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: 1-(888) 777-0102    

Date of fiscal year end: December 31

Date of reporting period: September 30, 2018

 

 

 


 

ITEM 1.

SCHEDULE OF INVESTMENTS.

 


WESTERN ASSET PREMIER BOND FUND

FORM N-Q

SEPTEMBER 30, 2018


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
CORPORATE BONDS & NOTES - 96.2%           
COMMUNICATION SERVICES - 15.2%           

Diversified Telecommunication Services - 4.0%

          

Cogent Communications Group Inc., Senior Secured Notes

     5.375     3/1/22        570,000      $ 581,400 (a)  

Orange SA, Senior Notes, Step Bond

     9.000     3/1/31        600,000        853,337  

Telefonica Emisiones SAU, Senior Notes

     5.134     4/27/20        2,000,000        2,056,280  

UPCB Finance IV Ltd., Senior Secured Notes

     5.375     1/15/25        400,000        400,500 (a)   

Verizon Communications Inc., Senior Notes

     5.150     9/15/23        1,180,000        1,264,513  

Windstream Services LLC/Windstream Finance Corp., Senior Notes

     10.500     6/30/24        1,480,000        1,272,800 (a)  
          

 

 

 

Total Diversified Telecommunication Services

             6,428,830  
          

 

 

 

Interactive Media & Services - 0.7%

          

Match Group Inc., Senior Notes

     5.000     12/15/27        1,155,000        1,155,116 (a)  
          

 

 

 

Media - 7.5%

          

21st Century Fox America Inc., Senior Notes

     8.875     4/26/23        400,000        482,562  

Altice France SA, Senior Secured Notes

     7.375     5/1/26        570,000        572,138 (a)   

Altice France SA, Senior Secured Notes

     8.125     2/1/27        2,200,000        2,271,500 (a)  

Altice Luxembourg SA, Senior Notes

     7.750     5/15/22        1,180,000        1,150,500 (a)  

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

     5.125     5/1/27        60,000        57,000 (a)   

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

     5.000     2/1/28        410,000        386,384 (a)   

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

     6.384     10/23/35        420,000        452,885  

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

     6.484     10/23/45        1,130,000        1,218,710  

Comcast Corp., Senior Notes

     7.050     3/15/33        1,000,000        1,244,095  

DISH DBS Corp., Senior Notes

     5.875     11/15/24        740,000        666,000  

DISH DBS Corp., Senior Notes

     7.750     7/1/26        1,320,000        1,250,106  

Time Warner Cable LLC, Senior Secured Notes

     7.300     7/1/38        720,000        826,978  

 

See Notes to Schedule of Investments.

 

1


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Media - (continued)

          

UPC Holding BV, Senior Secured Notes

     5.500     1/15/28        940,000      $ 894,476 (a)   

Virgin Media Finance PLC, Senior Notes

     6.000     10/15/24        770,000        773,411 (a)   
          

 

 

 

Total Media

             12,246,745  
          

 

 

 

Wireless Telecommunication Services - 3.0%

          

CSC Holdings LLC, Senior Notes

     6.625     10/15/25        610,000        644,312 (a)   

CSC Holdings LLC, Senior Notes

     10.875     10/15/25        201,000        234,165 (a)   

Sprint Capital Corp., Senior Notes

     6.875     11/15/28        420,000        423,150  

Sprint Capital Corp., Senior Notes

     8.750     3/15/32        30,000        33,825  

Sprint Communications Inc., Senior Notes

     9.000     11/15/18        500,000        503,725 (a)   

Sprint Communications Inc., Senior Notes

     7.000     8/15/20        260,000        272,350  

Sprint Communications Inc., Senior Notes

     11.500     11/15/21        280,000        329,700  

Sprint Corp., Senior Notes

     7.875     9/15/23        760,000        821,750  

VEON Holdings BV, Senior Notes

     5.950     2/13/23        570,000        576,544 (a)   

Vodafone Group PLC, Senior Notes

     4.375     5/30/28        1,130,000        1,115,477  
          

 

 

 

Total Wireless Telecommunication Services

             4,954,998  
          

 

 

 

TOTAL COMMUNICATION SERVICES

             24,785,689  
          

 

 

 
CONSUMER DISCRETIONARY - 6.5%           

Auto Components - 1.0%

          

Adient Global Holdings Ltd., Senior Notes

     4.875     8/15/26        230,000        205,562 (a)   

IHO Verwaltungs GmbH, Senior Secured Notes (4.750% Cash or 5.500% PIK)

     4.750     9/15/26        350,000        330,750 (a)(b)   

JB Poindexter & Co. Inc., Senior Notes

     7.125     4/15/26        550,000        573,375 (a)   

ZF North America Capital Inc., Senior Notes

     4.750     4/29/25        530,000        530,590 (a)   
          

 

 

 

Total Auto Components

             1,640,277  
          

 

 

 

Automobiles - 1.4%

          

Daimler Finance North America LLC, Senior Notes

     8.500     1/18/31        1,000,000        1,393,882  

General Motors Co., Senior Notes

     6.600     4/1/36        140,000        149,644  

General Motors Financial Co. Inc., Senior Notes

     4.350     1/17/27        750,000        717,757  
          

 

 

 

Total Automobiles

             2,261,283  
          

 

 

 

Diversified Consumer Services - 0.4%

          

Carriage Services Inc., Senior Notes

     6.625     6/1/26        550,000        565,125 (a)   
          

 

 

 

 

See Notes to Schedule of Investments.

 

2


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  

Hotels, Restaurants & Leisure - 2.6%

         

Brinker International Inc., Senior Notes

     5.000     10/1/24        1,611,000     $ 1,526,423 (a)  

Hilton Domestic Operating Co. Inc., Senior Notes

     5.125     5/1/26        1,020,000       1,020,000 (a)  

Marston’s Issuer PLC, Secured Notes (5.641% to 7/15/19 then
3 mo. GBP LIBOR + 2.550%)

     5.641     7/15/35        260,000 GBP       302,695 (c)(d)  

Silversea Cruise Finance Ltd., Senior Secured Notes

     7.250     2/1/25        348,000       380,190 (a)   

VOC Escrow Ltd., Senior Secured Notes

     5.000     2/15/28        1,110,000       1,072,304 (a)  
         

 

 

 

Total Hotels, Restaurants & Leisure

            4,301,612  
         

 

 

 

Household Durables - 0.1%

         

Lennar Corp., Senior Notes

     4.500     4/30/24        140,000       137,438  
         

 

 

 

Specialty Retail - 0.7%

         

Hertz Corp., Senior Notes

     5.875     10/15/20        640,000       640,000  

Party City Holdings Inc., Senior Notes

     6.625     8/1/26        500,000       507,500 (a)   
         

 

 

 

Total Specialty Retail

            1,147,500  
         

 

 

 

Textiles, Apparel & Luxury Goods - 0.3%

         

Hanesbrands Inc., Senior Notes

     4.625     5/15/24        550,000       537,281 (a)   
         

 

 

 

TOTAL CONSUMER DISCRETIONARY

            10,590,516  
         

 

 

 
CONSUMER STAPLES - 2.7%          

Beverages - 0.9%

         

Anheuser-Busch InBev Finance Inc., Senior Notes

     4.700     2/1/36        540,000       542,288  

Anheuser-Busch InBev Worldwide Inc., Senior Notes

     4.000     4/13/28        1,000,000       987,608  
         

 

 

 

Total Beverages

            1,529,896  
         

 

 

 

Food & Staples Retailing - 1.2%

         

CVS Health Corp. Pass-Through Trust, Secured Trust

     5.880     1/10/28        360,730       379,951  

CVS Health Corp. Pass-Through Trust, Secured Trust

     6.036     12/10/28        368,080       393,051  

CVS Health Corp. Pass-Through Trust, Secured Trust

     6.943     1/10/30        368,507       411,867  

CVS Health Corp. Pass-Through-Trust

     5.789     1/10/26        325,697       339,617 (a)   

CVS Health Corp. Pass-Through-Trust

     7.507     1/10/32        373,841       434,940 (a)   
         

 

 

 

Total Food & Staples Retailing

            1,959,426  
         

 

 

 

Food Products - 0.3%

         

Kraft Heinz Foods Co., Senior Notes

     3.950     7/15/25        440,000       434,227  
         

 

 

 

Household Products - 0.1%

         

Central Garden & Pet Co., Senior Notes

     6.125     11/15/23        250,000       259,063  
         

 

 

 

 

See Notes to Schedule of Investments.

 

3


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Tobacco - 0.2%

          

Reynolds American Inc., Senior Notes

     5.850     8/15/45        260,000      $ 283,729  
          

 

 

 

TOTAL CONSUMER STAPLES

             4,466,341  
          

 

 

 
ENERGY - 22.7%           

Oil, Gas & Consumable Fuels - 22.7%

          

Anadarko Finance Co., Senior Notes

     7.500     5/1/31        570,000        700,761  

Anadarko Petroleum Corp., Senior Notes

     5.550     3/15/26        750,000        797,000  

Apache Corp., Senior Notes

     4.250     1/15/44        250,000        222,434  

Berry Petroleum Co. Escrow

     —         —          130,000        0 *(e)(f)(g)  

Blue Racer Midstream LLC/Blue Racer Finance Corp., Senior Notes

     6.625     7/15/26        310,000        317,362 (a)   

BP Capital Markets PLC, Senior Notes

     3.723     11/28/28        410,000        406,426  

Burlington Resources Finance Co., Senior Notes

     7.400     12/1/31        450,000        585,621  

Chesapeake Energy Corp., Senior Notes

     5.375     6/15/21        320,000        320,000  

Chesapeake Energy Corp., Senior Notes

     8.000     1/15/25        230,000        237,763  

Continental Resources Inc., Senior Notes

     4.500     4/15/23        500,000        509,294  

Continental Resources Inc., Senior Notes

     3.800     6/1/24        270,000        265,112  

Continental Resources Inc., Senior Notes

     4.900     6/1/44        500,000        495,520  

Devon Energy Corp., Senior Notes

     3.250     5/15/22        500,000        491,630  

Ecopetrol SA, Senior Notes

     5.875     9/18/23        45,000        48,060  

Ecopetrol SA, Senior Notes

     4.125     1/16/25        2,260,000        2,197,850  

Ecopetrol SA, Senior Notes

     5.375     6/26/26        750,000        775,312  

Ecopetrol SA, Senior Notes

     5.875     5/28/45        2,510,000        2,491,802  

Enterprise Products Operating LLC, Senior Notes

     4.050     2/15/22        880,000        893,467  

EOG Resources Inc., Senior Notes

     3.150     4/1/25        2,250,000        2,182,331  

Genesis Energy LP/Genesis Energy Finance Corp., Senior Notes

     5.625     6/15/24        590,000        560,500  

Genesis Energy LP/Genesis Energy Finance Corp., Senior Notes

     6.500     10/1/25        210,000        204,225  

Genesis Energy LP/Genesis Energy Finance Corp., Senior Notes

     6.250     5/15/26        290,000        276,950  

KazMunayGas National Co. JSC, Senior Notes

     4.750     4/19/27        770,000        773,611 (a)   

Kinder Morgan Inc., Senior Notes

     7.750     1/15/32        190,000        240,616  

Kinder Morgan Inc., Senior Notes

     5.550     6/1/45        1,500,000        1,591,034  

Lukoil International Finance BV, Senior Notes

     4.750     11/2/26        1,200,000        1,188,714 (a)  

Magnum Hunter Resources Corp. Escrow

     —         —          960,000        0 *(e)(f)(g)  

MEG Energy Corp., Secured

     6.500     1/15/25        350,000        348,250 (a)   

 

See Notes to Schedule of Investments.

 

4


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Oil, Gas & Consumable Fuels - (continued)

          

MEG Energy Corp., Senior Notes

     6.375     1/30/23        860,000      $ 786,900 (a)  

MEG Energy Corp., Senior Notes

     7.000     3/31/24        150,000        137,625 (a)  

NGPL PipeCo LLC, Senior Notes

     7.768     12/15/37        490,000        602,700 (a)  

Noble Energy Inc., Senior Notes

     5.250     11/15/43        1,000,000        989,737  

Oasis Petroleum Inc., Senior Notes

     6.500     11/1/21        520,000        527,800  

Oasis Petroleum Inc., Senior Notes

     6.875     1/15/23        340,000        346,375  

Oasis Petroleum Inc., Senior Notes

     6.250     5/1/26        500,000        509,375 (a)  

Occidental Petroleum Corp., Senior Notes

     3.500     6/15/25        350,000        347,601  

Petrobras Global Finance BV, Senior Notes

     4.375     5/20/23        310,000        295,213  

Petrobras Global Finance BV, Senior Notes

     5.999     1/27/28        710,000        656,395  

Petrobras Global Finance BV, Senior Notes

     5.750     2/1/29        1,000,000        894,350  

Petrobras Global Finance BV, Senior Notes

     6.750     1/27/41        920,000        849,275  

Petroleos Mexicanos, Senior Notes

     6.500     3/13/27        450,000        460,800  

Range Resources Corp., Senior Notes

     4.875     5/15/25        380,000        361,475  

Rockies Express Pipeline LLC, Senior Notes

     7.500     7/15/38        350,000        418,250 (a)   

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.750     5/15/24        440,000        472,873  

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.000     3/15/27        1,850,000        1,901,543  

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

     5.125     2/1/25        460,000        465,750  

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

     5.375     2/1/27        200,000        201,000  

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

     5.000     1/15/28        1,310,000        1,280,525 (a)  

Transcontinental Gas Pipe Line Co., LLC, Senior Notes

     7.850     2/1/26        1,000,000        1,219,802  

Transportadora de Gas del Peru SA, Senior Notes

     4.250     4/30/28        1,500,000        1,477,500 (a)  

Transportadora de Gas del Sur SA, Senior Notes

     6.750     5/2/25        490,000        472,850 (a)   

Whiting Petroleum Corp., Senior Notes

     6.250     4/1/23        100,000        103,750  

 

See Notes to Schedule of Investments.

 

5


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Oil, Gas & Consumable Fuels - (continued)

          

Williams Cos. Inc., Senior Notes

     3.700     1/15/23        470,000      $ 465,747  

Williams Cos. Inc., Senior Notes

     4.550     6/24/24        60,000        61,033  

Williams Cos. Inc., Senior Notes

     7.500     1/15/31        443,000        539,890  

Williams Cos. Inc., Senior Notes

     8.750     3/15/32        39,000        52,147  

WPX Energy Inc., Senior Notes

     8.250     8/1/23        210,000        239,400  

YPF SA, Senior Notes

     6.950     7/21/27        800,000        702,760 (a)   
          

 

 

 

TOTAL ENERGY

             36,962,086  
          

 

 

 
FINANCIALS - 23.1%           

Banks - 17.2%

          

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

     5.875     3/15/28        350,000        346,063 (d)(h)   

Bank of America Corp., Senior Notes

     5.000     5/13/21        1,100,000        1,143,507  

Bank of America Corp., Subordinated Notes

     4.250     10/22/26        2,700,000        2,671,760  

Barclays Bank PLC, Subordinated Notes

     10.179     6/12/21        610,000        695,343 (a)   

Barclays Bank PLC, Subordinated Notes

     7.625     11/21/22        4,500,000        4,886,437  

Barclays PLC, Subordinated Notes

     5.200     5/12/26        500,000        492,135  

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

     7.375     8/19/25        510,000        536,749 (a)(d)(h)  

BPCE SA, Subordinated Notes

     5.150     7/21/24        1,000,000        1,018,295 (a)   

Citigroup Inc., Subordinated Notes

     3.500     5/15/23        500,000        492,351  

Citigroup Inc., Subordinated Notes

     4.450     9/29/27        800,000        791,626  

Citigroup Inc., Subordinated Notes

     6.625     6/15/32        1,000,000        1,182,745  

Cooperatieve Rabobank UA, Subordinated Notes

     4.375     8/4/25        500,000        495,860  

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

     8.125     12/23/25        1,080,000        1,190,685 (a)(d)(h)  

Intesa Sanpaolo SpA, Subordinated Notes

     5.017     6/26/24        1,950,000        1,761,782 (a)   

Intesa Sanpaolo SpA, Subordinated Notes

     5.710     1/15/26        540,000        491,942 (a)   

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

     6.000     8/1/23        2,800,000        2,915,500 (d)(h)  

JPMorgan Chase & Co., Subordinated Notes

     4.950     6/1/45        500,000        525,508  

 

See Notes to Schedule of Investments.

 

6


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Banks - (continued)

          

Lloyds Banking Group PLC, Subordinated Notes

     4.650     3/24/26        1,500,000      $ 1,476,118  

NatWest Markets NV, Subordinated Notes

     7.750     5/15/23        140,000        155,003  

Royal Bank of Scotland Group PLC, Junior Subordinated Notes (8.625% to 8/15/21 then USD 5 year Swap Rate + 7.598%)

     8.625     8/15/21        450,000        483,188 (d)(h)   

Royal Bank of Scotland Group PLC, Subordinated Notes

     6.000     12/19/23        150,000        156,222  

Royal Bank of Scotland Group PLC, Subordinated Notes

     5.125     5/28/24        1,330,000        1,332,630  

Santander UK Group Holdings PLC, Subordinated Notes

     5.625     9/15/45        1,000,000        1,036,766 (a)  

Santander UK PLC, Subordinated Notes

     5.000     11/7/23        510,000        514,922 (a)   

Standard Chartered PLC, Subordinated Notes

     5.700     3/26/44        300,000        311,730 (a)   

Wells Fargo & Co., Subordinated Notes

     4.300     7/22/27        1,000,000        998,024  
          

 

 

 

Total Banks

             28,102,891  
          

 

 

 

Capital Markets - 2.3%

          

Goldman Sachs Group Inc., Senior Notes

     5.250     7/27/21        800,000        837,927  

Goldman Sachs Group Inc., Senior Notes

     3.500     11/16/26        1,750,000        1,662,471  

Goldman Sachs Group Inc., Subordinated Notes

     6.750     10/1/37        1,000,000        1,205,018  
          

 

 

 

Total Capital Markets

             3,705,416  
          

 

 

 

Consumer Finance - 0.2%

          

Ally Financial Inc., Senior Notes

     8.000     3/15/20        282,000        299,625  
          

 

 

 

Diversified Financial Services - 2.9%

          

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

     4.625     7/1/22        230,000        234,875  

Ahold Lease USA Inc. Pass-Through-Trust, 2001, A-2

     8.620     1/2/25        686,921        786,211  

DAE Funding LLC, Senior Notes

     5.000     8/1/24        1,986,000        1,948,763 (a)   

International Lease Finance Corp., Senior Notes

     6.250     5/15/19        80,000        81,568  

International Lease Finance Corp., Senior Notes

     5.875     8/15/22        1,200,000        1,270,500  

Travelport Corporate Finance PLC, Senior Secured Notes

     6.000     3/15/26        422,000        429,668 (a)   
          

 

 

 

Total Diversified Financial Services

             4,751,585  
          

 

 

 

 

See Notes to Schedule of Investments.

 

7


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Insurance - 0.5%

          

MetLife Inc., Junior Subordinated Notes

     10.750     8/1/39        500,000      $ 768,750  
          

 

 

 

TOTAL FINANCIALS

             37,628,267  
          

 

 

 
HEALTH CARE - 6.4%           

Biotechnology - 0.1%

          

Celgene Corp., Senior Notes

     4.625     5/15/44        250,000        236,121  
          

 

 

 

Health Care Providers & Services - 2.9%

          

Centene Corp., Senior Notes

     5.625     2/15/21        280,000        285,600  

Centene Corp., Senior Notes

     6.125     2/15/24        220,000        231,550  

Centene Corp., Senior Notes

     4.750     1/15/25        810,000        810,000  

DaVita Inc., Senior Notes

     5.750     8/15/22        270,000        275,967  

DaVita Inc., Senior Notes

     5.000     5/1/25        250,000        239,688  

HCA Inc., Senior Secured Notes

     5.250     6/15/26        280,000        288,750  

HCA Inc., Senior Secured Notes

     4.500     2/15/27        1,000,000        981,250  

Humana Inc., Senior Notes

     3.950     3/15/27        290,000        285,548  

Magellan Health Inc., Senior Notes

     4.400     9/22/24        1,000,000        967,479  

RegionalCare Hospital Partners Holdings Inc., Senior Secured Notes

     8.250     5/1/23        360,000        379,800 (a)   
          

 

 

 

Total Health Care Providers & Services

             4,745,632  
          

 

 

 

Pharmaceuticals - 3.4%

          

Allergan Funding SCS, Senior Notes

     3.800     3/15/25        500,000        490,315  

Bausch Health Cos. Inc., Senior Notes

     6.125     4/15/25        1,490,000        1,419,225 (a)  

Teva Pharmaceutical Finance Co. BV, Senior Notes

     3.650     11/10/21        70,000        67,852  

Teva Pharmaceutical Finance Netherlands III BV, Senior Notes

     2.200     7/21/21        3,758,000        3,533,752  
          

 

 

 

Total Pharmaceuticals

             5,511,144  
          

 

 

 

TOTAL HEALTH CARE

             10,492,897  
          

 

 

 
INDUSTRIALS - 7.7%           

Aerospace & Defense - 1.1%

          

BBA US Holdings Inc., Senior Notes

     5.375     5/1/26        600,000        602,250 (a)   

Boeing Co., Senior Notes

     6.125     2/15/33        600,000        737,118  

BWX Technologies Inc., Senior Notes

     5.375     7/15/26        410,000        412,563 (a)   
          

 

 

 

Total Aerospace & Defense

             1,751,931  
          

 

 

 

Airlines - 2.0%

          

Airbus SAS Pass-Through Trust

     8.027     10/1/19        174,101        177,474 (a)   

America West Airlines Inc. Pass-Through-Trust

     8.057     7/2/20        868,194        926,351  

Continental Airlines 1999-1 Class A Pass Through Trust, Senior Secured Notes

     6.545     2/2/19        246,733        249,672  

 

See Notes to Schedule of Investments.

 

8


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Airlines - (continued)

          

Continental Airlines 2000-1 Class A-1 Pass Through Trust

     8.048     11/1/20        171,689      $ 178,230 (f)  

Continental Airlines 2001-1 Class A-1 Pass-Through Trust

     6.703     6/15/21        87,239        93,346  

Delta Air Lines 2007-1 Class B Pass Through Trust, Senior Secured Notes

     8.021     8/10/22        68,728        75,505 (f)   

Northwest Airlines 1999-2 Class A Pass-Through Trust

     7.575     3/1/19        28,914        29,275  

United Airlines 2014-1 Class B Pass-Through Trust

     4.750     4/11/22        253,673        254,307 (f)   

US Airways 2011-1 Class A Pass Through Trust

     7.125     10/22/23        1,180,783        1,308,372  
          

 

 

 

Total Airlines

             3,292,532  
          

 

 

 

Building Products - 1.6%

          

Standard Industries Inc., Senior Notes

     5.000     2/15/27        1,840,000        1,736,500 (a)  

Standard Industries Inc., Senior Notes

     4.750     1/15/28        991,000        919,103 (a)   
          

 

 

 

Total Building Products

             2,655,603  
          

 

 

 

Diversified Consumer Services - 0.1%

          

frontdoor Inc., Senior Notes

     6.750     8/15/26        70,000        72,275 (a)   
          

 

 

 

Machinery - 1.2%

          

Allison Transmission Inc., Senior Notes

     4.750     10/1/27        1,980,000        1,873,575 (a)  
          

 

 

 

Professional Services - 0.6%

          

IHS Markit Ltd., Senior Notes

     5.000     11/1/22        1,000,000        1,034,600 (a)  
          

 

 

 

Trading Companies & Distributors - 1.1%

          

Ashtead Capital Inc., Secured Notes

     4.125     8/15/25        670,000        639,850 (a)   

Ashtead Capital Inc., Secured Notes

     4.375     8/15/27        1,280,000        1,219,200 (a)  
          

 

 

 

Total Trading Companies & Distributors

             1,859,050  
          

 

 

 

TOTAL INDUSTRIALS

             12,539,566  
          

 

 

 
INFORMATION TECHNOLOGY - 2.4%           

IT Services - 0.4%

          

DXC Technology Co., Senior Notes

     7.450     10/15/29        500,000        601,786  
          

 

 

 

Semiconductors & Semiconductor Equipment - 0.4%

 

       

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

     3.125     1/15/25        750,000        697,775  
          

 

 

 

Software - 0.7%

          

CDK Global Inc., Senior Notes

     5.875     6/15/26        620,000        640,385  

j2 Cloud Services LLC/j2 Global Co-Obligor Inc., Senior Notes

     6.000     7/15/25        520,000        536,250 (a)   
          

 

 

 

Total Software

             1,176,635  
          

 

 

 

 

See Notes to Schedule of Investments.

 

9


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Technology Hardware, Storage & Peripherals - 0.9%

 

       

Seagate HDD Cayman, Senior Notes

     4.750     1/1/25        1,220,000      $ 1,171,326  

Seagate HDD Cayman, Senior Notes

     4.875     6/1/27        260,000        243,679  
          

 

 

 

Total Technology Hardware, Storage & Peripherals

 

          1,415,005  
          

 

 

 

TOTAL INFORMATION TECHNOLOGY

             3,891,201  
          

 

 

 
MATERIALS - 5.9%           

Chemicals - 1.1%

          

Braskem America Finance Co., Senior Notes

     7.125     7/22/41        920,000        1,066,372 (c)  

Braskem Finance Ltd., Senior Notes

     5.375     5/2/22        230,000        234,888 (a)   

Valvoline Inc., Senior Notes

     4.375     8/15/25        550,000        512,187  
          

 

 

 

Total Chemicals

             1,813,447  
          

 

 

 

Containers & Packaging - 0.9%

          

ARD Securities Finance SARL, Senior Secured Notes (8.750% PIK)

     8.750     1/31/23        512,390        514,952 (a)(b)  

Pactiv LLC, Senior Notes

     7.950     12/15/25        50,000        53,750  

Suzano Austria GmbH, Senior Notes

     5.750     7/14/26        950,000        960,687 (a)   
          

 

 

 

Total Containers & Packaging

             1,529,389  
          

 

 

 

Metals & Mining - 3.5%

          

Alcoa Nederland Holding BV, Senior Notes

     6.750     9/30/24        300,000        318,750 (a)   

Alcoa Nederland Holding BV, Senior Notes

     7.000     9/30/26        560,000        604,100 (a)   

Alcoa Nederland Holding BV, Senior Notes

     6.125     5/15/28        400,000        412,000 (a)   

Anglo American Capital PLC, Senior Notes

     4.125     9/27/22        210,000        210,320 (a)   

ArcelorMittal, Senior Notes

     7.000     10/15/39        430,000        501,275  

Freeport-McMoRan Inc., Senior Notes

     6.875     2/15/23        630,000        674,100  

Freeport-McMoRan Inc., Senior Notes

     4.550     11/14/24        400,000        390,000  

Freeport-McMoRan Inc., Senior Notes

     5.450     3/15/43        800,000        732,000  

Teck Resources Ltd., Senior Notes

     8.500     6/1/24        470,000        515,825 (a)   

Teck Resources Ltd., Senior Notes

     6.250     7/15/41        210,000        221,550  

Vale Overseas Ltd., Senior Notes

     6.875     11/10/39        940,000        1,105,910  
          

 

 

 

Total Metals & Mining

             5,685,830  
          

 

 

 

Paper & Forest Products - 0.4%

          

Schweitzer-Mauduit International Inc., Senior Notes

     6.875     10/1/26        600,000        613,500 (a)   
          

 

 

 

TOTAL MATERIALS

             9,642,166  
          

 

 

 

 

See Notes to Schedule of Investments.

 

10


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
REAL ESTATE - 1.3%           

Equity Real Estate Investment Trusts (REITs) - 1.1%

 

       

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

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

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

     5.250     8/1/26        1,560,000        1,558,050  
          

 

 

 

Total Equity Real Estate Investment Trusts (REITs)

 

          1,831,050  
          

 

 

 

Real Estate Management & Development - 0.2%

 

       

WeWork Cos. Inc., Senior Notes

     7.875     5/1/25        360,000        350,687 (a)   
          

 

 

 

TOTAL REAL ESTATE

             2,181,737  
          

 

 

 
UTILITIES - 2.3%           

Electric Utilities - 1.8%

          

FirstEnergy Corp., Senior Notes

     7.375     11/15/31        1,770,000        2,289,753  

Pampa Energia SA, Senior Notes

     7.400     7/21/23        670,000        624,782 (c)   
          

 

 

 

Total Electric Utilities

             2,914,535  
          

 

 

 

Independent Power and Renewable Electricity Producers - 0.5%

 

     

Minejesa Capital BV, Senior Secured Notes

     4.625     8/10/30        810,000        746,438 (a)   
          

 

 

 

TOTAL UTILITIES

             3,660,973  
          

 

 

 

TOTAL CORPORATE BONDS & NOTES
(Cost - $148,932,905)

 

          156,841,439  
          

 

 

 
SENIOR LOANS - 20.5%           
COMMUNICATION SERVICES - 2.8%           

Diversified Telecommunication Services - 0.2%

 

       

Level 3 Financing Inc., Tranche B 2024 Term Loan (1 mo. LIBOR + 2.250%)

     4.432     2/22/24        250,000        250,885 (d)(i)(j)  
          

 

 

 

Media - 2.6%

          

Charter Communications Operating LLC, Term Loan B
(1 mo. LIBOR + 2.000%)

     4.250     4/30/25        1,836,786        1,841,483 (d)(i)(j)  

Lamar Media Corp., Term Loan B (1 mo. LIBOR + 1.750%)

     3.938     3/14/25        2,437,750        2,449,432 (d)(i)(j)  
          

 

 

 

Total Media

             4,290,915  
          

 

 

 

TOTAL COMMUNICATION SERVICES

             4,541,800  
          

 

 

 
CONSUMER DISCRETIONARY - 8.4%           

Auto Components - 0.2%

          

American Axle & Manufacturing Inc., Tranche B Term Loan (1 mo. LIBOR + 2.250%)

     4.450-4.470     4/6/24        303,449        303,924 (d)(i)(j)   
          

 

 

 

Diversified Consumer Services - 0.4%

          

Weight Watchers International Inc., Initial Term Loan
(1 mo. LIBOR + 4.750%)

     6.860-7.090     11/29/24        673,750        682,382 (d)(i)(j)   
          

 

 

 

 

See Notes to Schedule of Investments.

 

11


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Hotels, Restaurants & Leisure - 5.9%

          

Aramark Services Inc., US Term Loan B3 (3 mo. LIBOR + 1.750%)

     4.084     3/11/25        3,326,635      $ 3,337,446 (d)(i)(j)  

Hilton Worldwide Finance LLC, Series B-2 Term Loan (1 mo. LIBOR + 1.750%)

     3.966     10/25/23        3,653,873        3,672,153 (d)(i)(j)(k)  

Las Vegas Sands LLC, Term Loan B (1 mo. LIBOR + 1.750%)

     3.992     3/27/25        1,239,373        1,239,796 (d)(i)(j)  

Wyndham Hotels & Resorts Inc., Term Loan B (1 mo. LIBOR + 1.750%)

     3.992     5/30/25        1,410,000        1,415,993 (d)(i)(j)  
          

 

 

 

Total Hotels, Restaurants & Leisure

             9,665,388  
          

 

 

 

Specialty Retail - 1.9%

          

PetSmart Inc., Term Loan B-2 (1 mo. LIBOR + 3.000%)

     5.120     3/11/22        2,231,639        1,964,773 (d)(i)(j)  

Sally Holdings LLC, Term Loan B1 (1 mo. LIBOR + 2.250%)

     4.330     7/5/24        1,030,300        1,025,148 (d)(f)(i)(j)(k)  
          

 

 

 

Total Specialty Retail

             2,989,921  
          

 

 

 

TOTAL CONSUMER DISCRETIONARY

             13,641,615  
          

 

 

 
FINANCIALS - 0.6%           

Diversified Financial Services - 0.6%

          

Travelport Finance (Luxembourg) SARL, Initial Term Loan
(3 mo. LIBOR + 2.500%)

     4.814     3/17/25        915,072        916,444 (d)(i)(j)  
          

 

 

 
HEALTH CARE - 1.1%           

Health Care Providers & Services - 1.1%

          

DaVita Healthcare Partner, Tranche B Term Loan (1 mo. LIBOR + 2.750%)

     4.992     6/24/21        1,732,563        1,742,309 (d)(i)(j)  
          

 

 

 
INDUSTRIALS - 4.0%           

Air Freight & Logistics - 3.5%

          

Avolon TLB Borrower 1 (US) LLC, Term Loan B3 (1 mo. LIBOR + 2.000%)

     4.165     1/15/25        4,229,356        4,247,868 (d)(i)(j)  

Delos Finance SARL, 2018 Term Loan (1 mo. LIBOR + 1.750%)

     4.136     10/6/23        1,500,000        1,507,769 (d)(i)(j)  
          

 

 

 

Total Air Freight & Logistics

             5,755,637  
          

 

 

 

Trading Companies & Distributors - 0.5%

          

Beacon Roofing Supply Inc., Initial Term Loan (1 mo. LIBOR + 2.250%)

     4.383     1/2/25        796,000        795,502 (d)(i)(j)  
          

 

 

 

TOTAL INDUSTRIALS

             6,551,139  
          

 

 

 
INFORMATION TECHNOLOGY - 2.1%           

Software - 0.9%

          

Dell International LLC, Refinancing Term Loan A2 (1 mo. LIBOR + 1.750%)

     4.000     9/7/21        1,425,240        1,427,133 (d)(i)(j)  
          

 

 

 

 

See Notes to Schedule of Investments.

 

12


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  

Technology Hardware, Storage & Peripherals - 1.2%

 

      

Western Digital Corp., New Term Loan B4 (1 mo. LIBOR + 1.750%)

     3.992     4/29/23        1,990,000     $ 1,996,211 (d)(i)(j)  
         

 

 

 

TOTAL INFORMATION TECHNOLOGY

            3,423,344  
         

 

 

 
MATERIALS - 1.4%          

Containers & Packaging - 1.4%

         

Berry Global Inc., Term Loan Q (1 mo. LIBOR + 2.000%)

     4.186     10/1/22        1,878,401       1,883,163 (d)(i)(j)  

Reynolds Group Holdings Inc., Incremental US Term Loan (1 mo. LIBOR + 2.750%)

     4.992     2/5/23        496,212       499,037 (d)(i)(j)  
         

 

 

 

TOTAL MATERIALS

            2,382,200  
         

 

 

 
UTILITIES - 0.1%          

Electric Utilities - 0.1%

         

Panda Temple Power LLC, Second Lien Term Loan
(1 mo. LIBOR + 8.000% PIK)

     10.148     2/7/23        156,924       158,101 (b)(d)(f)(i)(j)  
         

 

 

 

TOTAL SENIOR LOANS
(Cost - $33,512,115)

            33,356,952  
         

 

 

 
SOVEREIGN BONDS - 6.5%          

Argentina - 0.9%

         

Argentina POM Politica Monetaria, Bonds (Argentina Central Bank 7 Day Repo Reference Rate)

     43.077     6/21/20        8,140,000 ARS       233,613 (d)   

Argentine Republic Government International Bond, Senior Notes

     5.875     1/11/28        1,020,000       809,880  

Provincia de Buenos Aires, Senior Notes

     9.125     3/16/24        500,000       462,950 (a)   
         

 

 

 

Total Argentina

            1,506,443  
         

 

 

 

Brazil - 0.6%

         

Brazil Notas do Tesouro Nacional Series F, Notes

     10.000     1/1/23        3,800,000 BRL       918,614  
         

 

 

 

Colombia - 0.8%

         

Colombia Government International Bond, Senior Notes

     4.500     1/28/26        1,250,000       1,276,094  
         

 

 

 

Indonesia - 2.0%

         

Indonesia Government International Bond, Senior Notes

     4.125     1/15/25        1,000,000       986,070 (a)   

Indonesia Government International Bond, Senior Notes

     3.850     7/18/27        1,670,000       1,594,175 (a)  

Indonesia Government International Bond, Senior Notes

     3.500     1/11/28        750,000       699,019  
         

 

 

 

Total Indonesia

            3,279,264  
         

 

 

 

 

See Notes to Schedule of Investments.

 

13


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  

Mexico - 0.8%

         

Mexican Bonos, Bonds

     6.500     6/9/22        7,990,000 MXN     $ 410,161  

Mexico Government International Bond, Senior Notes

     3.750     1/11/28        1,000,000       954,250  
         

 

 

 

Total Mexico

            1,364,411  
         

 

 

 

Peru - 0.6%

         

Peruvian Government International Bond, Senior Notes

     7.350     7/21/25        750,000       921,382  
         

 

 

 

Russia - 0.8%

         

Russian Federal Bond - OFZ, Bonds

     7.050     1/19/28        97,605,000 RUB       1,365,264  
         

 

 

 

TOTAL SOVEREIGN BONDS
(Cost - $10,990,602)

            10,631,472  
         

 

 

 
ASSET-BACKED SECURITIES - 4.6%          

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

     3.116     7/25/46        517,327       246,468 (a)(d)  

Argent Securities Inc., Pass-Through Certificates Series, 2003-W3, M1 (1 mo. USD LIBOR + 1.125%)

     3.341     9/25/33        32,125       32,149 (d)   

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

     3.016     3/25/37        613,323       592,086 (a)(d)  

Bayview Financial Asset Trust, 2007-SR1A M3 (1 mo. LIBOR + 1.150%)

     3.366     3/25/37        232,640       228,323 (a)(d)  

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

     3.716     3/25/37        63,447       63,755 (a)(d)(f)  

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

     0.000     8/25/36        280,233       236,950  

ContiMortgage Home Equity Loan Trust, 201997-4, B1F

     7.330     10/15/28        52,399       95,804 (d)   

Countrywide Asset-Backed Certificates, 2004-3, 3A3 (1 mo. USD LIBOR + 0.760%)

     2.976     8/25/34        248,126       250,203 (d)   

Countrywide Asset-Backed Certificates, 2007-13, 2A1 (1 mo. USD LIBOR + 0.900%)

     3.116     10/25/47        513,043       513,359 (d)   

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

     3.216     8/25/47        10,965       10,818 (a)(d)   

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

     2.640     2/27/35        436,933       416,426 (a)(d)  

Firstfed Corp. Manufactured Housing Contract, 201996-1, B

     8.060     10/15/22        177,679       3,586 (a)   

 

See Notes to Schedule of Investments.

 

14


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

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

GSAA Home Equity Trust, 2004-8, A3A (1 mo. USD LIBOR + 0.740%)

     2.956     9/25/34        12,873      $ 12,913 (d)  

GSAMP Trust, 2003-SEA2, A1

     4.421     7/25/33        734,494        729,612  

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

     6.970     2/25/28        61,338        62,277  

Manufactured Housing Contract Pass-Through Certificates Trust, 2001-2 IA2 (Auction Rate Security)

     5.631     2/20/32        225,000        226,165 (d)  

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

     3.116     8/25/34        1,505,578        1,526,005 (d)  

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

     3.216     3/25/33        9,654        9,542 (d)  

Oakwood Mortgage Investors Inc., 2002-B, A3

     6.060     6/15/32        93,590        99,388 (d)  

Origen Manufactured Housing Contract Trust, 2006-A A2

     3.953     10/15/37        1,043,942        983,680 (d)  

Origen Manufactured Housing Contract Trust, 2007-A A2

     4.538     4/15/37        1,261,096        1,243,530 (d)  
          

 

 

 

TOTAL ASSET-BACKED SECURITIES
(Cost - $6,140,226)

 

          7,583,039  
          

 

 

 
COLLATERALIZED MORTGAGE OBLIGATIONS(l) - 1.8%           

Banc of America Funding Trust, 2004-B 6A1

     2.355     12/20/34        199,607        161,138 (d)  

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

     2.856     4/25/34        153,405        153,738 (d)  

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

     2.756     3/25/35        426,607        411,778 (d)  

Fannie Mae Trust, 2004-W15, 1A2

     6.500     8/25/44        111,660        122,395  

HarborView Mortgage Loan Trust, 2004-10, 4A

     4.199     1/19/35        86,376        85,844 (d)  

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

     2.856     3/25/35        139,506        129,727 (d)  

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

     3.016     4/25/35        43,517        42,135 (d)  

MAFI II Remic Trust 1998-B, 201998-BI, B1

     6.874     11/20/24        298,893        278,083 (d)  

MERIT Securities Corp., 2011PA, 3A1 (1 mo. LIBOR + 0.620%)

     2.862     4/28/27        54,542        53,567 (a)(d)  

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

     4.492     9/28/32        564,608        502,372 (a)(d)  

 

See Notes to Schedule of Investments.

 

15


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

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

 

       

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

     1.743     10/25/32        1,497,403      $ 118,616 (d)  

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

     1.061     7/25/34        2,570,268        99,956 (d)   

RAMP Series Trust, 2005-SL2, APO

     0.000     2/25/32        4,218        3,446  

Regal Trust IV (11th District Cost of Funds + 1.500%)

     2.434     9/29/31        3,403        3,209 (a)(d)   

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

     3.179     6/20/33        14,336        14,328 (d)   

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

     2.785     11/20/34        9,458        9,407 (d)   

Structured Asset Securities Corp., 1998-RF2, A

     5.062     7/15/27        126,241        123,563 (a)(d)  

Structured Asset Securities Corp. Mortgage Loan Trust, 2002-9, A2 (1 mo. USD LIBOR + 0.600%)

     2.816     10/25/27        182,361        180,738 (d)   

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

     4.153     3/25/33        74,853        74,892 (d)   

WaMu Mortgage Pass-Through Certificates Series Trust, 2004-AR6, A (1 mo. USD LIBOR + 0.420%)

     2.636     5/25/44        196,688        200,455 (d)   

WaMu Mortgage Pass-Through Certificates Series Trust, 2004-AR12, A2A (1 mo. USD LIBOR + 0.780%)

     2.996     10/25/44        180,944        182,758 (d)   

Washington Mutual MSC Mortgage Pass-Through Certificates Series Trust, 2004-RA1, 2A

     7.000     3/25/34        8,756        9,563  
          

 

 

 

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost - $2,343,322)

 

        2,961,708  
          

 

 

 
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 1.5%

 

       

U.S. Government Obligations - 1.5%

          

U.S. Treasury Notes

     1.375     5/31/21        500,000        480,938  

U.S. Treasury Notes

     2.125     8/15/21        500,000        489,697  

U.S. Treasury Notes

     2.125     11/30/23        500,000        480,156  

U.S. Treasury Notes

     2.125     3/31/24        500,000        478,711  

U.S. Treasury Notes

     1.875     12/15/20        450,000        440,780  
          

 

 

 

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost - $2,386,984)

 

        2,370,282  
          

 

 

 

 

See Notes to Schedule of Investments.

 

16


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE            SHARES      VALUE  
PREFERRED STOCKS - 1.3%           
FINANCIALS - 1.3%           

Diversified Financial Services - 1.3%

          

Citigroup Capital XIII (3 mo. USD LIBOR + 6.370%)

     8.709        75,725      $ 2,033,216 (d)  

Corporate Backed Trust Certificates

     7.375        33,900        3 *(e)(f)  
          

 

 

 

TOTAL FINANCIALS

             2,033,219  
          

 

 

 
INDUSTRIALS - 0.0%           

Marine - 0.0%

          

Tricer Tracking Preferred Equity Certificates (8.000% PIK)

     8.000        2,233,838        22,339 (b)(e)(f)  
          

 

 

 

TOTAL PREFERRED STOCKS
(Cost - $2,153,801)

             2,055,558  
          

 

 

 
           MATURITY
DATE
     FACE
AMOUNT†
        
CONVERTIBLE BONDS & NOTES - 0.9%           
COMMUNICATION SERVICES - 0.9%           

Interactive Media & Services - 0.1%

          

Twitter Inc., Senior Notes

     1.000     9/15/21        250,000        230,784  
          

 

 

 

Media - 0.8%

          

DISH Network Corp., Senior Notes

     2.375     3/15/24        1,375,000        1,223,866  
          

 

 

 

TOTAL CONVERTIBLE BONDS & NOTES
(Cost - $1,409,544)

 

          1,454,650  
          

 

 

 
                  SHARES         
COMMON STOCKS - 0.4%           
ENERGY - 0.3%           

Energy Equipment & Services - 0.0%

          

Hercules Offshore Inc. (Escrow)

          16,942        4,777 *(e)(f)  
          

 

 

 

Oil, Gas & Consumable Fuels - 0.3%

          

Berry Petroleum Corp.

          11,312        193,096 *(e) 

Blue Ridge Mountain Resources Inc.

          52,812        264,060 *(e)(f) 
          

 

 

 

Total Oil, Gas & Consumable Fuels

             457,156  
          

 

 

 

TOTAL ENERGY

             461,933  
          

 

 

 
INDUSTRIALS - 0.0%           

Marine - 0.0%

          

Tricer HoldCo, S.C.A.

          4,654        17,034 *(e)(f) 
          

 

 

 
UTILITIES - 0.1%           

Electric Utilities - 0.1%

          

Panda Temple Power LLC

          10,597        255,653 *(e)(f) 
          

 

 

 

TOTAL COMMON STOCKS
(Cost - $2,320,509)

             734,620  
          

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS
(Cost - $210,190,008)

 

     217,989,720  
          

 

 

 

 

See Notes to Schedule of Investments.

 

17


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

SECURITY

   RATE     SHARES      VALUE  
SHORT-TERM INVESTMENTS - 0.1%        

Western Asset Government Cash Management Portfolio LLC
(Cost - $101,741)

     2.100     101,741      $ 101,741 (m)  
       

 

 

 

TOTAL INVESTMENTS** - 133.8%
(Cost - $210,291,749)

 

       218,091,461  

Liabilities in Excess of Other Assets - (33.8)%

          (55,093,882
       

 

 

 

TOTAL NET ASSETS - 100.0%

        $ 162,997,579  
       

 

 

 

 

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

 

*

Non-income producing security.

 

**

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

 

(a)

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

 

(b)

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.

 

(c)

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.

 

(d)

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.

 

(e)

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

 

(f)

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

 

(g)

Value is less than $1.

 

(h)

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

 

(i)

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

 

(j)

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.

 

(k)

All or a portion of this loan is unfunded as of September 30, 2018. The interest rate for fully unfunded term loans is to be determined.

 

(l)

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.

 

(m)

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. At September 30, 2018, the total market value of investments in Affiliated Companies was $101,741 and the cost was $101,741 (Note 2).

 

See Notes to Schedule of Investments.

 

18


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    September 30, 2018

 

Abbreviations used in this schedule:

 

ARS    — Argentine Peso
BRL    — Brazilian Real
GBP    — British Pound
IO    — Interest Only
JSC    — Joint Stock Company
LIBOR    — London Interbank Offered Rate
MXN    — Mexican Peso
PIK    Payment-In-Kind
PO    — Principal Only
RUB    — Russian Ruble

At September 30, 2018, the Fund had the following open forward foreign currency contracts:

 

Currency
Purchased
     Currency
Sold
    

Counterparty

   Settlement
Date
     Unrealized
Appreciation
(Depreciation)
 
GBP      7,000        USD        8,952      Barclays Bank PLC      10/18/18      $ 180  
GBP      300,000        USD        384,252      Barclays Bank PLC      10/18/18        7,123  
GBP      1,006,461        USD        1,324,752      Barclays Bank PLC      10/18/18        (11,738
USD      1,939,983        GBP        1,462,200      Barclays Bank PLC      10/18/18        32,418  
                 

 

 

 
Total                   $ 27,983  
                 

 

 

 

Abbreviations used in this table:

 

GBP    — British Pound
USD    — United States Dollar

This Schedule of Investments is unaudited and is intended to provide information about the Fund’s investments 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.

 

19


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. 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.

 

20


Notes to Schedule of Investments (unaudited) (continued)

 

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.

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.

 

21


Notes to Schedule of Investments (unaudited) (continued)

 

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

     —        $ 36,962,086      $ 0   $ 36,962,086  

Industrials

     —          12,031,524        508,042       12,539,566  

Other Corporate Bonds & Notes

     —          107,339,787        —         107,339,787  

Senior Loans:

 

Consumer Discretionary

     —          12,616,467        1,025,148       13,641,615  

Utilities

     —          —          158,101       158,101  

Other Senior Loans

     —          19,557,236        —         19,557,236  

Sovereign Bonds

     —          10,631,472        —         10,631,472  

Asset-Backed Securities

     —          7,519,284        63,755       7,583,039  

Collateralized Mortgage Obligations

     —          2,961,708        —         2,961,708  

U.S. Government & Agency Obligations

     —          2,370,282        —         2,370,282  

Preferred Stocks:

          

Financials

   $ 2,033,216        —          3       2,033,219  

Industrials

     —          —          22,339       22,339  

Convertible Bonds & Notes

     —          1,454,650        —         1,454,650  

Common Stocks:

          

Energy

     —          193,096        268,837       461,933  

Industrials

     —          —          17,034       17,034  

Utilities

     —          —          255,653       255,653  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total Long-Term Investments

     2,033,216        213,637,592        2,318,912       217,989,720  
  

 

 

    

 

 

    

 

 

   

 

 

 

Short-Term Investments†

     —          101,741        —         101,741  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total Investments

   $ 2,033,216      $ 213,739,333      $ 2,318,912     $ 218,091,461  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other Financial Instruments:

          

Forward Foreign Currency Contracts

     —        $ 39,721        —       $ 39,721  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 2,033,216      $ 213,779,054      $ 2,318,912     $ 218,131,182  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

22


Notes to Schedule of Investments (unaudited) (continued)

 

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

     —        $ 11,738        —        $ 11,738  

 

See Schedule of Investments for additional detailed categorizations.

 

*

Amount represents less than $1.

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

 

Investments in Securities

   Balance
as of
December 31,
2017
    Accrued
premiums/
discounts
    Realized
gain
(loss)
    Change  in
unrealized
appreciation
(depreciation)1
    Purchases  

Corporate Bonds & Notes:

          

Energy

   $ 0     —         —         —         —    

Industrials

     627,306     $ (46   $ (22   $ (10,770     —    

Senior Loans:

          

Consumer Discretionary

     968,784       (5,251     (21     (390   $ 69,301  

Energy

     84,928       (694     (5,782     21,463       —    

Utilities

     —         (3,180     —         (33,525     194,806  

Asset-Backed Securities

     —         —         —         —         —    

Preferred Stocks:

          

Financials

     3       —         —         —         —    

Industrials

     20,685       —         —         —         1,654  

Common Stocks:

          

Energy

     4,778       —         —         —         —    

Industrials

     13,543       —         —         3,491       —    

Utilities

     —         —         —         22,559       233,094  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 1,720,027     $ (9,171   $ (5,825   $ 2,828     $ 498,855  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

23


Notes to Schedule of Investments (unaudited) (continued)

 

Investments in Securities (cont’d)

   Sales     Transfers
into
Level 32
     Transfers
out of
Level 33
    Balance
as of
September 30,
2018
    Net change
in  unrealized
appreciation
(depreciation)
for
investments
in securities
still held  at
September 30,
20181
 

Corporate Bonds & Notes:

           

Energy

     —         —          —       $ 0     —    

Industrials

   $ (366,797   $ 508,042      $ (249,671     508,042       —    

Senior Loans:

           

Consumer Discretionary

     (7,275     —          —         1,025,148     $ (390

Energy

     (99,915     —          —         —         —    

Utilities

     —         —          —         158,101       (33,525

Asset-Backed Securities

     —         63,755        —         63,755       —    

Preferred Stocks:

           

Financials

     —         —          —         3       —    

Industrials

     —         —          —         22,339       —    

Common Stocks:

           

Energy

     —         264,059        —         268,837       —    

Industrials

     —         —          —         17,034       3,491  

Utilities

     —         —          —         255,653       22,559  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total

   $ (473,987   $ 835,856      $ (249,671   $ 2,318,912     $ (7,865
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

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

 

*

Amount represents less than $1.

 

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.

2. Transactions with affiliated companies

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. The Fund may invest in Western Asset Government Cash Management Portfolio, LLC (“Cash Management Portfolio”), an affiliated private money market fund managed by Western Asset, the Fund’s investment adviser. Cash Management Portfolio is available as a

 

24


Notes to Schedule of Investments (unaudited) (continued)

 

cash management vehicle for certain proprietary investment companies affiliated with Legg Mason. While Cash Management Portfolio is not a registered money market fund, it conducts all of its investment activities in accordance with the requirements of Rule 2a-7 under the 1940 Act. Based on the Fund’s relative ownership, the following companies were considered affiliated companies for all or some portion of the period ended September 30, 2018. The following transactions were effected in shares of such companies for the period ended September 30, 2018.

 

     Affiliate
Value at
December 31,
2017
     Purchased      Sold      Realized
Gain (Loss)
     Interest
Income
     Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
     Affiliate
Value at
September 30,
2018
 
     Cost      Shares      Cost      Shares  
Western Asset Government Cash Management Portfolio LLC    $ 200,000      $ 42,411,330        42,411,330      $ 42,509,589        42,509,589        —        $ 4,775        —        $ 101,741  

 

25


 

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:

 

November 23, 2018

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:

 

November 23, 2018

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

Date:

 

November 23, 2018