8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

August 3, 2005 (July 28, 2005)

WADDELL & REED FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-13913	51-0261715
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6300 Lamar Avenue
Overland Park, Kansas 66202

(Address of Principal Executive Offices) (Zip Code)

(913) 236-2000

(Registrant’s telephone number, including area code)

(Registrant’s Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01:ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On July 28, 2005, Waddell & Reed Financial, Inc. (the “Company”) entered into a forward interest rate swap agreement with a notional principal amount of $100 million with JPMorgan Chase Bank (the “Agreement”) in order to hedge the variability of future interest rates in anticipation of the refinancing of the Company’s $200 million 7.5% senior notes due January 2006. Pursuant to the Agreement, the Company will pay a fixed rate of 4.565% on the total notional amount of $100 million, beginning on January 18, 2006 through January 18, 2011, in exchange for receiving floating rate payments based on three-month LIBOR on the same notional amount for the same five-year period. The Agreement will be cash settled, in accordance with its terms, on or before January 18, 2006. The foregoing description of the Agreement is qualified in its entirety by reference to the Confirmation therefor, a copy of which is attached to this report as Exhibit 10.2.

The Agreement is governed by and was entered into pursuant to the terms and conditions of an ISDA Master Agreement, dated March 12, 2002 by and between the Company and JPMorgan Chase Bank, N.A. The ISDA Master Agreement was previously filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002.

JPMorgan Chase Bank and/or their affiliates have performed, and may perform in the future, various commercial banking, investment banking or other financial advisory services in the ordinary course of business for the Company and its affiliates, for which they have received, and will receive, customary fees and commissions.

ITEM 9.01:        FINANCIAL STATEMENT AND EXHIBITS

(c)Exhibits.

10.1ISDA Master Agreement, dated as of March 12, 2002, by and between Waddell & Reed Financial, Inc. and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 and incorporated herein by reference (File No. 333-43687).

10.2Confirmation, trade date of July 28, 2005, by and between Waddell & Reed Financial, Inc. and JPMorgan Chase Bank, N.A.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	WADDELL & REED FINANCIAL, INC.
Date: August 3, 2005	By:	/s/ Wendy J. Hills
		Vice President, Secretary and
		Associate General Counsel

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EXHIBIT INDEX

Exhibit No.	Description
10.1	ISDA Master Agreement, dated as of March 12, 2002, by and between Waddell & Reed Financial, Inc. and JPMorgan Chase Bank, N.A. Filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2002 and incorporated herein by reference (File No. 333-43687).
10.2	Confirmation, trade date of July 28, 2005, by and between Waddell & Reed Financial, Inc. and JPMorgan Chase Bank, N.A.

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EX-10.2

Exhibit 10.2

Interest Rate Swap Transaction

The purpose of this letter agreement is to confirm the amendment of the terms and conditions of the Transaction entered into between:

JPMORGAN CHASE BANK, N.A.

(“JPMorgan”)

and

WADDELL & REED FINANCIAL, INC.

(the “Counterparty”)

on the Trade Date and identified by the JPMorgan Deal Number specified below (the “Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the Master Agreement specified below, and supersedes any previous confirmation or other writing with respect to the transaction described below.

The definitions and provisions contained in the 2000 ISDA Definitions (“Definitions”), as published by the International Swaps and Derivatives Association, Inc. are incorporated into this Confirmation. In the event of any inconsistency between those definitions and provisions and this Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as of 12 March 2002, as amended and supplemented from time to time (the “Agreement”), between JPMORGAN CHASE BANK, N.A. (“JPMorgan”) and WADDELL & REED FINANCIAL, INC. (the “Counterparty”). All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

The terms of the particular Interest Rate Swap Transaction to which this Confirmation relates are as follows:

A.            TRANSACTION DETAILS
JPMorgan Deal Number(s):	6900009965603
Notional Amount:	USD 100,000,000.00
Trade Date:	28 July 2005
Effective Date:	18 January 2006
Termination Date:	18 January 2011 subject to adjustment in accordance with the Modified Following Business Day Convention.
Fixed Amounts:
Fixed Rate Payer:	Counterparty
Fixed Rate Payer Payment Dates:	The 18 July and 18 January in each year, from and including 18 July 2006 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and there will be an adjustment to the Calculation Period.
Fixed Rate:	4.56500 percent
Fixed Rate Day Count Fraction:	30/360
Business Days:	London, New York
Floating Amounts:
Floating Rate Payer:	JPMorgan
Floating Rate Payer Payment Dates:	The 18 April, 18 July, 18 October and 18 January in each year, from and including 18 April 2006 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and there will be an adjustment to the Calculation Period.

Floating Rate for initial Calculation Period:	To be determined
Floating Rate Option:	USD-LIBOR-BBA
Designated Maturity:	3 Month
Spread:	None
Floating Rate Day Count Fraction	Actual/360
Reset Dates:	The first day of each Calculation Period.
Compounding:	Inapplicable
Business Days:	London, New York
Calculation Agent:	JPMorgan, unless otherwise stated in the Agreement.
B.            EARLY TERMINATION
Mandatory Early Termination:	Applicable
C.            SETTLEMENT TERMS
Mandatory Early Termination Date:	18 January 2006
Cash Settlement Valuation Time:	11:00 a.m. New York time
Cash Settlement Valuation Date:	2 Valuation Business Days preceding the Mandatory Early Termination Date
Valuation Business Days:	New York, London
Cash Settlement Method:	Cash Price
Cash Settlement Currency:	USD
Cash Settlement Reference Banks:	As defined in the Definitions
Quotation Rate:	mid

D.            ACCOUNT DETAILS
Payments to JPMorgan in USD:	JPMORGAN CHASE BANK NA JPMORGAN CHASE BANK NA – NEW YORK – JPMCB NYC GLB FX NYST BIC: CHASUS33XXX AC No. 099997979
Payments to Counterparty in USD:	As per your standard settlement instructions.
E.             OFFICES
JPMorgan:	NEW YORK
Counterparty:	OVERLAND PARK

F.             DOCUMENTS TO BE DELIVERED

Each party shall deliver to the other, at the time of its execution of this Confirmation, evidence of the incumbency and specimen signature of the person(s) executing this Confirmation, unless such evidence has been previously supplied and remains true and in effect.

G.            RELATIONSHIP BETWEEN PARTIES

Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(a)           Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.

(b)           Assessment and Understanding. It is capableof assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is capable of assuming, and assumes the risks of that Transaction.

(c)           Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returning it to us or by sending to us a letter, telex or facsimile substantially similar to this letter, which letter, telex or facsimile sets forth the material terms of the Transaction to which this Confirmation relates and indicates agreement to those terms. When referring to this Confirmation, please indicate:  JPMorgan Deal Number(s):  6900009965603.

JPMorgan Chase Bank, N.A.
/s/ Carmine Pilla
Name:	Carmine Pilla
Title:	Vice President
Accepted and confirmed as of the date
first written:
WADDELL & REED FINANCIAL, INC.
/s/ Daniel P. Connealy
Name:	Daniel P. Connealy
Title:	Senior Vice President and Chief Financial Officer
Your reference number:		6900009965603