PROSPECTUS & APPLICATION
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
INVESTMENT STRATEGY GLOBAL INCOME
AUGUST 1, 1998
LOGO FRANKLIN TEMPLETON
Please read this prospectus before investing, and keep it for future reference.
It contains important information, including how the fund invests and the
services available to shareholders.
The fund is a non-diversified series of Templeton Global Investment Trust (the
"Trust"). To learn more about the fund and its policies, you may request a copy
of the Trust's Statement of Additional Information ("SAI"), dated August 1,
1998, which we may amend from time to time. We have filed the SAI with the SEC
and have incorporated it by reference into this prospectus.
For a free copy of the SAI or a larger print version of this prospectus, contact
your investment representative or call 1-800/DIAL BEN.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY OF THE U.S.
GOVERNMENT. MUTUAL FUND SHARES INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
THE FUND MAY INVEST UP TO 100% OF ITS NET ASSETS IN NON-INVESTMENT GRADE BONDS.
THESE ARE COMMONLY KNOWN AS "JUNK BONDS." THEIR DEFAULT AND OTHER RISKS ARE
GREATER THAN THOSE OF HIGHER RATED SECURITIES. YOU SHOULD CAREFULLY CONSIDER
THESE RISKS BEFORE INVESTING IN THE FUND. PLEASE SEE "WHAT ARE THE RISKS OF
INVESTING IN THE FUND?"
LIKE ALL MUTUAL FUND SHARES, THE SEC HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PAGE
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
STATE, JURISDICTION OR COUNTRY IN WHICH THE OFFERING IS NOT AUTHORIZED. NO SALES
REPRESENTATIVE, DEALER, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. FURTHER
INFORMATION MAY BE OBTAINED FROM DISTRIBUTORS.
PAGE
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND
August 1, 1998
When reading this prospectus, you will see certain terms beginning with capital
letters. This means the term is explained in our glossary section.
TABLE OF CONTENTS
ABOUT THE FUND
Expense Summary.......................................... 2
Financial Highlights..................................... 3
How Does the Fund Invest Its Assets?..................... 4
What Are the Risks of Investing in the Fund?............. 9
Who Manages the Fund?.................................... 13
How Taxation Affects the Fund and Its Shareholders....... 15
How Is the Trust Organized?.............................. 19
ABOUT YOUR ACCOUNT
How Do I Buy Shares?..................................... 20
May I Exchange Shares for Shares of Another Fund?........ 28
How Do I Sell Shares?.................................... 30
What Distributions Might I Receive From the Fund?........ 33
Transaction Procedures and Special Requirements.......... 34
Services to Help You Manage Your Account................. 39
What If I Have Questions About My Account?............... 41
GLOSSARY
Useful Terms and Definitions............................. 41
APPENDIX
Description of Ratings................................... 44
100 Fountain Parkway
P.O. Box 33030
St. Petersburg, FL 33733-8030
1-800/DIAL BEN(R)
Templeton Americas Government Securities Fund 1
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ABOUT THE FUND
EXPENSE SUMMARY
This table is designed to help you understand the costs of investing in the
fund. It is based on the fund's historical expenses for the fiscal year ended
March 31, 1998. The fund's actual expenses may vary.
A. SHAREHOLDER TRANSACTION EXPENSES+
Maximum Sales Charge Imposed on Purchases
(as a percentage of Offering Price) 4.25%++
Deferred Sales Charge None+++
Exchange Fee (per transaction) $5.00*
B. ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees (after fee waiver) 0.00%**
Rule 12b-1 Fees 0.33%***
Other Expenses (after fee waiver) 0.92%**
-----
Total Fund Operating Expenses (after fee waivers) 1.25%**
C. EXAMPLE
Assume the fund's annual return is 5%, operating expenses are as described
above, and you sell your shares after the number of years shown. These are
the projected expenses for each $1,000 that you invest in the fund.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C>
$55**** $80 $108 $187
</TABLE>
THIS IS JUST AN EXAMPLE. IT DOES NOT REPRESENT PAST OR FUTURE EXPENSES OR
RETURNS. ACTUAL EXPENSES AND RETURNS MAY BE MORE OR LESS THAN THOSE SHOWN.
The fund pays its operating expenses. The effects of these expenses are
reflected in its Net Asset Value or dividends and are not directly charged
to your account.
+If your transaction is processed through your Securities Dealer, you may be
charged a fee by your Securities Dealer for this service.
++There is no front-end sales charge if you invest $1 million or more.
+++A Contingent Deferred Sales Charge of 1% may apply to purchases of $1 million
or more if you sell the shares within one year. A Contingent Deferred Sales
Charge may also apply to purchases by certain retirement plans that qualify to
buy shares without a front-end sales charge. See "How Do I Sell Shares? -
Contingent Deferred Sales Charge" for details.
*$5.00 fee is only for Market Timers. We process all other exchanges without a
fee.
**For the period shown, Investment Counsel had agreed in advance to waive its
management fees and FT Services had agreed to limit its administration fees.
Without these reductions, management fees would have been 0.60%, other expenses
would have been 0.96% and total fund operating expenses would have been 1.89%.
After July 31, 1999, this arrangement may end at any time upon notice to the
Board.
2 Templeton Americas Government Securities Fund
PAGE
***These fees may not exceed 0.35%. The combination of front-end sales charges
and Rule 12b-1 fees could cause long-term shareholders to pay more than the
economic equivalent of the maximum front-end sales charge permitted under the
NASD's rules
****Assumes a Contingent Deferred Sales Charge will not apply.
FINANCIAL HIGHLIGHTS
This table summarizes the fund's financial history. The information has been
audited by McGladrey & Pullen, LLP, the fund's independent auditors. Their audit
report covering the periods shown below appears in the fund's Annual Report to
Shareholders for the fiscal year ended March 31, 1998. The Annual Report to
Shareholders also includes more information about the fund's performance. For a
free copy, please call Fund Information.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------------
1998 1997 1996 1995+
---- ---- ---- ----
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
(For a share outstanding throughout the year)
Net Asset Value, beginning of year................... $ 10.64 $ 10.20 $ 9.59 $ 10.00
--------- -------- --------- -------
Income from investment operations:
Net investment income.............................. .73 .74 .75 .30
Net realized and unrealized gains
(losses)......................................... .68 .85 .71 (.43)
--------- -------- ------ ------
Total from investment operations..................... 1.41 1.59 1.46 (.13)
--------- -------- ------ ------
Less distributions from:
Net investment income.............................. (.72) (.77) (.69) (.28)
Net realized gains................................. (.65) (.38) (.16) --
--------- -------- ------ -------
Total distributions.................................. (1.37) (1.15) (.85) (.28)
--------- -------- ------ ------
Net Asset Value, end of year......................... $ 10.68 $ 10.64 $ 10.20 $ 9.59
========= ======== ========= =========
TOTAL RETURN*........................................ 14.21% 16.23% 15.49% (1.33)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000's)...................... $ 14,973 $5,627 $3,540 $2,826
Ratios to average net assets:
Expenses........................................... 1.25% 1.25% 1.25% 1.25%**
Expenses, excluding waiver and payments
by affiliate..................................... 1.89% 2.79% 4.98% 6.49%**
Net investment income.............................. 7.11% 7.16% 7.47% 5.07%**
Portfolio turnover rate.............................. 70.79% 275.02% 163.57% --
</TABLE>
*Total return does not reflect sales commissions and is not annualized.
**Annualized.
+For the period June 27, 1994 (commencement of operations) to March 31, 1995.
Templeton Americas Government Securities Fund 3
<PAGE>
HOW DOES THE FUND INVEST ITS ASSETS?
WHAT IS THE FUND'S GOAL?
The investment goal of the fund is to provide a high level of current income,
with total return as a secondary goal. This goal is fundamental, which means
that it may not be changed without shareholder approval.
WHAT IS THE FUND'S INVESTMENT STRATEGY?
The fund tries to achieve its investment goal by investing, under normal market
conditions, at least 65% of its total assets in debt securities issued or
guaranteed by Government Entities of Western Hemisphere countries (located in
North, South and Central America and the surrounding waters). Up to 35% of the
fund's total assets may be invested in securities issued by corporations and
financial institutions located in the Western Hemisphere.
The fund will allocate assets based upon Investment Counsel's assessment of
changing market, political and economic conditions. Investment Counsel will
consider various factors, including its evaluation of interest and currency
exchange rate changes and credit risks.
WHAT KINDS OF SECURITIES DOES THE FUND BUY?
DEBT SECURITIES represent an obligation of the issuer to repay a loan of money
to it, and generally, provide for the payment of interest. These include bonds,
notes and debentures; commercial paper; bankers' acceptances; and structured
investments which are described more fully in the SAI.
The fund may buy both rated and unrated debt securities. Independent rating
organizations rate debt securities based upon their assessment of the financial
soundness of the issuer. Generally, a lower rating indicates higher risk.
Non-investment grade securities are those rated lower than BBB by S&P or Baa by
Moody's or, if unrated, determined by the fund to be of comparable quality.
Commonly referred to as "junk bonds", the fund may invest up to 100% of its
total assets in these non-investment grade securities.
INDEXED OR CURRENCY-LINKED SECURITIES. In selecting debt securities, the fund
may include obligations which have been indexed to foreign currency exchange
rates. Indexed obligations generally provide that at maturity the principal
amount is adjusted up or down (but not below zero) to reflect fluctuations in
the exchange rate between two
4 Templeton Americas Government Securities Fund
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currencies during the period the obligation was outstanding. In selecting the
two currencies, Investment Counsel will consider the correlation and relative
yields of various currencies.
Investments in indexed securities are subject to the risk of loss in the event
that exchange rate movements are not accurately predicted.
BRADY BONDS. The Fund may invest a portion of its assets in certain debt
securities referred to as "Brady Bonds." These are public-issue bonds of
developing countries that are created through an exchange of existing commercial
bank loans to sovereign entities for new obligations in connection with a debt
restructuring plan introduced by former U.S. Treasury Secretary, Nicholas F.
Brady (the "Brady Plan"). Brady Plan debt restructurings have been implemented
in a number of countries to date including Argentina, Brazil, Bulgaria, Costa
Rica, Croatia, the Dominican Republic, Ecuador, Ivory Coast, Jordan, the former
Yugoslav Republic of Macedonia, Mexico, Nigeria, Panama, Peru, the Philippines,
Poland, Russia, Slovenia, Uruguay, Venezuela, and Vietnam (collectively, the
"Brady Countries").
Brady Bonds, if collateralized, are done so by U.S. Treasury zero coupon bonds
to ensure principal. Since many of the Brady Bonds have been issued relatively
recently, they do not have a long payment history.
In light of the residual risk of Brady Bonds and, among other factors, the
history of defaults with respect to commercial bank loans by public and private
entities of countries issuing Brady Bonds, investments in Brady Bonds are
generally considered speculative. In addition, many Brady Bonds currently are
rated below investment grade. Investments in Brady Bonds are subject to the
fund's operating policy of not investing more than 5% of its total assets in
non-investment grade debt securities.
OTHER DEBT SECURITIES OF GOVERNMENT ENTITIES. The fund may invest in
restructured external debt that has not undergone a Brady-style debt exchange,
and internal government debt such as Mexican Treasury Bills known as
Certificados de Tesoreria ("CETES"), Argentine Bonos del Tesors ("BOTE") and
Bonos de Inversion y Crecimiento-Quinta Serie ("BIC V"), and Venezuelan zero
coupon notes.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The fund may invest without limit
in mortgage-backed securities issued or guaranteed by Government Entities. It
may invest up to 35% of its total assets in privately issued mortgage-backed and
asset-backed securities.
Mortgage-backed securities represent an ownership interest in mortgage loans
made by banks and other financial institutions to finance purchases of homes,
commercial
Templeton Americas Government Securities Fund 5
PAGE
buildings or other real estate. These mortgage loans may have either fixed or
adjustable interest rates. The individual mortgage loans are packaged or
"pooled" together for sale to investors. As the underlying mortgage loans are
paid off, investors receive principal and interest payments.
The fund will focus on mortgage-backed securities issued or guaranteed by the
U.S. government, its agencies or instrumentalities. The payment of interest and
principal on securities issued by U.S. government agencies generally is
guaranteed either by the full faith and credit of the U.S. government or by the
credit of the agency. The guarantee applies only to the timely repayment of
principal and interest and not to the market prices and yields of the securities
or to the Net Asset Value or performance of the fund, which will vary with
changes in interest rates and other market conditions. The fund may also invest
in collateralized mortgage obligations, which are described in the SAI.
ASSET-BACKED SECURITIES are securities backed by credit card receivables,
automobile, mobile home and recreational vehicle loans and leases, and other
receivables.
DERIVATIVE MORTGAGE-BACKED SECURITIES. The fund may invest up to 25% of its
total assets in these securities consisting primarily (but not exclusively) of
stripped mortgage-backed securities. A stripped mortgage-backed security is
usually structured with two classes, each receiving different proportions of the
interest and principal payments on a pool of mortgage assets. Typically, one
class will receive some of the interest and most of the principal from the
mortgage assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the interest-only or "IO" class), while the other class will
receive all of the principal (the principal-only or "PO" class). The fund may
combine IOs with LIBOR-based inverse floaters (LIBOR being the London interbank
offered rate). These are floating rate instruments with floating or variable
interest rates that move in the opposite direction, usually at an accelerated
speed, to changes in LIBOR.
GENERAL. The fund may invest in any industry although it will not concentrate
(invest more than 25% of its total assets) in any one industry. The fund may
invest up to 15% of its total assets in illiquid securities, including up to 10%
of its total assets in restricted securities. Illiquid securities are generally
securities that cannot be sold within seven days in the normal course of
business at approximately the amount at which the fund has valued them.
Restricted securities are generally securities that are subject to restrictions
on their transfer.
Please see the SAI for more details on the types of securities in which the fund
invests.
6 Templeton Americas Government Securities Fund
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WHAT ARE SOME OF THE FUND'S OTHER INVESTMENT STRATEGIES AND PRACTICES?
TEMPORARY INVESTMENTS. When Investment Counsel believes that the securities
trading markets or the economy are experiencing excessive volatility or a
prolonged general decline, or other adverse conditions exist, for example, it
may invest the fund's portfolio in a temporary defensive manner.
Under such circumstances, the fund may invest up to 100% of its total assets in
money market securities denominated in the currency of any nation. These may
include:
/bullet/ short-term (maturities of less than 12 months) and medium-term
(maturities up to 5 years) securities issued or guaranteed by the U.S.
or a foreign government, their agencies or instrumentalities;
/bullet/ finance company and corporate commercial paper, and other short-term
corporate obligations, rated A by S&P or Prime-1 by Moody's or, if
unrated, determined by the fund to be of comparable quality;
/bullet/ bank obligations (including CDs, time deposits and bankers'
acceptances); and
/bullet/ repurchase agreements with banks and broker-dealers.
REPURCHASE AGREEMENTS. The fund will generally have a portion of its assets in
cash or cash equivalents for a variety of reasons including waiting for a
special investment opportunity or taking a defensive position. To earn income on
this portion of its assets, the fund may enter into repurchase agreements with
certain banks and broker-dealers. Under a repurchase agreement, the fund agrees
to buy a U.S. government security from one of these issuers and then to sell the
security back to the issuer after a short period of time (generally, less than
seven days) at a higher price. The bank or broker-dealer must transfer to the
fund's custodian securities with an initial value of at least 102% of the dollar
amount invested by the fund in each repurchase agreement.
OPTIONS ON SECURITIES AND SECURITIES INDICES. The fund may buy and sell options
on securities and securities indices to earn additional income and/or to help
protect its portfolio against market and/or exchange rate movements, although it
presently has no intention of doing so. An option on a security is a contract
that allows the buyer of the option the right to buy or sell a specific security
at a stated price during the option's term. An option on a securities index is a
contract that allows the buyer of the option the right to receive from the
seller cash, in an amount equal to the difference between the index's closing
price and the option's exercise price. The fund will limit the sale of options
on its securities to 15% or less of its total assets. The fund may only buy
options if the total premiums it paid for such options is 5% or less of its
total assets.
Templeton Americas Government Securities Fund 7
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FOREIGN CURRENCY EXCHANGE TRANSACTIONS. Because the fund may buy securities
which are valued in currencies other than the U.S. dollar, it may take steps to
help protect its portfolio against adverse changes in foreign currency exchange
rates. To do this, the fund may (1) buy and sell foreign currency at the
prevailing rate in the foreign currency exchange market; (2) enter into forward
foreign currency contracts which are agreements to buy or sell a specific
currency at a set price on a future date (generally within one year); and (3)
buy and sell put and call options on foreign currencies.
FUTURES CONTRACTS. Changes in interest rates, securities prices or foreign
currency valuations may affect the value of the fund's investments. To reduce
its exposure to these factors, the fund may buy and sell financial futures
contracts, stock and bond index futures contracts, foreign currency futures
contracts and options on any of these contracts. A financial futures contract is
an agreement to buy or sell a specific security or commodity at a specified
future date and price. An index futures contract is an agreement to take or make
delivery of an amount of cash based on the difference between the value of the
index at the beginning and end of the contract period. A foreign currency
futures contract is an agreement to buy or sell a specific amount of a currency
for a set price on a future date. The fund may not commit more than 5% of its
total assets to initial margin deposits on futures contracts and related
options.
SECURITIES LENDING. To generate additional income, the fund may lend its
portfolio securities to qualified securities dealers or other institutional
investors. Such loans may not exceed 33 1/3% of the value of the fund's total
assets measured at the time of the most recent loan. For each loan the fund must
receive in return collateral with a value at least equal to 100% of the current
market value of the loaned securities.
SHORT-TERM TRADING AND PORTFOLIO TURNOVER. The fund anticipates that its annual
portfolio turnover rate generally will not exceed 300%, although this rate may
be higher or lower, in relation to market conditions. The fund's portfolio
turnover rate was 70.79% for the fiscal year ended March 31, 1998 and 275.02%
for the fiscal year ended March 31, 1997. The higher portfolio turnover rate for
the fiscal year ended March 31, 1997 was due to the emerging market debt of the
Latin American countries in which the fund was invested experiencing rate
volatility, as a result of its sensitivity to U.S. Treasury price movements
during this period. In response, Investment Counsel adjusted the overall
duration of the fund's portfolio which resulted in a high turnover rate. High
portfolio turnover increases transaction costs and may increase the amount of
the fund's short-term capital gain, which is taxed as ordinary income when
distributed to shareholders.
8 Templeton Americas Government Securities Fund
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DIVERSIFICATION. Diversification involves limiting the amount of money invested
in any one issuer to help spread and reduce the risks of investment.
Non-diversified funds may invest a greater portion of their assets in the
securities of one issuer than diversified funds. Economic, business, political
or other changes can affect all securities of a similar type. A non-diversified
fund may be more sensitive to these changes. The fund is a non-diversified fund
although it intends to meet certain diversification requirements for tax
purposes.
OTHER POLICIES AND RESTRICTIONS. The fund has a number of additional investment
policies and restrictions that govern its activities. Those that are identified
as "fundamental" may only be changed with shareholder approval. The others may
be changed by the Board alone. For a list of these restrictions and more
information about the fund's investment policies, including those described
above, please see "How Do the Funds Invest Their Assets?" and "Investment
Restrictions" in the SAI.
Generally, the policies and restrictions discussed in this prospectus and in the
SAI apply when the fund makes an investment. In most cases, the fund is not
required to sell a security because circumstances change and the security no
longer meets one or more of the fund's policies or restrictions.
WHAT ARE THE RISKS OF INVESTING IN THE FUND?
GENERAL RISK. There is no assurance that the fund's investment goal will be met.
The fund will seek to spread investment risk by diversifying its investments but
the possibility of losses remains. Generally, if the securities owned by the
fund increase in value, the value of the shares of the fund which you own will
increase. Similarly, if the securities owned by the fund decrease in value, the
value of your shares will also decline. In this way, you participate in any
change in the value of the securities owned by the fund.
SOVEREIGN DEBT RISK. The debt securities issued or guaranteed by Latin American
Governmental Entities involve great risk and are considered to be of comparable
quality to high risk, low rated securities and are subject to many of the same
risks as those securities.
Developing market countries, including those in Latin America, are among the
world's largest debtors to commercial banks, other governments, international
financial organizations and other financial institutions. In the past, they
experienced major difficulties in servicing their external debt obligations,
which led to defaults on certain obligations and the restructuring of certain
debt. Many of the same factors that led to the defaults
Templeton Americas Government Securities Fund 9
PAGE
of the past currently exist. If a default occurs, the fund may have limited
legal recourse against the issuer and guarantor.
FOREIGN SECURITIES RISK. The value of foreign (and U.S.) securities is affected
by general economic conditions and individual company and industry earnings
prospects. While foreign securities may offer significant opportunities for
gain, they also involve additional risks that can increase the potential for
losses in the fund. These risks can be significantly greater for investments in
emerging markets. Investments in Depositary Receipts also involve some or all of
the risks described below.
The political, economic and social structures of some countries in which the
fund invests may be less stable and more volatile than those in the U.S. The
risks of investing in these countries include the possibility of the imposition
of exchange controls, expropriation, restrictions on removal of currency or
other assets, nationalization of assets, and punitive taxes.
There may be less publicly available information about a foreign company or
government than about a U.S. company or public entity. Certain countries'
financial markets and services are less developed than those in the U.S. or
other major economies. As a result, they may not have uniform accounting,
auditing and financial reporting standards and may have less government
supervision of financial markets. Foreign securities markets may have
substantially lower trading volumes than U.S. markets, resulting in less
liquidity and more volatility than experienced in the U.S. Transaction costs on
foreign securities markets are generally higher than in the U.S. The settlement
practices may be cumbersome and result in delays that may affect portfolio
liquidity. The fund may have greater difficulty voting proxies, exercising
shareholder rights, pursuing legal remedies and obtaining judgments with respect
to foreign investments in foreign courts than with respect to domestic issuers
in U.S. courts.
Investments in developing or emerging markets are subject to all of the risks of
foreign investing generally, and have additional and heightened risks due to a
lack of legal, business and social frameworks to support securities markets.
Emerging markets involve additional significant risks, including political and
social uncertainty (for example, regional conflicts and risk of war), currency
exchange rate volatility, pervasiveness of corruption and crime, delays in
settling portfolio transactions and risk of loss arising out of the system of
share registration and custody. The fund may invest up to 100% of its total
assets in emerging markets. For more information on the risks associated with
emerging markets securities, please see the SAI.
INTEREST RATE RISK is the risk that changes in interest rates can reduce the
value of a security. When interest rates rise, fixed-income security prices
fall. The opposite is also
10 Templeton Americas Government Securities Fund
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true: fixed-income security prices go up when interest rates fall. To explain
why this is so, assume you hold a security offering a 5% yield. A year later,
interest rates are on the rise and comparable securities are offered with a 6%
yield. With higher-yielding securities available, you would have trouble selling
your 5% security for the price you paid - causing you to lower your asking
price. On the other hand, if interest rates were falling and 4% securities were
being offered, you would be able to sell your 5% security for more than you
paid. Generally, interest rates will rise during times of inflation or a growing
economy, and will fall during an economic slowdown or recession. Securities with
longer maturities usually are more sensitive to interest rate changes than
securities with shorter maturities.
INCOME RISK is the risk that a fund's income will decrease due to falling
interest rates. Since a fund can only distribute what it earns, a fund's
distributions to its shareholders may decline when interest rates fall.
CREDIT RISK IS the possibility that the issuer of a debt security or the
borrower on the underlying mortgage or debt obligation will be unable to make
principal and interest payments in a timely manner and the security will go into
default.
Fixed-income securities rated below investment grade, junk bonds, generally have
more credit risk than higher-rated securities. The risk of default or price
changes due to changes in the issuer's credit quality is greater. Issuers of
lower-rated securities are typically in weaker financial health than issuers of
higher-rated securities, and their ability to make interest payments or repay
principal is less certain. These issuers are also more likely to encounter
financial difficulties and to be materially affected by these difficulties when
they do encounter them. The market price of lower-rated securities may fluctuate
more than higher-rated securities and may decline significantly in periods of
general or regional economic difficulty. Lower-rated securities may also be less
liquid than higher-rated securities.
Based upon the monthly weighted average ratings of debt securities held during
the fund's fiscal year ended March 31, 1998, the fund had 96.5% of its total
assets invested in debt securities that received a rating from Moody's and/or
S&P, and 3.5% of its total assets invested in debt securities that were not so
rated. The fund had the following percentages of its total assets invested in
rated securities: AAA and/or Aaa: 44.1%, BBB and/or Baa: 0.4%, BB+: 0.4%, BB
and/or Ba: 24.9%, and BB-: 10.1%, B+: 19.6%, and B: 0.5%. Included within the
3.5% unrated category are securities that have been determined by Investment
Counsel to be comparable to securities rated BB and/or Ba or below.
Templeton Americas Government Securities Fund 11
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MARKET AND CURRENCY RISK. Market risk is the risk that a security's value will
be reduced by market activity or the results of supply and demand. This is a
basic risk associated with all securities, both domestic and foreign. When there
are more sellers than buyers, prices tend to increase. In addition, the fund's
investments may be denominated in foreign currencies so that changes in foreign
currency exchange rates will affect the value of what the fund owns and thus the
price of its shares. Individual and worldwide securities markets and currency
valuations have both increased and decreased, sometimes very dramatically, in
the past. These changes are likely to occur again in the future at unpredictable
times.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES RISK. The fund's investment in
mortgage-backed securities differs from conventional debt securities because
principal is paid back over the life of the security rather than at maturity.
The fund may receive unscheduled prepayments of principal due to voluntary
prepayments, refinancing or foreclosure on the underlying mortgage loans. During
periods of declining interest rates, the volume of principal prepayments
generally increases as borrowers refinance their mortgages at lower rates. The
fund may be forced to reinvest returned principal at lower interest rates,
reducing the fund's income. For this reason, mortgage-backed securities may be
less effective than other types of securities as a means of "locking in"
long-term interest rates and may have less potential for capital appreciation
during periods of falling interest rates than other investments with similar
maturities. A reduction in the anticipated rate of principal prepayments,
especially during periods of rising interest rates, may increase the effective
maturity of mortgage-backed securities, making them more susceptible than other
debt securities to a decline in market value when interest rates rise. This
could increase the volatility of the fund's returns and share price.
Issuers of asset-backed securities may have limited ability to enforce the
security interest in the underlying assets and credit enhancements provided to
support these securities, if any, may be inadequate to protect investors in the
event of a default. Like mortgage-backed securities, asset-backed securities are
subject to prepayment risk.
DERIVATIVE SECURITIES RISK. Derivative investments are those whose values are
dependent upon the performance of one or more other securities or investments or
indices; in contrast to common stock, for example, whose value is dependent upon
the operations of the issuer. Option transactions, foreign currency exchange
transactions and futures contracts are considered derivative investments. To the
extent a fund enters into these transactions, their success will depend upon
Investment Counsel's ability to predict pertinent market movements. These
securities are subject to the risk that the other party to the transaction may
fail to perform, resulting in losses to the fund.
12 Templeton Americas Government Securities Fund
PAGE
WHO MANAGES THE FUND?
THE BOARD. The Board oversees the management of the fund and elects its
officers. The officers are responsible for the fund's day-to-day operations.
INVESTMENT MANAGER. Investment Counsel manages the fund's assets and makes its
investment decisions. Investment Counsel also performs similar services for
other funds. It is wholly owned by Resources, a publicly owned company engaged
in the financial services industry through its subsidiaries. Charles B. Johnson
and Rupert H. Johnson, Jr. are the principal shareholders of Resources.
Together, Investment Counsel and its affiliates manage over $239 billion in
assets. The Templeton organization has been investing globally since 1940.
Investment Counsel and its affiliates have offices in Argentina, Australia,
Bahamas, Bermuda, Brazil, the British Virgin Islands, Canada, China, Cyprus,
France, Germany, Hong Kong, India, Italy, Japan, Korea, Luxembourg, Mauritius,
the Netherlands, Poland, Russia, Singapore, South Africa, Switzerland, Taiwan,
United Kingdom, U.S. and Vietnam. Please see "Investment Management and Other
Services" and "Miscellaneous Information" in the SAI for information on
securities transactions and a summary of the fund's Code of Ethics.
MANAGEMENT TEAM. The team responsible for the day-to-day management of the
fund's portfolio is: Alexander C. Calvo since 1996, and Thomas J. Dickson since
1996.
Mr. Calvo is currently a portfolio manager for Templeton Global Bond Managers, a
division of Investment Counsel. He holds a BA in political science from
Binghamton University and an MA in international affairs (MALD) from The
Fletcher School of Law and Diplomacy at Tufts University. He also spent three
years in the Ph.D. program in economics at Boston University. Mr. Calvo holds an
Investment Management Certificate from the Investment Management Regulatory
Authority in the United Kingdom. Prior to joining the Templeton organization in
1995, he was an account executive with Fleishman-Hillard, where he served as a
consultant to firms investing in Latin America; and previously was a research
analyst with Zeta Investments.
Mr. Dickson is currently a portfolio manager for several Franklin Templeton
mutual funds. He holds a BS in managerial economics from the University of
California at Davis. Prior to joining the Templeton organization in 1994, Mr.
Dickson worked as a fixed-income analyst and trader for Advisers. Mr. Dickson
currently manages fixed income and currency trading for the Templeton
organization and has country responsibilities for Australia, Canada, Japan and
New Zealand.
MANAGEMENT FEES. During the fiscal year ended March 31, 1998, management fees,
before any advance waiver, totaled 0.60% and operating expenses, before any
advance waiver, totaled 1.89% of the average daily net assets of the fund. Under
an agreement
Templeton Americas Government Securities Fund 13
PAGE
by Investment Counsel to waive its fees, the fund paid no (0.00%) management
fees and paid operating expenses totaling 1.25%. After July 31, 1999, Investment
Counsel may end this arrangement at any time upon notice to the Board. During
the fiscal year ended March 31, 1998, Advisers was the fund's sub-advisor.
During this period, sub-advisory fees, before any advance waiver, totaled 0.25%
of the average daily net assets of the fund. Investment Counsel paid Advisers no
(0.00%) sub-advisory fees. The sub-advisory fee is not a separate expense of the
fund but would have been paid by Investment Counsel if it had received
management fees from the fund.
PORTFOLIO TRANSACTIONS. Investment Counsel tries to obtain the best execution on
all transactions. If Investment Counsel believes more than one broker or dealer
can provide the best execution, it may consider research and related services
and the sale of fund shares, as well as shares of other funds in the Franklin
Templeton Group of Funds, when selecting a broker or dealer. Please see "How Do
the Funds Buy Securities for Their Portfolios?" in the SAI for more information.
ADMINISTRATIVE SERVICES. FT Services provides certain administrative services
and facilities for the Trust. During the fiscal year ended March 31, 1998,
administration fees, before any advance waiver, totaled 0.15% of the average
daily net assets of the fund. Under an agreement by FT Services to limit its
fees, the fund paid administration fees totaling 0.11%. These fees are included
in the amount of total expenses shown above. Please see "Investment Management
and Other Services" in the SAI for more information.
THE RULE 12B-1 PLAN
The fund has a distribution plan or "Rule 12b-1 Plan" under which it may
reimburse Distributors or others for the expenses of activities that are
primarily intended to sell shares of the fund. These expenses may include, among
others, distribution or service fees paid to Securities Dealers or others who
have executed a servicing agreement with the fund, Distributors or its
affiliates; a prorated portion of Distributors' overhead expenses; and the
expenses of printing prospectuses and reports used for sales purposes, and
preparing and distributing sales literature and advertisements.
Payments by the fund under the plan may not exceed 0.35% per year of the fund's
average daily net assets. Expenses not reimbursed in any quarter may be
reimbursed in future quarters or years. This includes expenses not reimbursed
because they exceeded the applicable limit under the plan. As of March 31, 1998,
expenses under the plan that may be reimbursable in future quarters or years
totaled $26,480, or 0.18% of the fund's net assets. During the first year after
certain purchases made without a sales charge, Securities Dealers may not be
14 Templeton Americas Government Securities Fund
PAGE
eligible to receive the Rule 12b-1 fees associated with the purchase. For more
information, please see "The Fund's Underwriter" in the SAI.
HOW TAXATION AFFECTS THE FUND AND ITS SHAREHOLDERS
<TABLE>
<CAPTION>
<S> <C>
TAXATION OF THE FUND'S INVESTMENTS. The fund HOW DOES THE FUND EARN INCOME AND GAINS?
invests your money in the stocks, bonds and other THE FUND EARNS DIVIDENDS AND INTEREST (THE FUND'S "INCOME") ON
securities that are described in the section "How ITS INVESTMENTS. WHEN THE FUND SELLS A SECURITY FOR A PRICE
Does the Fund Invest Its Assets?" Special tax THAT IS HIGHER THAN IT PAID, IT HAS A GAIN. WHEN THE FUND
rules may apply in determining the income and SELLS A SECURITY FOR A PRICE THAT IS LOWER THAN IT PAID, IT
gains that the fund earns on its investments. HAS A LOSS. IF THE FUND HAS HELD THE SECURITY FOR MORE THAN
These rules may, in turn, affect the amount of ONE YEAR, THE GAIN OR LOSS WILL BE A LONG-TERM CAPITAL GAIN OR
distributions that the fund pays to you. These LOSS. IF THE FUND HAS HELD THE SECURITY FOR ONE YEAR OR LESS,
special tax rules are discussed in the SAI. THE GAIN OR LOSS WILL BE A SHORT-TERM CAPITAL GAIN OR LOSS.
THE FUND'S GAINS AND LOSSES ARE NETTED TOGETHER, AND, IF THE
TAXATION OF THE FUNDS. As a series of a regulated FUND HAS A NET GAIN (THE FUND'S "GAINS"), THAT GAIN WILL
investment company, the fund generally pays no GENERALLY BE DISTRIBUTED TO YOU.
federal income tax on the income and gains that
it distributes to you.
</TABLE>
FOREIGN TAXES. Foreign governments may impose taxes on the income and gains from
the fund's investments in foreign stocks and bonds. These taxes will reduce the
amount of the fund's distributions to you, but, depending upon the amount of the
fund's assets that are invested in foreign securities and foreign taxes paid,
may be passed through to you as a foreign tax credit on your income tax return.
The fund may also invest in the securities of foreign companies that are
"passive foreign investment companies" ("PFICs"). These investments in PFICs may
cause the fund to pay income taxes and interest charges. If possible, the fund
will adopt strategies to avoid PFIC taxes and interest charges.
Templeton Americas Government Securities Fund 15
TAXATION OF SHAREHOLDERS.
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTIONS. Distributions from the fund, whether you WHAT IS A DISTRIBUTION?
receive them in cash or in additional shares, are generally AS A SHAREHOLDER, YOU WILL RECEIVE YOUR SHARE
subject to income tax. The fund will send you a statement in OF THE FUND'S INCOME AND GAINS ON ITS
January that reflects the amount of ordinary dividends, INVESTMENTS IN STOCKS, BONDS AND OTHER
capital gain distributions and non-taxable distributions you SECURITIES. THE FUND'S INCOME AND SHORT-TERM
received from the fund in the prior year. This statement CAPITAL GAINS ARE PAID TO YOU AS ORDINARY
will include distributions declared in December and paid to DIVIDENDS. THE FUND'S LONG-TERM CAPITAL GAINS
you in January of the current year, but which are taxable as ARE PAID TO YOU AS CAPITAL GAIN DISTRIBUTIONS.
if paid on December 31 of the prior year. The IRS requires IF THE FUND PAYS YOU AN AMOUNT IN EXCESS OF ITS
you to report these amounts on your income tax return for INCOME AND GAINS, THIS EXCESS WILL GENERALLY BE
the prior year. The fund's statement for the prior year will TREATED AS A NON-TAXABLE DISTRIBUTION. THESE
tell you how much of your capital gain distribution AMOUNTS, TAKEN TOGETHER, ARE WHAT WE CALL THE
represents 28% rate gain. The remainder of the capital gain FUND'S DISTRIBUTIONS TO YOU.
distribution represents 20% rate gain.
</TABLE>
DISTRIBUTIONS TO RETIREMENT PLANS. Fund distributions received by your qualified
retirement plan, such as a section 401(k) plan or IRA, are generally
tax-deferred; this means that you are not required to report fund distributions
on your income tax return when paid to your plan, but, rather, when your plan
makes payments to you. Special rules apply to payouts from Roth and Education
IRAs.
DIVIDENDS-RECEIVED DEDUCTION. It is anticipated that no portion of the
fund's distributions will qualify for the corporate dividends-received
deduction.
16 Templeton Americas Government Securities Fund
PAGE
<TABLE>
<CAPTION>
<S> <C>
REDEMPTIONS AND EXCHANGES. If you redeem your shares or if WHAT IS A REDEMPTION?
you exchange your shares in the fund for shares in another A REDEMPTION IS A SALE BY YOU TO THE FUND OF SOME OR ALL
Franklin Templeton Fund, you will generally have a gain or OF YOUR SHARES IN THE FUND. THE PRICE PER SHARE YOU
loss that the IRS requires you to report on your income RECEIVE WHEN YOU REDEEM FUND SHARES MAY BE MORE OR LESS
tax return. If you exchange fund shares held for 90 days THAN THE PRICE AT WHICH YOU PURCHASED THOSE SHARES. AN
or less and pay no sales charge, or a reduced sales EXCHANGE OF SHARES IN THE FUND FOR SHARES OF ANOTHER
charge, for the new shares, all or a portion of the sales FRANKLIN TEMPLETON FUND IS TREATED AS A REDEMPTION OF
charge you paid on the purchase of the shares you FUND SHARES AND THEN A PURCHASE OF SHARES OF THE OTHER
exchanged is not included in their cost for purposes of FUND. WHEN YOU REDEEM OR EXCHANGE YOUR SHARES, YOU WILL
computing gain or loss on the exchange. If you hold your GENERALLY HAVE A GAIN OR LOSS, DEPENDING UPON WHETHER
shares for six months or less, any loss you have will be THE AMOUNT YOU RECEIVE FOR YOUR SHARES IS MORE OR LESS
treated as a long-term capital loss to the extent of any THAN YOUR COST OR OTHER BASIS IN THE SHARES. CALL FUND
capital gain distributions received by you from the fund. INFORMATION FOR A FREE FRANKLIN TEMPLETON TAX
All or a portion of any loss on the redemption or exchange INFORMATION HANDBOOK IF YOU NEED MORE INFORMATION ON
of your shares will be disallowed by the IRS if you CALCULATING THE GAIN OR LOSS ON THE REDEMPTION OR
purchase other shares in the fund within 30 days before or EXCHANGE OF YOUR SHARES.
after your redemption or exchange.
</TABLE>
U.S. GOVERNMENT OBLIGATION INTEREST. Many states grant tax-free status to
dividends paid from interest earned on direct obligations of the U.S.
government, subject to certain restrictions. The fund will provide you with
information at the end of each calendar year on the amount of such dividends
that may qualify for exemption from reporting on your individual income tax
return.
<TABLE>
<CAPTION>
<S> <C>
FOREIGN TAXES. If more than 50% of the value of the fund's assets WHAT IS A FOREIGN TAX CREDIT?
consists of foreign securities, the fund may elect to pass-through A FOREIGN TAX CREDIT IS A TAX CREDIT FOR THE
to you the amount of foreign taxes it paid. If the fund makes this AMOUNT OF TAXES IMPOSED BY A FOREIGN COUNTRY ON
election, your year-end statement will show more taxable income EARNINGS OF THE FUND. WHEN A FOREIGN COMPANY IN
than was actually distributed to you. However, you will be WHICH THE FUND INVESTS PAYS A DIVIDEND TO THE
entitled to either deduct your share of such taxes in computing FUND, THE DIVIDEND WILL GENERALLY BE SUBJECT TO
your taxable income or claim a foreign tax credit for such taxes A WITHHOLDING TAX. THE TAXES WITHHELD IN FOREIGN
against your U.S. federal income tax. Your year-end statement, COUNTRIES CREATE CREDITS THAT YOU MAY USE TO
showing the amount of deduction or credit available to you, will OFFSET YOUR U.S. FEDERAL INCOME TAX.
be distributed to you in January along with other shareholder
information records including your fund's IRS Form 1099-DIV.
</TABLE>
Templeton Americas Government Securities Fund 17
PAGE
The Taxpayer Relief Act of 1997 includes a provision that allows you to claim
these credits directly on your income tax return (IRS Form 1040) and eliminates
the previous requirement that you complete a detailed supporting form. To
qualify, you must have $600 or less in joint return foreign taxes ($300 or less
on a single return), all of which are reported to you on IRS Form 1099-DIV or
qualifies as passive investment-type income if received from other sources.
THIS SIMPLIFIED PROCEDURE IS AVAILABLE BEGINNING WITH CALENDAR YEAR 1998.
NON-U.S. INVESTORS. Ordinary dividends generally will be subject to U.S. income
tax withholding. Your home country may also tax ordinary dividends, capital gain
distributions and gains arising from redemptions or exchanges of your fund
shares. Fund shares held by the estate of a non-U.S. investor may be subject to
U.S. estate tax. You may wish to contact your tax advisor to determine the U.S.
and non-U.S. tax consequences of your investment in the fund. STATE TAXES.
Ordinary dividends and capital gain distributions that you receive from the
fund, and gains arising from redemptions or exchanges of your fund shares, will
generally be subject to state and local income tax. The holding of fund shares
may also be subject to state and local intangibles taxes. You may wish to
contact your tax advisor to determine the state and local tax consequences of
your investment in the fund.
<TABLE>
<CAPTION>
<S> <C>
BACKUP WITHHOLDING. When you open an account, IRS WHAT IS A BACKUP WITHHOLDING?
regulations require that you provide your taxpayer BACKUP WITHHOLDING OCCURS WHEN THE FUND IS REQUIRED
identification number ("TIN"), certify that it is correct, TO WITHHOLD AND PAY OVER TO THE IRS 31% OF YOUR
and certify that you are not subject to backup withholding DISTRIBUTIONS AND REDEMPTION PROCEEDS. YOU CAN
under IRS rules. If you fail to provide a correct TIN or the AVOID BACKUP WITHHOLDING BY PROVIDING THE FUND WITH
proper tax certifications, the fund is required to withhold YOUR TIN, AND BY COMPLETING THE TAX CERTIFICATIONS
31% of all the distributions (including ordinary dividends ON YOUR SHAREHOLDER APPLICATION THAT YOU WERE ASKED
and capital gain distributions), and redemption proceeds TO SIGN WHEN YOU OPENED YOUR ACCOUNT. HOWEVER, IF
paid to you. The fund is also required to begin backup THE IRS INSTRUCTS THE FUND TO BEGIN BACKUP
withholding on your account if the IRS instructs the fund to WITHHOLDING, IT IS REQUIRED TO DO SO EVEN IF YOU
do so. The fund reserves the right not to open your account, PROVIDED THE FUND WITH YOUR TIN AND THESE TAX
or, alternatively, to redeem your shares at the current net CERTIFICATIONS, AND BACKUP WITHHOLDING WILL REMAIN
asset value, less any taxes withheld, if you fail to provide IN PLACE UNTIL THE FUND IS INSTRUCTED BY THE IRS
a correct TIN, fail to provide the proper tax THAT IT IS NO LONGER REQUIRED.
certifications, or the IRS instructs the fund to begin
backup withholding on your account.
</TABLE>
18 Templeton Americas Government Securities Fund
PAGE
THIS TAX DISCUSSION IS FOR GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL OR
FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE FUND. A MORE COMPLETE
DISCUSSION OF THESE RULES AND RELATED MATTERS IS CONTAINED IN THE SECTION
ENTITLED "ADDITIONAL INFORMATION ON DISTRIBUTIONS AND TAXES" IN THE SAI. THE TAX
TREATMENT TO YOU OF DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, FOREIGN TAXES PAID
AND INCOME TAXES WITHHELD IS ALSO DISCUSSED IN A FREE FRANKLIN TEMPLETON TAX
INFORMATION HANDBOOK, WHICH YOU MAY REQUEST BY CONTACTING FUND INFORMATION.
HOW IS THE TRUST ORGANIZED?
The fund is a non-diversified series of the Trust, an open-end management
investment company, commonly called a mutual fund. The Trust was organized as a
Delaware business trust on December 21, 1993, and is registered with the SEC.
Shares of each series of the Trust have equal and exclusive rights to dividends
and distributions declared by that series and the net assets of the series in
the event of liquidation or dissolution. Shares of the fund are considered Class
I shares for redemption, exchange and other purposes. Additional series and
classes of shares may be offered in the future.
Shares of each class of a series have the same voting and other rights and
preferences as the other classes and series of the Trust for matters that affect
the Trust as a whole.
The Trust has noncumulative voting rights. This gives holders of more than 50%
of the shares voting the ability to elect all of the members of the Board. If
this happens, holders of the remaining shares voting will not be able to elect
anyone to the Board.
The Trust does not intend to hold annual shareholder meetings. The Trust or a
series of the Trust may hold special meetings, however, for matters requiring
shareholder approval. A meeting may also be called by the Board in its
discretion or for the purpose of considering the removal of a Board member if
requested in writing to do so by shareholders holding at least 10% of the
outstanding shares. In certain circumstances, we are required to help you
communicate with other shareholders about the removal of a Board member.
Templeton Americas Government Securities Fund 19
PAGE
ABOUT YOUR ACCOUNT
HOW DO I BUY SHARES?
OPENING YOUR ACCOUNT
To open your account, please follow the steps below. This will help avoid any
delays in processing your request.
1. Read this prospectus carefully.
2. Determine how much you would like to invest. The fund's minimum investments
are:
/bullet/ To open a regular, non-retirement account $1,000
/bullet/ To open an IRA, IRA Rollover, Roth IRA,
or Education IRA $ 250*
/bullet/ To open a custodial account for a minor
(an UGMA/UTMA account) $ 100
/bullet/ To open an account with an automatic
investment plan $ 50**
/bullet/ To add to an account $ 50***
*For all other retirement accounts, there is no minimum investment
requirement.
**$25 for an Education IRA.
***For all retirement accounts except IRAs, IRA Rollovers, Roth IRAs, or
Education IRAs, there is no minimum to add to an account.
We reserve the right to change the amount of these minimums from time
to time or to waive or lower these minimums for certain purchases. We
also reserve the right to refuse any order to buy shares.
3. Carefully complete and sign the enclosed shareholder application,
including the optional shareholder privileges section. By applying for
privileges now, you can avoid the delay and inconvenience of having to
send an additional application to add privileges later. It is important
that we receive a signed application since we will not be able to
process any redemptions from your account until we receive your signed
application.
20 Templeton Americas Government Securities Fund
PAGE
4. Make your investment using the table below.
- -------------------------------------- ----------------------------------------
METHOD STEPS TO FOLLOW
- -------------------------------------- ---------------------------------------
BY MAIL For an initial investment:
Return the application to the fund
with your check made payable to the
fund.
For additional investments:
Send a check made payable to the
fund. Please include your account
number on the check.
- -------------------------------------- ----------------------------------------
BY WIRE 1. Call Shareholder Services or, if that
number is busy, call 1-650/312-2000
collect, to receive a wire control
number and wire instructions. You
need a new wire control number every
time you wire money into your
account.If you do not have a currently
effective wire control number, we will
return the money to the bank, and we
will not credit the purchase to your
account.
2. For an initial investment you must
also return your signed shareholder
application to the fund.
IMPORTANT DEADLINES: If we receive your
call before 4:00 p.m. Eastern time and
the bank receives the wired funds and
reports the receipt of wired funds to
the fund by 6:00 p.m. Eastern time, we
will credit the purchase to your account
that day. If we receive your call after
4:00 p.m. or the bank receives the wire
after 6:00 p.m., we will credit the
purchase to your account the following
business day.
- -------------------------------------- ----------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -------------------------------------- ----------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
IF YOU QUALIFY TO BUY SHARES UNDER ONE OF THE SALES CHARGE REDUCTION OR
WAIVER CATEGORIES DESCRIBED BELOW, PLEASE INCLUDE A WRITTEN STATEMENT WITH
EACH PURCHASE ORDER EXPLAINING WHICH PRIVILEGE APPLIES. If you don't
include this statement, we cannot guarantee that you will receive the sales
charge reduction or waiver.
Templeton Americas Government Securities Fund 21
PAGE
QUANTITY DISCOUNTS. The sales charge you pay depends on the dollar amount you
invest, as shown in the table below.
<TABLE>
<CAPTION>
TOTAL SALES CHARGE AMOUNT PAID TO
AS A PERCENTAGE OF DEALER AS A
---------------------------
AMOUNT OF PURCHASE OFFERING NET AMOUNT PERCENTAGE OF
AT OFFERING PRICE PRICE INVESTED OFFERING PRICE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Under $100,000 4.25% 4.44% 4.00%
$100,000 but less than $250,000 3.50% 3.63% 3.25%
$250,000 but less than $500,000 2.75% 2.83% 2.50%
$500,000 but less than $1,000,000 2.15% 2.20% 2.00%
$1,000,000 or more* None None None
</TABLE>
*If you invest $1 million or more, a Contingent Deferred Sales Charge may be
imposed on an early redemption. Please see "How Do I Sell Shares? - Contingent
Deferred Sales Charge." Please also see "Other Payments to Securities Dealers"
below for a discussion of payments Distributors may make out of its own
resources to Securities Dealers for certain purchases.
CUMULATIVE QUANTITY DISCOUNTS. To determine if you may pay a reduced sales
charge, the amount of your current purchase is added to the cost or current
value, whichever is higher, of your existing shares in the Franklin Templeton
Funds, as well as those of your spouse, children under the age of 21 and
grandchildren under the age of 21. If you are the sole owner of a company, you
may also add any company accounts, including retirement plan accounts. Companies
with one or more retirement plans may add together the total plan assets
invested in the Franklin Templeton Funds to determine the sales charge that
applies.
LETTER OF INTENT. You may buy shares at a reduced sales charge by completing the
Letter of Intent section of the shareholder application. A Letter of Intent is a
commitment by you to invest a specified dollar amount during a 13 month period.
The amount you agree to invest determines the sales charge you pay.
BY COMPLETING THE LETTER OF INTENT SECTION OF THE SHAREHOLDER APPLICATION, YOU
ACKNOWLEDGE AND AGREE TO THE FOLLOWING:
/bullet/ You authorize Distributors to reserve 5% of your total intended
purchase in fund shares registered in your name until you fulfill your
Letter.
/bullet/ You give Distributors a security interest in the reserved shares and
appoint Distributors as attorney-in-fact.
/bullet/ Distributors may sell any or all of the reserved shares t cover any
additional sales charge if you do not fulfill the terms of the Letter.
/bullet/ Although you may exchange your shares, you may not sell reserved
shares until you complete the Letter or pay the higher sales charge.
22 Templeton Americas Government Securities Fund
PAGE
Your periodic statements will include the reserved shares in the total shares
you own. We will pay or reinvest dividend and capital gain distributions on the
reserved shares as you direct. Our policy of reserving shares does not apply to
certain retirement plans.
If you would like more information about the Letter of Intent privilege, please
see "How Do I Buy, Sell and Exchange Shares? - Letter of Intent" in the SAI or
call Shareholder Services.
GROUP PURCHASES. If you are a member of a qualified group, you may buy fund
shares at a reduced sales charge that applies to the group as a whole. The sales
charge is based on the combined dollar value of the group members' existing
investments, plus the amount of the current purchase.
A qualified group is one that:
/bullet/ Was formed at least six months ago,
/bullet/ Has a purpose other than buying fund shares at a discount,
/bullet/ Has more than 10 members,
/bullet/ Can arrange for meetings between our representatives and group
members,
/bullet/ Agrees to include Franklin Templeton Fund sales and other materials in
publications and mailings to its members at reduced or no cost to
Distributors,
/bullet/ Agrees to arrange for payroll deduction or other bulk transmission of
investments to the fund, and
/bullet/ Meets other uniform criteria that allow Distributors to achieve cost
savings in distributing shares.
A qualified group does not include a 403(b) plan that only allows salary
deferral contributions. 403(b) plans that only allow salary deferral
contributions and that purchased shares of the fund at a reduced sales charge
under the group purchase privilege before February 1, 1998, however, may
continue to do so.
SALES CHARGE WAIVERS. If one of the following sales charge waivers applies to
you or your purchase of fund shares, you may buy shares of the fund without a
front-end sales charge or a Contingent Deferred Sales Charge.
Certain distributions, payments or redemption proceeds that you receive may be
used to buy shares of the fund without a sales charge if you reinvest them
within 365 days of their payment or redemption date. They include:
1. Dividend and capital gain distributions from any Franklin Templeton
Templeton Americas Government Securities Fund 23
PAGE
Fund. The distributions generally must be reinvested in the SAME CLASS
of shares. Certain exceptions apply, however, to Class II shareholders
of another Franklin Templeton Fund who chose to reinvest their
distributions in the fund before November 17, 1997, and to Advisor
Class or Class Z shareholders of a Franklin Templeton Fund who may
reinvest their distributions in the fund.
2. Redemption proceeds from the sale of shares of any Franklin Templeton
Fund if you originally paid a sales charge on the shares and you
reinvest the money in the SAME CLASS of shares. This waiver does not
apply to exchanges.
If you paid a Contingent Deferred Sales Charge when you redeemed your
shares from a Franklin Templeton Fund, a Contingent Deferred Sales
Charge will apply to your purchase of fund shares and a new Contingency
Period will begin. We will, however, credit your fund account with
additional shares based on the Contingent Deferred Sales Charge you
paid and the amount of redemption proceeds that you reinvest.
If you immediately placed your redemption proceeds in a Franklin Bank
CD, you may reinvest them as described above. The proceeds must be
reinvested within 365 days from the date the CD matures, including any
rollover.
3. Dividend or capital gain distributions from a real estate investment
trust (REIT) sponsored or advised by Franklin Properties, Inc.
4. Annuity payments received under either an annuity option or from death
benefit proceeds, only if the annuity contract offers as an investment
option the Franklin Valuemark Funds or the Templeton Variable Products
Series Fund. You should contact your tax advisor for information on any
tax consequences that may apply.
5. Redemption proceeds from a repurchase of shares of Franklin Floating
Rate Trust, if the shares were continuously held for at least 12
months.
If you immediately placed your redemption proceeds in a Franklin Bank
CD or a Franklin Templeton money fund, you may reinvest them as
described above. The proceeds must be reinvested within 365 days from
the date the CD matures, including any rollover, or the date you redeem
your money fund shares.
6. Redemption proceeds from the sale of Class A shares of any of the
Templeton Global Strategy Funds if you are a qualified investor.
If you paid a contingent deferred sales charge when you redeemed your
Class A shares from a Templeton Global Strategy Fund, a Contingent
24 Templeton Americas Government Securities Fund
PAGE
Deferred Sales Charge will apply to your purchase of fund shares and a
new Contingency Period will begin. We will, however, credit your fund
account with additional shares based on the contingent deferred sales
charge you paid and the amount of the redemption proceeds that you
reinvest.
If you immediately placed your redemption proceeds in a Franklin
Templeton money fund, you may reinvest them as described above. The
proceeds must be reinvested within 365 days from the date they are
redeemed from the money fund.
7. Distributions from an existing retirement plan invested in the
Franklin Templeton Funds
Various individuals and institutions also may buy shares of the fund without a
front-end sales charge or Contingent Deferred Sales Charge, including:
1. Trust companies and bank trust departments agreeing to invest in
Franklin Templeton Funds over a 13 month period at least $1 million of
assets held in a fiduciary, agency, advisory, custodial or similar
capacity and over which the trust companies and bank trust departments
or other plan fiduciaries or participants, in the case of certain
retirement plans, have full or shared investment discretion. We will
accept orders for these accounts by mail accompanied by a check or by
telephone or other means of electronic data transfer directly from the
bank or trust company, with payment by federal funds received by the
close of business on the next business day following the order.
2. An Eligible Governmental Authority. Please consult your legal and
investment advisors to determine if an investment in the fund is
permissible and suitable for you and the effect, if any, of payments by
the fund on arbitrage rebate calculations.
3. Broker-dealers, registered investment advisors or certified financial
planners who have entered into an agreement with Distributors for
clients participating in comprehensive fee programs. The minimum
initial investment is $250.
4. Qualified registered investment advisors who buy through a
broker-dealer or service agent who has entered into an agreement with
Distributors
5. Registered Securities Dealers and their affiliates, for their
investment accounts only
6. Current employees of Securities Dealers and their affiliates and their
family members, as allowed by the internal policies of their employer
7. Officers, trustees, directors and full-time employees of the Franklin
Templeton Funds or the Franklin Templeton Group, and their family
members, consistent with our then-current policies. The minimum initial
investment is $100.
Templeton Americas Government Securities Fund 25
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8. Investment companies exchanging shares or selling assets pursuant to a
merger, acquisition or exchange offer
9. Accounts managed by the Franklin Templeton Group
10. Certain unit investment trusts and their holders reinvesting
distributions from the trusts
11. Group annuity separate accounts offered to retirement plans
12. Chilean retirement plans that meet the requirements described under
"Retirement Plans" below
RETIREMENT PLANS. Retirement plans that (i) are sponsored by an employer with at
least 100 employees, or (ii) have plan assets of $1 million or more, or (iii)
agree to invest at least $500,000 in the Franklin Templeton Funds over a 13
month period may buy shares without a front-end sales charge. Retirement plans
that are not Qualified Retirement Plans, SIMPLEs or SEPs must also meet the
requirements described under "Group Purchases" above to be able to buy shares
without a front-end sales charge. We may enter into a special arrangement with a
Securities Dealer, based on criteria established by the fund, to add together
certain small Qualified Retirement Plan accounts for the purpose of meeting
these requirements.
For retirement plan accounts opened on or after May 1, 1997, a Contingent
Deferred Sales Charge may apply if the retirement plan is transferred out of the
Franklin Templeton Funds or terminated within 365 days of the retirement plan
account's initial purchase in the Franklin Templeton Funds. Please see "How Do I
Sell Shares? Contingent Deferred Sales Charge" for details.
Any retirement plan that does not meet the requirements to buy shares without a
front-end sales charge and that was a shareholder of the fund on or before
February 1, 1995, may buy shares of the fund subject to a maximum sales charge
of 4% of the Offering Price, 3.2% of which will be retained by Securities
Dealers.
HOW DO I BUY SHARES IN CONNECTION WITH RETIREMENT PLANS?
Your individual or employer-sponsored retirement plan may invest in the fund.
Plan documents are required for all retirement plans. Trust Company can provide
the plan documents for you and serve as custodian or trustee.
Trust Company can provide you with brochures containing important information
about its plans. To establish a Trust Company retirement plan, you will need an
application other than the one included in this prospectus. For a retirement
plan brochure or application, call Retirement Plan Services.
26 Templeton Americas Government Securities Fund
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Please consult your legal, tax or retirement plan specialist before choosing a
retirement plan. Your investment representative or advisor can help you make
investment decisions within your plan.
OTHER PAYMENTS TO SECURITIES DEALERS
The payments described below may be made to Securities Dealers who initiate and
are responsible for certain purchases made without a sales charge. The payments
are subject to the sole discretion of Distributors, and are paid by Distributors
or one of its affiliates and not by the fund or its shareholders.
1. Purchases of $1 million or more - up to 0.75% of the amount invested.
2. Purchases made without a front-end sales charge by certain retirement
plans described under "Sales Charge Reductions and Waivers - Retirement
Plans" above - up to 1% of the amount invested.
3. Purchases by trust companies and bank trust departments, Eligible
Governmental Authorities, and broker-dealers or others on behalf of
clients participating in comprehensive fee programs - up to 0.25% of
the amount invested.
4. Purchases by Chilean retirement plans-up to 1% of the amount invested.
A Securities Dealer may receive only one of these payments for each qualifying
purchase. Securities Dealers who receive payments in connection with investments
described in paragraphs 1 or 4 above or a payment of up to 1% for investments
described in paragraph 2 will be eligible to receive the Rule 12b-1 fee
associated with the purchase starting in the thirteenth calendar month after the
purchase.
FOR BREAKPOINTS THAT MAY APPLY AND INFORMATION ON ADDITIONAL COMPENSATION
PAYABLE TO SECURITIES DEALERS IN CONNECTION WITH THE SALE OF FUND SHARES, PLEASE
SEE "HOW DO I BUY, SELL AND EXCHANGE SHARES? - OTHER PAYMENTS TO SECURITIES
DEALERS" IN THE SAI.
FOR INVESTORS OUTSIDE THE U.S.
The distribution of this prospectus and the offering of fund shares may be
limited in many jurisdictions. An investor who wishes to buy shares of the fund
should determine, or have a broker-dealer determine, the applicable laws and
regulations of the relevant jurisdiction. Investors are responsible for
compliance with tax, currency exchange or other regulations applicable to
redemption and purchase transactions in any jurisdiction to which they may be
subject. Investors should consult appropriate tax and legal advisors to obtain
information on the rules applicable to these transactions.
Templeton Americas Government Securities Fund 27
PAGE
MAY I EXCHANGE SHARES FOR SHARES OF ANOTHER FUND?
We offer a wide variety of funds. If you would like, you can move your
investment from your fund account to an existing or new account in another
Franklin Templeton Fund (an "exchange"). Because it is technically a sale and a
purchase of shares, an exchange is a taxable transaction.
Before making an exchange, please read the prospectus of the fund you are
interested in. This will help you learn about the fund, its investment goal and
policies, and its rules and requirements for exchanges. For example, some
Franklin Templeton Funds do not accept exchanges and others may have different
investment minimums.
METHOD STEPS TO FOLLOW
- -------------------------------------- ---------------------------------------
BY MAIL 1. Send us signed written instructions
2. Include any outstanding share
certificates for the shares you want
to exchange
- -------------------------------------- ---------------------------------------
BY PHONE Call Shareholder Services or TeleFACTS(R)
If you do not want the ability to
exchange by phone to apply to your
account, please let us know.
- -------------------------------------- ---------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -------------------------------------- ---------------------------------------
Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to exchange shares.
WILL SALES CHARGES APPLY TO MY EXCHANGE?
You generally will not pay a front-end sales charge on exchanges. If you have
held your shares less than six months, however, you will pay the percentage
difference between the sales charge you previously paid and the applicable sales
charge of the new fund, if the difference is more than 0.25%. If you have never
paid a sales charge on your shares because, for example, they have always been
held in a money fund, you will pay the fund's applicable sales charge no matter
how long you have held your shares. These charges may not apply if you qualify
to buy shares without a sales charge.
CONTINGENT DEFERRED SALES CHARGE. We will not impose a Contingent Deferred Sales
Charge when you exchange shares. Any shares subject to a Contingent Deferred
Sales Charge at the time of exchange, however, will remain so in the new fund.
For accounts with shares subject to a Contingent Deferred Sales Charge, we will
first exchange any shares in your account that are not subject to the charge. If
there are not enough of these to meet your exchange request, we will exchange
shares subject to the charge in the order they were purchased. If you exchange
shares into one of our money funds,
28 Templeton Americas Government Securities Fund
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the time your shares are held in that fund will not count towards the completion
of any Contingency Period. For more information about the Contingent Deferred
Sales Charge, please see "How Do I Sell Shares?"
EXCHANGE RESTRICTIONS
Please be aware that the following restrictions apply to exchanges:
/bullet/ You must meet the applicable minimum investment amount of the fund
you are exchanging into, or exchange 100% of your fund shares.
/bullet/ You may only exchange shares within the SAME CLASS, except as noted
below.
/bullet/ The accounts must be identically registered. You may, however,
exchange 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."
/bullet/ Trust Company IRA or 403(b) retirement plan accounts may exchange
shares as described above. Restrictions may apply to other types of
retirement plans. Please contact Retirement Plan Services for
information on exchanges within these plans.
/bullet/ The fund you are exchanging into must be eligible for sale in your
state.
/bullet/ We may modify or discontinue our exchange policy if we give you 60
days' written notice.
/bullet/ Your exchange may be restricted or refused if you have: (i) requested
an exchange out of the fund within two weeks of an earlier exchange
request, (ii) exchanged shares out of the fund more than twice in a
calendar quarter, or (iii) exchanged shares equal to at least $5
million, or more than 1% of the fund's net assets. Shares under common
ownership or control are combined for these limits. If you have
exchanged shares as described in this paragraph, you will be
considered a Market Timer. Each exchange by a Market Timer, if
accepted, will be charged $5.00. Some of our funds do not allow
investments by Market Timers.
Because excessive trading can hurt fund performance, operations and
shareholders, we may refuse any exchange purchase if (i) we believe the fund
would be harmed or unable to invest effectively, or (ii) the fund receives or
anticipates simultaneous orders that may significantly affect the fund.
Templeton Americas Government Securities Fund 29
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LIMITED EXCHANGES BETWEEN DIFFERENT CLASSES OF SHARES
Certain funds in the Franklin Templeton Funds offer classes of shares not
offered by the fund, such as "Advisor Class" or "Class Z" shares. Because the
fund does not currently offer an Advisor Class, you may exchange Advisor Class
shares of any Franklin Templeton Fund for shares of the fund at Net Asset Value.
If you do so and you later decide you would like to exchange into a fund that
offers an Advisor Class, you may exchange your fund shares for Advisor Class
shares of that fund. Certain shareholders of Class Z shares of Franklin Mutual
Series Fund Inc. may also exchange their Class Z shares for shares of the fund
at Net Asset Value.
HOW DO I SELL SHARES?
You may sell (redeem) your shares at any time.
METHOD STEPS TO FOLLOW
- -------------------------------------- ---------------------------------------
BY MAIL 1. Send us signed written instructions.
If you would like your redemption
proceeds wired to a bank account,
your instructions should include:
/bullet/ The name, address and
telephone number of the bank
where you want the proceeds
sent
/bullet/ Your bank account number
/bullet/ The Federal Reserve ABA
routing number
/bullet/ If you are using a savings
and loan or credit union,
the name of the corresponding
bank and the account number
2. Include any outstanding share
certificates for the shares you are
selling
3. Provide a signature guarantee if
required
4. Corporate, partnership and trust
accounts may need to send additional
documents. Accounts under court
jurisdiction may have other
requirements.
30 Templeton Americas Government Securities Fund
PAGE
- -------------------------------------- ---------------------------------------
BY PHONE Call Shareholder Services. If you would
like your redemption proceeds wired to a
bank account, other than an escrow
account, you must first sign up for the
wire feature. To sign up, send us written
instructions, with a signature guarantee.
To avoid any delay in processing, the
instructions should include the items
listed in "By Mail" above.
Telephone requests will be accepted:
/bullet/ If the request is $50,000 or
less. Institutional accounts may
exceed $50,000 by completing a
separate agreement. Call
Institutional Services to
receive a copy.
/bullet/ If there are no share
certificates issued for the
shares you want to sell or you
have already returned them to
the fund
/bullet/ Unless you are selling shares
in a Trust Company retirement
plan account
/bullet/ Unless the address on your
account was changed by phone
within the last 15 days
/bullet/ If you do not want the ability
to redeem by phone to apply to
your account, please let us
know.
- -------------------------------------- ----------------------------------------
THROUGH YOUR DEALER Call your investment representative
- -------------------------------------- ---------------------------------------
We will send your redemption check within seven days after we receive your
request in proper form. If you would like the check sent to an address other
than the address of record or made payable to someone other than the registered
owners on the account, send us written instructions signed by all account
owners, with a signature guarantee. We are not able to receive or pay out cash
in the form of currency.
The wiring of redemption proceeds is a special service that we make available
whenever possible for redemption requests of $1,000 or more. If we receive your
request in proper form before 4:00 p.m. Eastern time, your wire payment will be
sent the next business day. For requests received in proper form after 4:00 p.m.
Eastern time, the payment will be sent the second business day. By offering this
service to you, the fund is not bound to meet any redemption request in less
than the seven day period prescribed by law. Neither the fund nor its agents
shall be liable to you or any other person if, for any reason, a redemption
request by wire is not processed as described in this section.
If you sell shares you recently purchased with a check or draft, we may delay
sending you the proceeds until your check or draft has cleared, which may take
seven business days or more. A certified or cashier's check may clear in less
time.
Templeton Americas Government Securities Fund 31
PAGE
Under unusual circumstances, we may suspend redemptions or postpone payment for
more than seven days as permitted by federal securities law.
Please refer to "Transaction Procedures and Special Requirements" for other
important information on how to sell shares.
TRUST COMPANY RETIREMENT PLAN ACCOUNTS
To comply with IRS regulations, you need to complete additional forms before
selling shares in a Trust Company retirement plan account. Tax penalties
generally apply to any distribution from these plans to a participant under age
59 1/2, unless the distribution meets an exception stated in the Code. To obtain
the necessary forms, please call Retirement Plan Services.
CONTINGENT DEFERRED SALES CHARGE
If you did not pay a front-end sales charge because you invested $1 million or
more or agreed to invest $1 million or more under a Letter of Intent, a
Contingent Deferred Sales Charge may apply if you sell all or a part of your
investment within the Contingency Period. Once you have invested $1 million or
more, any additional investments you make without a sales charge may also be
subject to a Contingent Deferred Sales Charge if they are sold within the
Contingency Period. The charge is 1% of the value of the shares sold or the Net
Asset Value at the time of purchase, whichever is less.
Certain retirement plan accounts opened on or after May 1, 1997, and that
qualify to buy shares without a front-end sales charge may also be subject to a
Contingent Deferred Sales Charge if the retirement plan is transferred out of
the Franklin Templeton Funds or terminated within 365 days of the account's
initial purchase in the Franklin Templeton Funds.
We will first redeem any shares in your account that are not subject to the
charge. If there are not enough of these to meet your request, we will redeem
shares subject to the charge in the order they were purchased.
Unless otherwise specified, when you request to sell a stated DOLLAR AMOUNT, we
will redeem additional shares to cover any Contingent Deferred Sales Charge. For
requests to sell a stated NUMBER OF SHARES, we will deduct the amount of the
Contingent Deferred Sales Charge, if any, from the sale proceeds.
WAIVERS. We waive the Contingent Deferred Sales Charge for:
/bullet/ Account fees
/bullet/ Sales of shares purchased without a front-end sales charge by certain
31 Templeton Americas Government Securities Fund
PAGE
retirement plan accounts if (i) the account was opened before May 1,
1997, or (ii) the Securities Dealer of record received a payment from
Distributors of 0.25% or less, or (iii) Distributors did not make any
payment in connection with the purchase, or (iv) the Securities Dealer
of record has entered into a supplemental agreement with Distributors
/bullet/ Redemptions by the fund when an account falls below the minimum
required account size
/bullet/ Redemptions following the death of the shareholder or beneficial owner
/bullet/ Redemptions through a systematic withdrawal plan set up before
February 1, 1995
/bullet/ Redemptions through a systematic withdrawal plan set up on or after
February 1, 1995, at a rate of up to 1% a month of an account's Net
Asset Value. For example, if you maintain an annual balance of $1
million, you can redeem up to $120,000 annually through a systematic
withdrawal plan free of charge.
/bullet/ Distributions from IRAs due to death or disability or upon periodic
distributions based on life expectancy
/bullet/ Returns of excess contributions from employee benefit plans
/bullet/ Redemptions by Trust Company employee benefit plans or employee
benefit plans serviced by ValuSelect(R)
/bullet/ Participant initiated distributions from employee benefit plans or
participant initiated exchanges among investment choices in employee
benefit plans
WHAT DISTRIBUTIONS MIGHT I RECEIVE FROM THE FUND?
The fund intends to pay a monthly dividend representing substantially all of its
net investment income and to distribute at least annually any net realized
capital gains.
Dividend payments are not guaranteed, are subject to the Board's discretion and
may vary with each payment. THE FUND DOES NOT PAY "INTEREST" OR GUARANTEE ANY
FIXED RATE OF RETURN ON AN INVESTMENT IN ITS SHARES.
If you buy shares shortly before the record date, please keep in mind that any
distribution will lower the value of the fund's shares by the amount of the
distribution and you will then receive a portion of the price you paid back in
the form of a taxable distribution.
Templeton Americas Government Securities Fund 33
PAGE
DISTRIBUTION OPTIONS
You may receive your distributions from the fund in any of these ways:
1. BUY ADDITIONAL SHARES OF THE FUND - You may buy additional shares of the fund
(without a sales charge or imposition of a Contingent Deferred Sales Charge) by
reinvesting capital gain distributions, dividend distributions, or both. This is
a convenient way to accumulate additional shares and maintain or increase your
earnings base.
2. BUY SHARES OF OTHER FRANKLIN TEMPLETON FUNDS - You may direct your
distributions to buy the same class of shares of another Franklin Templeton Fund
(without a sales charge or imposition of a Contingent Deferred Sales Charge).
Many shareholders find this a convenient way to diversify their investments.
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive capital gain distributions,
dividend distributions, or both in cash. If you have the money sent to another
person or to a checking account, you may need a signature guarantee.
TO SELECT ONE OF THESE OPTIONS, PLEASE COMPLETE SECTIONS 6 AND 7 OF THE
SHAREHOLDER APPLICATION INCLUDED WITH THIS PROSPECTUS OR TELL YOUR INVESTMENT
REPRESENTATIVE WHICH OPTION YOU PREFER. IF YOU DO NOT SELECT AN OPTION, WE WILL
AUTOMATICALLY REINVEST DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS IN THE FUND. You
may change your distribution option at any time by notifying us by mail or
phone. Please allow at least seven days before the record date for us to process
the new option. For Trust Company retirement plans, special forms are required
to receive distributions in cash.
TRANSACTION PROCEDURES AND SPECIAL REQUIREMENTS
SHARE PRICE
When you buy shares, you pay the Offering Price. This is the Net Asset Value per
share, plus any applicable sales charges. When you sell shares, you receive the
Net Asset Value per share.
The Net Asset Value we use when you buy or sell shares is the one next
calculated after we receive your transaction request in proper form. If you buy
or sell shares through your Securities Dealer, however, we will use the Net
Asset Value next calculated after your Securities Dealer receives your request,
which is promptly transmitted to the fund. Your redemption proceeds will not
earn interest between the time we receive the order from your dealer and the
time we receive any required documents.
34 Templeton Americas Government Securities Fund
PAGE
HOW AND WHEN SHARES ARE PRICED
The fund is open for business each day the NYSE is open. We determine the Net
Asset Value per share as of the close of the NYSE, normally 4:00 p.m. Eastern
time. You can find the prior day's closing Net Asset Value and Offering Price of
the fund in many newspapers.
To calculate Net Asset Value per share, the fund's assets are valued and
totaled, liabilities are subtracted, and the balance, called net assets, is
divided by the number of shares outstanding. The fund's assets are valued as
described under "How Are Fund Shares Valued?" in the SAI.
WRITTEN INSTRUCTIONS
Written instructions must be signed by all registered owners. To avoid any delay
in processing your transaction, they should include:
/bullet/ Your name,
/bullet/ The fund's name,
/bullet/ A description of the request,
/bullet/ For exchanges, the name of the fund you are exchanging into,
/bullet/ Your account number,
/bullet/ The dollar amount or number of shares, and
/bullet/ A telephone number where we may reach you during the day, or in the
evening if preferred.
JOINT ACCOUNTS. For accounts with more than one registered owner, we accept
written instructions signed by only one owner for certain types of transactions
or account changes. These include transactions or account changes that you could
also make by phone, such as certain redemptions of $50,000 or less, exchanges
between identically registered accounts, and changes to the address of record.
For most other types of transactions or changes, written instructions must be
signed by all registered owners.
Please keep in mind that if you have previously told us that you do not want
telephone exchange or redemption privileges on your account, then we can only
accept written instructions to exchange or redeem shares if they are signed by
all registered owners on the account.
Templeton Americas Government Securities Fund 35
PAGE
SIGNATURE GUARANTEES
For our mutual protection, we require a signature guarantee in the following
situations:
1) You wish to sell over $50,000 worth of shares,
2) You want the proceeds to be paid to someone other than the registered
owners,
3) The proceeds are not being sent to the address of record, preauthorized
bank account, or preauthorized brokerage firm account,
4) We receive instructions from an agent, not the registered owners,
5) We believe a signature guarantee would protect us against potential claims
based on the instructions received.
A signature guarantee verifies the authenticity of your signature. You should be
able to obtain a signature guarantee from a bank, broker, credit union, savings
association, clearing agency, or securities exchange or association. A NOTARIZED
SIGNATURE IS NOT SUFFICIENT.
SHARE CERTIFICATES
We will credit your shares to your fund account. We do not issue share
certificates unless you specifically request them. This eliminates the costly
problem of replacing lost, stolen or destroyed certificates. If a certificate is
lost, stolen or destroyed, you may have to pay an insurance premium of up to 2%
of the value of the certificate to replace it.
Any outstanding share certificates must be returned to the fund if you want to
sell or exchange those shares or if you would like to start a systematic
withdrawal plan. The certificates should be properly endorsed. You can do this
either by signing the back of the certificate or by completing a share
assignment form. For your protection, you may prefer to complete a share
assignment form and to send the certificate and assignment form in separate
envelopes.
TELEPHONE TRANSACTIONS
You may initiate many transactions and changes to your account by phone. Please
refer to the sections of this prospectus that discuss the transaction you would
like to make or call Shareholder Services.
When you call, we will request personal or other identifying information to
confirm that instructions are genuine. We may also record calls. If our lines
are busy or you
36 Templeton Americas Government Securities Fund
PAGE
are otherwise unable to reach us by phone, you may wish to ask your investment
representative for assistance or send us written instructions, as described
elsewhere in this prospectus.
For your protection, we may delay a transaction or not implement one if we are
not reasonably satisfied that the instructions are genuine. If this occurs, we
will not be liable for any loss. We also will not be liable for any loss if we
follow instructions by phone that we reasonably believe are genuine or if you
are unable to execute a transaction by phone.
TRUST COMPANY RETIREMENT PLAN ACCOUNTS. We cannot accept instructions to sell
shares or change distribution options on Trust Company retirement plans by
phone. While you may exchange shares of Trust Company IRA and 403(b) retirement
accounts by phone, certain restrictions may be imposed on other retirement
plans.
To obtain any required forms or more information about distribution or transfer
procedures, please call Retirement Plan Services.
ACCOUNT REGISTRATIONS AND REQUIRED DOCUMENTS
When you open an account, we need you to tell us how you want your shares
registered. How you register your account will affect your ownership rights and
ability to make certain transactions. If you have questions about how to
register your account, you should consult your investment representative or
legal advisor. Please keep the following information in mind when registering
your account.
JOINT OWNERSHIP. If you open an account with two or more owners, we register the
account as "joint tenants with rights of survivorship" unless you tell us
otherwise. An account registered as "joint tenants with rights of survivorship"
is shown as "Jt Ten" on your account statement. For any account with two or more
owners, we cannot accept instructions to change owners on the account unless ALL
owners agree in writing, even if the law in your state says otherwise. If you
would like another person or owner to sign for you, please send us a current
power of attorney.
GIFTS AND TRANSFERS TO MINORS. You may set up a custodial account for a minor
under your state's Uniform Gifts/Transfers to Minors Act. Other than this form
of registration, a minor may not be named as an account owner.
TRUSTS. You should register your account as a trust only if you have a valid
written trust document. This avoids future disputes or possible court action
over who owns the account.
Templeton Americas Government Securities Fund 37
PAGE
REQUIRED DOCUMENTS. For corporate, partnership and trust accounts, please send
us the following documents when you open your account. This will help avoid
delays in processing your transactions while we verify who may sign on the
account.
TYPE OF ACCOUNT DOCUMENTS REQUIRED
- ------------------------------- -----------------------------------------------
CORPORATION Corporate Resolution
- ------------------------------- -----------------------------------------------
PARTNERSHIP 1. The pages from the partnership agreement that
identify the general partners, or
2. A certification for a partnership agreement
- ------------------------------- -----------------------------------------------
TRUST 1. The pages from the trust document that
identify the trustees, or
2. A certification for trust
- ------------------------------- -----------------------------------------------
STREET OR NOMINEE ACCOUNTS. If you have fund shares held in a "street" or
"nominee" name account with your Securities Dealer, you may transfer the shares
to the street or nominee name account of another Securities Dealer. Both dealers
must have an agreement with Distributors or we cannot process the transfer.
Contact your Securities Dealer to initiate the transfer. We will process the
transfer after we receive authorization in proper form from your delivering
Securities Dealer. Accounts may be transferred electronically through the NSCC.
For accounts registered in street or nominee name, we may take instructions
directly from the Securities Dealer or your nominee.
IMPORTANT INFORMATION IF YOU HAVE AN INVESTMENT REPRESENTATIVE
If there is a Securities Dealer or other representative of record on your
account, we are authorized: (1) to provide confirmations, account statements and
other information about your account directly to your dealer and/or
representative; and (2) to accept telephone and electronic instructions directly
from your dealer or representative, including instructions to exchange or redeem
your shares. Electronic instructions may be processed through established
electronic trading systems and programs used by the fund. Telephone instructions
directly from your representative will be accepted unless you have told us that
you do not want telephone privileges to apply to your account.
KEEPING YOUR ACCOUNT OPEN
Due to the relatively high cost of maintaining a small account, we may close
your account if the value of your shares is less than $250, or less than $50 for
employee accounts and custodial accounts for minors. We will only do this if the
value of your account fell below this amount because you voluntarily sold your
shares and your account has been inactive (except for the reinvestment of
distributions) for at least six
38 Templeton Americas Government Securities Fund
PAGE
months. Before we close your account, we will notify you and give you 30 days to
increase the value of your account to $1,000, or $100 for employee accounts and
custodial accounts for minors. These minimums do not apply to IRAs and other
retirement plan accounts or to accounts managed by the Franklin Templeton Group.
SERVICES TO HELP YOU MANAGE YOUR ACCOUNT
AUTOMATIC INVESTMENT PLAN
Our automatic investment plan offers a convenient way to invest in the fund.
Under the plan, you can have money transferred automatically from your checking
account to the fund each month to buy additional shares. If you are interested
in this program, please refer to the shareholder application included with this
prospectus or contact your investment representative. The market value of the
fund's shares may fluctuate and a systematic investment plan such as this will
not assure a profit or protect against a loss. You may discontinue the program
at any time by notifying Investor Services by mail or phone.
SYSTEMATIC WITHDRAWAL PLAN
Our systematic withdrawal plan allows you to sell your shares and receive
regular payments from your account on a monthly, quarterly, semiannual or annual
basis. The value of your account must be at least $5,000 and the minimum payment
amount for each withdrawal must be at least $50. For retirement plans subject to
mandatory distribution requirements, the $50 minimum will not apply.
If you would like to establish a systematic withdrawal plan, please complete the
systematic withdrawal plan section of the shareholder application included with
this prospectus and indicate how you would like to receive your payments. You
may choose to direct your payments to buy the same class of shares of another
Franklin Templeton Fund or have the money sent directly to you, to another
person, or to a checking account. Once your plan is established, any
distributions paid by the fund will be automatically reinvested in your account.
You will generally receive your payment by the end of the month in which a
payment is scheduled. When you sell your shares under a systematic withdrawal
plan, it is a taxable transaction.
To avoid paying sales charges on money you plan to withdraw within a short
period of time, you may not want to set up a systematic withdrawal plan if you
plan to buy shares on a regular basis. Shares sold under the plan may also be
subject to a Contingent Deferred Sales Charge. Please see "Contingent Deferred
Sales Charge" under "How Do I Sell Shares?"
Templeton Americas Government Securities Fund 39
PAGE
You may discontinue a systematic withdrawal plan, change the amount and schedule
of withdrawal payments, or suspend one payment by notifying us by mail or by
phone at least seven business days before the end of the month preceding a
scheduled payment. Please see "How Do I Buy, Sell and Exchange Shares? -
Systematic Withdrawal Plan" in the SAI for more information.
TELEFACTS(R)
From a touch-tone phone, you may call our TeleFACTS(R) system (day or night) at
1-800/247-1753 to:
/bullet/ obtain information about your account;
/bullet/ obtain price and performance information about any Franklin Templeton
Fund;
/bullet/ exchange shares (within the same class) between identically registered
Franklin Templeton Class I and Class II accounts; and
/bullet/ request duplicate statements and deposit slips for Franklin Templeton
accounts.
You will need the fund's code number to use TeleFACTS(R). The fund's code number
is 416.
STATEMENTS AND REPORTS TO SHAREHOLDERS
We will send you the following statements and reports on a regular basis:
/bullet/ Confirmation and account statements reflecting transactions in your
account, including additional purchases and dividend reinvestments.
PLEASE VERIFY THE ACCURACY OF YOUR STATEMENTS WHEN YOU RECEIVE THEM.
/bullet/ Financial reports of the fund will be sent every six months. To reduce
fund expenses, we attempt to identify related shareholders within a
household and send only one copy of a report. Call Fund Information if
you would like an additional free copy of the fund's financial
reports.
INSTITUTIONAL ACCOUNTS
Additional methods of buying, selling or exchanging shares of the fund may be
available to institutional accounts. Institutional investors may also be
required to complete an institutional account application. For more information,
call Institutional Services.
AVAILABILITY OF THESE SERVICES
The services above are available to most shareholders. If, however, your shares
are held by a financial institution, in a street name account, or networked
through the NSCC,
40 Templeton Americas Government Securities Fund
PAGE
the fund may not be able to offer these services directly to you. Please contact
your investment representative.
WHAT IF I HAVE QUESTIONS ABOUT MY ACCOUNT?
If you have any questions about your account, you may write to Investor Services
at 100 Fountain Parkway, P.O. Box 33030, St. Petersburg, Florida 33733-8030. The
fund and Distributors are also located at this address. Investment Counsel is
located at 500 East Broward Boulevard, Ft. Lauderdale, Florida 33394-3091.
Advisers is located at 777 Mariners Island Boulevard, San Mateo, California
94403-7777. You may also contact us by phone at one of the numbers listed below.
<TABLE>
<CAPTION>
HOURS OF OPERATION
(EASTERN TIME)
DEPARTMENT NAME TELEPHONE NO. (MONDAY THROUGH FRIDAY)
- --------------- ------------- -----------------------
<S> <C> <C>
Shareholder Services 1-800/632-2301 8:30 a.m. to 8:00 p.m.
Dealer Services 1-800/524-4040 8:30 a.m. to 8:00 p.m.
Fund Information 1-800/DIAL BEN 8:30 a.m. to 11:00 p.m.
(1-800/342-5236) 9:30 a.m. to 5:30 p.m.
(Saturday)
Retirement Plan Services 1-800/527-2020 8:30 a.m. to 8:00 p.m.
Institutional Services 1-800/321-8563 9:00 a.m. to 8:00 p.m.
TDD (hearing impaired) 1-800/851-0637 8:30 a.m. to 8:00 p.m.
</TABLE>
Your phone call may be monitored or recorded to ensure we provide you with high
quality service. You will hear a regular beeping tone if your call is being
recorded.
GLOSSARY
USEFUL TERMS AND DEFINITIONS
ADVISERS - Franklin Advisers, Inc., formerly the fund's sub-advisor
BOARD - The Board of Trustees of the Trust
CD - Certificate of deposit
CLASS I AND CLASS II - Certain funds in the Franklin Templeton Funds offer
multiple classes of shares. The different classes have proportionate interests
in the same portfolio of investment securities. They differ, however, primarily
in their sales charge structures and Rule 12b-1 plans. Because the fund's sales
charge structure and Rule 12b-1 plan are similar to those of Class I shares,
shares of the fund are considered Class I shares for redemption, exchange and
other purposes.
Templeton Americas Government Securities Fund 41
PAGE
CODE - Internal Revenue Code of 1986, as amended
CONTINGENCY PERIOD - The 12 month period during which a Contingent Deferred
Sales Charge may apply. The holding period begins on the day you buy your
shares. For example, if you buy shares on the 18th of the month, they will age
one month on the 18th day of the next month and each following month.
CONTINGENT DEFERRED SALES CHARGE (CDSC) - A sales charge of 1% that may apply if
you sell your shares within the Contingency Period.
DEPOSITARY RECEIPTS - Certificates that give their holders the right to receive
securities (a) of a foreign issuer deposited in a U.S. bank or trust company
(American Depositary Receipts, "ADRs"); or (b) of a foreign or U.S. issuer
deposited in a foreign bank or trust company (Global Depositary Receipts, "GDRs"
or European Depositary Receipts, "EDRs").
DISTRIBUTORS - Franklin/Templeton Distributors, Inc., the fund's principal
underwriter. The SAI lists the officers and Board members who are affiliated
with Distributors. See "Officers and Trustees."
ELIGIBLE GOVERNMENTAL AUTHORITY - Any state or local government or any
instrumentality, department, authority or agency thereof that has determined the
fund is a legally permissible investment and that can only buy shares of the
fund without paying sales charges.
FRANKLIN TEMPLETON FUNDS - The U.S. registered mutual funds in the Franklin
Group of Funds(R) and the Templeton Group of Funds except Franklin Valuemark
Funds, Templeton Capital Accumulator Fund, Inc., and Templeton Variable Products
Series Fund
FRANKLIN TEMPLETON GROUP - Franklin Resources, Inc., a publicly owned holding
company, and its various subsidiaries
FRANKLIN TEMPLETON GROUP OF FUNDS - All U.S. registered investment companies in
the Franklin Group of Funds(R) and the Templeton Group of Funds
FT SERVICES - Franklin Templeton Services, Inc., the fund's administrator
GOVERNMENT ENTITIES - Governments, their agencies and instrumentalities;
government-owned, controlled or sponsored entities (including central banks
located in the Western Hemisphere); entities organized and operated for the
purpose of restructuring the investment characteristics of securities issued by
any of the entities described.
INVESTMENT COUNSEL - The fund's investment manager is Templeton Investment
Counsel, Inc., through its Templeton Global Bond Managers division.
42 Templeton Americas Government Securities Fund
PAGE
INVESTOR SERVICES - Franklin/Templeton Investor Services, Inc., the fund's
shareholder servicing and transfer agent
IRA - Individual retirement account or annuity qualified under section 408 of
the Code
IRS - Internal Revenue Service
LETTER - Letter of Intent
MARKET TIMERS - Market Timers generally include market timing or asset
allocation services, accounts administered so as to buy, sell or exchange shares
based on predetermined market indicators, or any person or group whose
transactions seem to follow a timing pattern or whose transactions include
frequent or large exchanges.
MOODY'S - Moody's Investors Service, Inc.
NASD - National Association of Securities Dealers, Inc.
NET ASSET VALUE (NAV) - The value of a mutual fund is determined by deducting
the fund's liabilities from the total assets of the portfolio. The net asset
value per share is determined by dividing the net asset value of the fund by the
number of shares outstanding.
NSCC - National Securities Clearing Corporation
NYSE - New York Stock Exchange
OFFERING PRICE - The public offering price is based on the Net Asset Value per
share and includes the front-end sales charge. The maximum front-end sales
charge is 4.25%. We calculate the offering price to two decimal places using
standard rounding criteria.
QUALIFIED RETIREMENT PLANS - An employer sponsored pension or profit-sharing
plan that qualifies under section 401 of the Code. Examples include 401(k),
money purchase pension, profit sharing and defined benefit plans.
RESOURCES - Franklin Resources, Inc.
SAI - Statement of Additional Information
S&P - Standard & Poor's Corporation
SEC - U.S. Securities and Exchange Commission
SECURITIES DEALER - A financial institution that, either directly or through
affiliates, has an agreement with Distributors to handle customer orders and
accounts with the fund. This reference is for convenience only and does not
indicate a legal conclusion of capacity.
Templeton Americas Government Securities Fund 43
PAGE
SEP - An employer sponsored simplified employee pension plan established under
section 408(k) of the Code
SIMPLE (SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES) - An employer sponsored
salary deferral plan established under section 408(p) of the Code
TELEFACTS(R) - Franklin Templeton's automated customer servicing system
TRUST COMPANY - Franklin Templeton Trust Company. Trust Company is an affiliate
of Distributors and both are wholly owned subsidiaries of Resources.
WE/OUR/US - Unless the context indicates a different meaning, these terms refer
to the fund and/or Investor Services, Distributors, or other wholly owned
subsidiaries of Resources.
APPENDIX
DESCRIPTION OF RATINGS
CORPORATE BOND RATINGS
MOODY'S
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa - Bonds rated Aa are judged to be high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large, fluctuation of protective elements may be of greater amplitude, or
there may be other elements present that make the long-term risks appear
somewhat larger.
A - Bonds rated A possess many favorable investment attributes and are
considered upper medium-grade obligations. Factors giving security to principal
and interest are considered adequate, but elements may be present that suggest a
susceptibility to impairment sometime in the future.
Baa - Bonds rated Baa are considered medium-grade obligations. They are neither
highly protected nor poorly secured. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time. These
bonds lack outstanding investment characteristics and, in fact, have speculative
characteristics as well.
44 Templeton Americas Government Securities Fund
PAGE
Ba - Bonds rated Ba are judged to have predominantly speculative elements and
their future cannot be considered well assured. Often the protection of interest
and principal payments is very moderate and, thereby, not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa - Bonds rated Caa are of poor standing. These issues may be in default or
there may be present elements of danger with respect to principal or interest.
Ca - Bonds rated Ca represent obligations that are speculative to a high degree.
These issues are often in default or have other marked shortcomings.
C - Bonds rated C are the lowest rated class of bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond ratings. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; modifier 2 indicates a mid-range ranking; and modifier 3 indicates
that the issue ranks in the lower end of its generic rating category.
S&P
AAA - This is the highest rating assigned by S&P to a debt obligation and
indicates an extremely strong capacity to pay principal and interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong and, in the majority of instances,
differ from AAA issues only in a small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While these bonds will
Templeton Americas Government Securities Fund 45
PAGE
likely have some quality and protective characteristics, they are outweighed by
large uncertainties or major risk exposures to adverse conditions.
C - Bonds rated C are typically subordinated debt to senior debt that is
assigned an actual or implied CCC- rating. The C rating may also reflect the
filing of a bankruptcy petition under circumstances where debt service payments
are continuing. The C1 rating is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in default and payment of interest and/or repayment of
principal is in arrears.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
COMMERCIAL PAPER RATINGS
MOODY'S
Moody's commercial paper ratings are opinions of the ability of issuers to repay
punctually their promissory obligations not having an original maturity in
excess of nine months. Moody's employs the following designations, all judged to
be investment grade, to indicate the relative repayment capacity of rated
issuers:
P-1 (PRIME-1): Superior capacity for repayment.
P-2 (PRIME-2): Strong capacity for repayment.
S&P
S&P's ratings are a current assessment of the likelihood of timely payment of
debt having an original maturity of no more than 365 days. Ratings are graded
into four categories, ranging from "A" for the highest quality obligations to
"D" for the lowest. Issues within the "A" category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety, as follows:
A-1: This designation indicates the degree of safety regarding timely payment is
very strong. A "plus" (+) designation indicates an even stronger likelihood of
timely payment.
A-2: Capacity for timely payment on issues with this designation is strong. The
relative degree of safety, however, is not as overwhelming as for issues
designated A-1.
A-3: Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
46 Templeton Americas Government Securities Fund
PAGE
INSTRUCTIONS AND IMPORTANT NOTICE
SUBSTITUTE W-9 INSTRUCTIONS INFORMATION
GENERAL. Backup withholding is not an additional tax. Rather, the tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.
OBTAINING A NUMBER. If you do not have a Social Security Number/Taxpayer
Identification Number or you do not know your SSN/TIN, you must obtain Form SS-5
or Form SS-4 from your local Social Security or IRS office and apply for one. If
you have checked the "Awaiting TIN" box and signed the certification,
withholding will apply to payments relating to your account unless you provide a
certified TIN within 60 days.
WHAT SSN/TIN TO GIVE. Please refer to the following guidelines:
<TABLE>
<CAPTION>
ACCOUNT TYPE GIVE SSN OF ACCOUNT TYPE GIVE EMPLOYER ID # OF
--------------------------- -------------- --------------------- --------------------------
<S> <C> <C> <C>
o Individual Individual o Trust, Estate, Trust, Estate, or
or Pension Plan Pension Plan Trust
Trust
--------------------------- -------------- --------------------- --------------------------
o Joint Individual Owner who o Corporation, Corporation,
will be Partnership, or Partnership, or
paying tax other other organization
or organization
first-named
individual
--------------------------- -------------- --------------------- --------------------------
o Unif. Gift/ Minor o Broker nominee Broker nominee
Transfer to Minor
--------------------------- -------------- --------------------- --------------------------
o Sole Proprietor Owner of
business
--------------------------- -------------- --------------------- --------------------------
o Legal Guardian Ward,
Minor, or
Incompetent
--------------------------- -------------- --------------------- --------------------------
</TABLE>
EXEMPT RECIPIENTS. Please provide your TIN and check the "Exempt Recipient" box
if you are an exempt recipient. Exempt recipients
include:
A corporation An organization exempt from
tax under section 501(a), or an
A financial institution individual retirement plan
A registered dealer in securities An exempt charitable remainder
or commodities registered in trust or a non-exempt trust
the U.S. or a U.S.possession described in section 4947(a)(1)
A real estate investment trust An entity registered at all times
under the Investment Company
A common trust fund operated Act of 1940
by a bank under section 584(a)
IRS PENALTIES. If you do not supply us with your SSN/TIN, you will be subject to
an IRS $50 penalty unless your failure is due to reasonable cause and not
willful neglect. If you fail to report certain income on your federal income tax
return, you will be treated as negligent and subject to an IRS 20% penalty on
any underpayment of tax attributable to such negligence, unless there was
reasonable cause for the resulting underpayment and you acted in good faith. If
you falsify information on this form or make any other false statement resulting
in no backup withholding on an account which should be subject to backup
withholding, you may be subject to an IRS $500 penalty and certain criminal
penalties including fines and imprisonment.
20.21/150 (37/97)
PAGE
SUBSTITUTE W-8 INSTRUCTIONS INFORMATION
EXEMPT FOREIGN PERSON. Check the "Exempt Foreign Person" box if you qualify as a
non-resident alien or foreign entity that is not subject to certain U.S.
information return reporting or to backup withholding rules. Dividends paid to
your account may be subject to withholding of up to 30%. You are an "Exempt
Foreign Person" if you are not (1) a citizen or resident of the U.S., or (2) a
U.S. corporation, partnership, estate, or trust. In the case of an individual,
an "Exempt Foreign Person" is one who has been physically present in the U.S.
for less than 31 days during the current calendar year. An individual who is
physically present in the U.S. for at least 31 days during the current calendar
year will still be treated as an "Exempt Foreign Person," provided that the
total number of days physically present in the current calendar year and the two
preceding calendar years does not exceed 183 days (counting all of the days in
the current calendar year, only one-third of the days in the first preceding
calendar year and only one-sixth of the days in the second preceding calendar
year). In addition, lawful permanent residents or green card holders may not be
treated as "Exempt Foreign Persons." If you are an individual or an entity, you
must not now be, or at this time expect to be, engaged in a U.S. trade or
business with respect to which any gain derived from transactions effected by
the Fund/Payer during the calendar year is effectively connected to the U.S. (or
your transactions are exempt from U.S. taxes under a tax treaty).
PERMANENT ADDRESS. The Shareholder Application must contain your permanent
address if you are an "Exempt Foreign Person." If you are an individual, provide
your permanent address. If you are a partnership or corporation, provide the
address of your principal office. If you are an estate or trust, provide the
address of your permanent residence or the principal office of any fiduciary.
NOTICE OF CHANGE IN STATUS. If you become a U.S. citizen or resident after you
have provided certification of your foreign status, or if you cease to be an
"Exempt Foreign Person," you must notify the Fund/Payer within 30 days of your
change in status. Reporting will then begin on the account(s) listed, and backup
withholding may also begin unless you certify to the Fund/Payer that (1) the
taxpayer identification number you have given is correct, and (2) the Internal
Revenue Service has not notified you that you are subject to backup withholding
because you failed to report certain interest or dividend income. You may use
Form W-9, "Payer's Request for Taxpayer Identification Number and
Certification," to make these certifications. If an account is no longer active,
you do not have to notify a Fund/Payer or broker of your change in status unless
you also have another account with the same Fund/Payer that is still active. If
you receive interest from more than one Fund/Payer or have dealings with more
than one broker or barter exchange, file a certificate with each. If you have
more than one account with the same Fund/Payer, the Fund/Payer may require you
to file a separate certificate for each account.
WHEN TO FILE. File these certifications with the Fund before a payment is made
to you, unless you have already done this in either of the two preceding
calendar years.
HOW OFTEN YOU MUST FILE. This certificate generally remains in effect for three
calendar years. A Fund/Payer or broker, however, may require that a new
certificate be filed each time a payment is made. On joint accounts for which
each joint owner is a foreign person, each must provide a certification of
foreign status.
20.21/150 (07/97)
PAGE
LOGO RESOLUTION SUPPORTING AUTHORITY OF
Franklin Templeton CORPORATE /ASSOCIATION SHAREHOLDER
- ------------------------------------------------------------------------------
INSTRUCTION:
It will be necessary for corporate/association shareholders to provide a
certified copy of a resolution or other certificate of authority supporting the
authority of designated officers of the corporation/association to issue oral
and written instruction on behalf of the corporation/association for the
purchase, sale (redemption), transfer and/or exchange of Franklin Templeton Fund
shares. You may use the following form of resolution or you may prefer to use
your own.
CERTIFIED COPY OF RESOLUTION (Corporation or Association)
The undersigned hereby certifies and affirms that he/she is the duly elected
_______________________ of _______________________ a _______________________
Title Corporate Name Type of Organization
organized under the laws of the State of _________________ and that the
State
following is a true and correct copy of a resolution adopted by the Board of
Directors by unanimous written consent (a copy of which is attached) or at a
meeting duly called and held on ______________________________, 19__.
"RESOLVED, that _____________________________________________
Name of Corporation/Association
(the "Company") is authorized to invest the Company's assets in one or more
investment companies (mutual funds) whose shares are distributed by
Franklin/Templeton Distributors, Inc. ("Distributors"). Each such
investment company, or series thereof, is referred to as a "Franklin
Templeton Fund" or "Fund."
FURTHER RESOLVED, that any (enter number) _________________ of the following
officers of this Company (acting alone, if one, or acting together, if more
than one) is/are authorized to issue oral or written instructions (including
the signing of drafts in the case of draft accessed money fund accounts) on
behalf of the Company for the purchase, sale (redemption), transfer and/or
exchange of Fund shares and to execute any Fund application(s) and
agreements pertaining to Fund shares registered or to be registered to the
Company (referred to as a "Company Instruction"); and, that this authority
shall continue until Franklin/Templeton Investor Services, Inc. ("Investor
Services") receives written notice of revocation or amendment delivered by
registered mail. The Company's officers authorized to act on behalf of the
Company under this resolution are (enter officer titles
only):___________________________________________________________________
(referred to as the "Authorized Officers").
20.32/106 (07/97.1)
PAGE
FURTHER RESOLVED, that Investor Services may rely on the most recently
provided incumbency certificate delivered by the Company to Investor
Services to identify those individuals who are the incumbent Authorized
Officers and that Investor Services shall have no independent duty to
determine if there has been any change in the individuals serving as
incumbent Authorized Officers.
FURTHER RESOLVED, that the Company ("Indemnitor") undertakes and agrees to
indemnify and hold harmless Distributors, each affiliate of Distributors,
each Franklin Templeton Fund and their officers, employees and agents
(referred to hereafter collectively as the "Indemnitees") from and against
any and all liability, loss, suits, claims, costs, damages and expenses of
whatever amount and whatever nature (including without limitation reasonable
attorneys' fees, whether for consultation and advice or representation in
litigation at both the trial and appellate level) any indemnitee may sustain
or incur by reason of, in consequence of, or arising from or in connection
with any action taken or not taken by an Indemnitee in good faith reliance
on a Company Instruction given as authorized under this resolution."
The undersigned further certifies that the below named persons, whose signatures
appear opposite their names, are the incumbent Authorized Officers (as that term
is defined in the above resolution) who have been duly elected to the office
identified beside their name(s) (attach additional list if necessary).
X
Name/title (please print or type) Signature
X
Name/title (please print or type) Signature
X
Name/title (please print or type) Signature
X
Name/title (please print or type) Signature
Certified from minutes
X
Signature
- --------------------------------------------------------------------------------
Name/title (please print or type)
CORPORATE SEAL (if appropriate)
20.32/106 (07/97.1)
PAGE
FRANKLIN TEMPLETON GROUP OF FUNDS
LITERATURE REQUEST CALL 1-800/DIAL BEN (R) (1-800/342-5236) today for a free
descriptive brochure and prospectus on any of the funds listed below. The
prospectus contains more complete information, including fees, charges and
expenses, and should be read carefully before investing or sending money.
GLOBAL GROWTH
Franklin Global Health Care Fund
Mutual Discovery Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton Global Infrastructure Fund
Templeton Global Opportunities Trust
Templeton Global Real Estate Fund
Templeton Global Smaller Companies Fund
Templeton Greater European Fund
Templeton Growth Fund
Templeton Latin America Fund
Templeton Pacific Growth Fund
Templeton World Fund
GLOBAL GROWTH AND INCOME
Franklin Global Utilities Fund
Mutual European Fund
Templeton Global Bond Fund
Templeton Growth and Income Fund
GLOBAL INCOME
Franklin Global Government Income Fund
Franklin Templeton Gobal Currency Fund
Franklin Templeton Hard Currency Fund
Templeton Americas Government Securities Fund
GROWTH
Franklin Biotechnology Discovery Fund
Franklin Blue Chip Fund
Franklin California Growth Fund
Franklin DynaTech Fund
Franklin Equity Fund
Franklin Gold Fund
Franklin Growth Fund
Franklin MidCap Growth Fund
Franklin Small Cap Growth Fund
GROWTH AND INCOME
Franklin Asset Allocation Fund
Franklin Balance Sheet Investment Fund*
Franklin Convertible Securities Fund
Franklin Equity Income Fund
Franklin Income Fund
Franklin MicroCap Value Fund*
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Rising Dividends Fund
Franklin Strategic Income Fund
Franklin Utilities Fund
Franklin Value Fund
Mutual Beacon Fund
Mutual Financial Services Fund
Mutual Qualified Fund
Mutual Shares Fund
Templeton American Trust, Inc.
FUND ALLOCATOR SERIES
Franklin Templeton Conservative Target Fund
Franklin Templeton Moderate Target Fund
Franklin Templeton Growth Target Fund
INCOME
Franklin Adjustable Rate Securities Fund
Franklin Adjustable U.S. Government Securities Fund
Franklin's AGE High Income Fund
Franklin Bond Fund
Franklin Floating Rate Trust
Franklin Investment Grade Income Fund
Franklin Short-Intermediate U.S. Government Securities Fund
Franklin U.S. Government Securities Fund
Franklin Money Fund
Franklin Federal Money Fund
FRANKLIN FUNDS SEEKING
TAX-FREE INCOME
Federal Intermediate-Term Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund
Puerto Rico Tax-Free Income Fund
Tax-Exempt Money Fund
FRANKLIN STATE-SPECIFIC FUNDS
SEEKING TAX-FREE INCOME
Alabama
Arizona**
Arkansas***
California**
Colorado
Connecticut
Florida**
Georgia
Hawaii***
Indiana
Kentucky
Louisiana
Maryland
Massachusetts+
Michigan**
Minnesota+
Missouri
New Jersey
New York**
North Carolina
Ohio+
Oregon
Pennsylvania
Tennessee***
Texas
Virginia
Washington***
VARIABLE ANNUITIES++
Franklin Valuemark(R)
Franklin Templeton
Valuemark Income Plus
(an immediate annuity)
*These funds are now closed to new accounts, with the exception of retirement
plan accounts.
**Two or more fund options available: long-term portfolio, intermediate-term
portfolio, a portfolio of insured municipal securities, and/or a high yield
portfolio (CA) and a money market portfolio (CA and NY).
***The fund may invest up to 100% of its assets in bonds that pay interest
subject to the federal alternative minimum tax.
+Portfolio of insured municipal securities.
++Franklin Valuemark and Franklin Templeton Valuemark Income Plus are issued by
Allianz Life Insurance Company of North America or by its wholly owned
subsidiary, Preferred Life Insurance Company of New York, and distributed by
NALAC Financial Plans, LLC.
FGF07/98 [LOGO] Printed on recycled paper 416 P 08/98
PAGE
----------------
TEMPLETON AMERICAS GOVERNMENT SECURITIES FUND BULK RATE
U.S. Postage
100 Fountain Parkway PAID
P.O. Box 33030 Sacramento, CA
St. Petersburg, FL 33733-8030 Permit No. 333
----------------
416 P 08/98 [LOGO] Printed on recycled paper
