As reported in a newly-amended 13D filing with the US Securities and Exchange Commission, Boaz Weinstein‘s Saba Capital disclosed a proposal letter sent to the Franklin Ltd Duration Income Trust (NYSEMKT:FTF) asking from the board of directors to “consider authorizing a self-tender offer for all outstanding common shares of the Franklin Ltd Duration Income Trust (NYSEMKT:FTF) at or close to net asset value.”And, if more than 50% of the total amount of shares are submitted for tender, then the tender should be called off, and Franklin Ltd Duration Income Trust (NYSEMKT:FTF) should be either reformed into an open-end mutual fund or liquidated. Saba Capital owns 4.03 million shares of Franklin Ltd Duration Income Trust (NYSEMKT:FTF), which account for 15.03% of the company’s outstanding stock as calculated based upon 26.84 million shares outstanding reported in the company’s annual report to shareholders, filed on December 1, 2015. This is slightly more compared to 3.89 million shares Saba Capital reported in a previous 13D filing.
Franklin Ltd Duration Income Trust (NYSEMKT:FTF) is a closed-end investment company that invests in the fixed markets, such as floating rate bank loans, asset-backed securities, and high yield corporate bonds, to name a few. The company’s shares have dropped by 7.05% over the last 12 months.
At the end of December 2015, among the hedge funds and other institutional investors tracked by Insider Monkey, just two funds reported long positions in Franklin Ltd Duration Income Trust (NYSEMKT:FTF), including Saba Capital, which held the biggest position worth about $26,01 million in stock. The other hedge fund bullish on this stock is Andrew Weiss’ Weiss Asset Management, which reported a position valued at $194,000.
You can access the original SEC filing by clicking here.
Ownership Summary Table
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| Saba Capital Management | 0 | 4,032,405 | 0 | 4,032,405 | 4,032,405 | 15.03% |
| Boaz R. Weinstein | 0 | 4,032,405 | 0 | 4,032,405 | 4,032,405 | 15.03% |
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Page 1 of 7 – SEC Filing
| SECURITIES AND EXCHANGE COMMISSION | |
| Washington, D.C. 20549 | |
| SCHEDULE 13D | |
| Under the Securities Exchange Act of 1934 | |
| (Amendment No. 1)* | |
| Franklin | |
| (Name of Issuer) | |
| Common Stock, | |
| (Title of Class of Securities) | |
| 35472T101 | |
| (CUSIP Number) | |
| Saba Capital 405 Lexington Avenue 58th Floor New York, NY 10174 Attention: Michael D’Angelo (212) 542-4635 with a copy to: Eleazer Klein, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 | |
| (Name, Address and Telephone Number of Person | |
| Authorized to Receive Notices and Communications) | |
| April 20, | |
| (Date of Event Which Requires Filing of This Statement) | |
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule
13d-1(f) or Rule 13d-1(g), check the following box. ý
(Page 1
of 7 Pages)
______________________________
* The remainder of this cover page shall be filled out for a reporting
person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or
otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
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Page 2 of 7 – SEC Filing
| 1 | NAME OF REPORTING PERSON Saba Capital Management, L.P. | |||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) ¨ | ||
| 3 | SEC USE ONLY | |||
| 4 | SOURCE OF FUNDS OO (see Item 3) | |||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) | ¨ | ||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: | 7 | SOLE VOTING POWER -0- | ||
| 8 | SHARED VOTING POWER 4,032,405 | |||
| 9 | SOLE DISPOSITIVE POWER -0- | |||
| 10 | SHARED DISPOSITIVE POWER 4,032,405 | |||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,032,405 | |||
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | ¨ | ||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.03%1 | |||
| 14 | TYPE OF REPORTING PERSON PN; IA | |||
1 The percentages used in this Schedule 13D/A are calculated
based upon 26,835,650 Shares outstanding as of September 30, 2015 as reported in the Issuer’s Annual Report to Shareholders on
Form N-CSRS filed on December 1, 2015.
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Page 3 of 7 – SEC Filing
| 1 | NAME OF REPORTING PERSON Boaz R. Weinstein | |||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP | (a) ¨ (b) ¨ | ||
| 3 | SEC USE ONLY | |||
| 4 | SOURCE OF FUNDS OO (see Item 3) | |||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) | ¨ | ||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION United States | |||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: | 7 | SOLE VOTING POWER -0- | ||
| 8 | SHARED VOTING POWER 4,032,405 | |||
| 9 | SOLE DISPOSITIVE POWER -0- | |||
| 10 | SHARED DISPOSITIVE POWER 4,032,405 | |||
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 4,032,405 | |||
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | ¨ | ||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.03%1 | |||
| 14 | TYPE OF REPORTING PERSON IN | |||
____________________________
1 The
percentages used in this Schedule 13D/A are calculated based upon 26,835,650 Shares outstanding as of September 30, 2015 as reported
in the Issuer’s Annual Report to Shareholders on Form N-CSRS filed on December 1, 2015.
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Page 4 of 7 – SEC Filing
| This Amendment No. 1 (“Amendment No. 1“) amends the statement on Schedule 13D filed on March 4, 2016 (the “Original Schedule 13D“, and as amended hereby, the “Schedule 13D“) with respect to the common stock, without par value (the “Shares“), of Franklin Limited Duration Income Trust (the “Issuer“). Capitalized terms used herein and not otherwise defined in this Amendment No. 1 have the meanings set forth in the Original Schedule 13D. This Amendment No. 1 amends Items 3, 4, 5 and 7 as set forth below. |
| Item 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
| Item 3 of the Schedule 13D is hereby amended and restated as follows: | |
| Funds for the purchase of the Shares were derived from the subscription proceeds from investors in SCMF, SCMF II, SCLMF, SCS, SCEF 1 and SCEF 2 and the capital appreciation thereon and margin account borrowings made in the ordinary course of business. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account, which may exist from time to time. Since other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Shares reported herein. A total of $46,456,927 was paid to acquire the Shares reported herein. |
| Item 4. | PURPOSE OF TRANSACTION |
| Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following: | |
| The Reporting Persons have engaged, and may continue to engage, in discussions with management and the Board of Directors of the Issuer regarding the long-term performance of the Issuer and the trading of the Shares at a discount to the Issuer’s net asset value. On April 20, 2016, Saba Capital sent a letter to the Issuer containing a stockholder proposal under Rule 14a-8 requesting that the Board of Directors consider authorizing a self-tender for all outstanding Shares of the Issuer at or close to net asset value; provided, however, if more than 50% of the Issuer’s outstanding Shares are submitted for tender, the tender offer should be cancelled and the Issuer should be liquidated or converted into an open-end mutual fund. A copy of the letter is attached as Exhibit 2. |
| Item 5. | INTEREST IN SECURITIES OF THE ISSUER |
| Items 5(a), (b) and (c) of the Schedule 13D are hereby amended and restated as follows: |
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Page 5 of 7 – SEC Filing
| (a) | See rows (11) and (13) of the cover pages to this Schedule 13D for the aggregate number of Shares and percentages of the Shares beneficially owned by each of the Reporting Persons. The percentages used in this Schedule 13D are calculated based upon 26,835,650 Shares outstanding as of September 30, 2015 as reported in the Issuer‘s Annual Report to Shareholders on Form N-CSRS filed on December 1, 2015. |
| (b) | See rows (7) through (10) of the cover pages to this Schedule 13D for the number of Shares as to which each Reporting Person has the sole or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition. |
| (c) | The transactions in the Shares effected by Saba Capital since the filing of the Original Schedule 13D, which were all in the open market, are set forth in Schedule A, and are incorporated herein by reference. |
| Item 7. | MATERIAL TO BE FILED AS EXHIBITS |
| Item 7 of the Schedule 13D is hereby amended and supplemented by the addition of the following: | |
| Exhibit 2: | Letter dated April 20, 2016 sent by Saba Capital to the Issuer. |
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Page 6 of 7 – SEC Filing
SIGNATURES
After reasonable inquiry and to the best
of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true,
complete and correct.
Date: April 20, 2016
| SABA CAPITAL Management, L.P. | |
| /s/ Michael D’Angelo | |
| Name: Michael D’Angelo Title: Chief Compliance Officer | |
| BOAZ R. WEINSTEIN | |
| /s/ Michael D’Angelo | |
| Name: Michael D’Angelo | |
| Title: Attorney-in-fact* | |
| * Pursuant to a power of attorney dated as of November 16, 2015, which is incorporated herein by reference to Exhibit 2 to the Schedule 13G filed by the Reporting Persons on December 28, 2015, accession number: 0001062993-15-006823 | |
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Page 7 of 7 – SEC Filing
Schedule A
This Schedule sets forth
information with respect to each purchase and sale of Shares which were effectuated by Saba Capital since the filing of the Original
Schedule 13D/A. All transactions were effectuated in the open market through a broker.
| Trade Date | Shares Purchased (Sold) | Price ($)* |
| 04/14/2016 | 13,634 | 11.24 |
| 04/14/2016 | 8,658 | 11.26 |
| 04/13/2016 | 1,604 | 11.27 |
| 04/13/2016 | 5,200 | 11.23 |
| 04/08/2016 | 4,227 | 11.26 |
| 04/06/2016 | 8,441 | 11.22 |
| 04/05/2016 | 4,755 | 11.15 |
| 03/31/2016 | 2,706 | 11.24 |
| 03/30/2016 | 2,129 | 11.19 |
| 03/29/2016 | 11,159 | 11.14 |
| 03/28/2016 | 14,777 | 11.21 |
| 03/22/2016 | 5,364 | 11.27 |
| 03/21/2016 | 4,051 | 11.24 |
| 03/21/2016 | 25,630 | 11.21 |
| 03/18/2016 | 5,987 | 11.18 |
| 03/17/2016 | 4,947 | 11.15 |
| 03/16/2016 | 11,833 | 11.10 |
| 03/15/2016 | 11,489 | 11.09 |
* Excluding commissions.
