As filed with the Securities and Exchange Commission on February 19, 1999.
1933 Act File No. 333-_____
1940 Act File No. 811-08271
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. / /
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. / 13 /
FRANKLIN FLOATING RATE TRUST
(Exact Name of Registrant as Specified in Charter)
777 MARINERS ISLAND BLVD. SAN MATEO, CA 94404
(Address of Principal Executive Office)
Registrant's Telephone Number, Including Area Code (650) 312-2000
DEBORAH R. GATZEK, 777 MARINERS ISLAND BLVD., SAN MATEO, CA 94404
(Name and Address of Agent for Service of Process)
With a copy to:
Merrill R. Steiner, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
Approximate Date of Proposed Public offering: March 1, 1999
If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan check
the following box. [x]
It is proposed that this filing will become effective (check appropriate box)
[ ] when declared effective pursuant to section 8 (c)
[ ] immediately upon filing pursuant to paragraph (b)
[x] on March 1, 1999, pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a) of Rule 486
[ ] This post-effective amendment designates a new effective date for a
previously filed registration statement.
[ ] This Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities
Act registration statement number of the earlier effective
registration statement for the same offering is _________.
This Registration incorporates a combined prospectus pursuant to Rule 429
which relates to an earlier registration statement filed by the Registrant on
September 30, 1998, as amended to date (File No. 333-65111).
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Offering Aggregate Amount of
Being Amount Being Price Offering Registration
Registered Registered Per Unit Price Fee
- --------------------------------------------------------------------------------
Common Stock
par value $0.01 100,000,000 shares(1) $ 9.95 $995,000,000 $276,610.00(3)
- --------------------------------------------------------------------------------
Common Stock
par value $0.01 35,000,000 shares(2) $ 9.98 $349,300,000 $103,044.00(4)
(1) Currently being registered
(2) Previously registered
(3) Calculated pursuant to Rule 457(d) based on the net asset
value per share of $9.95 as of February 5, 1999.
(4) Calculated pursuant to Rule 457(d) based on the net asset value per
share of $9.98 as of September 24, 1998.
The Registrant's Prospectus and Statement of Additional Information dated
December 1, 1998, as filed with the Securities and Exchange Commission in a
Registration Statement on Form N-2 on November 24, 1998 (File Nos. 333-65111
and 811-08271) are hereby incorporated by reference.
020*P5
SUPPLEMENT DATED MARCH 1, 1999
TO THE PROSPECTUS OF
FRANKLIN FLOATING RATE TRUST
DATED DECEMBER 1, 1998
The prospectus is amended as follows:
I. All references in the prospectus to the number of Common Shares of the
fund registered with the SEC are amended to reflect the registration of
an additional 100,000,000 Common Shares, bringing the total number of
registered Common Shares of the fund to 170,000,000.
II. All references in the prospectus to "Class I" are replaced with "Class
A" and all references to "Class II" are replaced with "Class C."
III. The second, third and fourth paragraphs on the inside front cover are
replaced with the following:
The fund began offering its Common Shares and began investment
operations on October 10, 1997. The fund engages in a continuous
offering of Common Shares. The fund is authorized as a business trust
to issue an unlimited number of Common Shares and has registered
170,000,000 Common Shares. Common Shares are offered at a price equal
to the next determined Net Asset Value per share, which, as of February
5, 1999, was $9.95 per share. There is no front-end sales charge on
purchases of Common Shares. An Early Withdrawal Charge of 1% will be
imposed on Common Shares purchased after March 31, 1998, that are held
less than twelve months and that are accepted by the fund for
repurchase in a Tender Offer. Certain waivers of this charge may apply.
Please see "Early Withdrawal Charge." The price of Common Shares will
fluctuate, depending upon the fund's Net Asset Value per share.
The net proceeds of the offering of Common Shares registered to date
are estimated at $1,694,947,499.75 and, subject to any repurchases,
will be invested by the fund over the course of the continuous offering.
Offering expenses that have been incurred by the fund are summarized in
the table below.
Expenses
Date of Offering Number of Deducted from
(on or after) Shares Registered Proceeds to fund
October 10, 1997 10,000,000 $ 61,603.00
May 15, 1998 10,000,000 40,197.50
July 10, 1998 15,000,000 60,046.25
October 12, 1998 35,000,000 133,543.50
March 1, 1999 100,000,000 307,110.00
The fund has incurred organizational expenses of $111,000. These
organizational expenses will remain a liability of the fund and will be
gradually reduced in equal installments over a period not to exceed 60
months from the date the fund commenced investment operations on
October 10, 1997.
IV. The first paragraph of the section "Leverage and Borrowings" on page 16
is replaced with the following:
The fund is authorized to borrow money in amounts of up to 33 1/3% of
the value of its total assets (measured by adding the amount borrowed
to the fund's other assets). The fund has arranged a credit facility
with a bank, which permits it to borrow funds to meet unfunded
commitments in connection with investments or to make repurchases of
shares in Tender Offers for Common Shares. However, the fund will only
borrow money under this facility for temporary, extraordinary or
emergency purposes.
V. The first paragraph of the section "Leverage" on page 28 is replaced
with the following:
The fund is authorized to borrow money in amounts of up to 33 1/3% of
the value of its total assets (measured by adding the amount borrowed
to the fund's other assets). The fund's borrowings create an
opportunity for greater total return to the fund and, ultimately, the
fund's shareholders, but, at the same time, increase exposure to
losses. In addition, interest payments and fees paid by the fund on
any borrowings may offset or exceed the return earned on the borrowed
funds. The fund has arranged a credit facility with a bank, which
permits it to borrow funds to meet unfunded commitments in connection
with investments or to make repurchases of shares in Tender Offers for
Common Shares. The fund may also issue one or more series of preferred
shares but it does not currently intend to do so. See "What Are the
Risks of Investing in the Fund? - Effects of Leverage."
VI. The first paragraph of the section "Effects of Leverage" on page 31 is
replaced with the following:
The fund is authorized to borrow money in amounts of up to 33 1/3% of
the value of its total assets (measured by adding the amount borrowed
to the fund's other assets). The fund has arranged a credit facility
with a bank, which permits it to borrow funds to meet unfunded
commitments in connection with investments or to make repurchases of
shares in Tender Offers for Common Shares. However, the fund will only
borrow money under this facility for temporary, extraordinary or
emergency purposes. See "Periodic Offers By the Fund to Repurchase
Common Shares from Shareholders."
VII. In the section "Special Considerations of Repurchases" on page 46,
(a) the second paragraph is replaced with the following:
The fund has arranged a credit facility with a bank under which it may
borrow to finance the repurchase of Common Shares through Tenders
Offers. Any such borrowings will comply with the fund's investment
restrictions on borrowing. See "What Are the Risks of Investing in the
Fund? - Effects of Leverage" above, and "Investment Restrictions" in
the SAI.
(b) and the fourth sentence of the fourth paragraph is replaced with
the following:
In addition, when the fund borrows money for the purpose of financing
the repurchase of Common Shares in a Tender Offer, interest on the
borrowings will reduce the fund's net investment income.
VIII. The fifth item in the section "Exchange Restrictions" on page 51 is
replaced with the following:
Generally exchanges may only be made between identically registered
accounts, unless you send written instructions with a signature guarantee.
You may, however, exchange Common Shares from a fund account requiring two
or more signatures into an identically registered money fund account
requiring only one signature for all transactions. PLEASE NOTIFY US IN
WRITING IF YOU DO NOT WANT THIS OPTION TO BE AVAILABLE ON YOUR ACCOUNT.
Additional procedures may apply. Please see "Transaction Procedures and
Special Requirements."
IX. The reference to $50,000 in the section "Signature Guarantees" on page
60 is replaced with $100,000.
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE
o 020*SA
SUPPLEMENT DATED MARCH 1, 1999
TO THE STATEMENT OF ADDITIONAL INFORMATION OF
FRANKLIN FLOATING RATE TRUST
DATED DECEMBER 1, 1998
The Statement of Additional Information is amended as follows:
I. The following is added to the "Officers and Trustees" section:
NUMBER OF BOARDS
TOTAL FEES IN THE FRANKLIN
RECEIVED FROM THE TEMPLETON GROUP
FRANKLIN TEMPLETON OF FUNDS ON WHICH
NAME GROUP OF FUNDS* EACH SERVES**
- --------------------------------------------------------------------------------
Frank H. Abbott, III ........... $159,051 27
Harris J. Ashton ............... $361,157 49
S. Joseph Fortunato ............ $367,835 51
Edith Holiday .................. $ 211,400 25
Frank W.T. LaHaye .............. $163,753 27
Gordon S. Macklin .............. $361,157 49
*For the calendar year ended December 31, 1998.
**We base the number of boards on the number of registered investment
companies in the Franklin Templeton Group of Funds. This number does
not include the total number of series or funds within each investment
company for which the Board members are responsible. The Franklin
Templeton Group of Funds currently includes 54 registered investment
companies, with approximately 164 U.S. based funds or series.
As of February 1, 1999, the officers and Board members, as a group,
owned of record and beneficially approximately 51,142 Common Shares of
the fund, or less than 1% of the total outstanding shares of the fund.
Please keep this supplement for future reference.
FRANKLIN FLOATING RATE TRUST
FORM N-2
PART C - OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) Included in Part A: Financial Highlights
Included in Part B:
a) Financial Statements incorporated herein by reference to
the Registrant's Annual Report to Shareholders dated July
31, 1998 as filed with the SEC on Form N-30D on September
30, 1998:
(i) Financial Highlights
(ii) Statement of Investments, July 31, 1998
(iii) Statement of Assets and Liabilities - July 31, 1998
(iv) Statement of Operations - for the period October
10, 1997 (effective date) to July 31, 1998
(v) Statements of Changes in Net Assets - for the
period October 10, 1997 (effective date) to July
31, 1998
(vi) Statement of Cash Flows - for the period October
10, 1997 (effective date) to July 31, 1998
(vii) Reconciliation of Net Investment Income to Net Cash
Provided by Operating Activities - for the period
October 10, 1997 (effective date) to July 31, 1998
(viii) Notes to Financial Statements
(ix) Independent Auditor's Report
(2) Exhibits:
The following exhibits are incorporated by reference herein, except
exhibits (l)(i) and (n)(i) which are attached hereto.
(a) (i) Agreement and Declaration of Trust dated May
13, 1997
Filing: Post-Effective Amendment No. 1 to
Registration Statement on Form N-2
File No. 333-65111
Filing Date: November 24, 1998
(ii) Certificate of Trust dated May 13, 1997
Filing: Post-Effective Amendment No. 1 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: December 8, 1997
(b) (i) By-Laws
Filing: Registration Statement on Form N-2
File No. 333-30131
Filing Date: June 27, 1997
(c) Not Applicable
(d) Not Applicable
(e) Not Applicable
(f) Not Applicable
(g) (i) Investment Advisory Agreement between
Registrant and Franklin Advisers, Inc. dated
September 16, 1997
Filing: Post-Effective Amendment No. 3 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: March 6, 1998
(ii) Fund Administration Agreement between Registrant and
Franklin Templeton Services, Inc. dated September 16,
1997
Filing: Post-Effective Amendment No. 3 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: March 6, 1998
(h) (i) Amended Distribution Agreement between
Registrant and Franklin/Templeton Distributors, Inc.
dated July 1, 1998
Filing: Post-Effective Amendment No. 1 to
Registration Statement on Form N-2
File No. 333-65111
Filing Date: November 24, 1998
(ii) Form of Dealer Agreements between Franklin/Templeton
Distributors, Inc. and Securities Dealers
Filing: Post-Effective Amendment No. 1 to
Registration Statement on Form N-2
File No. 333-65111
Filing Date: November 24, 1998
(i) Not Applicable
(j) (i) Master Custody Agreement dated February 16, 1996
Filing: Post-Effective Amendment No. 3 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: March 6, 1998
(ii) Amendment dated May 7, 1997 to Master Custody
Agreement between Registrant and Bank of New York
dated February 16, 1996
Filing: Post-Effective Amendment No. 3 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: March 6, 1998
(iii) Amendment dated February 27, 1998 to Master Custody
Agreement between Registrant and Bank of New York
dated February 16, 1996
Filing: Registration Statement on Form N-2
File No. 333-65111
Filing Date: September 30, 1998
(iv) Foreign Custody Manager Agreement between Registrant
and Bank of New York made as of July 30, 1998,
effective as of February 27, 1998
Filing: Registration Statement on Form N-2
File No. 333-65111
Filing Date: September 30, 1998
(k) Not Applicable
(l) (i) Opinion and Consent of Counsel
(m) Not Applicable
(n) (i) Consent of Independent Auditors
(o) Not Applicable
(p) (i) Letter of Investment Intent dated September 16,
1997
Filing: Post-Effective Amendment No. 3 to
Registration Statement on Form N-2
File No. 333-30131
Filing Date: March 6, 1998
(q) Not Applicable
(r) Not Applicable
(s) (i) Power of Attorney dated June 16, 1998
Filing: Registration Statement on Form N-2
File No. 333-65111
Filing Date: September 30, 1998
(ii) Certificate of Secretary dated June 16, 1998
Filing: Registration Statement on Form N-2
File No. 333-65111
Filing Date: September 30, 1998
(27) Not Applicable
ITEM 25. MARKETING ARRANGEMENTS
None
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses already incurred and expected to
be incurred in connection with the cumulative offering described in this
Registration Statement. The amounts for the fiscal year ended July 31, 1998,
are actual amounts that the registrant has paid. The amounts for the current
fiscal year are based on actual amounts paid to date combined with estimates
that are reasonably expected to be incurred in distributing the offering
described in the prospectus.
FISCAL YEAR CURRENT
ENDED 7/31/98 FISCAL YEAR TOTAL
SEC/NASD/Blue Sky fees $121,275 $450,000 $571,275
Printing and Engraving Expenses 9,313 14,000 23,313
Legal Fees 115,211 35,000 150,211
Audit Fees 20,000 43,500 63,500
Accounting/Transfer Agent Fees 163,116 804,000 967,116
Mailing Expenses 1,689 16,500 18,189
- ------------------------------------------------------------------------------
Total $1,793,604
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not Applicable
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
9,546 record holders as of December 31, 1998
ITEM 29. INDEMNIFICATION
Under Article III, Section 7 of Registrant's Agreement and Declaration of
Trust, if any shareholder or former shareholder of Registrant (each, a
"Shareholder") shall be exposed to liability by reason of a claim or demand
relating to his or her being or having been a Shareholder, and not because of
his or her acts or omissions, the Shareholder or former Shareholder (or his
or her heirs, executors, administrators, or other legal representatives or in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified out of
the assets of the Registrant against all loss and expense arising from such
claim or demand.
Under Article VII, Section 2 of Registrant's Agreement and Declaration of
Trust, the Trustees of Registrant (each, a "Trustee," and collectively, the
"Trustees") shall not be responsible or liable in any event for any neglect
or wrong-doing of any officer, agent, employee, the investment manager or
principal underwriter of the Registrant, nor shall any Trustee be responsible
for the act or omission of any other Trustee, and the Registrant out of its
assets shall indemnify and hold harmless each and every Trustee from and
against any and all claims and demands whatsoever arising out of or related
to each Trustee's performance of his or her duties as a Trustee of the
Registrant; provided that nothing contained in Registrant's Agreement and
Declaration of Trust shall indemnify, hold harmless or protect any Trustee
from or against any liability to the Registrant or any Shareholder to which
he or she would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "1933 Act") may be permitted to Trustees, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a Trustee,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such Trustee, officer or
controlling person in connection with securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court or appropriate
jurisdiction the question whether such indemnification is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(a) Franklin Advisers, Inc.
See "Who Manages the Fund?"
The officers and directors of the Registrant's investment adviser also serve
as officers and/or directors for (1) the investment adviser's corporate
parent, Franklin Resources, Inc., 777 Mariners Island Blvd., San Mateo, CA
94404 and/or (2) other investment companies in the Franklin Templeton Group
of Funds. In addition, Mr. Charles B. Johnson was formerly a director of
General Host Corporation, Metro Center, One Station Place, Stamford, CT
06904-2045. For additional information please see Schedules A and D of Form
ADV of the Registrant's investment adviser (SEC File 801-26292) incorporated
herein by reference, which sets forth the officers and directors of the
Registrant's investment adviser and information as to any business,
profession, vocation or employment of a substantial nature engaged in by
those officers and directors during the past two years.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books or other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended, are kept by the
Registrant or its shareholder services agent, Franklin/Templeton Investor
Services, Inc., both of whose address is 777 Mariners Island Blvd., San
Mateo, CA 94404.
ITEM 32. MANAGEMENT SERVICES
Not Applicable
ITEM 33. UNDERTAKINGS
(1) Registrant undertakes to suspend the offering of its shares until
it amends its Prospectus if-
(a) subsequent to the effective date of this Registration
Statement, the net asset value declines more than 10% from
its net asset value as of the effective date of the
Registration Statement; or
(b) The net asset value increases to an amount greater than its
net proceeds as stated in the Prospectus.
(2) Registrant undertakes:
(a) to file, during any period in which offers or sales are
being made, a post-effective amendment to the registration
statement:
(1) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended
(the "Act");
(2) to reflect in the prospectus any facts or
events after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
and
(3) to include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement.
(b) that, for the purpose of determining any liability under
the 1933 Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of those
securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(c) to remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(3) Registrant further undertakes to send by first class mail or
other means designed to ensure equally prompt delivery, within
two business days of receipt of a written or oral request, any
Statement of Additional Information.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to
Rule 486(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Mateo, and the State of
California, on the 18th day of February, 1999.
FRANKLIN FLOATING RATE TRUST
(Registrant)
By: RUPERT H. JOHNSON, JR.*
Rupert H. Johnson, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities
and on the dates indicated:
SIGNATURE TITLE DATE
RUPERT H. JOHNSON, JR.* Trustee & Principal February 18, 1999
Rupert H. Johnson, Jr. Executive Officer
MARTIN L. FLANAGAN* Principal Financial February 18, 1999
Martin L. Flanagan Officer
DIOMEDES LOO-TAM* Principal Accounting February 18, 1999
Diomedes Loo-Tam Officer
FRANK H. ABBOTT, III* Trustee February 18, 1999
Frank H. Abbott, III
HARRIS J. ASHTON* Trustee February 18, 1999
Harris J. Ashton
S. JOSEPH FORTUNATO* Trustee February 18, 1999
S. Joseph Fortunato
EDITH E. HOLIDAY* Trustee February 18, 1999
Edith E. Holiday
CHARLES B. JOHNSON* Trustee & Chairman February 18, 1999
Charles B. Johnson of the Board
FRANK W. T. LAHAYE* Trustee February 18, 1999
Frank W. T. LaHaye
GORDON S. MACKLIN* Trustee February 18, 1999
Gordon S. Macklin
*By: /s/ Larry L. Greene
Attorney-in-Fact
(Pursuant to Power of Attorney previously filed)
FRANKLIN FLOATING RATE TRUST
REGISTRATION STATEMENT
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION LOCATION
EX-99.2(a)(i) Agreement and Declaration *
of Trust dated May 13, 1997
EX-99.2(a)(ii) Certificate of Trust dated May 13, 1997 *
EX-99.2(b)(i) By-Laws *
EX-99.2(g)(i) Investment Advisory Agreement between *
Registrant and Franklin Advisers, Inc.
dated September 16, 1997
EX-99.2(g)(ii) Fund Administration Agreement between *
Registrant and Franklin Templeton
Services, Inc. dated September 16, 1997
EX-99.2(h)(i) Amended Distribution Agreement between *
Registrant and Franklin/Templeton
Distributors, Inc. dated July 1, 1998
EX-99.2(h)(ii) Forms of Dealer Agreements *
between Franklin/Templeton
Distributors, Inc. and
Securities Dealers
EX-99.2(j)(i) Master Custody Agreement dated February *
16, 1996
EX-99.2(j)(ii) Amendment dated May 7, 1997 *
to Master Custody Agreement
between Registrant and Bank
of New York dated February
16, 1996
EX-99.2(j)(iii) Amendment dated February 27, *
1998 to Master Custody
Agreement between Registrant
and Bank of New York dated
February 16, 1996
EX-99.2(j)(iv) Foreign Master Custody *
Agreement between Registrant
and Bank of New York made as
of July 30, 1998, effective
as of February 27, 1998
EX-99.2(l)(i) Opinion and Consent Attached
of Counsel
EX-99.2(n)(i) Consent of Independent Attached
Auditors
EX-99.2(p)(i) Letter of Investment *
Intent dated September
16, 1997
EX-99.2(s(i) Power of Attorney dated *
June 16, 1998
EX-99.2(s)(ii) Certificate of Secretary *
dated June 16, 1998
*Incorporated by Reference
Law Offices
STRADLEY, RONON, STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103-7098
(215) 564-8000
Direct Dial: (215) 564-8024
February 18, 1999
Franklin Floating Rate Trust
777 Mariners Island Boulevard
San Mateo, CA 94404
Re: OFFER AND SALE OF ADDITIONAL 100,000,000 SHARES OF
FRANKLIN FLOATING RATE TRUST
Ladies and Gentlemen:
We are furnishing this opinion with respect to the proposed offer
and sale from time to time of an additional 100,000,000 shares of beneficial
interest, par value $.01 per share (the "Common Shares"), of the Franklin
Floating Rate Trust (the "Fund"), registered under the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company Act of 1940, as
amended (the "1940 Act"), by a fifth Registration Statement on Form N-2
(File No. 811-08271) as amended from time to time (the "Registration
Statement") to be filed with the U.S. Securities and Exchange Commission (the
"Commission").
We have acted as general counsel to the Fund in connection with
its initial organization and its registrations with the Commission, and we
are familiar with the actions taken by its Trustees to authorize previously
the issuance, offer and sale of 70,000,000 Common Shares and currently the
issuance, offer and sale of an additional 100,000,000 Common Shares.
We have examined the Agreement and Declaration of Trust (the
"Trust Agreement") of the Fund, a Delaware business trust organized under
Delaware law, the By-Laws of the Fund, minute books and such other
certificates and documents as deemed necessary for the purpose of this
opinion.
We have examined the Registration Statement and the prospectus
and statement of additional information included therein (the "Prospectus")
relating to the issuance of an additional 100,000,000 Common Shares of the
Fund. We have also examined the Fund's Notification of Registration on Form
N-8A under the 1940 Act. We have assisted in the preparation of the
Registration Statement to be filed with the Commission.
Based upon the foregoing information and examination, it is our
opinion that:
1. The Fund is duly organized and validly existing as a
business trust in good standing under the laws of the State of
Delaware; and
2. The Fund's Common Shares to be offered for sale
pursuant to the Prospectus are duly authorized and, when sold,
issued and paid for as contemplated by the Prospectus, will be
validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and amendments thereto, covering the registration of
the Fund's additional 100,000,000 Common Shares under the 1933 Act and the
1940 Act, and to the applications and registration statements, and amendments
thereto, filed in accordance with the securities laws of the several states
or other like jurisdictions of the United States in which the Fund's Common
Shares are offered and sold. We further consent to reference in the
Prospectus of the Fund to the fact that this opinion has been rendered by us.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
By: /s/ BRUCE G. LETO
BRUCE G. LETO, a Partner
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Franklin Floating Rate Trust on Form N-2 of our report dated September 4,
1998, on our audit of the financial statements and financial highlights of
the Franklin Floating Rate Trust, which report is included in the Annual
Report to Shareholders for the fiscal year ended July 31, 1998, which is
incorporated by reference in the Registration Statement.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
February 17, 1999
