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Fitch Affirms Franklin Universal Trust Notes at 'AAA'



  Fitch Affirms Franklin Universal Trust Notes at 'AAA'

Business Wire

CHICAGO -- March 13, 2013

Fitch Ratings has affirmed the 'AAA' rating assigned to the following notes
issued by Franklin Universal Trust (NYSE: FT), a leveraged multi-sector
closed-end fund advised by Franklin Advisers, Inc. (Franklin):

--$42,000,000 of 5.87% senior notes due Aug. 28, 2013.

KEY RATING DRIVERS

The 'AAA' rating affirmation reflects:

--Sufficient asset coverage provided to the senior notes by the underlying
portfolios of assets;

--The structural protections afforded by mandatory de-leveraging provisions in
the event of asset coverage declines;

--The legal and regulatory parameters that govern the fund's operations;

--The capabilities of Franklin as investment advisor.

LEVERAGE

As of Feb. 22, 2013, FT's total assets were approximately $240 million and
total leverage was approximately $44 million in senior notes or 18% of total
assets.

ASSET COVERAGE

At the time of the rating affirmations, the fund's asset coverage ratios, as
calculated in accordance with the Fitch total and net overcollateralization
tests (Fitch OC tests) per the 'AAA' rating guidelines outlined in Fitch's
applicable criteria, were in excess of 100%, which is the minimum asset
coverage amount deemed consistent with an 'AAA' rating. These tests serve as
minimum asset coverage covenants required by the fund's governing documents.
Should the asset coverage for the notes decline below 100%, the governing
documents require the fund to restore compliance within 30 days.

Additionally, the fund's asset coverage ratio for debt, as calculated in
accordance with the Investment Company Act of 1940, was in excess of 300%,
which is also a minimum asset coverage required by the fund's governing
documents.

FUND PROFILE

Franklin Universal Trust is a diversified, closed-end management investment
company, registered under the Investment Company Act of 1940, as amended, that
commenced investment operations in September 1988. The fund's primary
investment objective is high current income consistent with preservation of
capital. The fund's secondary investment objective is growth of income through
dividend increases and capital appreciation. Under normal circumstances, the
fund invests primarily in two asset classes: high yield bonds and utility
stocks. The fund also invests to a lesser extent in foreign equity securities
and sovereign debt, in each case U.S. dollar denominated. At the time of the
rating affirmations, the portfolio comprised 69% high yield corporate
securities, 30% common equity securities, and 1% cash and short-term
investments.

FUND ADVISOR

Franklin Advisers, Inc., a subsidiary of Franklin Resources, Inc. (NYSE:BEN)
acts as the investment adviser to the fund. As of Sept. 30, 2012, Franklin
Advisers, Inc. managed approximately $432 billion in assets.

RATING SENSITIVITY

The assigned rating may be sensitive to material changes in the leverage
composition, portfolio credit quality or market risk of the fund. A material
adverse deviation from Fitch guidelines for any key rating driver could cause
the rating to be lowered by Fitch.

For additional information about Fitch's rating guidelines applicable to debt
and preferred stock issued by closed-end funds, please review the criteria
referenced below, which can be found on Fitch's web site at
'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'. The ratings
above were solicited by, or on behalf of, the issuer, and therefore, Fitch has
been compensated for the provision of the ratings.

The sources of information used to assess these ratings were the public
domain, and Franklin.

Applicable Criteria and Related Research:

--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 15, 2012);

--'2013 Outlook: Closed-End Funds' (Dec. 14, 2012).

Applicable Criteria and Related Research

2013 Outlook: Closed-End Funds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=696831

Rating Closed-End Fund Debt and Preferred Stock

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686101

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS
OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
Primary Analyst
Russ Thomas, +1-312-368-3189
Director
Fitch Ratings, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst
Viktoria Baklanova, CFA, PhD, +1-212-908-9162
Senior Director
or
Committee Chairperson
Ralph Aurora, +1-212-908-0528
Senior Director
or
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com
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