Business Context and Reporting Period
Company: Franklin Resources, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 30, 2026
Event: Entry into a Second Amended and Restated Credit Agreement and termination of the prior Original Credit Agreement.
Key Financial Metrics and Debt Structure
This filing details a refinancing of the company's revolving credit facility. No revenue, profit, or cash flow metrics are provided in this specific document.
- Facility Type: Five-year revolving credit facility.
- Total Commitments: $1,500,000,000 (with an option to increase by up to $500,000,000).
- Outstanding Borrowings (as of Closing Date): $700,000,000.
- Maturity Date: July 30, 2031.
- Interest Rate Structure:
- Base Rate Option: Highest of (a) Federal Funds Rate + 0.5%, (b) Bank of America Prime Rate, (c) Term SOFR (1-month) + 1.00%, or (d) 1.00%.
- Term SOFR Option: Term SOFR (floor 0.00%) + Applicable Margin.
- Applicable Margins: 0.00% to 0.25% for Base Rate loans; 0.625% to 1.25% for Term SOFR loans (based on Debt Rating).
- Commitment Fee: 0.050% to 0.120% annually on unused amounts (based on Debt Rating).
Material Changes Versus Prior Period
The company terminated its Original Credit Agreement, which was scheduled to mature on April 30, 2030, and replaced it with the new facility maturing on July 30, 2031.
- Extension: The maturity date was extended by approximately 13 months (from April 2030 to July 2031).
- Continuity: The $700,000,000 outstanding under the original agreement was rolled directly into the new agreement.
- Commitment Level: The aggregate commitment level remained at $1,500,000,000, though the new agreement includes an accordion feature to increase commitments by an additional $500,000,000.
Guidance, Covenants, and Risks
Financial Covenants: The agreement includes a financial performance covenant requiring the Company to maintain a consolidated net leverage ratio of no greater than 3.25 to 1.00, measured as of the last day of each fiscal quarter.
Other Covenants: The agreement contains customary affirmative and negative covenants limiting the ability of subsidiaries to incur additional indebtedness, create liens, merge, dissolve, dispose of assets, or change the nature of their business.
Events of Default: Acceleration of repayment may occur upon failure to pay principal/interest, material inaccuracy of representations, covenant violations, cross-defaults, change of control, insolvency, or material judgments.
Use of Proceeds: Borrowings may be used for general corporate purposes.
Investor Verification Checklist
- Verify the Company's current Debt Rating to determine the specific applicable interest rate margin and commitment fee percentage.
- Confirm the Company's current consolidated net leverage ratio to ensure compliance with the 3.25 to 1.00 covenant.
- Review the full text of the Second Amended and Restated Credit Agreement (Exhibit 10.1) for specific definitions of "qualified acquisitions" and covenant baskets.
- Monitor the Company's ability to exercise the option to increase aggregate commitments by $500,000,000 if needed.