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Money Management Executive

Franklin to Buy Back Convertible Bonds

Published April 10, 2003, 1:00 a.m. EDT
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Franklin Resources, the money and mutual fund manager that operates Franklin Templeton Investments, said it was preparing to pay up to $521.1 million in cash next month to buy back its convertible bonds that mature in 2003, The Wall Street Journal reports.

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According to Deutsche Bank securities research, holders have the right to sell the bonds back to Franklin on May 11 at 59.301 cents on the dollar.

Many fund companies, including Janus, sold bonds between 2000 and 2002 with put options hoping that increasing prices would dissuade bondholders from exercising them. Instead, tumbling prices have forced these companies to buys the bonds back.


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