Form 8K Current Report
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): September 6, 2006
FRANKLIN
CREDIT MANAGEMENT CORPORATION
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-17771
|
75-2243266
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
file number)
|
(I.R.S.
employer
identification
no.)
|
|
101
Hudson Street
New
Jersey, New Jersey
(Address
of principal executive offices)
|
|
07302
(Zip
code)
|
Registrant’s
telephone number, including area code: (201) 604-4402
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2.
below):
Check
the
appropriate box below in the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
r
Written
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
r
Soliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
r
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
r
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
8.01 Other Events.
Franklin
Credit Management Corporation (the “Company”) recently entered into interest
rate cap agreements to hedge portions of its interest-rate sensitive term debt
against future increases in short-term interest rates.
On
August
29, 2006, the Company entered into a rate cap transaction agreement with LaSalle
Bank NA pursuant to which the Company purchased a $300 million (notional amount)
one-month LIBOR cap with a strike price of 5.75%. On August 30, 2006, the
Company entered into a similar rate cap transaction agreement with HBOS Treasury
Services plc pursuant to which the Company purchased a $500 million (notional
amount) one-month LIBOR cap with a strike price of 6.0%. Each of LaSalle and
BOS
(USA) Inc., an affiliate of Bank of Scotland, participate in certain of our
existing credit facilities with Sky Bank, and BOS is also our lender under
a
Master Credit and Security Agreement with Tribeca Lending Corp., our
wholly-owned subsidiary. Both rate cap transaction agreements are non-amortizing
and will be in effect for one year, and the cap resets match the interest rate
resets on the Company’s term debt. These caps will limit the Company’s exposure
to increased borrowing costs on $300 million of its term debt should the 30-day
LIBOR rate exceed 5.75%, and on a total of $800 million of its term debt should
such rate exceed 6.0%.
On
September 6, 2006, the Company issued a press release announcing its entry
into
these agreements. A copy of the press release is attached hereto as Exhibit
99.1
and is incorporated in this Item 8.01 by reference.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
|
Exhibit
No.
|
Description
|
| |
|
|
99.1
|
Press
Release, dated September 6, 2006, entitled “Franklin Credit Announces
Hedge Agreements.”
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
FRANKLIN
CREDIT
MANAGEMENT CORPORATION
By:
/s/
Paul D.
Colasono
Name: Paul
D.
Colasono
Title:
Chief
Financial Officer and
Executive Vice President
Date: September
6, 2006