In order to finance the acquisition of K2 Advisors LLC, Franklin
Resources Inc. (BEN) announced the pricing of a registered public
offering aggregating $600 million. The offering includes $300
million of senior unsecured notes due in 2017 and $300 billion of
notes maturing in 2022. The former notes are priced at 99.455% and
carry a coupon rate of 1.375%, whereas the latter are priced at
99.750% with an interest rate of 2.800%.
The new notes have been rated 'A1' by Moody's Investors Service
- a credit rating arm of Moody's Corporation (MCO).
Franklin anticipates the offering to be completed by September
24, 2012, subject to certain customary conditions. Merrill Lynch,
Pierce, Fenner & Smith Incorporated - a wing of Bank of America
Corporation (BAC) - and Morgan Stanley & Co. LLC - a unit of
Morgan Stanley (MS) - are acting as the joint book-running managers
for the offering.
The sale proceeds from the offering are planned to be used for
general corporate purposes. Additionally, these proceeds are
expected to be utilized for the redemption of the outstanding notes
scheduled to expire on May 20, 2013, having a coupon rate of
2.000%. This redemption will fund the acquisition of K2 Advisors
LLC's majority stake.
In the stringent regulatory landscape, the aforementioned
offering is expected to further strengthen the balance sheet of the
company as well as support its future growth. Additionally, it will
help the company bring down its cost of capital.
Franklin currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. Considering the company's
fundamentals, we also maintain a long-term 'Neutral' recommendation
on the stock.
In order to finance the acquisition of K2 Advisors LLC,
Franklin Resources Inc.
(
BEN
) announced the pricing of a registered public offering
aggregating $600 million. The offering includes $300 million of
senior unsecured notes due in 2017 and $300 billion of notes
maturing in 2022. The former notes are priced at 99.455% and
carry a coupon rate of 1.375%, whereas the latter are priced at
99.750% with an interest rate of 2.800%.
The new notes have been rated 'A1' by Moody's Investors
Service - a credit rating arm of
Moody's Corporation
(
MCO
).
Franklin anticipates the offering to be completed by September
24, 2012, subject to certain customary conditions. Merrill Lynch,
Pierce, Fenner & Smith Incorporated - a wing of
Bank of America Corporation
(
BAC
) - and Morgan Stanley & Co. LLC - a unit of
Morgan Stanley
(
MS
) - are acting as the joint book-running managers for the
offering.
The sale proceeds from the offering are planned to be used for
general corporate purposes. Additionally, these proceeds are
expected to be utilized for the redemption of the outstanding
notes scheduled to expire on May 20, 2013, having a coupon rate
of 2.000%. This redemption will fund the acquisition of K2
Advisors LLC's majority stake.
In the stringent regulatory landscape, the aforementioned
offering is expected to further strengthen the balance sheet of
the company as well as support its future growth. Additionally,
it will help the company bring down its cost of
capital.
Franklin currently retains a Zacks #3 Rank, which translates
into a short-term Hold rating. Considering the company's
fundamentals, we also maintain a long-term 'Neutral'
recommendation on the stock.
BANK OF AMER CP (BAC): Free Stock Analysis
Report
FRANKLIN RESOUR (BEN): Free Stock Analysis
Report
MOODYS CORP (MCO): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
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