By Andrea Heisinger
New York, Sept. 19 - Franklin Resources, Inc. priced an upsized $600 million of notes (A1/AA-/) in two tranches on Wednesday, a market source said.
The original deal size was $500 million.
A $300 million tranche of 1.375% five-year notes priced at 99.455 to yield 1.489% with a spread of Treasuries plus 80 basis points. The notes were priced tighter than talk in the 100 bps area.
The notes carry a make-whole call at 12.5 bps over Treasuries.
There was also $300 million of 2.8% 10-year notes sold at 99.75 to yield 2.829% with a spread of 105 bps over Treasuries. The deal was priced much lower than talk in the 125 bps area.
There is a make-whole call at 20 bps over Treasuries on the 10-year notes.
Bank of America Merrill Lynch and Morgan Stanley & Co. LLC were the bookrunners.
Proceeds will be used to redeem $305 million of outstanding 2% notes due May 20, 2013, and another $183 million is going toward financing the acquisition of a majority stake in K2 Advisors Holdings LLC with any remainder for general corporate purposes.
Franklin Resources was last in the market with a $900 million offering in three tranches on May 17, 2010. That deal included 3.125% five-year notes priced at 95 bps over Treasuries and 4.725% 10-year notes sold at 115 bps over Treasuries.
The holding company for investment managers Franklin Templeton Investments is based in San Mateo, Calif.
| Issuer: | Franklin Resources, Inc.
|
| Issue: | Notes
|
| Amount: | $600 million, upsized from $500 million
|
| Bookrunners: | Bank of America Merrill Lynch, Morgan Stanley & Co. LLC
|
| Trade date: | Sept. 19
|
| Settlement date: | Sept. 24
|
| Ratings: | Moody's: A1
|
| Standard & Poor's: AA-
|
|
|
| Five-year notes
|
| Amount: | $300 million
|
| Maturity: | Sept. 15, 2017
|
| Coupon: | 1.375%
|
| Price: | 99.455
|
| Yield: | 1.489%
|
| Spread: | Treasuries plus 80 bps
|
| Call: | Make-whole at Treasuries plus 12.5 bps
|
| Price talk: | 100 bps area
|
|
|
| 10-year notes
|
| Amount: | $300 million
|
| Maturity: | Sept. 15, 2022
|
| Coupon: | 2.8%
|
| Price: | 99.75
|
| Yield: | 2.829%
|
| Spread: | Treasuries plus 105 bps
|
| Call: | Make-whole at Treasuries plus 20 bps
|
| Price talk: | 125 bps area
|
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