At November 30, 2021, the Fund had the following open reverse repurchase agreements:
At November 30, 2021, the Fund had the following open forward foreign currency contracts:
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Investments in unaffiliated securities, at value (Cost $297,480,013)
|
|
$
|
328,434,224
|
|
Investments in affiliated securities, at value (Cost $6,873,587)
|
|
|
6,873,587
|
|
Foreign currency, at value (Cost $467,434)
|
|
|
418,977
|
|
Interest receivable
|
|
|
4,469,616
|
|
Unrealized appreciation on forward foreign currency contracts
|
|
|
87,761
|
|
Other receivables
|
|
|
1,459
|
|
Prepaid expenses
|
|
|
1,077
|
|
Total Assets
|
|
|
340,286,701
|
|
|
|
Liabilities:
|
|
|
|
|
Loan payable (Note 6)
|
|
|
83,500,000
|
|
Payable for open reverse repurchase agreements (Note 3)
|
|
|
23,272,158
|
|
Distributions payable
|
|
|
1,520,719
|
|
Payable for securities purchased
|
|
|
956,150
|
|
Investment management fee payable
|
|
|
240,917
|
|
Due to custodian
|
|
|
234,563
|
|
Unrealized depreciation on forward foreign currency contracts
|
|
|
9,359
|
|
Directors fees payable
|
|
|
8,306
|
|
Interest expense payable
|
|
|
3,826
|
|
Accrued expenses
|
|
|
162,157
|
|
Total Liabilities
|
|
|
109,908,155
|
|
Total Net Assets
|
|
$
|
230,378,546
|
|
|
|
Net Assets:
|
|
|
|
|
Par value ($0.001 par value; 22,697,297 shares issued and outstanding; 100,000,000 shares
authorized)
|
|
$
|
22,697
|
|
Paid-in capital in excess of par value
|
|
|
307,549,051
|
|
Total distributable earnings (loss)
|
|
|
(77,193,202)
|
|
Total Net Assets
|
|
$
|
230,378,546
|
|
|
|
Shares Outstanding
|
|
|
22,697,297
|
|
|
|
Net Asset Value
|
|
$
|
10.15
|
|
See Notes to Financial
Statements.
|
|
|
|
|
22
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
Statement of operations (unaudited)
For the Six Months Ended November 30, 2021
|
|
|
|
|
|
|
Investment Income:
|
|
|
|
|
Interest
|
|
$
|
11,427,617
|
|
Dividends from unaffiliated investments
|
|
|
39,900
|
|
Dividends from affiliated investments
|
|
|
290
|
|
Less: Foreign taxes withheld
|
|
|
(48,756)
|
|
Total Investment
Income
|
|
|
11,419,051
|
|
|
|
Expenses:
|
|
|
|
|
Investment management fee (Note 2)
|
|
|
1,485,652
|
|
Interest expense (Notes 3 and 6)
|
|
|
395,965
|
|
Commitment fees (Note 6)
|
|
|
122,233
|
|
Transfer agent fees
|
|
|
43,424
|
|
Legal fees
|
|
|
40,591
|
|
Directors fees
|
|
|
39,211
|
|
Audit and tax fees
|
|
|
36,158
|
|
Shareholder reports
|
|
|
6,895
|
|
Stock exchange listing fees
|
|
|
6,206
|
|
Custody fees
|
|
|
5,550
|
|
Fund accounting fees
|
|
|
4,012
|
|
Insurance
|
|
|
3,700
|
|
Miscellaneous expenses
|
|
|
5,185
|
|
Total Expenses
|
|
|
2,194,782
|
|
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
|
(303)
|
|
Net Expenses
|
|
|
2,194,479
|
|
Net Investment Income
|
|
|
9,224,572
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments, Forward Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
|
|
|
|
|
Net Realized Gain From:
|
|
|
|
|
Investment transactions in unaffiliated securities
|
|
|
1,542,671
|
|
Forward foreign currency contracts
|
|
|
2,324
|
|
Foreign currency transactions
|
|
|
11,705
|
|
Net Realized Gain
|
|
|
1,556,700
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
|
Investments in unaffiliated securities
|
|
|
(13,209,454)
|
|
Forward foreign currency contracts
|
|
|
126,090
|
|
Foreign currencies
|
|
|
(57,666)
|
|
Change in Net Unrealized Appreciation
(Depreciation)
|
|
|
(13,141,030)
|
|
Net Loss on Investments, Forward Foreign Currency Contracts and Foreign Currency Transactions
|
|
|
(11,584,330)
|
|
Decrease in Net Assets From Operations
|
|
$
|
(2,359,758)
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
23
|
|
Statements of changes in net assets
|
|
|
|
|
|
|
|
|
For the Six Months Ended November 30, 2021 (unaudited)
and the Year Ended May 31, 2021
|
|
November 30
|
|
|
May 31
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
9,224,572
|
|
|
$
|
23,552,746
|
|
Net realized gain
|
|
|
1,556,700
|
|
|
|
19,168,216
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
(13,141,030)
|
|
|
|
16,921,785
|
|
Increase (Decrease) in Net Assets From
Operations
|
|
|
(2,359,758)
|
|
|
|
59,642,747
|
|
|
|
|
Distributions to Shareholders From (Note 1):
|
|
|
|
|
|
|
|
|
Total distributable earnings
|
|
|
(9,124,313)
|
|
|
|
(19,645,733)
|
|
Return of capital
|
|
|
|
|
|
|
(5,694,904)
|
|
Decrease in Net Assets From Distributions
to Shareholders
|
|
|
(9,124,313)
|
|
|
|
(25,340,637)
|
|
|
|
|
Fund Share Transactions:
|
|
|
|
|
|
|
|
|
Cost of shares repurchased through tender offer (0 and 21,170,180 shares repurchased,
respectively) (Note 5)
|
|
|
|
|
|
|
(219,958,165)
|
|
Decrease in Net Assets From Fund Share
Transactions
|
|
|
|
|
|
|
(219,958,165)
|
|
Decrease in Net
Assets
|
|
|
(11,484,071)
|
|
|
|
(185,656,055)
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
241,862,617
|
|
|
|
427,518,672
|
|
End of period
|
|
$
|
230,378,546
|
|
|
$
|
241,862,617
|
|
See Notes to Financial
Statements.
|
|
|
|
|
24
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
Statement of cash flows (unaudited)
For the Six Months Ended November 30, 2021
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net decrease in net assets resulting from operations
|
|
$
|
(2,359,758)
|
|
Adjustments to reconcile net decrease in net assets resulting from operations to net cash
provided (used) by operating activities:
|
|
|
|
|
Purchases of portfolio securities
|
|
|
(60,061,544)
|
|
Sales of portfolio securities
|
|
|
70,391,153
|
|
Net purchases, sales and maturities of short-term investments
|
|
|
(6,739,283)
|
|
Return of capital
|
|
|
21,348
|
|
Net amortization of premium (accretion of discount)
|
|
|
(1,917,277)
|
|
Decrease in receivable for securities sold
|
|
|
1,128,763
|
|
Decrease in interest receivable
|
|
|
209,289
|
|
Decrease in prepaid expenses
|
|
|
7,870
|
|
Decrease in other receivables
|
|
|
1,188
|
|
Decrease in payable for securities purchased
|
|
|
(3,707,916)
|
|
Decrease in investment management fee payable
|
|
|
(10,829)
|
|
Decrease in Directors fees payable
|
|
|
(2,361)
|
|
Decrease in interest expense payable
|
|
|
(4,974)
|
|
Increase in accrued expenses
|
|
|
42,585
|
|
Net realized gain on investments
|
|
|
(1,542,671)
|
|
Change in net unrealized appreciation (depreciation) of investments and forward foreign
currency contracts
|
|
|
13,083,364
|
|
Net Cash Provided in Operating
Activities*
|
|
|
8,538,947
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Distributions paid on common stock (net of distributions payable)
|
|
|
(9,124,313)
|
|
Decrease in loan facility borrowings
|
|
|
(2,000,000)
|
|
Increase in due to custodian
|
|
|
234,563
|
|
Increase in payable for open reverse repurchase agreements
|
|
|
1,823,658
|
|
Net Cash Used by Financing
Activities
|
|
|
(9,066,092)
|
|
Net Decrease in Cash and Restricted Cash
|
|
|
(527,145)
|
|
Cash and restricted cash at beginning of period
|
|
|
946,122
|
|
Cash and restricted cash at end of period
|
|
$
|
418,977
|
|
*
|
Included in operating expenses is cash paid of $522,311 for interest and commitment fees.
|
|
The following table provides a reconciliation of cash (including foreign currency) and restricted cash reported within the
Statement of Assets and Liabilities that sums to the total of such amounts shown on the Statement of Cash Flows.
|
|
|
|
|
|
|
|
November 30, 2021
|
|
Cash
|
|
$
|
418,977
|
|
Restricted cash
|
|
|
|
|
Total cash and restricted cash shown in the Statement of Cash Flows
|
|
$
|
418,977
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
25
|
|
Financial highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of capital stock outstanding throughout each year ended
May 31,
unless otherwise noted:
|
|
|
|
20211,2
|
|
|
20211
|
|
|
20201
|
|
|
20191
|
|
|
20181
|
|
|
20171
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
|
$10.66
|
|
|
|
$9.75
|
|
|
|
$10.54
|
|
|
|
$10.58
|
|
|
|
$11.31
|
|
|
|
$10.55
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.41
|
|
|
|
0.72
|
|
|
|
0.76
|
|
|
|
0.72
|
|
|
|
0.73
|
|
|
|
0.82
|
|
Net realized and unrealized gain (loss)
|
|
|
(0.52)
|
|
|
|
0.96
|
|
|
|
(0.78)
|
|
|
|
(0.04)
|
|
|
|
(0.69)
|
|
|
|
0.98
|
|
Total income (loss) from
operations
|
|
|
(0.11)
|
|
|
|
1.68
|
|
|
|
(0.02)
|
|
|
|
0.68
|
|
|
|
0.04
|
|
|
|
1.80
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.40)
|
3
|
|
|
(0.55)
|
|
|
|
(0.69)
|
|
|
|
(0.70)
|
|
|
|
(0.75)
|
|
|
|
(0.93)
|
|
Return of capital
|
|
|
|
|
|
|
(0.25)
|
|
|
|
(0.09)
|
|
|
|
(0.04)
|
|
|
|
(0.03)
|
|
|
|
(0.11)
|
|
Total
distributions
|
|
|
(0.40)
|
|
|
|
(0.80)
|
|
|
|
(0.78)
|
|
|
|
(0.74)
|
|
|
|
(0.78)
|
|
|
|
(1.04)
|
|
Anti-dilutive impact of repurchase plan
|
|
|
|
|
|
|
|
|
|
|
0.01
|
4
|
|
|
0.03
|
4
|
|
|
0.01
|
4
|
|
|
|
|
Anti-dilutive impact of tender offer
|
|
|
|
|
|
|
0.03
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
|
$10.15
|
|
|
|
$10.66
|
|
|
|
$9.75
|
|
|
|
$10.54
|
|
|
|
$10.58
|
|
|
|
$11.31
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
|
$9.74
|
|
|
|
$10.40
|
|
|
|
$9.07
|
|
|
|
$9.59
|
|
|
|
$9.18
|
|
|
|
$10.23
|
|
Total return, based on NAV6,7
|
|
|
(1.11)
|
%
|
|
|
18.06
|
%
|
|
|
(0.17)
|
%8,9
|
|
|
6.90
|
%
|
|
|
0.29
|
%
|
|
|
17.82
|
%
|
Total return, based on Market Price10
|
|
|
(2.62)
|
%
|
|
|
24.19
|
%
|
|
|
2.66
|
%
|
|
|
13.17
|
%
|
|
|
(2.99)
|
%
|
|
|
19.21
|
%
|
|
|
|
|
|
|
|
Net assets, end of period (millions)
|
|
|
$230
|
|
|
|
$242
|
|
|
|
$428
|
|
|
|
$465
|
|
|
|
$475
|
|
|
|
$512
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.81
|
%11
|
|
|
1.69
|
%
|
|
|
2.76
|
%9
|
|
|
2.54
|
%
|
|
|
2.06
|
%12
|
|
|
1.89
|
%12
|
Net
expenses13,14
|
|
|
1.81
|
11
|
|
|
1.69
|
|
|
|
2.73
|
9
|
|
|
2.52
|
|
|
|
2.02
|
12
|
|
|
1.82
|
12
|
Net investment income
|
|
|
7.62
|
11
|
|
|
6.95
|
|
|
|
7.29
|
|
|
|
6.93
|
|
|
|
6.58
|
|
|
|
7.41
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
18
|
%
|
|
|
43
|
%
|
|
|
60
|
%
|
|
|
89
|
%
|
|
|
97
|
%
|
|
|
78
|
%
|
See Notes to Financial
Statements.
|
|
|
|
|
26
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a share of capital stock outstanding throughout each year ended
May 31,
unless otherwise noted:
|
|
|
|
20211,2
|
|
|
20211
|
|
|
20201
|
|
|
20191
|
|
|
20181
|
|
|
20171
|
|
|
|
|
|
|
|
|
Supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan Outstanding, End of Period (000s)
|
|
|
$83,500
|
|
|
|
$85,500
|
|
|
|
$158,000
|
|
|
|
$180,000
|
|
|
|
$168,000
|
|
|
|
$171,000
|
|
Asset Coverage Ratio for Loan Outstanding15
|
|
|
376
|
%
|
|
|
383
|
%
|
|
|
371
|
%
|
|
|
358
|
%
|
|
|
383
|
%
|
|
|
399
|
%
|
Asset Coverage, per $1,000 Principal Amount of Loan
Outstanding15
|
|
|
$3,759
|
|
|
|
$3,829
|
|
|
|
$3,706
|
|
|
|
$3,583
|
|
|
|
$3,829
|
|
|
|
$3,992
|
|
Weighted Average Loan (000s)
|
|
|
$83,817
|
|
|
|
$111,103
|
|
|
|
$175,765
|
|
|
|
$177,490
|
|
|
|
$170,507
|
|
|
|
$156,400
|
|
Weighted Average Interest Rate on Loan
|
|
|
0.90
|
%
|
|
|
0.92
|
%
|
|
|
2.74
|
%
|
|
|
3.06
|
%
|
|
|
2.36
|
%
|
|
|
1.72
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
For the six months ended November 30, 2021 (unaudited).
|
3
|
The actual source of the Funds current fiscal year distributions may be from net investment income, return of
capital or a combination of both. Shareholders will be informed of the tax characteristics of the distributions after the close of the fiscal year.
|
4
|
The repurchase plan was completed at an average repurchase price of $7.50 for 239,229 shares and $1,781,056 for the year
ended May 31, 2020, $8.74 for 816,259 shares and $7,135,435 for the year ended May 31, 2019 and $9.50 for 319,205 shares and $3,031,002 for the year ended May 31, 2018.
|
5
|
The tender offer was completed at a price of $10.39 for 21,170,180 shares and $219,958,165 for the year ended May 31,
2021.
|
6
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the
absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
7
|
The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future
results. Total returns for periods of less than one year are not annualized.
|
8
|
The total return includes gains from settlement of security litigations. Without these gains, the total return would have
been -0.27% for the year ended May 31, 2020.
|
9
|
Included in the expense ratios and total return are certain non-recurring legal
and transfer agent fees that were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would have been 2.49% and 2.47%, respectively, and total return would have been 0.04% for the year ended May 31,
2020.
|
10
|
The total return calculation assumes that distributions are reinvested in accordance with the Funds dividend
reinvestment plan. Past performance is no guarantee of future results. Total returns for periods of less than one year are not annualized.
|
12
|
Included in the expense ratios are certain non-recurring reorganization fees that
were incurred by the Fund during the period. Without these fees, the gross and net expense ratios would not have changed for the year ended May 31, 2018 and would have been 1.87% and 1.80%, respectively, for the year ended May 31, 2017.
|
13
|
Reflects fee waivers and/or expense reimbursements.
|
14
|
The manager has agreed to waive the Funds management fee to an extent sufficient to offset the net management fee
payable in connection with any investment in an affiliated money market fund.
|
15
|
Represents value of net assets plus the loan outstanding at the end of the period divided by the loan outstanding at the
end of the period.
|
See Notes to
Financial Statements.
|
|
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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27
|
|
Notes to financial statements (unaudited)
1. Organization and significant accounting policies
Western Asset Global High Income Fund Inc. (the Fund) was incorporated in Maryland and is registered as a
non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the 1940 Act). The Board of Directors
authorized 100 million shares of $0.001 par value common stock. The Funds primary investment objective is high current income. The Funds secondary objective is total return. Under normal market conditions, the Fund invests in a
global portfolio of securities consisting of below investment grade fixed income securities, emerging market fixed income securities and investment grade fixed income securities. The Fund may use leverage through borrowings, including loans from
certain financial institutions and/or the issuance of debt securities, and through the issuance of preferred stock. The Fund may use leverage through borrowings in an aggregate amount of up to approximately 33 1/3% of the Funds total assets
less all liabilities and indebtedness not represented by senior securities (for these purposes, total net assets) immediately after such borrowings. Furthermore, the Fund may use leverage through the issuance of preferred stock in an
aggregate amount of liquidation preference attributable to the preferred stock combined with the aggregate amount of any borrowings of up to approximately 50% of the Funds total net assets immediately after such issuance.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles
(GAAP). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.
(a) Investment valuation. The valuations for fixed income securities (which
may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party
pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer details, interest
rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each
fund on the day of valuation. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or
other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if
the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value
has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the
security is
|
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|
28
|
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
principally traded, but before the Fund calculates
its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Funds Board of Directors.
The Board of
Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Global Fund Valuation Committee (the Valuation Committee). The Valuation Committee, pursuant to the policies
adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Funds pricing policies, and reporting to the Board of Directors. When determining the reliability of third party
pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies
include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental
investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuers
financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts research and observations from financial institutions; information
regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the
existence of a shelf registration for restricted securities.
For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of
Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of
Directors quarterly.
The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the
type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount
estimated future cash flows to present value.
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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29
|
|
Notes to financial statements
(unaudited) (contd)
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used
to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:
|
|
Level 1 quoted prices in active markets for identical investments
|
|
|
Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.)
|
|
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair
value of investments)
|
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing
in those securities.
The following is a summary of the inputs used in valuing the Funds assets and liabilities carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Long-Term Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Bonds & Notes
|
|
|
|
|
|
$
|
251,056,107
|
|
|
|
|
|
|
$
|
251,056,107
|
|
Sovereign Bonds
|
|
|
|
|
|
|
41,469,182
|
|
|
|
|
|
|
|
41,469,182
|
|
U.S. Government & Agency Obligations
|
|
|
|
|
|
|
22,349,357
|
|
|
|
|
|
|
|
22,349,357
|
|
Senior Loans
|
|
|
|
|
|
|
8,410,679
|
|
|
|
|
|
|
|
8,410,679
|
|
Convertible Bonds & Notes
|
|
|
|
|
|
|
4,224,729
|
|
|
|
|
|
|
|
4,224,729
|
|
Convertible Preferred Stocks
|
|
|
|
|
|
|
910,621
|
|
|
|
|
|
|
|
910,621
|
|
Warrants
|
|
$
|
9,224
|
|
|
|
|
|
|
|
|
|
|
|
9,224
|
|
Common Stocks
|
|
|
|
|
|
|
|
|
|
$
|
4,325
|
|
|
|
4,325
|
|
Total Long-Term Investments
|
|
|
9,224
|
|
|
|
328,420,675
|
|
|
|
4,325
|
|
|
|
328,434,224
|
|
Short-Term Investments
|
|
|
6,873,587
|
|
|
|
|
|
|
|
|
|
|
|
6,873,587
|
|
Total Investments
|
|
$
|
6,882,811
|
|
|
$
|
328,420,675
|
|
|
$
|
4,325
|
|
|
$
|
335,307,811
|
|
Other Financial Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
|
|
|
$
|
87,761
|
|
|
|
|
|
|
$
|
87,761
|
|
Total
|
|
$
|
6,882,811
|
|
|
$
|
328,508,436
|
|
|
$
|
4,325
|
|
|
$
|
335,395,572
|
|
|
LIABILITIES
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Other Financial Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
|
|
|
$
|
9,359
|
|
|
|
|
|
|
$
|
9,359
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
|
Reflects the unrealized appreciation (depreciation) of the instruments.
|
|
|
|
|
|
30
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
(b) Forward foreign currency contracts. The Fund enters into a forward
foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of a foreign currency denominated portfolio transaction.
A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is
marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either
delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time
it is closed.
Non-deliverable forward foreign currency exchange contracts are settled with the counterparty in cash
without the delivery of foreign currency.
Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of
Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.
(c) Loan participations. The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Funds investment in any such loan may be in the form of a participation in or an assignment of the
loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of
off-set against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower.
In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any off-set between the lender and the borrower.
(d) Unfunded loan commitments. The Fund may enter into certain credit
agreements where all or a portion of the total amount committed may be unfunded. The Fund is obligated to fund these commitments at the borrowers discretion. The commitments are disclosed in the accompanying Schedule of Investments. At
November 30, 2021, the Fund had sufficient cash and/or securities to cover these commitments.
(e)
Reverse repurchase agreements. The Fund may enter into reverse repurchase agreements. Under the terms of a typical reverse repurchase agreement, a fund sells a security subject to an obligation to
repurchase the security from the buyer at an agreed upon time and price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Funds use of the proceeds of the agreement may be
restricted pending a determination by the counterparty, or its trustee or receiver, whether to enforce the Funds obligation to repurchase the securities. In entering into reverse repurchase agreements, the Fund will pledge cash, U.S.
government securities or other liquid debt obligations at least equal in value to its obligations with respect to
|
|
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|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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|
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|
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31
|
|
Notes to financial statements
(unaudited) (contd)
reverse repurchase agreements or will take other actions permitted by law to cover its
obligations. If the market value of the collateral declines during the period, the Fund may be required to post additional collateral to cover its obligation. Cash collateral that has been pledged to cover obligations of the Fund under reverse
repurchase agreements, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral are noted in the Schedule of Investments. Interest payments made on reverse repurchase agreements are recognized
as a component of Interest expense on the Statement of Operations. In periods of increased demand for the security, the Fund may receive a fee for use of the security by the counterparty, which may result in interest income to the Fund.
(f) Cash flow information. The Fund invests in securities and
distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are reported in the Statements of Changes in Net Assets and additional
information on cash receipts and cash payments is presented in the Statement of Cash Flows.
(g) Foreign
currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of
valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or
losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions
as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
(h) Credit and market risk. The Fund invests in high-yield and emerging
market instruments that are subject to certain credit and market risks. The yields of high-yield and emerging market debt obligations reflect, among other things, perceived credit and market risks. The Funds investments in securities rated
below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk
|
|
|
|
|
32
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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related to timely and ultimate payment of interest
and principal, greater market price volatility and less liquid secondary market trading. The consequences of political, social, economic or diplomatic changes may have disruptive effects on the market prices of investments held by the Fund. The
Funds investments in non-U.S. dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange rate fluctuations.
(i) Foreign investment risks. The Funds investments in foreign
securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or may pay interest or dividends in foreign currencies, changes in the
relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation,
taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.
(j) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other
transactions where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may
increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Funds subadviser attempts to mitigate counterparty risk by
(i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the
counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose
the Fund to increased risk of loss.
With exchange traded and centrally cleared derivatives, there is less counterparty risk to the Fund since the exchange or
clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse. While offset
rights may exist under applicable law, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default of the clearing broker or clearinghouse.
The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or
similar agreement, with certain of its derivative counterparties that govern over-the-counter (OTC) derivatives and provide for general obligations,
representations, agreements, collateral posting terms, netting provisions in the event of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in
the Funds net assets or net asset value per share over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional
collateral.
|
|
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|
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|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
33
|
|
Notes to financial statements
(unaudited) (contd)
Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the
counterparty certain derivative financial instruments payables and/or receivables with collateral held and/or posted and create one single net payment. However, absent an event of default by the counterparty or a termination of the agreement,
the terms of the ISDA Master Agreements do not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The
enforceability of the right to offset may vary by jurisdiction.
Collateral requirements differ by type of derivative. Collateral or margin requirements are set by
the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for OTC traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any,
will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.
As of November 30, 2021, the Fund held forward foreign currency contracts with credit related contingent features which had a liability position of $9,359. If a
contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties.
(k) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities), adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Paydown gains and losses on mortgage- and
asset-backed securities are recorded as adjustments to interest income. Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. Foreign dividend income is recorded
on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. The cost of investments sold is determined by use
of the specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of
default or credit event.
(l) Distributions to shareholders.
Distributions from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. The actual source of the Funds monthly distributions may be from net investment
income, return of capital or a combination of both. Shareholders will be informed of the tax characteristics of the distributions after the close of the fiscal year. Distributions of net realized gains, if any, are declared at least annually.
Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.
(m) Compensating balance arrangements. The Fund has an arrangement with its
custodian bank whereby a portion of the custodians fees is paid indirectly by credits earned on the Funds cash on deposit with the bank.
(n) Federal and other taxes. It is the Funds policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the
Code), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute
|
|
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|
|
34
|
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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its taxable income and net realized gains, if any,
to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Funds financial statements.
Management has analyzed the Funds tax positions taken on income tax returns for all open tax years and has concluded that as of May 31, 2021, no provision for
income tax is required in the Funds financial statements. The Funds federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the
Internal Revenue Service and state departments of revenue.
Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and
capital gains at various rates. Realized gains upon disposition of securities issued in or by certain foreign countries are subject to capital gains tax imposed by those countries.
(o) Reclassification. GAAP requires that certain components of net assets
be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
2. Investment management agreement and other transactions with affiliates
Legg Mason Partners Fund Advisor, LLC (LMPFA) is the Funds investment manager. Western Asset Management Company, LLC (Western Asset),
Western Asset Management Company Limited (Western Asset Limited) and Western Asset Management Company Pte. Ltd. (Western Asset Singapore) are the Funds subadvisers. LMPFA, Western Asset, Western Asset Limited and
Western Asset Singapore are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (Franklin Resources).
LMPFA provides administrative and
certain oversight services to the Fund. The Fund pays LMPFA an investment management fee, calculated daily and paid monthly, at an annual rate of 0.85% of the Funds average daily Managed Assets. Managed Assets means net assets plus
the amount of any borrowings and assets attributable to any preferred stock that may be outstanding.
LMPFA delegates to Western Asset the day-to-day portfolio management of the Fund. Western Asset Limited and Western Asset Singapore provide certain subadvisory services to the Fund relating to currency
transactions and investment in non-U.S. dollar denominated securities. Western Asset Limited and Western Asset Singapore do not receive any compensation from the Fund and are compensated by Western Asset for
its services to the Fund. For its services, LMPFA pays Western Asset monthly 70% of the net management fee it receives from the Fund. Western Asset pays Western Asset Limited and Western Asset Singapore a monthly subadvisory fee in an amount equal
to 100% of the management fee paid to Western Asset on the assets that Western Asset allocates to each such non-U.S. subadviser to manage.
During the periods in which the Fund utilizes financial leverage, the fees paid to LMPFA will be higher than if the Fund did not utilize leverage because the fees are
calculated as a percentage of the Funds assets, including those investments purchased with leverage.
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|
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Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
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|
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35
|
|
Notes to financial statements
(unaudited) (contd)
The manager has agreed to waive the Funds management fee to an extent sufficient to offset
the net management fee payable in connection with any investment in an affiliated money market fund.
During the six months ended November 30, 2021, fees waived
and/or expenses reimbursed amounted to $303, all of which was an affiliated money market fund waiver.
All officers and one Director of the Fund are employees of
Franklin Resources or its affiliates and do not receive compensation from the Fund.
3. Investments
During the six months ended November 30, 2021, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) and U.S.
Government & Agency Obligations were as follows:
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
U.S. Government &
Agency Obligations
|
|
Purchases
|
|
$
|
58,836,788
|
|
|
$
|
1,224,756
|
|
Sales
|
|
|
70,391,153
|
|
|
|
|
|
At November 30, 2021, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of
investments for federal income tax purposes were substantially as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
Gross
Unrealized
Appreciation
|
|
|
Gross
Unrealized
Depreciation
|
|
|
Net
Unrealized
Appreciation
|
|
Securities
|
|
$
|
304,353,600
|
|
|
$
|
36,533,733
|
|
|
$
|
(5,579,522)
|
|
|
$
|
30,954,211
|
|
Forward foreign currency contracts
|
|
|
|
|
|
|
87,761
|
|
|
|
(9,359)
|
|
|
|
78,402
|
|
Transactions in reverse repurchase agreements for the Fund during the six months ended November 30, 2021 were as follows:
|
|
|
|
|
Average Daily
Balance*
|
|
Weighted Average
Interest Rate*
|
|
Maximum Amount
Outstanding
|
$22,929,447
|
|
0.119%
|
|
$23,548,763
|
*
|
Averages based on the number of days that the Fund had reverse repurchase agreements outstanding.
|
Interest rates on reverse repurchase agreements ranged from 0.07% to 0.75% during the six months ended November 30, 2021. Interest expense incurred on reverse
repurchase agreements totaled $13,900.
|
|
|
|
|
36
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
4. Derivative instruments
and hedging activities
Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives
within the Statement of Assets and Liabilities at November 30, 2021.
|
|
|
|
|
ASSET
DERIVATIVES1
|
|
|
|
Foreign
Exchange Risk
|
|
Forward foreign currency contracts
|
|
$
|
87,761
|
|
|
LIABILITY
DERIVATIVES1
|
|
|
|
Foreign
Exchange Risk
|
|
Forward foreign currency contracts
|
|
$
|
9,359
|
|
1
|
Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation and for liability
derivatives is payables/net unrealized depreciation.
|
The following tables provide information about the effect of derivatives and hedging
activities on the Funds Statement of Operations for the six months ended November 30, 2021. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second
table provides additional information about the change in unrealized appreciation (depreciation) resulting from the Funds derivatives and hedging activities during the period.
|
|
|
|
|
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
|
|
|
|
Foreign
Exchange Risk
|
|
Forward foreign currency contracts
|
|
$
|
2,324
|
|
|
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
|
|
Foreign
Exchange Risk
|
|
Forward foreign currency contracts
|
|
$
|
126,090
|
|
During the six months ended November 30, 2021, the volume of derivative activity for the Fund was as follows:
|
|
|
|
|
|
|
Average Market
Value
|
|
Forward foreign currency contracts (to buy)
|
|
$
|
412,444
|
|
Forward foreign currency contracts (to sell)
|
|
|
2,353,755
|
|
|
|
|
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
37
|
|
Notes to financial statements
(unaudited) (contd)
The following table presents the Funds OTC derivative assets and liabilities by counterparty
net of amounts available for offset under an ISDA Master Agreement and net of the related collateral pledged (received) by the Fund as of November 30, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty
|
|
Gross Assets
Subject to
Master
Agreements1
|
|
|
Gross
Liabilities
Subject to
Master
Agreements1
|
|
|
Net Assets
(Liabilities)
Subject to
Master
Agreements
|
|
|
Collateral
Pledged
(Received)
|
|
|
Net
Amount2
|
|
BNP Paribas SA
|
|
|
|
|
|
$
|
(2,186)
|
|
|
$
|
(2,186)
|
|
|
|
|
|
|
$
|
(2,186)
|
|
Citibank N.A.
|
|
$
|
8,868
|
|
|
|
(2,860)
|
|
|
|
6,008
|
|
|
|
|
|
|
|
6,008
|
|
Goldman Sachs Group Inc.
|
|
|
78,893
|
|
|
|
(3,925)
|
|
|
|
74,968
|
|
|
|
|
|
|
|
74,968
|
|
Morgan Stanley & Co. Inc.
|
|
|
|
|
|
|
(388)
|
|
|
|
(388)
|
|
|
|
|
|
|
|
(388)
|
|
Total
|
|
$
|
87,761
|
|
|
$
|
(9,359)
|
|
|
$
|
78,402
|
|
|
|
|
|
|
$
|
78,402
|
|
1
|
Absent an event of default or early termination, derivative assets and liabilities are presented gross and not offset in
the Statement of Assets and Liabilities.
|
2
|
Represents the net amount receivable (payable) from (to) the counterparty in the event of default.
|
5. Tender offer
On June 22, 2020, the
Funds Board of Directors authorized (subject to certain conditions) a cash tender offer for up to 50% of the Funds outstanding shares at a price per share equal to 99.5% of the Funds net asset value per share as of the business day
immediately following the expiration date of the tender offer. On October 19, 2020, the Fund commenced its tender offer, which expired on November 16, 2020. On November 19, 2020, the Fund announced the final results of the tender
offer. The Fund accepted 21,170,180 duly tendered and not withdrawn shares, representing approximately 48% of the Funds outstanding shares. The shares accepted for tender were repurchased at a price of $10.39, equal to
99.5% of the per share net asset value, $10.44, as of the close of the regular trading session of the New York Stock Exchange on November 17, 2020. Payment for such
shares was made on November 19, 2020. Shares that were not tendered remain outstanding.
6. Loan
The Fund has a revolving credit agreement with The Bank of Nova Scotia (Credit Agreement), which allows the Fund to borrow up to an aggregate amount of
$180,000,000. Effective December 15, 2021, unless renewed, the Credit Agreement will terminate on December 14, 2022. The Fund pays a commitment fee on the unutilized portion of the loan commitment amount at an annual rate of 0.25%, except
that the commitment fee is 0.15% in the event that the aggregate outstanding principal balance of the loan is equal to or greater than 75% of $180,000,000. The interest on the loan is calculated at a variable rate based on a benchmark (currently
LIBOR, but subject to transition to adjusted SOFR, or an alternative benchmark, upon the occurrence of certain benchmark transition events including the cessation of publication of LIBOR) plus any applicable margin. Securities held by the Fund are
subject to a lien, granted to The Bank of Nova Scotia, to the extent of the borrowing outstanding and any additional expenses. The Funds Credit Agreement contains customary covenants that, among other things, may limit the Funds ability
to pay distributions in certain circumstances, incur additional debt, change its fundamental investment policies and engage in certain transactions, including mergers and
|
|
|
|
|
38
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
consolidations and require asset coverage ratios in
addition to those required by the 1940 Act. In addition, the Credit Agreement may be subject to early termination under certain conditions and may contain other provisions that could limit the Funds ability to utilize borrowing under the
agreement. Interest expense related to this loan for the six months ended November 30, 2021 was $382,048. For the six months ended November 30, 2021, the Fund incurred commitment fees of $122,233. For the six months ended November 30,
2021, based on the number of days during the reporting period that the Fund had an outstanding balance under the Credit Agreement, the Fund had an average daily loan balance outstanding of $83,816,940 and the weighted average interest rate was
0.90%. At November 30, 2021 the Fund had $83,500,000 of borrowings outstanding per the Credit Agreement.
7. Distributions subsequent
to November 30, 2021
The following distributions have been declared by the Funds Board of Directors and are payable subsequent to the period
end of this report:
|
|
|
|
|
|
|
|
|
Record Date
|
|
Payable Date
|
|
|
Amount
|
|
11/22/2021
|
|
|
12/1/2021
|
|
|
$
|
0.0670
|
|
12/23/2021
|
|
|
12/31/2021
|
|
|
$
|
0.0670
|
|
1/24/2022
|
|
|
2/1/2022
|
|
|
$
|
0.0670
|
|
2/18/2022
|
|
|
3/1/2022
|
|
|
$
|
0.0670
|
|
8. Stock repurchase program
On November 16, 2015, the Fund announced that the Funds Board of Directors (the Board) had authorized the Fund to repurchase in the open market up
to approximately 10% of the Funds outstanding common stock when the Funds shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase shares of common stock at such times and in such
amounts as management reasonably believes may enhance stockholder value. The Fund is under no obligation to purchase shares at any specific discount levels or in any specific amounts. During the six months ended November 30, 2021, the Fund did
not repurchase any shares.
Since the commencement of the stock repurchase program through November 30, 2021, the Fund repurchased 1,374,693 shares or 3.04% of
its common shares outstanding for a total amount of $11,947,493.
9. Transactions with affiliated company
As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common
ownership or control with the Fund. The following company was considered an affiliated company for
|
|
|
|
|
|
|
Western Asset Global High Income Fund Inc. 2021 Semi-Annual Report
|
|
|
|
|
39
|
|
Notes to financial statements
(unaudited) (contd)
all or some portion of the six months ended November 30, 2021. The following transactions
were effected in such company for the six months ended November 30, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
Value at
May 31,
|
|
|
Purchased
|
|
|
Sold
|
|
|
2021
|
|
|
Cost
|
|
|
Shares
|
|
|
Cost
|
|
|
Shares
|
|
Western Asset Premier Institutional Government Reserves, Premium Shares
|
|
$
|
134,264
|
|
|
$
|
45,096,212
|
|
|
|
45,096,212
|
|
|
$
|
38,356,889
|
|
|
|
38,356,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(contd)
|
|
Realized
Gain (Loss)
|
|
|
Dividend
Income
|
|
|
Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
|
|
|
Affiliate
Value at
November 30,
2021
|
|
Western Asset Premier Institutional Government Reserves, Premium Shares
|
|
|
|
|
|
$
|
290
|
|
|
|
|
|
|
$
|
6,873,587
|
|