WESTERN ASSET PREMIER BOND FUND (WEA)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-10603

Western Asset Premier Bond Fund

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

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

Date of fiscal year end: December 31

Date of reporting period: March 31, 2016

 

 

 


 

ITEM 1. SCHEDULE OF INVESTMENTS.


WESTERN ASSET PREMIER BOND FUND

FORM N-Q

MARCH 31, 2016


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  
CORPORATE BONDS & NOTES - 97.6%          
CONSUMER DISCRETIONARY - 13.6%          

Auto Components - 0.3%

         

ZF North America Capital Inc., Senior Notes

     4.750     4/29/25         530,000      $ 527,350 (a) 
         

 

 

 

Automobiles - 2.7%

         

Daimler Finance NA LLC, Notes

     8.500     1/18/31         1,000,000        1,532,818 (b) 

Ford Motor Credit Co., LLC, Senior Notes

     8.000     12/15/16         680,000        709,872 (b) 

General Motors Co., Senior Notes

     6.600     4/1/36         140,000        154,054   

General Motors Co., Senior Notes

     6.250     10/2/43         1,750,000        1,869,074 (b) 
         

 

 

 

Total Automobiles

            4,265,818   
         

 

 

 

Hotels, Restaurants & Leisure - 1.0%

         

CCM Merger Inc., Senior Notes

     9.125     5/1/19         570,000        589,950 (a) 

Greektown Holdings LLC/Greektown Mothership Corp., Senior Secured Notes

     8.875     3/15/19         220,000        225,500 (a)(b) 

Landry’s Holdings II Inc., Senior Notes

     10.250     1/1/18         720,000        716,400 (a)(b) 
         

 

 

 

Total Hotels, Restaurants & Leisure

            1,531,850   
         

 

 

 

Household Durables - 0.6%

         

Shea Homes LP/Shea Homes Funding Corp., Senior Notes

     6.125     4/1/25         580,000        568,400 (a) 

William Lyon Homes Inc., Senior Notes

     8.500     11/15/20         390,000        400,173 (b) 
         

 

 

 

Total Household Durables

            968,573   
         

 

 

 

Media - 8.1%

         

21st Century Fox America Inc., Senior Debentures

     8.875     4/26/23         400,000        536,714 (b) 

CCO Safari II LLC, Senior Secured Notes

     4.908     7/23/25         1,000,000        1,054,816 (a)(b) 

CCO Safari II LLC, Senior Secured Notes

     6.384     10/23/35         420,000        463,663 (a) 

CCO Safari II LLC, Senior Secured Notes

     6.484     10/23/45         2,130,000        2,370,106 (a) 

Comcast Corp., Notes

     7.050     3/15/33         1,000,000        1,377,043 (b) 

DISH DBS Corp., Senior Notes

     7.875     9/1/19         385,000        423,500 (b) 

iHeartCommunications Inc., Senior Notes

     14.000     2/1/21         525,200        118,170 (c) 

New Cotai LLC/New Cotai Capital Corp., Senior Secured Notes

     10.625     5/1/19         402,917        286,071 (a)(c) 

Time Warner Cable Inc., Debentures

     7.300     7/1/38         720,000        844,559 (b) 

Time Warner Cable Inc., Senior Notes

     5.850     5/1/17         500,000        521,217 (b) 

Time Warner Inc., Senior Debentures

     7.700     5/1/32         980,000        1,258,173 (b) 

Tribune Media Co., Senior Notes

     5.875     7/15/22         260,000        254,015 (a) 

UPC Holding BV, Junior Secured Subordinated Notes

     6.375     9/15/22         1,820,000 EUR      2,210,769 (a)(b) 

Viacom Inc., Senior Notes

     4.375     3/15/43         1,190,000        919,912   
         

 

 

 

Total Media

            12,638,728   
         

 

 

 

Specialty Retail - 0.9%

         

Hot Topic Inc., Senior Secured Notes

     9.250     6/15/21         270,000        270,675 (a)(b) 

L Brands Inc., Debentures

     6.950     3/1/33         180,000        185,400   

L Brands Inc., Senior Notes

     6.875     11/1/35         450,000        488,340   

Sally Holdings LLC/Sally Capital Inc., Senior Notes

     5.625     12/1/25         420,000        447,300 (b) 
         

 

 

 

Total Specialty Retail

            1,391,715   
         

 

 

 

TOTAL CONSUMER DISCRETIONARY

            21,324,034   
         

 

 

 
CONSUMER STAPLES - 5.0%          

Beverages - 1.1%

         

Anheuser-Busch InBev Finance Inc., Senior Notes

     4.700     2/1/36         540,000        583,580   

Anheuser-Busch InBev Finance Inc., Senior Notes

     4.900     2/1/46         1,010,000        1,128,738   
         

 

 

 

Total Beverages

            1,712,318   
         

 

 

 

Food & Staples Retailing - 2.3%

         

CVS Pass-Through Trust, Secured Bonds

     5.789     1/10/26         413,738        456,543 (a)(b) 

CVS Pass-Through Trust, Secured Notes

     5.880     1/10/28         428,369        472,687 (b) 

CVS Pass-Through Trust, Secured Notes

     6.036     12/10/28         429,324        480,847 (b) 

CVS Pass-Through Trust, Secured Notes

     6.943     1/10/30         417,725        482,524 (b) 

 

See Notes to Schedule of Investments.

 

1


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Food & Staples Retailing - (continued)

          

CVS Pass-Through Trust, Secured Notes

     7.507     1/10/32         412,072       $ 496,059 (a)(b) 

Kroger Co., Senior Notes

     6.400     8/15/17         1,090,000         1,164,933 (b) 
          

 

 

 

Total Food & Staples Retailing

             3,553,593   
          

 

 

 

Food Products - 1.2%

          

Ahold Lease USA Inc., Pass-Through Certificates

     8.620     1/2/25         686,921         819,048 (b) 

WM Wrigley Jr. Co., Senior Notes

     2.000     10/20/17         1,000,000         1,004,128 (a)(b) 
          

 

 

 

Total Food Products

             1,823,176   
          

 

 

 

Household Products - 0.2%

          

Central Garden & Pet Co., Senior Notes

     6.125     11/15/23         250,000         260,000 (b) 

Kronos Acquisition Holdings Inc., Senior Notes

     9.000     8/15/23         130,000         119,600 (a) 
          

 

 

 

Total Household Products

             379,600   
          

 

 

 

Tobacco - 0.2%

          

Reynolds American Inc., Senior Notes

     5.850     8/15/45         310,000         378,560 (b) 
          

 

 

 

TOTAL CONSUMER STAPLES

             7,847,247   
          

 

 

 
ENERGY - 16.1%           

Energy Equipment & Services - 0.4%

          

CGG, Senior Notes

     6.500     6/1/21         750,000         303,750   

Ensco PLC, Senior Notes

     4.700     3/15/21         430,000         300,084   
          

 

 

 

Total Energy Equipment & Services

             603,834   
          

 

 

 

Oil, Gas & Consumable Fuels - 15.7%

          

Anadarko Finance Co., Senior Notes

     7.500     5/1/31         570,000         617,186 (b) 

Anadarko Petroleum Corp., Senior Notes

     4.500     7/15/44         1,000,000         784,438 (b) 

Apache Corp., Senior Notes

     4.250     1/15/44         250,000         210,100 (b) 

Berry Petroleum Co., Senior Notes

     6.375     9/15/22         130,000         23,400   

Burlington Resources Finance Co., Senior Notes

     7.400     12/1/31         450,000         509,267 (b) 

Calumet Specialty Products Partners LP/Calumet Finance Corp., Senior Notes

     6.500     4/15/21         500,000         355,000 (b)(e) 

Chesapeake Energy Corp., Senior Notes

     6.875     11/15/20         270,000         105,975 (b) 

Chesapeake Energy Corp., Senior Notes

     5.375     6/15/21         320,000         113,600 (b) 

Continental Resources Inc., Senior Notes

     4.500     4/15/23         500,000         418,125 (b) 

Continental Resources Inc., Senior Notes

     4.900     6/1/44         500,000         372,500 (b) 

Devon Energy Corp., Debentures

     7.950     4/15/32         310,000         315,269 (b) 

Ecopetrol SA, Senior Notes

     5.875     9/18/23         55,000         54,231 (b) 

Ecopetrol SA, Senior Notes

     5.875     5/28/45         2,510,000         1,975,872   

Enterprise Products Operating LLC, Senior Notes

     4.050     2/15/22         880,000         916,194   

Enterprise Products Operating LLC, Senior Notes

     5.100     2/15/45         1,000,000         970,615 (b) 

EOG Resources Inc., Senior Notes

     3.150     4/1/25         2,250,000         2,183,551   

Freeport-McMoran Oil & Gas LLC/FCX Oil & Gas Inc., Senior Notes

     6.500     11/15/20         579,000         463,200 (b) 

Freeport-McMoran Oil & Gas LLC/FCX Oil & Gas Inc., Senior Notes

     6.875     2/15/23         840,000         642,600   

Kinder Morgan Inc., Medium-Term Notes

     7.750     1/15/32         190,000         198,738   

Kinder Morgan Inc., Senior Bonds

     5.550     6/1/45         1,500,000         1,333,092 (b) 

Lonestar Resources America Inc., Senior Notes

     8.750     4/15/19         180,000         106,200 (a) 

Magnum Hunter Resources Corp., Senior Notes

     9.750     5/15/20         960,000         211,200 *(d)(e) 

MEG Energy Corp., Senior Notes

     6.500     3/15/21         840,000         507,150 (a) 

Natural Resource Partners LP/Natural Resource Partners Finance Corp., Senior Notes

     9.125     10/1/18         370,000         239,575 (b) 

Noble Energy Inc., Senior Notes

     5.250     11/15/43         1,000,000         861,184 (b) 

Oasis Petroleum Inc., Senior Notes

     7.250     2/1/19         370,000         282,125   

Oasis Petroleum Inc., Senior Notes

     6.500     11/1/21         520,000         384,800   

Oasis Petroleum Inc., Senior Notes

     6.875     1/15/23         340,000         250,750   

Occidental Petroleum Corp., Senior Notes

     3.500     6/15/25         350,000         358,439   

Petrobras Global Finance BV, Senior Notes

     4.375     5/20/23         1,060,000         773,482   

Petrobras Global Finance BV, Senior Notes

     6.750     1/27/41         920,000         661,480   

Petroleos Mexicanos

     4.250     1/15/25         1,500,000         1,389,375   

Petroleos Mexicanos, Senior Notes

     6.875     8/4/26         1,210,000         1,309,825 (a) 

Reliance Holdings USA Inc., Senior Notes

     5.400     2/14/22         1,000,000         1,115,853 (a)(b) 

Reliance Holdings USA Inc., Senior Notes

     5.400     2/14/22         250,000         278,963 (f) 

 

See Notes to Schedule of Investments.

 

2


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Oil, Gas & Consumable Fuels - (continued)

          

Sanchez Energy Corp., Senior Notes

     6.125     1/15/23         380,000       $ 205,200   

Transcontinental Gas Pipe Line Co., LLC, Senior Notes

     7.850     2/1/26         1,000,000         1,143,718 (a)(b) 

Whiting Petroleum Corp., Senior Notes

     5.000     3/15/19         480,000         332,400   

Whiting Petroleum Corp., Senior Notes

     6.250     4/1/23         200,000         134,500   

Williams Cos. Inc., Debentures

     7.500     1/15/31         443,000         359,937 (b) 

Williams Cos. Inc., Senior Notes

     4.550     6/24/24         60,000         45,600   

Williams Cos. Inc., Senior Notes

     8.750     3/15/32         39,000         34,710 (b) 

WPX Energy Inc., Senior Notes

     7.500     8/1/20         160,000         124,800   

WPX Energy Inc., Senior Notes

     8.250     8/1/23         210,000         162,750   

YPF Sociedad Anonima, Senior Notes

     8.500     3/23/21         720,000         720,900 (a) 
          

 

 

 

Total Oil, Gas & Consumable Fuels

             24,557,869   
          

 

 

 

TOTAL ENERGY

             25,161,703   
          

 

 

 
FINANCIALS - 26.4%           

Banks - 17.5%

          

Bank of America Corp., Senior Notes

     3.750     7/12/16         500,000         503,646 (b) 

Bank of America Corp., Senior Notes

     5.000     5/13/21         1,100,000         1,220,879 (b) 

Bank of America Corp., Subordinated Notes

     4.250     10/22/26         1,200,000         1,217,890 (b) 

Barclays Bank PLC, Subordinated Notes

     10.179     6/12/21         610,000         775,095 (a)(b) 

Barclays Bank PLC, Subordinated Notes

     7.625     11/21/22         2,500,000         2,687,500   

BNP Paribas SA, Junior Subordinated Notes

     7.375     8/19/25         2,280,000         2,205,900 (a)(g)(h) 

BPCE SA, Subordinated Notes

     5.150     7/21/24         1,000,000         1,021,426 (a)(b) 

Capital One N.A., Senior Notes

     1.500     3/22/18         1,810,000         1,782,256 (b) 

CIT Group Inc., Senior Notes

     5.000     8/15/22         250,000         252,968   

Citigroup Inc., Subordinated Notes

     3.500     5/15/23         500,000         499,889 (b) 

Citigroup Inc., Subordinated Notes

     5.500     9/13/25         200,000         218,862 (b) 

Citigroup Inc., Subordinated Notes

     6.625     6/15/32         1,000,000         1,167,896 (b) 

Cooperatieve Rabobank U.A., Subordinated Notes

     5.250     8/4/45         270,000         291,995   

Credit Agricole SA, Junior Subordinated Notes

     8.125     12/23/25         1,080,000         1,077,386 (a)(b)(g)(h) 

Credit Agricole SA, Subordinated Notes

     4.375     3/17/25         850,000         832,328 (a) 

HBOS PLC, Subordinated Notes

     6.750     5/21/18         700,000         756,932 (a)(b) 

HSBC Holdings PLC, Junior Subordinated Bonds

     6.375     9/17/24         1,480,000         1,374,550 (g)(h) 

JPMorgan Chase & Co., Subordinated Notes

     4.950     6/1/45         1,500,000         1,583,202 (b) 

Lloyds Banking Group PLC, Subordinated Notes

     4.500     11/4/24         1,000,000         1,004,662 (b) 

Royal Bank of Scotland Group PLC, Subordinated Notes

     6.100     6/10/23         1,470,000         1,505,642   

Royal Bank of Scotland Group PLC, Subordinated Notes

     6.000     12/19/23         150,000         151,920   

Royal Bank of Scotland Group PLC, Subordinated Notes

     5.125     5/28/24         2,830,000         2,720,734   

Royal Bank of Scotland NV, Subordinated Bonds

     7.750     5/15/23         140,000         151,233 (b) 

Santander UK PLC, Subordinated Notes

     5.000     11/7/23         510,000         517,602 (a) 

Standard Chartered PLC, Subordinated Notes

     5.700     3/26/44         2,000,000         1,800,664 (a)(b) 
          

 

 

 

Total Banks

             27,323,057   
          

 

 

 

Capital Markets - 3.2%

          

Credit Suisse Group Funding Guernsey Ltd., Senior Notes

     4.875     5/15/45         1,500,000         1,429,028 (b) 

Goldman Sachs Group Inc., Senior Notes

     6.150     4/1/18         1,000,000         1,081,794 (b) 

Goldman Sachs Group Inc., Senior Notes

     5.250     7/27/21         800,000         900,500 (b) 

Goldman Sachs Group Inc., Subordinated Notes

     6.750     10/1/37         1,000,000         1,194,436 (b) 

Goldman Sachs Group Inc., Subordinated Notes

     5.150     5/22/45         450,000         457,147 (b) 
          

 

 

 

Total Capital Markets

             5,062,905   
          

 

 

 

Consumer Finance - 0.9%

          

Ally Financial Inc., Senior Notes

     8.000     3/15/20         282,000         315,840 (b) 

Capital One Financial Corp., Subordinated Notes

     6.150     9/1/16         500,000         510,149 (b) 

Navient Corp., Senior Notes

     6.125     3/25/24         680,000         584,800 (b) 
          

 

 

 

Total Consumer Finance

             1,410,789   
          

 

 

 

 

 

See Notes to Schedule of Investments.

 

3


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Diversified Financial Services - 2.7%

          

AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, Senior Bonds

     4.625     7/1/22         230,000       $ 234,600   

Argos Merger Sub Inc., Senior Notes

     7.125     3/15/23         780,000         829,140 (a)(b) 

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

     2.342     11/15/20         373,000         382,116 (a) 

International Lease Finance Corp., Senior Notes

     8.750     3/15/17         1,380,000         1,453,692 (b) 

International Lease Finance Corp., Senior Notes

     6.250     5/15/19         80,000         85,300   

International Lease Finance Corp., Senior Notes

     5.875     8/15/22         700,000         759,500 (b) 

International Lease Finance Corp., Senior Secured Notes

     7.125     9/1/18         400,000         436,000 (a)(b) 
          

 

 

 

Total Diversified Financial Services

             4,180,348   
          

 

 

 

Insurance - 0.8%

          

Genworth Holdings Inc., Senior Notes

     4.900     8/15/23         330,000         245,025 (b) 

Liberty Mutual Group Inc., Junior Subordinated Bonds

     7.800     3/15/37         200,000         218,000 (a)(b) 

Metlife Inc., Junior Subordinated Notes

     10.750     8/1/39         500,000         760,000 (b) 
          

 

 

 

Total Insurance

             1,223,025   
          

 

 

 

Real Estate Investment Trusts (REITs) - 0.4%

          

Communications Sales & Leasing Inc., Senior Secured Notes

     6.000     4/15/23         300,000         291,750 (a) 

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

     6.375     3/1/24         260,000         273,650   
          

 

 

 

Total Real Estate Investment Trusts (REITs)

             565,400   
          

 

 

 

Real Estate Management & Development - 0.4%

          

Howard Hughes Corp., Senior Notes

     6.875     10/1/21         690,000         679,650 (a)(b) 
          

 

 

 

Thrifts & Mortgage Finance - 0.5%

          

Quicken Loans Inc., Senior Notes

     5.750     5/1/25         860,000         834,200 (a)(b) 
          

 

 

 

TOTAL FINANCIALS

             41,279,374   
          

 

 

 
HEALTH CARE - 5.1%           

Biotechnology - 0.6%

          

AMAG Pharmaceuticals Inc., Senior Notes

     7.875     9/1/23         280,000         247,100 (a) 

Celgene Corp., Senior Notes

     5.000     8/15/45         260,000         281,147   

Gilead Sciences Inc., Senior Notes

     4.750     3/1/46         390,000         426,891   
          

 

 

 

Total Biotechnology

             955,138   
          

 

 

 

Health Care Equipment & Supplies - 1.0%

          

ConvaTec Finance International SA, Senior Notes

     8.250     1/15/19         340,000         336,812 (a)(c) 

DJO Finco Inc./DJO Finance LLC/DJO Finance Corp., Secured Notes

     8.125     6/15/21         1,040,000         920,400 (a) 

Greatbatch Ltd., Senior Notes

     9.125     11/1/23         330,000         327,113 (a) 
          

 

 

 

Total Health Care Equipment & Supplies

             1,584,325   
          

 

 

 

Health Care Providers & Services - 2.2%

          

Centene Corp., Senior Notes

     5.625     2/15/21         280,000         291,900 (a) 

Centene Corp., Senior Notes

     6.125     2/15/24         220,000         231,550 (a) 

HCA Inc., Debentures

     7.500     11/15/95         475,000         458,375 (b) 

HCA Inc., Notes

     7.690     6/15/25         90,000         96,750 (b) 

HCA Inc., Senior Secured Notes

     5.250     6/15/26         280,000         287,000   

IASIS Healthcare LLC/IASIS Capital Corp., Senior Notes

     8.375     5/15/19         230,000         226,837   

Tenet Healthcare Corp., Senior Notes

     8.125     4/1/22         1,440,000         1,481,400   

UnitedHealth Group Inc., Senior Notes

     4.750     7/15/45         340,000         389,875 (b) 
          

 

 

 

Total Health Care Providers & Services

             3,463,687   
          

 

 

 

Pharmaceuticals - 1.3%

          

Actavis Funding SCS, Senior Notes

     4.750     3/15/45         570,000         599,472 (b) 

JLL/Delta Dutch Pledgeco BV, Senior Notes

     8.750     5/1/20         760,000         741,000 (a)(c) 

Mallinckrodt International Finance SA, Senior Notes

     5.750     8/1/22         420,000         386,925 (a) 

Valeant Pharmaceuticals International Inc., Senior Notes

     5.375     3/15/20         360,000         293,400 (a) 
          

 

 

 

Total Pharmaceuticals

             2,020,797   
          

 

 

 

TOTAL HEALTH CARE

             8,023,947   
          

 

 

 

 

See Notes to Schedule of Investments.

 

4


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
INDUSTRIALS - 9.7%           

Aerospace & Defense - 0.7%

          

Aerojet Rocketdyne Holdings Inc., Secured Notes

     7.125     3/15/21         250,000       $ 259,375 (b) 

Boeing Co., Notes

     6.125     2/15/33         600,000         791,895 (b) 
          

 

 

 

Total Aerospace & Defense

             1,051,270   
          

 

 

 

Air Freight & Logistics - 0.4%

          

XPO Logistics Inc., Senior Notes

     6.500     6/15/22         710,000         689,587 (a) 
          

 

 

 

Airlines - 5.1%

          

Air 2 US, Notes

     8.027     10/1/19         845,907         883,973 (a)(b) 

America West Airlines Inc., Pass-Through Certificates, Ambac Assurance Corp.

     8.057     7/2/20         1,146,477         1,261,125 (b) 

Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes

     6.900     1/2/18         154,266         156,966 (b) 

Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes

     6.820     5/1/18         423,470         440,409 (b) 

Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes

     6.545     2/2/19         677,365         715,907 (b) 

Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes

     8.048     11/1/20         319,403         350,129 (b) 

Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes

     6.703     6/15/21         351,589         368,395 (b) 

Delta Air Lines Inc., Pass-Through Certificates, Secured Notes

     8.021     8/10/22         103,435         116,881 (b) 

Northwest Airlines Corp., Pass-Through Certificates

     7.575     3/1/19         240,956         262,040   

US Airways, Pass-Through Certificates, Senior Secured Bonds

     6.850     1/30/18         1,582,801         1,638,199 (b) 

US Airways, Pass-Through Certificates, Senior Secured Bonds

     7.125     10/22/23         1,508,797         1,743,603 (b) 
          

 

 

 

Total Airlines

             7,937,627   
          

 

 

 

Building Products - 0.4%

          

Standard Industries Inc., Senior Notes

     5.125     2/15/21         230,000         235,463 (a) 

Standard Industries Inc., Senior Notes

     5.500     2/15/23         330,000         337,425 (a) 
          

 

 

 

Total Building Products

             572,888   
          

 

 

 

Commercial Services & Supplies - 0.5%

          

Garda World Security Corp., Senior Notes

     7.250     11/15/21         220,000         169,400 (a) 

West Corp., Senior Notes

     5.375     7/15/22         670,000         614,591 (a) 
          

 

 

 

Total Commercial Services & Supplies

             783,991   
          

 

 

 

Construction & Engineering - 0.3%

          

Michael Baker International LLC/CDL Acquisition Co. Inc., Senior Secured Notes

     8.250     10/15/18         350,000         301,000 (a)(b) 

Modular Space Corp., Secured Notes

     10.250     1/31/19         340,000         188,700 (a)(b) 

Odebrecht Offshore Drilling Finance Ltd., Senior Secured Notes

     6.625     10/1/22         180,480         39,706 (a) 
          

 

 

 

Total Construction & Engineering

             529,406   
          

 

 

 

Electrical Equipment - 0.2%

          

International Wire Group Holdings Inc., Senior Secured Notes

     8.500     10/15/17         340,000         338,725 (a)(b) 
          

 

 

 

Industrial Conglomerates - 0.1%

          

General Electric Co., Subordinated Notes

     5.300     2/11/21         129,000         149,814 (b) 
          

 

 

 

Machinery - 0.2%

          

SPL Logistics Escrow LLC/SPL Logistics Finance Corp., Senior Secured Notes

     8.875     8/1/20         410,000         323,900 (a)(b) 
          

 

 

 

 

 

See Notes to Schedule of Investments.

 

5


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Marine - 0.2%

          

Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc., Senior Secured Notes

     8.125     11/15/21         470,000       $ 311,375 (a)(b) 
          

 

 

 

Professional Services - 0.7%

          

IHS Inc., Senior Notes

     5.000     11/1/22         1,000,000         1,036,250 (b) 
          

 

 

 

Road & Rail - 0.5%

          

Flexi-Van Leasing Inc., Senior Notes

     7.875     8/15/18         420,000         415,800 (a) 

Florida East Coast Holdings Corp., Senior Notes

     9.750     5/1/20         100,000         72,000 (a) 

Florida East Coast Holdings Corp., Senior Secured Notes

     6.750     5/1/19         240,000         240,000 (a) 
          

 

 

 

Total Road & Rail

             727,800   
          

 

 

 

Trading Companies & Distributors - 0.4%

          

H&E Equipment Services Inc., Senior Notes

     7.000     9/1/22         630,000         639,450 (b) 
          

 

 

 

TOTAL INDUSTRIALS

             15,092,083   
          

 

 

 
INFORMATION TECHNOLOGY - 3.3%           

Communications Equipment - 1.0%

          

Harris Corp., Senior Notes

     5.054     4/27/45         1,500,000         1,598,202 (b) 
          

 

 

 

Electronic Equipment, Instruments & Components - 0.2%

          

Interface Security Systems Holdings Inc./Interface Security Systems LLC, Senior Secured Notes

     9.250     1/15/18         340,000         319,600 (b) 
          

 

 

 

IT Services - 0.6%

          

Compiler Finance Subordinated Inc., Senior Notes

     7.000     5/1/21         465,000         209,250 (a)(e) 

First Data Corp., Senior Secured Notes

     6.750     11/1/20         98,000         103,047 (a)(b) 

HP Enterprise Services LLC, Notes

     7.450     10/15/29         500,000         570,435 (b) 
          

 

 

 

Total IT Services

             882,732   
          

 

 

 

Semiconductors & Semiconductor Equipment - 0.9%

          

QUALCOMM Inc., Senior Subordinated Notes

     4.800     5/20/45         1,500,000         1,485,880 (b) 
          

 

 

 

Technology Hardware, Storage & Peripherals - 0.6%

          

Seagate HDD Cayman, Senior Bonds

     4.750     1/1/25         750,000         585,793 (b) 

Western Digital Corp., Senior Notes

     10.500     4/1/24         320,000         320,800 (a) 
          

 

 

 

Total Technology Hardware, Storage & Peripherals

             906,593   
          

 

 

 

TOTAL INFORMATION TECHNOLOGY

             5,193,007   
          

 

 

 
MATERIALS - 3.4%           

Chemicals - 0.7%

          

Braskem America Finance Co., Senior Notes

     7.125     7/22/41         920,000         780,574 (f) 

Braskem Finance Ltd., Senior Notes

     5.375     5/2/22         230,000         208,725 (a) 

HIG BBC Intermediate Holdings LLC/HIG BBC Holdings Corp., Senior Notes

     10.500     9/15/18         264,062         184,843 (a)(c) 
          

 

 

 

Total Chemicals

             1,174,142   
          

 

 

 

Containers & Packaging - 0.7%

          

Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., Senior Notes

     9.125     10/15/20         415,000         427,450 (a) 

Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., Senior Notes

     7.000     11/15/20         213,529         203,387 (a) 

Coveris Holdings SA, Senior Notes

     7.875     11/1/19         390,000         349,050 (a) 

Pactiv LLC, Senior Notes

     7.950     12/15/25         50,000         46,000   
          

 

 

 

Total Containers & Packaging

             1,025,887   
          

 

 

 

Metals & Mining - 2.0%

          

Anglo American Capital PLC, Senior Notes

     4.125     9/27/22         210,000         170,625 (a) 

ArcelorMittal SA, Senior Notes

     6.500     3/1/21         160,000         157,600   

ArcelorMittal SA, Senior Notes

     8.000     10/15/39         430,000         374,100   

Barminco Finance Pty Ltd., Senior Notes

     9.000     6/1/18         400,000         299,000 (a)(b) 

BHP Billiton Finance USA Ltd., Subordinated Notes

     6.750     10/19/75         800,000         800,000 (a)(b)(g) 

 

See Notes to Schedule of Investments.

 

6


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Metals & Mining - (continued)

          

Freeport-McMoRan Inc., Senior Notes

     2.375     3/15/18         230,000       $ 203,550   

Freeport-McMoRan Inc., Senior Notes

     5.450     3/15/43         210,000         128,625   

Joseph T. Ryerson & Son Inc., Senior Notes

     11.250     10/15/18         414,000         277,380   

Vale SA, Senior Notes

     5.625     9/11/42         1,090,000         768,450   
          

 

 

 

Total Metals & Mining

             3,179,330   
          

 

 

 

TOTAL MATERIALS

             5,379,359   
          

 

 

 
TELECOMMUNICATION SERVICES - 11.8%           

Diversified Telecommunication Services - 9.3%

          

AT&T Inc., Senior Notes

     5.350     9/1/40         170,000         178,749 (b) 

CCOH Safari LLC, Senior Notes

     5.750     2/15/26         890,000         921,150 (a)(b) 

Cincinnati Bell Telephone Co., LLC, Senior Debentures

     6.300     12/1/28         25,000         23,188 (b) 

Frontier Communications Corp., Senior Notes

     11.000     9/15/25         390,000         391,950 (a) 

Level 3 Financing Inc., Senior Notes

     6.125     1/15/21         530,000         555,175 (b) 

Oi Brasil Holdings Cooperatief U.A., Senior Notes

     5.750     2/10/22         400,000         106,960 (a) 

Orange SA, Notes

     9.000     3/1/31         600,000         910,431 (b) 

Qwest Corp., Senior Notes

     6.750     12/1/21         1,500,000         1,612,500 (b) 

Telecom Italia SpA, Senior Notes

     5.303     5/30/24         2,750,000         2,818,750 (a) 

Telefonica Emisiones SAU, Senior Notes

     5.134     4/27/20         2,000,000         2,213,156 (b) 

Verizon Communications Inc., Senior Notes

     5.150     9/15/23         3,330,000         3,843,529   

Windstream Services LLC, Senior Notes

     7.750     10/15/20         830,000         713,800   

Windstream Services LLC, Senior Notes

     7.750     10/1/21         50,000         40,781   

Windstream Services LLC, Senior Notes

     6.375     8/1/23         250,000         183,125 (b) 
          

 

 

 

Total Diversified Telecommunication Services

             14,513,244   
          

 

 

 

Wireless Telecommunication Services - 2.5%

          

Altice Financing SA, Senior Secured Notes

     6.625     2/15/23         400,000         401,000 (a)(b) 

Neptune Finco Corp., Senior Notes

     10.125     1/15/23         200,000         214,000 (a) 

Neptune Finco Corp., Senior Notes

     6.625     10/15/25         610,000         659,502 (a)(b) 

Neptune Finco Corp., Senior Notes

     10.875     10/15/25         240,000         260,880 (a) 

Sprint Capital Corp., Senior Notes

     6.875     11/15/28         420,000         306,600   

Sprint Communications Inc., Senior Notes

     9.000     11/15/18         500,000         523,750 (a)(b) 

Sprint Communications Inc., Senior Notes

     7.000     8/15/20         260,000         206,700   

Sprint Communications Inc., Senior Notes

     11.500     11/15/21         310,000         275,900   

Sprint Corp., Senior Notes

     7.875     9/15/23         760,000         581,240   

VimpelCom Holdings BV, Senior Notes

     5.950     2/13/23         570,000         554,690 (a)(b) 
          

 

 

 

Total Wireless Telecommunication Services

             3,984,262   
          

 

 

 

TOTAL TELECOMMUNICATION SERVICES

             18,497,506   
          

 

 

 
UTILITIES - 3.2%           

Electric Utilities - 2.8%

          

Centrais Eletricas Brasileiras SA, Senior Notes

     5.750     10/27/21         210,000         176,400 (a) 

Electricite de France SA, Junior Subordinated Notes

     5.625     1/22/24         1,500,000         1,372,500 (a)(b)(g)(h) 

FirstEnergy Corp., Notes

     7.375     11/15/31         1,770,000         2,149,784 (b) 

Southern Co., Senior Notes

     1.950     9/1/16         150,000         150,708 (b) 

State Grid Overseas Investment 2014 Ltd., Senior Notes

     4.125     5/7/24         500,000         545,754 (f) 
          

 

 

 

Total Electric Utilities

             4,395,146   
          

 

 

 

Gas Utilities - 0.0%

          

Southern Natural Gas Co., LLC, Senior Notes

     8.000     3/1/32         20,000         21,139 (b) 
          

 

 

 

Independent Power and Renewable Electricity Producers - 0.4%

  

AES Corp., Senior Notes

     8.000     6/1/20         100,000         113,500 (b) 

Calpine Corp., Senior Secured Notes

     7.875     1/15/23         403,000         427,180 (a)(b) 
          

 

 

 

Total Independent Power and Renewable Electricity Producers

             540,680   
          

 

 

 

TOTAL UTILITIES

             4,956,965   
          

 

 

 

TOTAL CORPORATE BONDS & NOTES

(Cost - $150,817,307)

             152,755,225   
          

 

 

 

 

 

See Notes to Schedule of Investments.

 

7


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
ASSET-BACKED SECURITIES - 13.1%           

AAA Trust, 2005-1A 1A3B

     0.843     2/27/35         463,310       $ 419,875 (a)(g) 

ABFS Mortgage Loan Trust, 2002-3 M1

     5.902     9/15/33         889,799         676,872   

ACE Securities Corp., 2005-WF1 M1

     1.063     5/25/35         405,690         403,205 (g) 

Argent Securities Inc., 2003-W3 M1

     1.561     9/25/33         32,125         27,283 (g) 

Associates Manufactured Housing Pass-Through Certificates, 1997-CLB2

     8.900     6/15/28         1,990,656         1,891,123 (i) 

Bank of America Manufactured Housing Contract Trust, 1997-2M

     6.900     4/10/28         24,371         24,884 (g) 

Bayview Financial Asset Trust, 2007-SR1A M1

     1.233     3/25/37         843,299         724,718 (a)(g) 

Bayview Financial Asset Trust, 2007-SR1A M3

     1.583     3/25/37         319,872         256,656 (a)(g) 

Bayview Financial Asset Trust, 2007-SR1A M4

     1.933     3/25/37         87,238         66,498 (a)(g) 

Bear Stearns Asset-Backed Securities Trust, 2006-SD3 1P0, STRIPS, PO

     0.000     8/25/36         465,240         285,619   

Centex Home Equity Loan Trust, 2003-B AF4

     3.735     2/25/32         344,729         346,128   

Conseco Financial Corp., 1993-1 B

     8.450     4/15/18         11,969         4,078   

Contimortgage Home Equity Trust, 1997-4 B1F

     7.330     10/15/28         139,489         140,334   

Countrywide Asset-Backed Certificates, 2004-3 3A3

     1.193     8/25/34         135,516         125,223 (g) 

Countrywide Asset-Backed Certificates, 2006-3 3A1

     0.553     6/25/36         406         405 (g) 

Countrywide Asset-Backed Certificates, 2007-13 2A1

     1.333     10/25/47         804,652         716,482 (g) 

Countrywide Asset-Backed Certificates, 2007-SEA2 1A1

     1.433     8/25/47         34,198         31,594 (a)(g) 

Credit Suisse First Boston Mortgage Securities Corp., 2004-CF2 2A1

     0.903     5/25/44         11,666         11,550 (a)(g) 

Education Funding Capital Trust, 2004-1 B1

     1.846     6/15/43         1,200,000         1,055,641 (b)(g) 

EMC Mortgage Loan Trust, 2003-B A1

     0.983     11/25/41         14,053         13,183 (a)(g) 

Firstfed Corp. Manufactured Housing Contract, 1996-1 B

     8.060     10/15/22         214,074         81,048 (a) 

GMAC Mortgage Corp. Loan Trust, 2004-VF1 A1

     1.186     2/25/31         48,494         47,823 (a)(g) 

Green Tree Home Improvement Loan Trust, 1996-D HIB2

     8.000     9/15/27         10,702         10,702   

Greenpoint Manufactured Housing, 1999-2 A2

     3.055     3/18/29         425,000         367,846 (g) 

Greenpoint Manufactured Housing, 1999-3 2A2

     3.581     6/19/29         125,000         108,750 (g) 

Greenpoint Manufactured Housing, 1999-4 A2

     3.925     2/20/30         125,000         108,750 (g) 

Greenpoint Manufactured Housing, 2001-2 IA2

     3.929     2/20/32         275,000         249,629 (g) 

Greenpoint Manufactured Housing, 2001-2 IIA2

     3.931     3/13/32         450,000         403,198 (g) 

GSAA Home Equity Trust, 2004-8 A3A

     1.173     9/25/34         104,191         102,080 (g) 

GSAA Home Equity Trust, 2006-19 A3A

     0.673     12/25/36         564,961         314,783 (g) 

GSAMP Trust, 2003-SEA2 A1

     4.422     7/25/33         1,124,199         1,111,818   

GSRPM Mortgage Loan Trust, 2006-1 A1

     0.733     3/25/35         65,277         63,990 (a)(g) 

GSRPM Mortgage Loan Trust, 2006-2 A2

     0.736     9/25/36         91,123         86,504 (a)(g) 

Indymac Manufactured Housing Contract, 1997-1 A5

     6.970     2/25/28         98,336         100,085   

Lehman XS Trust, 2007-1 WF1

     4.771     1/25/37         548,756         364,472 (g) 

Morgan Stanley Capital Inc., 2003-NC9 M

     1.558     9/25/33         915,839         804,195 (g) 

Morgan Stanley Capital Inc., 2003-SD1 A1

     1.433     3/25/33         13,673         12,843 (g) 

Morgan Stanley Capital Inc., 2004-HE7 M1

     1.333     8/25/34         1,539,471         1,392,490 (b)(g) 

New Century Home Equity Loan Trust, 2004-2 A2

     1.173     8/25/34         475,320         430,535 (g) 

New Century Home Equity Loan Trust, 2004-3 M1

     1.363     11/25/34         1,480,740         1,290,913 (g) 

Oakwood Mortgage Investors Inc., 2002-B A3

     6.060     6/15/32         143,212         147,625 (g) 

Option One Mortgage Loan Trust, 2003-2 A2

     1.033     4/25/33         266,808         244,652 (g) 

Origen Manufactured Housing Contract Trust, 2006-A A2

     2.379     10/15/37         1,713,000         1,494,648 (g) 

Origen Manufactured Housing Contract Trust, 2007-A A2

     2.291     4/15/37         1,926,721         1,700,537 (g) 

 

See Notes to Schedule of Investments.

 

8


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
ASSET-BACKED SECURITIES - (continued)           

Park Place Securities Inc., 2004-WCW1 M2

     1.453     9/25/34         354,969       $ 353,779 (g) 

Park Place Securities Inc., 2004-WHQ2 M2

     1.378     2/25/35         250,127         249,175 (g) 

RAAC Series, 2007-RP1 M1

     0.986     5/25/46         210,000         154,789 (a)(g) 

Renaissance Home Equity Loan Trust, 2004-2 AF4

     5.392     7/25/34         150,202         151,127   

Renaissance Home Equity Loan Trust, 2005-3 AV3

     0.813     11/25/35         495,930         431,529 (g) 

Residential Asset Mortgage Products Inc., 2004-RZ1 AII

     0.913     3/25/34         144,849         145,387 (g) 

Residential Asset Securities Corp., 2002-KS2 AI6

     6.228     4/25/32         84,949         86,184 (g) 

Residential Asset Securities Corp., 2003-KS8 AI6

     4.830     10/25/33         66,753         66,291 (g) 

Settlement Fee Finance LLC, 2004-1A A

     9.100     7/25/34         342,913         359,384 (a) 

Structured Asset Securities Corp., 2006-GEL3 A2

     0.663     7/25/36         259,506         258,482 (a)(g) 
          

 

 

 

TOTAL ASSET-BACKED SECURITIES

(Cost - $17,801,478)

             20,517,394   
          

 

 

 
COLLATERALIZED MORTGAGE OBLIGATIONS - 7.8%           

American Home Mortgage Investment Trust, 2007-A 4A

     1.336     7/25/46         577,663         184,885 (a)(g) 

Banc of America Funding Corp., 2004-B 6A1

     2.088     12/20/34         235,060         158,588 (g) 

BCAP LLC Trust, 2009-RR12 2A2

     0.796     3/26/35         1,843,522         1,223,522 (a)(g) 

Bear Stearns Alt-A Trust, 2004-03 A1

     1.073     4/25/34         273,258         260,097 (g) 

Bear Stearns Alt-A Trust, 2005-10 21A1

     2.623     1/25/36         702,077         570,197 (g) 

Bear Stearns Asset-Backed Securities Trust, 2002-AC1 B4

     7.000     1/25/32         320,418         1,757 (a) 

BlackRock Capital Finance LP, 1997-R2 B5

     4.778     12/25/35         690         2 (a) 

Chevy Chase Mortgage Funding Corp., 2004-4A A1

     0.663     10/25/35         1,101,717         960,848 (a)(g) 

Countrywide Home Loans, 2004-R2 1AF1

     0.853     11/25/34         177,654         149,628 (a)(g) 

Countrywide Home Loans, 2005-7 1A1

     0.973     3/25/35         814,907         749,154 (g) 

Countrywide Home Loans, 2006-HYB4 3B

     2.830     6/20/36         631,099         538,682 (g) 

Greenpoint Mortgage Funding Trust, 2005-AR5 3A2

     0.703     11/25/46         176,068         820,277 (g) 

GSMPS Mortgage Loan Trust, 2001-2 A

     7.500     6/19/32         946,411         962,227 (a)(g) 

HarborView Mortgage Loan Trust, 2004-08 3A2

     1.232     11/19/34         97,967         73,792 (g) 

HarborView Mortgage Loan Trust, 2004-10 4A

     2.818     1/19/35         187,463         183,423 (g) 

Impac CMB Trust, 2004-9 1A1

     1.193     1/25/35         33,852         30,463 (g) 

Impac CMB Trust, 2005-2 2A2

     1.233     4/25/35         84,863         76,477 (g) 

Impac CMB Trust, 2A-10

     1.073     3/25/35         231,788         197,670 (g) 

Indymac Manufactured Housing Contract, A2-2

     6.170     8/25/29         53,362         52,814   

JPMorgan Alternative Loan Trust, 2006-S1 3A4

     6.180     3/25/36         890,477         612,980 (b)(g) 

JPMorgan Mortgage Trust, 2007-A2 4A2

     4.807     4/25/37         171,435         150,977 (g) 

LB-UBS Commercial Mortgage Trust, 2001-C3 X, IO, STRIPS

     0.509     6/15/36         235,832         671 (a)(e)(g) 

Merit Securities Corp., 11PA 3A1

     1.053     4/28/27         87,280         74,024 (a)(g) 

Merit Securities Corp., 11PA B3

     2.683     9/28/32         675,752         533,234 (a)(g) 

Metropolitan Asset Funding Inc., 1998-BI B1

     8.000     11/20/24         407,414         364,274 (b)(g) 

Prime Mortgage Trust, 2005-2 2XB, STRIPS, IO

     1.743     10/25/32         2,180,660         104,444 (g) 

Prime Mortgage Trust, 2005-5 1X, STRIPS, IO

     0.983     7/25/34         4,551,325         191,349 (g) 

Prime Mortgage Trust, 2005-5 1XB, STRIPS, IO

     1.156     7/25/34         342,309         3,485 (g) 

Regal Trust IV, 1999-1 A

     2.155     9/29/31         23,430         21,453 (a)(g) 

Residential Asset Mortgage Products Inc., 2005-SL2 AP0, STRIPS, PO

     0.000     2/25/32         14,159         13,563   

Sequoia Mortgage Trust, 2003-2 A2

     1.198     6/20/33         21,073         20,396 (g) 

Sequoia Mortgage Trust, 2004-10 A1A

     1.052     11/20/34         16,951         15,780 (g) 

Sequoia Mortgage Trust, 2004-11 A1

     1.032     12/20/34         25,524         24,552 (g) 

Sequoia Mortgage Trust, 2004-12 A1

     0.972     1/20/35         208,462         189,304 (g) 

Structured Asset Securities Corp., 1998-RF2 A

     6.657     7/15/27         202,698         198,220 (a)(g) 

Structured Asset Securities Corp., 2002-9 A2

     1.033     10/25/27         401,214         389,138 (g) 

Structured Asset Securities Corp., 2003-9A 2A2

     2.630     3/25/33         125,350         123,815 (g) 

Structured Asset Securities Corp., 2004-NP1 A

     1.233     9/25/33         63,176         62,066 (a)(g) 

 

See Notes to Schedule of Investments.

 

9


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  
COLLATERALIZED MORTGAGE OBLIGATIONS - (continued)          

Thornburg Mortgage Securities Trust, 2004-03 A

     1.173     9/25/44         335,938      $ 307,640 (g) 

Washington Mutual Alternative Mortgage Pass-Through Certificates, 2006-7 A2A

     4.495     9/25/36         1,000,287        540,338   

Washington Mutual Inc., Mortgage Pass-Through Certificates, 2004-AR06 A

     0.853     5/25/44         368,782        344,674 (g) 

Washington Mutual Inc., Mortgage Pass-Through Certificates, 2004-AR12 A2A

     0.823     10/25/44         281,187        268,769 (g) 

Washington Mutual Inc., Mortgage Pass-Through Certificates, 2006-AR5 3A

     1.291     7/25/46         682,635        421,613 (g) 

Washington Mutual Inc., MSC Pass-Through Certificates, 2004-RA1 2A

     7.000     3/25/34         14,388        15,015   
         

 

 

 

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost - $10,256,613)

            12,186,277   
         

 

 

 
MORTGAGE-BACKED SECURITIES - 0.1%          

FNMA - 0.1%

         

Federal National Mortgage Association (FNMA), Whole Loan (Cost - $181,827)

     6.500     8/25/44         179,026        200,362   
         

 

 

 
SENIOR LOANS - 1.3%          
CONSUMER DISCRETIONARY - 0.3%          

Hotels, Restaurants & Leisure - 0.3%

         

Equinox Holdings Inc., Second Lien Term Loan

     9.750     7/31/20         430,000        428,387 (j)(k) 
         

 

 

 
CONSUMER STAPLES - 0.1%          

Food Products - 0.1%

         

AdvancePierre Foods Inc., Second Lien Term Loan

     9.500     10/10/17         180,000        178,650 (j)(k) 
         

 

 

 
ENERGY - 0.5%          

Energy Equipment & Services - 0.3%

         

Hercules Offshore LLC, Exit Term Loan

     10.500     5/6/20         710,000        504,100 (j)(k) 
         

 

 

 

Oil, Gas & Consumable Fuels - 0.2%

         

Magnum Hunter Resources Inc., DIP Term Loan

     9.000     9/15/16         245,000        242,550 (e)(j)(k) 
         

 

 

 

TOTAL ENERGY

            746,650   
         

 

 

 
HEALTH CARE - 0.2%          

Health Care Providers & Services - 0.2%

         

Radnet Management Inc., Second Lien Term Loan

     8.000     3/25/21         440,000        401,500 (j)(k) 
         

 

 

 
UTILITIES - 0.2%          

Electric Utilities - 0.2%

         

Panda Temple Power LLC, 2015 Term Loan B

     7.250     3/4/22         425,700        308,633 (j)(k) 
         

 

 

 

TOTAL SENIOR LOANS

(Cost - $2,388,347)

            2,063,820   
         

 

 

 
SOVEREIGN BONDS - 1.8%          

Argentina - 0.2%

         

Republic of Argentina, Senior Bonds

     7.000     4/17/17         290,000        292,627   
         

 

 

 

Poland - 1.6%

         

Republic of Poland, Bonds

     4.000     10/25/23         8,440,000 PLN      2,490,017   
         

 

 

 

TOTAL SOVEREIGN BONDS

(Cost - $3,029,989)

            2,782,644   
         

 

 

 
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 7.5%          

U.S. Government Obligations - 7.5%

         

U.S. Treasury Bonds

     3.000     11/15/45         791,000        853,940   

U.S. Treasury Notes

     0.875     11/30/17         6,750,000        6,766,611   

U.S. Treasury Notes

     1.375     9/30/20         3,250,000        3,277,167   

U.S. Treasury Notes

     1.625     2/15/26         780,000        768,666   
         

 

 

 

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost - $11,621,536)

            11,666,384   
         

 

 

 

 

 

See Notes to Schedule of Investments.

 

10


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

 

SECURITY

                SHARES      VALUE  
COMMON STOCKS - 0.7%           
ENERGY - 0.0%           

Energy Equipment & Services - 0.0%

          

Hercules Offshore Inc.

          16,942       $ 40,661
          

 

 

 
FINANCIALS - 0.7%           

Banks - 0.7%

          

Citigroup Inc.

          25,131         1,049,219   
          

 

 

 
HEALTH CARE - 0.0%           

Health Care Providers & Services - 0.0%

          

Physiotherapy Associates Holdings Inc.

          1,900         21,622 *(e)(i) 
          

 

 

 
INDUSTRIALS - 0.0%           

Marine - 0.0%

          

DeepOcean Group Holding AS

          8,860         48,376 *(e)(i) 
          

 

 

 

TOTAL COMMON STOCKS

(Cost - $1,780,935)

             1,159,878   
          

 

 

 
     RATE                      
PREFERRED STOCKS - 2.3%           
FINANCIALS - 2.3%           

Consumer Finance - 1.0%

          

GMAC Capital Trust I

     6.402        62,722         1,537,316 (g) 
          

 

 

 

Diversified Financial Services - 1.3%

          

Citigroup Capital XIII

     6.988        75,725         1,990,810 (g) 

Corporate-Backed Trust Certificates, Series 2001-8, Class A-1

     7.375        33,900         34 *(d)(i) 
          

 

 

 

Total Diversified Financial Services

             1,990,844   
          

 

 

 

Thrifts & Mortgage Finance - 0.0%

          

Federal Home Loan Mortgage Corp. (FHLMC)

     0.000        100         380 *(g) 

Federal Home Loan Mortgage Corp. (FHLMC)

     5.000        200         819
          

 

 

 

Total Thrifts & Mortgage Finance

             1,199   
          

 

 

 

TOTAL PREFERRED STOCKS

(Cost - $3,682,190)

             3,529,359   
          

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS

(Cost - $201,560,222)

  

  

          206,861,343   
          

 

 

 
           MATURITY
DATE
     FACE
AMOUNT†
        
SHORT-TERM INVESTMENTS - 1.2%           

Repurchase Agreements - 0.4%

          

Bank of America repurchase agreement dated 3/31/16; Proceeds at maturity - $600,005; (Fully collateralized by U.S. government obligations, 3.625% due 2/15/44; Market value - $612,000) (Cost - $600,000)

     0.270     4/1/16         600,000         600,000   
          

 

 

 
                  SHARES         

Money Market Funds - 0.8%

          

State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost - $1,291,368)

     0.225        1,291,368         1,291,368   
          

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost - $1,891,368)

             1,891,368   
          

 

 

 

TOTAL INVESTMENTS - 133.4%

(Cost - $203,451,590#)

             208,752,711   

Liabilities in Excess of Other Assets - (33.4)%

             (52,291,719
          

 

 

 

TOTAL NET ASSETS - 100.0%

           $ 156,460,992   
          

 

 

 

 

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

 

* Non-income producing security.

 

See Notes to Schedule of Investments.

 

11


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2016

 

(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, unless otherwise noted.

 

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

 

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

 

(d) The coupon payment on these securities is currently in default as of March 31, 2016.

 

(e) Illiquid security.

 

(f) 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, unless otherwise noted.

 

(g) Variable rate security. Interest rate disclosed is as of the most recent information available.

 

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

 

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

 

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

 

(k) 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.

 

# Aggregate cost for federal income tax purposes is substantially the same.

Abbreviations used in this schedule:

 

DIP    — Debtor-in-Possession
EUR    — Euro
IO    — Interest Only
PLN    — Polish Zloty
PO    — Principal Only
STRIPS    — Separate Trading of Registered Interest and Principal Securities

This Schedule of Investments is unaudited and is intended to provide information about the Fund’s portfolio holdings as of the date of the schedule. Other information regarding the Fund is available in the Fund’s most recent annual or semi-annual shareholder report.

 

See Notes to Schedule of Investments.

 

12


Notes to Schedule of Investments (unaudited)

 

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 following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(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 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. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is 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.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to 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.

 

13


Notes to Schedule of Investments (unaudited) (continued)

 

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

 

   

Level 1 – quoted prices in active markets for identical investments

 

   

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

   

Level 3 – significant unobservable inputs (including the 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:

           

Industrials

     —         $ 13,767,701       $ 1,324,382       $ 15,092,083   

Other Corporate Bonds & Notes

     —           137,663,142         —           137,663,142   

Asset-Backed Securities

     —           17,988,896         2,528,498         20,517,394   

Collateralized Mortgage Obligations

     —           12,186,277         —           12,186,277   

Mortgage-Backed Securities

     —           200,362         —           200,362   

Senior Loans:

           

Energy

     —           —           746,650         746,650   

Utilities

     —           —           308,633         308,633   

Other Senior Loans

     —           1,008,537         —           1,008,537   

Sovereign Bonds

     —           2,782,644         —           2,782,644   

U.S. Government & Agency Obligations

     —           11,666,384         —           11,666,384   

Common Stocks:

        

Health care

     —           —           21,622         21,622   

Industrials

     —           —           48,376         48,376   

Other common stocks

   $ 1,089,880         —           —           1,089,880   

Preferred Stocks

     3,529,325         —           34         3,529,359   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Long-Term Investments

   $ 4,619,205       $ 197,263,943       $ 4,978,195       $ 206,861,343   
  

 

 

    

 

 

    

 

 

    

 

 

 

Short-Term Investments†

        

Repurchase agreements

     —         $ 600,000         —         $ 600,000   

Money market funds

   $ 1,291,368         —           —           1,291,368   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total short-term investments

   $ 1,291,368       $ 600,000         —         $ 1,891,368   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total investments

   $ 5,910,573       $ 197,863,943       $ 4,978,195       $ 208,752,711   
  

 

 

    

 

 

    

 

 

    

 

 

 

Receivable for insurance proceeds

     —         $ 1,633,988         —         $ 1,633,988   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other assets

     —           —         $ 7,743       $ 7,743   
  

 

 

    

 

 

    

 

 

    

 

 

 

Other Financial Instruments:

           

Forward Foreign Currency Contracts

     —           1,658         —           1,658   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 5,910,573       $ 199,499,589       $ 4,985,938       $ 210,396,100   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

†       See Schedule of Investments for additional detailed categorizations.

          

     

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

     —         $ 16,201         —         $ 16,201   

Futures Contracts

   $ 17,903         —           —           17,903   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 17,903       $ 16,201         —         $ 34,104   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

 

14


Notes to Schedule of Investments (unaudited) (continued)

 

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     CORPORATE
BONDS & NOTES
                          

INVESTMENTS IN SECURITIES

   INDUSTRIALS     ASSET-
BACKED
SECURITIES
                    

Balance as of December 31, 2015

   $ 2,546,072      $ 2,533,965          

Accrued premiums/discounts

     4,060        15,240          

Realized gain (loss)

     —          (657       

Change in unrealized appreciation (depreciation)1

     (71,845     (19,671       

Purchases

     —          —            

Sales

     (399,679     (379       

Transfers into Level 32

     883,973        —            

Transfers out of Level 33

     (1,638,199     —            
  

 

 

   

 

 

        

Balance as of March 31, 2016

   $ 1,324,382      $ 2,528,498          
  

 

 

   

 

 

        

Net change in unrealized appreciation (depreciation) for investments in securities still held at March 31, 20161

   $ (4,181   $ (19,671       
  

 

 

   

 

 

        
     SENIOR LOANS               

INVESTMENTS IN SECURITIES (cont’d)

   CONSUMER
STAPLES
    ENERGY     UTILITIES               

Balance as of December 31, 2015

   $ 176,400      $ 559,900      $ 341,420        

Accrued premiums/discounts

     186        3,150        250        

Realized gain (loss)

     —          —          19        

Change in unrealized appreciation (depreciation)1

     2,064        15,600        (31,981     

Purchases

     —          168,000        —          

Sales

     —          —          (1,075     

Transfers into Level 32

     —          —          —          

Transfers out of Level 33

     (178,650     —          —          
  

 

 

   

 

 

   

 

 

      

Balance as of March 31, 2016

     —        $ 746,650      $ 308,633        
  

 

 

   

 

 

   

 

 

      

Net change in unrealized appreciation (depreciation) for investments in securities still held at March 31, 20161

     —        $ 15,600      $ (31,981     
  

 

 

   

 

 

   

 

 

      
     COMMON STOCKS                     

INVESTMENTS IN SECURITIES (cont’d)

   HEALTH
CARE
    INDUSTRIALS     PREFERRED
STOCKS
    OTHER
ASSETS
     TOTAL  

Balance as of December 31, 2015

   $ 157,700      $ 41,368      $ —          7,743       $ 6,364,568   

Accrued premiums/discounts

     —          —          —          —           22,886   

Realized gain (loss)

     36,853        —          —          —           36,215   

Change in unrealized appreciation (depreciation)1

     19,135        7,008        —          —           (79,690

Purchases

     17,418        —          —          —           185,418   

Sales

     (209,484     —          —          —           (610,617

Transfers into Level 32

     —          —          34      $ —           884,007   

Transfers out of Level 33

     —          —          —          —           (1,816,849
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Balance as of March 31, 2016

     21,622      $ 48,376      $ 34      $ 7,743       $ 4,985,938   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Net change in unrealized appreciation (depreciation) for investments in securities still held at March 31, 20161

     4,204      $ 7,008        —          —         $ (29,021
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

The Fund’s policy is to recognize transfers between levels as of the end of the reporting period.

 

1

Change in unrealized appreciation (depreciation) includes net unrealized appreciation (depreciation) resulting from changes in investment values during the reporting period and the reversal of previously recorded unrealized appreciation (depreciation) when gains or losses are realized.

 

2

Transferred into Level 3 as a result of the unavailability of a quoted price in an active market for an identical investment or the unavailability of other significant observable inputs.

 

3 

Transferred out of Level 3 as a result of the availability of a quoted price in an active market for an identical investment or the availability of other significant observable inputs.

 

15


Notes to Schedule of Investments (unaudited) (continued)

 

2. Investments

At March 31, 2016, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

 

Gross unrealized appreciation

   $ 14,713,407   

Gross unrealized depreciation

     (9,412,286
  

 

 

 

Net unrealized appreciation

   $ 5,301,121   
  

 

 

 

At March 31, 2016, the Fund had the following open futures contracts:

 

     Number of
Contracts
     Expiration
Date
     Basis
Value
     Market
Value
     Unrealized
Depreciation
 
Contracts to Buy:               

U.S. Treasury Ultra Long-Term Bonds

     15         6/16       $ 2,605,872       $ 2,587,969       $ (17,903

At March 31, 2016, the Fund had the following open forward foreign currency contracts:

 

Currency
Purchased
     Currency
Sold
    

Counterparty

   Settlement
Date
     Unrealized
Appreciation
(Depreciation)
 
EUR      60,000         USD         66,695       Citibank N.A.      5/13/16       $ 1,658   
USD      1,977,448         EUR         1,750,000       Citibank N.A.      5/13/16         (16,201
                 

 

 

 

Total

  

   $ (14,543
                 

 

 

 

Abbreviations used in this table:

 

EUR    — Euro
USD    — United States Dollar

 

16


 

ITEM 2. 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 registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.


SIGNATURES

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

Western Asset Premier Bond Fund

 

By   /s/    JANE TRUST        
  Jane Trust
  Chief Executive Officer

Date:

 

May 20, 2016

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:

 

May 20, 2016

By   /s/    RICHARD F. SENNETT        
  Richard F. Sennett
  Principal Financial Officer

Date:

 

May 20, 2016