000 | 2,927,150 | ||||||
Series B, AGMC Insured,Pre-Refunded, 5.00%, 9/01/35 | 4,650,000 | 4,794,940 | ||||||
Montgomery County IDAR, Meadowood Senior Living Project, Refunding, Series A, 5.00%, 12/01/48 | 9,000,000 | 10,079,280 |
franklintempleton.com | Semiannual Report | 33 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Pennsylvania(continued) | ||||||||
Montour School District GO, | ||||||||
Series A, AGMC Insured, 5.00%, 4/01/40 | $ | 3,170,000 | $ | 3,635,673 | ||||
Series A, AGMC Insured, 5.00%, 4/01/41 | 2,000,000 | 2,289,980 | ||||||
Series A, AGMC Insured, 5.00%, 4/01/42 | 2,000,000 | 2,288,940 | ||||||
Pennsylvania State Economic Development Financing Authority Revenue, Water Facilities, Aqua Pennsylvania Inc. Project, Series B, 5.00%, 12/01/43 | 20,000,000 | 20,701,000 | ||||||
Pennsylvania State GO, Refunding, First Series, AGMC Insured, 5.00%, 8/15/26 | 20,805,000 | 25,066,488 | ||||||
Pennsylvania State Turnpike Commission Turnpike Revenue, Subordinate, Convertible Capital Appreciation, Series C, AGMC Insured, 6.25%, 6/01/33 | 5,000,000 | 6,348,350 | ||||||
Philadelphia School District GO, | ||||||||
Refunding, Series F, 5.00%, 9/01/33 | 6,415,000 | 7,556,742 | ||||||
Refunding, Series F, 5.00%, 9/01/36 | 4,090,000 | 4,787,509 | ||||||
Philadelphia Water and Wastewater Revenue, | ||||||||
Series A, 5.00%, 7/01/45 | 15,000,000 | 16,884,150 | ||||||
Series C, AGMC Insured,Pre-Refunded, 5.00%, 8/01/40 | 7,000,000 | 7,198,870 | ||||||
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 | 18,441,180 | ||||||
South Fork Municipal Authority Hospital Revenue, Conemaugh Valley Memorial Hospital, Series B, Assured Guaranty,Pre-Refunded, 5.375%, 7/01/35 | 15,000,000 | 15,401,100 | ||||||
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 | 11,770,800 | ||||||
Westmoreland County Municipal Authority Revenue, Municipal Service, Refunding, BAM Insured, 5.00%, 8/15/42 | 17,205,000 | 19,923,562 | ||||||
|
| |||||||
258,743,860 | ||||||||
|
| |||||||
Rhode Island 0.5% | ||||||||
Rhode Island Health and Educational Building Corp. Revenue, Hospital Financing, Lifespan Obligation Group, Refunding, 5.00%, 5/15/39 | 5,500,000 | 6,307,235 | ||||||
Rhode Island Housing and Mortgage Finance Corp. Revenue, | ||||||||
Homeownership Opportunity, Refunding, Series15-A, 6.85%, 10/01/24 | 120,000 | 120,445 | ||||||
Homeownership Opportunity, Series10-A, 6.50%, 10/01/22 | 205,000 | 205,665 | ||||||
Homeownership Opportunity, Series10-A, 6.50%, 4/01/27 | 130,000 | 130,412 | ||||||
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 | 7,780,867 | ||||||
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 | 4,646,835 | ||||||
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 | 10,605,110 | ||||||
New England Institute of Technology Issue, Series A,Pre-Refunded, 5.125%, 3/01/40 | 16,435,000 | 16,641,588 | ||||||
Rhode Island State Health and Educational Building Corp. Revenue, Public Schools, Bond Financing Program, Town of East Greenwich Issue, Series A, 5.00%, 5/15/37 | 10,000,000 | 10,875,900 | ||||||
|
| |||||||
57,314,057 | ||||||||
|
| |||||||
South Carolina 1.3% | ||||||||
Greenwood County Hospital Revenue, | ||||||||
Facilities Self Regional Healthcare, Refunding, 4.00%, 10/01/37 | 8,465,000 | 9,261,557 | ||||||
Facilities Self Regional Healthcare, Refunding, 4.00%, 10/01/39 | 1,195,000 | 1,297,997 | ||||||
Piedmont Municipal Power Agency Electric Revenue, Refunding, NATL Insured, 6.25%, 1/01/21 | 200,000 | 211,316 |
34 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
South Carolina(continued) | ||||||||
Rock Hill Utility System Revenue, | ||||||||
Combined Utility System, Refunding, 5.00%, 1/01/41 | $ | 7,690,000 | $ | 8,967,770 | ||||
Combined Utility System, Refunding, 5.00%, 1/01/47 | 5,000,000 | 5,790,150 | ||||||
South CarolinaJobs-EDA Economic Development Authority Revenue, Hospital, McLeod Health Projects, Refunding and Improvement, 5.00%, 11/01/48 | 20,000,000 | 23,740,800 | ||||||
South CarolinaJobs-EDA Hospital Revenue, | ||||||||
Prisma Health Obligated Group, Refunding, Series A, 5.00%, 5/01/43 | 20,000,000 | 23,551,200 | ||||||
Prisma Health Obligated Group, Refunding, Series A, 5.00%, 5/01/48 | 15,000,000 | 17,503,500 | ||||||
South Carolina State Ports Authority Revenue, | ||||||||
Series B, 5.00%, 7/01/44 | 10,000,000 | 12,015,200 | ||||||
Series B, 5.00%, 7/01/54 | 10,365,000 | 12,273,715 | ||||||
South Carolina State Public Service Authority Revenue, Refunding and Improvement, Series A, 5.00%, 12/01/55 | 20,000,000 | 22,593,800 | ||||||
Woodruff Roebuck Water District Revenue, South Carolina Water System Improvement, AGMC Insured,Pre-Refunded, 5.00%, 6/01/40 | 3,000,000 | 3,066,330 | ||||||
|
| |||||||
140,273,335 | ||||||||
|
| |||||||
South Dakota 0.7% | ||||||||
Huron School DistrictNo. 2-2 GO, 5.00%, 6/15/39 | 4,000,000 | 4,582,280 | ||||||
South Dakota State Building Authority Revenue, Refunding, Series A, 5.00%, 6/01/42 | 5,450,000 | 6,513,949 | ||||||
South Dakota State Health and Educational Facilities Authority Revenue, | ||||||||
Avera Health Issue, Refunding, 4.00%, 7/01/42 | 10,000,000 | 10,878,500 | ||||||
Avera Health Issue, Refunding, 5.00%, 7/01/46 | 13,000,000 | 15,231,710 | ||||||
Regional Health, 4.00%, 9/01/37 | 10,920,000 | 11,885,000 | ||||||
Regional Health, 5.00%, 9/01/40 | 10,000,000 | 11,815,100 | ||||||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/38 | 3,475,000 | 4,054,005 | ||||||
Vocational Education Program, Refunding, Series A, 5.00%, 8/01/46 | 6,005,000 | 6,510,621 | ||||||
Vocational Education Program, Series A, 5.125%, 8/01/46 | 7,000,000 | 7,432,040 | ||||||
|
| |||||||
78,903,205 | ||||||||
|
| |||||||
Tennessee 1.3% | ||||||||
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 | 9,115,145 | ||||||
Johnson City Medical Center Hospital, Improvement, Series C, NATL Insured,Pre-Refunded, 5.125%, 7/01/25 | 90,000 | 91,537 | ||||||
Knox County Health Educational and Housing Facility Board Hospital Revenue, Covenant Health, Refunding, Series A, 5.00%, 1/01/42 | 35,000,000 | 40,703,250 | ||||||
Memphis-Shelby County Airport Authority Airport Revenue, | ||||||||
5.00%, 7/01/43 | 7,500,000 | 8,915,925 | ||||||
5.00%, 7/01/47 | 11,000,000 | 13,006,180 | ||||||
Metropolitan Government of Nashville and Davidson County Water and Sewer Revenue, | ||||||||
Green Bonds, Subordinate, Series A, 5.00%, 7/01/46 | 6,000,000 | 7,173,000 | ||||||
Subordinate, Refunding, Series B, 5.00%, 7/01/42 | 21,645,000 | 26,027,896 | ||||||
Subordinate, Refunding, Series B, 5.00%, 7/01/46 | 15,925,000 | 19,038,338 | ||||||
Tennessee State School Bond Authority Revenue, Higher Educational Facilities Second Program, Series A, 5.00%, 11/01/47 | 15,000,000 | 18,207,150 | ||||||
|
| |||||||
142,278,421 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 35 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Texas 12.8% | ||||||||
Arlington Special Tax Revenue, Tarrant County, senior lien, Series A, AGMC Insured, 4.00%, 2/15/44 | $ | 20,000,000 | $ | 22,107,800 | ||||
Austin Community College District Public Facility Corp. Lease Revenue, Hays New Campus Project, Travis Williamson Hays Bastrop Lee and Caldwell Counties, 5.00%, 8/01/36 | 5,700,000 | 6,205,476 | ||||||
Austin Electric Utility System Revenue, Travis Williamson and Hays Counties, Refunding, Series A, 5.00%, 11/15/45 | 10,000,000 | 11,654,400 | ||||||
Austin Water and Wastewater System Revenue, Travis Williamson and Hays Counties, Refunding, Series A, 5.00%, 11/15/38 | 20,000,000 | 22,354,200 | ||||||
Central Texas Regional Mobility Authority Revenue, | ||||||||
senior lien,Pre-Refunded, 6.00%, 1/01/41 | 14,000,000 | 14,767,060 | ||||||
senior lien, Refunding, 5.00%, 1/01/40 | 12,505,000 | �� | 14,366,244 | |||||
senior lien, Refunding, 5.00%, 1/01/46 | 11,245,000 | 12,791,637 | ||||||
senior lien, Series A, 5.00%, 1/01/45 | 5,000,000 | 5,646,500 | ||||||
Corpus Christi Utility System Revenue, | ||||||||
Improvement, junior lien, 5.00%, 7/15/38 | 6,000,000 | 6,672,420 | ||||||
Improvement, junior lien, 5.00%, 7/15/43 | 7,000,000 | 7,761,460 | ||||||
Improvement, junior lien, Series A, 5.00%, 7/15/40 | 13,200,000 | 15,127,728 | ||||||
Crowley ISD, GO, Tarrant and Johnson Counties, School Building, PSF Guarantee, 5.00%, 8/01/45 | 10,000,000 | 11,594,300 | ||||||
Dallas Area Rapid Transit Sales Tax Revenue, | ||||||||
Refunding, Series A, 5.00%, 12/01/46 | 10,000,000 | 11,678,300 | ||||||
Refunding, Series A, 5.00%, 12/01/48 | 12,200,000 | 14,216,172 | ||||||
Dallas Civic Center Revenue, Refunding and Improvement, Assured Guaranty, 5.25%, 8/15/34 | 18,975,000 | 19,027,371 | ||||||
Dallas Waterworks and Sewer System Revenue, | ||||||||
Pre-Refunded, 5.00%, 10/01/35 | 4,515,000 | �� | 4,671,580 | |||||
Refunding, 5.00%, 10/01/35 | 5,485,000 | 5,664,579 | ||||||
Dallas/Fort Worth International Airport Revenue, | ||||||||
Joint Improvement, Series A,Pre-Refunded, 5.00%, 11/01/42 | 25,000,000 | 25,946,250 | ||||||
Joint Refunding, Series D, 5.25%, 11/01/32 | 10,000,000 | 11,423,300 | ||||||
Ector County ISD, GO, School Building, PSF Guarantee, 5.00%, 8/15/36 | 10,355,000 | 11,663,768 | ||||||
Forney ISD, GO, Refunding, PSF Guarantee, 5.00%, 8/15/37 | 15,000,000 | 17,565,150 | ||||||
Frisco ISD, | ||||||||
GO, Collin and Denton Counties, School Building, Refunding, Series B, PSF Guarantee, 5.00%, 8/15/41 | 10,000,000 | 11,873,200 | ||||||
GO, Collin and Denton Counties, School Building, Refunding, Series B, PSF Guarantee, 5.00%, 8/15/46 | 20,000,000 | 23,601,400 | ||||||
Goose Creek Consolidated ISD, GO, Schoolhouse, PSF Guarantee,Pre-Refunded, 5.00%, 2/15/38 | 6,045,000 | 6,787,870 | ||||||
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 | 10,635,000 | ||||||
Tela Supported, Subordinate Tier, Series A, 5.00%, 10/01/48 | 7,720,000 | 9,235,822 | ||||||
Harris County Cultural Education Facilities Finance Corp. Revenue, | ||||||||
Houston Methodist Hospital, 5.00%, 12/01/45 | 30,000,000 | 34,267,800 | ||||||
Memorial Hermann Health System, 5.00%, 7/01/45 | 15,000,000 | 17,186,400 | ||||||
Harris County Toll Road Revenue, senior lien, Refunding, Series A, 5.00%, 8/15/43 | 6,000,000 | 7,230,900 | ||||||
Hays County GO, Road,Pre-Refunded, 5.00%, 2/15/36 | 6,960,000 | 7,035,098 | ||||||
Hidalgo County Regional Mobility Authority Vehicle Registration Revenue, | ||||||||
senior lien, Refunding, 5.25%, 12/01/38 | 5,000,000 | 5,733,850 | ||||||
senior lien, Refunding, 5.00%, 12/01/43 | 5,000,000 | 5,635,400 | ||||||
Houston Utility System Revenue, Combined, first lien, Series D,Pre-Refunded, 5.00%, 11/15/36 | 10,000,000 | 10,778,900 | ||||||
Hutto ISD, GO, Refunding, Series A, PSF Guarantee, 5.00%, 8/01/39 | 10,000,000 | 11,548,700 |
36 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Texas(continued) | ||||||||
Lamar Consolidated ISD, GO, Fort Bend County, Schoolhouse, Refunding, PSF Guarantee, 5.00%, 2/15/43 | $ | 30,000,000 | $ | 35,763,900 | ||||
Laredo Waterworks Sewer System Revenue, | ||||||||
AGMC Insured, 5.00%, 3/01/41 | 2,500,000 | 2,616,225 | ||||||
Pre-Refunded, 5.25%, 3/01/40 | 16,535,000 | 16,755,081 | ||||||
Refunding, 4.00%, 3/01/41 | 9,690,000 | 10,491,654 | ||||||
Lower Colorado River Authority Transmission Contract Revenue, | ||||||||
LCRA Transmission Services Corp. Project, Refunding, 5.00%, 5/15/43 | 10,000,000 | 12,087,300 | ||||||
LCRA Transmission Services Corp. Project, Refunding, Series A, 5.00%, 5/15/36 | 10,000,000 | 11,124,000 | ||||||
Lubbock-Cooper ISD, GO, Refunding, PSF Guarantee, 5.00%, 2/15/41 | 12,500,000 | 14,415,750 | ||||||
Mesquite ISD, GO, Dallas County, School Building, PSF Guarantee, 5.00%, 8/15/43 | 11,845,000 | 14,243,731 | ||||||
Midlothian ISD, GO, School Building, Series A, PSF Guarantee, 5.00%, 2/15/47 | 11,865,000 | 14,063,229 | ||||||
New Hope Cultural Education Facilities Finance Corp. Revenue, Texas A&M University Project, Series A-1, 5.00%, 4/01/46 | 6,000,000 | 6,977,340 | ||||||
New Hope Cultural Education Facilities Finance Corp. Student Housing Revenue, | ||||||||
CHF-Collegiate Housing Island Campus LLC, Series A, 5.00%, 4/01/37 | 2,500,000 | 2,680,375 | ||||||
Collegiate Housing Corpus Christi II, Texas A&M University Corpus Christi Project, Series A, 5.00%, 4/01/48 | 7,825,000 | 7,858,726 | ||||||
NCCD-College Station Properties LLC, Texas A&M University Project, Series A, 5.00%, 7/01/47 | 10,000,000 | 9,268,800 | ||||||
New Hope Cultural Educational Facilities Finance Corp. Senior Living Revenue, | ||||||||
Quality Senior Housing Foundation of East Texas Inc. Project, Series A-1, 5.00%, 12/01/39 | 5,000,000 | 5,493,850 | ||||||
Quality Senior Housing Foundation of East Texas Inc. Project, Series A-1, 5.00%, 12/01/49 | 6,700,000 | 7,279,885 | ||||||
Quality Senior Housing Foundation of East Texas Inc. Project, Series A-1, 5.00%, 12/01/54 | 5,000,000 | 5,411,100 | ||||||
North East Regional Mobility Authority Revenue, senior lien, Series A, 5.00%, 1/01/41 | 16,750,000 | 18,964,015 | ||||||
North Fort Bend Water Authority Water System Revenue, | ||||||||
Assured Guaranty, 5.25%, 12/15/34 | 40,000,000 | 40,186,800 | ||||||
Refunding, Series A, 4.00%, 12/15/44 | 15,000,000 | 16,868,850 | ||||||
North Harris County Regional Water Authority Revenue, | ||||||||
senior lien, Refunding, 4.00%, 12/15/41 | 20,000,000 | 21,959,600 | ||||||
senior lien, Refunding, 5.00%, 12/15/46 | 18,460,000 | 21,702,684 | ||||||
North Texas Tollway Authority Revenue, | ||||||||
Special Projects System, Capital Appreciation, first tier, Refunding, Series I, 6.50%, 1/01/43 | 25,000,000 | 30,967,500 | ||||||
Special Projects System, Capital Appreciation, Series B, Pre-Refunded, zero cpn., 9/01/37 | 7,500,000 | 3,733,575 | ||||||
Special Projects System, Capital Appreciation, Series B, Pre-Refunded, zero cpn., 9/01/43 | 7,500,000 | 2,379,600 | ||||||
Special Projects System, Capital Appreciation, Series C, Pre-Refunded, zero cpn. to 9/01/21, 6.75% thereafter, 9/01/45 | 25,000,000 | 33,947,250 | ||||||
System, first tier, Refunding, Series A, 5.00%, 1/01/43 | 47,000,000 | 56,339,370 | ||||||
System, first tier, Refunding, Series A, 5.00%, 1/01/48 | 33,500,000 | 39,932,335 | ||||||
System, second tier, Refunding, 5.00%, 1/01/48 | 25,250,000 | 29,974,780 | ||||||
System, second tier, Refunding, Series A, 5.00%, 1/01/35 | 10,000,000 | 11,540,700 | ||||||
System, second tier, Refunding, Series A, 5.00%, 1/01/38 | 10,000,000 | 11,457,000 | ||||||
System, second tier, Refunding, Series B, 5.00%, 1/01/48 | 10,000,000 | 11,725,800 | ||||||
Prosper ISD, GO, School Building, PSF Guarantee, 5.00%, 2/15/47 | 9,725,000 | 11,555,440 | ||||||
Red River Education FICO Higher Education Revenue, St. Edward’s University Project, Refunding, 5.00%, 6/01/46 | 2,250,000 | 2,515,410 | ||||||
San Antonio Airport System Revenue, Passenger Facility Charge, sub. lien, Improvement and Refunding, AGMC Insured, 5.375%, 7/01/40 | 5,000,000 | 5,127,000 | ||||||
San Antonio Electric and Gas Systems Revenue, junior lien, 5.00%, 2/01/38 | 10,000,000 | 11,034,800 |
franklintempleton.com | Semiannual Report | 37 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Texas(continued) | ||||||||
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 | $ | 38,213,675 | ||||
San Antonio Water System Revenue, | ||||||||
Bexar County, junior lien, Refunding, Series A, 5.00%, 5/15/43 | 12,000,000 | 14,587,800 | ||||||
Bexar County, junior lien, Refunding, Series A, 5.00%, 5/15/48 | 10,000,000 | 12,088,700 | ||||||
San Jacinto River Authority Special Project Revenue, | ||||||||
Group Project, AGMC Insured, 5.00%, 10/01/32 | 5,000,000 | 5,013,000 | ||||||
Group Project, AGMC Insured, 5.00%, 10/01/37 | 3,000,000 | 3,007,920 | ||||||
San Marcos Electric Utility System Revenue, Hays Caldwell and Guadalupe Counties, BAM Insured, 5.00%, 11/01/33 | 6,300,000 | 6,922,566 | ||||||
Schertz-Cibolo-Universal City ISD, GO, School Building, PSF Guarantee, 5.00%, 2/01/42 | 10,000,000 | 11,699,800 | ||||||
Southwest Higher Education Authority Revenue, Southern Methodist University Project, Series A, 5.00%, 10/01/38 | 24,380,000 | 27,109,341 | ||||||
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 | 11,366,200 | ||||||
Hendrick Medical Center Obligation Group, Refunding, 5.50%, 9/01/43 | 5,350,000 | 5,967,925 | ||||||
Tarrant County Cultural Education Facilities Finance Corp. Revenue, | ||||||||
Christus Health, Series B, 5.00%, 7/01/43 | 10,000,000 | 12,012,000 | ||||||
Texas Health Resources System, Series A, 5.00%, 11/15/52 | 5,000,000 | 5,693,650 | ||||||
Tarrant County Health Facilities Development Corp. Health System Revenue, | ||||||||
Harris Methodist Health System, FGIC Insured, ETM, 6.00%, 9/01/24 | 2,295,000 | 2,607,441 | ||||||
Harris Methodist Health System, NATL Insured, ETM, 6.00%, 9/01/24 | 1,910,000 | 2,170,027 | ||||||
Tarrant Regional Water District Water Revenue, Refunding and Improvement, 5.00%, 3/01/37 | 10,000,000 | 10,854,000 | ||||||
Texas City IDC Marine Terminal Revenue, ARCO Pipe Line Co. Project, Refunding, 7.375%, 10/01/20 | 500,000 | 526,860 | ||||||
Texas State GO, Transportation Commission, Refunding, Series A, 5.00%, 10/01/39 | 30,000,000 | 34,645,500 | ||||||
Texas State Municipal Power Agency Revenue, Transmission, sub. lien, Refunding, 5.00%, 9/01/40 | 15,250,000 | 15,682,185 | ||||||
Texas State Transportation Commission Revenue, | ||||||||
First Tier Toll Revenue State Highway 249 Systems, Capital Appreciation, Series A, zero cpn., 8/01/48 | 6,250,000 | 1,738,813 | ||||||
First Tier Toll Revenue State Highway 249 Systems, Capital Appreciation, Series A, zero cpn., 8/01/49 | 5,000,000 | 1,321,150 | ||||||
First Tier Toll Revenue State Highway 249 Systems, Capital Appreciation, Series A, zero cpn., 8/01/50 | 5,500,000 | 1,365,595 | ||||||
Texas State Transportation Commission Turnpike System Revenue, | ||||||||
first tier, Refunding, Series A, AGMC Insured, 5.00%, 8/15/41 | 16,000,000 | 17,391,840 | ||||||
first tier, Refunding, Series A, BAM Insured, 5.00%, 8/15/41 | 9,665,000 | 10,505,758 | ||||||
first tier, Refunding, Series B, 5.00%, 8/15/37 | 10,000,000 | 11,407,500 | ||||||
second tier, Refunding, Series C, 5.00%, 8/15/37 | 15,000,000 | 16,884,600 | ||||||
second tier, Refunding, Series C, 5.00%, 8/15/42 | 10,000,000 | 11,175,100 | ||||||
Texas State Water Development Board Revenue, | ||||||||
State Water Implementation Fund, Master Trust, Series A, 4.00%, 10/15/42 | 25,000,000 | 27,959,250 | ||||||
State Water Implementation Fund, Master Trust, Series A, 4.00%, 10/15/44 | 8,500,000 | 9,633,815 | ||||||
State Water Implementation Fund, Master Trust, Series B, 4.00%, 10/15/43 | 25,000,000 | 28,198,500 | ||||||
State Water Implementation Fund, Master Trust, Series B, 5.00%, 4/15/49 | 15,000,000 | 18,306,150 | ||||||
West Harris County Regional Water Authority Water System Revenue, Refunding, 4.00%, 12/15/45 | 4,000,000 | 4,521,920 | ||||||
West Travis County Public Utility Agency Revenue, Refunding, BAM Insured, 4.00%, 8/15/41 | 5,000,000 | 5,523,950 | ||||||
|
| |||||||
1,379,002,021 | ||||||||
|
|
38 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Utah1.5% | ||||||||
Central Utah Water Conservancy District Water Revenue, | ||||||||
Refunding, Series B, 4.00%, 10/01/37 | $ | 2,600,000 | $ | 2,949,726 | ||||
Refunding, Series B, 4.00%, 10/01/38 | 10,000,000 | 11,318,400 | ||||||
Jordan Valley Water Conservancy District Water Revenue, | ||||||||
Refunding, Series B, 4.00%, 10/01/41 | 6,000,000 | 6,622,740 | ||||||
Series B,Pre-Refunded, 5.00%, 10/01/41 | 15,000,000 | 15,791,250 | ||||||
Salt Lake City Airport Revenue, | ||||||||
Salt Lake City International Airport, Series A, 5.00%, 7/01/42 | 15,000,000 | �� | 17,620,200 | |||||
Salt Lake City International Airport, Series A, 5.00%, 7/01/47 | 10,000,000 | 11,678,900 | ||||||
Salt Lake City International Airport, Series A, 5.00%, 7/01/48 | 9,400,000 | 11,136,744 | ||||||
Salt Lake City International Airport, Series A, 5.25%, 7/01/48 | 10,000,000 | 12,083,400 | ||||||
State Board of Regents University of Utah Revenue, | ||||||||
General, Refunding, Series A, 5.00%, 8/01/44 | 12,240,000 | 15,000,365 | ||||||
General, Series A,Pre-Refunded, 5.00%, 8/01/43 | 21,975,000 | 25,090,396 | ||||||
Utah Associated Municipal Power Systems Revenue, Central St. George Project,Pre-Refunded, 5.25%, 12/01/27 | 9,735,000 | 9,764,205 | ||||||
Utah State Municipal Power Agency Supply System Revenue, Series B, 5.00%, 7/01/38 | 10,000,000 | 11,740,000 | ||||||
Weber Basin Water Conservancy District Water Revenue, Series B, 5.00%, 4/01/39 | 7,180,000 | 7,938,854 | ||||||
|
| |||||||
158,735,180 | ||||||||
|
| |||||||
Vermont 0.4% | ||||||||
Vermont Educational and Health Buildings Financing Agency Revenue, | ||||||||
Middlebury College Project, Refunding, 5.00%, 11/01/38 | 10,000,000 | 10,000,000 | ||||||
Middlebury College Project, Refunding, 5.00%, 11/01/40 | 26,565,000 | 27,391,437 | ||||||
The University of Vermont Medical Center Project, Refunding, Series A, 5.00%, 12/01/36 | 5,000,000 | 5,883,750 | ||||||
|
| |||||||
43,275,187 | ||||||||
|
| |||||||
Virginia 1.1% | ||||||||
Chesterfield County EDA Revenue, Bon Secours Health System Inc., SeriesC-2, Assured Guaranty,Pre-Refunded, 5.00%, 11/01/42 | 8,000,000 | 8,286,640 | ||||||
Hampton Roads Sanitation District Wastewater Revenue, Subordinate, Series A,Pre-Refunded, 5.00%, 10/01/47 | 14,575,000 | 18,427,610 | ||||||
Hampton Roads Transportation Accountability Commission Revenue, Transportation Fund, senior lien, Series A, 5.00%, 7/01/42 | 25,000,000 | 30,575,000 | ||||||
Virginia Small Business Financing Authority Revenue, senior lien, 95 Express Lanes LLC Project, 5.00%, 7/01/49 | 25,000,000 | 26,597,750 | ||||||
Virginia State Commonwealth Transportation Board of Transportation Revenue, Capital Projects, 4.00%, 5/15/41 | 13,585,000 | 15,575,746 | ||||||
Virginia State Resources Authority Infrastructure Revenue, | ||||||||
Virginia Pooled Financing Program, Refunding, Series A, 5.00%, 11/01/39 | 6,370,000 | 7,003,624 | ||||||
Virginia Pooled Financing Program, Series A,Pre-Refunded, 5.00%, 11/01/39 | 5,985,000 | 6,658,851 | ||||||
|
| |||||||
113,125,221 | ||||||||
|
| |||||||
Washington 2.9% | ||||||||
bKing County Housing Authority Housing Revenue, Credit Enhanced Pooled, Refunding, 3.00%, 11/01/39 | 10,000,000 | 10,260,300 | ||||||
King County Sewer Revenue, | ||||||||
Pre-Refunded, 5.00%, 1/01/32 | 7,085,000 | 7,264,251 | ||||||
Refunding, 5.00%, 7/01/49 | 12,000,000 | 14,339,400 | ||||||
bKlickitat County Public Utility District No. 1, Refunding, Series A, AGMC Insured, 3.00%, 12/01/41 | 3,030,000 | 2,967,643 | ||||||
NJB Properties Lease Revenue, King County Washington Project, Series A, 5.00%, 12/01/36 | 5,000 | 5,014 |
franklintempleton.com | Semiannual Report | 39 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Washington(continued) | ||||||||
Port of Seattle Revenue, | ||||||||
intermediate lien, 4.00%, 4/01/44 | $ | 4,000,000 | $ | 4,404,960 | ||||
intermediate lien, 5.00%, 4/01/44 | 36,295,000 | 43,422,612 | ||||||
intermediate lien, Series A, 5.00%, 5/01/43 | 15,500,000 | 18,062,150 | ||||||
Seattle Municipal Light and Power Revenue, | ||||||||
Improvement and Refunding, Series A, 4.00%, 1/01/42 | 10,855,000 | 12,067,178 | ||||||
Improvement and Refunding, Series C, 4.00%, 9/01/36 | 22,170,000 | 25,166,275 | ||||||
University of Washington Revenues, 5.00%, 4/01/48 | 29,450,000 | 35,127,960 | ||||||
Washington Health Care Facilities Authority Revenue, | ||||||||
Fred Hutchinson Cancer Research Center, Refunding, Series A, 5.00%, 1/01/47 | 10,000,000 | 11,545,300 | ||||||
MultiCare Health System, Refunding, Series B, 4.00%, 8/15/41 | 25,000,000 | 27,438,000 | ||||||
Providence Health and Services, Refunding, Series A, 5.00%, 10/01/42 | 10,175,000 | 11,081,185 | ||||||
Seattle Children’s Hospital, Refunding, Series B, 5.00%, 10/01/38 | 15,000,000 | 17,191,200 | ||||||
Washington State Convention Center Public Facilities District Revenue, Lodging Tax, 5.00%, 7/01/43 | 13,870,000 | 16,739,842 | ||||||
Washington State GO, | ||||||||
Motor Vehicle Fuel Tax, Senior 520 Corridor Program Toll, Series C, 5.00%, 6/01/33 | 5,000,000 | 5,282,450 | ||||||
Motor Vehicle Fuel Tax, Series D, 5.00%, 6/01/43 | 11,040,000 | 13,597,747 | ||||||
Motor Vehicle Fuel Tax, Series D, 5.00%, 6/01/44 | 11,595,000 | 14,271,010 | ||||||
Washington State Health Care Facilities Authority Revenue, | ||||||||
Commonspirit Health, Refunding, SeriesA-2, 5.00%, 8/01/44 | 7,000,000 | 8,281,840 | ||||||
Providence Health and Services, Refunding, Series D, 5.00%, 10/01/41 | 9,850,000 | 11,183,985 | ||||||
Providence Health and Services, Series D,Pre-Refunded, 5.00%, 10/01/41 | 150,000 | 175,449 | ||||||
|
| |||||||
309,875,751 | ||||||||
|
| |||||||
West Virginia 1.0% | ||||||||
Berkeley County Public Service Sewer District Sewer Revenue, Refunding, Series B, BAM Insured, 5.00%, 6/01/36 | 1,000,000 | 1,177,390 | ||||||
West Virginia EDA Lottery Revenue, Series A,Pre-Refunded, 5.00%, 6/15/35 | 9,415,000 | 9,637,194 | ||||||
West Virginia Hospital Finance Authority Revenue, | ||||||||
Hospital, Charleston Area Medical Center Inc., Improvement and Refunding, Series A, 5.00%, 9/01/38 | 3,040,000 | 3,691,442 | ||||||
Hospital, Improvement, Cabell Huntington Hospital Obligated Group, Refunding, Series A, 5.00%, 1/01/43 | 13,250,000 | 15,563,185 | ||||||
Hospital, Improvement, West Virginia University Health System Obligated Group, Series A, 5.00%, 6/01/42 | 7,000,000 | 8,206,520 | ||||||
Hospital, Improvement, West Virginia University Health System Obligated Group, Series A, 5.00%, 6/01/47 | 10,190,000 | 11,876,751 | ||||||
Hospital, Improvement, West Virginia University Health System Obligated Group, Series A, 5.00%, 6/01/52 | 20,700,000 | 24,204,096 | ||||||
West Virginia State University Revenues, West Virginia University Projects, Series A, 5.00%, 10/01/44 | 21,800,000 | 24,746,488 | ||||||
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 | 5,945,750 | ||||||
West Virginia Infrastructure and Jobs Development Council Program, Refunding, Series A, 5.00%, 10/01/45 | 5,435,000 | 6,331,231 | ||||||
|
| |||||||
111,380,047 | ||||||||
|
|
40 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Municipal Bonds(continued) | ||||||||
Wisconsin 1.1% | ||||||||
Ashwaubenon CDA Lease Revenue, | ||||||||
Capital Appreciation, Brown County Expo Center Project, zero cpn., 6/01/49 | $ | 16,185,000 | $ | 5,611,178 | ||||
Capital Appreciation, Brown County Expo Center Project, zero cpn., 6/01/54 | 54,650,000 | 14,791,022 | ||||||
Superior Limited Obligation Revenue, Midwest Energy Resources Company Project, Refunding, Series E, NATL Insured, 6.90%, 8/01/21 | 3,000,000 | 3,280,650 | ||||||
Wisconsin Health and Educational Facilities Authority Revenue, | ||||||||
Ascension Health Alliance Senior Credit Group, Series B2, 4.00%, 11/15/43 | 10,000,000 | 11,040,700 | ||||||
Marquette University, Refunding, SeriesB-1, 5.00%, 10/01/30 | 3,880,000 | 3,900,370 | ||||||
Marquette University, Refunding, SeriesB-2, 5.00%, 10/01/30 | 2,540,000 | 2,553,335 | ||||||
Marquette University, SeriesB-1,Pre-Refunded, 5.00%, 10/01/30 | 2,985,000 | 3,000,044 | ||||||
Marquette University, SeriesB-1,Pre-Refunded, 5.00%, 10/01/33 | 1,500,000 | 1,507,665 | ||||||
Marquette University, SeriesB-2,Pre-Refunded, 5.00%, 10/01/30 | 930,000 | 934,817 | ||||||
Marquette University, SeriesB-3, 5.00%, 10/01/30 | 1,570,000 | 1,578,243 | ||||||
Marquette University, SeriesB-3,Pre-Refunded, 5.00%, 10/01/30 | 580,000 | 583,004 | ||||||
Marquette University, SeriesB-3,Pre-Refunded, 5.00%, 10/01/33 | 1,750,000 | 1,759,065 | ||||||
Marshfield Clinic Health System Inc., Refunding, Series C, 5.00%, 2/15/47 | 37,795,000 | 42,998,994 | ||||||
Thedacare Inc., Series A, 5.50%, 12/15/38 | 5,000,000 | 5,019,550 | ||||||
Wisconsin State Health and Educational Facilities Authority Revenue, Children’s Hospital of Wisconsin, Refunding, 4.00%, 8/15/42 | 15,000,000 | 16,333,500 | ||||||
|
| |||||||
114,892,137 | ||||||||
|
| |||||||
Wyoming 0.1% | ||||||||
Wyoming CDA Housing Revenue, Refunding, Series 1, 3.65%, 12/01/33 | 5,655,000 | 6,006,119 | ||||||
Wyoming Municipal Power Agency Power Supply System Revenue, Series A, BAM Insured, 5.00%, 1/01/42 | 7,000,000 | 8,175,580 | ||||||
|
| |||||||
14,181,699 | ||||||||
|
| |||||||
U.S. Territories 0.2% | ||||||||
Puerto Rico 0.2% | ||||||||
cPuerto Rico Electric Power Authority Power Revenue, | ||||||||
SeriesA-RSA-1, 5.00%, 7/01/42 | 18,925,000 | 14,241,063 | ||||||
SeriesXX-RSA-1, 5.25%, 7/01/40 | 15,000,000 | 11,437,500 | ||||||
|
| |||||||
25,678,563 | ||||||||
|
| |||||||
Total Municipal Bonds before Short Term Investments (Cost $9,752,047,157) | 10,530,898,208 | |||||||
|
| |||||||
Short Term Investments 1.7% | ||||||||
Municipal Bonds 1.7% | ||||||||
Arizona 0.1% | ||||||||
dPhoenix IDA Health Care Facilities Revenue, Mayo Clinic, Series B, SPA Wells Fargo Bank, Daily VRDN and Put, 1.20%, 11/15/52 | 10,010,000 | 10,010,000 | ||||||
|
| |||||||
Florida 0.7% | ||||||||
dJacksonville PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.29%, 5/01/29 | 8,600,000 | 8,600,000 | ||||||
dSt. Lucie County PCR, Florida Power and Light Co. Project, Refunding, Daily VRDN and Put, 1.31%, 9/01/28 | 69,100,000 | 69,100,000 | ||||||
|
| |||||||
77,700,000 | ||||||||
|
|
franklintempleton.com | Semiannual Report | 41 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
Principal Amount | Value | |||||||
Short Term Investments(continued) | ||||||||
Municipal Bonds(continued) | ||||||||
Georgia 0.0%† | ||||||||
dAthens-Clarke County Unified Government Development Authority Revenue, University of Georgia Athletic Assn. Project, Series B, LOC Wells Fargo Bank, Daily VRDN and Put, 1.23%, 7/01/35 | $ | 200,000 | $ | 200,000 | ||||
|
| |||||||
Maryland 0.0%† | ||||||||
dMontgomery County GO, Consolidated Public Improvement, Series E, SPA US Bank National Association, Daily VRDN and Put, 1.30%, 11/01/37 | 1,800,000 | 1,800,000 | ||||||
|
| |||||||
Mississippi 0.0%† | ||||||||
dMississippi Business Finance Corp. Gulf Opportunity Zone IDR, Chevron USA Inc. Project, Series B, Daily VRDN and Put, 1.26%, 11/01/35 | 100,000 | 100,000 | ||||||
|
| |||||||
New York 0.0%† | ||||||||
dMTA Dedicated Tax Fund Revenue, Refunding, SubseriesA-1, LOC Toronto Dominion Bank, Daily VRDN and Put, 1.20%, 11/01/31 | 300,000 | 300,000 | ||||||
|
| |||||||
Oregon 0.2% | ||||||||
dOregon State Facilities Authority Revenue, PeaceHealth, Refunding, Series B, LOC TD Bank National Association, Daily VRDN and Put, 1.20%, 8/01/34 | 16,800,000 | 16,800,000 | ||||||
|
| |||||||
Pennsylvania 0.2% | ||||||||
dEmmaus General Authority Revenue, SPA Wells Fargo Bank, Weekly VRDN and Put, 1.12%, 12/01/28 | 2,770,000 | 2,770,000 | ||||||
dGeisinger Authority Revenue, Geisinger Health System, Montour County, Refunding, Series A, SPA TD Bank National Association, Daily VRDN and Put, 1.16%, 5/15/35 | 8,000,000 | 8,000,000 | ||||||
dPennsylvania State Higher Educational Facilities Authority Revenue, Drexel University Multi-Modal, Series B, LOC TD Bank National Association, Daily VRDN and Put, 1.22%, 5/01/30 | 12,565,000 | 12,565,000 | ||||||
|
| |||||||
23,335,000 | ||||||||
|
| |||||||
Tennessee 0.4% | ||||||||
dShelby 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, 1.20%, 6/01/42 | 47,000,000 | 47,000,000 | ||||||
|
| |||||||
Utah 0.0%† | ||||||||
dWeber County Hospital Revenue, IHC Health Services Inc., Series C, SPA Bank of New York Mellon, Daily VRDN and Put, 1.35%, 2/15/35 | 130,000 | 130,000 | ||||||
|
| |||||||
Virginia 0.1% | ||||||||
dVirginia College Building Authority Educational Facilities Revenue, University of Richmond Project, SPA Wells Fargo Bank, Daily VRDN and Put, 1.23%, 11/01/36 | 4,600,000 | 4,600,000 | ||||||
|
| |||||||
Total Short Term Investments (Cost $181,975,000) | 181,975,000 | |||||||
|
| |||||||
Total Investments (Cost $9,934,022,157) 99.4% | 10,712,873,208 | |||||||
Other Assets, less Liabilities 0.6% | 68,065,143 | |||||||
|
| |||||||
Net Assets 100.0% | $ | 10,780,938,351 | ||||||
|
|
42 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
See Abbreviations on page 55.
†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 7 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 FEDERALTAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
October 31, 2019 (unaudited)
Assets: | ||||
Investments in securities: | ||||
Cost - Unaffiliated issuers | $ | 9,934,022,157 | ||
|
| |||
Value - Unaffiliated issuers | $ | 10,712,873,208 | ||
Cash | 147,301 | |||
Receivables: | ||||
Capital shares sold | 8,976,965 | |||
Interest | 129,499,658 | |||
Other assets | 3,285 | |||
|
| |||
Total assets | 10,851,500,417 | |||
|
| |||
Liabilities: | ||||
Payables: | ||||
Investment securities purchased | 41,432,723 | |||
Capital shares redeemed | 19,251,916 | |||
Management fees | 4,024,808 | |||
Distribution fees | 1,266,043 | |||
Transfer agent fees | 1,070,831 | |||
Trustees’ fees and expenses | 15,591 | |||
Distributions to shareholders | 3,047,349 | |||
Accrued expenses and other liabilities | 452,805 | |||
|
| |||
Total liabilities | 70,562,066 | |||
|
| |||
Net assets, at value | $ | 10,780,938,351 | ||
|
| |||
Net assets consist of: | ||||
Paid-in capital | $ | 10,403,886,127 | ||
Total distributable earnings (loss) | 377,052,224 | |||
|
| |||
Net assets, at value | $ | 10,780,938,351 | ||
|
|
44 | Semiannual Report | | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities(continued)
October 31, 2019 (unaudited)
Class A: | ||||
Net assets, at value | $ | 878,287,841 | ||
|
| |||
Shares outstanding | 73,104,037 | |||
|
| |||
Net asset value per sharea | $12.01 | |||
|
| |||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $12.48 | |||
|
| |||
Class A1: | ||||
Net assets, at value | $ | 7,746,899,925 | ||
|
| |||
Shares outstanding | 644,790,664 | |||
|
| |||
Net asset value per sharea | $12.01 | |||
|
| |||
Maximum offering price per share (net asset value per share ÷ 96.25%) | $12.48 | |||
|
| |||
Class C: | ||||
Net assets, at value | $ | 749,753,518 | ||
|
| |||
Shares outstanding | 62,443,297 | |||
|
| |||
Net asset value and maximum offering price per sharea | $12.01 | |||
|
| |||
Class R6: | ||||
Net assets, at value | $ | 196,551,429 | ||
|
| |||
Shares outstanding | 16,347,944 | |||
|
| |||
Net asset value and maximum offering price per share | $12.02 | |||
|
| |||
Advisor Class : | ||||
Net assets, at value | $ | 1,209,445,638 | ||
|
| |||
Shares outstanding | 100,554,742 | |||
|
| |||
Net asset value and maximum offering price per share | $12.03 | |||
|
|
aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 45 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Operations
for the six months ended October 31, 2019 (unaudited)
Investment income: | ||||
Interest: | ||||
Unaffiliated issuers | $ | 206,144,979 | ||
|
| |||
Expenses: | ||||
Management fees (Note 3a) | 24,145,397 | |||
Distribution fees: (Note 3c) | ||||
Class A | 898,036 | |||
Class A1 | 3,940,456 | |||
Class C | 2,652,508 | |||
Transfer agent fees: (Note 3e) | ||||
Class A | 236,152 | |||
Class A1 | 2,585,844 | |||
Class C | 267,621 | |||
Class R6 | 25,981 | |||
Advisor Class | 402,517 | |||
Custodian fees (Note 4) | 40,811 | |||
Reports to shareholders | 175,329 | |||
Registration and filing fees | 176,997 | |||
Professional fees | 69,796 | |||
Trustees’ fees and expenses | 75,166 | |||
Other | 171,223 | |||
|
| |||
Total expenses | 35,863,834 | |||
Expense reductions (Note 4) | (27,653 | ) | ||
Expenses waived/paid by affiliates | (3,926 | ) | ||
|
| |||
Net expenses | 35,832,255 | |||
|
| |||
Net investment income | 170,312,724 | |||
|
| |||
Realized and unrealized gains (losses): | ||||
Net realized gain (loss) from: | ||||
Investments: | ||||
Unaffiliated issuers | 6,556,082 | |||
|
| |||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments: | ||||
Unaffiliated issuers | 167,752,609 | |||
|
| |||
Net realized and unrealized gain (loss) | 174,308,691 | |||
|
| |||
Net increase (decrease) in net assets resulting from operations | $ | 344,621,415 | ||
|
|
46 | Semiannual Report | | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Six Months Ended October 31, 2019 (unaudited) | Year Ended April 30, 2019 | |||||||
Increase (decrease) in net assets: | ||||||||
Operations: | ||||||||
Net investment income | $ | 170,312,724 | $ | 383,980,643 | ||||
Net realized gain (loss) | 6,556,082 | (6,534,900 | ) | |||||
Net change in unrealized appreciation (depreciation) | 167,752,609 | 140,724,436 | ||||||
|
| |||||||
Net increase (decrease) in net assets resulting from operations | 344,621,415 | 518,170,179 | ||||||
|
| |||||||
Distributions to shareholders: | ||||||||
Class A | (10,842,325 | ) | (7,294,064 | ) | ||||
Class A1 | (125,354,726 | ) | (304,878,928 | ) | ||||
Class M | — | (32 | ) | |||||
Class C | (10,743,258 | ) | (32,684,588 | ) | ||||
Class R6 | (3,143,741 | ) | (9,543,201 | ) | ||||
Advisor Class | (20,134,993 | ) | (45,779,765 | ) | ||||
|
| |||||||
Total distributions to shareholders | (170,219,043 | ) | (400,180,578 | ) | ||||
|
| |||||||
Capital share transactions: (Note 2) | ||||||||
Class A | 301,099,452 | 554,214,796 | ||||||
Class A1 | (202,686,219 | ) | (880,522,197 | ) | ||||
Class M | — | (4,922 | ) | |||||
Class C | (105,722,176 | ) | (383,970,837 | ) | ||||
Class R6 | 15,637,993 | (187,474,712 | ) | |||||
Advisor Class | (21,926,898 | ) | (10,060,795 | ) | ||||
|
| |||||||
Total capital share transactions | (13,597,848 | ) | (907,818,667 | ) | ||||
|
| |||||||
Net increase (decrease) in net assets | 160,804,524 | (789,829,066 | ) | |||||
Net assets: | ||||||||
Beginning of period | 10,620,133,827 | 11,409,962,893 | ||||||
|
| |||||||
End of period | $ | 10,780,938,351 | $ | 10,620,133,827 | ||||
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Semiannual Report | 47 |
FRANKLIN FEDERALTAX-FREE INCOME FUND
Notes to Financial Statements (unaudited)
1. Organization and Significant Accounting Policies
Franklin FederalTax-Free Income Fund (Fund) is registered under the Investment Company Act of 1940 (1940 Act) as anopen-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 five classes of shares: Class A, Class A1, Class C, Class R6 and Advisor Class. Class C shares automatically convert to Class A shares after they have been held for 10 years. 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.
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 each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. 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 Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.
Debt securities generally trade in theover-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 Fund 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.
b. Securities Purchased on a When-Issued Basis
The Fund purchases securities on a when-issued basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.
c. Income Taxes
It is the Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Fund intends to distribute to shareholders substantially all of its income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.
The Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of October 31, 2019, 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
48 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERALTAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 theex-dividend date. Effective May 1, 2019, dividends from net investment income are declared daily and paid monthly. Distributable earnings 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.
franklintempleton.com | Semiannual Report | 49 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
2. Shares of Beneficial Interest
At October 31, 2019, 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, 2019 | Year Ended April 30, 2019a,b | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Class A Shares: | ||||||||||||||||
Shares soldc | 28,131,906 | $ | 337,576,611 | 54,976,359 | $ | 635,105,017 | ||||||||||
Shares issued in reinvestment of distributions | 842,365 | 10,121,831 | 583,015 | 6,770,988 | ||||||||||||
Shares redeemed | (3,879,691 | ) | (46,598,990 | ) | (7,549,917 | ) | (87,661,209 | ) | ||||||||
Net increase (decrease) | 25,094,580 | $ | 301,099,452 | 48,009,457 | $ | 554,214,796 | ||||||||||
Class A1 Shares: | ||||||||||||||||
Shares sold | 13,012,869 | $ | 156,065,179 | 45,798,256 | $ | 531,605,470 | ||||||||||
Shares issued in reinvestment of distributions | 9,291,900 | 111,606,472 | 23,327,043 | 271,106,417 | ||||||||||||
Shares redeemed | (39,214,256 | ) | (470,357,870 | ) | (144,984,150 | ) | (1,683,234,084 | ) | ||||||||
Net increase (decrease) | (16,909,487 | ) | $ | (202,686,219 | ) | (75,858,851 | ) | $ | (880,522,197 | ) | ||||||
Class M Shares: | ||||||||||||||||
Shares redeemed | — | — | (421 | ) | (4,922 | ) | ||||||||||
Net increase (decrease) | — | $ | — | (421 | ) | $ | (4,922 | ) | ||||||||
Class C Shares: | ||||||||||||||||
Shares sold | 4,515,350 | $ | 54,170,412 | 7,925,510 | $ | 91,985,924 | ||||||||||
Shares issued in reinvestment of distributions | 811,171 | 9,737,869 | 2,556,047 | 29,709,208 | ||||||||||||
Shares redeemedc | (14,152,563 | ) | (169,630,457 | ) | (43,740,609 | ) | (505,665,969 | ) | ||||||||
Net increase (decrease) | (8,826,042 | ) | $ | (105,722,176 | ) | (33,259,052 | ) | $ | (383,970,837 | ) | ||||||
Class R6 Shares: | ||||||||||||||||
Shares sold | 2,527,723 | $ | 30,354,803 | 6,244,529 | $ | 72,709,016 | ||||||||||
Shares issued in reinvestment of distributions | 237,244 | 2,852,310 | 759,013 | 8,834,679 | ||||||||||||
Shares redeemed | (1,462,900 | ) | (17,569,120 | ) | (23,215,164 | ) | (269,018,407 | ) | ||||||||
Net increase (decrease) | 1,302,067 | $ | 15,637,993 | (16,211,622 | ) | $ | (187,474,712 | ) | ||||||||
Advisor Class Shares: | ||||||||||||||||
Shares sold | 16,083,863 | $ | 193,452,000 | 35,225,002 | $ | 410,360,890 | ||||||||||
Shares issued in reinvestment of distributions | 1,410,436 | 16,961,084 | 3,299,730 | 38,379,202 | ||||||||||||
Shares redeemed | (19,259,207 | ) | (232,339,982 | ) | (39,459,693 | ) | (458,800,887 | ) | ||||||||
Net increase (decrease) | (1,764,908 | ) | $ | (21,926,898 | ) | (934,961 | ) | $ | (10,060,795 | ) |
aFor the period September 10, 2018 (effective date) to April 30, 2019, for Class A.
bClass M was closed to investors on June 8, 2018.
cMay include a portion of Class C shares that were automatically converted to Class A.
50 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. 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 |
a. Management Fees
The Fund pays an investment management fee to Advisers based on themonth-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, 2019, the annualized gross effective investment management fee rate was 0.447% 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 Rule12b-1 under the 1940 Act. Under the Fund’s Class A and A1 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 for each class. Under the Class A and A1 reimbursement distribution plans, 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 rates, is February 1 through January 31.
franklintempleton.com | Semiannual Report | 51 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
3. Transactions with Affiliates(continued)
c. Distribution Fees(continued)
The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:
Class A | 0.25 | % | ||
Class A1 | 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 | $ | 141,598 | ||
CDSC retained | $ | 26,932 |
e. Transfer Agent Fees
Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations. The fees are based on an annualized asset based fee of 0.02% plus a transaction based fee. In addition, each class reimburses Investor Services for out of pocket expenses incurred and, except for Class R6, reimburses 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, 2019, the Fund paid transfer agent fees of $3,518,115, of which $1,549,174 was retained by Investor Services.
f. Waiver and Expense Reimbursements
Investor Services has contractually agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees do not exceed 0.03% based on the average net assets of the class until August 31, 2020. Prior to September 1, 2019, Investor Services had voluntarily agreed in advance to waive or limit its fees so that the Class R6 transfer agent fees did not exceed 0.02%.
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, 2019, these purchase and sale transactions aggregated $212,568,000 and $141,373,000, respectively.
4. Expense Offset Arrangement
The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended October 31, 2019, the custodian fees were reduced as noted in the Statement of Operations.
52 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains.
At April 30, 2019, capital loss carryforwards were as follows:
Capital loss carryforwards not subject to expiration: | ||||
Short term | $ | 164,292,839 | ||
Long term | 223,363,622 | |||
|
| |||
Total capital loss carryforwards | $ | 387,656,461 | ||
|
|
At October 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:
Cost of investments. | $ | 9,961,064,567 | ||
|
| |||
Unrealized appreciation | $ | 792,999,828 | ||
Unrealized depreciation | (41,191,187 | ) | ||
|
| |||
Net unrealized appreciation (depreciation) | $ | 751,808,641 | ||
|
|
Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of wash sales.
6. Investment Transactions
Purchases and sales of investments (excluding short term securities) for the period ended October 31, 2019, aggregated $883,050,573 and $906,516,492, respectively.
7. Defaulted Securities
The Fund held defaulted securities and/or other securities for which the income has been deemed uncollectible. At October 31, 2019, the aggregate value of these securities was $25,678,563, representing 0.2% 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.
8. 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. 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.
9. Credit Facility
The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matures on February 7, 2020. 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.
franklintempleton.com | Semiannual Report | 53 |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
9. Credit Facility(continued)
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, 2019, the Fund did not use the Global Credit Facility.
10. 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.
At October 31, 2019, all of the Fund’s investments in financial instruments carried at fair value were valued using Level 2 inputs.
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.
54 | Semiannual Report | franklintempleton.com |
FRANKLIN FEDERAL TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 | LOC | Letter of Credit | |||
COP | Certificate of Participation | MFH | Multi-Family Housing | |||
EDA | Economic Development Authority | MFHR | Multi-Family Housing Revenue | |||
EDC | Economic Development Corp. | MFMR | Multi-Family Mortgage Revenue | |||
ETM | Escrow to Maturity | MTA | Metropolitan Transit Authority | |||
FGIC | Financial Guaranty Insurance Co. | NATL | National Public Financial Guarantee Corp. | |||
FHLMC | Federal Home Loan Mortgage Corp. | PCR | Pollution Control Revenue | |||
FICO | Financing Corp. | PSF | Permanent School Fund | |||
GO | General Obligation | RDA | Redevelopment Agency/Authority | |||
HFA | Housing Finance Authority/Agency | SPA | Standby Purchase Agreement | |||
HFAR | Housing Finance Authority Revenue | UHSD | Unified/Union High School District | |||
IDA | Industrial Development Authority/Agency | USD | Unified/Union School District |
franklintempleton.com | Semiannual Report | 55 |
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 U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent12-month period ended June 30.
Quarterly Statement of Investments
The Fund files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year as an exhibit to its report on FormN-PORT. Shareholders may view the filed FormN-PORT 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.
56 | Semiannual Report | franklintempleton.com |
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.
![]() | Semiannual Report and Shareholder Letter | |||||
Franklin FederalTax-Free Income Fund | ||||||
Investment Manager | Distributor | Shareholder Services | ||||
Franklin Advisers, Inc. | Franklin Templeton Distributors, Inc. | (800)632-2301 | ||||
(800) DIAL BEN®/342-5236 | ||||||
franklintempleton.com |
© 2019 Franklin Templeton Investments. All rights reserved. | 1116 S 12/19 |
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 13(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 Mary C. Choksi and she 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 forClosed-End Management Investment Companies. N/A |
Item 8. | Portfolio Managers ofClosed-End Management Investment Companies. N/A |
Item 9. | Purchases of Equity Securities byClosed-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 provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, 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 FormN-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 control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities forClosed-End Management Investment Company. N/A |
Item 13. | 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 FEDERALTAX-FREE INCOME FUND
By | /s/ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer – Finance and Administration |
Date December 31, 2019
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 31, 2019
By | /s/ GASTON GARDEY | |
Gaston Gardey | ||
Chief Financial Officer and Chief Accounting Officer |
Date December 31, 2019