oMUN P-2
SUPPLEMENT DATED JUNE 25, 1999
TO THE PROSPECTUS OF
FRANKLIN MUNICIPAL SECURITIES TRUST
(FRANKLIN ARKANSAS MUNICIPAL BOND FUND, FRANKLIN CALIFORNIA HIGH YIELD
MUNICIPAL FUND,
FRANKLIN HAWAII MUNICIPAL BOND FUND, FRANKLIN TENNESSEE MUNICIPAL BOND FUND
AND FRANKLIN WASHINGTON MUNICIPAL BOND FUND)
DATED OCTOBER 1, 1998
On June 23, 1999, shareholders of the Franklin Arkansas Municipal Bond Fund,
Franklin Hawaii Municipal Bond Fund and Franklin Washington Municipal Bond
Fund approved proposals to merge their respective fund into the Franklin
Federal Tax-Free Income Fund. The merger of the Franklin Hawaii Municipal
Bond Fund was completed on June 24, 1999. The mergers of the other funds are
expected to be completed August 26, 1999. Please see below for additional
details.
Franklin Hawaii Municipal Bond Fund
On June 24, 1999, Franklin Federal Tax-Free Income Fund acquired the assets
of Franklin Hawaii Municipal Bond Fund. In exchange, Franklin Hawaii
Municipal Bond Fund received shares of Franklin Federal Tax-Free Income Fund,
which it distributed to its shareholders. All references to the Franklin
Hawaii Municipal Bond Fund in the prospectus are deleted.
Franklin Arkansas Municipal Bond Fund and Franklin Washington Municipal Bond
Fund
As of the close of business on June 23, 1999, Franklin Arkansas Municipal
Bond Fund and Franklin Washington Municipal Bond Fund are closed to all
purchases, although you may continue to buy additional shares through
reinvestment of dividend or capital gain distributions or through established
automatic investment plans.
Although you may redeem your shares, please keep in mind that if you sell all
the shares in your account, your account will be closed and you will not be
allowed to buy additional shares of Franklin Arkansas Municipal Bond Fund or
Franklin Washington Municipal Bond Fund or to reopen your account in the
fund. If you sell your shares in the Franklin Arkansas Municipal Bond Fund or
Franklin Washington Municipal Bond Fund, you may reinvest some or all of the
proceeds in most of the other Franklin Templeton Funds within 365 days
without an initial sales charge. The proceeds must be reinvested within the
same share class.
It is anticipated that on August 26, 1999, Franklin Federal Tax-Free Income
Fund will acquire the assets of Franklin Arkansas Municipal Bond Fund and
Franklin Washington Municipal Bond Fund. In exchange, Franklin Arkansas
Municipal Bond Fund and Franklin Washington Municipal Bond Fund will receive
shares of Franklin Federal Tax-Free Income Fund, which they will distribute
to their shareholders. As of August 27, 1999, all references to the Franklin
Arkansas Municipal Bond Fund and Franklin Washington Municipal Bond Fund in
the prospectus are deleted.
Please keep this supplement for future reference.
