N-Q 1 d327513dnq.htm WESTERN ASSET PREMIER BOND FUND (WEA) 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: March 31, 2017

 

 

 


ITEM 1. SCHEDULE OF INVESTMENTS.


WESTERN ASSET PREMIER BOND FUND

FORM N-Q

MARCH 31, 2017


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  
CORPORATE BONDS & NOTES - 110.3%          
CONSUMER DISCRETIONARY - 18.9%          

Auto Components - 1.1%

         

Adient Global Holdings Ltd., Senior Notes

     4.875     8/15/26        1,410,000     $ 1,383,563 (a) 

ZF North America Capital Inc., Senior Notes

     4.750     4/29/25        530,000       548,550 (a) 
         

 

 

 

Total Auto Components

            1,932,113  
         

 

 

 

Automobiles - 2.5%

         

Daimler Finance NA LLC, Notes

     8.500     1/18/31        1,000,000       1,509,872  

General Motors Co., Senior Notes

     4.875     10/2/23        500,000       533,456  

General Motors Co., Senior Notes

     6.600     4/1/36        140,000       160,961  

General Motors Co., Senior Notes

     6.250     10/2/43        1,750,000       1,927,343  
         

 

 

 

Total Automobiles

            4,131,632  
         

 

 

 

Hotels, Restaurants & Leisure - 4.3%

         

Aramark Services Inc., Senior Notes

     5.000     4/1/25        270,000       278,100 (a) 

Brinker International Inc., Senior Notes

     5.000     10/1/24        4,345,000       4,290,687 (a) 

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

     8.875     3/15/19        220,000       230,285 (a) 

Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., Senior Notes

     4.625     4/1/25        750,000       759,150 (a) 

Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., Senior Notes

     4.875     4/1/27        350,000       353,500 (a) 

Marstons Issuer PLC, Secured Bonds

     5.641     7/15/35        260,000 GBP      293,414 (b)(c) 

Scientific Games International Inc., Senior Secured Notes

     7.000     1/1/22        480,000       512,400 (a) 

Silversea Cruise Finance Ltd., Senior Secured Notes

     7.250     2/1/25        498,000       522,900 (a) 
         

 

 

 

Total Hotels, Restaurants & Leisure

            7,240,436  
         

 

 

 

Media - 10.1%

         

21st Century Fox America Inc., Senior Debentures

     8.875     4/26/23        400,000       517,088  

AMC Entertainment Holdings Inc., Senior Notes

     6.125     5/15/27        330,000       332,888 (a) 

Carmike Cinemas Inc., Secured Notes

     6.000     6/15/23        260,000       274,300 (a) 

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

     4.464     7/23/22        500,000       527,266  

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

     4.908     7/23/25        1,270,000       1,341,968  

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

     6.384     10/23/35        420,000       477,436  

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

     6.484     10/23/45        2,130,000       2,452,346  

Comcast Corp., Notes

     7.050     3/15/33        1,000,000       1,329,050  

DISH DBS Corp., Senior Notes

     7.750     7/1/26        650,000       755,625  

SFR Group SA, Senior Secured Notes

     7.375     5/1/26        2,020,000       2,080,600 (a) 

Time Warner Cable LLC, Debentures

     7.300     7/1/38        720,000       892,200  

Time Warner Cable LLC, Senior Notes

     5.850     5/1/17        500,000       501,536  

UPC Holding BV, Junior Secured Subordinated Notes

     6.375     9/15/22        1,820,000 EUR      2,039,120 (a) 

Viacom Inc., Senior Notes

     3.450     10/4/26        1,200,000       1,141,388  

Viacom Inc., Senior Notes

     4.375     3/15/43        820,000       710,753  

Virgin Media Secured Finance PLC, Senior Secured Notes

     5.500     8/15/26        820,000       832,300 (a) 

Ziggo Secured Finance BV, Senior Secured Notes

     5.500     1/15/27        770,000       769,923 (a) 
         

 

 

 

Total Media

            16,975,787  
         

 

 

 

 

See Notes to Schedule of Investments.

 

1


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Specialty Retail - 0.9%

          

American Greetings Corp., Senior Notes

     7.875     2/15/25        730,000      $ 766,500 (a) 

PetSmart Inc., Senior Notes

     7.125     3/15/23        300,000        285,000 (a) 

ServiceMaster Co., LLC, Senior Notes

     5.125     11/15/24        460,000        471,500 (a) 
          

 

 

 

Total Specialty Retail

             1,523,000  
          

 

 

 

TOTAL CONSUMER DISCRETIONARY

             31,802,968  
          

 

 

 
CONSUMER STAPLES - 5.6%           

Beverages - 1.2%

          

Anheuser-Busch InBev Finance Inc., Senior Notes

     4.700     2/1/36        540,000        571,298  

Anheuser-Busch InBev Finance Inc., Senior Notes

     4.900     2/1/46        1,010,000        1,091,531  

Cott Holdings Inc., Senior Notes

     5.500     4/1/25        400,000        407,120 (a) 
          

 

 

 

Total Beverages

             2,069,949  
          

 

 

 

Food & Staples Retailing - 2.0%

          

CVS Pass-Through Trust, Secured Bonds

     5.789     1/10/26        380,006        421,240 (a) 

CVS Pass-Through Trust, Secured Notes

     5.880     1/10/28        402,498        451,313  

CVS Pass-Through Trust, Secured Notes

     6.036     12/10/28        405,927        456,290  

CVS Pass-Through Trust, Secured Notes

     6.943     1/10/30        399,054        474,607  

CVS Pass-Through Trust, Secured Notes

     7.507     1/10/32        397,632        488,840 (a) 

Kroger Co., Senior Notes

     6.400     8/15/17        1,090,000        1,109,312  
          

 

 

 

Total Food & Staples Retailing

             3,401,602  
          

 

 

 

Food Products - 2.0%

          

Kraft Heinz Foods Co., Senior Notes

     3.000     6/1/26        440,000        413,487  

Lamb Weston Holdings Inc., Senior Notes

     4.625     11/1/24        670,000        683,400 (a) 

Lamb Weston Holdings Inc., Senior Notes

     4.875     11/1/26        430,000        438,600 (a) 

Post Holdings Inc., Senior Notes

     5.500     3/1/25        690,000        693,450 (a) 

Smithfield Foods Inc., Senior Notes

     4.250     2/1/27        60,000        60,706 (a) 

WM Wrigley Jr. Co., Senior Notes

     2.000     10/20/17        1,000,000        1,002,516 (a) 
          

 

 

 

Total Food Products

             3,292,159  
          

 

 

 

Household Products - 0.2%

          

Central Garden & Pet Co., Senior Notes

     6.125     11/15/23        250,000        263,750  
          

 

 

 

Tobacco - 0.2%

          

Reynolds American Inc., Senior Notes

     5.850     8/15/45        260,000        305,345  
          

 

 

 

TOTAL CONSUMER STAPLES

             9,332,805  
          

 

 

 
ENERGY - 20.3%           

Energy Equipment & Services - 0.6%

          

CGG, Senior Notes

     6.500     6/1/21        750,000        346,875  

Ensco PLC, Senior Notes

     4.700     3/15/21        100,000        98,000  

Pride International Inc., Senior Notes

     7.875     8/15/40        400,000        370,000  

Transocean Inc., Senior Notes

     9.000     7/15/23        190,000        202,825 (a) 
          

 

 

 

Total Energy Equipment & Services

             1,017,700  
          

 

 

 

Oil, Gas & Consumable Fuels - 19.7%

          

Anadarko Finance Co., Senior Notes

     7.500     5/1/31        570,000        723,895  

Anadarko Petroleum Corp., Senior Notes

     4.850     3/15/21        500,000        534,877  

Anadarko Petroleum Corp., Senior Notes

     4.500     7/15/44        1,000,000        943,294  

Apache Corp., Senior Notes

     4.250     1/15/44        250,000        234,500  

Berry Petroleum Co. Escrow

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

BP Capital Markets PLC, Senior Notes

     3.723     11/28/28        410,000        414,903  

Burlington Resources Finance Co., Senior Notes

     7.400     12/1/31        450,000        607,166  

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

     11.500     1/15/21        550,000        635,250 (a) 

Chesapeake Energy Corp., Senior Notes

     5.375     6/15/21        320,000        297,600  

Chesapeake Energy Corp., Senior Notes

     8.000     1/15/25        230,000        230,000 (a) 

Continental Resources Inc., Senior Notes

     4.500     4/15/23        500,000        486,560  

Continental Resources Inc., Senior Notes

     3.800     6/1/24        120,000        111,600  

Continental Resources Inc., Senior Notes

     4.900     6/1/44        500,000        430,000  

Devon Energy Corp., Debentures

     7.950     4/15/32        310,000        402,108  

Devon Energy Corp., Senior Notes

     3.250     5/15/22        500,000        495,317  

 

See Notes to Schedule of Investments.

 

2


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Oil, Gas & Consumable Fuels - (continued)

          

Ecopetrol SA, Senior Bonds

     4.125     1/16/25        510,000      $ 493,935  

Ecopetrol SA, Senior Notes

     5.875     9/18/23        45,000        48,769  

Ecopetrol SA, Senior Notes

     5.375     6/26/26        750,000        767,100  

Ecopetrol SA, Senior Notes

     5.875     5/28/45        1,510,000        1,374,100  

Enterprise Products Operating LLC, Senior Notes

     4.050     2/15/22        880,000        925,528  

Enterprise Products Operating LLC, Senior Notes

     5.100     2/15/45        1,000,000        1,044,466  

EOG Resources Inc., Senior Notes

     3.150     4/1/25        2,250,000        2,196,146  

Exterran Energy Solutions LP/EES Finance Corp., Senior Notes

     8.125     5/1/25        320,000        326,400 (a) 

Kinder Morgan Inc., Medium-Term Notes

     7.750     1/15/32        190,000        236,994  

Kinder Morgan Inc., Senior Bonds

     5.550     6/1/45        1,500,000        1,532,622  

Magnum Hunter Resources Corp. Escrow

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

MEG Energy Corp., Secured Notes

     6.500     1/15/25        480,000        480,000 (a) 

MEG Energy Corp., Senior Notes

     7.000     3/31/24        210,000        187,950 (a) 

NGL Energy Partners LP/NGL Energy Finance Corp., Senior Notes

     7.500     11/1/23        500,000        516,250 (a) 

NGPL PipeCo LLC, Senior Secured Notes

     7.768     12/15/37        490,000        548,800 (a) 

Noble Energy Inc., Senior Notes

     5.250     11/15/43        1,000,000        1,039,890  

Oasis Petroleum Inc., Senior Notes

     7.250     2/1/19        370,000        366,300  

Oasis Petroleum Inc., Senior Notes

     6.500     11/1/21        520,000        521,300  

Oasis Petroleum Inc., Senior Notes

     6.875     1/15/23        340,000        345,950  

Occidental Petroleum Corp., Senior Notes

     3.500     6/15/25        350,000        353,445  

Petrobras Global Finance BV, Senior Notes

     4.375     5/20/23        310,000        293,725  

Petrobras Global Finance BV, Senior Notes

     6.750     1/27/41        920,000        861,120  

Petroleos Mexicanos, Senior Notes

     4.250     1/15/25        750,000        722,250  

Reliance Holdings USA Inc., Senior Notes

     5.400     2/14/22        1,000,000        1,091,189 (a) 

Reliance Holdings USA Inc., Senior Notes

     5.400     2/14/22        250,000        272,797 (b) 

Rockies Express Pipeline LLC, Senior Notes

     7.500     7/15/38        350,000        378,000 (a) 

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.750     5/15/24        440,000        479,512  

Sabine Pass Liquefaction LLC, Senior Secured Notes

     5.000     3/15/27        1,850,000        1,933,873 (a) 

Sanchez Energy Corp., Senior Notes

     6.125     1/15/23        380,000        352,450  

Shelf Drilling Holdings Ltd., Secured Notes

     9.500     11/2/20        90,000        84,150 (a) 

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

     5.125     2/1/25        460,000        473,800 (a) 

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

     5.375     2/1/27        490,000        507,150 (a) 

Tesoro Logistics LP/Tesoro Logistics Finance Corp., Senior Notes

     6.125     10/15/21        1,000,000        1,046,250  

Transcontinental Gas Pipe Line Co., LLC, Senior Notes

     7.850     2/1/26        1,000,000        1,284,043  

Transportadora de Gas del Peru SA, Senior Notes

     4.250     4/30/28        1,000,000        1,007,500 (a) 

Whiting Petroleum Corp., Senior Notes

     5.000     3/15/19        480,000        478,800  

Whiting Petroleum Corp., Senior Notes

     6.250     4/1/23        200,000        199,000  

Williams Cos. Inc., Debentures

     7.500     1/15/31        443,000        516,095  

Williams Cos. Inc., Senior Notes

     4.550     6/24/24        60,000        60,450  

Williams Cos. Inc., Senior Notes

     8.750     3/15/32        39,000        49,238  

WPX Energy Inc., Senior Notes

     7.500     8/1/20        160,000        169,600  

WPX Energy Inc., Senior Notes

     8.250     8/1/23        210,000        233,625  

YPF Sociedad Anonima, Senior Notes

     8.500     3/23/21        720,000        788,897 (a) 
          

 

 

 

Total Oil, Gas & Consumable Fuels

             33,136,529  
          

 

 

 

TOTAL ENERGY

             34,154,229  
          

 

 

 

 

See Notes to Schedule of Investments.

 

3


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  
FINANCIALS - 24.8%          

Banks - 15.2%

         

Bank of America Corp., Senior Notes

     5.000     5/13/21        1,100,000     $ 1,194,351  

Bank of America Corp., Subordinated Notes

     4.250     10/22/26        1,700,000       1,726,216  

Barclays Bank PLC, Subordinated Notes

     10.179     6/12/21        610,000       764,964 (a) 

Barclays Bank PLC, Subordinated Notes

     7.625     11/21/22        2,750,000       3,007,675  

BNP Paribas SA, Junior Subordinated Notes

     7.375     8/19/25        510,000       524,025 (a)(c)(g) 

BPCE SA, Subordinated Notes

     5.150     7/21/24        1,000,000       1,027,055 (a) 

Capital One N.A., Senior Notes

     1.500     3/22/18        1,810,000       1,805,674  

CIT Group Inc., Senior Notes

     5.000     8/15/22        250,000       261,717  

Citigroup Inc., Subordinated Notes

     3.500     5/15/23        500,000       503,631  

Citigroup Inc., Subordinated Notes

     5.500     9/13/25        200,000       218,652  

Citigroup Inc., Subordinated Notes

     4.450     9/29/27        500,000       506,021  

Citigroup Inc., Subordinated Notes

     6.625     6/15/32        1,000,000       1,218,225  

Cooperatieve Rabobank U.A., Subordinated Notes

     4.625     12/1/23        500,000       527,083  

Credit Agricole SA, Junior Subordinated Notes

     8.125     12/23/25        1,080,000       1,150,200 (a)(c)(g) 

HBOS PLC, Subordinated Notes

     6.750     5/21/18        700,000       733,053 (a) 

Intesa Sanpaolo SpA, Subordinated Notes

     5.710     1/15/26        490,000       474,857 (a) 

JPMorgan Chase & Co., Junior Subordinated Bonds

     6.000     8/1/23        3,300,000       3,441,240 (c)(g) 

JPMorgan Chase & Co., Subordinated Notes

     4.950     6/1/45        500,000       526,781  

Lloyds Banking Group PLC, Senior Notes

     3.100     7/6/21        400,000       403,286  

Lloyds Banking Group PLC, Subordinated Notes

     4.500     11/4/24        1,000,000       1,026,200  

Royal Bank of Scotland Group PLC, Junior Subordinated Notes

     8.625     8/15/21        450,000       469,125 (c)(g) 

Royal Bank of Scotland Group PLC, Subordinated Notes

     6.000     12/19/23        150,000       158,551  

Royal Bank of Scotland Group PLC, Subordinated Notes

     5.125     5/28/24        1,330,000       1,344,904  

Royal Bank of Scotland NV, Subordinated Bonds

     7.750     5/15/23        140,000       163,385  

Santander UK Group Holdings PLC, Subordinated Notes

     5.625     9/15/45        1,000,000       1,018,686 (a) 

Santander UK PLC, Subordinated Notes

     5.000     11/7/23        510,000       531,400 (a) 

Standard Chartered PLC, Subordinated Notes

     5.700     3/26/44        300,000       309,339 (a) 

Wells Fargo & Co., Subordinated Notes

     4.300     7/22/27        500,000       519,572  
         

 

 

 

Total Banks

            25,555,868  
         

 

 

 

Capital Markets - 4.2%

         

Credit Suisse Group Funding Guernsey Ltd., Senior Notes

     4.875     5/15/45        1,500,000       1,526,301  

Goldman Sachs Group Inc., Senior Notes

     6.150     4/1/18        1,000,000       1,041,780  

Goldman Sachs Group Inc., Senior Notes

     5.250     7/27/21        800,000       877,533  

Goldman Sachs Group Inc., Senior Notes

     3.500     11/16/26        500,000       488,808  

Goldman Sachs Group Inc., Subordinated Notes

     6.750     10/1/37        1,000,000       1,233,938  

UBS Group Funding Switzerland AG, Senior Notes

     4.253     3/23/28        1,850,000       1,876,509 (a) 
         

 

 

 

Total Capital Markets

            7,044,869  
         

 

 

 

Consumer Finance - 0.4%

         

Ally Financial Inc., Senior Notes

     8.000     3/15/20        282,000       316,545  

FirstCash Inc., Senior Notes

     6.750     4/1/21        330,000       344,025  
         

 

 

 

Total Consumer Finance

            660,570  
         

 

 

 

Diversified Financial Services - 4.4%

         

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

     4.625     7/1/22        230,000       242,615  

Ahold Lease USA Inc., Pass-Through Certificates

     8.620     1/2/25        686,921       806,435  

CPUK Finance Ltd., Senior Secured Notes

     7.239     2/28/24        1,000,000 GBP      1,652,092 (b) 

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

     2.342     11/15/20        373,000       374,614  

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

     3.373     11/15/25        500,000       513,128  

International Lease Finance Corp., Senior Notes

     6.250     5/15/19        80,000       86,199  

International Lease Finance Corp., Senior Notes

     5.875     8/15/22        1,200,000       1,336,654  

International Lease Finance Corp., Senior Secured Notes

     7.125     9/1/18        400,000       427,499 (a) 

Park Aerospace Holdings Ltd., Senior Notes

     5.250     8/15/22        650,000       676,000 (a) 

Park Aerospace Holdings Ltd., Senior Notes

     5.500     2/15/24        1,180,000       1,227,200 (a) 
         

 

 

 

Total Diversified Financial Services

            7,342,436  
         

 

 

 

 

See Notes to Schedule of Investments.

 

4


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Insurance - 0.6%

          

Genworth Holdings Inc., Senior Notes

     4.900     8/15/23        330,000      $ 274,725  

Metlife Inc., Junior Subordinated Notes

     10.750     8/1/39        500,000        772,500  
          

 

 

 

Total Insurance

             1,047,225  
          

 

 

 

TOTAL FINANCIALS

             41,650,968  
          

 

 

 
HEALTH CARE - 4.4%           

Biotechnology - 0.4%

          

Celgene Corp., Senior Notes

     5.000     8/15/45        250,000        261,679  

Gilead Sciences Inc., Senior Notes

     4.750     3/1/46        390,000        397,797  
          

 

 

 

Total Biotechnology

             659,476  
          

 

 

 

Health Care Providers & Services - 2.7%

          

Centene Corp., Senior Notes

     5.625     2/15/21        280,000        293,048  

Centene Corp., Senior Notes

     6.125     2/15/24        220,000        236,225  

Centene Corp., Senior Notes

     4.750     1/15/25        1,060,000        1,065,968  

DaVita Inc., Senior Notes

     5.750     8/15/22        270,000        279,450  

DaVita Inc., Senior Notes

     5.125     7/15/24        220,000        222,200  

DaVita Inc., Senior Notes

     5.000     5/1/25        860,000        862,150  

HCA Inc., Senior Secured Bonds

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

HCA Inc., Senior Secured Notes

     5.250     6/15/26        280,000        294,700  

Humana Inc., Senior Notes

     3.950     3/15/27        290,000        296,520  
          

 

 

 

Total Health Care Providers & Services

             4,550,261  
          

 

 

 

Pharmaceuticals - 1.3%

          

Actavis Funding SCS, Senior Notes

     4.750     3/15/45        570,000        572,440  

Valeant Pharmaceuticals International Inc., Senior Notes

     6.375     10/15/20        630,000        570,150 (a) 

Valeant Pharmaceuticals International Inc., Senior Notes

     6.125     4/15/25        680,000        523,600 (a) 

Valeant Pharmaceuticals International Inc., Senior Secured Notes

     6.500     3/15/22        180,000        185,175 (a) 

Valeant Pharmaceuticals International Inc., Senior Secured Notes

     7.000     3/15/24        290,000        297,613 (a) 
          

 

 

 

Total Pharmaceuticals

             2,148,978  
          

 

 

 

TOTAL HEALTH CARE

             7,358,715  
          

 

 

 
INDUSTRIALS - 9.3%           

Aerospace & Defense - 1.0%

          

Boeing Co., Notes

     6.125     2/15/33        600,000        766,867  

CBC Ammo LLC/CBC FinCo Inc., Senior Notes

     7.250     11/15/21        370,000        368,150 (a) 

Hexcel Corp., Senior Notes

     3.950     2/15/27        500,000        506,106  
          

 

 

 

Total Aerospace & Defense

             1,641,123  
          

 

 

 

Airlines - 3.1%

          

Air 2 U.S., Notes

     8.027     10/1/19        497,905        514,087 (a) 

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

     8.057     7/2/20        899,287        1,007,202  

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

     6.900     1/2/18        34,932        35,281 (f) 

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

     6.820     5/1/18        226,875        232,547 (f) 

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

     6.545     2/2/19        492,314        523,083  

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

     8.048     11/1/20        270,688        296,403  

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

     6.703     6/15/21        157,033        165,670  

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

     8.021     8/10/22        89,316        102,267  

Northwest Airlines Corp., Pass-Through Certificates

     7.575     3/1/19        149,045        155,006  

U.S. Airways, Pass-Through Certificates, Senior Secured Bonds

     6.850     1/30/18        357,397        364,545  

U.S. Airways, Pass-Through Certificates, Senior Secured Bonds

     7.125     10/22/23        1,392,039        1,607,805  

United Airlines Inc., Pass-Through Certificates, Secured Notes

     4.750     4/11/22        301,300        307,326  
          

 

 

 

Total Airlines

             5,311,222  
          

 

 

 

 

See Notes to Schedule of Investments.

 

5


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Building Products - 0.3%

          

Standard Industries Inc., Senior Notes

     5.125     2/15/21        230,000      $ 239,200 (a) 

Standard Industries Inc., Senior Notes

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

 

 

 

Total Building Products

             576,625  
          

 

 

 

Commercial Services & Supplies - 1.2%

          

ACCO Brands Corp., Senior Notes

     5.250     12/15/24        400,000        402,000 (a) 

Covanta Holding Corp., Senior Notes

     5.875     7/1/25        500,000        500,937  

United Rentals North America Inc., Senior Notes

     5.500     5/15/27        440,000        444,400  

West Corp., Senior Notes

     5.375     7/15/22        670,000        658,275 (a) 
          

 

 

 

Total Commercial Services & Supplies

             2,005,612  
          

 

 

 

Construction & Engineering - 0.2%

          

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

     8.250     10/15/18        350,000        351,750 (a) 
          

 

 

 

Industrial Conglomerates - 0.4%

          

General Electric Co., Subordinated Notes

     5.300     2/11/21        623,000        689,868  
          

 

 

 

Machinery - 1.1%

          

Allison Transmission Inc., Senior Bonds

     5.000     10/1/24        1,150,000        1,161,500 (a) 

Terex Corp., Senior Notes

     5.625     2/1/25        620,000        629,300 (a) 
          

 

 

 

Total Machinery

             1,790,800  
          

 

 

 

Professional Services - 0.6%

          

IHS Markit Ltd., Senior Notes

     5.000     11/1/22        1,000,000        1,047,500 (a) 
          

 

 

 

Road & Rail - 0.4%

          

Flexi-Van Leasing Inc., Senior Notes

     7.875     8/15/18        680,000        615,400 (a) 
          

 

 

 

Trading Companies & Distributors - 0.4%

          

H&E Equipment Services Inc., Senior Notes

     7.000     9/1/22        630,000        660,713  
          

 

 

 

Transportation - 0.6%

          

Mexico City Airport Trust, Senior Secured Bonds

     5.500     10/31/46        1,000,000        984,700 (a) 
          

 

 

 

TOTAL INDUSTRIALS

             15,675,313  
          

 

 

 
INFORMATION TECHNOLOGY - 4.8%           

Communications Equipment - 1.2%

          

CommScope Technologies LLC, Senior Notes

     5.000     3/15/27        370,000        369,426 (a) 

Harris Corp., Senior Notes

     5.054     4/27/45        1,500,000        1,641,216  
          

 

 

 

Total Communications Equipment

             2,010,642  
          

 

 

 

Electronic Equipment, Instruments & Components - 0.2%

          

CDW LLC/CDW Finance Corp., Senior Notes

     5.000     9/1/25        420,000        428,400  
          

 

 

 

IT Services - 0.4%

          

Compiler Finance Subordinated Inc., Senior Notes

     7.000     5/1/21        110,000        55,000 (a) 

HP Enterprise Services LLC, Notes

     7.450     10/15/29        500,000        601,721  
          

 

 

 

Total IT Services

             656,721  
          

 

 

 

Semiconductors & Semiconductor Equipment - 0.3%

          

Analog Devices Inc., Senior Notes

     2.500     12/5/21        490,000        485,304  
          

 

 

 

Software - 0.5%

          

Microsoft Corp., Senior Notes

     2.875     2/6/24        800,000        805,140  
          

 

 

 

Technology Hardware, Storage & Peripherals - 2.2%

          

Diamond 1 Finance Corp./Diamond 2 Finance Corp., Senior Notes

     5.875     6/15/21        550,000        578,233 (a) 

Diamond 1 Finance Corp./Diamond 2 Finance Corp., Senior Notes

     7.125     6/15/24        320,000        353,753 (a) 

Diamond 1 Finance Corp./Diamond 2 Finance Corp., Senior Secured Notes

     4.420     6/15/21        1,300,000        1,359,468 (a) 

Seagate HDD Cayman, Senior Bonds

     4.750     1/1/25        1,220,000        1,194,838  

Seagate HDD Cayman, Senior Bonds

     4.875     6/1/27        260,000        243,409  
          

 

 

 

Total Technology Hardware, Storage & Peripherals

             3,729,701  
          

 

 

 

TOTAL INFORMATION TECHNOLOGY

             8,115,908  
          

 

 

 

 

See Notes to Schedule of Investments.

 

6


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  
MATERIALS - 6.8%           

Chemicals - 1.1%

          

Braskem America Finance Co., Senior Notes

     7.125     7/22/41        920,000      $ 975,660 (b) 

Braskem Finance Ltd., Senior Notes

     5.375     5/2/22        230,000        239,315 (a) 

Valvoline Inc., Senior Notes

     5.500     7/15/24        550,000        577,500 (a) 
          

 

 

 

Total Chemicals

             1,792,475  
          

 

 

 

Construction Materials - 0.3%

          

U.S. Concrete Inc., Senior Notes

     6.375     6/1/24        420,000        434,700 (a) 
          

 

 

 

Containers & Packaging - 0.0%

          

Pactiv LLC, Senior Notes

     7.950     12/15/25        50,000        54,250  
          

 

 

 

Metals & Mining - 5.4%

          

Alcoa Nederland Holding BV, Senior Notes

     6.750     9/30/24        300,000        321,750 (a) 

Alcoa Nederland Holding BV, Senior Notes

     7.000     9/30/26        560,000        610,400 (a) 

Anglo American Capital PLC, Senior Notes

     3.625     5/14/20        450,000        453,375 (a) 

Anglo American Capital PLC, Senior Notes

     4.125     9/27/22        210,000        212,100 (a) 

ArcelorMittal SA, Senior Notes

     7.750     10/15/39        430,000        488,050  

Barrick Gold Corp., Senior Notes

     4.100     5/1/23        800,000        857,781  

First Quantum Minerals Ltd., Senior Notes

     7.250     4/1/23        330,000        333,713 (a) 

First Quantum Minerals Ltd., Senior Notes

     7.500     4/1/25        500,000        503,750 (a) 

Freeport-McMoRan Inc., Senior Notes

     2.375     3/15/18        230,000        228,275  

Freeport-McMoRan Inc., Senior Notes

     6.500     11/15/20        579,000        592,027 (a) 

Freeport-McMoRan Inc., Senior Notes

     6.875     2/15/23        630,000        650,475 (a) 

Freeport-McMoRan Inc., Senior Notes

     5.450     3/15/43        210,000        177,713  

HudBay Minerals Inc., Senior Notes

     7.625     1/15/25        390,000        423,150 (a) 

Teck Resources Ltd., Senior Notes

     8.000     6/1/21        400,000        438,000 (a) 

Teck Resources Ltd., Senior Notes

     8.500     6/1/24        470,000        542,262 (a) 

Teck Resources Ltd., Senior Notes

     6.250     7/15/41        210,000        217,875  

Vale Overseas Ltd., Senior Notes

     6.875     11/10/39        940,000        1,005,236  

Vale SA, Senior Notes

     5.625     9/11/42        1,090,000        1,029,832  
          

 

 

 

Total Metals & Mining

             9,085,764  
          

 

 

 

TOTAL MATERIALS

             11,367,189  
          

 

 

 
REAL ESTATE - 0.4%           

Equity Real Estate Investment Trusts (REITs) - 0.4%

          

Care Capital Properties LP, Senior Notes

     5.125     8/15/26        250,000        247,298  

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

     6.375     3/1/24        260,000        279,500  

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

     5.250     8/1/26        210,000        206,850  
          

 

 

 

TOTAL REAL ESTATE

             733,648  
          

 

 

 
TELECOMMUNICATION SERVICES - 13.2%           

Diversified Telecommunication Services - 9.3%

          

AT&T Inc., Senior Notes

     2.800     2/17/21        500,000        501,485  

AT&T Inc., Senior Notes

     4.250     3/1/27        500,000        505,539  

AT&T Inc., Senior Notes

     5.350     9/1/40        17,000        17,467  

AT&T Inc., Senior Notes

     4.550     3/9/49        176,000        156,904  

Cogent Communications Group Inc., Senior Secured Notes

     5.375     3/1/22        470,000        482,337 (a) 

Intelsat Jackson Holdings SA, Senior Notes

     7.250     4/1/19        1,000,000        953,750  

Level 3 Financing Inc., Senior Notes

     6.125     1/15/21        530,000        548,550  

Oi Brasil Holdings Cooperatief U.A., Senior Notes

     5.750     2/10/22        400,000        128,000 *(a)(h) 

Orange SA, Notes

     9.000     3/1/31        600,000        883,414  

 

See Notes to Schedule of Investments.

 

7


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

Diversified Telecommunication Services - (continued)

          

Qwest Corp., Senior Notes

     6.750     12/1/21        1,500,000      $ 1,644,372  

Telecom Italia SpA, Senior Notes

     5.303     5/30/24        3,350,000        3,387,687 (a) 

Telefonica Emisiones SAU, Senior Notes

     5.134     4/27/20        2,000,000        2,154,280  

Verizon Communications Inc., Senior Notes

     5.150     9/15/23        1,680,000        1,849,005  

Verizon Communications Inc., Senior Notes

     4.125     3/16/27        1,240,000        1,261,007  

Windstream Services LLC, Senior Notes

     7.750     10/15/20        830,000        842,450  

Windstream Services LLC, Senior Notes

     7.750     10/1/21        50,000        49,250  

Windstream Services LLC, Senior Notes

     6.375     8/1/23        250,000        221,875  
          

 

 

 

Total Diversified Telecommunication Services

             15,587,372  
          

 

 

 

Wireless Telecommunication Services - 3.9%

          

CSC Holdings LLC, Senior Notes

     10.125     1/15/23        200,000        232,000 (a) 

CSC Holdings LLC, Senior Notes

     6.625     10/15/25        610,000        663,375 (a) 

CSC Holdings LLC, Senior Notes

     10.875     10/15/25        240,000        288,600 (a) 

Sprint Capital Corp., Senior Notes

     6.875     11/15/28        420,000        443,625  

Sprint Capital Corp., Senior Notes

     8.750     3/15/32        30,000        36,075  

Sprint Communications Inc., Senior Notes

     9.000     11/15/18        500,000        544,375 (a) 

Sprint Communications Inc., Senior Notes

     7.000     8/15/20        260,000        279,175  

Sprint Communications Inc., Senior Notes

     11.500     11/15/21        280,000        351,400  

Sprint Corp., Senior Notes

     7.875     9/15/23        760,000        841,700  

Sprint Spectrum Co., LLC/Sprint Spectrum Co. II LLC/Sprint Spectrum Co. III LLC, Senior Secured Notes

     3.360     9/20/21        2,290,000        2,284,275 (a) 

VimpelCom Holdings BV, Senior Notes

     5.950     2/13/23        570,000        607,050 (a) 
          

 

 

 

Total Wireless Telecommunication Services

             6,571,650  
          

 

 

 

TOTAL TELECOMMUNICATION SERVICES

             22,159,022  
          

 

 

 
UTILITIES - 1.8%           

Electric Utilities - 1.8%

          

FirstEnergy Corp., Notes

     7.375     11/15/31        1,770,000        2,306,921  

Pampa Energia SA, Senior Notes

     7.500     1/24/27        670,000        678,542 (a) 
          

 

 

 

Total Electric Utilities

             2,985,463  
          

 

 

 

Gas Utilities - 0.0%

          

Southern Natural Gas Co., LLC, Senior Notes

     8.000     3/1/32        20,000        26,676  
          

 

 

 

TOTAL UTILITIES

             3,012,139  
          

 

 

 

TOTAL CORPORATE BONDS & NOTES
(Cost - $174,462,216)

             185,362,904  
          

 

 

 
ASSET-BACKED SECURITIES - 7.7%           

AAA Trust, 2005-1A 1A3B

     1.392     2/27/35        459,035        423,459 (a)(c)(f) 

ACE Securities Corp., 2005-WF1 M1

     1.612     5/25/35        178,839        178,253 (c) 

Argent Securities Inc., 2003-W3 M1

     2.107     9/25/33        32,125        28,779 (c) 

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

     6.900     4/10/28        4,085        4,097 (c) 

Bayview Financial Asset Trust, 2007-SR1A M1

     1.782     3/25/37        751,848        639,973 (a)(c) 

Bayview Financial Asset Trust, 2007-SR1A M3

     2.132     3/25/37        285,184        240,410 (a)(c) 

Bayview Financial Asset Trust, 2007-SR1A M4

     2.482     3/25/37        77,777        62,518 (a)(c) 

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

     0.000     8/25/36        381,067        273,855  

Conseco Financial Corp., 1993-1 B

     8.450     4/15/18        4,058        558  

 

See Notes to Schedule of Investments.

 

8


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
     VALUE  

ASSET-BACKED SECURITIES - (continued)

          

Contimortgage Home Equity Trust, 1997-4 B1F

     7.330     10/15/28        103,174      $ 115,263 (c) 

Countrywide Asset-Backed Certificates, 2004-3 3A3

     1.742     8/25/34        126,967        124,491 (c) 

Countrywide Asset-Backed Certificates, 2007-13 2A1

     1.882     10/25/47        602,364        550,718 (c) 

Countrywide Asset-Backed Certificates, 2007-SEA2 1A1

     1.982     8/25/47        20,489        18,760 (a)(c) 

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

     1.452     5/25/44        11,666        11,625 (a)(c) 

EMC Mortgage Loan Trust, 2003-B A1

     1.328     11/25/41        14,053        13,455 (a)(c) 

Firstfed Corp. Manufactured Housing Contract, 1996-1 B

     8.060     10/15/22        177,679        73,346 (a) 

Green Tree Home Improvement Loan Trust, 1996-D HIB2

     8.000     9/15/27        7,238        7,237  

Greenpoint Manufactured Housing, 1999-2 A2

     4.412     3/18/29        525,000        487,920 (c) 

Greenpoint Manufactured Housing, 1999-3 2A2

     4.890     6/19/29        325,000        300,235 (c)(f) 

Greenpoint Manufactured Housing, 1999-4 A2

     4.412     2/20/30        300,000        273,240 (c)(f) 

Greenpoint Manufactured Housing, 2001-2 IA2

     4.358     2/20/32        250,000        227,032 (c) 

Greenpoint Manufactured Housing, 2001-2 IIA2

     4.391     3/13/32        425,000        384,296 (c) 

GSAA Home Equity Trust, 2004-8 A3A

     1.722     9/25/34        76,192        75,217 (c) 

GSAA Home Equity Trust, 2006-19 A3A

     1.222     12/25/36        509,757        276,310 (c) 

GSAMP Trust, 2003-SEA2 A1

     4.422     7/25/33        947,464        936,303  

GSRPM Mortgage Loan Trust, 2006-1 A1

     1.282     3/25/35        50,159        49,387 (a)(c) 

Indymac Manufactured Housing Contract, 1997-1 A5

     6.970     2/25/28        88,800        90,401  

Morgan Stanley Capital Inc., 2003-NC9 M

     2.107     9/25/33        770,491        754,342 (c) 

Morgan Stanley Capital Inc., 2003-SD1 A1

     1.982     3/25/33        11,435        10,871 (c) 

Morgan Stanley Capital Inc., 2004-HE7 M1

     1.882     8/25/34        1,539,471        1,468,287 (c) 

New Century Home Equity Loan Trust, 2004-3 M1

     1.912     11/25/34        1,480,740        1,401,983 (c) 

Oakwood Mortgage Investors Inc., 2002-B A3

     6.060     6/15/32        123,579        127,531 (c) 

Origen Manufactured Housing Contract Trust, 2006-A A2

     2.562     10/15/37        1,450,170        1,288,560 (c) 

Origen Manufactured Housing Contract Trust, 2007-A A2

     2.575     4/15/37        1,635,026        1,503,904 (c) 

Park Place Securities Inc., 2004-WHQ2 M2

     1.927     2/25/35        104,898        105,051 (c) 

Renaissance Home Equity Loan Trust, 2004-2 AF4

     5.392     7/25/34        112,915        113,241  

Residential Asset Securities Corp., 2003-KS8 AI6

     4.830     10/25/33        37,074        36,828 (c) 

Settlement Fee Finance LLC, 2004-1A A

     9.100     7/25/34        177,391        180,623 (a) 

Structured Asset Securities Corp., 2006-GEL3 A2

     1.212     7/25/36        32,023        32,017 (a)(c) 
          

 

 

 

TOTAL ASSET-BACKED SECURITIES
(Cost - $11,120,585)

             12,890,376  
          

 

 

 
COLLATERALIZED MORTGAGE OBLIGATIONS - 4.4%           

American Home Mortgage Investment Trust, 2007-A 4A

     1.882     7/25/46        545,441        202,729 (a)(c) 

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

     2.032     12/20/34        227,491        159,174 (c) 

BCAP LLC Trust, 2009-RR12 2A1

     1.370     3/26/35        1,118,697        1,098,379 (a)(c) 

BCAP LLC Trust, 2009-RR12 2A2

     1.370     3/26/35        1,792,147        1,251,041 (a)(c) 

Bear Stearns Alt-A Trust, 2004-03 A1

     1.622     4/25/34        220,276        210,967 (c) 

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

     7.000     1/25/32        225,434        2 (a) 

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

     1.008     10/25/35        967,155        895,272 (a)(c) 

Countrywide Home Loans, 2005-7 1A1

     1.522     3/25/35        599,475        549,035 (c) 

HarborView Mortgage Loan Trust, 2004-08 3A2

     1.778     11/19/34        94,254        72,254 (c) 

HarborView Mortgage Loan Trust, 2004-10 4A

     3.353     1/19/35        144,835        142,425 (c) 

Impac CMB Trust, 2005-2 2A2

     1.782     4/25/35        71,226        66,037 (c) 

Impac CMB Trust, 2A-10

     1.622     3/25/35        189,245        172,023 (c) 

Indymac Manufactured Housing Contract, 1998-2 A2

     6.170     8/25/29        27,810        28,024  

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

     0.399     6/15/36        231,670        642 (a)(c) 

 

See Notes to Schedule of Investments.

 

9


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

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

Merit Securities Corp., 11PA 3A1

     1.603     4/28/27        73,913      $ 66,882 (a)(c) 

Merit Securities Corp., 11PA B3

     3.233     9/28/32        634,197        528,526 (a)(c) 

Metropolitan Asset Funding Inc., 1998-BI B1

     8.000     11/20/24        362,388        334,446 (c) 

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

     1.743     10/25/32        1,875,679        89,724 (c) 

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

     1.023     7/25/34        3,750,074        151,722 (c) 

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

     1.155     7/25/34        255,265        2,378 (c) 

Regal Trust IV, 1999-1 A

     2.116     9/29/31        15,280        14,248 (a)(c) 

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

     0.000     2/25/32        8,703        8,196  

Sequoia Mortgage Trust, 2003-2 A2

     1.955     6/20/33        17,691        17,184 (c) 

Sequoia Mortgage Trust, 2004-10 A1A

     1.598     11/20/34        13,827        12,970 (c) 

Sequoia Mortgage Trust, 2004-12 A1

     1.518     1/20/35        146,336        133,404 (c) 

Structured Asset Securities Corp., 1998-RF2 A

     5.624     7/15/27        175,034        170,305 (a)(c) 

Structured Asset Securities Corp., 2002-9 A2

     1.582     10/25/27        299,153        292,382 (c) 

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

     3.159     3/25/33        101,153        100,379 (c) 

Structured Asset Securities Corp., 2004-NP1 A

     1.782     9/25/33        37,719        37,401 *(a)(c)(h) 

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

     1.402     5/25/44        302,297        285,997 (c) 

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

     1.372     10/25/44        236,119        228,323 (c) 

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

     7.000     3/25/34        10,546        11,454  
          

 

 

 

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost - $6,234,704)

             7,333,925  
          

 

 

 
CONVERTIBLE BONDS & NOTES - 0.5%           
INFORMATION TECHNOLOGY - 0.5%           

Internet Software & Services - 0.1%

          

WebMD Health Corp., Notes

     2.625     6/15/23        210,000        199,369 (a) 
          

 

 

 

Semiconductors & Semiconductor Equipment - 0.4%

          

Microchip Technology Inc., Junior Subordinated Notes

     2.250     2/15/37        170,000        172,763 (a) 

Microchip Technology Inc., Senior Subordinated Notes

     1.625     2/15/27        300,000        303,937 (a) 

ON Semiconductor Corp., Senior Notes

     1.625     10/15/23        220,000        228,112 (a) 
          

 

 

 

Total Semiconductors & Semiconductor Equipment

             704,812  
          

 

 

 

TOTAL CONVERTIBLE BONDS & NOTES
(Cost - $891,023)

             904,181  
          

 

 

 
MORTGAGE-BACKED SECURITIES - 0.1%           
FNMA - 0.1%           

Federal National Mortgage Association (FNMA), Whole Loan
(Cost - $146,246)

     6.500     8/25/44        144,366        166,008  
          

 

 

 
SENIOR LOANS - 0.8%           
CONSUMER DISCRETIONARY - 0.3%           

Specialty Retail - 0.3%

          

PetSmart Inc., Term Loan B2

     —         3/11/22        570,000        544,350 (i) 
          

 

 

 
ENERGY - 0.2%           

Energy Equipment & Services - 0.1%

          

Hercules Offshore Inc., (wind-down lender claim)

     —         —          219,826        175,861 *(f) 
          

 

 

 

Oil, Gas & Consumable Fuels - 0.1%

          

Magnum Hunter Resources Inc., Exit Term Loan

     8.000     5/6/19        106,306        106,306 (e)(f)(j)(k) 
          

 

 

 

TOTAL ENERGY

             282,167  
          

 

 

 
UTILITIES - 0.3%           

Electric Utilities - 0.3%

          

Panda Temple II Power LLC, New Term Loan B

     7.250     4/3/19        128,148        111,009 (j)(k) 

Panda Temple Power LLC, 2015 Term Loan B

     7.250     3/4/22        426,700        356,294 (f)(j)(k) 
          

 

 

 
TOTAL UTILITIES              467,303  
          

 

 

 

TOTAL SENIOR LOANS
(Cost - $1,425,123)

             1,293,820  
          

 

 

 
SOVEREIGN BONDS - 4.1%           

Argentina - 0.9%

          

Provincia de Buenos Aires, Senior Notes

     9.125     3/16/24        500,000        554,375 (a) 

Republic of Argentina, Senior Notes

     6.875     4/22/21        340,000        365,160 (a) 

Republic of Argentina, Senior Notes

     7.500     4/22/26        210,000        223,230 (a) 

Republic of Argentina, Senior Notes

     7.125     7/6/36        300,000        290,400 (a) 
          

 

 

 

Total Argentina

             1,433,165  
          

 

 

 

 

See Notes to Schedule of Investments.

 

10


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT†
    VALUE  

Colombia - 0.8%

         

Republic of Colombia, Senior Bonds

     4.000     2/26/24        1,250,000     $ 1,286,250  
         

 

 

 

Peru - 0.8%

         

Republic of Peru, Senior Bonds

     4.125     8/25/27        1,250,000       1,343,750  
         

 

 

 

Poland - 1.3%

         

Republic of Poland, Bonds

     4.000     10/25/23        8,440,000 PLN      2,243,601  
         

 

 

 

Russia - 0.3%

         

Russian Federal Bond, Bonds

     7.050     1/19/28        34,870,000 RUB      581,961  
         

 

 

 

TOTAL SOVEREIGN BONDS
(Cost - $7,287,235)

            6,888,727  
         

 

 

 
U.S. GOVERNMENT & AGENCY OBLIGATIONS - 3.3%          

U.S. Government Obligations - 3.3%

         

U.S. Treasury Notes

     1.125     8/31/21        1,750,000       1,695,381  

U.S. Treasury Notes

     1.125     9/30/21        250,000       241,865  

U.S. Treasury Notes

     2.125     6/30/22        2,240,000       2,255,487  

U.S. Treasury Notes

     2.000     11/30/22        1,370,000       1,364,916  
         

 

 

 

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost - $5,535,223)

            5,557,649  
         

 

 

 
                  SHARES        
COMMON STOCKS - 0.4%          
ENERGY - 0.4%          

Energy Equipment & Services - 0.0%

         

Hercules Offshore Inc. (Escrow)

          16,942       4,778 *(e)(f) 
         

 

 

 

Oil, Gas & Consumable Fuels - 0.4%

         

Berry Petroleum Co.

          5,092       58,558 *(e)(f) 

Magnum Hunter Resources Corp.

          52,812       586,213 *(e)(f) 
         

 

 

 

Total Oil, Gas & Consumable Fuels

            644,771  
         

 

 

 

TOTAL ENERGY

            649,549  
         

 

 

 
HEALTH CARE - 0.0%          

Health Care Providers & Services - 0.0%

         

Physiotherapy Associates Holdings Inc. (Escrow)

          1,900       23,921 *(e)(f) 
         

 

 

 
INDUSTRIALS - 0.0%          

Marine - 0.0%

         

Tricer HoldCo, S.C.A.

          4,654       14,148 *(e)(f) 
         

 

 

 

TOTAL COMMON STOCKS
(Cost - $2,049,920)

            687,618  
         

 

 

 
CONVERTIBLE PREFERRED STOCKS - 1.0%          
ENERGY - 0.3%          

Oil, Gas & Consumable Fuels - 0.3%

         

Berry Petroleum Co.

     6.000        5,554       74,979 (l) 

Berry Petroleum Co.

     6.000        84       1,134 (l)(m) 

Sanchez Energy Corp.

     6.500        12,700       450,088  
         

 

 

 

TOTAL ENERGY

            526,201  
         

 

 

 

 

See Notes to Schedule of Investments.

 

11


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

SECURITY

   RATE            SHARES      VALUE  
HEALTH CARE - 0.7%           

Pharmaceuticals - 0.7%

          

Allergan PLC

     5.500        1,318      $ 1,120,010  
          

 

 

 

TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost - $1,672,114)

             1,646,211  
          

 

 

 
PREFERRED STOCKS - 1.3%           
ENERGY - 0.1%           

Oil, Gas & Consumable Fuels - 0.1%

          

Scorpio Tankers Inc.

     8.250        5,425        136,037
          

 

 

 
FINANCIALS - 1.2%           

Diversified Financial Services - 1.2%

          

Citigroup Capital XIII

     7.409        75,725        2,018,071 (c) 

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

     7.375        33,900        4 *(e)(f)(h) 
          

 

 

 

TOTAL FINANCIALS

             2,018,075  
          

 

 

 
INDUSTRIALS - 0.0%           

Marine - 0.0%

          

Tricer Tracking Preferred Equity Certificates

     8.000        2,068,500        20,685 *(e)(f) 
          

 

 

 

TOTAL PREFERRED STOCKS
(Cost - $2,287,772)

             2,174,797  
          

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS
(Cost - $213,112,161)

             224,906,216  
          

 

 

 
SHORT-TERM INVESTMENTS - 0.0%           

State Street Institutional U.S. Government Money Market Fund, Premier Class
(Cost - $24,744)

     0.634        24,744        24,744  
          

 

 

 

TOTAL INVESTMENTS** - 133.9%
(Cost - $213,136,905#)

             224,930,960  

Liabilities in Excess of Other Assets - (33.9)%

             (56,955,295
          

 

 

 

TOTAL NET ASSETS - 100.0%

           $ 167,975,665  
          

 

 

 

 

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, unless otherwise noted.

 

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

 

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

 

(d) Value is less than $1.

 

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

 

(f) Security is valued using significant unobservable inputs.

 

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

 

(h) The coupon payment on these securities is currently in default as of March 31, 2017.

 

(i) All or a portion of this loan is unfunded as of March 31, 2017. The interest rate for fully unfunded term loans is to be determined.

 

(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.

 

(l) 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.

 

(m) Restricted security (See Note 3).

 

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

Abbreviations used in this schedule:

 

EUR    — Euro
GBP    — British Pound
IO    — Interest Only
PLN    — Polish Zloty
PO    — Principal Only
RUB    — Russian Ruble
STRIPS    — Separate Trading of Registered Interest and Principal Securities

 

See Notes to Schedule of Investments.

 

12


WESTERN ASSET PREMIER BOND FUND

 

Schedule of investments (unaudited) (cont’d)    March 31, 2017

 

At March 31, 2017, the Fund had the following open forward foreign currency contracts:

 

Currency
Purchased
     Currency
Sold
    

Counterparty

   Settlement
Date
     Unrealized
Appreciation
(Depreciation)
 
EUR      1,642,000        USD        1,777,498      Barclays Bank PLC      4/20/17      $ (24,568
USD      301,217        GBP        240,000      Barclays Bank PLC      4/20/17        409  
USD      1,750,372        EUR        1,642,000      Citibank N.A.      4/20/17        (2,558
USD      1,613,227        GBP        1,287,200      UBS AG      4/20/17        (106
                 

 

 

 
Total                   $ (26,823
                 

 

 

 

Abbreviations used in this table:

 

EUR    — Euro
GBP    — British Pound
USD    — United States Dollar

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.

 

13


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.

 

14


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:

          

Energy

     —        $ 34,154,229      $ 0   $ 34,154,229  

Industrials

     —          15,407,485        267,828       15,675,313  

Other Corporate Bonds & Notes

     —          135,533,362        —         135,533,362  

Asset-Backed Securities

     —          11,893,442        996,934       12,890,376  

Collateralized Mortgage Obligations

     —          7,333,925        —         7,333,925  

Convertible Bonds & Notes

     —          904,181        —         904,181  

Mortgage-Backed Securities

     —          166,008        —         166,008  

Senior Loans:

          

Consumer Discretionary

     —          544,350        —         544,350  

Energy

     —          —          282,167       282,167  

Utilities

     —          111,009        356,294       467,303  

Sovereign Bonds

     —          6,888,727        —         6,888,727  

U.S. Government & Agency Obligations

     —          5,557,649        —         5,557,649  

Common Stocks:

          

Energy

     —          —          649,549       649,549  

Health Care

     —          —          23,921       23,921  

Industrials

     —          —          14,148       14,148  

Convertible Preferred Stocks:

          

Energy

   $ 76,113        450,088        —         526,201  

Health Care

     1,120,010        —          —         1,120,010  

Preferred Stocks:

          

Energy

     136,037        —          —         136,037  

Financials

     2,018,071        —          4       2,018,075  

Industrials

     —          —          20,685       20,685  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total Long-Term Investments

   $ 3,350,231      $ 218,944,455      $ 2,611,530     $ 224,906,216  
  

 

 

    

 

 

    

 

 

   

 

 

 

Short-Term Investments†

     24,744        —          —         24,744  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total Investments

   $ 3,374,975      $ 218,944,455      $ 2,611,530     $ 224,930,960  
  

 

 

    

 

 

    

 

 

   

 

 

 

Other assets

     —          —          7,743       7,743  

Other Financial Instruments:

          

Forward Foreign Currency Contracts

     —          409        —         409  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

   $ 3,374,975      $ 218,944,864      $ 2,619,273     $ 224,939,112  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

15


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

     —        $ 27,232        —        $ 27,232  

 

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:

 

     CORPORATE BONDS & NOTES           SENIOR LOANS  

INVESTMENTS IN SECURITIES

   ENERGY     INDUSTRIALS     ASSET-
BACKED
SECURITIES
    ENERGY     UTILITIES  

Balance as of December 31, 2016

   $ 0   $ 627,158     $ 989,147     $ 498,057     $ 369,666  

Accrued premiums/discounts

     —         (149     3,391       (2,001     270  

Realized gain (loss)

     —         19       702       (18,648     —    

Change in unrealized appreciation (depreciation)(1)

     —         (6,535     6,392       (15,927     (17,867

Purchases

     —         —         —         2,130       4,225  

Sales

     —         (197,659     (2,698     (181,444     —    

Transfers into Level 3(2)

     —         —         —         —         —    

Transfers out of Level 3(3)

     —         (155,006     —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of March 31, 2017

   $ 0   $ 267,828     $ 996,934     $ 282,167     $ 356,294  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) for investments in securities still held at March 31, 2017(1)

     —       $ (6,535   $ 6,392     $ (15,927   $ (17,867
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    COMMON STOCKS     PREFERRED STOCKS              

INVESTMENTS IN SECURITIES (cont’d)

  ENERGY     HEALTH
CARE
    INDUSTRIALS     FINANCIALS     INDUSTRIALS     OTHER
ASSETS
    TOTAL  

Balance as of December 31, 2016

    —       $ 23,028     $ 6,283     $ 3       27,917     $ 7,743     $ 2,549,002  

Accrued premiums/discounts

    —         —         —         —         —         —         1,511  

Realized gain (loss)

    —         —         —         —         —         —         (17,927

Change in unrealized appreciation (depreciation)(1)

  $ (7,638     893     $ 7,865       1       (7,232     —         (40,048

Purchases

    66,196       —         —         —         —         —         72,551  

Sales

    —         —         —         —         —         —         (381,801

Transfers into Level 3(2)

    590,991       —         —         —         —         —         590,991  

Transfers out of Level 3(3)

    —         —         —         —         —         —         (155,006
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of March 31, 2017

  $ 649,549     $ 23,921     $ 14,148     $ 4       20,685       7,743     $ 2,619,273  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) for investments in securities still held at March 31, 2017(1)

  $ (7,638   $ 893     $ 7,865     $ 1       (7,232     —       $ (40,048
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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. Investments

At March 31, 2017, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

 

Gross unrealized appreciation

   $ 16,031,205  

Gross unrealized depreciation

     (4,237,150
  

 

 

 

Net unrealized appreciation

   $ 11,794,055  
  

 

 

 

3. Restricted securities

The following Fund investment is restricted as to resale.

 

Security

   Number of
Shares
     Acquisition
Date
     Cost      Value at
3/31/17
     Value per
Share
     Percent of
Net Assets
 

Berry Petroleum Co.

     84        2/25/17      $ 840      $ 1,134      $ 13.50        0.00

 

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 24, 2017

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 24, 2017

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

Date:

 

May 24, 2017