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Franklin Universal prepays $8 million of 5.87% notes to fix asset coverage
By Susanna Moon
Chicago, Oct. 15 - Franklin Universal Trust said it made an $8 million partial prepayment Tuesday on its 5.87% senior fixed-rate notes due Aug. 28, 2013.
The company said it made the partial prepayment following unprecedented volatility in the fixed-income and equity markets in order to restore the asset coverage required by the terms of the notes for the payment of dividends that have been declared on the trust's common shares.
As a result, the trust incurred an early payment penalty of $951,222.
There is $57 million of the notes outstanding.
Franklin Universal Trust is a San Mateo, Calif.-based closed-end investment company managed by Franklin Advisers Inc.
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