UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-CSR

 

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-10603

 

 

Western Asset Premier Bond Fund

Exact name of registrant as specified in charter)

 

 

620 Eighth Avenue, 47th Floor,

New York, NY 10018

(Address of principal executive offices) (Zip code)

 

 

Marc A. De Oliveira.

Franklin Templeton

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (888) 777-0102

Date of fiscal year end: December 31

Date of reporting period: December 31, 2021

 

 

 


ITEM

1. REPORT TO STOCKHOLDERS.

The Annual Report to Stockholders is filed herewith.

 


LOGO

 

Annual Report   December 31, 2021

WESTERN ASSET

PREMIER BOND FUND

(WEA)

 

 

 

 

 

LOGO

 

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE


What’s inside      
Letter from the president     III  
Fund overview     1  
Fund at a glance     7  
Fund performance     8  
Schedule of investments     10  
Statement of assets and liabilities     31  
Statement of operations     32  
Statements of changes in net assets     33  
Statement of cash flows     34  
Financial highlights     36  
Notes to financial statements     38  
Report of independent registered public accounting firm     54  
Additional information     55  
Annual chief executive officer and principal financial officer certifications     62  
Other shareholder communications regarding accounting matters     63  
Summary of information regarding the Fund     64  
Dividend reinvestment plan     78  
Important tax information     80  

Fund objective

The Fund’s investment objective is to provide current income and capital appreciation by investing primarily in a diversified portfolio of investment grade bonds.

Under normal market conditions, the Fund expects to invest substantially all (but at least 80%) of its total managed assets in bonds, including corporate bonds, U.S. government and agency securities and mortgage-related securities, and at least 65% of its total managed assets in bonds that, at the time of purchase, are of investment grade quality. The Fund may invest up to 35% of its total managed assets in bonds of below investment grade quality (commonly referred to as “junk bonds”) at the time of purchase. The Fund may invest in securities or instruments other than bonds (including preferred stock) and may invest up to 10% of its total managed assets in instruments denominated in currencies other than the U.S. dollar. The Fund may invest in a variety of derivative instruments for investment or risk management purposes. The Fund expects that the average effective duration of its portfolio will range between 3.5 and seven years, although this target duration may change from time to time. Trust preferred interests and capital securities are considered bonds and not preferred stock for purposes of the foregoing guidelines.

 

 

 II 

   Western Asset Premier Bond Fund


Letter from the president

 

LOGO

Dear Shareholder,

We are pleased to provide the annual report of Western Asset Premier Bond Fund for the twelve-month reporting period ended December 31, 2021. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

 

 

Fund prices and performance,

 

 

Market insights and commentaries from our portfolio managers, and

 

 

A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

 

LOGO

Jane Trust, CFA

President and Chief Executive Officer

January 31, 2022

 

 

Western Asset Premier Bond Fund  

 

 III 


Fund overview

 

Q. What is the Fund’s investment strategy?

A. The Fund’s investment objective is to provide current income and capital appreciation by investing primarily in a diversified portfolio of investment grade bonds. Under normal market conditions, the Fund expects to invest substantially all (but at least 80%) of its total managed assetsi in bonds, including corporate bonds, U.S. government and agency securities and mortgage-related securities, and at least 65% of its total managed assets in bonds that, at the time of purchase, are of investment grade quality. The Fund may invest up to 35% of its total managed assets in bonds of below investment grade quality (commonly referred to as “junk” bonds) at the time of purchase. The Fund may invest in securities or instruments other than bonds (including preferred stock) and may invest up to 10% of its total managed assets in instruments denominated in currencies other than the U.S. dollar. The Fund may invest in a variety of derivative instruments for investment or risk management purposes. The Fund expects that the average effective duration of its portfolio will range between 3.5 and seven years, although this target duration may change from time to time. Trust preferred interests and capital securities are considered bonds and not preferred stock for purposes of the foregoing guidelines. If a security is rated by multiple nationally recognized statistical rating organizations (“NRSROs”) and receives different ratings, the Fund will treat the security as being rated in the highest rating category received from an NRSRO.

At Western Asset Management Company, LLC (“Western Asset”), the Fund’s investment adviser, we utilize a fixed income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western Asset’s senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed income portfolios will reflect a consensus of interdisciplinary views within the Western Asset organization. The individuals responsible for development of investment strategy, day-today portfolio management, oversight and coordination of the Fund are S. Kenneth Leech, Michael C. Buchanan and Christopher F. Kilpatrick.

Q. What were the overall market conditions during the Fund’s reporting period?

A. Fixed income markets experienced periods of volatility and, overall, declined over the twelve-month reporting period ended December 31, 2021. Volatility was driven by a number of factors, including the repercussions from the COVID-19 pandemic, rebounding global growth, sharply rising inflation, fluctuating interest rates, and expectations for less accommodative central bank monetary policy. Most spread sectors (non-Treasuries) outperformed similar duration Treasuries, as many investors looked to generate incremental yield in the relatively low interest rate environment.

Short-term U.S. Treasury yields moved sharply higher as the Federal Reserve Board (the “Fed”) telegraphed that it was poised to begin raising interest rates in 2022. The yield for the two-year Treasury note began the reporting period at 0.13% and ended the reporting period at 0.73%. The low of 0.09% occurred on February 5, 2021 and the high of 0.76% took

 

Western Asset Premier Bond Fund 2021 Annual Report

   

 

 

 1 

 


Fund overview (cont’d)

 

place on December 27, 2021. Long-term U.S. Treasury yields also moved higher, as positive economic data and rising inflation triggered expectations that the Fed would remove its monetary policy accommodation sooner than previously anticipated. The yield for the ten-year Treasury began the reporting period at 0.93% (equaling the low for the period) and ended the reporting period at 1.52%. The high of 1.74% took place on March 19 and March 31, 2021.

All told, the Bloomberg U.S. Aggregate Indexii returned -1.54% for the twelve months ended December 31, 2021. For comparison purposes, riskier fixed income securities, including high-yield bonds and emerging market debt, produced mixed results. Over the fiscal year, the Bloomberg U.S. Corporate High Yield 2% Issuer Cap Indexiii and the JPMorgan Emerging Markets Bond Index Globaliv returned 5.26% and -1.51%, respectively.

Q. How did we respond to these changing market conditions?

A. A number of adjustments were made to the Fund’s portfolio during the reporting period. We increased the Fund’s allocations to U.S. dollar-denominated emerging market sovereigns and corporates. In contrast, we reduced the Fund’s cash position, as well as its allocations to investment-grade corporate bonds and Treasury securities.

During the reporting period, we employed U.S. Treasury futures to manage the Fund’s duration and currency forwards to manage the Fund’s currency exposure. In aggregate, they contributed to the performance.

The use of leverage was tactically managed during the reporting period. The Fund ended the period with leverage as a percentage of gross assets at roughly 29%, versus 28% from the beginning of the reporting period. Overall, leverage contributed to results given the positive total return of the assets of the Fund in 2021.

Performance review

For the twelve months ended December 31, 2021, Western Asset Premier Bond Fund returned 1.80% based on its net asset value (“NAV”)v and 6.87% based on its New York Stock Exchange (“NYSE”) market price per share. The Fund’s unmanaged benchmarks, the Bloomberg U.S. Corporate High Yield Indexvi and the Bloomberg U.S. Credit Indexvii, returned 5.28% and -1.08%, respectively, for the same period. The Lipper Corporate BBB-Rated Debt Closed-End Funds (Leveraged) Category Averageviii returned 3.61% over the same time frame. Please note that Lipper performance returns are based on each fund’s NAV.

The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. The Fund’s manager believes the practice helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV.

 

 

 

  2

    Western Asset Premier Bond Fund 2021 Annual Report


 

During the twelve-month period, the Fund made distributions to shareholders totaling $0.79 per share.* The performance table shows the Fund’s twelve-month total return based on its NAV and market price as of December 31, 2021. Past performance is no guarantee of future results.

 

Performance Snapshot as of December 31, 2021  
Price Per Share   12-Month
Total Return**
 
$14.32 (NAV)     1.80 %† 
$14.33 (Market Price)     6.87 %‡ 

All figures represent past performance and are not a guarantee of future results.

** Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.

† Total return assumes the reinvestment of all distributions at NAV.

‡ Total return assumes the reinvestment of all distributions in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.

Q. What were the leading contributors to performance?

A. The largest contributor to the Fund’s absolute performance during the reporting period was its issuer selection among its high-yield bond allocation. In particular, issuer selection in the energy and transportation sectors was rewarded.

In the energy sector, overweight positions in Western Midstream Operating LP, Range Resources, EQT, and Oasis Petroleum performed well. Almost all of these issuers were upgraded by at least one ratings agency and all have benefited from the move higher in commodity prices. In addition, fundamental performance continues to improve for these companies and we are anticipating additional ratings upgrades in the sector. Energy companies continue to focus on debt reduction and free cash flow rather than drilling activities.

In the transportation space, overweight positions in Delta Air Lines, Avolon holding company debt (Global Aircraft Leasing), United Airlines, and global cruise ship operators Norwegian and Viking cruise lines were rewarded. Debt of these companies performed well as they all increased their liquidity and saw strong demand for their services given the global pent-up demand for travel and leisure.

In the Fund’s emerging markets exposure, an overweight to global generic drug manufacturer Teva Pharmaceuticals performed well. The company’s spreads narrowed as it posted improved fundamental results and generated free cash flow. After the reporting

* For the tax character of distributions paid during the fiscal year ended December 31, 2021, please refer to page 52 of this report.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 3 

 


Fund overview (cont’d)

 

period, Teva Pharmaceuticals addressed several front-end maturities with a refinancing that was well received by the global fixed income market.

Q. What were the leading detractors from performance?

A. The largest detractor from absolute performance was a handful of emerging market positions. Longer duration emerging market corporates underperformed, such as Ecopetrol SA and Petrobras SA bonds. While fundamental performance has stabilized at these two companies, our positioning was not rewarded.

Lastly, an overweight to Peru detracted from results. Peru held elections recently and the candidates that took office are seen as less market friendly and not as fiscally conservative as the previous administration.

Looking for additional information?

The Fund is traded under the symbol “WEA” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the symbol “XWEAX” on most financial websites. Barron’s and The Wall Street Journal’s Monday edition both carry closed-end fund tables that provide additional information.

In addition, the Fund issues a quarterly press release that can be found on most major financial websites as well as www.franklintempleton.com. In a continuing effort to provide information concerning the Fund, shareholders may call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern Time, for the Fund’s current NAV, market price and other information.

Thank you for your investment in Western Asset Premier Bond Fund. As always, we appreciate that you have chosen us to manage your assets and we remain focused on achieving the Fund’s investment goals.

Sincerely,

Western Asset Management Company, LLC

January 21, 2022

RISKS: The Fund is a diversified closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objective. The Fund’s common shares are traded on the New York Stock Exchange. Similar to stocks, the Fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. Diversification does not assure against market loss. The Fund’s investments are subject to a number of risks, including credit, inflation and interest rate risks. As interest rates rise, bond prices fall, reducing the value of a fixed income investment’s price. The Fund may invest in high-yield bonds (commonly referred to as “junk” bonds), which are rated below investment grade and carry more risk than higher-rated securities. To the extent that the Fund invests in asset-backed,

 

 

  4

    Western Asset Premier Bond Fund 2021 Annual Report


mortgage- backed or mortgage related securities, its exposure to prepayment and extension risks may be greater than if it invested in other fixed income securities. Leverage may result in greater volatility of NAV and the market price of common shares and increases a shareholder’s risk of loss. Investing in foreign securities is subject to certain risks not associated with domestic investing, such as currency fluctuations, and social, political and economic uncertainties which could result in significant volatility. These risks are magnified in emerging or developing markets. Emerging market countries tend to have economic, political, and legal systems that are less developed and are less stable than those of more developed countries. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The Fund may also invest in money market funds, including funds affiliated with the Fund’s manager and subadvisers. For more information on Fund risks, see Summary of information regarding the Fund - Principal Risk Factors in this report.

Portfolio holdings and breakdowns are as of December 31, 2021 and are subject to change and may not be representative of the portfolio managers’ current or future investments. Please refer to pages 10 through 30 for a list and percentage breakdown of the Fund’s holdings.

The mention of sector breakdowns is for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. Portfolio holdings are subject to change at any time and may not be representative of the portfolio managers’ current or future investments. The Fund’s top five sector holdings (as a percentage of net assets) as of December 31, 2021 were: financials (25.1%), energy (24.4%), communication services (19.3%), consumer discretionary (18.1%) and industrials (13.9%). The Fund’s portfolio composition is subject to change at any time.

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 5 

 


Fund overview (cont’d)

 

 

i 

“Total managed assets” equals the total assets of the Fund (including any assets attributable to leverage) minus accrued liabilities (other than liabilities representing leverage).

 

ii 

The Bloomberg U.S. Aggregate Index is a broad-based bond index comprised of government, corporate, mortgage- and asset-backed issues, rated investment grade or higher, and having at least one year to maturity.

 

iii 

The Bloomberg U.S. Corporate High Yield - 2% Issuer Cap Index is an index of the 2% Issuer Cap component of the Bloomberg U.S. Corporate High Yield Index, which covers the U.S. dollar-denominated, non-investment grade, fixed- rate, taxable corporate bond market.

 

iv 

The JPMorgan Emerging Markets Bond Index Global tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds and local market instruments.

 

v 

Net asset value (“NAV”) is calculated by subtracting total liabilities and outstanding preferred stock (if any) from the closing value of all securities held by the Fund (plus all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The NAV fluctuates with changes in the market prices of securities in which the Fund has invested. However, the price at which an investor may buy or sell shares of the Fund is the Fund’s market price as determined by supply of and demand for the Fund’s shares.

 

vi

The Bloomberg U.S. Corporate High Yield Index covers the universe of fixed-rate, non-investment grade debt, including corporate and non-corporate sectors. Pay-in-kind (“PIK”) bonds, Eurobonds and debt issues from countries designated as emerging markets are excluded, but Canadian and global bonds (SEC registered) of issuers in non- emerging market countries are included. Original issue zero coupon bonds, step-up coupon structures and 144A securities are also included.

 

vii 

The Bloomberg U.S. Credit Index is an index composed of corporate and non-corporate debt issues that are investment grade (rated Baa3/BBB- or higher).

 

viii 

Lipper, Inc., a wholly-owned subsidiary of Refinitiv, provides independent insight on global collective investments. Returns are based on the twelve-month period ended December 31, 2021, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 9 funds in the Fund’s Lipper category.

 

 

  6

    Western Asset Premier Bond Fund 2021 Annual Report


Fund at a glance (unaudited)

 

Investment breakdown (%) as a percent of total investments

 

LOGO

 

The bar graph above represents the Fund’s portfolio as of December 31, 2021 and December 31, 2020 and does not include derivatives, such as forward foreign currency contracts. The Fund’s portfolio is actively managed. As a result, the composition of its portfolio holdings and sectors is subject to change at any time.

 

Represents less than 0.1%.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 7 

 


Fund performance (unaudited)

 

Net Asset Value       
Average annual total returns1        
Twelve Months Ended 12/31/21      1.80
Five Years Ended 12/31/21      6.52  
Ten Years Ended 12/31/21      8.02  
Cumulative total returns1        
12/31/11 through 12/31/21     

 

116.26

 

 

Market Price       
Average annual total returns2        
Twelve Months Ended 12/31/21      6.87
Five Years Ended 12/31/21      8.28  
Ten Years Ended 12/31/21      6.03  
Cumulative total returns2        
12/31/11 through 12/31/21      79.51

All figures represent past performance and are not a guarantee of future results. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.

 

1 

Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value.

 

2 

Assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.

 

 

  8

    Western Asset Premier Bond Fund 2021 Annual Report


 

Historical performance

Value of $10,000 invested in

Western Asset Premier Bond Fund vs. Bloomberg U.S. Corporate High Yield Index and Bloomberg U.S. Credit Index† — December 2011 - December 2021

 

LOGO

All figures represent past performance and are not a guarantee of future results. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.

 

Hypothetical illustration of $10,000 invested in Western Asset Premier Bond Fund on December 31, 2011, assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value and also assuming the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan through December 31, 2021. The hypothetical illustration also assumes a $10,000 investment in the Bloomberg U.S. Corporate High Yield Index and the Bloomberg U.S. Credit Index (together, the “Indices”). The Bloomberg U.S. Corporate High Yield Index covers the universe of fixed-rate, non-investment grade debt, including corporate and non-corporate sectors. Pay-in-kind (“PIK”) bonds, Eurobonds and debt issues from countries designated as emerging markets are excluded, but Canadian and global bonds (SEC registered) of issuers in non-emerging market countries are included. Original issue zero coupon bonds, step-up coupon structures and 144-A securities are also included. The Bloomberg U.S. Credit Index is an index composed of corporate and non-corporate debt issues that are investment grade. The Indices are unmanaged. Please note that an investor cannot invest directly in an index.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 9 

 


Schedule of investments

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  
Corporate Bonds & Notes — 107.1%                                
Communication Services — 14.0%                                

Diversified Telecommunication Services — 2.7%

 

                       

Altice France Holding SA, Senior Notes

    6.000     2/15/28       670,000     $ 641,056  (a)  

Altice France Holding SA, Senior Secured Notes

    10.500     5/15/27       450,000       484,384 (a)  

Altice France SA, Senior Secured Notes

    8.125     2/1/27       430,000       460,111 (a)  

Altice France SA, Senior Secured Notes

    5.500     10/15/29       400,000       394,682 (a)  

Lumen Technologies Inc., Senior Secured Notes

    4.000     2/15/27       1,050,000      
1,066,590
 
(a)
 

Orange SA, Senior Notes

    9.000     3/1/31       600,000       920,382  

Verizon Communications Inc., Senior Notes

    4.329     9/21/28       500,000       568,489  

Total Diversified Telecommunication Services

 

                    4,535,694  

Entertainment — 1.1%

                               

Netflix Inc., Senior Notes

    5.875     11/15/28       410,000       493,714  

Netflix Inc., Senior Notes

    6.375     5/15/29       310,000       385,661  

TWDC Enterprises 18 Corp., Senior Notes

    3.000     2/13/26       500,000       529,465  

Walt Disney Co., Senior Notes

    8.875     4/26/23       400,000       441,552  

Total Entertainment

                            1,850,392  

Media — 7.3%

                               

CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes

    5.125     5/1/27       350,000       360,929 (a)  

CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes

    5.000     2/1/28       410,000       427,220 (a)  

Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes

    4.200     3/15/28       1,000,000       1,096,031  

Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes

    2.300     2/1/32       1,000,000       950,553  

Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes

    6.384     10/23/35       420,000       543,359  

Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes

    6.484     10/23/45       1,130,000       1,546,475  

Comcast Corp., Senior Notes

    3.700     4/15/24       1,000,000       1,062,948  

Comcast Corp., Senior Notes

    7.050     3/15/33       1,000,000       1,441,687  

Directv Financing LLC/Directv Financing Co-Obligor Inc., Senior Secured Notes

    5.875     8/15/27       730,000       748,396 (a)  

 

See Notes to Financial Statements.

 

 

  10

    Western Asset Premier Bond Fund 2021 Annual Report


Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Media — continued

                                   

DISH DBS Corp., Senior Notes

     5.875      11/15/24        1,160,000      $ 1,193,130  

DISH DBS Corp., Senior Notes

     7.750      7/1/26        1,180,000        1,246,434  

DISH DBS Corp., Senior Secured Notes

     5.750      12/1/28        240,000        242,850 (a)  

Time Warner Cable LLC, Senior Secured Notes

     7.300      7/1/38        720,000        1,020,780  

Univision Communications Inc., Senior Secured Notes

     9.500      5/1/25        470,000        502,790 (a)  

Total Media

                                12,383,582  

Wireless Telecommunication Services — 2.9%

 

                          

CSC Holdings LLC, Senior Notes

     6.500      2/1/29        560,000        600,337 (a)  

Sprint Capital Corp., Senior Notes

     6.875      11/15/28        420,000        532,006  

Sprint Capital Corp., Senior Notes

     8.750      3/15/32        30,000        45,050  

Sprint Corp., Senior Notes

     7.875      9/15/23        760,000        838,071  

T-Mobile USA Inc., Senior Secured Notes

     2.550      2/15/31        1,250,000        1,244,713  

VEON Holdings BV, Senior Notes

     5.950      2/13/23        570,000        594,929 (a)  

VEON Holdings BV, Senior Notes

     3.375      11/25/27        600,000        586,308 (a)  

Vodafone Group PLC, Senior Notes

     4.375      5/30/28        500,000        563,079  

Total Wireless Telecommunication Services

 

                       5,004,493  

Total Communication Services

                                23,774,161  
Consumer Discretionary — 14.9%                                    

Auto Components — 1.4%

                                   

Adient Global Holdings Ltd., Senior Notes

     4.875      8/15/26        580,000        592,348 (a)  

Adient US LLC, Senior Secured Notes

     9.000      4/15/25        360,000        382,903 (a)  

American Axle & Manufacturing Inc., Senior Notes

     6.500      4/1/27        600,000        623,850  

JB Poindexter & Co. Inc., Senior Notes

     7.125      4/15/26        790,000        827,758 (a)  

Total Auto Components

                                2,426,859  

Automobiles — 3.2%

                                   

Daimler Finance North America LLC, Senior Notes

     8.500      1/18/31        1,000,000        1,488,517  

Ford Motor Co., Senior Notes

     9.000      4/22/25        580,000        709,842  

Ford Motor Credit Co. LLC, Senior Notes

     4.250      9/20/22        200,000        203,863  

General Motors Co., Senior Notes

     5.400      10/2/23        100,000        107,081  

General Motors Co., Senior Notes

     6.125      10/1/25        130,000        149,462  

General Motors Co., Senior Notes

     4.200      10/1/27        750,000        821,397  

General Motors Co., Senior Notes

     6.600      4/1/36        140,000        189,652  

Nissan Motor Co. Ltd., Senior Notes

     4.810      9/17/30        1,570,000        1,757,707 (a)  

Total Automobiles

                                5,427,521  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 11 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Diversified Consumer Services — 0.4%

                                   

Carriage Services Inc., Senior Notes

     4.250      5/15/29        540,000      $ 538,118  (a) 

StoneMor Inc., Senior Secured Notes

     8.500      5/15/29        150,000        155,173  (a) 

Total Diversified Consumer Services

                                693,291  

Hotels, Restaurants & Leisure — 8.6%

                                   

1011778 BC ULC/New Red Finance Inc., Senior Secured Notes

     5.750      4/15/25        250,000        259,671  (a) 

Carnival Corp., Senior Notes

     7.625      3/1/26        310,000        325,362  (a) 

Carnival Corp., Senior Notes

     6.000      5/1/29        980,000        977,036  (a) 

Carrols Restaurant Group Inc., Senior Notes

     5.875      7/1/29        840,000        757,180  (a) 

IRB Holding Corp., Senior Secured Notes

     7.000      6/15/25        430,000        455,364  (a) 

Las Vegas Sands Corp., Senior Notes

     3.900      8/8/29        950,000        957,576  

Marston’s Issuer PLC, Secured Notes (3 mo. GBP LIBOR + 2.550%)

     2.684      7/16/35        540,000 GBP       566,489  (b)(c) 

NCL Corp. Ltd., Senior Secured Notes

     12.250      5/15/24        598,000        709,237  (a) 

NCL Corp. Ltd., Senior Secured Notes

     10.250      2/1/26        546,000        635,629  (a) 

Royal Caribbean Cruises Ltd., Senior Notes

     5.500      8/31/26        750,000        763,440  (a) 

Royal Caribbean Cruises Ltd., Senior Notes

     5.500      4/1/28        640,000        648,499  (a) 

Saga PLC, Senior Notes

     3.375      5/12/24        910,000 GBP       1,170,267  (b) 

Sands China Ltd., Senior Notes

     2.850      3/8/29        250,000        235,619  (a) 

Sands China Ltd., Senior Notes

     3.250      8/8/31        1,500,000        1,411,492  (a) 

Viking Cruises Ltd., Senior Notes

     5.875      9/15/27        130,000        123,916   (a) 

VOC Escrow Ltd., Senior Secured Notes

     5.000      2/15/28        980,000        971,621  (a) 

Wheel Bidco Ltd., Senior Secured Notes

     6.750      7/15/26        380,000 GBP       506,505  (a) 

Wynn Macau Ltd., Senior Notes

     4.875      10/1/24        1,010,000        950,496  (a) 

Wynn Macau Ltd., Senior Notes

     5.500      10/1/27        200,000        186,200  (a) 

Wynn Macau Ltd., Senior Notes

     5.125      12/15/29        1,000,000        910,000  (a) 

Wynn Resorts Finance LLC/Wynn Resorts Capital Corp., Senior Notes

     7.750      4/15/25        990,000        1,039,267  (a) 

Total Hotels, Restaurants & Leisure

                                14,560,866  

Household Durables — 0.7%

                                   

Lennar Corp., Senior Notes

     5.000      6/15/27        430,000        486,717  

Lennar Corp., Senior Notes

     4.750      11/29/27        250,000        283,353  

Newell Brands Inc., Senior Notes

     4.875      6/1/25        420,000        458,319  

Total Household Durables

                                1,228,389  

Specialty Retail — 0.3%

                                   

Party City Holdings Inc., Senior Secured Notes

     8.750      2/15/26        480,000        496,099   (a)  

 

See Notes to Financial Statements.

 

 

  12

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Textiles, Apparel & Luxury Goods — 0.3%

                                   

Hanesbrands Inc., Senior Notes

     4.875      5/15/26        450,000      $ 481,498  (a)  

Total Consumer Discretionary

                                25,314,523  
Consumer Staples — 3.3%                                    

Beverages — 1.0%

                                   

Anheuser-Busch Cos. LLC/Anheuser- Busch InBev Worldwide Inc., Senior Notes

     4.700      2/1/36        540,000        652,711  

Anheuser-Busch InBev Worldwide Inc., Senior Notes

     4.000      4/13/28        1,000,000        1,112,973  

Total Beverages

                                1,765,684  

Food & Staples Retailing — 0.9%

                                   

CVS Pass-Through Trust

     5.789      1/10/26        192,431        207,447  (a)  

CVS Pass-Through Trust

     7.507      1/10/32        307,171        380,554  (a) 

CVS Pass-Through Trust, Secured Trust

     5.880      1/10/28        256,584        290,396  

CVS Pass-Through Trust, Secured Trust

     6.943      1/10/30        290,364        344,200  

CVS Pass-Through Trust, Senior Secured Trust

     6.036      12/10/28        273,356        311,732  

Total Food & Staples Retailing

                                1,534,329  

Food Products — 0.9%

                                   

Kraft Heinz Foods Co., Senior Notes

     5.500      6/1/50        340,000        461,308  

Pilgrim’s Pride Corp., Senior Notes

     5.875      9/30/27        920,000        972,431  (a) 

Total Food Products

                                1,433,739  

Tobacco — 0.5%

                                   

Altria Group Inc., Senior Notes

     4.800      2/14/29        250,000        282,225  

Altria Group Inc., Senior Notes

     2.450      2/4/32        250,000        237,621  

Reynolds American Inc., Senior Notes

     5.850      8/15/45        260,000        316,597  

Total Tobacco

                                836,443  

Total Consumer Staples

                                5,570,195  
Energy — 23.6%                                    

Energy Equipment & Services — 0.4%

                                   

Sunnova Energy Corp., Senior Notes

     5.875      9/1/26        610,000        622,834  (a)  

Oil, Gas & Consumable Fuels — 23.2%

                                   

Anadarko Finance Co., Senior Notes

     7.500      5/1/31        570,000        697,632  

Burlington Resources LLC, Senior Notes

     7.400      12/1/31        450,000        646,276  

Continental Resources Inc., Senior Notes

     3.800      6/1/24        560,000        585,077  

Continental Resources Inc., Senior Notes

     4.375      1/15/28        210,000        227,384  

Continental Resources Inc., Senior Notes

     4.900      6/1/44        250,000        277,470  

Diamondback Energy Inc., Senior Notes

     3.500      12/1/29        400,000        424,600  

Ecopetrol SA, Senior Notes

     5.875      9/18/23        45,000        47,757  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 13 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  

Oil, Gas & Consumable Fuels — continued

                               

Ecopetrol SA, Senior Notes

    5.375     6/26/26       750,000     $ 791,325  

Ecopetrol SA, Senior Notes

    5.875     5/28/45       2,510,000       2,404,492  

Energy Transfer LP, Junior Subordinated Notes (6.500% to 11/15/26 then 5 year Treasury Constant Maturity Rate + 5.694%)

    6.500     11/15/26       100,000       102,000  (c)(d) 

Energy Transfer LP, Junior Subordinated Notes (6.625% to 2/15/28 then 3 mo. USD LIBOR + 4.155%)

    6.625     2/15/28       510,000       485,097  (c)(d) 

Energy Transfer LP, Junior Subordinated Notes (6.750% to 5/15/25 then 5 year Treasury Constant Maturity Rate + 5.134%)

    6.750     5/15/25       280,000       281,050  (c)(d) 

Energy Transfer LP, Junior Subordinated Notes (7.125% to 5/15/30 then 5 year Treasury Constant Maturity Rate + 5.306%)

    7.125     5/15/30       1,380,000       1,404,150  (c)(d) 

EOG Resources Inc., Senior Notes

    3.150     4/1/25       2,250,000       2,363,000  

EQT Corp., Senior Notes

    3.900     10/1/27       1,050,000       1,127,448  

EQT Corp., Senior Notes

    5.000     1/15/29       760,000       842,783  

Howard Midstream Energy Partners LLC, Senior Notes

    6.750     1/15/27       350,000       359,075  (a) 

KazMunayGas National Co. JSC, Senior Notes

    4.750     4/19/27       770,000       851,866  (a) 

Kinder Morgan Inc., Senior Notes

    7.750     1/15/32       190,000       267,219  

Kinder Morgan Inc., Senior Notes

    5.550     6/1/45       1,500,000       1,900,763  

Lukoil International Finance BV, Senior Notes

    4.750     11/2/26       1,000,000       1,070,650  (a) 

NGPL PipeCo LLC, Senior Notes

    7.768     12/15/37       490,000       688,288  (a) 

Oasis Petroleum Inc., Senior Notes

    6.375     6/1/26       330,000       346,985  (a) 

Occidental Petroleum Corp., Senior Notes

    6.200     3/15/40       250,000       307,865  

Petrobras Global Finance BV, Senior Notes

    5.999     1/27/28       1,460,000       1,593,991  

Petrobras Global Finance BV, Senior Notes

    5.750     2/1/29       1,000,000       1,077,710  (e) 

Petrobras Global Finance BV, Senior Notes

    6.750     1/27/41       920,000       998,375  

Petroleos del Peru SA, Senior Notes

    5.625     6/19/47       1,270,000       1,259,561  (a) 

Qatar Energy, Senior Notes

    2.250     7/12/31       750,000       744,824  (a)  

Range Resources Corp., Senior Notes

    5.000     3/15/23       280,000       286,597  

 

See Notes to Financial Statements.

 

 

  14

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Oil, Gas & Consumable Fuels — continued

                                   

Range Resources Corp., Senior Notes

     4.875      5/15/25        190,000      $ 196,420  

Range Resources Corp., Senior Notes

     9.250      2/1/26        1,645,000        1,775,058  

Range Resources Corp., Senior Notes

     8.250      1/15/29        300,000        335,023  

Rockies Express Pipeline LLC, Senior Notes

     7.500      7/15/38        350,000        395,568  (a) 

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.750      5/15/24        440,000        478,774  

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.000      3/15/27        1,850,000        2,079,286  

Summit Midstream Holdings LLC/Summit Midstream Finance Corp., Secured Notes

     8.500      10/15/26        280,000        292,032  (a)  

Targa Resources Partners LP/Targa Resources Partners Finance Corp., Senior Notes

     6.500      7/15/27        250,000        268,270  

Targa Resources Partners LP/Targa Resources Partners Finance Corp., Senior Notes

     6.875      1/15/29        20,000        22,403  

Transcontinental Gas Pipe Line Co. LLC, Senior Notes

     7.850      2/1/26        1,000,000        1,221,731  

Transportadora de Gas del Peru SA, Senior Notes

     4.250      4/30/28        1,750,000        1,855,402  (a)  

Transportadora de Gas del Sur SA, Senior Notes

     6.750      5/2/25        300,000        276,438  (a) 

Western Midstream Operating LP, Senior Notes

     5.300      2/1/30        2,200,000        2,422,255  

Western Midstream Operating LP, Senior Notes

     5.300      3/1/48        100,000        120,646  

Western Midstream Operating LP, Senior Notes

     6.500      2/1/50        1,680,000        1,989,154  

Williams Cos. Inc., Senior Notes

     4.550      6/24/24        60,000        64,243  

Williams Cos. Inc., Senior Notes

     7.500      1/15/31        443,000        601,052  

Williams Cos. Inc., Senior Notes

     8.750      3/15/32        39,000        57,921  

YPF SA, Senior Notes

     8.500      7/28/25        630,000        474,081  (a) 

Total Oil, Gas & Consumable Fuels

                                39,387,067  

Total Energy

                                40,009,901  
Financials — 25.1%                                    

Banks — 17.6%

                                   

Bank of America Corp., Junior Subordinated Notes (5.875% to 3/15/28 then 3 mo. USD LIBOR + 2.931%)

     5.875      3/15/28        350,000        389,812   (c)(d) 

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 15 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Banks — continued

                                   

Bank of America Corp., Subordinated Notes

     4.250      10/22/26        2,200,000      $ 2,429,087  

Barclays Bank PLC, Subordinated Notes

     7.625      11/21/22        1,159,000        1,223,023  

Barclays PLC, Junior Subordinated Notes (8.000% to 6/15/24 then 5 year Treasury Constant Maturity Rate + 5.672%)

     8.000      6/15/24        550,000        609,279  (c)(d) 

Barclays PLC, Subordinated Notes

     5.200      5/12/26        1,000,000            1,118,095  

BBVA Bancomer SA, Subordinated Notes (5.125% to 1/17/28 then 5 year Treasury Constant Maturity Rate + 2.650%)

     5.125      1/18/33        950,000        976,472  (a)(c) 

BNP Paribas SA, Junior Subordinated Notes (7.375% to 8/19/25 then USD 5 year ICE Swap Rate + 5.150%)

     7.375      8/19/25        510,000        579,842  (a)(c)(d) 

BPCE SA, Subordinated Notes

     5.150      7/21/24        1,000,000        1,083,633  (a) 

CIT Group Inc., Senior Notes

     5.250      3/7/25        312,000        344,069  

Citigroup Inc., Junior Subordinated Notes (5.950% to 5/15/25 then 3 mo. USD LIBOR + 3.905%)

     5.950      5/15/25        900,000        965,250   (c)(d) 

Citigroup Inc., Junior Subordinated Notes (6.300% to 5/15/24 then 3 mo. USD LIBOR + 3.423%)

     6.300      5/15/24        500,000        525,315   (c)(d) 

Citigroup Inc., Subordinated Notes

     3.500      5/15/23        500,000        517,059  

Citigroup Inc., Subordinated Notes

     4.125      7/25/28        800,000        878,733  

Citigroup Inc., Subordinated Notes

     6.625      6/15/32        1,000,000        1,329,154  

Credit Agricole SA, Junior Subordinated Notes (8.125% to 12/23/25 then USD 5 year ICE Swap Rate + 6.185%)

     8.125      12/23/25        1,080,000        1,282,770  (a)(c)(d) 

HSBC Holdings PLC, Junior Subordinated Notes (6.000% to 5/22/27 then USD 5 year ICE Swap Rate + 3.746%)

     6.000      5/22/27        400,000        431,500  (c)(d) 

HSBC Holdings PLC, Junior Subordinated Notes (6.500% to 3/23/28 then USD 5 year ICE Swap Rate + 3.606%)

     6.500      3/23/28        1,130,000        1,246,791  (c)(d) 

Intesa Sanpaolo SpA, Subordinated Notes

     5.017      6/26/24        1,320,000        1,415,272  (a) 

Intesa Sanpaolo SpA, Subordinated Notes

     5.710      1/15/26        2,070,000        2,291,688  (a) 

JPMorgan Chase & Co., Junior Subordinated Notes (6.000% to 8/1/23 then 3 mo. USD LIBOR + 3.300%)

     6.000      8/1/23        2,600,000        2,714,075  (c)(d) 

 

See Notes to Financial Statements.

 

 

  16

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Banks — continued

                                   

JPMorgan Chase & Co., Junior Subordinated Notes (6.100% to 10/1/24 then 3 mo. USD LIBOR + 3.330%)

     6.100      10/1/24        400,000      $ 422,250  (c)(d) 

JPMorgan Chase & Co., Subordinated Notes

     4.950      6/1/45        500,000        652,140  

Lloyds Banking Group PLC, Subordinated Notes

     4.650      3/24/26        1,500,000        1,652,909  

NatWest Group PLC, Subordinated Notes

     6.000      12/19/23        150,000        163,077  

NatWest Group PLC, Subordinated Notes

     5.125      5/28/24        1,330,000        1,434,846  

NatWest Markets NV, Subordinated Notes

     7.750      5/15/23        140,000        151,856  

Santander UK Group Holdings PLC, Subordinated Notes

     5.625      9/15/45        1,000,000        1,298,027  (a)  

UniCredit SpA, Subordinated Notes (7.296% to 4/2/29 then USD 5 year ICE Swap Rate + 4.914%)

     7.296      4/2/34        740,000        887,330  (a)(c) 

Wells Fargo & Co., Senior Notes

     3.000      10/23/26        750,000        788,473  

Total Banks

                                29,801,827  

Capital Markets — 3.4%

                                   

Credit Suisse Group AG, Junior Subordinated Notes (7.250% to 9/12/25 then USD 5 year ICE Swap Rate + 4.332%)

     7.250      9/12/25        1,350,000        1,483,691  (a)(c)(d) 

Goldman Sachs Group Inc., Senior Notes

     3.500      11/16/26        1,750,000        1,865,951  

Morgan Stanley, Senior Notes (4.431% to 1/23/29 then 3 mo. USD LIBOR + 1.628%)

     4.431      1/23/30        1,000,000        1,140,561  (c) 

UBS Group AG, Junior Subordinated

                                   

Notes (7.000% to 1/31/24 then USD 5 year ICE Swap Rate + 4.344%)

     7.000      1/31/24        1,250,000        1,348,681  (a)(c)(d) 

Total Capital Markets

                                5,838,884  

Consumer Finance — 0.2%

                                   

FirstCash Inc., Senior Notes

     5.625      1/1/30        360,000        367,484  (a)  

Diversified Financial Services — 3.4%

                                   

AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Senior Notes

     4.625      7/1/22        230,000        234,516  

AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Senior Notes

     2.450      10/29/26        500,000        504,388  

AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Senior Notes

     4.625      10/15/27        1,360,000        1,505,591  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 17 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  

Diversified Financial Services — continued

                                   

Ahold Lease USA Inc. Pass-Through- Trust, Senior Secured Notes, Step bond (8.620% to 1/2/25 then 0.000%)

     8.620      1/2/25        218,086      $ 241,618  

GE Capital International Funding Co. Unlimited Co., Senior Notes

     4.418      11/15/35        500,000        597,501  

Global Aircraft Leasing Co. Ltd., Senior Notes (6.500% Cash or 7.250% PIK)

     6.500      9/15/24        1,696,626        1,639,136  (a)(f) 

Huarong Finance 2019 Co. Ltd., Senior Notes

     2.500      2/24/23        200,000        198,936  (b)  

Huarong Finance 2019 Co. Ltd., Senior Notes

     2.125      9/30/23        200,000        197,250  (b)  

International Lease Finance Corp., Senior Notes

     5.875      8/15/22        700,000        721,718  

Total Diversified Financial Services

                                5,840,654  

Insurance — 0.5%

                                   

MetLife Inc., Junior Subordinated Notes

     10.750      8/1/39        500,000        847,469  

Total Financials

                                42,696,318  
Health Care — 6.0%                                    

Biotechnology — 0.3%

                                   

AbbVie Inc., Senior Notes

     3.800      3/15/25        500,000        532,604  

Health Care Providers & Services — 2.7%

                                   

Centene Corp., Senior Notes

     4.250      12/15/27        240,000        250,615  

Centene Corp., Senior Notes

     4.625      12/15/29        370,000        399,670  

HCA Inc., Senior Secured Notes

     4.500      2/15/27        1,000,000        1,102,199  

HCA Inc., Senior Secured Notes

     4.125      6/15/29        550,000        605,788  

Humana Inc., Senior Notes

     3.950      3/15/27        1,200,000        1,312,447  

Legacy LifePoint Health LLC, Senior Secured Notes

     6.750      4/15/25        330,000        344,360  (a)  

Magellan Health Inc., Senior Notes

     4.900      9/22/24        515,000        558,028  

Total Health Care Providers & Services

                                4,573,107  

Pharmaceuticals — 3.0%

                                   

Bausch Health Cos. Inc., Senior Notes

     6.125      4/15/25        1,214,000        1,238,080  (a)  

Bristol-Myers Squibb Co., Senior Notes

     3.400      7/26/29        780,000        854,902  

Bristol-Myers Squibb Co., Senior Notes

     4.625      5/15/44        250,000        319,857  

Teva Pharmaceutical Finance Co. BV,

                                   

Senior Notes

     2.950      12/18/22        575,000        576,647  

Teva Pharmaceutical Finance Netherlands III BV, Senior Notes

     2.800      7/21/23        1,046,000        1,051,000  

 

See Notes to Financial Statements.

 

 

  18

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  

Pharmaceuticals — continued

                               

Teva Pharmaceutical Finance Netherlands III BV, Senior Notes

    6.000     4/15/24       760,000     $ 797,301  

Teva Pharmaceutical Finance Netherlands III BV, Senior Notes

    3.150     10/1/26       180,000       169,482  

Total Pharmaceuticals

                            5,007,269  

Total Health Care

                            10,112,980  
Industrials — 11.6%                                

Aerospace & Defense — 2.8%

                               

Boeing Co., Senior Notes

    3.250     2/1/28       750,000       782,137  

Boeing Co., Senior Notes

    3.200     3/1/29       1,650,000       1,699,795  

Boeing Co., Senior Notes

    6.125     2/15/33       600,000       760,903  

Boeing Co., Senior Notes

    3.750     2/1/50       500,000       521,053  

TransDigm Inc., Senior Secured Notes

    8.000     12/15/25       920,000       971,736  (a) 

Total Aerospace & Defense

                            4,735,624  

Airlines — 4.5%

                               

Delta Air Lines Inc., Senior Notes

    3.625     3/15/22       460,000       460,017  

Delta Air Lines Inc., Senior Notes

    3.800     4/19/23       1,100,000       1,125,010  

Delta Air Lines Inc., Senior Notes

    2.900     10/28/24       310,000       316,293  

Delta Air Lines Inc., Senior Notes

    7.375     1/15/26       260,000       306,373  

Delta Air Lines Inc., Senior Secured Notes

    7.000     5/1/25       1,490,000       1,704,997  (a) 

Delta Air Lines Inc./SkyMiles IP Ltd., Senior Secured Notes

    4.750     10/20/28       340,000       371,546  (a) 

Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., Senior Secured Notes

    6.500     6/20/27       920,000       983,485  (a) 

Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., Senior Secured Notes

    8.000     9/20/25       1,169,999       1,293,048  (a)  

United Airlines Inc., Senior Secured Notes

    4.625     4/15/29       80,000       82,666  (a) 

United Airlines Pass-Through Trust

    4.750     4/11/22       144,098       145,563  

United Airlines Pass-Through Trust

    4.875     1/15/26       826,160       861,316  

Total Airlines

                            7,650,314  

Building Products — 1.4%

                               

Standard Industries Inc., Senior Notes

    5.000     2/15/27       1,870,000       1,927,287  (a)  

Standard Industries Inc., Senior Notes

    4.750     1/15/28       511,000       528,535  (a)  

Total Building Products

                            2,455,822  

Commercial Services & Supplies — 0.6%

                               

CoreCivic Inc., Senior Notes

    8.250     4/15/26       930,000       973,175  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 19 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

  (Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  

Industrial Conglomerates — 0.2%

                               

General Electric Co., Junior Subordinated Notes (3 mo. USD LIBOR + 3.330%)

    3.533     3/15/22       260,000     $ 258,700  (c)(d) 

Machinery — 0.3%

                               

Cellnex Finance Co. SA, Senior Notes

    2.000     2/15/33       500,000  EUR      542,271  (b) 

Professional Services — 0.6%

                               

IHS Markit Ltd., Senior Notes

    5.000     11/1/22       1,000,000       1,032,685  (a) 

Trading Companies & Distributors — 1.2%

                               

H&E Equipment Services Inc., Senior Notes

    3.875     12/15/28       250,000       248,569  (a)  

United Rentals North America Inc., Secured Notes

    3.875     11/15/27       1,500,000       1,558,928  

United Rentals North America Inc., Senior Notes

    5.500     5/15/27       160,000       166,590  

United Rentals North America Inc., Senior Notes

    4.875     1/15/28       110,000       115,786  

Total Trading Companies & Distributors

                            2,089,873  

Total Industrials

                            19,738,464  
Information Technology — 1.6%                                

Communications Equipment — 0.1%

                               

CommScope Inc., Senior Notes

    8.250     3/1/27       170,000       174,916  (a) 

Semiconductors & Semiconductor Equipment — 0.3%

 

                       

Broadcom Corp./Broadcom Cayman Finance Ltd., Senior Notes

    3.125     1/15/25       500,000       522,721  

Technology Hardware, Storage & Peripherals — 1.2%

 

                       

Seagate HDD Cayman, Senior Notes

    4.750     1/1/25       1,220,000       1,306,693  

Seagate HDD Cayman, Senior Notes

    4.875     6/1/27       260,000       283,660  

Western Digital Corp., Senior Notes

    4.750     2/15/26       430,000       470,745  

Total Technology Hardware, Storage & Peripherals

 

                    2,061,098  

Total Information Technology

                            2,758,735  
Materials — 4.7%                                

Chemicals — 0.7%

                               

Braskem America Finance Co., Senior Notes

    7.125     7/22/41       920,000       1,190,025  (b)  

Containers & Packaging — 0.0%††

                               

Pactiv LLC, Senior Notes

    7.950     12/15/25       50,000       55,445  

Metals & Mining — 3.2%

                               

Anglo American Capital PLC, Senior Notes

    4.125     9/27/22       210,000       215,033  (a) 

ArcelorMittal SA, Senior Notes

    7.000     10/15/39       430,000       593,013  

 

See Notes to Financial Statements.

 

 

  20

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  

Metals & Mining — continued

                               

First Quantum Minerals Ltd., Senior Notes

    7.250     4/1/23       210,000     $ 212,683  (a) 

Freeport-McMoRan Inc., Senior Notes

    5.400     11/14/34       220,000       268,160  

Freeport-McMoRan Inc., Senior Notes

    5.450     3/15/43       580,000       730,243  

Fresnillo PLC, Senior Notes

    4.250     10/2/50       1,750,000       1,836,100  (a) 

Teck Resources Ltd., Senior Notes

    6.000     8/15/40       210,000       269,413  

Vale Overseas Ltd., Senior Notes

    6.875     11/10/39       940,000       1,263,576  

Total Metals & Mining

                            5,388,221  

Paper & Forest Products — 0.8%

                               

Suzano Austria GmbH, Senior Notes

    5.750     7/14/26       950,000       1,085,627  (a) 

Suzano Austria GmbH, Senior Notes

    3.125     1/15/32       350,000       339,234  

Total Paper & Forest Products

                            1,424,861  

Total Materials

                            8,058,552  
Real Estate — 1.1%                                

Equity Real Estate Investment Trusts (REITs) — 1.1%

 

                       

Diversified Healthcare Trust, Senior Notes

    9.750     6/15/25       240,000       259,972  

MPT Operating Partnership LP/MPT Finance Corp., Senior Notes

    5.000     10/15/27       1,500,000       1,571,220  

Total Real Estate

                            1,831,192  
Utilities — 1.2%                                

Electric Utilities — 0.7%

                               

FirstEnergy Corp., Senior Notes

    7.375     11/15/31       700,000       946,330  

Pampa Energia SA, Senior Notes

    7.500     1/24/27       280,000       242,144  (a) 

Total Electric Utilities

                            1,188,474  

Independent Power and Renewable Electricity Producers — 0.5%

 

               

Minejesa Capital BV, Senior Secured Notes

    4.625     8/10/30       810,000       834,916  (a)  

Total Utilities

                            2,023,390  

Total Corporate Bonds & Notes (Cost — $161,050,744)

 

            181,888,411  
Sovereign Bonds — 10.7%                                

Argentina — 0.4%

                               

Argentine Republic Government International Bond, Senior Notes

    1.000     7/9/29       43,394       15,839  

Provincia de Buenos Aires, Senior Notes, Step bond (3.900% to 9/1/22 then 5.250%)

    3.900     9/1/37       468,827       201,009  (a)  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 21 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
   

Face

Amount†

    Value  

Argentina — continued

                               

Provincia de Cordoba, Senior Notes, Step bond (5.000% to 6/10/22 then 6.875%)

    5.000     12/10/25       200,000     $ 151,252   (a)  

Provincia de Cordoba, Senior Notes, Step bond (5.000% to 6/1/22 then 6.990%)

    5.000     6/1/27       560,000       357,706  (a)  

Total Argentina

                            725,806  

Chile — 1.6%

                               

Chile Government International Bond, Senior Notes

    2.550     1/27/32       2,750,000       2,750,000  

Indonesia — 2.5%

                               

Indonesia Government International Bond, Senior Notes

    4.125     1/15/25       300,000       324,048   (a)  

Indonesia Government International Bond, Senior Notes

    3.850     7/18/27       300,000       328,986   (a)  

Indonesia Government International Bond, Senior Notes

    3.500     1/11/28       2,420,000       2,615,970  

Indonesia Treasury Bond

    7.000     5/15/22       14,227,000,000  IDR      1,012,735  

Total Indonesia

                            4,281,739  

Mexico — 2.2%

                               

Mexican Bonos, Senior Notes

    7.750     11/13/42       33,080,000   MXN      1,569,416  

Mexico Government International Bond, Senior Notes

    3.750     1/11/28       1,500,000       1,613,662  

Mexico Government International Bond, Senior Notes

    2.659     5/24/31       500,000       489,005  

Total Mexico

                            3,672,083  

Panama — 1.1%

                               

Panama Government International Bond, Senior Notes

    2.252     9/29/32       1,900,000       1,806,425  

Peru — 1.7%

                               

Peruvian Government International Bond, Senior Notes

    2.783     1/23/31       1,340,000       1,336,663  

Peruvian Government International Bond, Senior Notes

    1.862     12/1/32       1,500,000       1,372,515  

Peruvian Government International Bond, Senior Notes

    3.300     3/11/41       230,000       230,865  

Total Peru

                            2,940,043  

Russia — 1.2%

                               

Russian Federal Bond — OFZ

    7.750     9/16/26       61,630,000   RUB       805,422  

Russian Federal Bond — OFZ

    6.900     5/23/29       94,950,000  RUB       1,170,229  

Total Russia

                            1,975,651  

Total Sovereign Bonds (Cost — $17,968,987)

 

                    18,151,747  

 

See Notes to Financial Statements.

 

 

  22

    Western Asset Premier Bond Fund 2021 Annual Report


 

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  
Senior Loans — 10.0%                                    
Communication Services — 4.5%                                    

Diversified Telecommunication Services — 0.8%

                                   

Level 3 Financing Inc., 2027 Term Loan B (1 mo. USD LIBOR + 1.750%)

     1.854      3/1/27        1,418,664      $ 1,402,704  (c)(g)(h) 

Media — 3.7%

                                   

Charter Communications Operating LLC, TermLoan B1 (1 mo. USD LIBOR + 1.750%)

     1.860      4/30/25        2,393,100        2,390,563  (c)(g)(h) 

Charter Communications Operating LLC, Term Loan B2 (1 mo. USD LIBOR + 1.750%)

     1.850      2/1/27        489,975        485,916  (c)(g)(h) 

DIRECTV Financing LLC, Closing Date Term Loan (the greater of 3 mo. USD LIBOR or 0.750% + 5.000%)

     5.750      8/2/27        3,343,050        3,350,438  (c)(g)(h) 

Total Media

                                6,226,917  

Total Communication Services

                                7,629,621  
Consumer Discretionary — 3.2%                                    

Hotels, Restaurants & Leisure — 3.2%

                                   

Hilton Worldwide Finance LLC, Refinance Term Loan B2 (1mo. USD LIBOR + 1.750%)

     1.852      6/22/26        4,863,291        4,828,713  (c)(g)(h) 

Royal Caribbean Cruises Ltd., Term Loan

            4/5/22        690,000        658,950  (i)(j)  

Total Consumer Discretionary

                                5,487,663  
Energy — 0.4%                                    

Oil, Gas & Consumable Fuels — 0.4%

                                   

Southwestern Energy Co., Initial Term Loan

            6/22/27        750,000        752,348  (i)  
Industrials — 1.9%                                    

Airlines — 1.9%

                                   

Delta Air Lines Inc., Initial Term Loan (the greater of 3 mo. USD LIBOR or 1.000% + 3.750%)

     4.750      10/20/27        650,000        689,000  (c)(g)(h) 

Mileage Plus Holdings LLC, Initial Term Loan (the greater of 3 mo. USD LIBOR or 1.000% + 5.250%)

     6.250      6/21/27        1,770,000       
1,871,341
 (c)(g)(h) 
 

United Airlines Inc., Term Loan B (the greater of 3 mo. USD LIBOR or 0.750% + 3.750%)

     4.500      4/21/28        645,125        648,899  (c)(g)(h) 

Total Industrials

                                3,209,240  

Total Senior Loans (Cost — $16,870,650)

                                17,078,872  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 23 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  
U.S. Government & Agency Obligations — 7.8%

 

                          

U.S. Government Obligations — 7.8%

                                   

U.S. Treasury Notes

     1.625      5/31/23        1,250,000      $ 1,268,994  (e) 

U.S. Treasury Notes

     2.750      8/31/23        1,400,000        1,448,234  (e)  

U.S. Treasury Notes

     2.875      9/30/23        2,500,000        2,595,605  (e)  

U.S. Treasury Notes

     2.125      3/31/24        1,500,000        1,544,004  (e)  

U.S. Treasury Notes

     0.500      2/28/26        1,000,000        971,758  

U.S. Treasury Notes

     0.750      3/31/26        2,000,000        1,962,188  (e)  

U.S. Treasury Notes

     0.500      5/31/27        1,500,000        1,436,660  (e)  

U.S. Treasury Notes

     1.250      4/30/28        2,000,000        1,982,266  (e)  

Total U.S. Government & Agency Obligations (Cost — $13,057,985)

 

     13,209,709  
Asset-Backed Securities — 2.0%                                    

American Home Mortgage Investment Trust, 2007-A 4A (1 mo. USD LIBOR + 0.900%)

     1.002      7/25/46        441,353        174,140  (a)(c)  

Bayview Financial Asset Trust, 2007- SR1A M1 (1 mo. USD LIBOR + 0.800%)

     0.892      3/25/37        378,595        359,878  (a)(c)  

Bayview Financial Asset Trust, 2007- SR1A M4 (1 mo. USD LIBOR + 1.500%)

     1.592      3/25/37        39,165        39,091  (a)(c)  

Bear Stearns Asset Backed Securities Trust, 2006-SD3 1PO, STRIPS, PO

     0.000      8/25/36        200,510        165,727  

CWABS Asset Backed Notes Trust, 2007- SEA2 1A1
(1 mo. USD LIBOR + 1.000%)

     1.102      8/25/47        3,407        3,424  (a)(c) 

Financial Asset Securities Corp. AAA Trust, 2005-1A 1A3B
(1 mo. USD LIBOR + 0.410%)

     0.513      2/27/35        178,151        163,762  (a)(c)  

GSAMP Trust, 2003-SEA2 A1, Step bond

     5.421      7/25/33        475,607        471,228  

Indymac Manufactured Housing Contract Pass-Through Certificates, 1997-1 A5

     6.970      2/25/28        16,408        16,575  

Morgan Stanley ABS Capital I Inc. Trust, 2004-HE7 M1
(1 mo. USD LIBOR + 0.900%)

     1.002      8/25/34        953,861        949,638  (c) 

Morgan Stanley ABS Capital I Inc. Trust Series, 2003-SD1 A1 (1 mo. USD LIBOR + 1.000%)

     1.102      3/25/33        6,603        6,631  (c)  

Oakwood Mortgage Investors Inc., 2002-B A3

     6.060      6/15/32        27,905        28,583  (c)  

 

See Notes to Financial Statements.

 

 

  24

    Western Asset Premier Bond Fund 2021 Annual Report


Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security    Rate      Maturity
Date
     Face
Amount†
     Value  
Asset-Backed Securities — continued                                    

Origen Manufactured Housing Contract Trust, 2006-A A2

     1.616      10/15/37        470,356      $ 452,868  (c) 

Origen Manufactured Housing Contract Trust, 2007-A A2

     2.544      4/15/37        603,526        579,899  (c) 

Total Asset-Backed Securities (Cost — $2,972,159)

 

              3,411,444  
Convertible Bonds & Notes — 1.2%                                    
Communication Services — 0.8%                                    

Media — 0.8%

                                   

DISH Network Corp., Senior Notes

     3.375      8/15/26        1,370,000        1,300,202  
Industrials — 0.4%                                    

Airlines — 0.4%

                                   

Spirit Airlines Inc., Senior Notes

     1.000      5/15/26        880,000        762,996  

Total Convertible Bonds & Notes (Cost — $1,972,779)

 

              2,063,198  
Collateralized Mortgage Obligations (k) —0.8%

 

                          

Banc of America Funding Trust, 2004-B 6A1

     2.163      12/20/34        156,758        141,989  (c)  

Bear Stearns ALT-A Trust, 2004-3 A1 (1 mo. USD LIBOR + 0.640%)

     0.742      4/25/34        62,771        63,188  (c)  

CHL Mortgage Pass-Through Trust, 2005-7 1A1 (1 mo. USD LIBOR + 0.540%)

     0.642      3/25/35        242,688        236,016  (c)  

Fannie Mae Trust, 2004-W15 1A2

     6.500      8/25/44        65,245        74,653  

Impac CMB Trust Series, 2004-10 2A (1 mo. USD LIBOR + 0.640%)

     0.742      3/25/35        69,849        67,511  (c)  

Impac CMB Trust Series, 2005-2 2A2 (1 mo. USD LIBOR + 0.800%)

     0.902      4/25/35        25,459        24,571  (c)  

MAFI II Remic Trust, 1998-BI B1

     5.733      11/20/24        132,863        116,032  (c)  

MERIT Securities Corp., 2011PA B3 (1 mo. USD LIBOR + 2.250%)

     2.352      9/28/32        461,397        425,876  (a)(c) 

Prime Mortgage Trust, 2005-2 2XB, IO

     1.743      10/25/32        1,115,944        80,910  (c)  

Prime Mortgage Trust, 2005-5 1X, IO

     1.085      7/25/34        1,443,807        46,975  (c)  

RAMP Series Trust, 2005-SL2 APO, STRIPS, PO

     0.000      2/25/32        2,223        1,965  

Regal Trust IV, 1999-1 A (11th District Cost of Funds + 1.500%)

     1.738      9/29/31        1,371        1,348  (a)(c)  

Sequoia Mortgage Trust, 2003-2 A2 (6 mo. USD LIBOR + 0.680%)

     0.904      6/20/33        6,095        6,024  (c)  

Sequoia Mortgage Trust, 2004-10 A1A (1 mo. USD LIBOR + 0.620%)

     0.724      11/20/34        5,482        5,377  (c)  

Structured Asset Securities Corp., 1998- RF2 A

     4.739      7/15/27        76,206        75,972  (a)(c)  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 25 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security   Rate     Maturity
Date
    Face
Amount†
    Value  
Collateralized Mortgage Obligations (k) — continued

 

                       

Structured Asset Securities Corp. Mortgage Pass-Through Certificates, 2003-9A 2A2

    2.217     3/25/33       39,109     $ 40,846  (c)  

WaMu Mortgage Pass-Through Certificates Series Trust, 2004-AR6 A (1 mo. USD LIBOR + 0.840%)

    0.943     5/25/44       38,063       38,474  (c)  

Total Collateralized Mortgage Obligations (Cost — $1,152,014)

 

            1,447,727  
                   Shares         
Convertible Preferred Stocks — 0.4%                                
Energy — 0.4%                                

Oil, Gas & Consumable Fuels — 0.4%

                               

Targa Resources Corp., Non Voting Shares (Cost — $609,000)

    9.500             580       627,401  
            Expiration
Date
    Warrants         
Warrants — 0.0%††                                
Financials — 0.0%††                                

Capital Markets — 0.0%††

                               

EG Acquisition Corp., Class A Shares (Cost — $9,613)

            5/28/28       10,040       6,224  * 
                   Shares         
Preferred Stocks — 0.0%††                                
Financials — 0.0%††                                

Diversified Financial Services — 0.0%††

                               

Corporate Backed Trust Certificates (Cost — $0)

    7.375             33,900       1,210  *(j)(l)(m)  
Common Stocks — 0.0%††                                
Energy — 0.0%††                                

Energy Equipment & Services — 0.0%††

                               

Hercules Offshore Inc. (Escrow) (Cost — $742,787)

 

            16,942       0  *(j)(m)(n)  

Total Investments before Short-Term Investments (Cost — $216,406,718)

 

    237,885,943  

 

See Notes to Financial Statements.

 

 

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    Western Asset Premier Bond Fund 2021 Annual Report


Western Asset Premier Bond Fund

 

(Percentages shown based on Fund net assets)

 

Security  

Rate

           Shares     Value  
Short-Term Investments — 0.6%

 

                       

Western Asset Premier Institutional Government Reserves, Premium Shares (Cost — $912,279)

    0.010                        912,279     $ 912,279  (o)  

Total Investments** — 140.6% (Cost — $217,318,997)

 

    238,798,222  

Liabilities in Excess of Other Assets — (40.6)%

                            (68,915,408

Total Net Assets — 100.0%

 

  $ 169,882,814  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report    

 

 

 27 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

Face amount denominated in U.S. dollars, unless otherwise noted.

 

††

Represents less than 0.1%.

 

*

Non-income producing security.

 

**

The entire portfolio is subject to lien, granted to the lender, to the extent of the borrowing outstanding and any additional expenses.

 

(a)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees.

 

(b) 

Security is exempt from registration under Regulation S of the Securities Act of 1933. Regulation S applies to securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees.

 

(c) 

Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.

 

(d) 

Security has no maturity date. The date shown represents the next call date.

 

(e)

All or a portion of this security is held by the counterparty as collateral for open reverse repurchase agreements.

 

(f)

Payment-in-kind security for which the issuer has the option at each interest payment date of making interest payments in cash or additional securities.

 

(g)

Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to multiple contracts under the same loan.

 

(h) 

Senior loans may be considered restricted in that the Fund ordinarily is contractually obligated to receive approval from the agent bank and/or borrower prior to the disposition of a senior loan.

 

(i)

All or a portion of this loan is unfunded as of December 31, 2021. The interest rate for fully unfunded term loans is to be determined.

 

(j)

Security is valued using significant unobservable inputs (Note 1).

 

(k)

Collateralized mortgage obligations are secured by an underlying pool of mortgages or mortgage pass-through certificates that are structured to direct payments on underlying collateral to different series or classes of the obligations. The interest rate may change positively or inversely in relation to one or more interest rates, financial indices or other financial indicators and may be subject to an upper and/or lower limit.

 

(l)

The coupon payment on this security is currently in default as of December 31, 2021.

 

(m) 

Security is valued in good faith in accordance with procedures approved by the Board of Trustees (Note 1).

 

(n)

Value is less than $1.

 

(o)

In this instance, as defined in the Investment Company Act of 1940, an “Affiliated Company” represents Fund ownership of at least 5% of the outstanding voting securities of an issuer, or a company which is under common ownership or control with the Fund. At December 31, 2021, the total market value of investments in Affiliated Companies was $912,279 and the cost was $912,279 (Note 8).

 

See Notes to Financial Statements.

 

 

  28

    Western Asset Premier Bond Fund 2021 Annual Report


Western Asset Premier Bond Fund

 

Abbreviation(s) used in this schedule:

EUR   —   Euro
GBP   —   British Pound
ICE   —   Intercontinental Exchange
IDR   —   Indonesian Rupiah
IO   —   Interest Only
JSC   —   Joint Stock Company
LIBOR   —   London Interbank Offered Rate
MXN   —   Mexican Peso
OFZ   —   Obligatsyi Federal’novo Zaima (Russian Federal Loan Obligation)
PIK     Payment-In-Kind
PO   —   Principal Only
RUB   —   Russian Ruble
STRIPS   —   Separate Trading of Registered Interest and Principal Securities
USD   —   United States Dollar

At December 31, 2021, the Fund had the following open reverse repurchase agreements:

 

Counterparty   Rate     Effective
Date
    Maturity
Date
  Face Amount
of Reverse
Repurchase
Agreements
    Asset Class
of Collateral*
    Collateral
Value**
 
Deutsche Bank AG     0.140     11/26/2021     2/24/2022   $ 12,273,562       U.S. Government & Agency Obligations     $ 12,288,099  
Goldman Sachs Group Inc.     0.500     10/15/2021     TBD***     901,624       Corporate Bonds & Notes       1,101,668  
                        $ 13,175,186             $ 13,389,767  

 

*

Refer to the Schedule of Investments for positions held at the counterparty as collateral for reverse repurchase agreements.

**

Including accrued interest.

***

TBD — To Be Determined; These reverse repurchase agreements have no maturity dates because they are renewed daily and can be terminated by either the Fund or the counterparty in accordance with the terms of the agreements. The rates for these agreements are variable. The rate disclosed is the rate as of December 31, 2021.

At December 31, 2021, the Fund had the following open forward foreign currency contracts:

 

Currency
Purchased
   

Currency

Sold

    Counterparty   Settlement
Date
    Unrealized
Appreciation
(Depreciation)
 
USD     11,579     EUR     10,000     BNP Paribas SA     1/18/22     $ 190  
USD     27,818     EUR     24,028     Goldman Sachs Group Inc.     1/18/22       453  
USD     561,757     EUR     495,000     Goldman Sachs Group Inc.     1/18/22       (2,002)  
USD     2,237,695     GBP     1,639,767     Goldman Sachs Group Inc.     1/18/22       18,280  
Total                                   $ 16,921  

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2021 Annual Report  

 

 

 29 

 


Schedule of investments (cont’d)

December 31, 2021

 

Western Asset Premier Bond Fund

 

Abbreviation(s) used in this table:

EUR — Euro

GBP — British Pound

USD — United States Dollar

 

See Notes to Financial Statements.

 

 

  30

  Western Asset Premier Bond Fund 2021 Annual Report


Statement of assets and liabilities

December 31, 2021

 

Assets:         

Investments in unaffiliated securities, at value (Cost — $216,406,718)

   $ 237,885,943  

Investments in affiliated securities, at value (Cost — $912,279)

     912,279  

Foreign currency, at value (Cost — $336,196)

     333,024  

Cash

     128,838  

Interest and dividends receivable from unaffiliated investments

     2,701,329  

Deposits with brokers for futures contracts

     157,003  

Unrealized appreciation on forward foreign currency contracts

     18,923  

Dividends receivable from affiliated investments

     24  

Other receivables

     17,196  

Prepaid expenses

     535  

Total Assets

     242,155,094  
Liabilities:         

Loan payable (Note 5)

     57,500,000  

Payable for open reverse repurchase agreements (Note 3)

     13,175,186  

Payable for securities purchased

     1,407,868  

Investment management fee payable

     86,642  

Administration fee payable

     25,510  

Interest expense payable

     5,255  

Unrealized depreciation on forward foreign currency contracts

     2,002  

Trustees’ fees payable

     538  

Accrued expenses

     69,279  

Total Liabilities

     72,272,280  
Total Net Assets    $ 169,882,814  
Net Assets: