ThZeal - The Zeal

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number_811-09869

__Franklin Floating Rate Master Trust
(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)

Registrant's telephone number, including area code: 650 312-2000

Date of fiscal year end: 7/31

Date of reporting period: 1/31/19

Item 1. Reports to Stockholders.

As a Fund shareholder, you can incur two types of costs: (1) transaction costs, including sales charges (loads) on Fund purchases and redemptions; and (2) ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses. The table below shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.

The table below provides information about actual account values and actual expenses in the columns under the heading “Actual.” In these columns the Fund’s actual return, which includes the effect of Fund expenses, is used to calculate the “Ending Account Value.” You can estimate the expenses you paid during the period by following these steps (of course, your account value and expenses will differ from those in this illustration): Divide your account value by $1,000 (if your account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6). Then multiply the result by the number in the row for your class of shares under the headings “Actual” and “Expenses Paid During Period” (if Actual Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50). In this illustration, the actual expenses paid this period are $64.50.

Under the heading “Hypothetical” in the table, information is provided about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. This information may not be used to estimate the actual ending account balance or expenses you paid for the period, but it can help you compare ongoing costs of investing in the Fund with those of other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transactional costs. Therefore, information under the heading “Hypothetical” is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transactional costs were included, your total costs would have been higher.

1. Expenses are equal to the annualized expense ratio for the six-month period as indicated above—in the far right column—multiplied by the simple average account value over the period indicated, and then multiplied by 184/365 to reflect the one-half year period.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

Shareholder Information

Proxy Voting Policies and Procedures

The Fund’s investment manager has established Proxy Voting
Policies and Procedures (Policies) that the Fund uses to
determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund’s complete Policies online at
franklintempleton.com. Alternatively, shareholders may request
copies of the Policies free of charge by calling the Proxy Group
collect at (954) 527-7678 or by sending a written request
to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street,
Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of
the Fund’s proxy voting records are also made available online
at franklintempleton.com and posted on the U.S. Securities and
Exchange Commission’s website at sec.gov and reflect the
most recent 12-month period ended June 30.

Quarterly Consolidated Statement of
Investments

The Trust, on behalf of the Fund, files a complete consolidated
statement of investments with the U.S. Securities and Exchange
Commission for the first and third quarters for each fiscal year
on Form N-Q. Shareholders may view the filed Form N-Q by
visiting the Commission’s website at sec.gov. The filed form
may also be viewed and copied at the Commission’s Public
Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by
calling (800) SEC-0330.


	Six Months Ended
	January 31, 2019				Year Ended July 31,
	(unaudited)		2018		2017		2016		2015		2014
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$8.54		$8.69		$8.47		$8.65		$8.92		$8.93
Income from investment operations^a:
Net investment income.	0.211		0.398		0.332		0.419		0.391		0.299
Net realized and unrealized gains (losses)	(0.215	)	(0.156	)	0.221		(0.184	)	(0.270	)	(0.010	)
Total from investment operations	(0.004	)	0.242		0.553		0.235		0.121		0.289
Less distributions from net investment income .	(0.206	)	(0.392	)	(0.333	)	(0.415	)	(0.391	)	(0.299	)
Net asset value, end of period	$8.33		$8.54		$8.69		$8.47		$8.65		$8.92

Total return^b	(0.06	)%	2.73	%	6.71	%	3.07	%	1.30	%	3.28	%

Ratios to average net assets^c
Expenses before waiver and payments by
affiliates	0.55	%	0.55	%	0.55	%	0.55	%	0.77	%	0.92	%
Expenses net of waiver and payments by
affiliates^d	0.53	%	0.53	%	0.53	%	0.53	%	0.67	%	0.80	%
Net investment income	4.90	%	4.60	%	3.78	%	5.03	%	4.43	%	3.36	%

Supplemental data
Net assets, end of period (000’s)	$1,645,799		$1,760,544		$2,090,626		$1,363,955		$1,959,681		$2,260,151
Portfolio turnover rate	16.11	%	49.97	%	67.00	%	28.94	%	62.43	%	70.55	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
^bTotal return does is not annualized for periods less than one year.
^cRatios are annualized for periods less than one year.
^dBenefit of expense reduction rounds to less than 0.01%.

The accompanying notes are an integral part of these financial statements. | Semiannual Report 3


Statement of Investments, January 31, 2019 (unaudited)

Franklin Floating Rate Master Series
			Shares/			% of Net
	Country		Units		Value	Assets
Common Stocks and Other Equity Interests
Diversified Support Services
^a,b,c,dRemington Outdoor Co. Inc	United States		870,865	$	4,959,660	0.30
^a,b,c,dRemington Outdoor Co. Inc., Litigation Units.	United States		81,987		—	0.00
					4,959,660	0.30
Forest Products
^a,b,c,dAppvion Operations Inc	United States		519,107		5,289,741	0.32
Oil & Gas Exploration & Production
^aSamson Resources II LLC	United States		155,501		3,537,648	0.22
Total Common Stocks and Other Equity Interests
(Cost $49,304,337)					13,787,049	0.84

Management Investment Companies
Other Diversified Financial Services
^eFranklin Liberty Senior Loan ETF	United States		1,093,000		27,188,375	1.65
^eFranklin Lower Tier Floating Rate Fund	United States		3,405,364		30,273,686	1.84
^eFranklin Middle Tier Floating Rate Fund	United States		3,457,562		31,083,478	1.89
Total Management Investment Companies
(Cost $96,789,637)					88,545,539	5.38

			Principal
			Amount*
Corporate Bonds (Cost $8,800,584)
Industrial Machinery
^fOnsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%,
10/26/23	Australia	$	10,100,685		7,828,031	0.48

^g,hSenior Floating Rate Interests
Aerospace & Defense
Delos Finance S.A.R.L. (AerCap), New Loans, 4.553%, (3-month
USD LIBOR + 1.75%), 10/06/23	Luxembourg		27,284,435		27,272,266	1.66
Doncasters U.S. Finance LLC,
Second Lien Term Loan, 11.053%, (3-month USD LIBOR +
8.25%), 10/09/20.	United States		6,096,324		4,816,096	0.29
Term B Loans, 6.303%, (3-month USD LIBOR + 3.50%),
4/09/20	United States		14,777,047		13,447,113	0.82
Flying Fortress Holdings LLC (ILFC), New Loan, 4.553%, (3-month
USD LIBOR + 1.75%), 10/30/22	United States		18,210,912		18,172,979	1.10
					63,708,454	3.87
Agricultural Products
Allflex Holdings III Inc., Second Lien Initial Term Loan, 9.506%,
(1-month USD LIBOR + 7.00%), 7/19/21	United States		1,552,184		1,540,543	0.09
Air Freight & Logistics
XPO Logistics Inc., Refinanced Term Loan, 4.50%, (1-month USD
LIBOR + 2.00%), 2/24/25	United States		5,000,000		4,932,030	0.30
Airlines
Air Canada, Term Loan, 4.50%, (1-month USD LIBOR + 2.00%),
10/06/23	Canada		12,761,713		12,729,656	0.78
^i,jAllegiant Travel Co., Term Loan B, TBD, 2/05/24	United States		3,700,000		3,672,250	0.22


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Airlines (continued)
American Airlines Inc.,
2017 Replacement Term Loans, 4.516%, (1-month USD LIBOR
+ 2.00%), 10/10/21	United States	$	2,688,305	$	2,658,228	0.16
2018 Replacement Term Loans, 4.252%, (1-month USD LIBOR
+ 1.75%), 6/27/25	United States		9,556,691		9,190,851	0.56
					28,250,985	1.72
Apparel Retail
Ascena Retail Group Inc., Tranche B Term Loan, 7.00%, (1-month
USD LIBOR + 4.50%), 8/21/22	United States		42,797,160		39,444,645	2.40
Application Software
TIBCO Software Inc., Term B-1 Loans, 6.01%, (1-month USD LIBOR
+ 3.50%), 12/04/20	United States		7,051,598		7,014,577	0.43
Auto Parts & Equipment
Allison Transmission Inc., New Term Loans, 4.26%, (1-month USD
LIBOR + 1.75%), 9/23/22	United States		11,906,423		11,865,489	0.72
American Axle & Manufacturing Inc., Tranche B Term Loan, 4.76%,
(1-month USD LIBOR + 2.25%), 4/06/24	United States		1,924,940		1,861,577	0.11
TI Group Automotive Systems LLC, Initial US Term Loan, 4.999%,
(1-month USD LIBOR + 2.50%), 6/30/22	United States		16,310,481		15,807,580	0.96
					29,534,646	1.79
Automobile Manufacturers
^i,jThor Industries Inc., Term Loan B, TBD, 2/01/26	United States		10,000,000		9,612,500	0.58
Broadcasting
Gray Television Inc.,
Term B-2 Loan, 4.77%, (3-month USD LIBOR + 2.25%),
2/07/24	United States		15,704,652		15,478,898	0.94
Term C Loan, 5.02%, (3-month USD LIBOR + 2.50%), 1/02/26 .	United States		2,880,908		2,847,302	0.17
ⁱMission Broadcasting Inc., Term B-3 Loan, 4.756%, (1-month USD
LIBOR + 2.25%), 1/17/24	United States		1,573,789		1,525,591	0.09
Nexstar Broadcasting Inc.,
Term A-4 Loan, 4.256%, (1-week USD LIBOR + 1.75%),
10/26/23.	United States		6,801,811		6,733,793	0.41
ⁱTerm B-3 Loan, 4.752%, (1-month USD LIBOR + 2.25%),
7/17/24	United States		9,103,366		8,824,575	0.54
Sinclair Television Group Inc., Tranche B Term Loans, 4.75%,
(1-month USD LIBOR + 2.25%), 1/03/24	United States		20,340,249		20,187,697	1.23
WXXA-TV LLC and WLAJ-TV LLC, Term A-4 Loan, 4.256%, (1-week
USD LIBOR + 1.75%), 10/26/23	United States		188,253		185,430	0.01
					55,783,286	3.39
Building Products
Resideo Funding Inc.,
Tranche A Term Loan, 4.63%, (2-month USD LIBOR + 2.00%),
10/25/23.	United States		8,600,000		8,605,160	0.52
Tranche B Term Loan, 4.63%, (2-month USD LIBOR + 2.00%),
10/25/25.	United States		853,853		852,775	0.05
					9,457,935	0.57


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Cable & Satellite
Charter Communications Operating LLC, Term B Loan, 4.50%,
(1-month USD LIBOR + 2.00%), 4/30/25	United States	$	13,869,737	$	13,708,155	0.83
CSC Holdings LLC, March 2017 Incremental Term Loans, 4.759%,
(1-month USD LIBOR + 2.25%), 7/17/25	United States		20,619,446		20,032,946	1.22
Mediacom Illinois LLC, Tranche N Term Loan, 4.17%, (1-week USD
LIBOR + 1.75%), 2/15/24	United States		4,740,968		4,689,609	0.29
					38,430,710	2.34
Casinos & Gaming
Aristocrat Technologies Inc., Term B-3 Loans, 4.526%, (3-month
USD LIBOR + 1.75%), 10/19/24	United States		8,663,213		8,526,499	0.52
Boyd Gaming Corp.,
Refinancing Term B Loans, 4.664%, (1-week USD LIBOR +
2.25%), 9/15/23	United States		7,972,084		7,889,876	0.48
Term A Loan, 4.664%, (1-week USD LIBOR + 2.25%), 9/15/21 .	United States		2,122,197		2,106,280	0.13
Caesars Resort Collection LLC, Term B Loans, 5.249%, (1-month
USD LIBOR + 2.75%), 12/22/24	United States		6,302,256		6,234,733	0.38
CEOC LLC, Term B Loans, 4.499%, (1-month USD LIBOR + 2.00%),
10/06/24	United States		4,576,152		4,496,069	0.27
Eldorado Resorts Inc.,
Initial Term Loan, 4.813%, (1-month USD LIBOR + 2.25%),
4/17/24	United States		3,298,185		3,265,203	0.20
Initial Term Loan, 4.813%, (3-month USD LIBOR + 2.25%),
4/17/24	United States		2,901,301		2,872,288	0.17
Greektown Holdings LLC, Initial Term Loan, 5.249%, (1-month USD
LIBOR + 2.75%), 4/25/24	United States		8,325,410		8,304,597	0.50
Kingpin Intermediate Holdings LLC, Amendment No. 2 Term Loans,
6.00%, (1-month USD LIBOR + 3.50%), 7/03/24	United States		1,580,040		1,572,140	0.10
Las Vegas Sands LLC, Term B Loans, 4.249%, (1-month USD
LIBOR + 1.75%), 3/27/25	United States		10,018,116		9,858,898	0.60
Station Casinos LLC, Term B Facility Loans, 5.00%, (1-month USD
LIBOR + 2.50%), 6/08/23	United States		5,958,812		5,899,969	0.36
					61,026,552	3.71
Coal & Consumable Fuels
Bowie Resource Holdings LLC,
First Lien Initial Term Loan, 8.457%, (3-month USD LIBOR +
5.75%), 8/14/20	United States		16,723,192		16,472,344	1.00
Second Lien Initial Term Loan, 13.457%, (3-month USD LIBOR
+ 10.75%), 2/16/21	United States		2,232,389		2,102,167	0.13
Foresight Energy LLC, Term Loans, 8.249%, (1-month USD LIBOR +
5.75%), 3/28/22	United States		26,556,008		26,331,929	1.60
					44,906,440	2.73
Commodity Chemicals
Ineos U.S. Finance LLC, 2024 Dollar Term Loan, 4.499%, (1-month
USD LIBOR + 2.00%), 3/31/24	United States		11,562,970		11,257,372	0.68


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Communications Equipment
Ciena Corp., 2018 Term Loan, 4.503%, (1-month USD LIBOR +
2.00%), 9/28/25	United States	$	4,671,986	$	4,657,386	0.28
CommScope Inc., Tranche 5 Term Loans, 4.499%, (1-month USD
LIBOR + 2.00%), 12/29/22	United States		4,898,660		4,884,821	0.30
					9,542,207	0.58
Construction & Engineering
AECOM, Term B Loans, 4.249%, (1-month USD LIBOR + 1.75%),
3/13/25.	United States		7,801,314		7,655,078	0.47
Data Processing & Outsourced Services
Iron Mountain Information Management LLC, Term B Loan, 4.249%,
(1-month USD LIBOR + 1.75%), 1/26/26	United States		4,589,798		4,454,972	0.27
ⁱWex Inc., Term B-2 Loan, 4.749%, (1-month USD LIBOR + 2.25%),
7/01/23.	United States		11,599,673		11,459,515	0.70
					15,914,487	0.97
Diversified Chemicals
Chemours Co., Tranche B-2 US$ Term Loan, 4.25%, (1-month USD
LIBOR + 1.75%), 4/03/25	United States		8,776,424		8,641,048	0.53
Univar USA Inc., Term B-3 Loans, 4.749%, (1-month USD LIBOR +
2.25%), 7/01/24	United States		4,040,334		3,967,103	0.24
					12,608,151	0.77
Diversified Support Services
United Rentals North America Inc., Initial Term Loans, 4.249%,
(1-month USD LIBOR + 1.75%), 10/30/25	United States		1,355,394		1,350,029	0.08
Ventia Pty. Ltd., Term B Loans (USD), 6.303%, (3-month USD
LIBOR + 3.50%), 5/21/22	Australia		4,904,843		4,831,270	0.30
					6,181,299	0.38
Electric Utilities
EFS Cogen Holdings I LLC (Linden),
Term B Advance, 5.75%, (1-month USD LIBOR + 3.25%),
6/28/23	United States		1,041,637		1,026,533	0.06
Term B Advance, 6.06%, (3-month USD LIBOR + 3.25%),
6/28/23	United States		3,005,718		2,962,135	0.18
					3,988,668	0.24
Food Distributors
Aramark Corp., U.S. Term B-3 Loan, 4.249%, (1-month USD LIBOR
+ 1.75%), 3/11/25	United States		8,979,533		8,930,891	0.54
Nutraceutical International Corp., Term Loan B, 5.749%, (1-month
USD LIBOR + 3.25%), 8/22/23	United States		2,889,617		2,824,601	0.17
U.S. Foods Inc., Initial Term Loans, 4.499%, (1-month USD LIBOR +
2.00%), 6/27/23	United States		4,343,701		4,282,889	0.26
					16,038,381	0.97
Food Retail
BI-LO LLC (Southeastern Grocers), FILO Loan (ABL), 7.867%,
(2-month USD LIBOR + 5.25%), 5/31/22	United States		4,625,000		4,578,750	0.28
Forest Products
^bAppvion Operations Inc., Term Loan, 8.80%, (3-month USD LIBOR
+ 6.00%), 6/15/26	United States		9,486,988		9,422,950	0.57


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
General Merchandise Stores
^f99 Cents Only Stores, First Lien Term Loan, PIK, 9.207% - 9.303%,
(3-month USD LIBOR + 6.50%), 1/13/22	United States	$	17,587,795	$	15,829,016	0.96
Evergreen AcqCo. 1 LP (Savers), Term Loan, 6.526%, (3-month
USD LIBOR + 3.75%), 7/09/19	United States		24,070,603		22,897,161	1.39
					38,726,177	2.35
Health Care Distributors
Mallinckrodt International Finance SA & Mallinckrodt CB LLC, 2017
Term B Loans, 5.553%, (3-month USD LIBOR + 2.75%), 9/24/24	Luxembourg		9,586,169		8,955,083	0.54
Health Care Facilities
HCA Inc.,
Term Loan B10, 4.499%, (1-month USD LIBOR + 2.00%),
3/13/25	United States		4,449,869		4,443,612	0.27
Term Loan B11, 4.249%, (1-month USD LIBOR + 1.75%),
3/18/23	United States		2,560,650		2,554,889	0.16
					6,998,501	0.43
Health Care Services
Air Medical Group Holdings Inc., 2018 New Term Loans, 6.769%,
(1-month USD LIBOR + 4.25%), 3/14/25	United States		7,367,410		6,949,921	0.42
Catalent Pharma Solutions Inc., Dollar Term Loan, 4.749%,
(1-month USD LIBOR + 2.25%), 5/20/24	United States		8,045,017		8,000,392	0.49
DaVita Healthcare Partners Inc.,
Tranche A Term Loan, 4.499%, (1-month USD LIBOR + 2.00%),
6/24/19	United States		5,585,941		5,585,242	0.34
Tranche B Term Loan, 5.249%, (1-month USD LIBOR + 2.75%),
6/24/21	United States		7,240,125		7,240,081	0.44
U.S. Renal Care Inc., Initial Term Loan, 7.053%, (3-month USD
LIBOR + 4.25%), 12/31/22	United States		8,890,110		8,753,052	0.53
					36,528,688	2.22
Health Care Technology
IQVIA Inc.,
Term B-1 Dollar Loans, 4.803%, (3-month USD LIBOR +
2.00%), 3/07/24	United States		5,681,250		5,648,111	0.34
Term B-3 Dollar Loans, 4.249%, (1-month USD LIBOR +
1.75%), 6/11/25	United States		2,985,000		2,939,294	0.18
					8,587,405	0.52
Hotels, Resorts & Cruise Lines
Hilton Worldwide Finance LLC, Series B-2 Term Loans, 4.26%,
(1-month USD LIBOR + 1.75%), 10/25/23	United States		7,871,325		7,802,490	0.47
Independent Power Producers & Energy Traders
NRG Energy Inc., Term Loan B, 4.249%, (1-month USD LIBOR +
1.75%), 6/30/23	United States		31,970,345		31,525,318	1.92


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Industrial Machinery
Altra Industrial Motion Corp., Term Loan, 4.499%, (1-month USD
LIBOR + 2.00%), 10/01/25	United States	$	7,189,838	$	7,078,992	0.43
Harsco Corp., Term Loan B-2, 4.75%, (1-month USD LIBOR +
2.25%), 12/10/24	United States		9,234,069		9,187,899	0.56
Navistar Inc., Tranche B Term Loan, 6.02%, (1-month USD LIBOR +
3.50%), 11/06/24	United States		33,001,754		32,547,155	1.98
Onsite Rental Group Operations Pty. Ltd., Term Loan, 7.01%,
(1-month USD LIBOR + 4.50%), 10/25/22	Australia		7,387,773		7,313,895	0.44
RBS Global Inc. (Rexnord), Term B Loan, 4.499%, (1-month USD
LIBOR + 2.00%), 8/21/24	United States		3,896,875		3,864,866	0.24
					59,992,807	3.65
Integrated Telecommunication Services
Global Tel*Link Corp.,
First Lien Term Loan, 6.956%, (3-month USD LIBOR + 4.25%),
11/29/25.	United States		4,886,245		4,828,221	0.29
Second Lien Term Loan, 10.956%, (3-month USD LIBOR +
8.25%), 11/29/26.	United States		3,374,143		3,306,660	0.20
Securus Technologies Holdings Inc., Second Lien Initial Loan,
10.749%, (1-month USD LIBOR + 8.25%), 11/01/25	United States		817,114		795,665	0.05
Zayo Group LLC, 2017 Incremental Refinancing B-1 Term Loan,
4.499%, (1-month USD LIBOR + 2.00%), 1/19/21	United States		10,235,098		10,183,922	0.62
					19,114,468	1.16
Interactive Media & Services
Ancestry.com Operations Inc., Term Loans, 5.75%, (1-month USD
LIBOR + 3.25%), 10/19/23	United States		4,050,144		3,989,372	0.24
Go Daddy Operating Co. LLC, Tranche B-1 Term Loans, 4.749%,
(1-month USD LIBOR + 2.25%), 2/15/24	United States		11,262,682		11,142,002	0.68
Rackspace Hosting Inc., Term B Loans, 5.582%, (3-month USD
LIBOR + 3.00%), 11/03/23	United States		5,055,236		4,701,951	0.29
					19,833,325	1.21
Internet Services & Infrastructure
LegalZoom.com Inc., 2018 Term Loans, 7.019%, (1-month USD
LIBOR + 4.50%), 11/21/24	United States		4,092,697		4,095,255	0.25
IT Consulting & Other Services
Gartner Inc., Tranche A Term Loans, 3.999%, (1-month USD LIBOR
+ 1.50%), 3/21/22	United States		4,840,356		4,809,982	0.29
Leisure Facilities
24 Hour Fitness Worldwide Inc., Term Loan, 5.999%, (1-month USD
LIBOR + 3.50%), 5/30/25	United States		7,343,520		7,242,547	0.44
Equinox Holdings Inc., Term B-1 Loans, 5.499%, (1-month USD
LIBOR + 3.00%), 3/08/24	United States		4,377,834		4,327,900	0.26
					11,570,447	0.70
Life Sciences Tools & Services
Syneos Health Inc., Initial Term B Loans, 4.499%, (1-month USD
LIBOR + 2.00%), 8/01/24	United States		6,899,385		6,801,621	0.41


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Marine
International Seaways Operating Corp., Initial Term Loans, 8.50%,
(1-month USD LIBOR + 6.00%), 6/22/22	United States	$	3,046,835	$	3,031,601	0.18
Navios Maritime Partners LP, Initial Term Loan, 7.78%, (3-month
USD LIBOR + 5.00%), 9/14/20	United States		8,076,136		8,035,755	0.49
					11,067,356	0.67
Metal & Glass Containers
Berry Global Inc., Term Q Loan, 4.516%, (1-month USD LIBOR +
2.00%), 10/01/22	United States		6,883,881		6,795,685	0.41
Movies & Entertainment
AMC Entertainment Holdings Inc.,
2016 Incremental Term Loans, 4.759%, (1-month USD LIBOR +
2.25%), 12/15/23.	United States		1,593,814		1,570,903	0.10
Initial Term Loans, 4.759%, (1-month USD LIBOR + 2.25%),
12/15/22.	United States		2,717,182		2,678,122	0.16
Lions Gate Capital Holdings LLC, Term A Loan, 4.249%, (1-month
USD LIBOR + 1.75%), 3/22/23	Canada		12,095,329		11,913,899	0.72
Live Nation Entertainment Inc., Term B-3 Loans, 4.25%, (1-month
USD LIBOR + 1.75%), 10/31/23	United States		3,779,287		3,768,263	0.23
					19,931,187	1.21
Oil & Gas Exploration & Production
Cantium LLC, Commitment, 8.82%, (3-month USD LIBOR + 6.00%),
6/13/20.	United States		4,294,278		4,243,176	0.26
Fieldwood Energy LLC, Closing Date Loans, 7.749%, (1-month USD
LIBOR + 5.25%), 4/11/22	United States		69,684,139		64,152,961	3.90
Utex Industries Inc., First Lien Initial Term Loan, 6.499%, (1-month
USD LIBOR + 4.00%), 5/21/21	United States		15,758,939		14,892,197	0.90
					83,288,334	5.06
Oil & Gas Storage & Transportation
Centurion Pipeline Co. LLC, Initial Term Loans, 6.053%, (3-month
USD LIBOR + 3.25%), 9/28/25	United States		3,132,248		3,100,926	0.19
Strike LLC, Term Loan, 10.594%, (3-month USD LIBOR + 8.00%),
11/30/22	United States		3,366,000		3,370,207	0.20
					6,471,133	0.39
Other Diversified Financial Services
Asurion LLC,
AM No. 14 Replacement B-4 Term Loans, 5.499%, (1-month
USD LIBOR + 3.00%), 8/04/22	United States		3,905,673		3,853,598	0.24
Replacement B-6 Term Loans, 5.499%, (1-month USD LIBOR +
3.00%), 11/03/23.	United States		1,736,447		1,712,137	0.10
					5,565,735	0.34
Packaged Foods & Meats
CSM Bakery Supplies LLC,
Second Lien Term Loan, 10.55%, (3-month USD LIBOR +
7.75%), 7/03/21	United States		5,971,086		5,448,616	0.33
Term Loans, 6.80%, (3-month USD LIBOR + 4.00%), 7/03/20	United States		3,860,482		3,609,551	0.22


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Packaged Foods & Meats (continued)
JBS USA Lux S.A.,
New Initial Term Loans, 4.999%, (1-month USD LIBOR +
2.50%), 10/30/22.	United States	$	4,369,216	$	4,330,985	0.26
New Initial Term Loans, 5.301%, (3-month USD LIBOR +
2.50%), 10/30/22.	United States		25,486,444		25,263,438	1.54
ⁱPost Holdings Inc., Series A Incremental Term Loans, 4.52%,
(1-month USD LIBOR + 2.00%), 5/24/24	United States		14,297,905		14,154,926	0.86
					52,807,516	3.21
Paper Packaging
Caraustar Industries Inc., Refinancing Term Loans, 8.303%,
(3-month USD LIBOR + 5.50%), 3/14/22	United States		12,605,352		12,611,654	0.76
Reynolds Group Holdings Inc., U.S. Term Loans, 5.249%, (1-month
USD LIBOR + 2.75%), 2/05/23	United States		4,446,700		4,391,424	0.27
					17,003,078	1.03
Personal Products
^cFGI Operating Co. LLC (Freedom Group),
DDTL FILO, 9.707%, (3-month USD LIBOR + 7.00%), 5/15/21	United States		272,727		270,446	0.02
^fTerm Loan, PIK, 12.616%, (3-month USD LIBOR + 10.00%),
5/15/22	United States		8,694,803		8,416,830	0.51
Term Loan FILO, 9.616%, (3-month USD LIBOR + 7.00%),
5/15/21	United States		2,727,273		2,704,460	0.16
					11,391,736	0.69
Pharmaceuticals
Endo Luxembourg Finance Co. I S.A.R.L. and Endo LLC, Initial Term
Loans, 6.75%, (1-month USD LIBOR + 4.25%), 4/29/24	United States		14,145,739		14,039,646	0.85
Grifols Worldwide Operations USA Inc., Tranche B Term Loan,
4.664%, (1-week USD LIBOR + 2.25%), 1/31/25	United States		11,449,383		11,321,677	0.69
Horizon Pharma Inc., Fourth Amendment Refinancing Term Loans,
5.563%, (1-month USD LIBOR + 3.00%), 3/29/24	United States		18,344,306		18,298,445	1.11
Innoviva Inc., Initial Term Loan, 7.146%, (3-month USD LIBOR +
4.50%), 8/18/22	United States		93,404		93,123	0.01
Valeant Pharmaceuticals International, Initial Term Loans, 5.513%,
(1-month USD LIBOR + 3.00%), 6/02/25	United States		8,803,304		8,726,962	0.53
					52,479,853	3.19
Research & Consulting Services
ⁱNielsen Finance LLC, Class B-4 Term Loans, 4.51%, (1-month USD
LIBOR + 2.00%), 10/04/23	United States		1,700,000		1,676,776	0.10
Restaurants
1011778 B.C. ULC, Term B-3 Loan, 4.749%, (1-month USD LIBOR +
2.25%), 2/17/24	Canada		1,700,000		1,673,642	0.10
KFC Holding Co./Pizza Hut Holdings LLC/Taco Bell of America LLC
(Yum Brands), Term Loan B, 4.263%, (1-month USD LIBOR +
1.75%), 4/03/25	United States		9,955,856		9,886,374	0.60
NPC International Inc., Second Lien Initial Term Loan, 10.134%,
(2-month USD LIBOR + 7.50%), 4/20/25	United States		4,842,941		4,552,364	0.28
					16,112,380	0.98


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Security & Alarm Services
Prime Security Services Borrower LLC, Term B-1 Loans, 5.249%,
(1-month USD LIBOR + 2.75%), 5/02/22	United States	$	4,468,501	$	4,413,445	0.27
Semiconductor Equipment
^i,jMKS Instruments Inc., Tranche B-5 Term Loans, TBD, 2/01/26	United States		2,729,502		2,726,516	0.17
Semiconductors
ON Semiconductor Corp., 2018 New Replacement Term B-3 Loans,
4.249%, (1-month USD LIBOR + 1.75%), 3/31/23	United States		13,894,659		13,750,280	0.84
Specialized Consumer Services
Avis Budget Car Rental LLC, Tranche B Term Loans, 4.50%,
(1-month USD LIBOR + 2.00%), 2/13/25	United States		19,079,782		18,894,994	1.15
NVA Holdings Inc., Term B-3 Loan, 5.249%, (1-month USD LIBOR +
2.75%), 2/02/25	United States		7,759,601		7,449,217	0.45
Sabre GLBL Inc.,
2017 Other Term A Loans, 4.499%, (1-month USD LIBOR +
2.00%), 7/01/22	United States		6,157,950		6,065,581	0.37
2018 Other Term B Loans, 4.499%, (1-month USD LIBOR +
2.00%), 2/22/24	United States		1,534,709		1,516,644	0.09
					33,926,436	2.06
Specialized Finance
Trans Union LLC, 2017 Replacement Term A-2 Loans, 4.249%,
(1-month USD LIBOR + 1.75%), 8/09/22	United States		6,666,935		6,591,932	0.40
Specialty Chemicals
Ashland LLC, Term B Loan, 4.249% - 4.269%, (1-month USD LIBOR
+ 1.75%), 5/17/24	United States		6,238,996		6,196,758	0.38
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan,
4.553%, (3-month USD LIBOR + 1.75%), 6/01/24	United States		18,197,559		17,898,482	1.09
Oxbow Carbon LLC,
Second Lien Term Loan, 9.999%, (1-month USD LIBOR +
7.50%), 1/04/24	United States		7,556,614		7,575,505	0.46
Tranche A Term Loan, 4.749%, (1-month USD LIBOR + 2.25%),
1/04/22	United States		6,300,000		6,268,500	0.38
Tranche B Term Loan, 5.999%, (1-month USD LIBOR + 3.50%),
1/04/23	United States		4,674,000		4,668,158	0.28
W.R. Grace & Co.,
Term B-1 Loans, 4.553%, (3-month USD LIBOR + 1.75%),
4/03/25	United States		1,504,921		1,489,403	0.09
Term B-2 Loans, 4.553%, (3-month USD LIBOR + 1.75%),
4/03/25	United States		2,579,865		2,553,261	0.15
					46,650,067	2.83
Specialty Stores
General Nutrition Centers Inc.,
FILO Term Loan (ABL), 9.50%, (1-month USD LIBOR + 7.00%),
12/31/22.	United States		12,691,811		12,891,453	0.78
Tranche B-2 Term Loans, 11.75%, (1-month USD LIBOR +
9.25%), 3/04/21	United States		8,930,005		8,650,942	0.53
Tranche B-2 Term Loans, 12.00%, (3-month USD LIBOR +
9.25%), 3/04/21	United States		9,018,742		8,736,906	0.53


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

^g,hSenior Floating Rate Interests (continued)
Specialty Stores (continued)
General Nutrition Centers Inc., (continued)
Tranche B-2 Term Loans, 13.75%, (Prime + 8.25%), 3/04/21	United States	$	4,762,669	$	4,613,836	0.28
Harbor Freight Tools USA Inc., Refinancing Loans, 4.999%,
(1-month USD LIBOR + 2.50%), 8/19/23	United States		4,462,901		4,336,985	0.26
Jo-Ann Stores Inc., Initial Loans, 7.761%, (3-month USD LIBOR +
5.00%), 10/23/23	United States		4,110,161		4,069,060	0.25
Michaels Stores Inc., 2018 New Replacement Term B Loan, 5.002%
- 5.003%, (1-month USD LIBOR + 2.50%), 1/28/23	United States		13,593,190		13,473,910	0.82
PETCO Animal Supplies Stores Inc., Second Amendment Term
Loans, 5.994%, (3-month USD LIBOR + 3.25%), 1/26/23	United States		3,586,654		2,771,809	0.17
					59,544,901	3.62
Technology Distributors
CDW LLC, Term B Loan, 4.25%, (1-month USD LIBOR + 1.75%),
8/17/23.	United States		4,331,939		4,318,402	0.26
Technology Hardware, Storage & Peripherals
Western Digital Corp., U.S. Term B-4 Loan, 4.26%, (1-month USD
LIBOR + 1.75%), 4/29/23	United States		2,977,500		2,911,435	0.18
Trucking
Hertz Corp., Tranche B-1 Term Loan, 5.249%, (1-month USD LIBOR
+ 2.75%), 6/30/23	United States		20,609,209		20,100,409	1.22
Total Senior Floating Rate Interests
(Cost $1,259,689,688)					1,235,696,805	75.08

Asset-Backed Securities
Other Diversified Financial Services
^k,lAlinea CLO Ltd., 2018-1A, C, 144A, FRN, 4.661%, (3-month USD
LIBOR + 1.90%), 7/20/31	United States		2,600,000		2,481,648	0.15
^k,lAnnisa CLO Ltd., 2016-2A, CR, 144A, FRN, 4.761%, (3-month USD
LIBOR + 2.00%), 7/20/31	United States		1,800,000		1,735,398	0.11
^k,mARES XLIX CLO Ltd., 2018-49A, C, 144A, FRN, 4.711%, 7/22/30	United States		3,100,000		2,961,647	0.18
^k,lARES XLVIII CLO Ltd., 2018-48A, C, 144A, FRN, 4.561%, (3-month
USD LIBOR + 1.80%), 7/20/30	United States		3,135,000		3,009,663	0.18
^k,lARES XXXVII CLO Ltd., 2015-4A, BR, 144A, FRN, 4.587%,
(3-month USD LIBOR + 1.80%), 10/15/30	United States		3,150,000		2,998,422	0.18
^k,lAtrium XII, 2012A, CR, 144A, FRN, 4.411%, (3-month USD LIBOR +
1.65%), 4/22/27	United States		2,240,000		2,209,021	0.13
^k,mAtrium XIV LLC,
14A, B, 144A, FRN, 4.479%, 8/23/30	United States		7,200,000		7,145,424	0.43
14A, C, 144A, FRN, 4.729%, 8/23/30	United States		4,000,000		3,838,160	0.23
^k,lBetony CLO 2 Ltd., 2018-1A, B, 144A, FRN, 4.601%, (3-month USD
LIBOR + 1.85%), 4/30/31	United States		2,400,000		2,266,008	0.14
^k,mBlueMountain CLO Ltd., 2012-2A, CR2, 144A, FRN, 4.645%,
11/20/28	United States		4,000,000		3,905,600	0.24


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

Asset-Backed Securities (continued)
Other Diversified Financial Services (continued)
^k,mBlueMountain CLO XXII Ltd.,
2018-1A, B, 144A, FRN, 4.451%, 7/30/30	United States	$	5,400,000	$	5,351,454	0.33
2018-1A, C, 144A, FRN, 4.801%, 7/30/30	United States		2,750,000		2,654,987	0.16
^k,lBlueMountain Fuji U.S. CLO I Ltd., 2017-1A, C, 144A, FRN, 5.111%,
(3-month USD LIBOR + 2.35%), 7/20/29	United States		2,275,000		2,276,092	0.14
^k,lBlueMountain Fuji U.S. CLO III Ltd., 2017-3A, C, 144A, FRN,
4.487%, (3-month USD LIBOR + 1.70%), 1/15/30	United States		2,100,000		2,018,142	0.12
^k,lBristol Park CLO Ltd., 2016-1A, A, 144A, FRN, 4.207%, (3-month
USD LIBOR + 1.42%), 4/15/29	United States		22,000,000		21,981,960	1.34
^k,lCarlyle Global Market Strategies CLO Ltd.,
2012-4A, C1R, 144A, FRN, 5.361%, (3-month USD LIBOR +
2.60%), 1/20/29	United States		3,675,000		3,677,095	0.22
2014-4RA, B, 144A, FRN, 4.687%, (3-month USD LIBOR +
1.90%), 7/15/30	United States		3,400,000		3,291,914	0.20
^k,mCole Park CLO Ltd., 2015-1A, CR, 144A, FRN, 4.761%, 10/20/28	United States		2,000,000		1,955,020	0.12
^k,mColumbia Cent CLO, 2018-27A, B, 144A, FRN, 4.79%, 10/25/28.	United States		2,600,000		2,585,518	0.16
^k,lDryden 30 Senior Loan Fund, 2013-30A, A, 144A, FRN, 4.316%,
(3-month USD LIBOR + 1.70%), 11/15/28	United States		2,100,000		2,008,251	0.12
^k,mDryden 40 Senior Loan Fund, 2015-40A, CR, 144A, FRN, 4.716%,
8/15/31.	United States		3,000,000		2,954,490	0.18
^k,lDryden 55 CLO Ltd., 2018-55A, C, 144A, FRN, 4.687%, (3-month
USD LIBOR + 1.90%), 4/15/31	United States		2,900,000		2,788,118	0.17
^k,lDryden 58 CLO Ltd., 2018-58A, C, 144A, FRN, 4.573%, (3-month
USD LIBOR + 1.80%), 7/17/31	United States		2,500,000		2,377,200	0.14
^k,mDryden 70 CLO Ltd.,
2018-70A, B, 144A, FRN, 4.54%, 1/16/32	United States		2,940,217		2,926,721	0.18
2018-70A, C, 144A, FRN, 4.99%, 1/16/32	United States		2,500,000		2,480,250	0.15
^k,lDryden Senior Loan Fund, 2016-42A, CR, 144A, FRN, 4.837%,
(3-month USD LIBOR + 2.05%), 7/15/30	United States		2,400,000		2,355,360	0.14
^kEaton Vance CLO Ltd.,
^m2014-1RA, C, 144A, FRN, 4.887%, 7/15/30	United States		2,900,000		2,800,443	0.17
^l2015-1A, CR, 144A, FRN, 4.661%, (3-month USD LIBOR +
1.90%), 1/20/30	United States		1,400,000		1,336,286	0.08
^kEmerson Park CLO Ltd., 2013-1A, C2R, 144A, 4.055%, 7/15/25	United States		1,100,000		1,080,497	0.07
^k,lFlagship CLO VIII Ltd., 2014-8A, CRR, 144A, FRN, 4.579%,
(3-month USD LIBOR + 1.80%), 1/16/26	United States		2,900,000		2,827,848	0.17
^k,lGalaxy XVIII CLO Ltd., 2018-28A, C, 144A, FRN, 4.737%, (3-month
USD LIBOR + 1.95%), 7/15/31	United States		2,700,000		2,584,953	0.16
^k,mGalaxy XXV CLO Ltd.,
2018-25A, B, 144A, FRN, 3.987%, 10/25/31	United States		3,750,000		3,703,575	0.22
2018-25A, C, 144A, FRN, 4.337%, 10/25/31	United States		2,500,000		2,402,525	0.15
^k,mGalaxy XXVI CLO Ltd., 2018-26A, C, 144A, FRN, 4.802%, 11/22/31 .	United States		2,100,000		2,030,301	0.12
^k,mLCM Loan Income Fund I Income Note Issuer Ltd., 2027A, C, 144A,
FRN, 4.729%, 7/16/31	United States		2,700,000		2,594,403	0.16
^k,mLCM XVI LP,
2016A, BR2, 144A, FRN, 4.537%, 10/15/31	United States		2,500,000		2,497,825	0.15
2016A, CR2, 144A, FRN, 4.937%, 10/15/31.	United States		4,500,000		4,397,760	0.27
^k,lLCM XVIII LP, 2018A, CR, 144A, FRN, 4.611%, (3-month USD
LIBOR + 1.85%), 4/20/31	United States		2,625,000		2,517,979	0.15
^k,lLCM XXIV Ltd., 24A, A, 144A, FRN, 4.071%, (3-month USD LIBOR
+ 1.31%), 3/20/30	United States		26,400,000		26,401,320	1.60


Franklin Floating Rate Master Series (continued)
			Principal			% of Net
	Country		Amount*		Value	Assets

Asset-Backed Securities (continued)
Other Diversified Financial Services (continued)
^k,lLCM XXV Ltd.,
25A, B2, 144A, FRN, 4.411%, (3-month USD LIBOR + 1.65%),
7/20/30	United States	$	4,075,000	$	4,043,826	0.25
25A, C2, 144A, FRN, 5.061%, (3-month USD LIBOR + 2.30%),
7/20/30	United States		1,625,000		1,618,776	0.10
^k,lMadison Park Funding Ltd.,
2016-21A, A1, 144A, FRN, 4.301%, (3-month USD LIBOR +
1.53%), 7/25/29	United States		7,100,000		7,148,493	0.43
2018-28A, C, 144A, FRN, 4.637%, (3-month USD LIBOR +
1.85%), 7/15/30	United States		4,200,000		4,080,678	0.25
^k,lMadison Park Funding XXIV Ltd., 2016-24A, C1, 144A, FRN,
5.361%, (3-month USD LIBOR + 2.60%), 1/20/28	United States		1,750,000		1,750,997	0.11
^k,lMagnetite IX Ltd., 2014-9A, BR, 144A, FRN, 4.771%, (3-month USD
LIBOR + 2.00%), 7/25/26	United States		2,793,000		2,767,193	0.17
^k,lMagnetite XI Ltd., 2014-11A, BR, 144A, FRN, 4.88%, (3-month USD
LIBOR + 2.10%), 1/18/27	United States		1,172,000		1,165,366	0.07
^k,lNeuberger Berman CLO Ltd., 2017-26A, C, 144A, FRN, 4.53%,
(3-month USD LIBOR + 1.75%), 10/18/30	United States		2,100,000		1,991,703	0.12
^k,lNZCG Funding Ltd., 2015-1A, A2R, 144A, FRN, 4.239%, (3-month
USD LIBOR + 1.55%), 2/26/31	United States		5,810,000		5,708,093	0.35
^k,lOctagon Investment Partners 26 Ltd., 2016-1A, CR, 144A, FRN,
4.587%, (3-month USD LIBOR + 1.80%), 7/15/30	United States		3,300,000		3,181,200	0.19
^k,mOctagon Investment Partners 27 Ltd., 2016-1A, CR, 144A, FRN,
4.887%, 7/15/30	United States		3,500,000		3,447,430	0.21
^k,mOctagon Investment Partners 28 Ltd., 2016-1A, BR, 144A, FRN,
4.579%, 10/24/30	United States		5,869,565		5,871,737	0.36
^k,lOctagon Investment Partners 31 LLC, 2017-1A, C, 144A, FRN,
5.161%, (3-month USD LIBOR + 2.40%), 7/20/30	United States		2,288,855		2,280,249	0.14
^k,lOctagon Investment Partners 37 Ltd., 2018-2A, B, 144A, FRN,
4.521%, (3-month USD LIBOR + 1.75%), 7/25/30	United States		3,250,000		3,086,005	0.19
^k,mOctagon Investment Partners 38,
2018-1A, A3A, 144A, FRN, 4.431%, 7/20/30	United States		4,500,000		4,469,715	0.27
2018-1A, B, 144A, FRN, 4.711%, 7/20/30	United States		3,900,000		3,748,446	0.23
^k,lOctagon Investment Partners XVI Ltd., 2013-1A, CR, 144A, FRN,
4.623%, (3-month USD LIBOR + 1.85%), 7/17/30	United States		3,000,000		2,892,120	0.18
^k,lOctagon Investment Partners XXII Ltd., 2014-1A, CRR, 144A, FRN,
4.661%, (3-month USD LIBOR + 1.90%), 1/22/30	United States		2,100,000		2,025,450	0.12
^k,mRace Point X CLO Ltd., 2016-10A, C1R, 144A, FRN, 4.771%,
7/25/31.	United States		2,300,000		2,211,979	0.13
^k,lTCI-Cent CLO Income Note Issuer Ltd., 2017-1A, B, 144A, FRN,
5.121%, (3-month USD LIBOR + 2.35%), 7/25/30	United States		3,000,000		3,002,010	0.18
^kVoya CLO Ltd.,
^m2016-3A, BR, 144A, FRN, 4.98%, 10/18/31	United States		3,500,000		3,475,360	0.21
^l2017-3A, B, 144A, FRN, 5.111%, (3-month USD LIBOR +
2.35%), 7/20/30	United States		2,508,761		2,509,664	0.15
Total Asset-Backed Securities (Cost $230,171,977) .					225,885,768	13.72
Total Investments before Short Term Investments
(Cost $1,644,756,223)					1,571,743,192	95.50

*The principal amount is stated in U.S. dollars unless otherwise indicated.
^aNon-income producing.
^bSee Note 10 regarding holdings of 5% voting securities.
^cFair valued using significant unobservable inputs. See Note 13 regarding fair value measurements.
^dSee Note 8 regarding restricted securities.
^eSee Note 3(d) regarding investments in affiliated management investment companies.
^fIncome may be received in additional securities and/or cash.
^gThe coupon rate shown represents the rate at period end.
^hSee Note 1(e) regarding senior floating rate interests.
ⁱA portion or all of the security purchased on a delayed delivery basis. See Note 1(c).
^jA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
^kSecurity was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Trust’s Board of Trustees. At January 31, 2019, the aggregate value of these securities was $225,885,768, representing 13.7% of net assets.
^lThe coupon rate shown represents the rate inclusive of any caps or floors, if applicable, in effect at period end.
^mAdjustable rate security with an interest rate that is not based on a published reference index and spread. The rate is based on the structure of the agreement and current market conditions. The coupon rate shown represents the rate at period end.
ⁿSee Note 1(b) regarding joint repurchase agreement.
^oThe security was issued on a discount basis with no stated coupon rate.

Franklin Floating Rate Master Series (continued)

At January 31, 2019, the Fund had the following credit default swap contracts outstanding. See Note 1(d).

^aPerformance triggers for settlement of contract include failure to pay or bankruptcy of the underlying securities for traded index swaps.

See Note 9 regarding other derivative information.

See Abbreviations on page 31.

The accompanying notes are an integral part of these financial statements. | Semiannual Report 17


Franklin Floating Rate Master Series

Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	1,489,900,046
Cost - Controlled affiliates (Note 3d and 10)		27,581,167
Cost - Non-controlled affiliates (Note 3d and 10)		127,275,010
Cost - Unaffiliated repurchase agreements		97,457,859
Value - Unaffiliated issuers	$	1,463,525,302
Value - Controlled affiliates (Note 3d and 10)		27,188,375
Value - Non-controlled affiliates (Note 3d and 10)		81,029,515
Value - Unaffiliated repurchase agreements		97,457,859
Cash		2,707,732
Receivables:
Investment securities sold		3,635,441
Dividends and interest		4,642,300
Deposits with brokers for:
Centrally cleared swap contracts		537,747
Other assets		41
Total assets		1,680,724,312
Liabilities:
Payables:
Investment securities purchased		26,411,420
Management fees		732,235
Trustees’ fees and expenses		2,478
Distributions to shareholders		7,627,167
Variation margin on centrally cleared swap contracts		84,408
Accrued expenses and other liabilities.		67,181
Total liabilities		34,924,889
Net assets, at value	$	1,645,799,423
Net assets consist of:
Paid-in capital	$	1,922,188,759
Total distributable earnings (loss)		(276,389,336	)
Net assets, at value	$	1,645,799,423
Shares outstanding.		197,623,813
Net asset value and maximum offering price per share ($1,645,799,423÷197,623,813 shares outstanding)	$	8.33

18 Semiannual Report | The accompanying notes are an integral part of these financial statements.

Statement of Operations
for the six months ended January 31, 2019 (unaudited)


Franklin Floating Rate Master Series

Investment income:
Dividends:
Controlled affiliates (Note 3d and 10)	$	327,814
Non-controlled affiliates (Note 3d and 10)		2,723,023
Interest:
Unaffiliated issuers		45,224,862
Non-controlled affiliates (Note 10)		406,518
Total investment income		48,682,217
Expenses:
Management fees (Note 3a)		4,755,558
Custodian fees (Note 4)		8,354
Reports to shareholders		4,194
Registration and filing fees		118
Professional fees		96,962
Trustees’ fees and expenses		42,275
Other		22,703
Total expenses		4,930,164
Expense reductions (Note 4)		(9,903	)
Expenses waived/paid by affiliates (Note 3d and 3e)		(197,466	)
Net expenses		4,722,795
Net investment income.		43,959,422
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		(1,387,316	)
Swap contracts.		(202,192	)
Net realized gain (loss)		(1,589,508	)
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(29,741,894	)
Controlled affiliates (Note 3d and 10)		(382,599	)
Non-controlled affiliates (Note 3d and 10)		(14,616,580	)
Swap contracts.		214,536
Net change in unrealized appreciation (depreciation)		(44,526,537	)
Net realized and unrealized gain (loss)		(46,116,045	)
Net increase (decrease) in net assets resulting from operations	$	(2,156,623	)

The accompanying notes are an integral part of these financial statements. | Semiannual Report 19

20 Semiannual Report | The accompanying notes are an integral part of these financial statements.

Notes to Financial Statements (unaudited)

Franklin Floating Rate Master Series

1. Organization and Significant Accounting Policies

Franklin Floating Rate Master Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of three separate funds and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). Franklin Floating Rate Master Series (Fund) is included in this report. The Fund’s shares are exempt from registration under the Securities Act of 1933.

The following summarizes the Fund’s significant accounting policies.

a. Financial Instrument Valuation

The Fund’s investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants on the measurement date. The Fund calculates the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Fund may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Over-the-counter (OTC) securities are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund’s pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing

services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value.

Investments in repurchase agreements are valued at cost, which approximates fair value.

Certain derivative financial instruments are centrally cleared or trade in the OTC market. The Fund’s pricing services use various techniques including industry standard option pricing models and proprietary discounted cash flow models to determine the fair value of those instruments. The Fund’s net benefit or obligation under the derivative contract, as measured by the fair value of the contract, is included in net assets.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Fund primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

b. Joint Repurchase Agreement

The Fund enters into a joint repurchase agreement whereby its uninvested cash balance is deposited into a joint cash account with other funds managed by the investment manager or anaffiliate of the investment manager and is used to invest in one or more repurchase agreements. The value and face amount of the joint repurchase agreement are allocated to the funds based on their pro-rata interest. A repurchase agreement is accounted for as a loan by the Fund to the seller, collateralized by securities which are delivered to the Fund’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by

1. Organization and Significant Accounting Policies (continued)

b. Joint Repurchase Agreement (continued)

the funds, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Fund, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Fund may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Fund in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. The joint repurchase agreement held by the Fund at period end, as indicated in the Statement of Investments, had been entered into on January 31, 2019.

c. Securities Purchased on a Delayed Delivery Basis

The Fund purchases securities on a delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of holding the securities, it may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

d. Derivative Financial Instruments

The Fund invested in derivative financial instruments in order to manage risk or gain exposure to various other investments or markets. Derivatives are financial contracts based on an underlying or notional amount, require no initial investment or an initial net investment that is smaller than would normally be required to have a similar response to changes in market factors, and require or permit net settlement. Derivatives contain various risks including the potential inability of the counterparty to fulfill their obligations under the terms of the contract, the potential for an illiquid secondary market, and/or the potential for market movements which expose the Fund to gains or losses in excess of the amounts shown in the Statement of Assets and

Liabilities. Realized gain and loss and unrealized appreciation and depreciation on these contracts for the period are included in the Statement of Operations.

Collateral requirements differ by type of derivative. Collateral or initial margin requirements are set by the broker or exchange clearing house for exchange traded and centrally cleared derivatives. Initial margin deposited is held at the exchange and can be in the form of cash and/or securities.

The Fund entered into credit default swap contracts primarily to manage and/or gain exposure to credit risk. A credit default swap is an agreement between the Fund and a counterparty whereby the buyer of the contract receives credit protection and the seller of the contract guarantees the credit worthiness of a referenced debt obligation. These agreements may be privately negotiated in the over-the-counter market (OTC credit default swaps) or may be executed in a multilateral trade facility platform, such as a registered exchange (centrally cleared credit default swaps). The underlying referenced debt obligation may be a single issuer of corporate or sovereign debt, a credit index, a basket of issuers or indices, or a tranche of a credit index or basket of issuers or indices. In the event of a default of the underlying referenced debt obligation, the buyer is entitled to receive the notional amount of the credit default swap contract from the seller in exchange for the referenced debt obligation, a net settlement amount equal to the notional amount of the credit default swap less the recovery value of the referenced debt obligation, or other agreed upon amount. For centrally cleared credit default swaps, required initial margins are pledged by the Fund, and the daily change in fair value is accounted for as a variation margin payable or receivable in the Statement of Assets and Liabilities. Over the term of the contract, the buyer pays the seller a periodic stream of payments, provided that no event of default has occurred. Such periodic payments are accrued daily as an unrealized appreciation or depreciation until the payments are made, at which time they are realized. Upfront payments and receipts are reflected in the Statement of Assets and Liabilities and represent compensating factors between stated terms of the credit default swap agreement and prevailing market conditions (credit spreads and other relevant factors). These upfront payments and receipts are amortized over the term of the contract as a realized gain or loss in the Statement of Operations.

See Note 9 regarding other derivative information.

e. Senior Floating Rate Interests
The Fund invests in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated maturity. Senior secured corporate loans in which the Fund invests are generally readily marketable, but may be subject to certain restrictions on resale.

f. Income Taxes

The Fund is a disregarded entity for U.S. income tax purposes. As such, no provision has been made for income taxes because all income, expenses, gains and losses are allocated to a non-U.S. beneficial owner for inclusion in its individual income tax return, as applicable.

g. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date. The Fund’s net investment income is allocated to the owner daily and paid monthly. Net capital gains (or losses) realized by the Fund will not be distributed. Distributions to shareholders are recorded on the ex-dividend date. Distributable earnings are determined according to income

tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified,
as they may reverse in subsequent periods.*

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each Fund to the combined net assets of the Trust or based on the ratio of number of shareholders of each Fund to the combined number of shareholders of the Trust. Fund specific expenses are charged directly to the Fund that incurred the expense.

h. Accounting Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

i. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Fund, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

*Effective during the current reporting period, it is no longer required to present certain line items in the Statements of Changes in Net Assets. The below prior period amounts affected by this change are shown as they were in the prior year Statements of Changes in Net Assets.

For the year ended July 31, 2018, distributions to shareholders were as follows:

Netinvestmentincome $(81,458,861)

For the year ended July 31, 2018, undistributed net investment income included in net assets was $2,349,039.

Franklin Floating Rate Master Series (continued)

2. Shares of Beneficial Interest

At January 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Fund’s shares
were as follows:

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Fund are also officers and/or directors of the following subsidiaries:

The Fund pays an investment management fee to Advisers based on the average daily net assets of the Fund as follows:

Under an agreement with Advisers, FT Services provides administrative services to the Fund. The fee is paid by Advisers based on the Fund’s average daily net assets, and is not an additional expense of the Fund.

Investor Services, under terms of an agreement, performs shareholder servicing for the Fund and is not paid by the Fund for the services.

The Fund invests in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Fund are waived on assets invested in the affiliated management investment companies, as noted in the Statement of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended January 31, 2019, the Fund held investments in affiliated management investment companies as follows:

Advisers has voluntarily agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Fund so that the expenses (excluding acquired fund fees and expenses) do not exceed 0.53% based on the average net assets of the Fund (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations). Total expenses waived or paid are not subject to recapture subsequent to the Fund’s fiscal year end. Advisers may discontinue this waiver at any time upon notice to the Board.

At January 31, 2019, Franklin Floating Rate Fund, PLC owned 100% of the Fund’s outstanding shares. Investment activities of this shareholder could have a material impact on the Fund.

The Fund has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Fund’s custodian expenses. During the period ended January 31, 2019, the custodian fees were reduced as noted in the Statement of Operations.

At January 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of bond discounts and premiums.

Franklin Floating Rate Master Series (continued)

6. Investment Transactions

Purchases and sales of investments (excluding short term securities) for the period ended January 31, 2019, aggregated $279,672,057 and $260,417,688, respectively.

At January 31, 2019, the Fund had 65.6% of its portfolio invested in high yield securities, senior secured floating rate loans, or other securities rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

The Fund invests in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Fund may have registration rights for restricted securities. The issuer generally incurs all registration costs.

At January 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:

^aThe Fund also invests in unrestricted securities of the issuer, valued at $9,422,950 as of January 31, 2019.

9. Other Derivative Information

At January 31, 2019, the Fund’s investments in derivative contracts are reflected in the Statement of Assets and Liabilities as follows:

^aThis amount reflects the cumulative appreciation (depreciation) of centrally cleared swap contracts as reported in the Statement of Investments. Only the variation margin receivable/payable at period end is separately reported within the Statement of Assets and Liabilities. Prior variation margin movements were recorded to cash upon receipt or payment.

For the period ended January 31, 2019, the effect of derivative contracts in the Fund’s Statement of Operations was as follows:

For the period ended January 31, 2019, the average month end notional amount of swap contracts represented $26,285,143.

The 1940 Act defines "affiliated companies" to include investments in portfolio companies in which a fund owns 5% or more of the outstanding voting securities. During the period ended January 31, 2019, investments in “affiliated companies” were as follows:

For the period ended January 31, 2019, the Fund made the following distributions:

The Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 8, 2019. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 8, 2019, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 7, 2020, for a total of $2 billion.

Under the terms of the Global Credit Facility, the Fund shall, in addition to interest charged on any borrowings made by the Fund and other costs incurred by the Fund, pay its share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon its relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statement of Operations. During the period ended January 31, 2019, the Fund did not use the Global Credit Facility.

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of January 31, 2019, in valuing the Fund’s assets and liabilities carried at fair value, is as follows:

^aFor detailed categories, see the accompanying Statement of Investments.
^bIncludes common stocks and management investment companies as well as other equity interests.
^cIncludes securities determined to have no value at January 31, 2019.

A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the beginning and/or end of the period. At January 31, 2019, the reconciliation of assets and liabilities, is as follows:

^aMay include accretion, amortization, partnership adjustments, and/or other cost basis adjustments.
^bIncludes common stocks as well as other equity interests.
^cIncludes securities determined to have no value.

Franklin Floating Rate Master Series (continued)

13. Fair Value Measurements (continued)

Significant unobservable valuation inputs for material Level 3 financial instruments and impact to fair value as a result of changes in unobservable valuation inputs as of January 31, 2019, are as follows:

^aWeighted based on the relative fair value of the financial instruments.
^bRepresents the directional change in the fair value of the Level 3 financial instruments that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.
^cRepresents a significant impact to fair value and net assets.
^dRepresents a significant impact to fair value but not net assets.
^eIncludes fair value of immaterial financial instruments developed using various valuation techniques and unobservable inputs. May also include financial instruments with values derived using private transaction prices or non-public third party pricing information which is unobservable.
^fIncludes securities determined to have no value at January 31, 2019.

The Fund has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

2. Reflects expenses after fee waivers and expense reimbursements. Does not include acquired fund fees and expenses.

Shareholder Information

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting
Policies and Procedures (Policies) that the Trust uses to
determine how to vote proxies relating to portfolio securities.
Shareholders may view the Trust’s complete Policies online at
franklintempleton.com. Alternatively, shareholders may request
copies of the Policies free of charge by calling the Proxy Group
collect at (954) 527-7678 or by sending a written request
to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street,
Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of
the Trust’s proxy voting records are also made available online
at franklintempleton.com and posted on the U.S. Securities and
Exchange Commission’s website at sec.gov and reflect the
most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the
U.S. Securities and Exchange Commission for the first and
third quarters for each fiscal year on Form N-Q. Shareholders
may view the filed Form N-Q by visiting the Commission’s
website at sec.gov. The filed form may also be viewed and
copied at the Commission’s Public Reference Room in
Washington, DC. Information regarding the operations of the
Public Reference Room may be obtained by calling (800)
SEC-0330.


Financial Highlights
Franklin Lower Tier Floating Rate Fund
		Six Months Ended
		January 31, 2019			Year Ended July 31,
		(unaudited)			2018			2017			2016	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$	9.78		$	10.50		$	9.99		$	10.00
Income from investment operations^b:
Net investment income		0.421			0.920			0.962			0.658
Net realized and unrealized gains (losses)		(0.871	)		(0.445	)		0.530			(0.017	)
Total from investment operations		(0.450	)		0.475			1.492			0.641
Less distributions from:
Net investment income		(0.440	)		(0.918	)		(0.982	)		(0.651	)
Net realized gains		—			(0.277	)		—			—
Total distributions		(0.440	)		(1.195	)		(0.982	)		(0.651	)
Net asset value, end of period	$	8.89		$	9.78		$	10.50		$	9.99

Total return^c		(4.74	)%		4.69	%		15.55	%		6.90	%

Ratios to average net assets^d
Expenses before waiver and payments by affiliates		0.68	%		0.68	%		0.70	%		0.70	%
Expenses net of waiver and payments by affiliates^e		0.60	%		0.60	%		0.60	%		0.60	%
Net investment income		8.80	%		9.09	%		9.31	%		9.47	%

Supplemental data
Net assets, end of period (000’s)	$	353,836		$	395,983		$	341,611		$	436,180
Portfolio turnover rate.		1.37	%		33.79	%		54.26	%		26.40	%^f

^aFor the period November 6, 2015 (commencement of operations) to July 31, 2016.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
^cTotal return is not annualized for periods less than one year.
^dRatios are annualized for periods less than one year except for non-recurring expenses, if any.
^eBenefit of expense reduction rounds to less than 0.01%.
^fExcludes the value of portfolio securities received from purchase in-kind.

4 Semiannual Report | The accompanying notes are an integral part of these financial statements.


Statement of Investments, January 31, 2019 (unaudited)
Franklin Lower Tier Floating Rate Fund
			Shares/
	Country		Units		Value
Common Stocks and Other Equity Interests 4.8%
Diversified Support Services 3.3%
^a,b,c,dRemington Outdoor Co. Inc	United States		2,076,237	$	11,824,369
^a,b,c,dRemington Outdoor Co. Inc., Litigation Units	United States		195,465		—
					11,824,369
Forest Products 1.5%
^a,b,c,dAppvion Operations Inc	United States		520,183		5,300,706
Total Common Stocks and Other Equity Interests
(Cost $47,866,181)					17,125,075

			Principal
			Amount*
Corporate Bonds (Cost $5,455,508) 1.6%
Industrial Machinery 1.6%
^eOnsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23	Australia	$	7,308,657		5,664,209
^f,gSenior Floating Rate Interests 88.1%
Aerospace & Defense 4.1%
Doncasters U.S. Finance LLC, Second Lien Term Loan, 11.053%, (3-month USD
LIBOR + 8.25%), 10/09/20	United States		18,536,432		14,643,781
Agricultural Products 0.2%
Allflex Holdings III Inc., Second Lien Initial Term Loan, 9.506%, (1-month USD LIBOR +
7.00%), 7/19/21	United States		886,793		880,141
Apparel Retail 3.2%
Ascena Retail Group Inc., Tranche B Term Loan, 7.00%, (1-month USD LIBOR +
4.50%), 8/21/22	United States		12,374,760		11,405,383
Coal & Consumable Fuels 5.1%
Bowie Resource Holdings LLC,
First Lien Initial Term Loan, 8.457%, (3-month USD LIBOR + 5.75%), 8/14/20	United States		142,555		140,417
Second Lien Initial Term Loan, 13.457%, (3-month USD LIBOR + 10.75%),
2/16/21	United States		8,992,344		8,467,794
Foresight Energy LLC, Term Loans, 8.249%, (1-month USD LIBOR + 5.75%), 3/28/22	United States		9,580,248		9,499,410
					18,107,621
Food Retail 2.6%
Smart & Final Stores LLC, First Lien Term Loan, 5.999%, (1-month USD LIBOR +
3.50%), 11/15/22	United States		9,975,204		9,227,064
Forest Products 4.1%
^bAppvion Operations Inc., Term Loan, 8.80%, (3-month USD LIBOR + 6.00%), 6/15/26	United States		14,520,990		14,422,973
General Merchandise Stores 9.4%
^e99 Cents Only Stores, First Lien Term Loan, PIK, 9.207% - 9.303%, (3-month USD
LIBOR + 6.50%), 1/13/22	United States		17,862,924		16,076,632
Evergreen AcqCo. 1 LP (Savers), Term Loan, 6.526%, (3-month USD LIBOR + 3.75%),
7/09/19	United States		18,000,451		17,122,929
					33,199,561
Industrial Machinery 1.5%
Onsite Rental Group Operations Pty. Ltd., Term Loan, 7.01%, (1-month USD LIBOR +
4.50%), 10/25/22	Australia		5,345,644		5,292,188


Franklin Lower Tier Floating Rate Fund (continued)
			Principal
	Country		Amount*		Value
^f,gSenior Floating Rate Interests (continued)
Integrated Telecommunication Services 6.0%
Global Tel*Link Corp., Second Lien Term Loan, 10.956%, (3-month USD LIBOR +
8.25%), 11/29/26	United States	$	5,095,856	$	4,993,939
Securus Technologies Holdings Inc., Second Lien Initial Loan, 10.749%, (1-month USD
LIBOR + 8.25%), 11/01/25	United States		16,624,308		16,187,920
					21,181,859
Marine 0.5%
International Seaways Operating Corp., Initial Term Loans, 8.50%, (1-month USD
LIBOR + 6.00%), 6/22/22	United States		1,947,568		1,937,830
Oil & Gas Exploration & Production 15.9%
Fieldwood Energy LLC, Closing Date Loans, 7.749%, (1-month USD LIBOR + 5.25%),
4/11/22	United States		44,676,845		41,130,621
Utex Industries Inc.,
First Lien Initial Term Loan, 6.499%, (1-month USD LIBOR + 4.00%), 5/21/21	United States		14,508,450		13,710,485
Second Lien Initial Term Loan, 9.749%, (1-month USD LIBOR + 7.25%), 5/20/22	United States		1,500,000		1,361,250
					56,202,356
Other Diversified Financial Services 0.3%
Asurion LLC, Second Lien Replacement B-2 Term Loans, 8.999%, (1-month USD
LIBOR + 6.50%), 8/04/25	United States		1,000,000		1,009,375
Packaged Foods & Meats 5.3%
CSM Bakery Supplies LLC, Second Lien Term Loan, 10.55%, (3-month USD LIBOR +
7.75%), 7/03/21	United States		20,441,850		18,653,188
Paper Packaging 4.0%
Caraustar Industries Inc., Refinancing Term Loans, 8.303%, (3-month USD LIBOR +
5.50%), 3/14/22	United States		14,022,484		14,029,496
Personal Products 18.6%
^cFGI Operating Co. LLC (Freedom Group),
DDTL FILO, 9.707%, (3-month USD LIBOR + 7.00%), 5/15/21	United States		4,090,909		4,056,690
^eTerm Loan, PIK, 12.616%, (3-month USD LIBOR + 10.00%), 5/15/22	United States		21,737,007		21,042,074
Term Loan FILO, 9.616%, (3-month USD LIBOR + 7.00%), 5/15/21	United States		40,909,091		40,566,900
					65,665,664
Specialty Chemicals 2.0%
Oxbow Carbon LLC, Second Lien Term Loan, 9.999%, (1-month USD LIBOR + 7.50%),
1/04/24	United States		7,019,188		7,036,736
Specialty Stores 5.3%
General Nutrition Centers Inc.,
FILO Term Loan (ABL), 9.50%, (1-month USD LIBOR + 7.00%), 12/31/22	United States		4,249,683		4,316,530
Tranche B-2 Term Loans, 11.75%, (1-month USD LIBOR + 9.25%), 3/04/21	United States		4,581,488		4,438,316
Tranche B-2 Term Loans, 12.00%, (3-month USD LIBOR + 9.25%), 3/04/21	United States		4,627,014		4,482,420
Tranche B-2 Term Loans, 13.75%, (Prime + 8.25%), 3/04/21	United States		2,443,460		2,367,102
PETCO Animal Supplies Stores Inc., Second Amendment Term Loans, 5.994%,
(3-month USD LIBOR + 3.25%), 1/26/23	United States		2,984,615		2,306,547
PetSmart Inc., Tranche B-2 Loans, 5.52%, (1-month USD LIBOR + 3.00%), 3/11/22	United States		992,268		834,522
					18,745,437
Total Senior Floating Rate Interests
(Cost $318,376,973)					311,640,653
Total Investments before Short Term Investments
(Cost $371,698,662)					334,429,937

See Abbreviations on page 27.

*The principal amount is stated in U.S. dollars unless otherwise indicated.
^aNon-income producing.
^bSee Note 10 regarding holdings of 5% voting securities.
^cFair valued using significant unobservable inputs. See Note 12 regarding fair value measurements.
^dSee Note 9 regarding restricted securities.
^eIncome may be received in additional securities and/or cash.
^fThe coupon rate shown represents the rate at period end.
^gSee Note 1(c) regarding senior floating rate interests.
^hSee Note 3(d) regarding investments in affiliated management investment companies.
ⁱThe rate shown is the annualized seven-day effective yield at period end.

The accompanying notes are an integral part of these financial statements. | Semiannual Report 7

^aFor the period November 6, 2015 (commencement of operations) to July 31, 2016.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of the Fund’s shares in relation to income earned and/or fluctuating fair value of the investments of the Fund.
^cTotal return is not annualized for periods less than one year.
^dRatios are annualized for periods less than one year, except for non-recurring expenses, if any.
^eBenefit of expense reduction rounds to less than 0.01%.
^fExcludes the value of portfolio securities received from purchase in-kind.

8 Semiannual Report | The accompanying notes are an integral part of these financial statements.


Statement of Investments, January 31, 2019 (unaudited)
Franklin Middle Tier Floating Rate Fund
			Shares/
	Country		Units		Value
Common Stocks and Other Equity Interests 1.8%
Diversified Support Services 1.2%
^a,b,c,dRemington Outdoor Co. Inc	United States		732,184	$	4,169,858
^a,b,c,dRemington Outdoor Co. Inc., Litigation Units	United States		68,931		—
					4,169,858
Forest Products 0.6%
^a,c,dAppvion Operations Inc	United States		209,637		2,136,218
Total Common Stocks and Other Equity Interests
(Cost $35,453,756)					6,306,076

			Principal
			Amount*
Corporate Bonds (Cost $7,243,979) 2.0%
Industrial Machinery 2.0%
^eOnsite Rental Group Operations Pty. Ltd., secured note, PIK, 6.10%, 10/26/23	Australia	$	8,660,319		6,711,747
^f,gSenior Floating Rate Interests 89.8%
Aerospace & Defense 2.6%
Doncasters U.S. Finance LLC,
Second Lien Term Loan, 11.053%, (3-month USD LIBOR + 8.25%), 10/09/20	United States		5,623,654		4,442,687
Term B Loans, 6.303%, (3-month USD LIBOR + 3.50%), 4/09/20.	United States		4,834,073		4,399,007
					8,841,694
Airlines 2.3%
^h,iAllegiant Travel Co., Term Loan B, TBD, 2/05/24	United States		3,888,195		3,859,034
XO Management Holding Inc., Initial Term Loan, 8.49%, (3-month USD LIBOR +
5.75%), 12/06/21	United States		3,986,554		3,807,159
					7,666,193
Apparel Retail 10.3%
Ascena Retail Group Inc., Tranche B Term Loan, 7.00%, (1-month USD LIBOR +
4.50%), 8/21/22	United States		38,089,836		35,106,069
Application Software 0.6%
TIBCO Software Inc., Term B-1 Loans, 6.01%, (1-month USD LIBOR + 3.50%),
12/04/20	United States		1,994,911		1,984,437
Auto Parts & Equipment 0.1%
TI Group Automotive Systems LLC, Initial US Term Loan, 4.999%, (1-month USD
LIBOR + 2.50%), 6/30/22	United States		496,508		481,199
Automotive Retail 0.8%
^h,iWand NewCo. 3 Inc., First Lien Term Loan, TBD, 1/23/26	United States		2,673,134		2,672,573
Cable & Satellite 0.5%
CSC Holdings LLC, March 2017 Incremental Term Loans, 4.759%, (1-month USD
LIBOR + 2.25%), 7/17/25	United States		1,700,690		1,652,315
Casinos & Gaming 0.4%
Kingpin Intermediate Holdings LLC, Amendment No. 2 Term Loans, 6.00%,
(1-month USD LIBOR + 3.50%), 7/03/24	United States		1,358,834		1,352,040
Coal & Consumable Fuels 10.1%
Bowie Resource Holdings LLC, First Lien Initial Term Loan, 8.457%, (3-month USD
LIBOR + 5.75%), 8/14/20	United States		34,693,313		34,172,913


Franklin Middle Tier Floating Rate Fund (continued)
			Principal
	Country		Amount*		Value
^f,gSenior Floating Rate Interests (continued)
Communications Equipment 0.0%^†
CommScope Inc., Tranche 5 Term Loans, 4.499%, (1-month USD LIBOR + 2.00%),
12/29/22	United States	$	46,065	$	45,935
Diversified Support Services 0.3%
Ventia Pty. Ltd., Term B Loans (USD), 6.303%, (3-month USD LIBOR + 3.50%),
5/21/22	Australia		1,151,700		1,134,425
Electric Utilities 0.2%
EFS Cogen Holdings I LLC (Linden),
Term B Advance, 5.75%, (1-month USD LIBOR + 3.25%), 6/28/23.	United States		165,608		163,206
Term B Advance, 6.06%, (3-month USD LIBOR + 3.25%), 6/28/23.	United States		477,875		470,946
					634,152
Food Retail 1.4%
Smart & Final Stores LLC, First Lien Term Loan, 5.999%, (1-month USD LIBOR +
3.50%), 11/15/22	United States		4,999,217		4,624,276
Forest Products 4.2%
Appvion Operations Inc., Term Loan, 8.80%, (3-month USD LIBOR + 6.00%),
6/15/26	United States		14,520,990		14,422,973
General Merchandise Stores 2.6%
^e99 Cents Only Stores, First Lien Term Loan, PIK, 9.207% - 9.303%, (3-month USD
LIBOR + 6.50%), 1/13/22	United States		9,986,859		8,988,173
Health Care Services 3.2%
Air Medical Group Holdings Inc., 2018 New Term Loans, 6.769%, (1-month USD
LIBOR + 4.25%), 3/14/25	United States		6,969,600		6,574,654
U.S. Renal Care Inc., Initial Term Loan, 7.053%, (3-month USD LIBOR + 4.25%),
12/31/22	United States		4,179,991		4,115,548
					10,690,202
Industrial Machinery 5.7%
Navistar Inc., Tranche B Term Loan, 6.02%, (1-month USD LIBOR + 3.50%),
11/06/24	United States		13,214,937		13,032,901
Onsite Rental Group Operations Pty. Ltd., Term Loan, 7.01%, (1-month USD LIBOR
+ 4.50%), 10/25/22	Australia		6,334,266		6,270,924
					19,303,825
Integrated Telecommunication Services 8.2%
Global Tel*Link Corp., First Lien Term Loan, 6.956%, (3-month USD LIBOR +
4.25%), 11/29/25	United States		14,848,555		14,672,229
Securus Technologies Holdings Inc.,
Initial Term Loan B, 6.999%, (1-month USD LIBOR + 4.50%), 11/01/24	United States		11,683,220		11,391,139
Second Lien Initial Loan, 10.749%, (1-month USD LIBOR + 8.25%), 11/01/25	United States		1,645,000		1,601,819
					27,665,187
Internet Services & Infrastructure 0.9%
LegalZoom.com Inc., 2018 Term Loans, 7.019%, (1-month USD LIBOR + 4.50%),
11/21/24	United States		2,927,419		2,929,248
Leisure Facilities 1.3%
^h24 Hour Fitness Worldwide Inc., Term Loan, 5.999%, (1-month USD LIBOR +
3.50%), 5/30/25	United States		4,555,356		4,492,720
Managed Health Care 0.2%
Air Methods Corp., Initial Term Loans, 6.303%, (3-month USD LIBOR + 3.50%),
4/21/24	United States		1,000,000		821,000


Franklin Middle Tier Floating Rate Fund (continued)
			Principal
	Country		Amount*		Value

^f,gSenior Floating Rate Interests (continued)
Marine 2.9%
Navios Maritime Midstream Partners LP, Initial Term Loan, 7.30%, (3-month USD
LIBOR + 4.50%), 6/18/20	Marshall Islands	$	83,964	$	80,920
Navios Maritime Partners LP, Initial Term Loan, 7.78%, (3-month USD LIBOR +
5.00%), 9/14/20	United States		9,824,159		9,775,038
					9,855,958
Oil & Gas Exploration & Production 12.5%
Fieldwood Energy LLC, Closing Date Loans, 7.749%, (1-month USD LIBOR +
5.25%), 4/11/22	United States		45,933,101		42,287,161
Oil & Gas Storage & Transportation 0.8%
Strike LLC, Term Loan, 10.594%, (3-month USD LIBOR + 8.00%), 11/30/22	United States		2,776,172		2,779,642
Other Diversified Financial Services 0.3%
Asurion LLC, Second Lien Replacement B-2 Term Loans, 8.999%, (1-month USD
LIBOR + 6.50%), 8/04/25	United States		1,000,000		1,009,375
Packaged Foods & Meats 3.6%
CSM Bakery Supplies LLC,
Second Lien Term Loan, 10.55%, (3-month USD LIBOR + 7.75%), 7/03/21	United States		1,630,000		1,487,375
Term Loans, 6.80%, (3-month USD LIBOR + 4.00%), 7/03/20	United States		11,433,510		10,690,332
					12,177,707
Pharmaceuticals 1.2%
^hEndo Luxembourg Finance Co. I S.A.R.L. and Endo LLC, Initial Term Loans, 6.75%,
(1-month USD LIBOR + 4.25%), 4/29/24	United States		1,808,075		1,794,515
Horizon Pharma Inc., Fourth Amendment Refinancing Term Loans, 5.563%,
(1-month USD LIBOR + 3.00%), 3/29/24	United States		2,273,518		2,267,834
					4,062,349
Specialized Consumer Services 0.3%
NVA Holdings Inc., Term B-3 Loan, 5.249%, (1-month USD LIBOR + 2.75%),
2/02/25	United States		1,118,225		1,073,496
Sabre GLBL Inc., 2018 Other Term B Loans, 4.499%, (1-month USD LIBOR +
2.00%), 2/22/24	United States		66,754		65,968
					1,139,464
Specialty Chemicals 1.4%
Axalta Coating Systems U.S. Holdings Inc., Term B-3 Dollar Loan, 4.553%,
(3-month USD LIBOR + 1.75%), 6/01/24	United States		1,611,853		1,585,362
Oxbow Carbon LLC, Second Lien Term Loan, 9.999%, (1-month USD LIBOR +
7.50%), 1/04/24	United States		3,140,163		3,148,013
					4,733,375
Specialty Stores 10.9%
General Nutrition Centers Inc.,
FILO Term Loan (ABL), 9.50%, (1-month USD LIBOR + 7.00%), 12/31/22	United States		3,860,511		3,921,236
Tranche B-2 Term Loans, 11.75%, (1-month USD LIBOR + 9.25%), 3/04/21	United States		10,855,558		10,516,322
Tranche B-2 Term Loans, 12.00%, (3-month USD LIBOR + 9.25%), 3/04/21	United States		10,963,429		10,620,822
Tranche B-2 Term Loans, 13.75%, (Prime + 8.25%), 3/04/21	United States		5,789,631		5,608,705
Jo-Ann Stores Inc., Initial Loans, 7.761%, (3-month USD LIBOR + 5.00%),
10/23/23	United States		5,639,647		5,583,251

See Abbreviations on page 27.

^†Rounds to less than 0.1% of net assets.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
^aNon-income producing.
^bSee Note 10 regarding holdings of 5% voting securities.
^cFair valued using significant unobservable inputs. See Note 12 regarding fair value measurements.
^dSee Note 9 regarding restricted securities.
^eIncome may be received in additional securities and/or cash.
^fThe coupon rate shown represents the rate at period end.
^gSee Note 1(c) regarding senior floating rate interests.
^hA portion or all of the security purchased on a delayed delivery basis. See Note 1(b).
ⁱA portion or all of the security represents an unsettled loan commitment. The coupon rate is to-be determined (TBD) at the time of settlement and will be based upon a reference index/floor plus a spread.
^jSee Note 3(d) regarding investments in affiliated management investment companies.
^kThe rate shown is the annualized seven-day effective yield at period end.

12 Semiannual Report | The accompanying notes are an integral part of these financial statements.


Financial Statements


Statements of Assets and Liabilities
January 31, 2019 (unaudited)

		Franklin			Franklin
		Lower Tier			Middle Tier
		Floating			Floating
		Rate Fund			Rate Fund
Assets:
Investments in securities:
Cost - Unaffiliated issuers	$	309,353,750		$	323,147,649
Cost - Non-controlled affiliates (Note 3d and 10)		80,793,263			60,153,249
Value - Unaffiliated issuers	$	302,881,889		$	316,734,825
Value - Non-controlled affiliates (Note 3d and 10)		49,996,399			31,017,997
Cash		800,689			1,696,688
Receivables:
Investment securities sold		—			299,331
Interest		3,227,576			2,118,726
Other assets		9			7
Total assets		356,906,562			351,867,574
Liabilities:
Payables:
Investment securities purchased		—			9,926,834
Management fees		174,542			164,196
Distributions to shareholders		2,878,884			2,270,177
Accrued expenses and other liabilities.		17,060			6,070
Total liabilities		3,070,486			12,367,277
Net assets, at value	$	353,836,076		$	339,500,297
Net assets consist of:
Paid-in capital	$	395,616,092		$	375,177,248
Total distributable earnings (loss)		(41,780,016	)		(35,676,951	)
Net assets, at value	$	353,836,076		$	339,500,297
Shares outstanding.		39,817,117			37,766,313
Net asset value per share	$	8.89		$	8.99

The accompanying notes are an integral part of these financial statements. | Semiannual Report 13


Statements of Operations
for the six months ended January 31, 2019 (unaudited)

		Franklin			Franklin
		Lower Tier			Middle Tier
		Floating			Floating
		Rate Fund			Rate Fund
Investment income:
Dividends:
Non-controlled affiliates (Note 3d and 10)	$	176,909		$	300,341
Interest:
Unaffiliated issuers		17,249,045			13,727,544
Non-controlled affiliates (Note 10)		622,225			—
Total investment income		18,048,179			14,027,885
Expenses:
Management fees (Note 3a)		1,248,899			1,162,033
Custodian fees (Note 4)		1,483			1,288
Reports to shareholders		3,176			3,045
Registration and filing fees		124			121
Professional fees.		42,648			42,626
Trustees’ fees and expenses.		9,416			8,396
Other		5,555			6,294
Total expenses		1,311,301			1,223,803
Expense reductions (Note 4)		(2,008	)		(1,795	)
Expenses waived/paid by affiliates (Note 3d and 3e)		(156,564	)		(149,465	)
Net expenses		1,152,729			1,072,543
Net investment income		16,895,450			12,955,342
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments:
Unaffiliated issuers		363,484			302,847
Net change in unrealized appreciation (depreciation) on:
Investments:
Unaffiliated issuers		(11,478,961	)		(8,611,603	)
Non-controlled affiliates (Note 3d and 10)		(23,980,567	)		(8,474,069	)
Net change in unrealized appreciation (depreciation)		(35,459,528	)		(17,085,672	)
Net realized and unrealized gain (loss)		(35,096,044	)		(16,782,825	)
Net increase (decrease) in net assets resulting from operations	$	(18,200,594	)	$	(3,827,483	)

14 Semiannual Report | The accompanying notes are an integral part of these financial statements.

The accompanying notes are an integral part of these financial statements. | Semiannual Report 15


Statements of Cash Flows
for the six months ended January 31, 2019 (unaudited)

		Franklin
		Lower Tier
		Floating
		Rate Fund
Cash flow from operating activities:
Dividends, interest and other income received	$	17,189,357
Operating expenses paid		(1,368,058	)
Purchases of long-term investments		(27,999,932	)
Sales and maturities of long-term investments.		17,958,874
Net sales of short-term investments		18,495,364
Cash used - operating activities		24,275,605
Cash flow from financing activities:
Payment of shares redeemed		(6,301,680	)
Cash distributions to shareholders		(17,659,072	)
Cash used - financing activities		(23,960,753	)
Net increase (decrease) in cash.		314,852
Cash at beginning of period		485,837
Cash at end of period.	$	800,689


Reconciliation of Net Increase (Decrease) in Net Assets resulting from Operating Activities to Net Cash Provided by
Operating Activities
for the six months ended January 31, 2019 (unaudited)

Net increase (decrease) in net assets resulting from operating activities	$	(18,200,594	)
Adjustments to reconcile net increase (decrease) in net assets resulting from operating activities to net cash provided by
operating activities:
Net amortization income		(172,253	)
Reinvested dividends from Sweep Money Fund		(176,909	)
Increase in dividends and interest receivable and other assets		(509,660	)
Decrease in affiliates, accrued expenses, and other liabilities		(215,329	)
Decrease in payable for investments purchased		(23,093,133	)
Decrease in recievable for investments sold		11,186,407
Decrease in cost of investments		19,997,548
Decrease in unrealized appreciation on investments		35,459,528
Net cash used by operating activities	$	24,275,605

16 Semiannual Report | The accompanying notes are an integral part of these financial statements.

1. Organization and Significant Accounting Policies

Franklin Floating Rate Master Trust (Trust) is registered under the Investment Company Act of 1940 (1940 Act) as an open-end management investment company, consisting of three separate funds, two of which are included in this report (Funds) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The shares are issued in private placements and exempt from registration under the Securities Act of 1933.

The following summarizes the Funds’ significant accounting policies.

a. Financial Instrument Valuation

The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share each business day as of 4 p.m. Eastern time or the regularly scheduled close of the New York Stock Exchange (NYSE), whichever is earlier. Under compliance policies and procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation Committee (VC). The Funds may utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Funds’ pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing

Investments in open-end mutual funds are valued at the closing NAV.

The Funds have procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the Funds primarily employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed.

b. Securities Purchased on a Delayed Delivery Basis

Certain or all Funds purchase securities on a delayed delivery basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Funds will generally purchase these securities with the intention of holding the securities, they may sell the securities before the settlement date. Sufficient assets have been segregated for these securities.

c. Senior Floating Rate Interests

Certain or all Funds invest in senior secured corporate loans that pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or the London InterBank Offered Rate (LIBOR). Senior secured corporate loans often require prepayment of principal from excess cash flows or at the discretion of the borrower. As a result, actual maturity may be substantially less than the stated

1. Organization and Significant Accounting Policies (continued)

c. Senior Floating Rate Interests (continued)

maturity. Senior secured corporate loans in which the Funds invest are generally readily marketable, but may be subject to certain restrictions on resale.

d. Income Taxes

It is each Fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each Fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.

Each Fund may recognize an income tax liability related to its uncertain tax positions under U.S. GAAP when the uncertain tax position has a less than 50% probability that it will be sustained upon examination by the tax authorities based on its technical merits. As of January 31, 2019, each Fund has determined that no tax liability is required in its financial statements related to uncertain tax positions for any open tax years (or expected to be taken in future tax years). Open tax years are those that remain subject to examination and are based on the statute of limitations in each jurisdiction in which the Fund invests.

e. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Interest income and estimated expenses are accrued daily. Amortization of premium and accretion of discount on debt securities are included in interest income. Facility fees are recognized as income over the expected term of the loan. Dividend income is recorded on the ex-dividend date. Dividends from net investment income are normally declared daily; these dividends may be reinvested or

paid monthly to shareholders. Distributions from realized capital gains and other distributions, if any, are recorded on the ex-dividend date. Distributable earnings are determined according to income tax regulations (tax basis) and may differ from earnings recorded in accordance with U.S. GAAP. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.*

f. Accounting Estimates

g. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

For the year ended July 31, 2018, distributions to shareholders were as follows:

For the year ended July 31, 2018, undistributed net investment income/distributions in excess of net investment income included in net assets were as follows:

At January 31, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton. Certain officers and trustees of the Trust are also officers, and/or directors of the following subsidiaries:

The Funds pay an investment management fee to Advisers based on the average daily net assets of the Funds as follows:

Under an agreement with Advisers, FT Services provides administrative services to the Funds. The fee is paid by Advisers based on each of the Fund’s average daily net assets, and is not an additional expense of the Funds.

Investor Services, under terms of an agreement, performs shareholder servicing for the Funds and is not paid by the Funds for the services.

Certain or all Funds invest in one or more affiliated management investment companies for purposes other than exercising a controlling influence over the management or policies. Management fees paid by the Funds are waived on assets invested in the affiliated management investment companies, as noted in the Statements of Operations, in an amount not to exceed the management and administrative fees paid directly or indirectly by each affiliate. During the period ended January 31, 2019, investments in affiliated management investment companies were as follows:

Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Funds so that the expenses (excluding acquired fund fees and expenses, and certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) for each of the Funds does not exceed 0.60%, based on the average net assets of each fund until November 30, 2019. Total expenses waived or paid are not subject to recapture subsequent to the Funds’ fiscal year end.

At January 31, 2019, the shares of the Funds were owned by the following investment companies:

The Funds have entered into an arrangement with their custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ custodian expenses. During the period ended January 31, 2019, the custodian fees were reduced as noted in the Statements of Operations.

For tax purposes, capital losses may be carried over to offset future capital gains, if any. At July 31, 2018, the capital loss carryforwards were as follows:

At January 31, 2019, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of defaulted securities.

Purchases and sales of investments (excluding short term securities) for the period ended January 31, 2019, were as follows:

At January 31, 2019, Franklin Lower Tier Floating Rate Fund and Franklin Middle Tier Floating Rate Fund had 89.9% and 90.5%, respectively, of their portfolio invested in senior secured floating rate loans rated below investment grade and unrated securities, if any. These securities may be more sensitive to economic conditions causing greater price volatility and are potentially subject to a greater risk of loss due to default than higher rated securities.

The Funds invest a large percentage of their total assets in securities within similar businesses or sectors. Such concentration may subject the Funds to risks associated with industrial or regional matters, and economic, political or legal developments occurring within the businesses. Investing in these securities expose the Funds to heightened risks due to similar adverse economic and market events and ongoing restructuring discussions.

Certain or all Funds invest in securities that are restricted under the Securities Act of 1933 (1933 Act). Restricted securities are often purchased in private placement transactions, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. Disposal of these securities may require greater effort and expense, and prompt sale at an acceptable price may be difficult. The Funds may have registration rights for restricted securities. The issuer generally incurs all registration costs.

At January 31, 2019, investments in restricted securities, excluding securities exempt from registration under the 1933 Act deemed to be liquid, were as follows:

^aThe Fund also invests in unrestricted securities of the issuer, valued at $14,422,973 as of January 31, 2019.


	Number of				Number of
	Shares/Units/				Shares/Units/
	Principal				Principal								Net Change in
	Amount Held				Amount Held		Value				Realized		Unrealized
	at Beginning	Gross	Gross		at End		at End Investment				Gain		Appreciation
Name of Issuer	of Period	Additions	Reductions		of Period		of Period		Income		(Loss)		(Depreciation)
Franklin Lower Tier Floating Rate Fund
Non-Controlled Affiliates
								Dividends
Appvion Operations Inc	520,183	—	—		520,183	$	5,300,706	$	—	$	—	$	149,571
Remington Outdoor Co. Inc	2,076,237	—	—		2,076,237		11,824,369		—		—		(24,029,720	)
Remington Outdoor Co. Inc., Litigation Units	195,465	—	—		195,465		—		—		—		—
						$	17,125,075	$	—	$	—	$	(23,880,149	)

									Interest
Appvion Operations Inc., Term Loan, 8.80%,
(3-month USD LIBOR + 6.00%), 6/15/26.	14,600,813	—	(79,823	)^a	14,520,990		14,422,973		622,225		—		(100,418	)
Total Affiliated Securities (Value is 8.9% of Net Assets)						$	31,548,048	$ 622,225		$	—	$	(23,980,567	)
Franklin Middle Tier Floating Rate Fund
Non-Controlled Affiliates
Remington Outdoor Co. Inc	732,184	—	—		732,184	$	4,169,858	$	—	$	—	$	(8,474,069	)
Remington Outdoor Co. Inc., Litigation Units	68,931	—	—		68,931		—		—		—		—
Total Affiliated Securities (Value is 1.2% of Net Assets)						$	4,169,858	$	—	$	—	$	(8,474,069	)

^aGross reduction was the result of various corporate actions.

The Funds, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton, are borrowers in a joint syndicated senior unsecured credit facility totaling $2 billion (Global Credit Facility) which matured on February 8, 2019. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 8, 2019, the Borrowers renewed the Global Credit Facility for a one year term, maturing February 7, 2020, for a total of $2 billion.

Under the terms of the Global Credit Facility, the Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.15% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses in the Statements of Operations. During the period ended January 31, 2019, the Funds did not use the Global Credit Facility.

The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

A summary of inputs used as of January 31, 2019, in valuing the Funds’ assets and liabilities carried at fair value, is as follows:

^aFor detailed categories, see the accompanying Statement of Investments.
^bIncludes common stocks and other equity interests.
^cIncludes securities determined to have no value at January 31, 2019.

A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are significant Level 3 financial instruments at the beginning and/or end of the period. At January 31, 2019, the reconciliations of assets and liabilities are as follows:


																					Net Change in
																					Unrealized
																					Appreciation
									Transfer				Net		Net						(Depreciation)
		Balance at							Into				Realized		Unrealized			Balance			on Assets
		Beginning of							(Out of)		Cost Basis		Gain		Appreciation			at End			Held at
		Period			Purchases		Sales		Level 3		Adjustments^a		(Loss)		(Depreciation)			of Period			Period End
Franklin Lower Tier Floating Rate Fund
Assets:
Investments in Securities:
Equity Investments:^b
Diversified Support Services	$	35,854,089	^c	$	—	$	—	$	—	$	—	$	—	$	(24,029,720	)	$	11,824,369	^c	$	(24,029,720	)
Forest Products		5,151,135			—		—		—		—		—		149,571			5,300,706			149,571
Senior Floating Rate Interests
Personal Products		60,680,227			3,950,630		—		—		592,053		—		442,754			65,665,664			442,754
Total Investments in Securities	$	101,685,451		$	3,950,630	$	—	$	—	$	592,053	$	—	$	(23,437,395	)	$	82,790,739		$	(23,437,395	)
Liabilities:
Other Financial Instruments:
Unfunded Loan Commitments	$	(10,653	)	$	—	$	—	$	—	$	—	$	—	$	10,653		$	—		$	—
Franklin Middle Tier Floating Rate Fund
Assets:
Investments in Securities:
Equity Investments:^b
Diversified Support Services	$	12,643,927	^c	$	—	$	—	$	—	$	—	$	—	$	(8,474,069	)	$	4,169,858		$	(8,474,069	)
Forest Products		2,075,940			—		—		—		—		—		60,278			2,136,218			60,278
Total Investments in Securities	$	14,719,867		$	—	$	—	$	—	$	—	$	—	$	(8,413,791	)	$	6,306,076		$	(8,413,791	)

^aMay include accretion, amortization, partnership adjustments, and/or other cost basis adjustments.
^bIncludes common stocks and other equity interests.
^cIncludes securities determined to have no value.


				Amount/		Impact to
				Range		Fair Value
	Fair Value at	Valuation	Unobservable	(Weighted		if Input
Description	End of Period	Technique	Inputs	Average^a)		Increases^b
Franklin Lower Tier Floating Rate Fund:
Assets:
Investments in Securities:
Equity Investments:
Diversified Support			Discount for lack of
Services	$11,824,369	Discounted cash flow	marketability	20.0	%	Decrease^c
			Long-term revenue
			growth rate	1.0	%	Increase^c
			Weighted average
			cost of capital	13.1	%	Decrease^d
		Consensus Pricing	Offered quote	$3.50		Increase^d
			Discount for lack of
Forest Products	5,300,706	Market Comparables	marketability	20.0	%	Decrease^e
			EV/EBITDA multiple	6.2	x	Increase^d
Senior Floating Rate
Interests:
Personal Products	65,665,664	Discounted cash flow	Discount rate	11.8% - 12.6% (12.1%)		Decrease^d
			Free cash flow	$87.6	(mil)	Increase^d
Total.	$82,790,739
Franklin Middle Tier Floating Rate Fund:
Assets:
Investments in Securities:
Equity Investments:
Diversified Support			Discount for lack of
Services	$4,169,858	Discounted cash flow	marketability	20.0	%	Decrease
			Long-term revenue
			growth rate	1.0	%	Increase
			Weighted average
			cost of capital	13.1	%	Decrease^d
		Consensus Pricing	Offered quote	$3.50		Increase^d
			Discount for lack of
Forest Products	2,136,218	Discounted cash flow	marketability	20.0	%	Decrease^e
		Market Comparables	EV/EBITDA multiple	6.2	x	Increase^d
Total.	$6,306,076

^aWeighted based on the relative fair value of the financial instruments.
^bRepresents the directional change in the fair value of the Level 3 financial instruments that would result from a significant and reasonable increase in the corresponding input. A significant and reasonable decrease in the input would have the opposite effect. Significant impacts, if any, to fair value and/or net assets have been indicated.
^cRepresents a significant impact to net assets but not fair value.
^dRepresents a significant impact to fair value and net assets.
^eRepresents a significant impact to fair value but not net assets.

Abbreviations List

EBITDA - Earnings before interest, taxes, depreciation and amortization
EV - Enterprise value

The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 12(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Terrence J. Checki and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services. N/A

Item 5. Audit Committee of Listed Registrants. N/A

Item 6. Schedule of Investments. N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A

Item 8. Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls. There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company. N/A

Item 13. Exhibits.

(a) (1) Code of Ethics

(a) (2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN FLOATING RATE MASTER TRUST

By /s/ Matthew T. Hinkle

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Date March 27, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By /s/ Matthew T. Hinkle

Matthew T. Hinkle

Chief Executive Officer - Finance and Administration

Date March 27, 2019

By /s/ Gaston Gardey

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer

Date March 27, 2019


		Actual		Hypothetical
	(actual return after expenses)		(5% annual return before expenses)

					Net
Beginning	Ending	Paid During	Ending	Paid During	Annualized
Account	Account	Period	Account	Period	Expense
Value 8/1/18	Value 1/31/19	8/1/18–1/31/19^1,2	Value 1/31/19	8/1/18–1/31/19^1,2	Ratio²

$1,000	$999.40	$2.67	$1,022.53	$2.70	0.53%


Franklin Floating Rate Master Series (continued)
			Principal				% of Net
	Country		Amount*		Value		Assets

Short Term Investments (Cost $97,457,859)

Repurchase Agreements
ⁿJoint Repurchase Agreement, 2.57%, 2/01/19
(Maturity Value $97,464,818)
BNP Paribas Securities Corp. (Maturity Value $66,458,336)
Deutsche Bank Securities Inc. (Maturity Value $22,699,556)
HSBC Securities (USA) Inc. (Maturity Value $8,306,926)
Collateralized by U.S. Government Agency Securities, 4.00% -
4.50%, 6/20/42 - 7/20/43; ^oU.S. Treasury Bills, 2/12/19; U.S.
Treasury Bonds, 8.50%, 2/15/20; and U.S. Treasury Notes,
1.625% - 2.021%, 6/30/20 - 7/31/22 (valued at $99,471,653)	United States	$	97,457,859	$	97,457,859		5.92
Total Investments (Cost $1,742,214,082)					1,669,201,051		101.42
Other Assets, less Liabilities.					(23,401,628	)	(1.42	)
Net Assets				$	1,645,799,423		100.00


		Six Months Ended
		January 31, 2019			Year Ended
		(unaudited)			July 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income.	$	43,959,422		$	82,584,552
Net realized gain (loss)		(1,589,508	)		(19,588,559	)
Net change in unrealized appreciation (depreciation)		(44,526,537	)		(15,624,862	)
Net increase (decrease) in net assets resulting from operations		(2,156,623	)		47,371,131
Distributions to shareholders (Note 1g)		(43,174,932	)		(81,458,861	)
Capital share transactions (Note 2)		(69,412,838	)		(295,994,793	)
Net increase (decrease) in net assets		(114,744,393	)		(330,082,523	)
Net assets:
Beginning of period		1,760,543,816			2,090,626,339
End of period (Note 1g)	$	1,645,799,423		$	1,760,543,816


	Six Months Ended		Year Ended
	January 31, 2019		July 31, 2018
	Shares	Amount	Shares	Amount
Shares sold	23,757,303	$201,049,497	31,816,088	$273,788,383
Shares redeemed	(32,339,286)	(270,462,335)	(66,050,697)	(569,783,176)
Net increase (decrease)	(8,581,983)	$(69,412,838)	(34,234,609)	$(295,994,793)


Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent


Annualized Fee Rate	Net Assets
0.530%	Up to and including $2.5 billion
0.450%	Over $2.5 billion, up to and including $6.5 billion
0.430%	Over $6.5 billion, up to and including $11.5 billion
0.400%	Over $11.5 billion, up to and including $16.5 billion
0.390%	Over $16.5 billion, up to and including $19 billion
0.380%	Over $19 billion, up to and including $21.5 billion
0.370%	In excess of $21.5 billion


Cost of investments.	$	1,740,710,655

Unrealized appreciation	$	5,525,606
Unrealized depreciation		(79,303,186	)
Net unrealized appreciation (depreciation)	$	(73,777,580	)


Shares/		Acquisition
Units	Issuer	Date		Cost		Value
519,107	^aAppvion Operations Inc	6/14/18	$	5,320,516	$	5,289,741
870,865	Remington Outdoor Co. Inc	4/13/12 - 5/08/17		43,284,066		4,959,660
81,987	Remington Outdoor Co. Inc., Litigation Units	5/16/18		—		—
	Total Restricted Securities (Value is 0.62% of Net Assets)		$	48,604,582	$	10,249,401


	Asset Derivatives		Liability Derivatives
Derivative Contracts	Statement of		Statement of
Not Accounted for as	Assets and Liabilities		Assets and Liabilities
Hedging Instruments	Location	Fair Value	Location	Fair Value

Credit contracts	Variation margin on centrally	$ —	Variation margin on centrally	$430,071^a
	cleared swap contracts		cleared swap contracts


Payment Date	Amount Per Share
8/31/2018	$ 0.033718
9/28/2018	0.032148
10/31/2018	0.033878
11/30/2018	0.032564
12/31/2018	0.035705
1/31/2019	0.037520
Total	$ 0.205533


	Level 1		Level 2		Level 3			Total
Assets:
Investments in Securities:^a
Equity Investments:^b
Diversified Support Services	$ —	$	—	$	4,959,660	^c	$	4,959,660
Forest Products	—		—		5,289,741			5,289,741
Oil & Gas Exploration & Production	—		3,537,648		—			3,537,648
All Other Equity Investments.	88,545,539		—		—			88,545,539
Corporate Bonds	—		7,828,031		—			7,828,031
Senior Floating Rate Interests:
Personal Products	—		—		11,391,736			11,391,736
All Other Senior Floating Rate Interests	—		1,224,305,069		—			1,224,305,069
Asset-Backed Securities.	—		225,885,768		—			225,885,768
Short Term Investments	—		97,457,859		—			97,457,859
Total Investments in Securities	$ 88,545,539	$	1,559,014,375	$	21,641,137		$	1,669,201,051

Liabilities:
Other Financial Instruments:
Swap Contracts.	$ —	$	430,071	$	—		$	430,071


						Amount/Range	Impact to Fair
		Fair Value at				(Weighted	Value if Input
Description		End of Period		Valuation Technique	Unobservable Inputs	Average^a)	Increases^b
Assets:
Investments in Securities:
Equity Investments:
Diversified Support	$	4,959,660		Discounted cash flow	Discount for lack of	20.0%	Decrease
Services					marketability
					Long-term revenue	1.0%	Increase
					growth rate
					Weighted average cost	13.1%	Decrease^c
					of capital
				Consensus Pricing	Offered/Bid quotes	$ 3.50	Increase^d

Forest Products		5,289,741		Market Comparables	Discount for lack of	20.0%	Decrease^d
					marketability
					EV/EBITDA multiple	6.2X	Increase^d
Senior Floating Rate Interests:
Personal Products		11,121,290		Discounted cash flow	Discount rate	11.8% - 12.6%	Decrease^d
						(12.4%)
					Free cash flow	$15.6 (mil)	Increase^c
All other investments^e		270,446	^f

Total	$	21,641,137


Abbreviations List
EBITDA	Earnings before interest, taxes, depreciation and amortization
EV	Enterprise value


Abbreviations

Currency	Selected Portfolio		Index
USD United States Dollar	CLO	Collateralized Loan Obligation	CDX.NA.HY.Series number	CDX North America High Yield Index
	ETF	Exchange Traded Fund
	FRN	Floating Rate Note
	LIBOR	London InterBank Offered Rate
	PIK	Payment-In-Kind
	TBD	To Be Determined


Statements of Changes in Net Assets

		Franklin Lower Tier						Franklin Middle Tier
		Floating Rate Fund						Floating Rate Fund
		Six Months Ended						Six Months Ended
		January 31, 2019			Year Ended			January 31, 2019			Year Ended
		(unaudited)			July 31, 2018			(unaudited)			July 31, 2018
Increase (decrease) in net assets:
Operations:
Net investment income	$	16,895,450		$	35,302,271		$	12,955,342		$	25,454,468
Net realized gain (loss)		363,484			(3,205,603	)		302,847			774,231
Net change in unrealized appreciation (depreciation).		(35,459,528	)		(13,619,986	)		(17,085,672	)		(21,733,022	)
Net increase (decrease) in net assets resulting
from operations		(18,200,594	)		18,476,682			(3,827,483	)		4,495,677
Distributions to shareholders (Note 1e)		(17,644,600	)		(46,080,323	)		(13,443,004	)		(25,511,112	)
Capital share transactions (Note 2)		(6,301,680	)		81,975,267			(6,300,360	)		80,397,811
Net increase (decrease) in net assets		(42,146,874	)		54,371,626			(23,570,847	)		59,382,376
Net assets:
Beginning of period		395,982,950			341,611,324			363,071,144			303,688,768
End of period (Note 1e)	$	353,836,076		$	395,982,950		$	339,500,297		$	363,071,144


				Distributions in
				excess
		Undistributed net		of net investment
Fund		investment income		income

Franklin Lower Tier Floating Rate Fund	$	—	$	(328,979	)
Franklin Middle Tier Floating Rate Fund	$	69,405	$	—


Annualized Fee Rate		Net Assets
0.650%		Up to and including $500 million
0.550%		Over $500 million, up to and including $1 billion
0.500%		Over $1 billion, up to and including $1.5 billion
0.450%		Over $1.5 billion, up to and including $6.5 billion
0.425%		Over $6.5 billion, up to and including $11.5 billion
0.400%		Over $11.5 billion, up to and including $16.5 billion
0.390%		Over $16.5 billion, up to and including $19 billion
0.380%		Over $19 billion, up to and including $21.5 billion
0.370%		In excess of $21.5 billion


		Percentage of
Franklin Lower Tier Floating Rate Fund	Shares	Outstanding Shares
Franklin Floating Rate Daily Access Fund	6,729,194	16.9	%
Franklin Floating Rate Master Series	3,405,364	8.5	%
Franklin Low Duration Total Return Fund	1,893,663	4.8	%
Franklin Strategic Income Fund.	25,361,119	63.7	%^a
Franklin Strategic Income VIP Fund.	1,430,188	3.6	%
Franklin Total Return Fund	997,589	2.5	%
Total	39,817,117	100	%

		Percentage of
Franklin Middle Tier Floating Rate Fund	Shares	Outstanding Shares
Franklin Floating Rate Daily Access Fund	6,837,495	18.1	%
Franklin Floating Rate Master Trust	3,457,562	9.2	%
Franklin Low Duration Total Return Fund	2,389,308	6.3	%
Franklin Strategic Income Fund.	21,833,687	57.8	%^a
Franklin Strategic Income VIP Fund.	1,358,951	3.6	%
Franklin Total Return Fund	1,889,310	5.0	%
Total	37,766,313	100.0	%

^aInvestment activities of this shareholder could have a material impact on the Fund.