UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 10, 2022
FRANKLIN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-09318 | 13-2670991 | ||||||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
One Franklin Parkway, San Mateo, CA 94403
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (650) 312-2000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $0.10 per share | BEN | New York Stock Exchange | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
2022 Credit Agreement
On January 10, 2022 (the “Closing Date”), Franklin Resources, Inc., a Delaware corporation (the “Company”), entered into a credit agreement (the “2022 Credit Agreement”), by and among the Company, as borrower, the financial institutions from time to time party thereto, as lenders, and Bank of America, N.A., as administrative agent, pursuant to which the Company established a 364 day revolving credit facility with aggregate commitments of $500,000,000 (the “Revolving Credit Facility”). As of the Closing Date, there were no amounts outstanding under the 2022 Credit Agreement.
Amounts outstanding under the 2022 Credit Agreement bear interest at an annual rate equal to, at the option of the Company, either (i) a base rate equal to the highest of (a) the federal funds rate plus 0.5%, (b) the prime rate of Bank of America, N.A., (c) the Bloomberg Short-Term Bank Yield Index rate (the “BSBY Rate”) plus 1.00%, and (d) 1.00%, plus, in each case, an applicable margin equal to 0.65%; or (ii) the BSBY rate (provided that the BSBY Rate shall not be less than 0.00%), plus an applicable margin equal to 0.65%. The Company is also required to pay an annual commitment fee equal to 0.05% on the average unused amount of the Revolving Credit Facility payable quarterly.
At any time, subject to timely prior written notice, the Company may terminate the commitments under the Revolving Credit Facility in full or in part or prepay loans outstanding under the Revolving Credit Facility in whole or in part, subject to the payment of BSBY breakage fees, if any.
The 2022 Credit Agreement contains customary affirmative and negative covenants, including covenants that affect, among other things, the ability of the Company’s subsidiaries to incur additional indebtedness and limit the ability of the Company and its subsidiaries to create liens, merge or dissolve, dispose of assets and change the nature of their respective business, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the 2022 Credit Agreement contains a financial performance covenant, requiring that the Company maintains a consolidated net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00.
The repayment obligation under the 2022 Credit Agreement may be accelerated (and commitments under the Revolving Credit Facility terminated) upon the occurrence of an event of default thereunder, including, among other things, failure to pay principal or interest on a timely basis, material inaccuracy of any representation or warranty, failure to comply with covenants, cross-default, change of control, certain insolvency or bankruptcy-related events and material judgments, subject, in each case, to any applicable grace and/or cure periods.
Borrowings under the 2022 Credit Agreement may be used for general corporate purposes.
The foregoing description of the 2022 Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the 2022 Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
| 10.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
- 2 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FRANKLIN RESOURCES, INC. | ||||||||
| Date: | January 14, 2022 | /s/ Thomas C. Merchant | ||||||
| Name: Thomas C. Merchant | ||||||||
| Title: Vice President and Secretary | ||||||||
- 3 -