Franklin Limited Duration Income Trust Announces Sources of Monthly Dividend Distribution

Rhea-AI Summary

Franklin Limited Duration Income Trust (FTF) has declared a dividend of $0.0776 per common share, payable on September 15, 2021, to shareholders of record as of August 31, 2021. The dividend consists of an estimated $0.0420 per share in net investment income and $0.0356 per share as return of principal. The Fund follows a managed distribution plan aiming for a minimum annual distribution rate of 10% based on average monthly net asset value. Shareholders will be notified of the source of income for each dividend, with tax treatment varying for different distributions.

Positive

• Dividend declared at $0.0776 per common share.
• Managed distribution plan providing a minimum annual distribution rate of 10%.
• Estimation of $0.0420 per share in net investment income enhances shareholder income.

Negative

• Potential for adverse effects on market price due to changes in the managed distribution plan.
• Dependence on long-term capital gains and return of capital if net investment income is insufficient.

SAN MATEO, Calif.--(BUSINESS WIRE)-- The Franklin Limited Duration Income Trust [NYSE American: FTF] (CUSIP 35472T101) has declared a dividend of $0.0776 per common share payable September 15, 2021, to shareholders of record as of August 31, 2021. It is currently estimated that $0.0420 per share represents net investment income and $0.0356 per share represents return of principal.

The Fund adopted a managed distribution plan and will make monthly distributions to common shareholders at an annual minimum fixed rate of 10 percent, based on the average monthly net asset value (NAV) of the Fund’s common shares. The Fund will calculate the average NAV from the previous month based on the number of business days in that month on which the NAV is calculated. The distribution will be calculated as 10 percent of the previous month’s average NAV, divided by 12. Management will generally distribute amounts necessary to satisfy the Fund’s plan and the requirements prescribed by excise tax rules and Subchapter M of the Internal Revenue Code. The plan is intended to provide shareholders with a constant, but not guaranteed, fixed minimum rate of distribution each month and is intended to narrow the discount between the market price and the NAV of the Fund’s common shares, but there is no assurance that the plan will be successful in doing so.

Under the managed distribution plan, to the extent that sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return of capital in order to maintain its managed distribution level. No conclusions should be drawn about the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the Fund’s managed distribution plan.

The Board may amend the terms of the plan or terminate the plan at any time without prior notice to the Fund’s shareholders. The amendment or termination of the plan could have an adverse effect on the market price of the Fund’s common shares. The plan will be subject to the periodic review by the Board, including a yearly review of the annual minimum fixed rate to determine if an adjustment should be made.

In compliance with Rule 19a-1 of the Investment Company Act of 1940, shareholders will receive a notice that details the source of income for each dividend, such as net investment income, gain from the sale of securities and return of principal. Please note: Determination of the actual source of the Fund’s dividend can only be made at year-end. The actual source amounts of all Fund dividends will be included in the Fund’s annual or semiannual reports.

In addition, the tax treatment may differ from the accounting treatment used to calculate the source of the Fund’s dividends as shown on your statement. Please refer to your Form 1099-DIV for the character and amount of distributions for income tax reporting purposes. Since each shareholder’s tax situation is unique, please consult your tax advisor as to the appropriate treatment of Fund distributions.

You may request a copy of the Fund's current Report to Shareholders by contacting Franklin Templeton’s Fund Information Department at 1-800/DIAL BEN® (1-800-342-5236) or by visiting franklintempleton.com. All investments involve risks, including possible loss of principal. Interest rate movements and mortgage prepayments will affect the Fund's share price and yield. Bond prices generally move in the opposite direction of interest rates. As the prices of bonds in a fund adjust to a rise in interest rates, the fund’s share price may decline. Investments in lower-rated bonds include higher risk of default and loss of principal. The Fund is actively managed but there is no guarantee that the manager's investment decisions will produce the desired results. For portfolio management discussions, including information regarding the Fund’s investment strategies, please view the most recent Annual or Semi-Annual Report to Shareholders which can be found at franklintempleton.com or sec.gov.

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 165 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company brings extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has over 70 years of investment experience and over $1.5 trillion in assets under management as of August 31, 2021. For more information, please visit franklintempleton.com.

Copyright © 2021. Franklin Templeton. All rights reserved.

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Franklin Templeton

Shareholders/Financial Advisors: (800) 342-5236

Source: Franklin Templeton

FAQ

What is the dividend amount declared by Franklin Limited Duration Income Trust?

The declared dividend amount is $0.0776 per common share.

What is the payment date for the dividend of FTF?

The dividend is payable on September 15, 2021.

How often does Franklin Limited Duration Income Trust pay dividends?

The Fund follows a managed distribution plan that provides monthly distributions.

What percentage is the minimum fixed rate for distributions?

The minimum fixed rate for distributions is 10% annually.

What are the components of the dividend declared by FTF?

The dividend includes an estimated $0.0420 per share in net investment income and $0.0356 per share as return of principal.