Franklin Resources (NYSE: BEN) signs $1.5B revolving credit facility maturing 2031
Rhea-AI Filing Summary
Franklin Resources, Inc. entered into a Second Amended and Restated Credit Agreement with a syndicate of lenders and Bank of America, N.A. as administrative agent. The agreement provides a five-year revolving credit facility with $1,500,000,000 of aggregate commitments, maturing on July 30, 2031, and includes an option to increase commitments by up to $500,000,000. As of the closing date, $700,000,000 was outstanding.
Borrowings bear interest at either a Base Rate or Term SOFR plus a margin tied to the company’s debt rating, and an annual commitment fee is payable on unused commitments. The facility contains customary covenants and a financial covenant requiring a consolidated net leverage ratio not greater than 3.25 to 1.00, and may be used for general corporate purposes. It replaces a prior $1,500,000,000 revolving credit agreement that was scheduled to mature on April 30, 2030, with existing borrowings rolled into the new facility.
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8-K Event Classification
4 items: 1.01, 1.02, 2.03, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 1.02
Termination of a Material Definitive Agreement
Business
A significant contract was terminated, which may affect business operations or revenue.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Revolving Credit Facility Commitments: $1,500,000,000
Accordion Feature: $500,000,000
Outstanding Borrowings at Closing: $700,000,000
+5 more
8 metrics
Revolving Credit Facility Commitments
$1,500,000,000
Aggregate commitments under the Second Amended and Restated Credit Agreement
Accordion Feature
$500,000,000
Maximum additional commitments the facility may be increased by
Outstanding Borrowings at Closing
$700,000,000
Amount outstanding under the Second Amended and Restated Credit Agreement on the Closing Date
Maturity Date
July 30, 2031
Stated maturity of the Second Amended and Restated Credit Agreement
Net Leverage Covenant
3.25 to 1.00
Maximum consolidated net leverage ratio required each fiscal quarter
Base Rate Margin Range
0.00% to 0.25%
Applicable margin for loans bearing interest by reference to the Base Rate
Term SOFR Margin Range
0.625% to 1.25%
Applicable margin for loans bearing interest by reference to Term SOFR
Commitment Fee Range
0.050% to 0.120%
Annual fee on the average unused amount of the Revolving Credit Facility
Key Terms
Second Amended and Restated Credit Agreement, Revolving Credit Facility, Term SOFR, consolidated net leverage ratio, +1 more
5 terms
Second Amended and Restated Credit Agreement financial
"entered into a Second Amended and Restated Credit Agreement by and among the Company"
A second amended and restated credit agreement is a company’s loan contract that has been changed twice and rewritten into a single, updated document so all the terms are clear in one place. Investors care because it alters the company’s debt rules — such as interest rates, repayment schedule, and covenants — which affects cash flow, default risk, and the ability to invest or pay dividends; think of it like refinancing and reorganizing a mortgage that changes monthly payments and rules.
Revolving Credit Facility financial
"provides for a five-year revolving credit facility with $1,500,000,000 of aggregate commitments"
A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.
Term SOFR financial
"either a base rate or Term SOFR plus an applicable margin based on the Company’s Debt Rating"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
consolidated net leverage ratio financial
"requiring that the Company maintains a consolidated net leverage ratio of no greater than 3.25 to 1.00"
The consolidated net leverage ratio measures how much debt a company carries compared with the cash it generates from core operations, calculated by taking total borrowings minus cash and dividing by annual operating profit. Like comparing a household’s mortgage balance to its yearly income, it tells investors how many years of operating profit would be needed to pay off net debt and thus gauges financial risk, flexibility to invest, and capacity to weather downturns.
event of default financial
"repayment obligation may be accelerated upon the occurrence of an event of default thereunder"
An event of default is a specific breach of a loan or bond agreement—such as missed payments or breaking agreed rules—that gives lenders the legal right to act, for example by demanding immediate repayment, seizing collateral, or accelerating other obligations. For investors, it’s a red flag because it can sharply reduce a company’s ability to operate or raise money, like a car lender repossessing a vehicle after missed payments, and often leads to falling share or bond prices.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What credit facility did Franklin Resources (BEN) enter on July 30, 2026?
Franklin Resources entered a Second Amended and Restated Credit Agreement providing a five-year revolving credit facility with $1.5 billion in aggregate commitments, maturing on July 30, 2031, with Bank of America, N.A. as administrative agent and multiple lenders participating.
What is the size and expansion option of Franklin Resources (BEN) new revolver?
The new revolving credit facility has $1,500,000,000 of aggregate commitments, with an option to increase commitments by up to an additional $500,000,000. This provides flexibility to expand available liquidity if needed, subject to the terms and conditions of the agreement and lender participation.
How much was outstanding under Franklin Resources (BEN) credit facility at closing?
As of the closing date of the new facility, $700,000,000 was outstanding. Borrowings under the company’s prior $1,500,000,000 revolving credit agreement were terminated and rolled into the Second Amended and Restated Credit Agreement on the same date.
What are the key financial covenants in Franklin Resources (BEN) new credit agreement?
The agreement includes a financial covenant requiring Franklin Resources to maintain a consolidated net leverage ratio not greater than 3.25 to 1.00, measured at the end of each fiscal quarter, with certain adjustments related to qualified acquisitions as specified in the agreement.
How is interest determined under Franklin Resources (BEN) new revolving credit facility?
Borrowings bear interest at either a Base Rate or Term SOFR plus an applicable margin. Margins range from 0.00%–0.25% for Base Rate loans and 0.625%–1.25% for Term SOFR loans, with an additional commitment fee of 0.050%–0.120% on unused commitments.
What happened to Franklin Resources (BEN) prior revolving credit agreement?
Franklin Resources terminated its prior $1,500,000,000 revolving credit agreement, which was scheduled to mature on April 30, 2030. At termination, $700,000,000 of borrowings under the prior facility were rolled into the new Second Amended and Restated Credit Agreement as of the closing date.