WEA Western Asset Premier Bond Fund

 

 

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: 1-888-777-0102

Date of fiscal year end: December 31

Date of reporting period: December 31, 2023

 

 

 

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ITEM 1.

REPORT TO STOCKHOLDERS.

The Annual Report to Stockholders is filed herewith.

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Annual Report		December 31, 2023

WESTERN ASSET

PREMIER BOND FUND (WEA)

 

 

 

 

 

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

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What’s inside
Letter from the president			III
Fund overview			1
Fund at a glance			6
Fund performance			7
Schedule of investments			9
Statement of assets and liabilities			26
Statement of operations			27
Statements of changes in net assets			28
Statement of cash flows			29
Financial highlights			30
Notes to financial statements			32
Report of independent registered public accounting firm			47
Additional information			48
Annual chief executive officer and principal financial officer certifications			55
Other shareholder communications regarding accounting matters			56
Summary of information regarding the Fund			57
Dividend reinvestment plan			72
Important tax information			74

 

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

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Letter from the president

 

 

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, 2023. 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,

 

Jane Trust, CFA

President and Chief Executive Officer

January 31, 2024

 

Western Asset Premier Bond Fund		III

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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-to-day 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. The U.S. fixed income market experienced periods of elevated volatility, but ultimately generated solid results in 2023. The market moved higher over the first quarter of the reporting period amid shifting expectations for Federal Reserve Board (the “Fed”) rate hikes. Turmoil in the regional banking industry also triggered a flight to quality assets. Those market gains were then erased during the second and third quarters of 2023, as persistent inflation led to expectations of a “higher for longer” interest rate environment. The market ended the year on a positive note, as the Fed indicated it would likely pivot from raising rates to cutting rates in 2024. Moderating inflation and hopes that the central bank could orchestrate a “soft landing” for the economy also supported the market.

Short-term U.S. Treasury yields declined as inflation fell and the Fed indicated the likely end of its rate hike cycle. The yield for the two-year Treasury note began the reporting period at

 

Western Asset Premier Bond Fund 2023 Annual Report					1

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Fund overview (cont’d)

 

4.41% and ended the period at 4.23%. The low of 3.75% was on May 4, 2023, and the peak of 5.19% occurred on October 17 and 18, 2023. The yield for the ten-year Treasury note began and ended the reporting period at 3.88%. The low of 3.30% was on April 5 and 6, 2023, and the peak of 4.98% occurred on October 19, 2023.

All told, the Bloomberg U.S. Aggregate Indexⁱⁱ returned 5.53% for the twelve months ended December 31, 2023. For comparison purposes, riskier fixed income securities, including high yield bonds and emerging market debt, produced stronger results. Over the fiscal year, the Bloomberg U.S. Corporate High Yield — 2% Issuer Cap Indexⁱⁱⁱ and the JPMorgan Emerging Markets Bond Index Global^iv returned 13.44% and 10.45%, 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 reduced duration given our expectations for rising rates. We increased the Fund’s allocation to investment-grade bonds, adding to industrials, consumer cyclical¹ and energy, and cutting some financials (banking). In contrast, we reduced the Fund’s allocations to below-investment-grade corporate bonds, Treasuries, and emerging markets.

During the reporting period, we employed currency forwards to manage the Fund’s currency exposure, which did not meaningfully impact the performance.

The use of leverage was tactically managed during the reporting period. The Fund ended the period with leverage as a percentage of total assets at roughly 26%, versus 34% from the beginning of the reporting period. The use of leverage contributed to performance.

Performance review

For the twelve months ended December 31, 2023, Western Asset Premier Bond Fund returned 9.77% based on its net asset value (“NAV”)^v and 9.57% based on its New York Stock Exchange (“NYSE”) market price per share. The Fund’s unmanaged benchmarks, the Bloomberg U.S. Corporate High Yield Index^vi and the Bloomberg U.S. Credit Index^vii, returned 13.44% and 8.18%, respectively, for the same period.

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.

During the twelve-month period, the Fund made distributions to shareholders totaling $0.80 per share.* The performance table shows the Fund’s twelve-month total return based on its NAV and market price as of December 31, 2023. Past performance is no guarantee of future results.

 

 

1	Cyclicals consists of the following industries: automotive, entertainment, gaming, home construction, lodging, retailers, restaurants, textiles and other consumer services.

 

*	For the tax character of distributions paid during the fiscal year ended December 31, 2023, please refer to page 45 of this report.

 

2				Western Asset Premier Bond Fund 2023 Annual Report

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Performance Snapshot as of December 31, 2023
Price Per Share		12-Month Total Return**
$11.47 (NAV)			9.77	%†
$ 10.80 (Market Price)			9.57	%‡

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. Among the largest contributors to the Fund’s absolute performance during the reporting period were its exposure to the energy sector, led by positions in Ecopetrol SA and Western Midstream Operating LP. Within the consumer cyclicals sector, positions in Royal Caribbean and Carnival added the most value, as the reopening trade played out. In terms of the banking space, UBS, Wells Fargo and JPMorgan Chase added the most value.

Q. What were the leading detractors from performance?

A. The largest detractor from absolute performance was the Fund’s exposure to Credit Suisse. The Fund’s exposure to Sprit Airlines (transportation) and Lumen Technologies (communication services) were also headwinds for returns. Elsewhere, the Fund’s emerging market sovereign exposure detracted from performance, partially due to its Russia exposure, but driven mainly by its exposure to Panama.

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.

 

Western Asset Premier Bond Fund 2023 Annual Report					3

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Fund overview (cont’d)

 

Thank you for your investment in the 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 17, 2024

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 NYSE. 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, 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 market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to changes in general market conditions, overall economic trends or events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes or other factors, political developments, armed conflicts, economic sanctions and countermeasures in response to sanctions, major cybersecurity events, investor sentiment, the global and domestic effects of a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. The Fund may also invest in money market funds, including funds affiliated with the Fund’s investment adviser. For more information on Fund risks, see Summary of information regarding the Fund - Principal Risk Factors in this report.

This material is not intended as a recommendation or as investment advice of any kind, including in connection with rollovers, transfers, and distributions. Such material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment

 

4				Western Asset Premier Bond Fund 2023 Annual Report

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decisions, and does not constitute a solicitation of an offer to buy or sell securities. All content has been provided for informational or educational purposes only and is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

Portfolio holdings and breakdowns are as of December 31, 2023 and are subject to change and may not be representative of the portfolio managers’ current or future investments. Please refer to pages 9 through 25 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, 2023 were: financials (29.3%), energy (21.6%), consumer discretionary (17.3%), communication services (13.1%) and industrials (12.6%). 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.

 

 

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).

 

Western Asset Premier Bond Fund 2023 Annual Report					5

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Fund at a glance^† (unaudited)

 

Investment breakdown (%) as a percent of total investments

 

 

†

The bar graph above represents the Fund’s portfolio as of December 31, 2023 and December 31, 2022 and does not include derivatives, such as forward foreign currency contracts. The Fund’s portfolio is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.

 

6				Western Asset Premier Bond Fund 2023 Annual Report

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Fund performance (unaudited)

 

Net Asset Value
Average annual total returns1
Twelve Months Ended 12/31/23			9.77	%
Five Years Ended 12/31/23			3.67
Ten Years Ended 12/31/23			3.99
Cumulative total returns1
12/31/13 through 12/31/23			47.86	%
Market Price
Average annual total returns2
Twelve Months Ended 12/31/23			9.57	%
Five Years Ended 12/31/23			4.22
Ten Years Ended 12/31/23			3.87
Cumulative total returns2
12/31/13 through 12/31/23			46.25	%

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.

 

Western Asset Premier Bond Fund 2023 Annual Report					7

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Fund performance (unaudited) (cont’d)

 

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 2013 - December 2023

 

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, 2013, 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, 2023. 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 144A 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.

 

8				Western Asset Premier Bond Fund 2023 Annual Report

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Schedule of investments

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Corporate Bonds & Notes — 111.1%
Communication Services — 12.2%
Diversified Telecommunication Services — 4.1%
Altice Financing SA, Senior Secured Notes			5.000	%			1/15/28				420,000			$	381,050	(a)
Altice Financing SA, Senior Secured Notes			5.750	%			8/15/29				590,000				524,359	(a)
Altice France Holding SA, Senior Notes			6.000	%			2/15/28				620,000				298,347	(a)
Altice France Holding SA, Senior Secured Notes			10.500	%			5/15/27				510,000				330,806	(a)
Altice France SA, Senior Secured Notes			5.125	%			7/15/29				200,000				155,872	(a)
Lumen Technologies Inc., Senior Notes			7.600	%			9/15/39				1,050,000				298,841	(b)
Orange SA, Junior Subordinated Notes (2.375% to 4/15/25 then EUR 5 year Swap Rate + 2.359%)			2.375	%			1/15/25				500,000	EUR			537,833	(c)(d)(e)
Orange SA, Senior Notes			9.000	%			3/1/31				600,000				740,546
Telecom Italia SpA, Senior Notes			5.303	%			5/30/24				250,000				249,041	(a)
Verizon Communications Inc., Senior Notes			3.875	%			2/8/29				1,670,000				1,620,228	(b)
Verizon Communications Inc., Senior Notes			2.355	%			3/15/32				500,000				416,036
Total Diversified Telecommunication Services															5,552,959
Entertainment — 1.1%
Banijay Entertainment SASU, Senior Secured Notes			8.125	%			5/1/29				340,000				350,375	(a)
Netflix Inc., Senior Notes			6.375	%			5/15/29				310,000				337,371
Walt Disney Co., Senior Notes			2.650	%			1/13/31				880,000				783,288
Total Entertainment															1,471,034
Interactive Media & Services — 0.1%
Match Group Holdings II LLC, Senior Notes			3.625	%			10/1/31				200,000				172,991	(a)
Media — 3.6%
Charter Communications Operating LLC/ Charter Communications Operating Capital Corp., Senior Secured Notes			6.484	%			10/23/45				630,000				619,642	(b)
Comcast Corp., Senior Notes			7.050	%			3/15/33				1,000,000				1,167,053	(b)
Comcast Corp., Senior Notes			4.200	%			8/15/34				920,000				879,974
DirecTV Financing LLC/DirecTV Financing Co-Obligor Inc., Senior Secured Notes			5.875	%			8/15/27				660,000				620,662	(a)(b)
DISH DBS Corp., Senior Notes			5.875	%			11/15/24				70,000				65,698
DISH DBS Corp., Senior Notes			7.375	%			7/1/28				620,000				371,227
DISH DBS Corp., Senior Notes			5.125	%			6/1/29				990,000				511,261	(b)
Time Warner Cable LLC, Senior Secured Notes			5.875	%			11/15/40				720,000				652,708
Total Media															4,888,225

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					9

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Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Wireless Telecommunication Services — 3.3%
CSC Holdings LLC, Senior Notes			11.250	%			5/15/28				550,000			$	567,086	(a)
CSC Holdings LLC, Senior Notes			5.750	%			1/15/30				230,000				143,414	(a)
CSC Holdings LLC, Senior Notes			4.625	%			12/1/30				1,130,000				681,809	(a)
CSC Holdings LLC, Senior Notes			5.000	%			11/15/31				310,000				187,897	(a)
Millicom International Cellular SA, Senior Notes			4.500	%			4/27/31				500,000				416,251	(a)
Sprint Capital Corp., Senior Notes			6.875	%			11/15/28				420,000				455,371	(b)
Sprint Capital Corp., Senior Notes			8.750	%			3/15/32				30,000				37,063	(b)
T-Mobile USA Inc., Senior Notes			3.500	%			4/15/31				1,140,000				1,043,527	(b)
Vmed O2 UK Financing I PLC, Senior Secured Notes			4.500	%			7/15/31				500,000	GBP			552,870	(a)
Vmed O2 UK Financing I PLC, Senior Secured Notes			4.750	%			7/15/31				540,000				482,696	(a)
Total Wireless Telecommunication Services															4,567,984
Total Communication Services															16,653,193
Consumer Discretionary — 16.5%
Automobile Components — 2.4%
Adient Global Holdings Ltd., Senior Notes			4.875	%			8/15/26				580,000				567,523	(a)
American Axle & Manufacturing Inc., Senior Notes			6.500	%			4/1/27				740,000				743,645	(b)
American Axle & Manufacturing Inc., Senior Notes			5.000	%			10/1/29				350,000				309,684
JB Poindexter & Co. Inc., Senior Notes			8.750	%			12/15/31				1,270,000				1,296,987	(a)
ZF North America Capital Inc., Senior Notes			7.125	%			4/14/30				280,000				298,749	(a)
Total Automobile Components															3,216,588
Automobiles — 3.7%
Ford Motor Co., Senior Notes			3.250	%			2/12/32				1,700,000				1,414,607	(b)
General Motors Co., Senior Notes			6.125	%			10/1/25				130,000				131,785	(b)
General Motors Co., Senior Notes			4.200	%			10/1/27				750,000				732,810	(b)
General Motors Co., Senior Notes			6.600	%			4/1/36				140,000				150,030	(b)
Mercedes-Benz Finance North America LLC, Senior Notes			8.500	%			1/18/31				1,000,000				1,255,588	(b)
Nissan Motor Acceptance Co. LLC, Senior Notes			2.750	%			3/9/28				1,570,000				1,386,486	(a)(b)
Total Automobiles															5,071,306
Broadline Retail — 0.9%
Amazon.com Inc., Senior Notes			2.100	%			5/12/31				700,000				603,888
Marks & Spencer PLC, Senior Notes			7.125	%			12/1/37				650,000				657,688	(a)
Total Broadline Retail															1,261,576

 

See Notes to Financial Statements.

 

10				Western Asset Premier Bond Fund 2023 Annual Report

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Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Distributors — 0.5%
Ritchie Bros Holdings Inc., Senior Notes			7.750	%			3/15/31				610,000			$	651,090	(a)
Diversified Consumer Services — 1.3%
APCOA Parking Holdings GmbH, Senior Secured Notes			4.625	%			1/15/27				130,000	EUR			135,420	(d)
APCOA Parking Holdings GmbH, Senior Secured Notes			4.625	%			1/15/27				910,000	EUR			947,943	(a)
Carriage Services Inc., Senior Notes			4.250	%			5/15/29				280,000				249,000	(a)
StoneMor Inc., Senior Secured Notes			8.500	%			5/15/29				280,000				220,070	(a)
WW International Inc., Senior Secured Notes			4.500	%			4/15/29				320,000				210,126	(a)
Total Diversified Consumer Services															1,762,559
Hotels, Restaurants & Leisure — 7.1%
888 Acquisitions Ltd., Senior Secured Notes			7.558	%			7/15/27				600,000	EUR			637,154	(a)
Carnival PLC, Senior Notes			1.000	%			10/28/29				1,210,000	EUR			972,114
Carrols Restaurant Group Inc., Senior Notes			5.875	%			7/1/29				150,000				132,659	(a)
IRB Holding Corp., Senior Secured Notes			7.000	%			6/15/25				430,000				430,335	(a)
Las Vegas Sands Corp., Senior Notes			3.900	%			8/8/29				1,510,000				1,393,212	(b)
Marston’s Issuer PLC, Secured Notes (SONIA + 2.669%)			7.889	%			7/16/35				540,000	GBP			509,935	(d)(e)
NCL Corp. Ltd., Senior Notes			3.625	%			12/15/24				590,000				573,558	(a)(b)
NCL Corp. Ltd., Senior Notes			7.750	%			2/15/29				130,000				130,907	(a)
NCL Corp. Ltd., Senior Secured Notes			8.125	%			1/15/29				140,000				146,347	(a)
NCL Finance Ltd., Senior Notes			6.125	%			3/15/28				700,000				670,706	(a)
Royal Caribbean Cruises Ltd., Senior Notes			5.375	%			7/15/27				1,150,000				1,139,128	(a)(b)
Royal Caribbean Cruises Ltd., Senior Notes			5.500	%			4/1/28				720,000				711,276	(a)
Saga PLC, Senior Notes			5.500	%			7/15/26				140,000	GBP			144,545	(d)
Sands China Ltd., Senior Notes			3.500	%			8/8/31				1,340,000				1,124,064
Wheel Bidco Ltd., Senior Secured Notes			6.750	%			7/15/26				250,000	GBP			273,795	(a)
Wynn Macau Ltd., Senior Notes			5.625	%			8/26/28				200,000				185,415	(a)
Wynn Macau Ltd., Senior Notes			5.125	%			12/15/29				620,000				551,585	(a)
Total Hotels, Restaurants & Leisure															9,726,735
Household Durables — 0.5%
Lennar Corp., Senior Notes			5.000	%			6/15/27				430,000				431,672
Lennar Corp., Senior Notes			4.750	%			11/29/27				250,000				249,702
Total Household Durables															681,374
Specialty Retail — 0.1%
Michaels Cos. Inc., Senior Secured Notes			5.250	%			5/1/28				190,000				150,353	(a)
Total Consumer Discretionary															22,521,581

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					11

---

Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Consumer Staples — 2.6%
Beverages — 1.1%
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide Inc., Senior Notes			4.700	%			2/1/36				1,540,000			$	1,535,852	(b)
Food Products — 0.7%
Bellis Acquisition Co. PLC, Senior Secured Notes			3.250	%			2/16/26				140,000	GBP			166,041	(d)
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance Inc., Senior Notes			3.750	%			12/1/31				500,000				431,274
Kraft Heinz Foods Co., Senior Notes			5.500	%			6/1/50				340,000				350,916	(b)
Total Food Products															948,231
Tobacco — 0.8%
Altria Group Inc., Senior Notes			2.450	%			2/4/32				1,000,000				816,118
Reynolds American Inc., Senior Notes			5.850	%			8/15/45				260,000				243,848
Total Tobacco															1,059,966
Total Consumer Staples															3,544,049
Energy — 21.6%
Energy Equipment & Services — 0.5%
Noble Finance II LLC, Senior Notes			8.000	%			4/15/30				280,000				291,591	(a)
Sunnova Energy Corp., Senior Notes			5.875	%			9/1/26				500,000				426,070	(a)
Total Energy Equipment & Services															717,661
Oil, Gas & Consumable Fuels — 21.1%
Anadarko Finance Co., Senior Notes			7.500	%			5/1/31				570,000				607,460
Burlington Resources LLC, Senior Notes			7.400	%			12/1/31				450,000				525,996
Cheniere Energy Partners LP, Senior Notes			4.000	%			3/1/31				500,000				455,234
Continental Resources Inc., Senior Notes			3.800	%			6/1/24				560,000				555,777
Continental Resources Inc., Senior Notes			4.375	%			1/15/28				210,000				203,495
Continental Resources Inc., Senior Notes			4.900	%			6/1/44				250,000				202,487
Diamondback Energy Inc., Senior Notes			3.500	%			12/1/29				400,000				371,753
Ecopetrol SA, Senior Notes			4.625	%			11/2/31				750,000				637,051
Ecopetrol SA, Senior Notes			5.875	%			5/28/45				390,000				308,496
Ecopetrol SA, Senior Notes			5.875	%			11/2/51				2,400,000				1,818,564
Energy Transfer LP, Junior Subordinated Notes (6.625% to 2/15/28 then 3 mo. USD LIBOR + 4.155%)			6.625	%			2/15/28				300,000				251,622	(c)(e)
EOG Resources Inc., Senior Notes			3.150	%			4/1/25				2,250,000				2,207,055	(b)
EQM Midstream Partners LP, Senior Notes			4.500	%			1/15/29				230,000				217,496	(a)
EQM Midstream Partners LP, Senior Notes			7.500	%			6/1/30				280,000				301,324	(a)
EQT Corp., Senior Notes			3.900	%			10/1/27				1,050,000				1,005,135	(b)
EQT Corp., Senior Notes			5.000	%			1/15/29				1,260,000				1,249,425	(b)

 

See Notes to Financial Statements.

 

12				Western Asset Premier Bond Fund 2023 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
Hilcorp Energy I LP/Hilcorp Finance Co., Senior Notes			8.375	%			11/1/33				280,000			$	297,076	(a)
KazMunayGas National Co. JSC, Senior Notes			3.500	%			4/14/33				1,120,000				933,595	(a)
Kinder Morgan Inc., Senior Notes			7.750	%			1/15/32				190,000				216,274
Kinder Morgan Inc., Senior Notes			5.550	%			6/1/45				1,500,000				1,445,639	(b)
NGPL PipeCo LLC, Senior Notes			7.768	%			12/15/37				490,000				546,419	(a)
Occidental Petroleum Corp., Senior Notes			6.200	%			3/15/40				250,000				258,449
Petrobras Global Finance BV, Senior Notes			5.999	%			1/27/28				710,000				722,285
Petrobras Global Finance BV, Senior Notes			6.750	%			1/27/41				920,000				920,966
Petroleos del Peru SA, Senior Notes			4.750	%			6/19/32				1,270,000				912,747	(a)
Petroleos Mexicanos, Senior Notes			5.500	%			6/27/44				360,000				222,790
Range Resources Corp., Senior Notes			4.875	%			5/15/25				190,000				187,774
Range Resources Corp., Senior Notes			8.250	%			1/15/29				300,000				310,867
Rockies Express Pipeline LLC, Senior Notes			7.500	%			7/15/38				350,000				353,881	(a)
Sabine Pass Liquefaction LLC, Senior Secured Notes			5.000	%			3/15/27				1,850,000				1,858,796	(b)
SilverBow Resources Inc., Secured Notes (3 mo. Term SOFR + 7.750%)			13.135	%			12/15/28				460,000				455,400	(a)(e)(f)(g)
Southern Natural Gas Co. LLC, Senior Notes			4.800	%			3/15/47				800,000				672,961	(a)
Summit Midstream Holdings LLC/Summit Midstream Finance Corp., Secured Notes			9.000	%			10/15/26				280,000				278,064	(a)
Targa Resources Partners LP/Targa Resources Partners Finance Corp., Senior Notes			6.500	%			7/15/27				250,000				253,456
Targa Resources Partners LP/Targa Resources Partners Finance Corp., Senior Notes			6.875	%			1/15/29				20,000				20,673
Transcontinental Gas Pipe Line Co. LLC, Senior Notes			7.850	%			2/1/26				1,000,000				1,047,714	(b)
Transportadora de Gas del Peru SA, Senior Notes			4.250	%			4/30/28				750,000				739,002	(a)
Venture Global LNG Inc., Senior Secured Notes			9.875	%			2/1/32				240,000				250,143	(a)
Western Midstream Operating LP, Senior Notes			4.050	%			2/1/30				2,200,000				2,059,927	(b)
Western Midstream Operating LP, Senior Notes			5.300	%			3/1/48				100,000				87,168
Western Midstream Operating LP, Senior Notes			5.250	%			2/1/50				1,680,000				1,508,364	(b)
Williams Cos. Inc., Senior Notes			4.550	%			6/24/24				60,000				59,689
Williams Cos. Inc., Senior Notes			7.500	%			1/15/31				443,000				501,888

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					13

---

Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Oil, Gas & Consumable Fuels — continued
Williams Cos. Inc., Senior Notes			8.750	%			3/15/32				39,000			$	47,338
YPF SA, Senior Notes			8.500	%			7/28/25				630,000				608,813	(a)
Total Oil, Gas & Consumable Fuels															28,696,528
Total Energy															29,414,189
Financials — 27.6%
Banks — 18.5%
Banco Mercantil del Norte SA, Junior Subordinated Notes (6.625% to 1/24/32 then 10 year Treasury Constant Maturity Rate + 5.034%)			6.625	%			1/24/32				490,000				417,480	(a)(c)(e)
Bank of America Corp., Subordinated Notes			4.250	%			10/22/26				1,000,000				982,374	(b)
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				547,593	(b)(c)(e)
Barclays PLC, Subordinated Notes			5.200	%			5/12/26				1,000,000				994,114	(b)
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				300,000				272,054	(a)(e)
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				1,010,000				1,013,928	(a)(c)(e)
BPCE SA, Subordinated Notes			5.150	%			7/21/24				1,000,000				991,627	(a)
Citigroup Inc., Junior Subordinated Notes (5.950% to 5/15/25 then 3 mo. Term SOFR + 4.167%)			5.950	%			5/15/25				900,000				882,052	(b)(c)(e)
Citigroup Inc., Subordinated Notes			4.125	%			7/25/28				800,000				768,828	(b)
Citigroup Inc., Subordinated Notes			6.625	%			6/15/32				1,000,000				1,088,924	(b)
Comerica Bank, Senior Notes			2.500	%			7/23/24				410,000				401,682
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				1,104,043	(a)(c)(e)
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				383,024	(c)(e)
HSBC Holdings PLC, Senior Notes (3.973% to 5/22/29 then 3 mo. Term SOFR + 1.872%)			3.973	%			5/22/30				1,130,000				1,056,447	(e)
HSBC Holdings PLC, Subordinated Notes (8.113% to 11/3/32 then SOFR + 4.250%)			8.113	%			11/3/33				700,000				809,363	(e)
Intesa Sanpaolo SpA, Subordinated Notes			5.017	%			6/26/24				1,120,000				1,108,754	(a)
Intesa Sanpaolo SpA, Subordinated Notes			5.710	%			1/15/26				1,260,000				1,254,631	(a)

 

See Notes to Financial Statements.

 

14				Western Asset Premier Bond Fund 2023 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 (3 mo. Term SOFR + 3.562%)			8.939	%			2/1/24				2,600,000			$	2,629,250	(b)(c)(e)
JPMorgan Chase & Co., Junior Subordinated Notes (6.100% to 10/1/24 then 3 mo. Term SOFR + 3.592%)			6.100	%			10/1/24				400,000				398,055	(b)(c)(e)
JPMorgan Chase & Co., Subordinated Notes			4.950	%			6/1/45				500,000				478,631	(b)
Lloyds Banking Group PLC, Junior Subordinated Notes (7.500% to 9/27/25 then USD 5 year ICE Swap Rate + 4.496%)			7.500	%			9/27/25				500,000				490,895	(c)(e)
Lloyds Banking Group PLC, Subordinated Notes			4.650	%			3/24/26				1,500,000				1,471,959	(b)
PNC Financial Services Group Inc., Senior Notes			2.550	%			1/22/30				750,000				656,414
PNC Financial Services Group Inc., Senior Notes (5.812% to 6/12/25 then SOFR + 1.322%)			5.812	%			6/12/26				750,000				754,960	(e)
Santander UK Group Holdings PLC, Subordinated Notes			5.625	%			9/15/45				1,000,000				806,003	(a)(b)
UniCredit SpA, Subordinated Notes (7.296% to 4/2/29 then USD 5 year ICE Swap Rate + 4.914%)			7.296	%			4/2/34				880,000				905,843	(a)(b)(e)
Wells Fargo & Co., Junior Subordinated Notes			5.900	%			6/15/24				2,500,000				2,479,894	(b)(c)(e)
Total Banks															25,148,822
Capital Markets — 5.3%
Charles Schwab Corp., Junior Subordinated Notes (4.000% to 12/1/30 then 10 year Treasury Constant Maturity Rate + 3.079%)			4.000	%			12/1/30				2,000,000				1,582,120	(b)(c)(e)
Credit Suisse AG AT1 Claim			—				—				2,560,000				307,200	*(f)
Credit Suisse AG, Senior Notes			7.500	%			2/15/28				400,000				438,323	(b)
Goldman Sachs Group Inc., Senior Notes (2.640% to 2/24/27 then SOFR + 1.114%)			2.640	%			2/24/28				2,000,000				1,854,838	(e)
Morgan Stanley, Senior Notes (2.699% to 1/22/30 then SOFR + 1.143%)			2.699	%			1/22/31				500,000				437,403	(e)
UBS Group AG, Junior Subordinated Notes (6.875% to 8/7/25 then USD 5 year ICE Swap Rate + 4.590%)			6.875	%			8/7/25				680,000				670,330	(c)(d)(e)
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				820,000				820,259	(a)(c)(e)

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					15

---

Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Capital Markets — continued
UBS Group AG, Junior Subordinated Notes (9.250% to 11/13/28 then 5 year Treasury Constant Maturity Rate + 4.745%)			9.250	%			11/13/28				290,000			$	313,570	(a)(c)(e)
UBS Group AG, Senior Notes (6.537% to 8/12/32 then SOFR + 3.920%)			6.537	%			8/12/33				770,000				822,189	(a)(e)
Total Capital Markets															7,246,232
Financial Services — 3.3%
AerCap Ireland Capital DAC/AerCap Global Aviation Trust, Senior Notes			3.400	%			10/29/33				2,500,000				2,148,235	(b)
Ahold Lease USA Inc. Pass-Through-Trust, Senior Secured Notes			8.620	%			1/2/25				43,860				44,950
Global Aircraft Leasing Co. Ltd., Senior Notes (6.500% Cash or 7.250% PIK)			6.500	%			9/15/24				2,049,728				1,929,132	(a)(h)
GTCR W-2 Merger Sub LLC, Senior Secured Notes			7.500	%			1/15/31				220,000				232,622	(a)
GTCR W-2 Merger Sub LLC/GTCR W Dutch Finance Sub BV, Senior Secured Notes			8.500	%			1/15/31				100,000	GBP			138,204	(a)
Total Financial Services															4,493,143
Insurance — 0.5%
MetLife Inc., Junior Subordinated Notes			10.750	%			8/1/39				500,000				669,879
Total Financials															37,558,076
Health Care — 9.0%
Biotechnology — 0.6%
AbbVie Inc., Senior Notes			2.950	%			11/21/26				500,000				479,601
Amgen Inc., Senior Notes			2.450	%			2/21/30				400,000				354,900
Total Biotechnology															834,501
Health Care Providers & Services — 6.5%
Centene Corp., Senior Notes			3.375	%			2/15/30				2,940,000				2,641,546	(b)
CHS/Community Health Systems Inc., Senior Secured Notes			10.875	%			1/15/32				500,000				523,190	(a)
CVS Health Corp., Senior Notes			3.750	%			4/1/30				1,000,000				941,035	(b)
CVS Health Corp., Senior Notes			5.250	%			2/21/33				400,000				409,045
CVS Pass-Through Trust			5.789	%			1/10/26				102,643				102,697	(a)
CVS Pass-Through Trust			7.507	%			1/10/32				261,761				275,418	(a)(b)
CVS Pass-Through Trust, Secured Trust			5.880	%			1/10/28				181,896				180,095
CVS Pass-Through Trust, Secured Trust			6.943	%			1/10/30				232,770				237,872	(b)
CVS Pass-Through Trust, Senior Secured Trust			6.036	%			12/10/28				205,116				207,248	(b)
HCA Inc., Senior Notes			4.500	%			2/15/27				1,000,000				988,812	(b)
HCA Inc., Senior Notes			3.500	%			9/1/30				1,000,000				906,795
Humana Inc., Senior Notes			5.875	%			3/1/33				400,000				426,326

 

See Notes to Financial Statements.

 

16				Western Asset Premier Bond Fund 2023 Annual Report

---

 

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Health Care Providers & Services — continued
Legacy LifePoint Health LLC, Senior Secured Notes			4.375	%			2/15/27				360,000			$	332,755	(a)
Tenet Healthcare Corp., Secured Notes			6.250	%			2/1/27				670,000				673,756
Total Health Care Providers & Services															8,846,590
Pharmaceuticals — 1.9%
Par Pharmaceutical Inc., Senior Secured Notes			7.500	%			4/1/27				330,000				211,535	*(a)(i)
Teva Pharmaceutical Finance Netherlands III BV, Senior Notes			6.000	%			4/15/24				760,000				758,146	(b)
Teva Pharmaceutical Finance Netherlands III BV, Senior Notes			3.150	%			10/1/26				780,000				722,775
Teva Pharmaceutical Finance Netherlands III BV, Senior Notes			5.125	%			5/9/29				846,000				808,878
Total Pharmaceuticals															2,501,334
Total Health Care															12,182,425
Industrials — 12.2%
Aerospace & Defense — 3.6%
Avolon Holdings Funding Ltd., Senior Notes			3.250	%			2/15/27				750,000				694,234	(a)
Avolon Holdings Funding Ltd., Senior Notes			2.750	%			2/21/28				1,000,000				889,419	(a)
Boeing Co., Senior Notes			3.200	%			3/1/29				750,000				701,857	(b)
Boeing Co., Senior Notes			3.625	%			2/1/31				560,000				520,394	(b)
Boeing Co., Senior Notes			6.125	%			2/15/33				600,000				647,555	(b)
Boeing Co., Senior Notes			3.750	%			2/1/50				500,000				388,580	(b)
Bombardier Inc., Senior Notes			7.500	%			2/1/29				310,000				315,406	(a)
TransDigm Inc., Senior Secured Notes			7.125	%			12/1/31				730,000				765,890	(a)
Total Aerospace & Defense															4,923,335
Building Products — 0.9%
Standard Industries Inc., Senior Notes			4.375	%			7/15/30				1,278,000				1,175,227	(a)(b)
Commercial Services & Supplies — 0.9%
CoreCivic Inc., Senior Notes			8.250	%			4/15/26				930,000				947,021	(b)
GFL Environmental Inc., Senior Secured Notes			6.750	%			1/15/31				190,000				195,991	(a)
Total Commercial Services & Supplies															1,143,012
Machinery — 0.5%
Cellnex Finance Co. SA, Senior Notes			2.000	%			2/15/33				500,000	EUR			472,213	(d)
Titan International Inc., Senior Secured Notes			7.000	%			4/30/28				210,000				210,297
Total Machinery															682,510
Passenger Airlines — 4.3%
American Airlines Group Inc., Senior Notes			3.750	%			3/1/25				570,000				556,001	(a)(b)
American Airlines Inc., Senior Secured Notes			8.500	%			5/15/29				770,000				813,601	(a)

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					17

---

Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Passenger Airlines — continued
Delta Air Lines Inc., Senior Notes			2.900	%			10/28/24				310,000			$	301,977	(b)
Delta Air Lines Inc., Senior Notes			7.375	%			1/15/26				260,000				268,949	(b)
Delta Air Lines Inc., Senior Secured Notes			7.000	%			5/1/25				1,490,000				1,517,305	(a)(j)
Mileage Plus Holdings LLC/Mileage Plus Intellectual Property Assets Ltd., Senior Secured Notes			6.500	%			6/20/27				644,000				646,298	(a)(b)
Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., Senior Secured Notes			8.000	%			9/20/25				1,229,999				886,015	(a)(b)
Spirit Loyalty Cayman Ltd./Spirit IP Cayman Ltd., Senior Secured Notes			8.000	%			9/20/25				700,000				504,237	(a)
United Airlines Pass-Through Trust			4.875	%			1/15/26				407,360				394,894	(b)
Total Passenger Airlines															5,889,277
Trading Companies & Distributors — 2.0%
Ashtead Capital Inc., Senior Notes			2.450	%			8/12/31				1,230,000				1,002,403	(a)
H&E Equipment Services Inc., Senior Notes			3.875	%			12/15/28				750,000				682,515	(a)(b)
United Rentals North America Inc., Secured Notes			3.875	%			11/15/27				1,000,000				955,254	(b)
United Rentals North America Inc., Senior Notes			5.500	%			5/15/27				80,000				80,232
Total Trading Companies & Distributors															2,720,404
Total Industrials															16,533,765
Information Technology — 2.0%
Communications Equipment — 0.2%
CommScope Inc., Senior Notes			7.125	%			7/1/28				20,000				9,520	(a)
CommScope Inc., Senior Secured Notes			4.750	%			9/1/29				10,000				6,723	(a)
CommScope Technologies LLC, Senior Notes			5.000	%			3/15/27				150,000				62,578	(a)
Viasat Inc., Senior Notes			7.500	%			5/30/31				250,000				196,562	(a)
Total Communications Equipment															275,383
Semiconductors & Semiconductor Equipment — 0.4%
Broadcom Corp./Broadcom Cayman Finance Ltd., Senior Notes			3.125	%			1/15/25				500,000				489,408
Technology Hardware, Storage & Peripherals — 1.4%
Seagate HDD Cayman, Senior Notes			4.750	%			1/1/25				1,220,000				1,210,846	(b)
Seagate HDD Cayman, Senior Notes			4.875	%			6/1/27				260,000				255,232
Western Digital Corp., Senior Notes			4.750	%			2/15/26				430,000				422,135	(b)
Total Technology Hardware, Storage & Peripherals															1,888,213
Total Information Technology															2,653,004

 

See Notes to Financial Statements.

 

18				Western Asset Premier Bond Fund 2023 Annual Report

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Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Materials — 4.8%
Chemicals — 1.0%
Braskem America Finance Co., Senior Notes			7.125	%			7/22/41				920,000			$	712,422	(d)
Sasol Financing USA LLC, Senior Notes			8.750	%			5/3/29				700,000				714,925	(a)
Total Chemicals															1,427,347
Construction Materials — 0.3%
Smyrna Ready Mix Concrete LLC, Senior Secured Notes			8.875	%			11/15/31				440,000				463,002	(a)
Containers & Packaging — 0.0%††
Pactiv LLC, Senior Notes			7.950	%			12/15/25				50,000				50,787
Metals & Mining — 2.1%
ArcelorMittal SA, Senior Notes			7.000	%			10/15/39				430,000				466,374
First Quantum Minerals Ltd., Senior Notes			6.875	%			3/1/26				340,000				304,791	(a)
Freeport-McMoRan Inc., Senior Notes			5.400	%			11/14/34				220,000				221,770
Freeport-McMoRan Inc., Senior Notes			5.450	%			3/15/43				580,000				565,196
Teck Resources Ltd., Senior Notes			6.000	%			8/15/40				210,000				213,640
Vale Overseas Ltd., Senior Notes			6.875	%			11/10/39				940,000				1,033,067	(b)
Total Metals & Mining															2,804,838
Paper & Forest Products — 1.4%
Suzano Austria GmbH, Senior Notes			5.750	%			7/14/26				950,000				959,442	(a)(b)
Suzano Austria GmbH, Senior Notes			3.750	%			1/15/31				1,000,000				877,960	(b)
Total Paper & Forest Products															1,837,402
Total Materials															6,583,376
Real Estate — 0.6%
Hotel & Resort REITs — 0.2%
Service Properties Trust, Senior Notes			4.375	%			2/15/30				290,000				225,480
Real Estate Management & Development — 0.4%
Cushman & Wakefield US Borrower LLC, Senior Secured Notes			8.875	%			9/1/31				120,000				127,263	(a)
Samhallsbyggnadsbolaget i Norden AB, Senior Notes			2.375	%			9/4/26				600,000	EUR			480,201	(d)
Total Real Estate Management & Development															607,464
Total Real Estate															832,944
Utilities — 2.0%
Electric Utilities — 1.4%
FirstEnergy Corp., Senior Notes			7.375	%			11/15/31				700,000				826,649	(b)
Pacific Gas and Electric Co., First Mortgage Bonds			6.950	%			3/15/34				700,000				769,802
Vistra Operations Co. LLC, Senior Notes			7.750	%			10/15/31				300,000				311,802	(a)
Total Electric Utilities															1,908,253

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					19

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Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Independent Power and Renewable Electricity Producers — 0.6%
Minejesa Capital BV, Senior Secured Notes			4.625	%			8/10/30				810,000			$	770,513	(a)
Total Utilities															2,678,766
Total Corporate Bonds & Notes (Cost — $145,051,654)															151,155,368
Sovereign Bonds — 9.0%
Angola — 0.3%
Angolan Government International Bond, Senior Notes			8.000	%			11/26/29				400,000				356,397	(a)
Argentina — 0.5%
Argentine Republic Government International Bond, Senior Notes			1.000	%			7/9/29				43,394				17,444
Provincia de Buenos Aires, Senior Notes, Step bond (6.375% to 9/1/24 then 6.625%)			6.375	%			9/1/37				468,827				180,717	(a)
Provincia de Cordoba, Senior Notes			6.990	%			6/1/27				560,000				478,296	(a)
Total Argentina															676,457
Colombia — 1.0%
Colombia Government International Bond, Senior Notes			3.250	%			4/22/32				1,750,000				1,394,626
Dominican Republic — 0.2%
Dominican Republic International Bond, Senior Notes			4.875	%			9/23/32				380,000				346,902	(a)
Indonesia — 1.4%
Indonesia Government International Bond, Senior Notes			3.850	%			7/18/27				300,000				293,530	(a)
Indonesia Government International Bond, Senior Notes			3.500	%			1/11/28				1,670,000				1,603,746	(b)
Total Indonesia															1,897,276
Mexico — 3.7%
Mexican Bonos, Bonds			7.750	%			5/29/31				34,280,000	MXN			1,884,118
Mexico Government International Bond, Senior Notes			3.750	%			1/11/28				500,000				483,016
Mexico Government International Bond, Senior Notes			2.659	%			5/24/31				1,560,000				1,322,613
Mexico Government International Bond, Senior Notes			4.350	%			1/15/47				1,750,000				1,414,142
Total Mexico															5,103,889
Panama — 0.9%
Panama Government International Bond, Senior Notes			4.500	%			5/15/47				1,650,000				1,176,351

 

See Notes to Financial Statements.

 

20				Western Asset Premier Bond Fund 2023 Annual Report

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Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Peru — 1.0%
Peruvian Government International Bond, Senior Notes			2.783	%			1/23/31				1,540,000			$	1,344,913
Total Sovereign Bonds (Cost — $11,799,989)															12,296,811
U.S. Government & Agency Obligations — 4.2%
U.S. Government Obligations — 4.2%
U.S. Treasury Notes			3.250	%			8/31/24				3,495,000				3,453,744
U.S. Treasury Notes			4.125	%			1/31/25				1,450,000				1,441,249
U.S. Treasury Notes			0.750	%			4/30/26				850,000				786,483
Total U.S. Government & Agency Obligations (Cost — $5,691,622)															5,681,476
Senior Loans — 3.6%
Consumer Discretionary — 0.8%
Diversified Consumer Services — 0.1%
WW International Inc., Initial Term Loan (1 mo. Term SOFR + 3.614%)			8.970	%			4/13/28				200,000				142,583	(e)(k)(l)
Hotels, Restaurants & Leisure — 0.7%
Scientific Games International Inc., Initial Term Loan B (1 mo. Term SOFR + 3.100%)			8.465	%			4/16/29				989,950				994,281	(e)(k)(l)
Total Consumer Discretionary															1,136,864
Financials — 1.7%
Financial Services — 1.7%
Citadel Securities LP, Term Loan B (1 mo. Term SOFR + 2.614%)			7.970	%			7/29/30				2,227,495				2,235,381	(e)(k)(l)
Industrials — 0.4%
Passenger Airlines — 0.4%
Delta Air Lines Inc., Initial Term Loan (3 mo. Term SOFR + 3.750%)			9.166	%			10/20/27				520,000				533,270	(e)(k)(l)
Materials — 0.7%
Paper & Forest Products — 0.7%
Asplundh Tree Expert LLC, 2021 Refinancing Term Loan (1 mo. Term SOFR + 1.850%)			7.206	%			9/7/27				989,770				992,111	(e)(k)(l)
Total Senior Loans (Cost — $4,853,987)															4,897,626
Asset-Backed Securities — 1.7%
American Home Mortgage Investment Trust, 2007-A 4A (1 mo. Term SOFR + 1.014%)			6.370	%			7/25/46				437,070				113,205	(a)(e)
Bayview Financial Asset Trust, 2007-SR1A M1 (1 mo. Term SOFR + 0.914%)			6.270	%			3/25/37				298,573				292,539	(a)(e)
Bayview Financial Asset Trust, 2007-SR1A M4 (1 mo. Term SOFR + 1.614%)			6.970	%			3/25/37				30,887				31,603	(a)(e)

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					21

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Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Asset-Backed Securities — continued
CWABS Asset Backed Notes Trust, 2007- SEA2 1A1 (1 mo. Term SOFR + 2.114%)			7.470	%			8/25/47				286			$	286	(a)(e)
Financial Asset Securities Corp. Trust, 2005-1A 1A3B (1 mo. Term SOFR + 0.524%)			5.881	%			2/27/35				153,215				141,020	(a)(e)
GSAMP Trust, 2003-SEA2 A1			5.421	%			7/25/33				367,840				357,304
Indymac Manufactured Housing Contract Pass-Through Certificates, 1997-1 A5			6.970	%			2/25/28				6,460				6,403
Morgan Stanley ABS Capital Inc. Trust, 2003- SD1 A1 (1 mo. Term SOFR + 1.114%)			6.470	%			3/25/33				4,364				4,268	(e)
Morgan Stanley ABS Capital Inc. Trust, 2004- HE7 M1 (1 mo. Term SOFR + 1.014%)			6.370	%			8/25/34				775,077				759,034	(e)
Origen Manufactured Housing Contract Trust, 2006-A A2			6.962	%			10/15/37				257,776				233,282	(e)
Origen Manufactured Housing Contract Trust, 2007-A A2			7.800	%			4/15/37				329,501				309,448	(e)
Total Asset-Backed Securities (Cost — $2,107,285)															2,248,392
Collateralized Mortgage Obligations (m) — 1.5%
Bear Stearns ALT-A Trust, 2004-3 A1 (1 mo. Term SOFR + 0.754%)			6.110	%			4/25/34				31,638				30,122	(e)
CHL Mortgage Pass-Through Trust, 2005-7 1A1 (1 mo. Term SOFR + 0.654%)			6.010	%			3/25/35				172,100				157,036	(e)
Citigroup Commercial Mortgage Trust, 2015-P1 D			3.225	%			9/15/48				440,000				332,173	(a)
CSAIL Commercial Mortgage Trust, 2015-C3 C			4.351	%			8/15/48				310,000				234,230	(e)
Federal National Mortgage Association (FNMA), 2004-W15 1A2			6.500	%			8/25/44				45,063				45,961
Impac CMB Trust, 2004-10 2A (1 mo. Term SOFR + 0.754%)			6.110	%			3/25/35				44,819				40,790	(e)
Impac CMB Trust, 2005-2 2A2 (1 mo. Term SOFR + 0.914%)			6.270	%			4/25/35				11,504				10,652	(e)
MAFI II Remic Trust, 1998-BI B1			5.183	%			11/20/24				110,922				92,354	(e)
MERIT Securities Corp., 2011-PA B3 (1 mo. USD LIBOR + 2.250%)			7.720	%			9/28/32				440,914				395,758	(a)(e)
Morgan Stanley Capital Trust, 2016-BNK2 B			3.485	%			11/15/49				430,000				321,015
Prime Mortgage Trust, 2005-2 2XB, IO			1.743	%			10/25/32				876,407				50,843	(e)
Prime Mortgage Trust, 2005-5 1X, IO			1.096	%			7/25/34				1,124,471				31,254	(e)
RAMP Trust, 2005-SL2 APO, STRIPS, PO			0.000	%			2/25/32				1,802				1,486
Sequoia Mortgage Trust, 2003-2 A2 (6 mo. Term SOFR + 1.108%)			6.483	%			6/20/33				3,397				3,250	(e)
Structured Asset Securities Corp., 1998-RF2 A			4.739	%			7/15/27				57,278				57,184	(a)(e)

 

See Notes to Financial Statements.

 

22				Western Asset Premier Bond Fund 2023 Annual Report

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Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Maturity Date				Face Amount†				Value
Collateralized Mortgage Obligations (m) — continued
Structured Asset Securities Corp. Mortgage Pass-Through Certificates, 2003-9A 2A2			6.598	%			3/25/33				21,081			$	20,291	(e)
UBS Commercial Mortgage Trust, 2018-C15 C			5.140	%			12/15/51				285,000				236,507	(e)
WaMu Mortgage Pass-Through Certificates Trust, 2004-AR6 A (1 mo. Term SOFR + 0.954%)			6.310	%			5/25/44				3,595				3,591	(e)
Total Collateralized Mortgage Obligations (Cost — $1,914,666)															2,064,497
Convertible Bonds & Notes — 0.9%
Communication Services — 0.9%
Media — 0.9%
DISH Network Corp., Senior Notes			2.375	%			3/15/24				370,000				367,687
DISH Network Corp., Senior Notes			0.000	%			12/15/25				1,020,000				637,500
DISH Network Corp., Senior Notes			3.375	%			8/15/26				415,000				222,025	(b)
Total Communication Services															1,227,212
Industrials — 0.0%††
Passenger Airlines — 0.0%††
Spirit Airlines Inc., Senior Notes			1.000	%			5/15/26				90,000				62,820
Total Convertible Bonds & Notes (Cost — $1,522,486)															1,290,032
						Expiration Date				Warrants
Warrants — 0.0%††
Industrials — 0.0%††
Passenger Airlines — 0.0%††
flyExclusive Inc. (Cost — $8,421)							5/28/28				8,795				1,935	*
		Rate								Shares
Preferred Stocks — 0.0%††
Financials — 0.0%††
Financial Services — 0.0%††
Corporate Backed Trust Certificates (Cost — $0)			7.375	%							33,900				10	*(f)(g)(i)
Total Investments before Short-Term Investments (Cost — $172,950,110)															179,636,147
						Maturity Date				Face Amount†
Short-Term Investments — 2.2%
U.S. Treasury Bills — 0.6%
U.S. Treasury Bills (Cost — $749,890)			0.000	%			1/2/24				750,000				750,000	(n)

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					23

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Schedule of investments (cont’d)

December 31, 2023

 

Western Asset Premier Bond Fund

(Percentages shown based on Fund net assets)

 

Security		Rate				Shares				Value
Money Market Funds — 1.6%
Western Asset Premier Institutional Government Reserves, Premium Shares (Cost — $2,196,036)			5.295	%			2,196,036			$	2,196,036	(o)(p)
Total Short-Term Investments (Cost — $2,945,926)											2,946,036
Total Investments — 134.2% (Cost — $175,896,036)											182,582,183
Liabilities in Excess of Other Assets — (34.2)%											(46,494,980	)
Total Net Assets — 100.0%										$	136,087,203

 

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

 

††	Represents less than 0.1%.

 

*	Non-income producing security.

 

(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)	All or a portion of this security is pledged as collateral pursuant to the loan agreement (Note 5).

 

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

 

(d)

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.

 

(e)

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.

 

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

 

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

 

(h)	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.

 

(i)	The coupon payment on this security is currently in default as of December 31, 2023.

 

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

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

 

(l)	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.

 

(m)

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.

 

(n)	Rate shown represents yield-to-maturity.

 

(o)	Rate shown is one-day yield as of the end of the reporting period.

 

(p)

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, 2023, the total market value of investments in Affiliated Companies was $2,196,036 and the cost was $2,196,036 (Note 8).

 

See Notes to Financial Statements.

 

24				Western Asset Premier Bond Fund 2023 Annual Report

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Western Asset Premier Bond Fund

 

Abbreviation(s) used in this schedule:
EUR		— Euro
GBP		— British Pound
ICE		— Intercontinental Exchange
IO		— Interest Only
JSC		— Joint Stock Company
LIBOR		— London Interbank Offered Rate
MXN		— Mexican Peso
PIK		— Payment-In-Kind
PO		— Principal Only
SOFR		— Secured Overnight Financing Rate
SONIA		— Sterling Overnight Index Average
STRIPS		— Separate Trading of Registered Interest and Principal Securities
USD		— United States Dollar

At December 31, 2023, 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**

Goldman Sachs Group Inc.

5.700

%

12/1/2023

1/5/2024

$

1,468,977

Corporate Bonds & Notes

$

1,534,688

 

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

 

**Including

accrued interest.

At December 31, 2023, the Fund had the following open forward foreign currency contracts:

 

Currency Purchased						Currency Sold								Counterparty		Settlement Date		Unrealized Depreciation
USD			3,085,225				EUR				2,910,038			BNP Paribas SA		1/19/24		$	(130,092	)
USD			1,187,767				GBP				971,806			BNP Paribas SA		1/19/24			(51,095	)
USD			459,685				EUR				430,877			Morgan Stanley & Co. Inc.		1/19/24			(16,394	)
Net unrealized depreciation on open forward foreign currency contracts																		$	(197,581	)

 

Abbreviation(s) used in this table:
EUR		— Euro
GBP		— British Pound
USD		— United States Dollar

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					25

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Statement of assets and liabilities

December 31, 2023

 

Assets:
Investments in unaffiliated securities, at value (Cost — $173,700,000)		$	180,386,147
Investments in affiliated securities, at value (Cost — $2,196,036)			2,196,036
Foreign currency, at value (Cost — $189,408)			178,324
Cash			41,125
Interest receivable			2,476,145
Receivable for securities sold			478,750
Dividends receivable from affiliated investments			10,128
Prepaid expenses			837
Total Assets			185,767,492
Liabilities:
Loan payable (Note 5)			47,500,000
Payable for open reverse repurchase agreements (Note 3)			1,468,977
Interest and commitment fee payable			273,600
Unrealized depreciation on forward foreign currency contracts			197,581
Investment management fee payable			65,652
Administration fee payable			19,361
Trustees’ fees payable			882
Accrued expenses			154,236
Total Liabilities			49,680,289
Total Net Assets		$	136,087,203
Net Assets:
Common shares, no par value, unlimited number of shares authorized, 11,865,600 shares issued and outstanding		$	156,166,075
Total distributable earnings (loss)			(20,078,872)
Total Net Assets		$	136,087,203
Shares Outstanding			11,865,600
Net Asset Value		$	11.47

 

See Notes to Financial Statements.

 

26				Western Asset Premier Bond Fund 2023 Annual Report

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Statement of operations

For the Year Ended December 31, 2023

 

Investment Income:
Interest		$	13,488,361
Dividends from affiliated investments			75,927
Less: Foreign taxes withheld			(7,496)
Total Investment Income			13,556,792
Expenses:
Interest expense (Notes 3 and 5)			3,014,771
Investment management fee (Note 2)			1,015,103
Audit and tax fees			70,192
Legal fees			55,757
Fund accounting fees			50,783
Transfer agent fees			39,840
Commitment fees (Note 5)			36,135
Trustees’ fees			30,033
Shareholder reports			22,998
Stock exchange listing fees			12,500
Excise tax (Note 1)			4,655
Custody fees			2,416
Insurance			1,281
Miscellaneous expenses			9,062
Total Expenses			4,365,526
Less: Fee waivers and/or expense reimbursements (Note 2)			(1,369)
Net Expenses			4,364,157
Net Investment Income			9,192,635
Realized and Unrealized Gain (Loss) on Investments, Forward Foreign Currency Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
Net Realized Gain (Loss) From:
Investment transactions in unaffiliated securities			(6,837,418)
Forward foreign currency contracts			(122,138)
Foreign currency transactions			26,578
Net Realized Loss			(6,932,978)
Change in Net Unrealized Appreciation (Depreciation) From:
Investments in unaffiliated securities			10,186,337
Forward foreign currency contracts			(19,461)
Foreign currencies			(18,980)
Change in Net Unrealized Appreciation (Depreciation)			10,147,896
Net Gain on Investments, Forward Foreign Currency Contracts and Foreign Currency Transactions			3,214,918
Increase in Net Assets From Operations		$	12,407,553

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					27

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Statements of changes in net assets

 

 

For the Years Ended December 31,		2023				2022
Operations:
Net investment income		$	9,192,635			$	9,784,279
Net realized loss			(6,932,978)				(11,889,638)
Change in net unrealized appreciation (depreciation)			10,147,896				(25,160,308)
Increase (Decrease) in Net Assets From Operations			12,407,553				(27,265,667)
Distributions to Shareholders From (Note 1):
Total distributable earnings			(9,539,942)				(9,397,555)
Decrease in Net Assets From Distributions to Shareholders			(9,539,942)				(9,397,555)
Increase (Decrease) in Net Assets			2,867,611				(36,663,222)
Net Assets:
Beginning of year			133,219,592				169,882,814
End of year		$	136,087,203			$	133,219,592

 

See Notes to Financial Statements.

 

28				Western Asset Premier Bond Fund 2023 Annual Report

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Statement of cash flows

For the Year Ended December 31, 2023

 

Increase (Decrease) in Cash:
Cash Flows from Operating Activities:
Net increase in net assets resulting from operations		$	12,407,553
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating activities:
Purchases of portfolio securities			(64,841,509)
Sales of portfolio securities			89,754,511
Net purchases, sales and maturities of short-term investments			(1,442,298)
Net amortization of premium (accretion of discount)			(2,800,740)
Securities litigation proceeds			15,600
Increase in receivable for securities sold			(478,750)
Decrease in interest receivable			273,003
Decrease in prepaid expenses			54
Increase in dividends receivable from affiliated investments			(4,546)
Decrease in payable for securities purchased			(87,772)
Decrease in investment management fee payable			(8,279)
Decrease in Trustees’ fees payable			(2,059)
Decrease in administration fee payable			(2,422)
Increase in interest and commitment fee payable			(31,193)
Increase in accrued expenses			42,021
Net realized loss on investments			6,837,418
Change in net unrealized appreciation (depreciation) of investments and forward foreign currency contracts			(10,166,876)
Net Cash Provided in Operating Activities*			29,463,716
Cash Flows from Financing Activities:
Distributions paid on common stock			(9,539,942)
Decrease in loan facility borrowings			(10,000,000)
Decrease in payable for open reverse repurchase agreements			(10,136,303)
Net Cash Used by Financing Activities			(29,676,245)
Net Decrease in Cash and Restricted Cash			(212,529)
Cash and restricted cash at beginning of year			431,978
Cash and restricted cash at end of year		$	219,449

 

*	Included in operating expenses is $3,084,033 paid for interest and commitment fees on borrowings.

 

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.

 

		December 31, 2023
Cash		$	219,449
Restricted cash			—
Total cash and restricted cash shown in the Statement of Cash Flows		$	219,449

 

See Notes to Financial Statements.

 

Western Asset Premier Bond Fund 2023 Annual Report					29

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Financial highlights

 

For a common share outstanding throughout each year ended December 31, unless otherwise noted:
		20231				20221				20211				20201				20191
Net asset value, beginning of year			$11.23				$14.32				$14.85				$14.66				$13.00
Income (loss) from operations:
Net investment income			0.77				0.82				0.87				0.87				0.82
Net realized and unrealized gain (loss)			0.27				(3.12)				(0.61)				0.10				1.63
Total income (loss) from operations			1.04				(2.30)				0.26				0.97				2.45
Less distributions from:
Net investment income			(0.80)				(0.79)				(0.79)				(0.79)				(0.79)
Total distributions			(0.80)				(0.79)				(0.79)				(0.79)				(0.79)
Anti-dilutive impact of repurchase plan			—				—				—				0.01	2			—
Net asset value, end of year			$11.47				$11.23				$14.32				$14.85				$14.66
Market price, end of year			$10.80				$10.64				$14.33				$14.17				$14.65
Total return, based on NAV3,4			9.77	%			(16.21)	%			1.80	%			7.28	%			19.22	%
Total return, based on Market Price5			9.57	%			(20.29)	%			6.87	%			2.64	%			28.35	%
Net assets, end of year (millions)			$136				$133				$170				$176				$175
Ratios to average net assets:
Gross expenses			3.29	%			2.19	%			1.22	%			1.50	%			2.14	%
Net expenses6			3.29	7			2.19	7			1.22	7			1.50				2.14
Net investment income			6.94				6.80				5.93				6.24				5.78
Portfolio turnover rate			36	%			72	%			32	%			55	%			47	%
Supplemental data:
Loan Outstanding, End of Year (000s)			$47,500				$57,500				$57,500				$57,500				$57,000
Asset Coverage Ratio for Loan Outstanding8			386	%			332	%			395	%			406	%			406	%
Asset Coverage, per $1,000 Principal Amount of Loan Outstanding8			$3,865				$3,317				$3,954				$4,064				$4,063
Weighted Average Loan (000s)			$48,240				$57,500				$57,500				$57,448				$57,000
Weighted Average Interest Rate on Loan			5.81	%			2.42	%			0.80	%			1.48	%			3.09	%

 

See Notes to Financial Statements.

 

30				Western Asset Premier Bond Fund 2023 Annual Report

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1	Per share amounts have been calculated using the average shares method.

 

2	The repurchase plan was completed at an average repurchase price of $10.38 for 44,671 shares and $462,743 for the year ended December 31, 2020.

 

3	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.

 

4	The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results.

 

5	The total return calculation assumes that distributions are reinvested in accordance with the Fund’s dividend reinvestment plan. Past performance is no guarantee of future results.

 

6	The investment adviser has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund.

 

7	Reflects fee waivers and/or expense reimbursements.

 

8	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.

 

Western Asset Premier Bond Fund 2023 Annual Report					31

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Notes to financial statements

 

1. Organization and significant accounting policies

Western Asset Premier Bond Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, closed-end management investment company. The Fund commenced investment operations on March 28, 2002. The Fund’s investment objective is to provide current income and capital appreciation by investing primarily in a diversified portfolio of investment grade bonds.

The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services — Investment Companies (“ASC 946”). The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”), including, but not limited to, ASC 946. 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 adviser to be unreliable, the market price may be determined by the adviser 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 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 Fund’s Board of Trustees.

 

32				Western Asset Premier Bond Fund 2023 Annual Report

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Pursuant to policies adopted by the Board of Trustees, the Fund’s adviser has been designated as the valuation designee and is responsible for the oversight of the daily valuation process. The Fund’s adviser is assisted by the Global Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Fund’s adviser and the Board of Trustees. 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 issuer’s 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 Trustees, 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 Trustees 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.

 

Western Asset Premier Bond Fund 2023 Annual Report					33

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Notes to financial statements (cont’d)

 

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 — unadjusted 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 Fund’s 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 Fund’s 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:
Energy			—			$	28,958,789			$	455,400			$	29,414,189
Other Corporate Bonds & Notes			—				121,741,179				—				121,741,179
Sovereign Bonds			—				12,296,811				—				12,296,811
U.S. Government & Agency Obligations			—				5,681,476				—				5,681,476
Senior Loans			—				4,897,626				—				4,897,626
Asset-Backed Securities			—				2,248,392				—				2,248,392
Collateralized Mortgage Obligations			—				2,064,497				—				2,064,497
Convertible Bonds & Notes			—				1,290,032				—				1,290,032
Warrants		$	1,935				—				—				1,935
Preferred Stocks			—				—				10				10
Total Long-Term Investments			1,935				179,178,802				455,410				179,636,147
Short-Term Investments†:
U.S. Treasury Bills			—				750,000				—				750,000
Money Market Funds			2,196,036				—				—				2,196,036
Total Short-Term Investments			2,196,036				750,000				—				2,946,036
Total Investments		$	2,197,971			$	179,928,802			$	455,410			$	182,582,183

 

34				Western Asset Premier Bond Fund 2023 Annual Report

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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††			—			$	197,581				—			$	197,581

 

†	See Schedule of Investments for additional detailed categorizations.

 

††	Reflects the unrealized appreciation (depreciation) of the instruments.

(b) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge exposure of bond positions or in an attempt to increase the Fund’s return. 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.

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 Fund’s 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 offset 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 offset between the lender and the borrower.

(d) Stripped securities. The Fund may invest in ‘‘Stripped Securities,’’ a term used collectively for components, or strips, of fixed income securities. Stripped Securities can be principal only securities (“PO”), which are debt obligations that have been stripped of unmatured interest coupons, or interest only securities (“IO”), which are unmatured interest

 

Western Asset Premier Bond Fund 2023 Annual Report					35

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Notes to financial statements (cont’d)

 

coupons that have been stripped from debt obligations. The market value of Stripped Securities will fluctuate in response to changes in economic conditions, rates of prepayment, interest rates and the market’s perception of the securities. However, fluctuations in response to interest rates may be greater in Stripped Securities than for debt obligations of comparable maturities that pay interest currently. The amount of fluctuation may increase with a longer period of maturity.

The yield to maturity on IO’s is sensitive to the rate of principal repayments (including prepayments) on the related underlying debt obligation and principal payments may have a material effect on yield to maturity. If the underlying debt obligation experiences greater than anticipated prepayments of principal, the Fund may not fully recoup its initial investment in IO’s.

(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 Fund’s 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 Fund’s 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 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

 

36				Western Asset Premier Bond Fund 2023 Annual Report

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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 Fund’s 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 Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk 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 Fund’s investments in non-U.S. dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange rate fluctuations.

Investments in securities that are collateralized by real estate mortgages are subject to certain credit and liquidity risks. When market conditions result in an increase in default rates of the underlying mortgages and the foreclosure values of underlying real estate properties are materially below the outstanding amount of these underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be doubtful. Such market conditions may significantly impair the value and liquidity of these investments and may result in a lack of correlation between their credit ratings and values.

(i) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign

 

Western Asset Premier Bond Fund 2023 Annual Report					37

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Notes to financial statements (cont’d)

 

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 Fund’s investment adviser 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 investment adviser. 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 Fund’s 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.

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

 

38				Western Asset Premier Bond Fund 2023 Annual Report

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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 December 31, 2023, the Fund held forward foreign currency contracts with credit related contingent features which had a liability position of $197,581. 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) is recorded on the accrual basis. Amortization of premiums and accretion of discounts on debt securities are recorded to interest income over the lives of the respective securities, except for premiums on certain callable debt securities, which are amortized to the earliest call date. 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. 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. 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 custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

(n) Federal and other taxes. It is the Fund’s 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 its taxable income and net realized gains, if any, to shareholders in accordance with timing

 

Western Asset Premier Bond Fund 2023 Annual Report					39

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Notes to financial statements (cont’d)

 

requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements.

However, due to the timing of when distributions are made by the Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Fund’s annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable income and realized gains for the calendar year. During the year, the Fund paid $49,872 of federal income taxes attributable to calendar year 2022. The Fund anticipates being subject to an excise tax of approximately $15,000 for the calendar year 2023.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of December 31, 2023, no provision for income tax is required in the Fund’s financial statements. The Fund’s 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.

(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. During the current year, the following reclassifications have been made:

 

		Total Distributable Earnings (Loss)				Paid-in Capital
(a)		$	49,872			$	(49,872)

 

(a)	Reclassifications are due to a non-deductible excise tax paid by the Fund.

2. Investment management agreement and other transactions with affiliates

The Fund has a management agreement with Western Asset Management Company, LLC (“Western Asset”). Pursuant to the terms of the management agreement, the Fund pays Western Asset an annual fee, payable monthly, in an amount equal to 0.55% of the average weekly value of the Fund’s total managed assets. “Total managed assets” means the total assets of the Fund (including any assets attributable to leverage) minus accrued liabilities (other than liabilities representing leverage). Pursuant to a Portfolio Management Agreement between Western Asset and Western Asset Management Company Limited (“Western London”), Western Asset pays monthly a portion of the fees it receives from the Fund to Western London at an annual rate of 0.425% of the average weekly value of the Fund’s total managed assets that Western London manages. Western Asset Management Company Pte. Ltd. (“Western Asset Singapore”) and Western Asset Management Company Ltd (“Western Asset Japan”) are additional investment advisers to the Fund under portfolio management agreements between Western Asset and Western Asset Singapore and Western Asset and Western Asset Japan, respectively. Western Asset pays monthly a

 

40				Western Asset Premier Bond Fund 2023 Annual Report

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portion of the fees it receives from the Fund to each Western Asset Singapore and Western Asset Japan at an annual rate of 0.425% of the average weekly value of the Fund’s total managed assets that each Western Asset Singapore and Western Asset Japan manages.

Western Asset Singapore and Western Asset Japan provide certain advisory services to the Fund relating to currency transactions and investments in non-U.S. dollar-denominated securities and related foreign currency instruments in Asia (excluding Japan) and Japan, respectively.

Under the terms of the administration services agreement between Western Asset and Franklin Templeton Fund Adviser, LLC (“FTFA”) (formerly known as Legg Mason Partners Fund Advisor, LLC (“LMPFA”) prior to November 30, 2023), Western Asset pays FTFA a monthly fee at an annual rate of 0.125% of the Fund’s average weekly total managed assets, subject to a monthly minimum fee of $12,500.

Western Asset has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund (the “affiliated money market fund waiver”).

During the year ended December 31, 2023, fees waived and/or expenses reimbursed amounted to $1,369, all of which included an affiliated money market fund waiver.

FTFA, Western Asset, Western London, Western Asset Singapore and Western Asset Japan are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).

During periods in which the Fund utilizes financial leverage, the fees paid to the investment adviser will be higher than if the Fund did not utilize leverage because the fees are calculated as a percentage of the Fund’s assets, including those investments purchased with leverage.

All officers and one Trustee of the Fund are employees of Franklin Resources or its affiliates and do not receive compensation from the Fund.

3. Investments

During the year ended December 31, 2023, 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		$	52,035,351			$	12,806,158
Sales			65,794,113				23,960,398

 

Western Asset Premier Bond Fund 2023 Annual Report					41

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Notes to financial statements (cont’d)

 

At December 31, 2023, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:

 

		Cost				Gross Unrealized Appreciation				Gross Unrealized Depreciation				Net Unrealized Appreciation (Depreciation)
Securities		$	176,525,247			$	9,709,644			$	(3,652,708)			$	6,056,936
Forward foreign currency contracts			—				—				(197,581)				(197,581)

Transactions in reverse repurchase agreements for the Fund during the year ended December 31, 2023 were as follows:

 

Average Daily Balance*		Weighted Average Interest Rate*		Maximum Amount Outstanding
$3,578,809		4.834%		$11,605,280

 

*	Averages based on the number of days that the Fund had reverse repurchase agreements outstanding.

Interest rates on reverse repurchase agreements ranged from 4.310% to 5.750% during the year ended December 31, 2023. Interest expense incurred on reverse repurchase agreements totaled $175,420.

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 December 31, 2023.

 

LIABILITY DERIVATIVES1
		Foreign Exchange Risk
Forward foreign currency contracts		$	197,581

 

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 Fund’s Statement of Operations for the year ended December 31, 2023. 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 net unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.

 

AMOUNT OF NET REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
		Foreign Exchange Risk
Forward foreign currency contracts		$	(122,138)

 

42				Western Asset Premier Bond Fund 2023 Annual Report

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CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
		Foreign Exchange Risk
Forward foreign currency contracts		$	(19,461)

During the year ended December 31, 2023, the volume of derivative activity for the Fund was as follows:

 

		Average Market Value
Forward foreign currency contracts (to buy)†		$	318,887
Forward foreign currency contracts (to sell)			4,473,646

 

†	At December 31, 2023, there were no open positions held in this derivative.

The following table presents the Fund’s 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 December 31, 2023.

 

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			—			$	(181,187)			$	(181,187)				—			$	(181,187)
Morgan Stanley & Co. Inc.			—				(16,394)				(16,394)				—				(16,394)
Total			—			$	(197,581)			$	(197,581)				—			$	(197,581)

 

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. Loan

The Fund has a Margin Loan and Security Agreement (the “Credit Agreement”) with Bank of America, N.A. (“BofA”) that allows the Fund to borrow up to an aggregate amount of $72,000,000 and renews daily for a 179-day term unless notice to the contrary is given to the Fund. The Fund pays interest on borrowings calculated based on SOFR plus applicable margin. The Fund pays a commitment fee on the unutilized portion of the loan commitment amount at an annual rate of 0.20% except that the commitment fee is 0.15% when the aggregate outstanding balance of the loan is equal to or greater than 50% of the maximum commitment amount. To the extent of the borrowing outstanding, the Fund is required to maintain collateral in a special custody account at the Fund’s custodian on behalf of BofA. The Credit Agreement contains customary covenants that, among other things, may limit the Fund’s ability to pay distributions in certain circumstances, incur additional debt, change its fundamental investment policies and engage in certain transactions, including mergers and 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 Fund’s ability to

 

Western Asset Premier Bond Fund 2023 Annual Report					43

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Notes to financial statements (cont’d)

 

utilize borrowing under the agreement. Interest expense related to the Credit Agreement for the year ended December 31, 2023 was $2,839,319. For the year ended December 31, 2023, the Fund incurred commitment fees of $36,135. For the year ended December 31, 2023, based on the number of days during the reporting period that the Fund had a loan balance outstanding, the average daily loan balance was $48,239,726 and the weighted average interest rate was 5.81%. At December 31, 2023, the Fund had $47,500,000 of borrowings outstanding.

6. Distributions subsequent to December 31, 2023

The following distributions have been declared by the Fund’s Board of Trustees and are payable subsequent to the period end of this report:

 

Record Date		Payable Date				Amount
1/24/2024			2/1/2024			$	0.0700
2/22/2024			3/1/2024			$	0.0700
3/21/2024			4/1/2024			$	0.0700
4/23/2024			5/1/2024			$	0.0700
5/23/2024			6/3/2024			$	0.0700

7. Share repurchase program

On November 20, 2015, the Fund announced that the Fund’s Board of Trustees (the “Board”) had authorized the Fund to repurchase in the open market up to approximately 10% of the Fund’s outstanding common shares when the Fund’s shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase its common shares at such times and in such amounts as management reasonably believes may enhance shareholder value. The Fund is under no obligation to purchase shares at any specific discount levels or in any specific amounts. During the years ended December 31, 2023 and December 31, 2022, the Fund did not repurchase any shares.

Since the commencement of the share repurchase program through December 31, 2023, the Fund repurchased 44,671 shares or 0.38% of its common shares outstanding for a total amount of $462,743.

8. 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

 

44				Western Asset Premier Bond Fund 2023 Annual Report

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all or some portion of the year ended December 31, 2023. The following transactions were effected in such company for the year ended December 31, 2023.

 

		Affiliate Value at December 31, 2022				Purchased								Sold
						Cost				Shares				Proceeds				Shares
Western Asset Premier Institutional Government Reserves, Premium Shares		$	2,364,791			$	38,212,580				38,212,580			$	38,381,335				38,381,335

 

(cont’d)		Realized Gain (Loss)		Dividend Income				Net Increase (Decrease) in Unrealized Appreciation (Depreciation)		Affiliate Value at December 31, 2023
Western Asset Premier Institutional Government Reserves, Premium Shares		—		$	75,927			—		$	2,196,036

9. Income tax information and distributions to shareholders

The tax character of distributions paid during the fiscal years ended December 31, was as follows:

 

		2023				2022
Distributions paid from:
Ordinary income		$	9,539,942			$	9,397,555

As of December 31, 2023, the components of distributable earnings (loss) on a tax basis were as follows:

 

Undistributed ordinary income — net		$	1,058,994
Deferred capital losses*			(27,109,247)
Other book/tax temporary differences(a)			120,465
Unrealized appreciation (depreciation)(b)			5,850,916
Total distributable earnings (loss) — net		$	(20,078,872)

 

*	These capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on the first day of the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.

 

(a)	Other book/tax temporary differences are attributable to the tax deferral of losses on straddles, the realization for tax purposes of unrealized gains (losses) on foreign currency contracts and book/tax differences in the timing of the deductibility of various expenses.

 

(b)	The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash sales, book/tax differences in the accrual of interest income on securities in default and other book/tax basis adjustments.

 

Western Asset Premier Bond Fund 2023 Annual Report					45

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Notes to financial statements (cont’d)

 

10. Recent accounting pronouncement

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (Topic 848) — Facilitation of the Effects of Reference Rate Reform on Financial Reporting. In January 2021 and December 2022, the FASB issued ASU No. 2021-01 and ASU No. 2022-06, with further amendments to Topic 848. The amendments in the ASUs provide optional temporary accounting recognition and financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR) and other interbank-offered based reference rates as of the end of 2021 for certain LIBOR settings and 2023 for the remainder. The ASUs are effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2024. Management has reviewed the requirements and believes the adoption of these ASUs will not have a material impact on the financial statements.

 

46				Western Asset Premier Bond Fund 2023 Annual Report

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Report of independent registered public accounting firm

 

To the Board of Trustees and Shareholders of Western Asset Premier Bond Fund

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Western Asset Premier Bond Fund (the “Fund”) as of December 31, 2023, the related statements of operations and cash flows for the year ended December 31, 2023, the statement of changes in net assets for each of the two years in the period ended December 31, 2023, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2023 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of December 31, 2023, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2023 and the financial highlights for each of the five years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian, agent banks and brokers; when replies were not received, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

/s/PricewaterhouseCoopers LLP

Baltimore, Maryland

February 23, 2024

We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.

 

Western Asset Premier Bond Fund 2023 Annual Report					47

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Additional information (unaudited)

Information about Trustees and Officers

 

The business and affairs of Western Asset Premier Bond Fund (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is c/o Jane Trust, Franklin Templeton, 280 Park Avenue, 8th Floor, New York, New York 10017.

Information pertaining to the Trustees and officers of the Fund is set forth below. The Fund’s annual proxy statement includes additional information about Trustees and is available, without charge, upon request by calling the Fund at 1-888-777-0102.

 

Independent Trustees†
Robert Abeles, Jr.
Year of birth		1945
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees and Chair of Audit Committee
Term of office and length of time served1		Since 2013
Principal occupation(s) during the past five years		Senior Vice President Emeritus (since 2016) and formerly, Senior Vice President, Finance and Chief Financial Officer (2009 to 2016) at University of Southern California; Board Member of Excellent Education Development (since 2012); and formerly, Board Member of Great Public Schools Now (2018 to 2022)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		None
Jane F. Dasher
Year of birth		1949
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees
Term of office and length of time served1		Since 1999
Principal occupation(s) during the past five years		Director (since 2022) and formerly Chief Financial Officer, Long Light Capital, LLC, formerly known as Korsant Partners, LLC (a family investment company) (since 1997)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Formerly, Director, Visual Kinematics, Inc. (2018 to 2022)

 

48				Western Asset Premier Bond Fund

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Independent Trustees† (cont’d)
Anita L. DeFrantz
Year of birth		1952
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees and Chair of Governance and Nominating Committee
Term of office and length of time served1		Since 1998
Principal occupation(s) during the past five years		President of Tubman Truth Corp. (since 2015); President Emeritus (since 2015); Member (since 1986), Member of the Executive Board (since 2013) and Vice President (since 2017) of the International Olympic Committee; and formerly, President (1987 to 2015) and Director (1990 to 2015) of LA84 (formerly Amateur Athletic Foundation of Los Angeles)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		None
Susan B. Kerley
Year of birth		1951
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees and Chair of Investment and Performance Committee
Term of office and length of time served1		Since 1992
Principal occupation(s) during the past five years		Investment Consulting Partner, Strategic Management Advisors, LLC (investment consulting) (since 1990)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Director and Trustee (since 1990) and Chairman (since 2017 and 2005 to 2012) of various series of MainStay Family of Funds (66 funds); formerly, Investment Company Institute (ICI) Board of Governors (2006 to 2014); ICI Executive Committee (2011 to 2014); and Chairman of the Independent Directors Council (2012 to 2014)
Michael Larson
Year of birth		1959
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees
Term of office and length of time served1		Since 2004
Principal occupation(s) during the past five years		Chief Investment Officer for William H. Gates III (since 1994)3
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Ecolab Inc. (since 2012); Fomento Economico Mexicano, SAB (since 2011); and Republic Services, Inc. (since 2009)

 

Western Asset Premier Bond Fund					49

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Additional information (unaudited) (cont’d)

Information about Trustees and Officers

 

Independent Trustees† (cont’d)
Avedick B. Poladian
Year of birth		1951
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees
Term of office and length of time served1		Since 2007
Principal occupation(s) during the past five years		Director and Advisor (since 2017) and formerly, Executive Vice President and Chief Operating Officer (2002 to 2016) of Lowe Enterprises, Inc. (privately held real estate and hospitality firm); and formerly, Partner, Arthur Andersen, LLP (1974 to 2002)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Public Storage (since 2010); Occidental Petroleum Corporation (since 2008); and formerly, California Resources Corporation (2014 to 2021)
William E.B. Siart
Year of birth		1946
Position(s) with Fund		Trustee and Chairman of the Board and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees and Chair of Executive and Contracts Committee
Term of office and length of time served1		Since 1997
Principal occupation(s) during the past five years		Chairman of Excellent Education Development (since 2000); formerly, Chairman of Great Public Schools Now (2015 to 2020); Trustee of The Getty Trust (2005 to 2017); and Chairman ofWalt Disney Concert Hall, Inc. (1998 to 2006)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Trustee, University of Southern California (since 1994); and formerly, Member of Board of United States Golf Association, Executive Committee Member (2017 to 2021)

 

50				Western Asset Premier Bond Fund

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Independent Trustees† (cont’d)
Jaynie Miller Studenmund
Year of birth		1954
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees
Term of office and length of time served1		Since 2004
Principal occupation(s) during the past five years		Corporate Board Member and Advisor (since 2004); formerly, Chief Operating Officer of Overture Services, Inc. (publicly traded internet company that created search engine marketing) (2001 to 2004); President and Chief Operating Officer, PayMyBills (internet innovator in bill presentment/payment space) (1999 to 2001); and Executive vice president for consumer and business banking for three national financial institutions (1984 to 1997)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Director of Pacific Premier Bancorp Inc. and Pacific Premier Bank (since 2019); Director of EXL (operations management and analytics company) (since 2018); Director of CoreLogic, Inc. (information, analytics and business services company) (2012 to 2021); formerly, Director of Pinnacle Entertainment, Inc. (gaming and hospitality company) (2012 to 2018); and Director of LifeLock, Inc. (identity theft protection company) (2015 to 2017)
Peter J. Taylor
Year of birth		1958
Position(s) with Fund		Trustee and Member of Audit, Executive and Contracts, Investment and Performance and Governance and Nominating Committees, and Coordinator of Alternative Investments
Term of office and length of time served1		Since 2019
Principal occupation(s) during the past five years		Retired; formerly, President, ECMC Foundation (nonprofit organization) (2014 to 2023); and Executive Vice President and Chief Financial Officer for University of California system (2009 to 2014)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Director of 23andMe, Inc. (genetics and health care services company) (since 2021); Director of Pacific Mutual Holding Company4 (since 2016); Ralph M. Parson Foundation (since 2015); Edison International (since 2011); and formerly, Member of the Board of Trustees of California State University System (2015 to 2022) and Kaiser Family Foundation (2012 to 2022)

 

Western Asset Premier Bond Fund					51

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Additional information (unaudited) (cont’d)

Information about Trustees and Officers

 

Interested Trustees
Ronald L. Olson5
Year of birth		1941
Position(s) with Fund		Trustee and Member of Investment and Performance Committee
Term of office and length of time served1		Since 2005
Principal occupation(s) during the past five years		Partner of Munger, Tolles & Olson LLP (law partnership) (since 1968)
Number of funds in fund complex overseen by Trustee2		50
Other board memberships held by Trustee during the past five years		Director of Provivi, Inc. (since 2017); and Director of Berkshire Hathaway, Inc. (since 1997)
Interested Trustee and Officer
Jane Trust, CFA6
Year of birth		1962
Position(s) with Fund		Trustee and Member of Investment and Performance Committee, President and Chief Executive Officer
Term of office and length of time served1		Since 2015
Principal occupation(s) during the past five years		Senior Vice President, Fund Board Management, Franklin Templeton (since 2020); Officer and/or Trustee/Director of 123 funds associated with FTFA or its affiliates (since 2015); President and Chief Executive Officer of FTFA (since 2015); formerly, Senior Managing Director (2018 to 2020) and Managing Director (2016 to 2018) of Legg Mason & Co., LLC (“Legg Mason & Co.”); and Senior Vice President of FTFA (2015)
Number of funds in fund complex overseen by Trustee2		123
Other board memberships held by Trustee during the past five years		None
Additional Officers
Ted P. Becker Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth		1951
Position(s) with Fund		Chief Compliance Officer
Term of office1 and length of time served7		Since 2007
Principal occupation(s) during the past five years		Vice President, Global Compliance of Franklin Templeton (since 2020); Chief Compliance Officer of FTFA (since 2006); Chief Compliance Officer of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Director of Global Compliance at Legg Mason (2006 to 2020); Managing Director of Compliance of Legg Mason & Co. (2005 to 2020)

 

52				Western Asset Premier Bond Fund

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Additional Officers (cont’d)
Marc A. De Oliveira Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth		1971
Position(s) with Fund		Secretary and Chief Legal Officer
Term of office1 and length of time served7		Since 2020
Principal occupation(s) during the past five years		Associate General Counsel of Franklin Templeton (since 2020); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); formerly, Managing Director (2016 to 2020) and Associate General Counsel of Legg Mason & Co. (2005 to 2020)
Thomas C. Mandia Franklin Templeton 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth		1962
Position(s) with Fund		Senior Vice President
Term of office1 and length of time served7		Since 2022
Principal occupation(s) during the past five years		Senior Associate General Counsel of Franklin Templeton (since 2020); Secretary of FTFA (since 2006); Assistant Secretary of certain funds associated with Legg Mason & Co. or its affiliates (since 2006); Secretary of LM Asset Services, LLC (“LMAS”) (since 2002) and Legg Mason Fund Asset Management, Inc. (“LMFAM”) (since 2013) (formerly registered investment advisers); formerly, Managing Director and Deputy General Counsel of Legg Mason & Co. (2005 to 2020) and Assistant Secretary of certain funds in the fund complex (2020 to 2022)
Christopher Berarducci Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth		1974
Position(s) with Fund		Treasurer and Principal Financial Officer
Term of office1 and length of time served7		Since 2019
Principal occupation(s) during the past five years		Vice President, Fund Administration and Reporting, Franklin Templeton (since 2020); Treasurer (since 2010) and Principal Financial Officer (since 2019) of certain funds associated with Legg Mason & Co. or its affiliates; formerly, Managing Director (2020), Director (2015 to 2020), and Vice President (2011 to 2015) of Legg Mason & Co.

 

Western Asset Premier Bond Fund					53

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Additional information (unaudited) (cont’d)

Information about Trustees and Officers

 

Additional Officers (cont’d)
Jeanne M. Kelly Franklin Templeton 280 Park Avenue, 8th Floor, New York, NY 10017
Year of birth		1951
Position(s) with Fund		Senior Vice President
Term of office1 and length of time served7		Since 2007
Principal occupation(s) during the past five years		U.S. Fund Board Team Manager, Franklin Templeton (since 2020); Senior Vice President of certain funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of FTFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); formerly, Managing Director of Legg Mason & Co. (2005 to 2020); and Senior Vice President of LMFAM (2013 to 2015)

 

FTFA, referenced above, was formerly known as LMPFA prior to November 30, 2023.

 

†	Trustees who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

 

1

Each of the Trustees of the Fund holds office until his or her successor shall have been duly elected and shall qualify, subject to prior death, resignation, retirement, disqualification or removal from office and applicable law and the rules of the New York Stock Exchange. Each officer holds office until his or her respective successor is chosen and qualified, or in each case until he or she sooner dies, resigns, is removed with or without cause or becomes disqualified.

 

2

Each board member also serves as a member of the Boards of Western Asset Inflation-Linked Opportunities & Income Fund, Western Asset Inflation-Linked Income Fund and Western Asset Investment Grade Income Fund Inc. (each a closed-end investment company) and the portfolios of Western Asset Funds, Inc., Legg Mason Partners Income Trust, Legg Mason Partners Institutional Trust, Legg Mason Partners Money Market Trust, Legg Mason Partners Premium Money Market Trust, Legg Mason Partners Variable Income Trust and Master Portfolio Trust (each an open-end investment company), which are all considered part of the same fund complex as the Fund.

 

3

Mr. Larson is the chief investment officer for William H. Gates III and in that capacity oversees the non-Microsoft investments of Mr. Gates and all of the investments of the Bill and Melinda Gates Foundation Trust (such combined investments are referred to as the “Accounts”). Since 1997, Western Asset has provided discretionary investment advice with respect to one or more Accounts.

 

4

Western Asset and its affiliates provide investment advisory services with respect to registered investment companies sponsored by an affiliate of Pacific Mutual Holding Company (“Pacific Holdings”). Affiliates of Pacific Holdings receive compensation from FTFA or its affiliates for shareholder or distribution services provided with respect to registered investment companies for which Western Asset or its affiliates serve as investment adviser.

 

5	Mr. Olson is an “interested person” of the Fund, as defined in the 1940 Act, because his law firm has provided legal services to Western Asset.

 

6	Ms. Trust is an “interested person” of the Fund, as defined in the 1940 Act, because of her position with FTFA and/or certain of its affiliates.

 

7	Indicates the earliest year in which the officer took such office. Each officer of the Fund is an “interested person” (as defined above) of the Fund.

 

54				Western Asset Premier Bond Fund

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Annual chief executive officer and

principal financial officer certifications (unaudited)

 

The Fund’s Chief Executive Officer (“CEO”) has submitted to the NYSE the required annual certification and the Fund also has included the Certifications of the Fund’s CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC for the period of this report.

 

Western Asset Premier Bond Fund					55

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Other shareholder communications regarding accounting matters (unaudited)

 

The Fund’s Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (collectively, “Accounting Matters”). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Chief Compliance Officer (“CCO”). Persons who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Fund’s Audit Committee Chair. Complaints may be submitted on an anonymous basis.

The CCO may be contacted at:

Franklin Resources Inc.

Compliance Department

280 Park Ave, 8th Floor

New York, NY 10017

Complaints may also be submitted by telephone at 1-800-742-5274. Complaints submitted through this number will be received by the CCO.

 

56				Western Asset Premier Bond Fund

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Summary of information regarding the Fund (unaudited)

 

Investment 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.

Principal Investment Policies and Strategies

Under normal market conditions, the Fund expects to invest substantially all (but at least 80%) of its total managed assets¹ 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. Investment grade quality bonds are bonds rated within a rating agency’s four highest grades (Baa or BBB or higher by Moody’s Investors Service, Inc. (“Moody’s”), S&P Global Ratings (“S&P”) or Fitch Ratings, Inc. (“Fitch”) or another nationally recognized rating agency) or bonds that are unrated but judged to be of comparable quality by Western Asset. 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 expects that the average effective duration² of its portfolio will range between 3.5 and seven years, although this target duration may change from time to time. 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.

The Fund may invest in commercial mortgage-related securities. Other mortgage-related securities in which the Fund may invest include residential mortgage-related securities, mortgage pass-through securities, collateralized mortgage obligations (“CMOs”), mortgage dollar rolls, CMO residuals, stripped mortgage-backed securities (“SMBSs”), interests in real estate mortgage investment conduits, adjustable rate mortgages, real estate investment trusts (“REITs”), including debt and preferred stock issued by REITs, and other securities that directly or indirectly represent a participation in, or are secured by and payable from, mortgage loans on real property. The Fund may also invest in other types of asset-backed securities that are offered in the marketplace.

The Fund may also enter into dollar roll transactions in which the Fund sells a fixed income security for delivery in the current month and simultaneously contracts to purchase substantially similar (same type, coupon and maturity) securities at an agreed upon future time.

 

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

 

2

Effective duration is a duration calculation for bonds with embedded options. Effective duration takes into account that expected cash flows will fluctuate as interest rates change. Please note, duration measures the sensitivity of price (the value of principal) of a fixed-income investment to a change in interest rates. Funds that employ leverage calculate effective duration based off of net assets.

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

The Fund currently anticipates leveraging its portfolio by borrowing an aggregate amount of up to 33 1/3% of its total managed assets from one or more banks or other financial institutions. The Fund may also borrow through reverse repurchase agreements, credit default swaps, dollar rolls and other investment techniques. The Fund may (but is not required to) cover its commitments under these instruments by the segregation of liquid assets, equal in value to the amount of the Fund’s commitments, or by entering into offsetting transactions or owning positions covering its obligations. To the extent these instruments are so covered, investment in the instruments will not be considered “leverage” by the Fund. The Fund is permitted to incur leverage in an amount up to 38% of its total managed assets. The precise amount of leverage used by the Fund may vary from time to time, and the Fund will not necessarily incur the maximum amount of leverage permitted.

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. Trust preferred interests and capital securities are considered bonds and not preferred stock for purposes of the foregoing guidelines. Western Asset may, but is not required to, use a variety of derivative instruments to earn income, facilitate portfolio management and mitigate risks, including currency risk. Examples of derivative instruments that the Fund may use include options contracts, futures contracts, options on futures contracts, warrants and swaps, including credit default swaps.

Upon Western Asset’s recommendation, during temporary defensive periods and in order to keep the Fund’s cash fully invested, the Fund may invest up to 100% of its total managed assets in short-term investments, including, but not limited to, U.S. government securities, certificates of deposit, bankers’ acceptances, commercial paper and repurchase agreements. Short-term investments will be counted as bonds for purposes of the 80% test described above. The Fund may not achieve its investment objective under these circumstances.

The Fund may invest in “structured” notes and other related instruments, which are privately negotiated debt obligations the principal and/or interest of which is determined by reference to the performance of a benchmark asset or market (an “embedded index”), such as selected securities or an index of securities, or the differential performance of two assets or markets, such as indices reflecting bonds.

The Fund may invest up to 10% of its total managed assets in securities of other closed-end or open-end investment companies that invest primarily in bonds or other securities and instruments of the types in which the Fund may invest directly. This limitation applies only at the time a security is purchased, and the Fund is not required to dispose of securities if, due to market movements, greater than 10% of the Fund’s assets are invested in securities

 

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of other investment companies. The Fund may also invest in money market funds, including funds affiliated with Western Asset or the Fund’s subadvisers.

The Fund may borrow money in an amount up to 5% of its total assets as a temporary measure for extraordinary or emergency purposes, including the payment of dividends and the settlement of securities transactions that otherwise might require untimely dispositions of Fund securities.

Consistent with the Fund’s investment objective and policies, Western Asset may invest in new types of securities and engage in new types of investment practices if Western Asset believes that these investments and investment techniques may assist the Fund in achieving its investment objective. In addition, Western Asset may use investment techniques and instruments that are not specifically described herein.

Principal Risk Factors

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 objectives. 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.

Investment and Market Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Your investment in the Fund’s common shares represents an indirect investment in the fixed income securities and other investments owned by the Fund. The value of the Fund’s portfolio securities may move up or down, sometimes rapidly and unpredictably. At any point in time, your common shares may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.

Market Discount Risk. Shares of closed-end investment companies frequently trade at a discount from their net asset value. This risk is separate and distinct from the risk that the Fund’s net asset value could decrease as a result of its investment activities. Whether investors will realize gains or losses upon the sale of the common share will depend not upon the Fund’s net asset value but upon whether the market price of the common share at the time of sale is above or below the investor’s purchase price for the common share.

Because the market price of the common share will be determined by factors such as relative supply of and demand for the common share in the market, general market and economic conditions and other factors beyond the control of the Fund, the Fund cannot predict whether the common share will trade at, above or below net asset value or at,

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

above or below the initial public offering price. The Fund’s common share is designed primarily for long term investors and you should not view the Fund as a vehicle for trading purposes.

Fixed Income Securities Risk. In addition to the risks described elsewhere in this section with respect to valuations and liquidity, fixed income securities, including high-yield securities, are also subject to certain risks, including:

 

•

Issuer Risk. The value of fixed income securities may decline for a number of reasons that directly relate to the issuer, such as management performance, financial leverage and reduced demand for the issuer’s goods and services.

 

•

Interest Rate Risk. The market price of the Fund’s investments will change in response to changes in interest rates and other factors. During periods of declining interest rates, the market price of fixed income securities generally rises. Conversely, during periods of rising interest rates, the market price of such securities generally declines. The magnitude of these fluctuations in the market price of fixed income securities is generally greater for securities with longer maturities. Fluctuations in the market price of the Fund’s securities will not affect interest income derived from securities already owned by the Fund, but will be reflected in the Fund’s net asset value. The Fund may utilize certain strategies, including swaps, futures contracts, options on futures and options based on U.S. Treasury securities, for the purpose of reducing the interest rate sensitivity of the portfolio, although there is no assurance that it will do so or that such strategies will be successful. Recently, there have been inflationary price movements. As such, fixed income securities markets may experience heightened levels of interest rate volatility and liquidity risk.

 

•

Prepayment Risk. Many issuers have a right to prepay their securities. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest the proceeds from such prepayment in lower yielding securities, which may result in a decline in the Fund’s income and distributions to shareholders. This is known as prepayment or “call” risk. Debt securities frequently have call features that allow the issuer to redeem the security at dates prior to its stated maturity at a specified price (typically greater than par) only if certain prescribed conditions are met. An issuer may choose to redeem a debt security if, for example, the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer.

 

•

Reinvestment Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if and when the Fund invests the proceeds from matured, traded or called fixed income securities at market interest rates that are below the portfolio’s current earnings

 

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rate. A decline in income could affect the Fund’s common share price, its distributions or its overall return.

 

•

Duration Risk. For the simplest fixed income securities, “duration” indicates the average time at which the security’s cash flows are to be received. For simple fixed income securities with interest payments occurring prior to the payment of principal, duration is always less than maturity. In general, the lower the stated or coupon rate of interest of a fixed income security, the closer its duration will be to its final maturity; conversely, the higher the stated or coupon rate of interest of a fixed income security, the shorter its duration will be compared to its final maturity.

Determining duration becomes more complex when fixed income security features like floating or adjustable coupon payments, optionality (for example, the right of the issuer to prepay or call the security), and structuring (for example, the right of the holders of certain securities to receive priority as to the issuer’s cash flows) are considered. The calculation of “effective duration” attempts to take into account optionality and other complex features. Generally, the longer the effective duration of a security, the greater will be the expected change in the percentage price of the security with respect to a change in the security’s own yield. By way of illustration, a security with an effective duration of 3.5 years might normally be expected to go down in price by 35 bps if its yield goes up by 10 bps, while another security with an effective duration of 4.0 years might normally be expected to go down in price by 40 bps if its yield goes up by 10 bps. The assumptions that are made about a security’s features and options when calculating effective duration may prove to be incorrect. For example, many mortgage pass-through securities may have stated final maturities of 30 years, but current prepayment rates, which can vary widely under different economic conditions, may have a large influence on the pass-through security’s response to changes in yield. In these situations, the Fund’s portfolio manager may consider other analytical techniques that seek to incorporate the security’s additional features into the determination of its response to changes in its yield.

A security may change in price for a variety of reasons. For example, floating rate securities may have final maturities of ten or more years, but their effective durations will tend to be very short. If there is an adverse credit event, or a perceived change in the issuer’s creditworthiness, these securities could experience a far greater negative price movement than would be predicted by the change in the security’s yield in relation to its effective duration. As a result, investors should be aware that effective duration is not an exact measurement and may not reliably predict a security’s price sensitivity to changes in yield or interest rates.

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

•

Extension Risk. When interest rates rise, repayments of fixed income securities, particularly asset- and mortgage- backed securities, may occur more slowly than anticipated, extending the effective duration of these fixed income securities at below market interest rates and causing their market prices to decline more than they would have declined due to the rise in interest rates alone. This may cause the Fund’s share price to be more volatile.

Financials Sector Risk. The Fund may be susceptible to adverse economic or regulatory occurrences affecting the financial services sector. Financial services companies are subject to extensive government regulation and, as a result, their profitability may be affected by new regulations or regulatory interpretations. Unstable interest rates can have a disproportionate effect on the financial services sector and financial services companies whose securities the Fund may purchase may themselves have concentrated portfolios, which makes them vulnerable to economic conditions that affect that sector. Financial services companies have also been affected by increased competition, which could adversely affect the profitability or viability of such companies.

Energy Sector Risk. The Fund may be susceptible to adverse economic or regulatory occurrences affecting the energy sector. The Fund’s performance may be susceptible to fluctuations in commodity prices, changes in the supply of or demand for energy commodities, an inability to acquire additional energy deposits sufficient to replace the natural depletion of existing reserves, environmental and safety regulations, seasonal and extreme weather, catastrophic events or accidents, acquisition costs and erroneous assumptions regarding new acquisitions and the cyclical fluctuation and intense price competition inherent to the energy industry. Additionally, companies operating in the energy sector are subject to industry-specific risks related to infrastructure, which includes transportation via pipeline, the gathering, processing and midstream storage of resources, variations in upstream and downstream demand, and the effects of land, weather and unforeseen events on oil, oilfields, coal stockpiles, power infrastructure and marine transportation.

Credit Risk. If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults or its credit is downgraded, or is perceived to be less creditworthy, or if the value of the assets underlying a security declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. Subordinated securities (meaning securities that rank below other securities with respect to claims on the issuer’s assets) are more likely to suffer a credit loss than non-subordinated securities of the same issuer and will be disproportionately affected by a default, downgrade or perceived decline in creditworthiness.

 

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Counterparty Risk. The Fund may enter into transactions with counterparties that become unable or unwilling to fulfill their contractual obligations. There can be no assurance that any such counterparty will not default on its obligations to the Fund. In the event of a counterparty default, the Fund may be hindered or delayed in exercising rights against a counterparty and may experience significant losses. To the extent that the Fund enters into multiple transactions with a single or small set of counterparties, the Fund will be subject to increased counterparty risk.

Lower and Unrated Securities Risk. The Fund may invest in below investment grade securities (commonly referred to as “high-yield” securities or “junk bonds”) at the time of investment. High yield debt securities are generally subject to greater credit risks than higher-grade debt securities, including the risk of default on the payment of interest or principal. High yield debt securities are considered speculative, typically have lower liquidity and are more difficult to value than higher grade bonds. High yield debt securities tend to be volatile and more susceptible to adverse events, credit downgrades and negative sentiments and may be difficult to sell at a desired price, or at all, during periods of uncertainty or market turmoil.

Leverage Risk. The value of your investment may be more volatile if the Fund uses leverage through borrowing of money and, under certain circumstances, reverse repurchase agreements, credit default swaps, dollar roll transactions and other investment techniques. The Fund’s leveraging strategy may not be successful. Leverage is a speculative technique that may expose the Fund to greater risk and increased costs. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage. As a result, leverage will cause greater changes in the Fund’s net asset value than if leverage were not used. The Fund will also have to pay interest with respect to its leverage, which may reduce the Fund’s return. This expense may be greater than the Fund’s return on the underlying investments. It is anticipated that interest with respect to leverage will be based on shorter-term interest rates that would be periodically reset. There can be no assurance that the use of leverage will result in a higher yield on the shares. When leverage is employed, the net asset value and market price of the shares and the yield to shareholders will be more volatile. The use of leverage will cause the Fund’s net asset value to fall more sharply in response to increases in interest rates than it would in the absence of the use of leverage. Leverage creates two major types of risks for shareholders: the likelihood of greater volatility of net asset value and market price of the shares because changes in the value of the Fund’s assets, including investments bought with the proceeds from the use of leverage, are borne entirely by the shareholders; and the possibility either that net investment income will fall if the interest and dividend rates on leverage rise or that net investment income will fluctuate because the interest and dividend rates on leverage vary.

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

Because the fees received by Western Asset are based on the average weekly value of the Fund’s total managed assets, Western Asset has a financial incentive for the Fund to incur leverage, which may create a conflict of interest between Western Asset and the shareholders. The fees paid to Franklin Templeton Fund Adviser, LLC are also based on the average weekly assets of the Fund.

Foreign Securities and Emerging Markets Risk. A fund that invests in foreign (non-U.S.) securities may experience more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Investments in foreign securities (including those denominated in U.S. dollars) are subject to economic and political developments in the countries and regions where the issuers operate or are domiciled, or where the securities are traded, such as changes in economic or monetary policies. Values may also be affected by restrictions on receiving the investment proceeds from a foreign country. Less information may be publicly available about foreign companies than about U.S. companies. Foreign companies are generally not subject to the same accounting, auditing and financial reporting standards as are U.S. companies. The Public Company Accounting Oversight Board, which regulates auditors of U.S. public companies, is unable to inspect audit work papers in certain foreign countries. Investors in foreign countries often have limited rights and few practical remedies to pursue shareholder claims, including class actions or fraud claims, and the ability of the Securities and Exchange Commission (the “SEC”), the U.S. Department of Justice and other authorities to bring and enforce actions against foreign issuers or foreign persons is limited. Foreign investments may also be adversely affected by U.S. government or international interventions, restrictions or economic sanctions, which could negatively affect the value of an investment or result in the Fund selling an investment at a disadvantageous time. In addition, the Fund’s investments in foreign securities may be subject to the risk of nationalization or expropriation of assets, imposition of currency exchange controls or restrictions on the repatriation of foreign currency, confiscatory taxation, political or financial instability and adverse diplomatic developments. In addition, there may be difficulty in obtaining or enforcing a court judgment abroad. Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to non-U.S. withholding taxes, and special U.S. tax considerations may apply.

The risks of foreign investment are greater for investments in emerging markets. Emerging market countries typically have economic and political systems that are less fully developed, and that can be expected to be less stable, than those of more advanced countries. Low trading volumes may result in a lack of liquidity and in price volatility. Emerging market countries may have policies that restrict investment by foreigners, that require governmental approval prior to investments by foreign persons, or that prevent

 

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foreign investors from withdrawing their money at will. An investment in emerging market securities should be considered speculative.

Foreign Currency Risk. The value of investments in securities denominated in foreign currencies increases or decreases as the rates of exchange between those currencies and the U.S. dollar change. Currency conversion costs and currency fluctuations could erase investment gains or add to investment losses. Currency exchange rates can be volatile, and are affected by factors such as general economic conditions, the actions of the U.S. and foreign governments or central banks, the imposition of currency controls and speculation. The Fund may be unable or may choose not to hedge its foreign currency exposure.

Mortgage-backed and Asset-backed Securities Risk. When market interest rates increase, the market values of mortgage-backed securities decline. At the same time, mortgage refinancings and prepayments slow, which lengthens the effective duration of these securities. As a result, the negative effect of the interest rate increase on the market value of mortgage-backed securities is usually more pronounced than it is for other types of fixed income securities, potentially increasing the volatility of the Fund. Conversely, when market interest rates decline, while the value of mortgage-backed securities may increase, the rate of prepayment of the underlying mortgages also tends to increase, which shortens the effective duration of these securities. Mortgage-backed securities are also subject to the risk that underlying borrowers will be unable to meet their obligations and the value of property that secures the mortgage may decline in value and be insufficient, upon foreclosure, to repay the associated loan. Investments in asset-backed securities are subject to similar risks. The ability of an issuer of asset-backed securities to enforce its security interest in the underlying assets may be limited, and therefore certain asset-backed securities present a heightened level of risk.

Derivatives Risk. Using derivatives can increase Fund losses and reduce opportunities for gains when market prices, interest rates, currencies, or the derivatives themselves behave in a way not anticipated by the Fund. Using derivatives also can have a leveraging effect and increase Fund volatility. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Derivatives may not be available at the time or price desired, may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the Fund. Derivatives are generally subject to the risks applicable to the assets, rates, indices or other indicators underlying the derivative. The value of a derivative may fluctuate more than the underlying assets, rates, indices or other indicators to which it relates. Use of derivatives may have different tax consequences for the Fund than an investment in the underlying security, and those differences may affect the amount, timing and character of income distributed to shareholders. The U.S. government and foreign governments have adopted and implemented regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements. The

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

ultimate impact of the regulations remains unclear. Additional regulation of derivatives may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance or disrupt markets.

Futures contracts require the Fund to deposit “initial margin” and may require the Fund to increase the level of its initial margin payment as a result of margin calls. If the Fund has insufficient cash to meet daily variation margin requirements, it might need to sell securities at a disadvantageous time or price. If the Fund were unable to liquidate a futures contract or an option on a futures position due to the absence of a liquid secondary market, the imposition of price limits or otherwise, it could incur substantial losses. The Fund would continue to be subject to market risk with respect to the position. In addition, except in the case of purchased options, the Fund would continue to be required to make daily variation margin payments and might be required to maintain the position being hedged by the future or option or to maintain cash or securities in a segregated account.

Effective August 19, 2022, the Fund began operating under Rule 18f-4 under the 1940 Act which, among other things, governs the use of derivative investments and certain financing transactions (e.g., reverse repurchase agreements) by registered investment companies. Among other things, Rule 18f-4 requires funds that invest in derivative instruments beyond a specified limited amount to apply a value at risk (VaR) based limit to their use of certain derivative instruments and financing transactions and to adopt and implement a derivatives risk management program. A fund that uses derivative instruments in a limited amount is not subject to the full requirements of Rule 18f-4. Compliance with Rule 18f-4 by the Fund could, among other things, make derivatives more costly, limit their availability or utility, or otherwise adversely affect their performance. Rule 18f-4 may limit the Fund’s ability to use derivatives as part of its investment strategy.

Credit default swap contracts involve heightened risks and may result in losses to the Fund. Credit default swaps may be illiquid and difficult to value. When the Fund sells credit protection via a credit default swap, credit risk increases since the Fund has exposure to both the issuer whose credit is the subject of the swap and the counterparty to the swap.

Reverse Repurchase Agreements Risk. The Fund’s use of reverse repurchase agreements is a form of leverage and therefore involves many of the same risks involved in the Fund’s use of leverage described above, as the proceeds from reverse repurchase agreements generally will be invested in additional securities. There is a risk that the market value of the securities sold by the Fund in the reverse repurchase agreement may decline below the price at which the Fund remains obligated to repurchase such securities. In addition, there is a risk that the market value of the securities retained by the Fund may decline. If the buyer of securities under a reverse repurchase agreement were to file for bankruptcy or experiences insolvency, the Fund may be adversely affected. Also, in entering into reverse repurchase agreements, the Fund would bear the risk of loss to the extent that the proceeds

 

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of the reverse repurchase agreement are less than the value of the underlying securities. In addition, due to the interest costs associated with reverse repurchase agreements transactions, the Fund’s NAV will decline, and, in some cases, the Fund may be worse off than if it had not used such instruments.

Inflation/Deflation Risk. Inflation risk is the risk that the Fund’s assets or income from the Fund’s investments will be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Fund’s portfolio could decline. Common shares and distributions on the common shares can decline. In addition, during any periods of rising inflation, the dividend rates or borrowing costs associated with the Fund’s use of leverage would likely increase, which would tend to further reduce returns to shareholders Deflation risk is the risk that prices throughout the economy may decline over time--the opposite of inflation. Deflation may have an adverse effect on the creditworthiness of issuers and may make issuer defaults more likely, which may result in a decline in the value of the Fund’s portfolio.

Portfolio Turnover Risk. The length of time the Fund has held a particular security is not generally a consideration in investment decisions. A change in the securities held by the Fund is known as “portfolio turnover.” As a result of the Fund’s investment policies, under certain market conditions the Fund’s turnover rate may be higher than that of other investment companies. Portfolio turnover generally involves some expense to the Fund, including brokerage commissions or dealer mark-ups and other transaction costs on the sale of securities and reinvestment in other securities. These transactions may result in realization of taxable capital gains.

Higher portfolio turnover rates, such as those above 100%, are likely to result in higher brokerage commissions or other transaction costs and could give rise to a greater amount of taxable capital gains.

Management Risk. The Fund is subject to management risk because it is an actively managed investment portfolio. Western Asset will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results.

Liquidity Risk. Liquidity risk exists when particular investments are difficult to sell. Securities may become “illiquid securities” after purchase by the Fund, particularly during periods of market turmoil. When the Fund holds illiquid investments, the portfolio may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments in order to segregate assets or for other cash needs, the Fund may suffer a loss.

Valuation Risk. The sales price the Fund could receive for any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

in thin or volatile markets or that are valued using a fair value methodology. These differences may increase significantly and affect Fund investments more broadly during periods of market volatility. The Fund’s ability to value its investments may be impacted by technological issues and/or errors by pricing services or other third party service providers. The valuation of the Fund’s investments involves subjective judgment.

Investment in Other Investment Companies Risk. If the Fund acquires shares of investment companies, including ones affiliated with the Fund, shareholders bear both their proportionate share of expenses in the Fund (including management and advisory fees) and, indirectly, the expenses of the investment companies (to the extent not offset by Western Asset or its affiliates through waivers).

Anti-Takeover Provisions Risk. The Charter and Bylaws of the Fund include provisions that are designed to limit the ability of other entities or persons to acquire control of the Fund for short-term objectives, including by converting the Fund to open-end status or changing the composition of the Board, that may be detrimental to the Fund’s ability to achieve its investment objective. The Bylaws contain a provision providing that a shareholder who obtains beneficial ownership of Fund shares in a “Control Share Acquisition” may exercise voting rights with respect to such shares generally only to the extent the authorization of such voting rights is approved by other shareholders of the Fund. This provision is intended to protect the interests of the Fund and its shareholders by limiting the risk that the Fund will become subject to undue influence by any person who makes a “Control Share Acquisition” of Fund shares. There can be no assurance, however, that such provisions will be sufficient to deter professional arbitrageurs that seek to cause the Fund to take actions that may not be consistent with its investment objective or aligned with the interests of long-term shareholders, such as liquidating debt investments prior to maturity, triggering taxable events for shareholders and decreasing the size of the Fund. Such provisions may limit the ability of shareholders to sell their shares at a premium over prevailing market prices by discouraging an investor from seeking to obtain control of the Fund. There can be no assurance, however, that such provisions will be sufficient to deter professional investors that seek to cause the Fund to take actions that may not be aligned with the interests of long-term shareholders in order to allow the professional investor to arbitrage the Fund’s market price.

Market Events Risk. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to factors such as economic events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes or other factors, political developments, armed conflicts, economic sanctions and countermeasures in response to sanctions, major cybersecurity events, the global and domestic effects of widespread or local health, weather or climate events, and other factors that may or may not be related to

 

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the issuer of the security or other asset. Economies and financial markets throughout the world are increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, public health events, terrorism, wars, natural disasters and other circumstances in one country or region could have profound impacts on global economies or markets. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries or markets directly affected, the value and liquidity of the Fund’s investments may be negatively affected. Following Russia’s invasion of Ukraine, Russian stocks lost all, or nearly all, of their market value. Other securities or markets could be similarly affected by past or future geopolitical or other events or conditions. Furthermore, events involving limited liquidity, defaults, non-performance or other adverse developments that affect one industry, such as the financial services industry, or concerns or rumors about any events of these kinds, have in the past and may in the future lead to market-wide liquidity problems, may spread to other industries, and could negatively affect the value and liquidity of the Fund’s investments.

The long-term impact of the COVID-19 pandemic and its subsequent variants on economies, markets, industries and individual issuers is not known. Some sectors of the economy and individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets, reduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee availability, may continue for some time. The U.S. government and the Federal Reserve, as well as certain foreign governments and central banks, took extraordinary actions to support local and global economies and the financial markets in response to the COVID-19 pandemic. This and other government intervention into the economy and financial markets may not work as intended, and have resulted in a large expansion of government deficits and debt, the long term consequences of which are not known. In addition, the COVID-19 pandemic, and measures taken to mitigate its effects, could result in disruptions to the services provided to the Fund by its service providers.

Raising the ceiling on U.S. government debt has become increasingly politicized. Any failure to increase the total amount that the U.S. government is authorized to borrow could lead to a default on U.S. government obligations, with unpredictable consequences for economies and markets in the U.S. and elsewhere. Recently, inflation and interest rates have increased and may rise further. These circumstances could adversely affect the value and liquidity of the Fund’s investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance.

The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods

 

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Summary of information regarding the Fund (unaudited) (cont’d)

 

to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the Fund’s opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund’s assets may go down.

LIBOR Risk. The Fund’s investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which was the offered rate for short-term Eurodollar deposits between major international banks. In 2017, the U.K. Financial Conduct Authority (“FCA”) announced its intention to cease compelling banks to provide the quotations needed to sustain LIBOR after 2021. In addition, global regulators have announced that, with limited exceptions, no new LIBOR-based contracts should be entered into after 2021. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. In March 2022, the U.S. federal government enacted legislation to establish a process for replacing LIBOR in certain existing contracts that do not already provide for the use of a clearly defined or practicable replacement benchmark rate as described in the legislation. Generally speaking, for contracts that do not contain a fallback provision as described in the legislation, a benchmark replacement recommended by the Federal Reserve Board effectively automatically replaced the USD LIBOR benchmark in the contract upon LIBOR’s cessation at the end of June 2023. The recommended benchmark replacement is based on the Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York, including certain spread adjustments and benchmark replacement conforming changes. Various financial industry groups have been planning for the transition away from LIBOR, but there remains uncertainty regarding the impact of the transition from LIBOR on the Fund’s transactions and the financial markets generally. The transition away from LIBOR may lead to increased volatility and illiquidity in markets that rely on LIBOR and may adversely affect the Fund’s performance. The transition may also result in a reduction in the value of certain LIBOR-based investments held by the Fund or reduce the effectiveness of related transactions such as hedges. Any such effects of the transition away from LIBOR, as well as other unforeseen effects, could result in losses for the Fund.

Operational Risk. Your ability to transact with the Fund or the valuation of the Fund’s investments may be negatively impacted because of the operational risks arising from

 

70				Western Asset Premier Bond Fund

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factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology (including those due to cybersecurity incidents), changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.

Cybersecurity Risk. Like other funds and business enterprises, the Fund, the Fund’s investment advisers and their service providers are subject to the risk of cyber incidents occurring from time to time. Cybersecurity incidents, whether intentionally caused by third parties or otherwise, may allow an unauthorized party to gain access to Fund assets, Fund or customer data (including private shareholder information) or proprietary information, cause the Fund, the manager, the subadviser and/or their service providers (including, but not limited to, Fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or loss of operational functionality, or prevent Fund investors from purchasing, redeeming or exchanging shares, receiving distributions or receiving timely information regarding the Fund or their investment in the Fund. The Fund and the Fund’s investment advisers have limited ability to prevent or mitigate cybersecurity incidents affecting third party service providers, and such third party service providers may have limited indemnification obligations to the Fund and/or the Fund’s investment advisers. Cybersecurity incidents may result in financial losses to the Fund and its shareholders, and substantial costs may be incurred in order to prevent or mitigate any future cybersecurity incidents. Issuers of securities in which the Fund invests are also subject to cybersecurity risks, and the value of these securities could decline if the issuers experience cybersecurity incidents.

New ways to carry out cyber attacks continue to develop. There is a chance that some risks have not been identified or prepared for, or that an attack may not be detected, which puts limitations on the Fund’s ability to plan for or respond to a cyber attack.

More Information

For a complete list of the Fund’s fundamental investment restrictions and more detailed descriptions of the Fund’s investment policies, strategies and risks, see the Fund’s prospectus and statement of additional information, dated March 25, 2002, as amended or superseded by subsequent disclosures. The Fund’s fundamental investment restrictions may not be changed without the approval of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act.

 

Western Asset Premier Bond Fund					71

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Dividend reinvestment plan (unaudited)

 

The Fund and Computershare Inc. (“Agent”), as the Transfer Agent and Registrar of the Fund, offer a convenient way to add shares of the Fund to your account. The Fund offers to all common shareholders a Dividend Reinvestment Plan (“Plan”). Under the Plan, cash distributions (e.g., dividends and capital gains) of registered shareholders (those who own shares in their own name on the Fund’s records) on the common shares are automatically invested in shares of the Fund unless the shareholder elects otherwise by contacting the Agent at the address set forth below. Shareholders who own shares in a brokerage, bank or other financial institution account must contact the company where their account is held in order to participate in the Plan.

As a participant in the Dividend Reinvestment Plan you will automatically receive your dividend or net capital gains distribution in newly issued shares of the Fund if the market price of a share on the date of the distribution is at or above the NAV of a Fund share, minus estimated brokerage commissions that would be incurred upon the purchase of common shares on the open market. The number of shares to be issued to you will be determined by dividing the amount of the cash distribution to which you are entitled (net of any applicable withholding taxes) by the greater of the NAV per share on such date or 95% of the market price of a share on such date. If the market price of a share on such distribution date is below the NAV, minus estimated brokerage commissions that would be incurred upon the purchase of common shares on the open market, the Agent will, as agent for the participants, buy shares of the Fund through a broker on the open market. The price per share of shares purchased for each participant’s account with respect to a particular dividend or other distribution will be the average price (including brokerage commissions, transfer taxes and any other costs of purchase) of all shares purchased with respect to that dividend or other distribution. All common shares acquired on your behalf through the Plan will be automatically credited to an account maintained on the books of the Agent. Full and fractional shares will be voted by the Agent in accordance with your instructions.

Additional information regarding the plan

The Fund will pay all costs applicable to the Plan, except for brokerage commissions for open market purchases by the Agent under the Plan, which will be charged to participants. All shares acquired through the Plan receive voting rights and are eligible for any share split, share dividend, or other rights accruing to shareholders that the Board of Trustees may declare. Registered shareholder may terminate participation in the Plan at any time by giving notice to the Agent. Such termination will be effective prior to the record date next succeeding the receipt of such instructions or by a later date of termination specified in such instructions. Upon termination, a participant will receive a certificate for the full shares credited to his or her account or may request the sale of all or part of such shares. Fractional shares credited to a terminating account will be paid for in cash at the current market price at the time of termination. Shareholders who own shares in a brokerage, bank or other financial institution account must contact the company where their account is held in order to terminate participation in the Plan.

 

72				Western Asset Premier Bond Fund

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Dividends and other distributions invested in additional shares under the Plan are subject to income tax just as if they had been received in cash. After year end, dividends paid on the accumulated shares will be included in the Form 1099-DIV information return to the Internal Revenue Service (IRS) and only one Form 1099-DIV will be sent to participants each year. Inquiries regarding the Plan, as well as notices of termination, should be directed to Computershare Inc., P.O. Box 43006 Providence, RI 02940-3078. Investor Relations Telephone number 1-888-888-0151.

 

Western Asset Premier Bond Fund					73

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Important tax information (unaudited)

 

By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.

The following tax information for the Fund is required to be furnished to shareholders with respect to income earned and distributions paid during its fiscal year.

The Fund hereby reports the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended December 31, 2023:

 

		Pursuant to:		Amount Reported
Qualified Net Interest Income (QII)		§871(k)(1)(C)		$	5,040,826
Section 163(j) Interest Earned		§163(j)		$	12,567,426
Interest Earned from Federal Obligations		Note (1)		$	282,864

Note (1) - The law varies in each state as to whether and what percentage of dividend income attributable to Federal obligations is exempt from state income tax. Shareholders are advised to consult with their tax advisors to determine if any portion of the dividends received is exempt from state income taxes.

 

74				Western Asset Premier Bond Fund

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Western Asset

Premier Bond Fund

 

Trustees

Robert Abeles, Jr

Jane F. Dasher

Anita L. DeFrantz

Susan B. Kerley

Michael Larson

Ronald L. Olson

Avedick B. Poladian

William E.B. Siart

Chairman

Jaynie M. Studenmund

Peter J. Taylor

Jane Trust

Officers

Jane Trust

President and Chief Executive Officer

Christopher Berarducci

Treasurer and Principal Financial Officer

Ted P. Becker

Chief Compliance Officer

Marc A. De Oliveira

Secretary and Chief Legal Officer

Thomas C. Mandia

Senior Vice President

Jeanne M. Kelly

Senior Vice President

Western Asset Premier Bond Fund

620 Eighth Avenue

47th Floor

New York, NY 10018

Investment advisers

Western Asset Management Company, LLC

Western Asset Management Company Limited

Western Asset Management Company Pte. Ltd.

Western Asset Management Company Ltd

Custodian

The Bank of New York Mellon

Independent registered public accounting firm

PricewaterhouseCoopers LLP

100 East Pratt Street

Baltimore, MD 21202

Legal counsel

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036

Transfer agent

Computershare Inc.

P.O. Box 43006

Providence, RI 02940-3078

New York Stock Exchange Symbol

WEA

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Legg Mason Funds Privacy and Security Notice

 

Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds

This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include the Western Asset Money Market Funds sold by the Funds’ distributor, Franklin Distributors, LLC, as well as Legg Mason-sponsored closed-end funds. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information the Funds Collect About You

 

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

 

•

Personal information included on applications or other forms;

 

•

Account balances, transactions, and mutual fund holdings and positions;

 

•

Bank account information, legal documents, and identity verification documentation; and

 

•

Online account access user IDs, passwords, security challenge question responses.

How the Funds Use Nonpublic Personal Information About You

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law.

The Funds may disclose information about you to:

 

•

Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business or to comply with obligations to government regulators;

 

•

Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform statistical analysis, market research and marketing services solely for the Funds;

 

•

Permit access to transfer, whether in the United States or countries outside of the United States to such Funds’ employees, agents and affiliates and service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

 

•

The Funds’ representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;

 

•

Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

 

NOT PART OF THE ANNUAL REPORT

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Legg Mason Funds Privacy and Security Notice (cont’d)

 

Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf, including those outside the United States, are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.

The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

Keeping You Informed of the Funds’ Privacy and Security Practices

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time, they will notify you promptly if this privacy policy changes.

The Funds’ Security Practices

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, if you have questions about the Funds’ privacy practices, or our use of your nonpublic personal information, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.franklintempleton.com, or contact the Funds at 1-877-721-1926 for the Western Asset Money Market Funds or 1-888-777-0102 for the Legg Mason-sponsored closed-end funds.

Revised October 2022

 

NOT PART OF THE ANNUAL REPORT

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Legg Mason Funds Privacy and Security Notice (cont’d)

 

Legg Mason California Consumer Privacy Act Policy

Although much of the personal information we collect is “nonpublic personal information” subject to federal law, residents of California may, in certain circumstances, have additional rights under the California Consumer Privacy Act (“CCPA”). For example, if you are a broker, dealer, agent, fiduciary, or representative acting by or on behalf of, or for, the account of any other person(s) or household, or a financial advisor, or if you have otherwise provided personal information to us separate from the relationship we have with personal investors, the provisions of this Privacy Policy apply to your personal information (as defined by the CCPA).

In addition to the provisions of the Legg Mason Funds Security and Privacy Notice, you may have the right to know the categories and specific pieces of personal information we have collected about you.

You also have the right to request the deletion of the personal information collected or maintained by the Funds.

If you wish to exercise any of the rights you have in respect of your personal information, you should advise the Funds by contacting them as set forth below. The rights noted above are subject to our other legal and regulatory obligations and any exemptions under the CCPA. You may designate an authorized agent to make a rights request on your behalf, subject to the identification process described below. We do not discriminate based on requests for information related to our use of your personal information, and you have the right not to receive discriminatory treatment related to the exercise of your privacy rights.

We may request information from you in order to verify your identity or authority in making such a request. If you have appointed an authorized agent to make a request on your behalf, or you are an authorized agent making such a request (such as a power of attorney or other written permission), this process may include providing a password/passcode, a copy of government issued identification, affidavit or other applicable documentation, i.e. written permission. We may require you to verify your identity directly even when using an authorized agent, unless a power of attorney has been provided. We reserve the right to deny a request submitted by an agent if suitable and appropriate proof is not provided.

For the 12-month period prior to the date of this Privacy Policy, the Legg Mason Funds have not sold any of your personal information; nor do we have any plans to do so in the future.

Contact Information

Address: Data Privacy Officer, 100 International Dr., Baltimore, MD 21202

Email: DataProtectionOfficer@franklintempleton.com

Phone: 1-800-396-4748

Revised October 2022

 

NOT PART OF THE ANNUAL REPORT

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Western Asset Premier Bond Fund

Western Asset Premier Bond Fund

620 Eighth Avenue

47th Floor

New York, NY 10018

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase, at market prices, its common shares.

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 1-888-777-0102 or visit the Fund’s website at www.franklintempleton.com.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling 1-888-777-0102, (2) at www.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton’s website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton’s website in this report.

This report is transmitted to the shareholders of Western Asset Premier Bond Fund for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.

Computershare Inc.

P.O. Box 43006

Providence, RI 02940-3078

WASX013147 2/24 SR24-4814

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ITEM 2.

CODE OF ETHICS.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.

 

ITEM 3.

AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the registrant has determined that Mr. Robert Abeles, Jr., possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as “audit committee financial expert,” and have designated Mr. Abeles as the Audit Committee’s financial expert. Mr. Abeles is an “independent” Director pursuant to paragraph (a) (2) of Item 3 to Form N-CSR.

 

ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) Audit Fees. The aggregate fees billed in the previous fiscal years ending December 31, 2022 and December 31, 2023 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $66,192 in December 31, 2022 and $66,192 in December 31, 2023.

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in December 31, 2022 and $0 in December 31, 2023.

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $10,000 in December 31, 2022 and $10,000 in December 31, 2023. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed for tax services by the Auditors to service affiliates during the Reporting Periods that required pre-approval by the Audit Committee.

(d) All Other Fees. The aggregate fees for other fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item for the Western Asset Premier Bond Fund were $0 in December 31, 2022 and $0 in December 31, 2023.

All Other Fees. There were no other non-audit services rendered by the Auditor to Franklin Templeton Fund Adviser, LLC (“FTFA”), and any entity controlling, controlled by or under common control with FTFA that provided ongoing services to Western Asset Premier Bond Fund requiring pre-approval by the Audit Committee in the Reporting Period.

(e) Audit Committee’s pre—approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.

(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by FTFA or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any Covered Service Providers if the engagement

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relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.

The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.

(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Non-audit fees billed by the Auditor for services rendered to Western Asset Premier Bond Fund, FTFA and any entity controlling, controlled by, or under common control with FTFA that provides ongoing services to Western Asset Premier Bond Fund during the reporting period were $350,359 in December 31, 2022 and $342,635 in December 31, 2023.

(h) Yes. Western Asset Premier Bond Fund’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor to the Western Asset Premier Bond Fund or to Service Affiliates, which were required to be pre-approved, were pre-approved as required.

(i) Not applicable.

(j) Not applicable.

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ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANTS.

a) Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)58(A) of the Exchange Act. The Audit Committee consists of the following Board members:

Robert Abeles, Jr

Jane F. Dasher

Anita L. DeFrantz

Susan B. Kerley

Michael Larson

Avedick B. Poladian

William E.B. Siart

JaynieM. Studenmund

Peter J. Taylor

b) Not applicable

 

ITEM 6.

SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

 

ITEM 7.

DISCLOSURE OF PROXY VOTING POLOCIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Western Asset Management Company, LLC

Proxy Voting Policies and Procedures

NOTE

The policy below relating to proxy voting and corporate actions is a global policy for Western Asset Management Company, LLC (“Western Asset” or the “Firm”) and all Western Asset affiliates, including Western Asset Management Company Limited (“Western Asset Limited”), Western Asset Management Company Ltd (“Western Asset Japan”) and Western Asset Management Company Pte. Ltd. (“Western Asset Singapore”), as applicable. As compliance with the policy is monitored by Western Asset, the policy has been adopted from the US Compliance Manual and all defined terms are those defined in the US Compliance Manual rather than the compliance manual of any other Western Asset affiliate.

BACKGROUND

An investment adviser is required to adopt and implement policies and procedures that we believe are reasonably designed to ensure that proxies are voted in the best interest of clients, in accordance with fiduciary duties and Rule 206(4)-6 under the Investment Advisers Act of 1940 (“Advisers Act”). The authority to vote the proxies of our clients is established through investment management agreements or comparable documents. In addition to SEC requirements governing advisers, long-standing fiduciary standards and responsibilities have been established for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the investment manager.

POLICY

As a fixed income only manager, the occasion to vote proxies is very rare. However, the Firm has adopted and implemented policies and procedures that we believe are reasonably designed to ensure that proxies are

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voted in the best interest of clients, in accordance with our fiduciary duties and Rule 206(4)-6 under the Advisers Act. In addition to SEC requirements governing advisers, our proxy voting policies reflect the long-standing fiduciary standards and responsibilities for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the investment manager.

While the guidelines included in the procedures are intended to provide a benchmark for voting standards, each vote is ultimately cast on a case-by-case basis, taking into consideration the Firm’s contractual obligations to our clients and all other relevant facts and circumstances at the time of the vote (such that these guidelines may be overridden to the extent the Firm deems appropriate).

In exercising its voting authority, Western Asset will not consult or enter into agreements with officers, directors or employees of Franklin Resources (Franklin Resources includes Franklin Resources, Inc. and organizations operating as Franklin Resources) or any of its affiliates (other than Western Asset affiliated companies) regarding the voting of any securities owned by its clients.

 

•

PROCEDURES

Responsibility and Oversight

The Regulatory Affairs Group is responsible for administering and overseeing the proxy voting process. The gathering of proxies is coordinated through the Corporate Actions area of Investment Operations Group (“Corporate Actions”). Research analysts and portfolio managers are responsible for determining appropriate voting positions on each proxy utilizing any applicable guidelines contained in these procedures.

Client Authority

The Investment Management Agreement for each client is reviewed at account start-up for proxy voting instructions. If an agreement is silent on proxy voting, but contains an overall delegation of discretionary authority or if the account represents assets of an ERISA plan, Western Asset will assume responsibility for proxy voting. The Regulatory Affairs Group maintains a matrix of proxy voting authority.

Proxy Gathering

Registered owners of record, client custodians, client banks and trustees (“Proxy Recipients”) that receive proxy materials on behalf of clients should forward them to Corporate Actions. Proxy Recipients for new clients (or, if Western Asset becomes aware that the applicable Proxy Recipient for an existing client has changed, the Proxy Recipient for the existing client) are notified at start-up of appropriate routing to Corporate Actions of proxy materials received and reminded of their responsibility to forward all proxy materials on a timely basis. If Western Asset personnel other than Corporate Actions receive proxy materials, they should promptly forward the materials to Corporate Actions.

Proxy Voting

Once proxy materials are received by Corporate Actions, they are forwarded to the Regulatory Affairs Group for coordination and the following actions:

Proxies are reviewed to determine accounts impacted.

Impacted accounts are checked to confirm Western Asset voting authority.

The Regulatory Affairs Group reviews proxy issues to determine any material conflicts of interest. (See Conflicts of Interest section of these procedures for further information on determining material conflicts of interest.)

If a material conflict of interest exists, (i) to the extent reasonably practicable and permitted by applicable law, the client is promptly notified, the conflict is disclosed and Western Asset obtains the client’s proxy voting instructions, and (ii) to the extent that it is not reasonably practicable or permitted by applicable law to notify the client and obtain such instructions (e.g., the client is a mutual fund or other commingled vehicle or is an ERISA plan client), Western Asset seeks voting instructions from an independent third party.

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The Regulatory Affairs Group provides proxy material to the appropriate research analyst or portfolio manager to obtain their recommended vote. Research analysts and portfolio managers determine votes on a case-by-case basis taking into account the voting guidelines contained in these procedures. For avoidance of doubt, depending on the best interest of each individual client, Western Asset may vote the same proxy differently for different clients. The analyst’s or portfolio manager’s basis for their decision is documented and maintained by the Regulatory Affairs Group.

Portfolio Compliance Group votes the proxy pursuant to the instructions received in (d) or (e) and returns the voted proxy as indicated in the proxy materials.

Timing

Western Asset’s Legal and Compliance Department personnel act in such a manner to ensure that, absent special circumstances, the proxy gathering and proxy voting steps noted above can be completed before the applicable deadline for returning proxy votes.

Recordkeeping

Western Asset maintains records of proxies voted pursuant to Rule 204-2 of the Advisers Act and ERISA DOL Bulletin 94-2. These records include:

 

•

A copy of Western Asset’s proxy voting policies and procedures.

Copies of proxy statements received with respect to securities in client accounts.

A copy of any document created by Western Asset that was material to making a decision how to vote proxies.

Each written client request for proxy voting records and Western Asset’s written response to both verbal and written client requests.

A proxy log including:

 

1.

Issuer name;

 

2.

Exchange ticker symbol of the issuer’s shares to be voted;

 

3.

Committee on Uniform Securities Identification Procedures (“CUSIP”) number for the shares to be voted;

 

4.

A brief identification of the matter voted on;

 

5.

Whether the matter was proposed by the issuer or by a shareholder of the issuer;

 

6.

Whether a vote was cast on the matter;

 

7.

A record of how the vote was cast; and

 

8.

Whether the vote was cast for or against the recommendation of the issuer’s management team.

Records are maintained in an easily accessible place for a period of not less than five (5) years with the first two (2) years in Western Asset’s offices.

Disclosure

Western Asset’s proxy policies and procedures are described in the Firm’s Form ADV Part 2A. Clients are provided with a copy of these policies and procedures upon request. In addition, clients may receive reports on how their proxies have been voted, upon request.

Conflicts of Interest

All proxies are reviewed by the Regulatory Affairs Group for material conflicts of interest. Issues to be reviewed include, but are not limited to:

---

1.

Whether Western Asset (or, to the extent required to be considered by applicable law, its affiliates) manages assets for the company or an employee group of the company or otherwise has an interest in the company;

 

2.

Whether Western Asset or an officer or director of Western Asset or the applicable portfolio manager or analyst responsible for recommending the proxy vote (together, “Voting Persons”) is a close relative of or has a personal or business relationship with an executive, director or person who is a candidate for director of the company or is a participant in a proxy contest; and

 

3.

Whether there is any other business or personal relationship where a Voting Person has a personal interest in the outcome of the matter before shareholders.

Voting Guidelines

Western Asset’s substantive voting decisions are based on the particular facts and circumstances of each proxy vote and are evaluated by the designated research analyst or portfolio manager. The examples outlined below are meant as guidelines to aid in the decision making process.

Situations can arise in which more than one Western Asset client invests in instruments of the same issuer or in which a single client may invest in instruments of the same issuer but in multiple accounts or strategies. Multiple clients or the same client in multiple accounts or strategies may have different investment objectives, investment styles, or investment professionals involved in making decisions. While there may be differences, votes are always cast in the best interests of the client and the investment objectives agreed with Western Asset. As a result, there may be circumstances where Western Asset casts different votes on behalf of different clients or on behalf of the same client with multiple accounts or strategies.

Guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and are recommended by a company’s board of directors; Part II deals with proposals submitted by shareholders for inclusion in proxy statements; Part III addresses issues relating to voting shares of investment companies; and Part IV addresses unique considerations pertaining to foreign issuers.

 

I.	Board Approved Proposals

The vast majority of matters presented to shareholders for a vote involve proposals made by a company itself that have been approved and recommended by its board of directors. In view of the enhanced corporate governance practices currently being implemented in public companies, Western Asset generally votes in support of decisions reached by independent boards of directors. More specific guidelines related to certain board-approved proposals are as follows:

 

1.

Matters relating to the Board of Directors

Western Asset votes proxies for the election of the company’s nominees for directors and for board-approved proposals on other matters relating to the board of directors with the following exceptions:

 

a.

Votes are withheld for the entire board of directors if the board does not have a majority of independent directors or the board does not have nominating, audit and compensation committees composed solely of independent directors.

 

b.

Votes are withheld for any nominee for director who is considered an independent director by the company and who has received compensation from the company other than for service as a director.

 

c.

Votes are withheld for any nominee for director who attends less than 75% of board and committee meetings without valid reasons for absences.

 

d.

Votes are cast on a case-by-case basis in contested elections of directors.

 

2.

Matters relating to Executive Compensation

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Western Asset generally favors compensation programs that relate executive compensation to a company’s long-term performance. Votes are cast on a case-by-case basis on board-approved proposals relating to executive compensation, except as follows:

 

•

Except where the firm is otherwise withholding votes for the entire board of directors, Western Asset votes for stock option plans that will result in a minimal annual dilution.

 

•

Western Asset votes against stock option plans or proposals that permit replacing or repricing of underwater options.

 

•

Western Asset votes against stock option plans that permit issuance of options with an exercise price below the stock’s current market price.

 

•

Except where the firm is otherwise withholding votes for the entire board of directors, Western Asset votes for employee stock purchase plans that limit the discount for shares purchased under the plan to no more than 15% of their market value, have an offering period of 27 months or less and result in dilution of 10% or less.

 

3.

Matters relating to Capitalization

The Management of a company’s capital structure involves a number of important issues, including cash flows, financing needs and market conditions that are unique to the circumstances of each company. As a result, Western Asset votes on a case-by-case basis on board-approved proposals involving changes to a company’s capitalization except where Western Asset is otherwise withholding votes for the entire board of directors.

 

a.

Western Asset votes for proposals relating to the authorization of additional common stock.

 

b.

Western Asset votes for proposals to effect stock splits (excluding reverse stock splits).

 

c.

Western Asset votes for proposals authorizing share repurchase programs.

 

4.

Matters relating to Acquisitions, Mergers, Reorganizations and Other Transactions

Western Asset votes these issues on a case-by-case basis on board-approved transactions.

 

5.

Matters relating to Anti-Takeover Measures

Western Asset votes against board-approved proposals to adopt anti-takeover measures except as follows:

 

a.

Western Asset votes on a case-by-case basis on proposals to ratify or approve shareholder rights plans.

 

b.

Western Asset votes on a case-by-case basis on proposals to adopt fair price provisions.

 

6.

Other Business Matters

Western Asset votes for board-approved proposals approving such routine business matters such as changing the company’s name, ratifying the appointment of auditors and procedural matters relating to the shareholder meeting.

 

a.

Western Asset votes on a case-by-case basis on proposals to amend a company’s charter or bylaws.

 

b.

Western Asset votes against authorization to transact other unidentified, substantive business at the meeting.

 

7.

Reporting of Financially Material Information

Western Asset generally believes issuers should disclose information that is material to their business. This principle extends to Environmental, Social and Governance matters. What qualifies as “material” can vary, so votes are cast on a case by case basis but consistent with the overarching principle.

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II.	Shareholder Proposals

SEC regulations permit shareholders to submit proposals for inclusion in a company’s proxy statement. These proposals generally seek to change some aspect of a company’s corporate governance structure or to change some aspect of its business operations. Western Asset votes in accordance with the recommendation of the company’s board of directors on all shareholder proposals, except as follows:

 

1.

Western Asset votes for shareholder proposals to require shareholder approval of shareholder rights plans.

 

2.

Western Asset votes for shareholder proposals that are consistent with Western Asset’s proxy voting guidelines for board-approved proposals.

 

3.

Western Asset votes on a case-by-case basis on other shareholder proposals where the firm is otherwise withholding votes for the entire board of directors.

Environmental or social issues that are the subject of a proxy vote will be considered on a case by case basis. Constructive proposals that seek to advance the health of the issuer and the prospect for risk-adjusted returns to Western Assets clients are viewed more favorably than proposals that advance a single issue or limit the ability of management to meet its operating objectives.

 

III.	Voting Shares of Investment Companies

Western Asset may utilize shares of open or closed-end investment companies to implement its investment strategies. Shareholder votes for investment companies that fall within the categories listed in Parts I and II above are voted in accordance with those guidelines.

 

1.

Western Asset votes on a case-by-case basis on proposals relating to changes in the investment objectives of an investment company taking into account the original intent of the fund and the role the fund plays in the clients’ portfolios.

 

2.

Western Asset votes on a case-by-case basis all proposals that would result in increases in expenses (e.g., proposals to adopt 12b-1 plans, alter investment advisory arrangements or approve fund mergers) taking into account comparable expenses for similar funds and the services to be provided.

 

IV.	Voting Shares of Foreign Issuers

In the event Western Asset is required to vote on securities held in non-U.S. issuers – i.e. issuers that are incorporated under the laws of a foreign jurisdiction and that are not listed on a U.S. securities exchange or the NASDAQ stock market, the following guidelines are used, which are premised on the existence of a sound corporate governance and disclosure framework. These guidelines, however, may not be appropriate under some circumstances for foreign issuers and therefore apply only where applicable.

 

1.

Western Asset votes for shareholder proposals calling for a majority of the directors to be independent of management.

 

2.

Western Asset votes for shareholder proposals seeking to increase the independence of board nominating, audit and compensation committees.

 

3.

Western Asset votes for shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.

 

4.

Western Asset votes on a case-by-case basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company’s outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company’s outstanding common stock where shareholders have preemptive rights.

 

V.	Environmental, Social and Governance Matters

Western Asset considers ESG matters as part of the overall investment process where appropriate. The Firm seeks to identify and consider material risks to the investment thesis, including material risks presented by

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ESG factors. While Western Asset is primarily a fixed income manager, opportunities to vote proxies are considered on the investment merits of the instruments and strategies involved.

As a general proposition, Western Asset votes to encourage disclosure of information material to their business. This principle extends to ESG matters. What qualifies as “material” can vary, so votes are cast on a case by case basis but consistent with the overarching principle. Western Asset recognizes that objective standards and criteria may not be available or universally agreed and that there may be different views and subjective analysis regarding factors and their significance.

As a general matter, Western Asset votes to encourage management and governance practices that enhance the strength of the issuer, build value for investors, and mitigate risks that might threaten their ability to operate and navigate competitive pressures.

Targeted environmental or social issues that are the subject of a proxy vote will be considered on a case by case basis. Constructive proposals that seek to advance the health of the issuer and the prospect for risk-adjusted returns to Western Assets clients are viewed more favorably than proposals that advance a single issue or limit the ability of management to meet its operating objectives.

Situations can arise in which different clients and strategies have explicit ESG objectives beyond generally taking into account material ESG risks. Votes may be cast for such clients with the ESG objectives in mind. Votes involving ESG proposals that are not otherwise addressed in this policy will be voted on a case-by-case basis consistent with the Firm’s fiduciary duties to its clients, the potential consequences to the investment thesis for that issuer, and the specific facts and circumstances of each proposal.

 

•

Retirement Accounts

For accounts subject to ERISA, as well as other retirement accounts, Western Asset is presumed to have the responsibility to vote proxies for the client. The Department of Labor has issued a bulletin that states that investment managers have the responsibility to vote proxies on behalf of Retirement Accounts unless the authority to vote proxies has been specifically reserved to another named fiduciary. Furthermore, unless Western Asset is expressly precluded from voting the proxies, the Department of Labor has determined that the responsibility remains with the investment manager.

In order to comply with the Department of Labor’s position, Western Asset will be presumed to have the obligation to vote proxies for its retirement accounts unless Western Asset has obtained a specific written instruction indicating that: (a) the right to vote proxies has been reserved to a named fiduciary of the client, and (b) Western Asset is precluded from voting proxies on behalf of the client. If Western Asset does not receive such an instruction, Western Asset will be responsible for voting proxies in the best interests of the retirement account client and in accordance with any proxy voting guidelines provided by the client.

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ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a)(1): As of the date of filing this report:

 

NAME AND ADDRESS		LENGTH OF TIME SERVED				PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
S. Kenneth Leech   Western Asset 385 East Colorado Blvd. Pasadena, CA 91101			Since 2014			Responsible for the day-to-day management with other members of the Fund’s portfolio management team; Chief Investment Officer of Western Asset from 1998 to 2008 and since 2014; Senior Advisor/Chief Investment Officer Emeritus of Western Asset from 2008-2013; Co- Chief Investment Officer of Western Asset from 2013-2014.
Michael C. Buchanan   Western Asset 385 East Colorado Blvd. Pasadena, CA 91101			Since 2010			Responsible for the day-to-day management with other members of the Fund’s portfolio management team; employed by Western Asset Management as an investment professional for at least the past five years; Managing Director and head of U.S. Credit Products from 2003-2005 at Credit Suisse Asset Management
Christopher F. Kilpatrick Western Asset 385 East Colorado Blvd. Pasadena, CA 91101			Since 2012			Responsible for the day-to-day management with other members of the Fund’s portfolio management team; employed by Western Asset Management as an investment professional for at least the past five years.

(a)(2): DATA TO BE PROVIDED BY FINANCIAL CONTROL

The following tables set forth certain additional information with respect to the fund’s portfolio managers for the fund. Unless noted otherwise, all information is provided as of December 31, 2023.

Other Accounts Managed by Portfolio Managers

The table below identifies the number of accounts (other than the fund) for which the fund’s portfolio managers have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories:

registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance is also indicated.

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Name of PM		Type of Account		Number of Accounts Managed		Total Assets Managed		Number of Accounts Managed for which Advisory Fee is Performance -Based		Assets Managed for which Advisory Fee is Performance- Based
S. Kenneth Leech‡		Other Registered Investment Companies		93		$129.16 billion		None		None
		Other Pooled Vehicles		295		$69.79 billion		23		$2.65 billion
		Other Accounts		592		$189.61 billion		21		$12.77 billion
Christopher Kilpatrick‡		Other Registered Investment Companies		7		$2.95 billion		None		None
		Other Pooled Vehicles		6		$503 million		3		$330 million
		Other Accounts		None		None		None		None
Michael Buchanan‡		Other Registered Investment Companies		32		$16.29 billion		None		None
		Other Pooled Vehicles		55		$18.68 billion		7		$1.46 billion
		Other Accounts		148		$58.25 billion		6		$1.61 billion

 

‡

The numbers above reflect the overall number of portfolios managed by employees of Western Asset Management Company (“Western Asset”). Mr. Leech is involved in the management of all the Firm’s portfolios, but they are not solely responsible for particular portfolios. Western Asset’s investment discipline emphasizes a team approach that combines the efforts of groups of specialists working in different market sectors. They are responsible for overseeing implementation of Western Asset’s overall investment ideas and coordinating the work of the various sector teams. This structure ensures that client portfolios benefit from a consensus that draws on the expertise of all team members.

(a)(3): As of December 31, 2023:

Investment Professional Compensation

Conflicts of Interest

The Subadviser has adopted compliance policies and procedures to address a wide range of potential conflicts of interest that could directly impact client portfolios. For example, potential conflicts of interest may arise in connection with the management of multiple portfolios (including portfolios managed in a personal capacity). These could include potential conflicts of interest related to the knowledge and timing of a portfolio’s trades, investment opportunities and broker selection. Portfolio managers are privy to the size, timing, and possible market impact of a portfolio’s trades.

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It is possible that an investment opportunity may be suitable for both a portfolio and other accounts managed by a portfolio manager, but may not be available in sufficient quantities for both the portfolio and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by a portfolio and another account. A conflict may arise where the portfolio manager may have an incentive to treat an account preferentially as compared to a portfolio because the account pays a performance-based fee or the portfolio manager, the Subadviser or an affiliate has an interest in the account. The Subadviser has adopted procedures for allocation of portfolio transactions and investment opportunities across multiple client accounts on a fair and equitable basis over time. Eligible accounts that can participate in a trade generally share the same price on a pro-rata allocation basis, taking into account differences based on factors such as cash availability, investment restrictions and guidelines, and portfolio composition versus strategy.

With respect to securities transactions, the Subadviser determines which broker or dealer to use to execute each order, consistent with their duty to seek best execution of the transaction. However, with respect to certain other accounts (such as pooled investment vehicles that are not registered investment companies and other accounts managed for organizations and individuals), the Subadviser may be limited by the client with respect to the selection of brokers or dealers or may be instructed to direct trades through a particular broker or dealer. In these cases, trades for a portfolio in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of a portfolio or the other account(s) involved. Additionally, the management of multiple portfolios and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each portfolio and/or other account. The Subadviser’s team approach to portfolio management and block trading approach seeks to limit this potential risk.

The Subadviser also maintains a gift and entertainment policy to address the potential for a business contact to give gifts or host entertainment events that may influence the business judgment of an employee. Employees are permitted to retain gifts of only a nominal value and are required to make reimbursement for entertainment events above a certain value. All gifts (except those of a de minimis value) and entertainment events that are given or sponsored by a business contact are required to be reported in a gift and entertainment log which is reviewed on a regular basis for possible issues.

Employees of the Subadviser have access to transactions and holdings information regarding client accounts and the Subadviser’s overall trading activities. This information represents a potential conflict of interest because employees may take advantage of this information as they trade in their personal accounts. Accordingly, the Subadviser maintains a Code of Ethics that is compliant with Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act to address personal trading. In addition, the Code of Ethics seeks to establish broader principles of good conduct and fiduciary responsibility in all aspects of the Subadviser’s business. The Code of Ethics is administered by the Legal and Compliance Department and monitored through the Subadviser’s compliance monitoring program.

The Subadviser may also face other potential conflicts of interest with respect to managing client assets, and the description above is not a complete description of every conflict of interest that could be deemed to exist. The Subadviser also maintains a compliance monitoring program and engages independent auditors to conduct a SOC1/ISAE 3402 audit on an annual basis. These steps help to ensure that potential conflicts of interest have been addressed.

Investment Professional Compensation

With respect to the compensation of the Fund’s investment professionals, the Subadviser’s compensation system assigns each employee a total compensation range, which is derived from annual market surveys that benchmark each role with its job function and peer universe. This method is designed to reward employees with total compensation reflective of the external market value of their skills, experience and ability to produce desired results. Standard compensation includes competitive base salaries, generous employee benefits and a retirement plan.

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In addition, the Subadviser’s employees are eligible for bonuses. These are structured to closely align the interests of employees with those of the Subadviser, and are determined by the professional’s job function and pre-tax performance as measured by a formal review process. All bonuses are completely discretionary. The principal factor considered is an investment professional’s investment performance versus appropriate peer groups and benchmarks (e.g., a securities index and with respect to the Fund, the benchmark set forth in the Fund’s Prospectus to which the Fund’s average annual total returns are compared or, if none, the benchmark set forth in the Fund’s annual report). Performance is reviewed on a 1, 3 and 5 year basis for compensation—with 3 and 5 years having a larger emphasis. The Subadviser may also measure an investment professional’s pre-tax investment performance against other benchmarks, as it determines appropriate. Because investment professionals are generally responsible for multiple accounts (including the Fund) with similar investment strategies, they are generally compensated on the performance of the aggregate group of similar accounts, rather than a specific account. Other factors that may be considered when making bonus decisions include client service, business development, length of service to the Subadviser, management or supervisory responsibilities, contributions to developing business strategy and overall contributions to the Subadviser’s business.

Finally, in order to attract and retain top talent, all investment professionals are eligible for additional incentives in recognition of outstanding performance. These are determined based upon the factors described above and include long-term incentives that vest over a set period of time past the award date.

(a)(4): Investment Professional Securities Ownership

The table below identifies the dollar range of securities beneficially owned by each investment professional as of December 31, 2023.

 

Investment Professional(s)		Dollar Range of Portfolio Securities Beneficially Owned
S. Kenneth Leech		A
Michael C. Buchanan		A
Christopher Kilpatrick		A

Dollar Range ownership is as follows:

A: none

B: $1 - $10,000

C: 10,001 - $50,000

D: $50,001 - $100,000

E: $100,001 - $500,000

F: $500,001 - $1 million

G: over $1 million

 

ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

 

ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

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ITEM 11.

CONTROLS AND PROCEDURES.

 

(a)

The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

 

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the period covered by this report that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

 

ITEM 12.

DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

 

ITEM 13.

RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

 

(a)

Not applicable.

 

(b)

Not applicable.

 

ITEM 14.

EXHIBITS.

(a) (1) Code of Ethics attached hereto.

Exhibit  99.CODE ETH

(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit  99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit  99.906CERT

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SIGNATURES

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

Western Asset Premier Bond Fund

By:		/s/ Jane Trust
		Jane Trust
		Chief Executive Officer
Date:		February 29, 2024

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

 

By:		/s/ Jane Trust
		Jane Trust
		Chief Executive Officer
Date:		February 29, 2024

 

By:		/s/ Christopher Berarducci
		Christopher Berarducci
		Principal Financial Officer
Date:		February 29, 2024

Code of Conduct for Principal Executive and Financial Officers (SOX)

Covered Officers and Purpose of the Code

The Funds’ code of ethics (the “Code”) for investment companies within the Legg Mason family of mutual funds (each a “Fund,” and collectively, the “Funds”) applies to each Fund’s Principal Executive Officer, Principal Financial Officer, and Controller (the “Covered Officers”) for the purpose of promoting:

 

•

honest and ethical conduct, including ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

 

•

full, fair, accurate, timely and understandable disclosure in reports and documents a registrant files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Funds;

 

•

compliance with applicable laws and governmental rules and regulations;

 

•

prompt internal reporting of Code violations to appropriate persons identified in the Code; and

 

•

accountability for adherence to the Code.

Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

Covered Officers Should Ethically Handle Actual and Apparent Conflicts of Interest

A “conflict of interest” occurs when a Covered Officer’s private interest interferes with the interests of, or his or her service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his or her family, receives improper personal benefits as a result of his or her position with a Fund.

Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (“Investment Company Act”) and the Investment Advisers Act of 1940 (“Investment Advisers Act”). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as “affiliated persons” of the Fund. The Funds’ and the investment advisers’ compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between a Fund and an investment adviser of which Covered Officers are also officers or employees. As a result, this Code recognizes Covered Officers will, in the normal course of their duties (whether formally for a Fund or for the adviser, or for both), be involved in establishing policies and

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implementing decisions that will have different effects on the adviser and the Funds. The participation of Covered Officers in such activities is inherent in the contractual relationship between a Fund and an adviser and is consistent with the performance by Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds’ Boards of Directors/Trustees (“Boards”) that Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes and that such service, by itself does not give rise to a conflict of interest.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund.

Each Covered Officer must:

 

•

not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund;

 

•

not cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Fund; and,

 

•

not use material non-public knowledge of portfolio transactions made or contemplated for the Trust to trade personally or cause others to trade personally in contemplation of the market effect of such transactions.

There are some actual or potential conflict of interest situations that, if material, should always be discussed with the Chief Compliance Officer (“CCO”) or designate that has been appointed by the Board of the Funds. Examples of these include:

 

•

service as a director on the board of any public company (other than the Funds or their investment advisers or any affiliated person thereof);

 

•

the receipt of any non-nominal gifts (i.e., in excess of $100);

 

•

the receipt of any entertainment from any company with which a Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety;

 

•

any ownership interest in, or any consulting or employment relationship with, any of the Funds’ service providers (other than their investment advisers, or principal underwriter, or any affiliated person thereof);

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•

a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership.

Disclosure and Compliance

Each Covered Officer should:

 

•

familiarize him or herself with the disclosure requirements generally applicable to the Funds;

 

•

not knowingly misrepresent, or cause others to misrepresent, facts about a Fund to others, whether within or outside the Fund, including to the Fund’s Directors/Trustees and auditors, and to governmental regulators and self-regulatory organizations; and

 

•

to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Funds and the advisers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds.

It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.

Reporting and Accountability

Each Covered Officer must:

 

•

upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he or she has received, read, and understands the Code;

 

•

annually thereafter affirm to the Board that he or she has complied with the requirements of the Code;

 

•

not retaliate against any other Covered Officer or any employee of the Funds or their advisers or any affiliated persons thereof or service providers of the Funds for reports of potential violations that are made in good faith;

 

•

notify the CCO promptly if he or she knows of any violation of this Code, of which failure to do so is itself a violation; and

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•

report at least annually, if necessary, any employment position, including officer or directorships, held by the Covered Officer or any immediate family member of a Covered Officer with affiliated persons of or Service Providers to the Funds.

The CCO is responsible for applying this Code to specific situations in which questions are presented and has the authority to interpret this Code in any particular situation. However, approvals or waivers sought by a Covered Officer will be considered by the Compliance Committee or Audit Committee, (the “Committee”) responsible for oversight of the Fund’s code of ethics under Rule 17j-1 under the Investment Company Act. If a Covered Officer seeking an approval or waiver sits on the Committee, the Covered Person shall recuse him or herself from any such deliberations. Any approval or waiver granted by the Committee will be reported promptly to the Chair of the Audit Committees of the Funds.

The Funds will follow these procedures in investigating and enforcing this Code:

 

•

the CCO will take all appropriate action to investigate any potential violations reported to him, which actions may include the use of internal or external counsel, accountants or other personnel;

 

•

if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required to take any further action;

 

•

any matter that the CCO believes is a violation will be reported to the Committee;

 

•

if the Committee concurs that a violation has occurred, it will inform the Board, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer;

 

•

the Committee will be responsible for granting waivers, as appropriate; and,

 

•

any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.

Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds’ advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of Covered Officers subject to this Code, they are superseded by this Code to the extent they overlap or conflict with the provisions of this Code. The Funds’ and their investment advisers’ and principal underwriter’s codes of

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ethics under Rule 17j-1 under the Investment Company Act are separate requirements applying to Covered Officers and others, and are not part of this Code.

Confidentiality

All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the appropriate Board and Fund counsel, and the board of Directors/Trustees and fund counsel of any other investment company for whom a Covered Officer serves in a similar capacity.

Annual Report

No less than annually, the CCO shall provide the Board with a written report describing any issues having arisen since the prior year’s report.

Internal Use

This Code is intended solely for the internal use by the Funds and does not constitute an admission by or on behalf of any Fund, as to any fact, circumstance or legal consideration.

CERTIFICATIONS PURSUANT TO SECTION 302

EX-99.CERT

CERTIFICATIONS

I, Jane Trust, certify that:

 

1.	I have reviewed this report on Form N-CSR of Western Asset Premier Bond Fund;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 29, 2024						/s/ Jane Trust
						Jane Trust
						Chief Executive Officer

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CERTIFICATIONS

I, Christopher Berarducci, certify that:

 

1.	I have reviewed this report on Form N-CSR of Western Asset Premier Bond Fund;

 

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial information included in this report, and the financial statements on which the financial information is based, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.	The registrant’s other certifying officers and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: February 29, 2024						/s/ Christopher Berarducci
						Christopher Berarducci
						Principal Financial Officer

CERTIFICATIONS PURSUANT TO SECTION 906

EX-99.906CERT

CERTIFICATION

Jane Trust, Chief Executive Officer, and Christopher Berarducci, Principal Financial Officer of Western Asset Premier Bond Fund (the “Registrant”), each certify to the best of their knowledge that:

1. The Registrant’s periodic report on Form N-CSR for the period ended December 31, 2023 (the “Form N-CSR”) fully complies with the requirements of section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Chief Executive Officer				Principal Financial Officer
Western Asset Premier Bond Fund				Western Asset Premier Bond Fund
/s/ Jane Trust				/s/ Christopher Berarducci
Jane Trust				Christopher Berarducci
Date: February 29, 2024				Date: February 29, 2024

This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Commission.

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