N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-21477

WESTERN ASSET/CLAYMORE U.S. TREASURY

INFLATION PROTECTED SECURITIES FUND 2

(Exact Name of Registrant as Specified In Its Charter)

Address of Principal Executive Offices:

385 East Colorado Boulevard

Pasadena, CA 91101

Name and address of agent for service:

Gregory B. McShea

Western Asset Management Company

385 East Colorado Boulevard

Pasadena, CA 91101

Registrant’s telephone number, including area code: (626) 844-9400

Date of fiscal year end: December 31, 2004

Date of reporting period: December 31, 2004

Item 1 – Report to Shareholders

Western Asset/Claymore U.S. Treasury

Inflation Protected Securities Fund 2

Annual Report to Shareholders

December 31, 2004

Annual Report to Shareholders

LETTER TO SHAREHOLDERS

Dear Shareholder:

Claymore Advisors, LLC, your Fund’s investment adviser, is pleased to present the annual report for the first fiscal year of the Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2. The Fund priced its initial public offering (“IPO”) on February 24, 2004, and commenced investment operations on February 27, 2004. During this initial period, the Fund implemented its investment strategy on not only the common assets raised in the IPO but also the $410 million raised through the issuance of preferred shares as part of the Fund’s leverage strategy. The net asset value (“NAV”) of the Fund ended the period at $14.00 per common share, down from its initial level of $14.33 per share after deducting the sales charge. Given this change in NAV and assuming reinvestment of dividends, the Fund generated a total return at NAV of 3.99% for the period. The Fund’s common stock price did not fare as well, declining from its initial $15.00 per share to $12.82 at December 31, 2004. The Fund’s total return at market price was –8.73%.

Management’s discussion of fund performance and additional information about the Fund follow this letter. We appreciate your investment with us and thank you for giving us the opportunity to serve your investment needs. For more information about the Fund, please call 1-800-345-7999 or visit the Fund’s website at www.westernclaymore.com.

Claymore Advisors, LLC

February 18, 2005

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Annual Report to Shareholders

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

The Market

2004 was a good year for U.S. Treasury Inflation-Protected Securities (“TIPS”) as higher energy prices created an increased demand for inflation protection. Headline inflation (as opposed to the core measure which excludes the volatile food and energy components), expressed by the Consumer Price Index for All Urban Consumers (“CPI-U”), rose from 1.9% (year-over-year) in December 2003 to 3.3% (year-over-year) in December 2004. In June, the Fed at long last began raising short-term interest rates, taking them from 1% to 2.25% by the end of the year. Because the Fed was able to implement a policy of raising short-term interest rates at a “gradual pace,” longer dated real yields fell as the yield curve flattened.

Performance

For the year ended December 31, 2004, the Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (“Fund”) paid dividends from net investment income of $0.8675 per share and generated a total return of 3.99% on a net asset value (“NAV”) basis from inception (February 27, 2004) to December 31, 2004. Unfortunately, the Fund’s stock price did not follow suit, returning –8.73% for the period. The emerging market debt component of the Fund performed well in 2004 due to a positive global environment and strengthening country fundamentals. Spreads in Brazil, Russia, and Mexico all tightened as the market recognized their continuing pursuit of prudent fiscal and monetary policies. Again, the bulk of the performance is from U.S. TIPS.

Though the Fund is not required to be hedged, we currently continue to implement hedging strategies in the Fund. We are currently particularly focused on hedging high-volatility market events such as employment release dates. The current hedging strategies employed allowed the Fund to maintain a relatively stable NAV throughout the year; however, these hedging strategies had a negative impact on performance, primarily due to options expiring worthless at various points during the year. Depending on market and other conditions, we may discontinue our hedging strategies at any time.

One of our current goals is to maintain a stable NAV; in bull markets, our hedging strategies may cause us to underperform published indices on a total return basis, and in bear markets, the hedging strategies are designed to protect the NAV against a significant decline in value, although, of course, this may not be achieved by our hedging strategies.

Western Asset Management Company

January 26, 2005

2

Annual Report to Shareholders

FUND HIGHLIGHTS

(Amounts in Thousands, except per share amounts)

	December 31, 2004
Net Asset Value	$856,560
Per Share	$14.00
Market Value Per Share	$12.82
Net Investment Income	$59,267
Per Share	$0.97
Dividends Paid to Common Shareholders	$53,147
Per Share	$0.87

The Fund

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (“WIW” or the “Fund”) is a closed-end, diversified management investment company which seeks to provide current income for its shareholders. Capital appreciation, when consistent with current income, is a secondary investment objective. Substantially all of the Fund’s net investment income (after payment of dividends to holders of preferred shares and interest in connection with other forms of leverage (if applicable)) is distributed to the Fund’s common shareholders. A Dividend Reinvestment Plan is available to those common shareholders of record desiring it. The Fund’s common shares are listed on the New York Stock Exchange (“NYSE”) where they are traded under the symbol WIW.

Performance Information

Total return on market value measures investment performance in terms of appreciation or depreciation in market value per share, plus dividends and any capital gain distributions. Total return on net asset value measures investment performance in terms of appreciation or depreciation in net asset value per share, plus dividends and any capital gain distributions. Total return on market value assumes that dividends and distributions were reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total return on net asset value assumes that dividends and distributions were reinvested at net asset value. No adjustment has been made for any income taxes payable by shareholders.

	Since InceptionA		Fourth Quarter 2004
Total Fund Investment Return Based on:
Market Value	(8.73	)%	1.84%
Net Asset Value	3.99	%	4.25%
Barclays U.S. Government Inflation-Linked 1-10 Year IndexB	4.06	%	1.70%
Barclays U.S. Government Inflation-Linked Index (All Maturities)C	4.83	%	2.52%

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please visit http://www.westernclaymore.com. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when sold, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions.

^A The Fund’s inception date is February 27, 2004.

^B This index is the 1 to 10 year component of the Barclays Global Inflation-Linked Bond Index.

^C This index is the U.S. component of the Barclays Global Inflation-Linked Bond Index, which measures the performance of the major government inflation-linked bond markets.

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Annual Report to Shareholders

FUND HIGHLIGHTS—Continued

Investment Policies

The Fund’s investment policies include, among others, that its portfolio be invested as follows:

• At least 80% of total managed assets^D in U.S. Treasury Inflation Protected Securities.

• Up to 20% of total managed assets in corporate bonds or other securities and instruments, including securities and instruments of issuers located in developing or “emerging market” countries.

• Preferred shares, together with other forms of leverage (including reverse repurchase agreements and dollar roll transactions), will not exceed 38% of the Fund’s total managed assets.

Dividend Reinvestment Plan

The Fund and EquiServe Trust Company N.A. (“Agent”), as the Transfer Agent and Registrar of WIW, offer a convenient way to add shares of WIW to your account. WIW offers to all common shareholders a Dividend Reinvestment Plan (“Plan”). Under the Plan, cash distributions (e.g., dividends and capital gains) on the common shares are automatically invested in shares of WIW unless the shareholder elects otherwise.

As a participant in the Dividend Reinvestment Plan, you will automatically receive your dividend or net capital gains distribution in newly issued shares of WIW, if the market price of the shares on the date of the distribution is at or above the net asset value (“NAV”) of the shares, minus estimated brokerage commissions that would be incurred upon the purchase of common shares on the open market. The number of shares to be issued to you will be determined by dividing the amount of the cash distribution to which you are entitled (net of any applicable withholding taxes) by the greater of the NAV per share on such date or 95% of the market price of a share on such date. If the market price of a share on such distribution date is below the NAV, less estimated brokerage commissions that would be incurred upon the purchase of common shares on the open market, the Agent will, as agent for the participants, buy shares of WIW through a broker on the open market. All common shares acquired on your behalf through the Plan will be automatically credited to an account maintained on the books of the Agent.

Additional Information Regarding the Plan

WIW will pay all costs applicable to the Plan, except for brokerage commissions for open market purchases by the Agent under the Plan which will be charged to participants. All shares acquired through the Plan receive voting rights and are eligible for any stock split, stock dividend, or other rights accruing to shareholders that the Board of Trustees may declare.

You may terminate participation in the Plan at any time by giving written notice to the Agent. Such termination shall be effective prior to the record date next succeeding the receipt of such instructions or by a later date of termination specified in such instructions. Upon termination, a participant may request a certificate for the full shares credited to his or her account or may request the sale of all or part of such shares. Fractional shares credited to a terminating account will be paid for in cash at the current market price at the time of termination.

Dividends and other distributions invested in additional shares under the Plan are subject to income tax just as if they had been received in cash. After year end, dividends paid on the accumulated shares will be included in the Form 1099-DIV information return to the Internal Revenue Service (“IRS”) and only one Form 1099-DIV will be sent to participants each year.

Inquiries regarding the Plan, as well as notices of termination, should be directed to EquiServe Trust Company, N.A., P.O. Box 43011, Providence, Rhode Island 02940-3011—Investor Relations telephone number (800) 426-5523.

Annual Certifications

In September 2004, the Fund submitted a CEO annual certification to the NYSE in which the Fund’s principal executive officer certified that he was not aware, as of the date of the certification, of any violation by the Fund of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related Securities and Exchange Commission (“SEC”) rules, the Fund’s principal executive and principal financial officers have made quarterly certifi

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

4

Annual Report to Shareholders

cations, included in filings with the SEC on Forms N-CSR and N-Q, relating to, among other things, the Fund’s disclosure controls and procedures and internal control over financial reporting.

Proxy Voting

You may request a free description of the policies and procedures that the Fund uses to determine how proxies relating to the Fund’s portfolio securities are voted by calling 1-800-345-7999 or by writing to the Fund, or you may obtain a copy of these policies and procedures (and other information relating to the Fund) from the SEC’s website (http://www.sec.gov). You may request a free report regarding the Fund’s voting of proxies relating to portfolio securities during the most recent twelve-month period ended June 30 by calling 1-800-345-7999 or by writing to the Fund, or you may obtain a copy of this report (and other information relating to the Fund) from the SEC’s website (http://www.sec.gov).

IMPORTANT TAX INFORMATION 2004

(Unaudited)

The portion of dividends attributable to interest earned on direct obligations of the U.S. government is exempt from state income tax in many states. The percentage of such interest earned by the Fund for each quarter and for each period ended December 31, 2004, is as follows:

First Quarter 2004	Second Quarter 2004	Third Quarter 2004	Fourth Quarter 2004	Period Ended December 31, 2004
77.99%	80.41%	73.36%	71.80%	76.14%

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Annual Report to Shareholders

PORTFOLIO DIVERSIFICATION

December 31, 2004

The pie chart and bar chart above represent the Fund’s portfolio as of December 31, 2004. The Fund’s portfolio is actively managed, and its portfolio composition, credit quality breakdown, and other portfolio characteristics will vary from time to time. U.S. Treasury Inflation-Protected Securities are unrated, but are backed by the full faith and credit of the government of the United States of America and are therefore considered by the Fund’s investment adviser to be comparable to bonds rated AAA/Aaa.

The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. You may obtain a free copy of the Fund’s Form N-Q by calling 1-800-345-7999, visiting the Fund’s website (http://www.westernclaymore.com), or by writing to the Fund, or you may obtain a copy of this report (and other information relating to the Fund) from the SEC’s website (http://www.sec.gov). Additionally, the Fund’s Form N-Q can be viewed or copied at the SEC’s Public Reference Room in Washington D.C. Information about the operation of the Public Reference Room can be obtained by calling 1-800-SEC-0330.

^A Ratings shown are expressed as a percentage of the portfolio. Standard & Poor’s Ratings Services provides capital markets with credit ratings for the evaluation and assessment of credit risk.

^B Expressed as a percentage of the portfolio.

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Annual Report to Shareholders

PORTFOLIO OF INVESTMENTS

December 31, 2004

(Amounts in Thousands)

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

	% OF NET ASSETS	RATE	MATURITY DATE	PAR/SHARES		VALUE
Long-Term Securities	150.2%
U.S. Government and Agency Obligations	120.5%
Indexed SecuritiesA	120.5%
United States Treasury Inflation-Protected Security		0.875%	4/15/10	$	124,168	$	122,960
United States Treasury Inflation-Protected Security		1.875%	7/15/13		53,520		55,055	B
United States Treasury Inflation-Protected Security		2.000%	1/15/14		825,351		854,238
Total U.S. Government and Agency Obligations (Identified Cost—$1,035,098)							1,032,253
Corporate Bonds and Notes	4.0%
Electric	0.7%
The AES Corporation		8.875%	2/15/11		5,000		5,712
Food, Beverage and Tobacco	0.9%
Altria Group, Inc.		7.000%	11/4/13		7,500		8,127
Gas and Pipeline Utilities	1.2%
Dynegy Holdings Inc.		8.750%	2/15/12		5,000		5,237
The Williams Companies, Inc.		7.500%	1/15/31		5,000		5,175
							10,412
Health Care	0.6%
Tenet Healthcare Corporation		7.375%	2/1/13		5,000		4,850
Oil and Gas	0.6%
El Paso Corporation		7.750%	1/15/32		5,000		4,788
Total Corporate Bonds and Notes (Identified Cost—$31,705)							33,889
Asset-Backed Securities	0.2%
Indexed SecuritiesC	0.2%
Mutual Fund Fee Trust XIII Series 2000-3		9.070%	7/1/08		5,159		1,692	D
Total Asset-Backed Securities (Identified Cost—$1,504)							1,692
Yankee BondsE	25.3%
Electric Utilities	0.6%
Empresa Nacional de Electricidad S.A.		7.875%	2/1/27		5,000		5,299

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Annual Report to Shareholders

PORTFOLIO OF INVESTMENTS—Continued

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2—Continued

	% OF NET ASSETS	RATE	MATURITY DATE	PAR/SHARES			VALUE
Yankee Bonds—Continued
Foreign Governments	21.3%
Federative Republic of Brazil		14.500%	10/15/09		$15,510		$	20,681
Federative Republic of Brazil		8.000%	4/15/14		7,342			7,512
Federative Republic of Brazil		10.125%	5/15/27		19,915			22,673
Federative Republic of Brazil		11.000%	8/17/40		11,710			13,894
Republic of Colombia		11.750%	2/25/20		15,980			20,534
Republic of Ecuador		8.000%	8/15/30		6,670			5,753F
Republic of El Salvador		8.250%	4/10/32		5,030			5,080G
Republic of Panama		9.375%	1/16/23		13,940			16,101
Republic of Peru		8.750%	11/21/33		15,260			16,557
Russian Federation		5.000%	3/31/30		36,800			38,066F
United Mexican States		11.500%	5/15/26		2,680			4,101
United Mexican States		7.500%	4/8/33		11,240			12,139
								183,091
Oil and Gas (Exploration and Production)	0.6%
Petroleos Mexicanos		8.625%	12/1/23		4,410			5,109G
Special Purpose	2.1%
Aries Vermogensverwaltungs		9.600%	10/25/14		5,000			6,150G
Petrozuata Finance, Inc.		8.220%	4/1/17		11,525			11,510G
								17,660
Telecommunications	0.4%
Axtel SA		11.000%	12/15/13		500			539
Innova S. de R.L.		9.375%	9/19/13		2,300			2,616
								3,155
Transportation	0.3%
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.		11.750%	6/15/09		2,440			2,486
Total Yankee Bonds (Identified Cost—$201,387)								216,800
Preferred Stocks	0.2%
Fannie Mae		7.000%			34	shs		1,945C
Total Preferred Stocks (Identified Cost—$1,715)								1,945
Total Long-Term Securities (Identified Cost—$1,271,409)								1,286,579

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Annual Report to Shareholders

	% OF NET ASSETS	PAR/SHARES	VALUE
Short-Term Securities	0.1%
Options PurchasedH	0.1%
Emerging Markets Bond Index Futures Put, February 2005, Strike Price $266.40		50,000,000I	$	0
Eurodollar Future Call, October 2005, Strike Price $96.00		600I		986
Total Short-Term Securities (Identified Cost—$1,626)				986
Total Investments (Identified Cost—$1,273,035)	150.3%			1,287,565
Other Assets Less Liabilities	(2.4)%			(21,005	)
Liquidation Value of Preferred Shares	(47.9)%			(410,000	)
Net Assets Applicable to Common Shareholders	100.0%		$	856,560
	EXPIRATION	ACTUAL CONTRACTS	APPRECIATION/ (DEPRECIATION)
Options WrittenH
Emerging Markets Bond Index Call, Strike Price $319.68	February 2005	50,000,000	$	(1,453	)
U.S. Treasury Note Futures Call, Strike Price $109.00	March 2005	1,250		(124	)
			$	(1,577	)
Futures Contracts WrittenH
U.S. Treasury Bond Futures	March 2005	218	$	51
U.S. Treasury Note Futures	March 2005	2,312		(395	)
			$	(344	)

^A Treasury Inflation-Protected Security – Treasury security whose principal value is adjusted daily in accordance with changes to the Consumer Price Index for All Urban Consumers. Interest is calculated on the basis of the current adjusted principal value.

^B Collateral to cover futures and written option contracts.

^C Indexed security – The rates of interest earned on these securities are tied to the London Interbank Offered Rate (“LIBOR”). The coupon rates are the rates as of December 31, 2004.

^D Private placement.

^E Yankee Bond – A dollar-denominated bond issued in the U.S. by foreign entities.

^F Stepped coupon security – A security with a predetermined schedule of interest or dividend rate changes, at which time it begins to accrue interest or pay dividends.

^G Rule 144a Security – A security purchased pursuant to Rule 144a under the Securities Act of 1933 which may not be resold subject to that rule except to qualified institutional buyers. These securities represent 3.3% of net assets.

^H Options and futures are described in more detail in the notes to financial statements.

^I Par shown represents actual number of contracts.

See notes to financial statements.

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Annual Report to Shareholders

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2004

(Amounts in Thousands)

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Assets:
Investments, at value (Identified Cost—$1,271,409)	$	1,286,579
Short-term securities, purchased, at value (Identified Cost—$1,626)		986
			$	1,287,565
Cash				1,005
Receivable for:
Securities sold				8,197
Interest				13,608
Total assets				1,310,375
Liabilities:
Options written (Proceeds—$4,213)				5,790
Payable for:
Reverse repurchase agreement and interest payable				20,865
Securities purchased				9,997
Investment advisory fee				693
Administrative fee				10
Income distribution				5,363
Futures variation margin				778
Accrued expenses and other liabilities				319
Total liabilities				43,815
Preferred Shares:
No par value, 16 shares authorized, issued and outstanding, $25 liquidation value per share (Note 5)				410,000
Net Assets Applicable to Common Shareholders			$	856,560
Summary of Stockholders’ Equity:
Common shares, no par value, unlimited number of shares authorized, 61,184 shares issued and outstanding (Note 4)			$	869,931
Under/(over) distributed net investment income				962
Accumulated net realized gain/(loss) on investments, options and futures				(26,942	)
Net unrealized appreciation/(depreciation) on investments, options and futures				12,609
Net Assets Applicable to Common Shareholders			$	856,560
Net asset value per common share ($856,560 ÷ 61,184 common shares issued and outstanding)				$14.00

See notes to financial statements.

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Annual Report to Shareholders

STATEMENT OF OPERATIONS

(Amounts in Thousands)

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

	FOR THE PERIOD ENDED DECEMBER 31, 2004A
Investment Income:
Interest	$	67,999
Expenses:
Advisory and administration fees		6,625
Audit and legal fees		148
Custodian fees		165
Preferred share agent fees		24
Proxy expense		55
Registration fees		44
Reports to shareholders		110
Transfer agent and shareholder servicing expense		22
Trustees’ fees and expenses		60
Other		38
Total operating expenses		7,291
Less compensating balance credits		(3	)
Interest expense		1,444
Total expenses		8,732
Net Investment Income		59,267
Net Realized and Unrealized Gain/(Loss) on Investments:
Net realized gain/(loss) on:
Investments		2,300
Options		(24,293	)
Futures		(4,966	)
Unrealized appreciation/(depreciation) of investments and options		12,609
Net Realized and Unrealized Gain/(Loss) on Investments		(14,350	)
Increase in Net Assets Resulting From Operations		44,917
Dividends to Auction Preferred Shareholders From Net Investment Income		(5,141	)
Net Increase in Net Assets Applicable to Common Shareholders Resulting From Operations	$	39,776

^A For the period February 27, 2004 (commencement of operations) to December 31, 2004.

See notes to financial statements.

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Annual Report to Shareholders

STATEMENT OF CHANGES IN NET ASSETS

(Amounts in Thousands)

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

	FOR THE PERIOD ENDED DECEMBER 31, 2004A
Increase in Net Assets Applicable to Common Shareholders:
Net investment income	$	59,267
Net realized gain/(loss) on investments, options and futures		(26,959	)
Unrealized appreciation/(depreciation) of investments, options and futures		12,609
Increase in net assets resulting from operations		44,917
Dividends to preferred shareholders from net investment income		(5,141	)
Increase in Net Assets Applicable to Common Shareholders Resulting From Operations		39,776
Distributions to Common Shareholders:
From net investment income		(53,147	)
Capital Transactions:
Net proceeds from initial offering		874,900
Offering costs from common shares issuance		(1,833	)
Offering costs from preferred shares issuance		(521	)
Sales load on issuance of preferred shares		(4,100	)
Reinvestment of dividends resulting in the issuance of common shares		1,385
		869,831
Net increase in net assets applicable to common shareholders		856,460
Net Assets:
Beginning of period		100
End of period	$	856,560
Under/(over) distributed net investment income	$	962

^A For the period February 27, 2004 (commencement of operations) to December 31, 2004.

See notes to financial statements.

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Annual Report to Shareholders

STATEMENT OF CASH FLOWS

(Amounts in Thousands)

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

	FOR THE PERIOD ENDED DECEMBER 31, 2004A
Increase/(Decrease) in Cash:
Cash flows provided from/(used for) operating activities:
Purchased interest	$	(11,784	)
Interest received		26,321
Expenses paid		(6,042	)
Interest sold		6,022
Interest expense paid		(1,444	)
Purchase of long-term portfolio investments		(1,906,760	)
Proceeds from sale of long-term portfolio investments		672,869
Net purchases in excess of proceeds from sales of short-term portfolio transactions		1
Net payments for futures transactions		(13,777	)
Net premiums received from written options transactions		(12,460	)
Net cash used for operating activities		(1,247,054	)
Cash flows provided by/(used for) financing activities:
Net cash provided by initial public offering		874,594
Cash provided by reverse repurchase agreements		20,865
Net cash provided by preferred shares initial public offering		405,383
Cash distributions paid to common shareholders		(47,784	)
Cash distributions paid to preferred shareholders		(5,099	)
Net cash provided by financing activities		1,247,959
Net increase in cash:
Cash at beginning of period		100
Cash at end of period	$	1,005
Reconciliation of Net Increase in Net Assets Resulting From Operations to Net Cash Used for Operating Activities:
Net increase in net assets resulting from operations	$	44,917
Increase in investments		(1,301,676	)
Net realized loss on investment transactions, options and futures		26,959
Net increase in unrealized appreciation/(depreciation) of investments		(12,609	)
Increase in interest and dividends receivable		(21,805	)
Increase in accrued expenses and other liabilities		17,160
Total adjustments		(1,291,971	)
Net cash used for operating activities	$	(1,247,054	)

^A For the period February 27, 2004 (commencement of operations) to December 31, 2004.

See notes to financial statements.

13

Annual Report to Shareholders

FINANCIAL HIGHLIGHTS

Contained below is per-share operating performance data for a share of common stock outstanding throughout the period shown, total investment return, ratios to average net assets and other supplemental data. This information has been derived from information in the financial statements.

	FOR THE PERIOD ENDED DECEMBER 31, 2004A
Per Share Operating Performance:
Net asset value, beginning of period	$14.33	B
Net investment income	.97
Net realized and unrealized gain/(loss) on investments	(.32	)
Total from investment operations	.65
Dividends paid to preferred shareholders	(.08	)
Total from investment operations applicable to common shareholders	.57
Dividends paid to common shareholders from net investment income	(.87	)
Offering costs charged to paid-in capital	(.03	)
Net asset value, end of period	$14.00
Market value, end of period	$12.82
Average market value per share	$13.33
Total Investment Return Based on:C
Market value	(8.73	)%D
Net asset value	3.99	%E
Ratios and Supplemental Data:
Ratio of expenses to average weekly net assets (including interest expense) attributable to:
Common shares	1.25	%F
Total managed assetsG	.80	%F
Ratio of net investment income to average weekly net assets attributable to:
Common shares	8.47	%F
Total managed assetsG	5.45	%F
Asset coverage on preferred shares, end of periodH	308	%
Portfolio turnover rate	54.16%	D
Net assets applicable to common shareholders at end of period (in thousands)	$856,560

^A For the period February 27, 2004 (commencement of operations) to December 31, 2004.

^B Net of sales load of $0.675 on initial shares issued.

^C Total return based on market value reflects changes in market value. Total return based on net asset value reflects changes in the Fund’s net asset value during the period. Each figure includes reinvestments of distributions. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund’s shares trade during the period. Total investment return is not annualized for periods of less than one year. Brokerage commissions are not reflected.

^D Not annualized.

^E Not annualized. Total return on NAV includes offering costs. If offering costs were excluded, the total return would be 4.20%.

^F Annualized.

^G Includes liquidation value of preferred shares.

^H Asset coverage on preferred shares equals net assets of common shares plus the redemption value of the preferred shares divided by the value of outstanding preferred stock.

See notes to financial statements.

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Annual Report to Shareholders

NOTES TO FINANCIAL STATEMENTS

(Amounts in Thousands)

1. Significant Accounting Policies:

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (“Fund”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified, closed-end management investment company. The Fund commenced operations on February 27, 2004.

The Fund’s primary investment objective is to provide current income for its shareholders. Capital appreciation, when consistent with current income, is a secondary investment objective.

The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements:

Security Valuation

Securities owned by the Fund for which market quotations are readily available are valued at current market value. Current market value means the last sale price of the day or, in the absence of any such sales, the bid price obtained from quotation reporting systems, pricing services or other approved methods. Other assets and securities for which no quotations are readily available are valued at fair value as determined in good faith by the Board of Trustees or persons acting under their supervision. The factors considered in making such valuations are subject to change over time and are reviewed periodically. The values assigned to fair valued investments are based on available information and do not necessarily represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Further, because of the inherent uncertainty of valuation, such estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material.

Where a security is traded on more than one market, the securities are generally valued on the market considered by the Fund’s adviser to be the primary market.

Security Transactions

Security transactions are recorded on the trade date. Realized gains and losses from security transactions are reported on an identified cost basis for both financial reporting and federal income tax purposes.

Purchases and sales of investment securities (excluding short-term investments, U.S. government securities and U.S. government agencies) aggregated $322,188 and $67,192, respectively, for the period ended December 31, 2004. Purchases and sales of U.S. government and government agency obligations were $1,594,063 and $594,818, respectively, for the period ended December 31, 2004.

Repurchase Agreements

The Fund may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, a fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and a fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during a fund’s holding period. This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund’s holding period. The value of the collateral is at all times at least equal to the total amount of the repurchase obligation, including interest. In the event of counterparty default, a fund has the right to use the collateral to satisfy the terms of the repurchase agreement. However, there could be potential loss to the fund in the event the fund is delayed or prevented from exercising its right to dispose of the collateral securities, including the risk of a possible decline in the value of the collateral securities during the period in which the fund seeks to assert its rights. The Fund’s investment adviser reviews the value of the collateral and the creditworthiness of those banks and dealers with which the Fund enters into repurchase agreements to evaluate potential risks.

Reverse Repurchase Agreements

The Fund may enter into reverse repurchase agreements. Under the terms of a typical reverse repurchase agreement, a fund sells a security subject to an obligation to repurchase the security from the buyer at an agreed-upon time and price, thereby determining the yield to the buyer during the buyer’s holding period. A reverse repurchase agreement involves the risk, among others, that the market value of the collateral retained by the fund may decline below the price of the securities the fund has sold but is

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Annual Report to Shareholders

NOTES TO FINANCIAL STATEMENTS—Continued

obligated to repurchase under the agreement. In the event the buyer of securities under a repurchase agreement files for bankruptcy or becomes insolvent, the fund’s use of the proceeds of the agreement may be restricted pending a determination by the party, or its trustee or receiver, whether to enforce the fund’s obligation to repurchase the securities. In entering into reverse repurchase agreements, the Fund will maintain cash, U.S. government securities or other liquid high grade debt obligations at least equal in value to its obligations with respect to reverse repurchase agreements or take other actions permitted by law to cover its obligations.

Options, Futures and Swap Agreements

The current market value of an exchange traded option is the last sale price or, in the absence of a sale, the price obtained by reference to broker-dealer quotations. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Futures contracts are marked-to-market on a daily basis. As the contract’s value fluctuates, payments known as variation margin are made by or received by the Fund each day, depending on the daily fluctuation in the value of the contract. The daily changes in contract value are recorded as unrealized gains or losses, and the Fund recognizes a gain or loss when the contract is closed. Swap agreements are priced daily based upon quotations from brokers and the change, if any, is recorded as unrealized appreciation or depreciation.

Short Sales

The Fund may sell a security it does not own in anticipation of a decline in the market price of that security. The Fund must then borrow the security sold short and deliver it to the dealer that brokered the short sale. A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale. With respect to each short sale, the Fund must maintain collateral in a segregated account consisting of liquid assets with a value at least equal to the current market value of the shorted securities, marked-to-market daily, or take other actions permitted by law to cover its obligations. Dividend expenses and fees paid to brokers to borrow securities in connection with short sales are considered part of the cost of short sale transactions.

Distributions to Common Shareholders

Net investment income for dividend purposes is recorded on the accrual basis and consists of interest and dividends earned less expenses. All premiums and discounts are amortized for financial reporting and tax purposes using the effective interest method over the period to maturity of the security, and serve to reduce or increase interest income. Dividend income is recorded on the ex-dividend date. Dividends from net investment income are paid monthly. Distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles; accordingly, periodic reclassifications are made within the Fund’s capital accounts to reflect income and gains available for distribution under tax regulations.

Compensating Balance Credits

The Fund has an arrangement with its custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Fund’s cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments. For the period ended December 31, 2004, the Fund earned compensating balance credits of $3.

Use of Estimates

The preparation of the financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.

Other

In the normal course of business, the Fund enters into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is dependent upon claims that may be made against the Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.

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Annual Report to Shareholders

2. Federal Income Taxes:

No provision for federal income or excise taxes is required since the Fund intends to qualify as a regulated investment company and distribute substantially all of its taxable income and capital gain to its shareholders. Because federal income tax regulations differ from U.S. generally accepted accounting principles, income and capital gain distributions determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements.

Distributions of $58,288 during the period ended December 31, 2004, were characterized as ordinary income. No capital gain distributions were paid during the period ended December 31, 2004.

Pursuant to federal income tax regulations applicable to investment companies, the Fund has elected to treat net capital losses realized between November 1 and December 31 of each year (“post-October loss”) as occurring on the first day of the following tax year. For the period ended December 31, 2004, realized capital and currency losses reflected in the accompanying financial statements, which will not be recognized for federal income tax purposes until 2005, are shown in the table below.

The tax basis components of net assets at December 31, 2004, were:

Unrealized appreciation	$	18,329
Unrealized depreciation		(5,517	)
Net unrealized appreciation/(depreciation)		12,812
Undistributed ordinary income		6,325
Capital loss carryforwards		(27,145	)
Paid-in capital		864,568
Net assets	$	856,560

The Fund intends to retain realized capital gains that may be offset against available capital loss carryforwards for federal income tax purposes. The Fund had unused capital loss carryforwards for federal income tax purposes at December 31, 2004, of $27,145, which expire in 2012.

For financial reporting purposes, capital accounts and distributions to shareholders are adjusted to reflect the tax character of permanent book/tax differences. For the period ended December 31, 2004, the Funds recorded a $17 permanent reclassification, which relates primarily to reclassifications of gains/losses on paydown securities. Results of operations and net assets were not affected by these reclassifications.

At December 31, 2004, the cost of investments for federal income tax purposes was $1,272,832.

3. Financial Instruments:

Options Transactions

As part of its investment program, the Fund may utilize options and futures. Options may be written (sold) or purchased by the Fund. When the Fund purchases a put or call option, the premium paid is recorded as an investment and its value is marked-to-market daily. When the Fund writes a put or call option, an amount equal to the premium received by the Fund is recorded as a liability and its value is marked-to-market daily.

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Annual Report to Shareholders

NOTES TO FINANCIAL STATEMENTS—Continued

When options, whether written or purchased, expire, are exercised or are closed (by entering into a closing purchase or sale transaction), the Fund realizes a gain or loss as described in the chart below:

Purchased option:	Impact on the Fund:
The option expires	Realize a loss in the amount of the cost of the option.
The option is closed through a closing sale transaction	Realize a gain or loss depending on whether the proceeds from the closing sale transaction are greater or less than the cost of the option.
The Fund exercises a call option	The cost of the security purchased through the exercise of the option will be increased by the premium originally paid to purchase the option.
The Fund exercises a put option	Realize a gain or loss from the sale of the underlying security. The proceeds of that sale will be reduced by the premium originally paid to purchase that put option.

Written option:	Impact on the Fund:
The option expires	Realize a gain equal to the amount of the premium received.
The option is closed through a closing purchase transaction	Realize a gain or loss without regard to any unrealized gain or loss on the underlying security and eliminate the option liability. The Fund will realize a loss in this transaction if the cost of the closing purchase exceeds the premium received when the option was written.
A written call option is exercised by the option purchaser	Realize a gain or loss from the sale of the underlying security. The proceeds of that sale will be increased by the premium originally received when the option was written.
A written put option is exercised by the option purchaser	The amount of the premium originally received will reduce the cost of the security that the Fund purchased when the option was exercised.

The risk associated with purchasing options is limited to the premium originally paid. Options written by the Fund involve, to varying degrees, risk of loss in excess of the option value reflected in the portfolio of investments. The risk in writing a covered call option is that the Fund may forgo the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market or, for over-the-counter options, because of the counterparty’s inability or unwillingness to perform.

Activity in written call and put options during the period ended December 31, 2004, was as follows:

	Calls					Puts
	Actual Contracts		Premiums			Actual Contracts		Premiums
Options written	100,018,836		$	29,979		1,000		$	542
Options closed	(50,010,639	)		(13,659	)	(1,000	)		(542	)
Options expired	(3,150	)		(1,318	)	—			—
Options exercised	(3,797	)		(10,789	)	—			—
Options outstanding at December 31, 2004	50,001,250		$	4,213		—		$	—

Swap Agreements

The use of swaps involves risks that are different from those associated with ordinary portfolio securities transactions. Swap agreements may be considered to be illiquid. Although the Fund will not enter into any swap agreement unless Western Asset Management Company (the “Investment Manager”) believes that the other party to the transaction is creditworthy, the Fund does

18

Annual Report to Shareholders

bear the risk of loss of the amount expected to be received under the swap agreement in the event of the default or bankruptcy of the agreement counterparty. The Fund had no open swap agreements at December 31, 2004.

Futures

Upon entering into a futures contract, the Fund is required to deposit with the broker an amount of cash or cash equivalents equal to a percentage of the contract amount. This is known as the “initial margin.” Subsequent payments (“variation margin”) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. The daily changes in contract value are recorded as unrealized gains or losses and the Fund recognizes a realized gain or loss when the contract is closed. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded.

The Fund may enter into futures contracts for various reasons, including in connection with its interest rate management strategy. Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. The change in value of the futures contracts primarily corresponds with the value of the underlying instruments, which may not correlate with changes in interest rates, if applicable. In addition, there is a risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market. The open futures positions and related appreciation or depreciation at December 31, 2004, are listed at the end of the Fund’s portfolio of investments.

Reverse Repurchase Agreements

For the period ended December 31, 2004, the average amount of reverse repurchase agreements outstanding was $148,616 and the daily weighted average interest rate was 1.34%.

As of December 31, 2004, the Fund entered into a reverse repurchase agreement (the “Reverse Repurchase Agreement”) with Lehman Brothers, Inc. for $20,865, which was settled on January 11, 2005. The Reverse Repurchase Agreement was recorded at cost and was collateralized by a U.S. Treasury Inflation Protected Security with a par value of $19,500 and a market value as of December 31, 2004, of $20,845 that matures on January 15, 2013. The implied interest rate on the Reverse Repurchase Agreement was 2.13% at December 31, 2004.

4. Common Shares:

On February 27, 2004, the Fund completed the initial public offering of 53,350 shares of common stock. Proceeds paid to the Fund amounted to $763,972 after deduction of sales load of $36,011 and underwriting commissions of $267.

On March 16, 2004, the Fund’s underwriters exercised an option to purchase an additional 4,500 shares of common stock. Proceeds paid to the Fund amounted to $64,440 after deduction of sales load of $3,038 and underwriting commissions of $23.

On April 13, 2004, the Fund’s underwriters exercised an option to purchase an additional 3,225 shares of common stock. Proceeds paid to the Fund amounted to $46,182 after deduction of sales load of $2,177 and underwriting commissions of $16.

Of the 61,184 shares of common stock outstanding at December 31, 2004, the Investment Manager owned 7 shares and 102 shares were issued pursuant to the Dividend Reinvestment Plan.

5. Preferred Shares (amounts are not in thousands):

There are 16,400 shares of Auction Market Preferred Shares (“Preferred Shares”) authorized. The Preferred Shares have rights as set forth in the Fund’s Agreement and Declaration of Trust, as amended to date, and its Bylaws, as amended to date (the “Bylaws”), or as otherwise determined by the Trustees. The 16,400 Preferred Shares outstanding consist of five series: 3,280 shares each of Series M, Series T, Series W, Series TH, and Series F. The Preferred Shares have a liquidation value of $25,000 per share, plus any accumulated but unpaid dividends whether or not earned or declared.

Dividends on the Series M, Series W and Series F Preferred Shares are cumulative and are paid at a rate typically reset every 7 days based on the results of an auction. The rate for Series T and Series TH is reset every 28 days. Dividend rates ranged from 1.32% to 2.75% from May 17, 2004, to December 31, 2004; the average rate was 1.80%. Under the 1940 Act, the Fund may not declare dividends or make other distributions on common shares or purchase any such shares if, at the time of declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares would be less than 200%.

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Annual Report to Shareholders

NOTES TO FINANCIAL STATEMENTS—Continued

The Preferred Shares are redeemable at the option of the Fund, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated but unpaid dividends. The Preferred Shares are also subject to mandatory redemption at $25,000 per share plus any accumulated but unpaid dividends, whether or not earned or declared, if certain requirements relating to the composition of the assets and liabilities of the Fund as set forth in the Bylaws are not satisfied.

Preferred shareholders, who are entitled to one vote per Preferred Share, generally vote as a single class with the common shareholders, but will vote separately as a class (and, in certain circumstances, vote separately by series) with respect to certain matters set forth in the Bylaws. The preferred shareholders are entitled to elect at least two Trustees of the Fund.

6. Securities Loaned:

The Fund may lend its portfolio securities in order to earn income. The Fund will receive collateral in cash or high quality securities at least equal to the current value of the loaned securities. The Fund earns interest on the securities it lends and income when it invests the collateral for the loaned securities. As of December 31, 2004, there were no securities on loan.

7. Transactions With Affiliates and Certain Other Parties:

The Fund has entered into an Investment Advisory Agreement with Claymore Advisors, LLC (“Investment Adviser”), which provides for payment of a monthly fee computed at the annual rate of 0.60% of the Fund’s average weekly assets. The Investment Adviser has, in turn, entered into an Investment Management Agreement with the Investment Manager, pursuant to which the Investment Manager provides investment management services to the Fund. In exchange for the services provided by the Investment Manager, the Investment Adviser pays a portion of the fees it receives from the Fund to the Investment Manager, at the annual rate of 0.27% of the Fund’s average weekly assets. “Average weekly assets” means the average weekly value of the total assets of the Fund (including any assets attributable to leverage) minus accrued liabilities (other than liabilities representing leverage). For purposes of calculating “average weekly assets,” neither the liquidation preference of any preferred shares outstanding nor any liabilities associated with any instrument or transactions used by the Investment Manager to leverage the Fund’s portfolio (whether or not such instruments or transactions are “covered” as described in the prospectus) is considered a liability.

Under the administrative agreement with the Fund, Legg Mason Fund Adviser, Inc. (“Administrator”), an affiliate of the Investment Manager, provides certain administrative and accounting functions for the Fund. In consideration for these services, the Fund pays the Administrator a monthly fee at an annual rate of $125.

8. Trustee Compensation (dollar amounts are not in thousands):

Each Independent Trustee currently receives a fee of $8,000 annually for serving as a Trustee of the Fund and a fee of $1,000 and related expenses for each meeting of the Board of Trustees attended. The Chairman of the Board receives an additional $1,500 per year for serving in that capacity. Audit Committee members receive $500 for each meeting, and the Audit Committee Chairman receives an additional $1,500 annually. Other committee members receive $500 per meeting.

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Annual Report to Shareholders

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Trustees of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2:

In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations, changes in net assets, and cash flows and the financial highlights present fairly, in all material respects, the financial position of the Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (the “Fund”) at December 31, 2004, the results of its operations, the changes in its net assets, the statement of cash flows and the financial highlights for the fiscal period presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at December 31, 2004, by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Baltimore, Maryland

February 14, 2005

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Annual Report to Shareholders

TRUSTEES AND OFFICERS

The Trustees and officers of the Fund, their ages, and a description of their principal occupations during the past five years are listed below. Except as noted, each Trustee’s and officer’s principal occupation and business experience for the last five years have been with the employer(s) indicated, although in some cases the Trustee or officer may have held different positions with such employer(s). Unless otherwise indicated, the business address of the persons listed below is c/o Western Asset Management Company, 385 East Colorado Boulevard, Pasadena, CA 91101.

Name and Age	Position(s) With the Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Independent Trustees
Peter Erichsen Age 48	Trustee and Chairman of the Board of Trustees(1)(2)	Term expires in 2006; served since January 2004	Vice President, General Counsel and Secretary of the J. Paul Getty Trust (2001-present); Governor of the Philadelphia Stock Exchange (1999-present); Chairman of the Philadelphia Stock Exchange’s Audit Committee (1999-present). Formerly: Vice President and General Counsel of the University of Pennsylvania (1997-2001).	2	Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present).
Michael Larson Age 44	Trustee(1)(2)	Term expires 2005; served since September 2004	Chief Investment Officer for William H. Gates III (1994-present). Formerly: Senior Partner, Fixed Income for Harris Investment Management (1993); Chief Fixed Income Officer, Commonwealth Investment Counsel (1992); Senior Portfolio Manager, Putnam Management Company (1989-1992); Director, ARCO Investment Management Company (1980-1989).	2	Pan American Silver Corp. (silver mining, development and exploration company) (1999-present); Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2004-present).
Ronald A. Nyberg Age 51	Trustee(1)(2)	Term expires in 2006; served since January 2004	Principal of Ronald A. Nyberg, Ltd, a law firm specializing in corporate law, estate planning and business transactions (2000-present). Formerly: Executive Vice President, General Counsel and Corporate Secretary of Van Kampen Investments, an investment advisory firm (1982-1999).	6	Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present); Trustee of MBIA/Claymore Managed Duration Investment Grade Municipal Fund (2003-present); Trustee of Advent Claymore Convertible Securities & Income Fund (2003-present); Trustee of Dreman/Claymore Dividend & Income Fund (2003-present); Trustee of TS & W/Claymore Tax-Advantaged Balanced Fund (2004-present); Trustee of Madison/Claymore Covered Call Fund (2004-present); Trustee of Fiduciary/Claymore MLP Opportunity Fund (2004-present).

22

Annual Report to Shareholders

Name and Age	Position(s) With the Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Ronald E. Toupin, Jr. Age 46	Trustee(1)(2)	Term expires in 2007; served since January 2004	Formerly: Vice President, Manager and Portfolio Manager of Nuveen Asset Management, an investment advisory firm (1998-1999); Vice President and Portfolio Manager of Nuveen Investment Advisory Corporation, an investment advisory firm (1992-1999); Vice President and Manager of Nuveen Unit Investment Trusts (1991-1998); and Assistant Vice President and Portfolio Manager of Nuveen Unit Trusts (1988-1990), and John Nuveen & Company, Inc. (1982-1999).	6	Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present); Trustee of MBIA/Claymore Managed Duration Investment Grade Municipal Fund (2003-present); Trustee of Advent Claymore Convertible Securities & Income Fund (2003-present); Trustee of Dreman/Claymore Dividend & Income Fund (2003-present); Trustee of TS&W/Claymore Tax-Advantaged Balanced Fund (2004-present); Trustee of Madison/Claymore Covered Call Fund (2004-present); Trustee of Fiduciary/Claymore MLP Opportunity Fund (2004-present).
Interested Trustees
Nicholas Dalmaso Age 39(3)	Trustee	Term expires in 2005; served since January 2004	Senior Managing Director and General Counsel of Claymore Securities, Inc. (2001-present) and Claymore Advisors, LLC (2003-present); Chief Executive Officer, Chief Legal Officer, President and Chief Compliance Officer to funds in the Claymore Fund Complex. Manager of Claymore Fund Management Company LLC (2002-present). Formerly: Assistant General Counsel of John Nuveen & Company, Inc. (1999-2001); Vice President and Associate General Counsel of Van Kampen Investments (1992-1999).	6	Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present); Trustee of MBIA/Claymore Managed Duration Investment Grade Municipal Fund (2003-present); Director of Flaherty & Crumrine/Claymore Preferred Securities Income Fund (2002-present); Trustee of Advent Claymore Convertible Securities & Income Fund (2003-present); Trustee of Flaherty & Crumrine/Claymore Total Return Fund (2003-present); Trustee of Dreman/Claymore Dividend & Income Fund (2004-present); Trustee of TS&W/Claymore Tax-Advantaged Balanced Fund (2004-present); Trustee of Madison/Claymore Covered Call Fund (2004-present); Trustee of Fiduciary/Claymore MLP Opportunity Fund (2004-present).

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Annual Report to Shareholders

TRUSTEES AND OFFICERS—Continued

Name and Age	Position(s) With the Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Randolph L. Kohn Age 58(4)	Trustee and President	Term expires in 2007; served since January 2004(5)	President, Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present) and Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (2004-present). Formerly: Director, Global Client Services and Marketing, Western Asset Management Company (1984-2002); Director (1996-2001) and Chairman (2000-2001), Arroyo Seco, Inc.; Director of Marketing, American Express Asset Management (1982-1984); Director of Marketing, First Asset Management (1979-1982); Marketing Executive, Kemper Financial Services (1975-1979).	2	Trustee of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present).
Officers
Gregory B. McShea Age 38(6)	Vice President	Served since January 2004(5)	General Counsel, Western Asset Management Company (2003-present); Vice President, Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present). Formerly: Associate General Counsel and Compliance Director, Private Client Group, Legg Mason Wood Walker, Incorporated, a brokerage firm (“LMWW”), and an affiliate of Western Asset Management Company (1997-2003).	N/A	N/A
Marie K. Karpinski Age 55 100 Light Street Baltimore, MD 21202(6)	Treasurer	Served since January 2004(5)	Vice President, LMWW (1992-present); Vice President and Treasurer of all Legg Mason retail, open-end investment companies (1986-present); Vice President and Treasurer of Legg Mason Charles Street Trust, Inc., an open-end investment company (1998-present); Treasurer and Principal Financial and Accounting Officer of Pacific American Income Shares, Inc., a closed-end investment company (2001-present), Western Asset Funds, Inc. (1990-present), Western Asset Premier Bond Fund (2001-present), and Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present). Formerly: Assistant Treasurer of Pacific American Income Shares, Inc. (1988-2001).	N/A	N/A

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Annual Report to Shareholders

Name and Age	Position(s) With the Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Amy M. Olmert Age 41 100 Light Street Baltimore, MD 21202(6)	Chief Compliance Officer	Served since September 2004(5)	Senior Vice President of Legg Mason, Inc. since 2004. Vice President and Chief Compliance Officer of all Legg Mason retail, open-end investment companies since 2004. Vice President and Chief Compliance Officer of Legg Mason Charles Street Trust, Inc. an open-end investment company since 2004. Chief Compliance Officer of Western Asset Funds, Inc., Pacific American Income Shares, Inc., Western Asset Premier Bond Fund, and Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund since 2004. Formerly: Managing Director, Deutsche Asset Management (1997-2004).	N/A	N/A
Erin K. Morris Age 38 100 Light Street Baltimore, MD 21202(6)	Assistant Treasurer	Served since January 2004(5)	Assistant Vice President of LMWW (2002-present); Assistant Treasurer of Legg Mason Income Trust, Inc., Legg Mason Cash Reserve Trust, Legg Mason Tax Exempt Trust, Inc., Legg Mason Tax-Free Income Fund, Pacific American Income Shares, Inc., Western Asset Funds, Inc. and Western Asset Premier Bond Fund (2001-present) and Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (2003-present); Manager, Funds Accounting, LMWW (2000-present. Formerly: Assistant Manager, Funds Accounting, LMWW (1993-2000).	N/A	N/A
Heidemarie Gregoriev Age 33 2455 Corporate West Drive, Lisle, IL 60532(6)	Secretary	Served since May 2004(5)	Vice President and Assistant General Counsel, Claymore Advisors, LLC and Claymore Securities, Inc. since February 2004 and Secretary to funds in the Claymore Fund Complex. Previously: Legal Counsel, Henderson Global Investors (North America) Inc. and Assistant Secretary (2001-2004) and Chief Legal Officer (2003-2004) of Henderson Global Funds; Attorney, Gardner, Carton & Douglas, 1997-2001.	N/A	N/A

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Annual Report to Shareholders

TRUSTEES AND OFFICERS—Continued

Name and Age	Position(s) With the Fund	Term of Office and Length of Time Served	Principal Occupation(s) During the Past Five Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Directorships Held by Trustee
Steven M. Hill Age 40 2455 Corporate West Drive, Lisle, IL 60532(6)	Assistant Treasurer	Served since May 2004(5)	Managing Director of Claymore Advisors, LLC and Claymore Securities, Inc. since 2003; Chief Financial Officer, Chief Accounting Officer and Treasurer of funds in the Claymore Fund Complex. Previously: Treasurer of Henderson Global Funds and Operations Manager for Henderson Global Investors (NA) Inc. (2002-2003); Managing Director, FrontPoint Partners LLC (2001-2002); Vice President, Nuveen Investments (1999-2001); Chief Financial Officer, Skyline Asset Management LP, (1999); Vice President, Van Kampen Investments and Assistant Treasurer, Van Kampen mutual funds (1989-1999).	N/A	N/A
Richard C. Sarhaddi Age 30 2455 Corporate West Drive, Lisle, IL 60532(6)	Assistant Secretary	Served since May 2004(5)	Assistant Vice President and Attorney, Claymore Advisors, LLC and Claymore Securities, Inc.; and Assistant Secretary to funds in the Claymore Fund Complex (2004-present). Formerly: Editor, CCH Incorporated (2003-2004).	N/A	N/A

⁽¹⁾ Member of the Audit Committee of the Board of Trustees.

⁽²⁾ Member of the Governance and Nominating Committee of the Board of Trustees.

⁽³⁾ Mr. Dalmaso may be deemed an “interested person” (as defined in section 2(a)(19) of the 1940 Act) of the Fund on the basis of his position as an officer of Claymore Advisors, LLC, the Fund’s Investment Adviser, and his ownership of an interest therein.

⁽⁴⁾ Mr. Kohn is an “interested person” (as defined above) of the Fund on the basis of his former employment with Western Asset and certain of its affiliated entities (as disclosed above), as well as his ownership of certain shares of common stock of Legg Mason, Inc., Western Asset’s parent company.

⁽⁵⁾ Each officer shall hold office until his or her respective successor is chosen and qualified, or in each case until he or she sooner dies, resigns, is removed with or without cause or becomes disqualified.

⁽⁶⁾ Officers of the Fund are “interested persons” (as defined above).

26

Annual Report to Shareholders

PRIVACY POLICY

We are committed to keeping nonpublic personal information about you secure and confidential. This notice is intended to help you understand how we fulfill this commitment.

From time to time, we may collect a variety of personal information about you, including:

• Information we receive from you on applications and forms, via the telephone, and through our websites;

• Information about your transactions with us, our affiliates, or others (such as your purchases, sales, or account balances); and

• Information we receive from consumer reporting agencies.

We do not disclose your nonpublic personal information, except as permitted by applicable law or regulation. For example, we may share this information with others in order to process your transactions. We may also provide this information to companies that perform services on our behalf, such as printing and mailing, or to other financial institutions with whom we have joint marketing agreements. We will require these companies to protect the confidentiality of this information and to use it only to perform the services for which we hired them.

With respect to our internal security procedures, we maintain physical, electronic, and procedural safeguards to protect your nonpublic personal information, and we restrict access to this information.

If you decide at some point either to close your account(s) or become an inactive customer, we will continue to adhere to our privacy policies and practices with respect to your nonpublic personal information.

This notice is being provided on behalf of:

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Western Asset/Claymore U.S. Treasury

Inflation Protected Securities Fund 2

The Board of Trustees

Peter Erichsen, Chairman

Randolph L. Kohn, President

Nicholas Dalmaso

Michael Larson

Ronald A. Nyberg

Ronald E. Toupin, Jr.

Officers

Gregory B. McShea, Vice President

Amy M. Olmert, Chief Compliance Officer

Marie K. Karpinski, Treasurer and Principal Financial and Accounting Officer

Steven M. Hill, Assistant Treasurer

Erin K. Morris, Assistant Treasurer

Heidemarie Gregoriev, Secretary

Richard C. Sarhaddi, Assistant Secretary

Investment Manager

Western Asset Management Company

385 East Colorado Boulevard

Pasadena, CA 91101

Investment Adviser

Claymore Advisors, LLC

2455 Corporate West Drive

Lisle, IL 60532

Custodian

State Street Bank & Trust Company

P.O. Box 1031

Boston, MA 02103

Counsel

Ropes & Gray LLP

45 Rockefeller Plaza

New York, NY 10111

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP

250 West Pratt Street

Baltimore, MD 21201

Transfer Agent

EquiServe Trust Company, N.A.

P.O. Box 43011

Providence, RI 02940-3011

This report is sent to shareholders of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 for their information. It is not a Prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in this report.

In accordance with Section 23(c) of the Investment Company Act of 1940, the Fund hereby gives notice that it may, from time to time, repurchase its shares in the open market at the option of the Board of Trustees, and on such terms as the Board of Trustees shall determine.

WIW-AR-04

Item 2 – Code of Ethics

(a) Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (the “Registrant”) has adopted a Code of Ethics, as defined in the instructions to Item 2 of Form N-CSR, that applies to the Registrant’s principal executive, financial and accounting officers, a copy of which is attached as an exhibit to this Form N-CSR.

(b) Omitted.

(c) Not applicable.

(d) Not applicable.

(e) Not applicable.

Item 3 – Audit Committee Financial Expert

The Audit Committee of the Registrant’s Board of Trustees is comprised solely of Trustees who are “independent” (as such term has been defined by the Securities and Exchange Commission (“SEC”) in regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002 (the “Regulations”)). In addition, the Board of Trustees of the Registrant has determined that Mr. Ronald E. Toupin, Jr. qualifies as an “audit committee financial expert” (as such term has been defined in the Regulations) based on its review of his pertinent experience, knowledge and education. The SEC has stated that the designation or identification of a person as an audit committee financial expert pursuant to this Item 3 of Form N-CSR does not impose on such person any duties, obligations or liability that are greater than the duties, obligations and liabilities imposed on such person as a member of the Audit Committee and the Board of Trustees in absence of such designation or identification.

Item 4 – Principal Accounting Fees and Services

(a) Audit Fees

Fiscal Year Ended December 31, 2003 - $0

Fiscal Year Ended December 31, 2004 - $72,300

(b) Audit-Related Fees

Fiscal Year Ended December 31, 2003 - $0

Fiscal Year Ended December 31, 2004 - $16,400

Review of the rating agency compliance testing for the Registrant’s auction market preferred shares outstanding.

PricewaterhouseCoopers LLP did not bill fees for non-audit services that required pre-approval by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the Registrant’s last two fiscal years.

(c) Tax Fees

Fiscal Year Ended December 31, 2003 - $0

Fiscal Year Ended December 31, 2004 - $900

Services include preparation of federal and state income tax returns and preparation of excise tax returns.

PricewaterhouseCoopers LLP did not bill fees for tax services that required pre-approval by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the Registrant’s last two fiscal years.

(d) All Other Fees

There were no fees billed to the Registrant during each of the last two fiscal years by PricewaterhouseCoopers LLP that were not disclosed in Items 4(a), (b) or (c) above.

PricewaterhouseCoopers LLP did not bill fees for services not included in Items 4(a), (b) or (c) above that required pre-approval by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X during the Registrant’s last two fiscal years.

(e) (1) The Audit Committee has determined that all work performed for the Registrant by PricewaterhouseCoopers LLP will be pre-approved by the full Audit Committee and, therefore, has not adopted pre-approval policies and procedures.

(2) None.

(f) Not applicable.

(g) Non-Audit Fees

Fiscal Year Ended December 31, 2003 - $0

Fiscal Year Ended December 31, 2004 - $0

(h) The Audit Committee of the Registrant has considered whether the non-audit services that were rendered by the Registrant’s principal accountant to the Registrant’s investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser and that were not pre-approved by the Audit Committee are compatible with maintaining the principal accountant’s independence.

Item 5 – Audit Committee of Listed Registrants

The Registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit committee of the Registrant is comprised of Peter Erichsen, Michael Larson, Ronald A. Nyberg and Ronald E. Toupin, Jr.

Item 6 – Schedule of Investments

The schedule of investments in unaffiliated issuers as of the close of the reporting period is included as part of the annual report to shareholders contained in Item 1 hereof.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

The Registrant has delegated the voting of proxies relating to its portfolio securities to its sub-adviser, Western Asset Management Company (the “Sub-Adviser”). The Proxy Voting Policies and Procedures of the Sub-Adviser are attached as an exhibit to this Form N-CSR.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers

Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item 10.

Item 11 – Controls and Procedures

(a) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods in the SEC’s rules and forms and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) There were no changes in the Registrant’s internal control over financial reporting during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12 – Exhibits

(a)(1)	Code of Ethics subject to the disclosure required by Item 2 – filed as an exhibit hereto.
(a)(2)	Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – filed as an exhibit hereto.
(a)(3)	Not applicable.
(b)	Certifications pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 – filed as an exhibit hereto.
(c)	Proxy Voting Policies and Procedures subject to the disclosure required by Item 7 – filed as an exhibit 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/Claymore U.S. Treasury Inflation Protected Securities Fund 2

By:	/s/    RANDOLPH L. KOHN
	Randolph L. Kohn
	President, Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Date: February 25, 2005

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/    RANDOLPH L. KOHN
	Randolph L. Kohn
	President, Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Date: February 25, 2005

By:	/s/    MARIE K. KARPINSKI
	Marie K. Karpinski
	Treasurer and Principal Financial Accounting Officer,
	Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Date: February 25, 2005

EX-99.CODE ETH

Exhibit 12(a)(1)

CODE OF ETHICS CONTEMPLATED BY SECTION 406 OF THE

SARBANES-OXLEY ACT OF 2002 FOR PRINCIPAL EXECUTIVE AND

SENIOR FINANCIAL OFFICERS

January 20, 2004

I. Covered Officers/Purpose of the Code

This Code of Ethics (this “Code”) contemplated by Section 406 of the Sarbanes-Oxley Act of 2002 has been adopted by Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (the “Fund”) and applies to the Fund’s Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer (the “Covered Officers,” each of whom is identified in Exhibit A) for the purpose of promoting:

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

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

• compliance with applicable laws and governmental rules and regulations;

• the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and

• accountability for adherence to the Code.

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

II. Covered Officers Should Handle Ethically Actual or Apparent Conflicts of Interest

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

Certain conflicts of interest arise out of the relationships between Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (including the regulations thereunder, the “1940 Act”) and the Investment Advisers Act of 1940 (including the regulations thereunder, the “Investment Advisers Act”). For example, Covered Officers may not engage in certain transactions (such as the purchase or sale of portfolio securities or other property) with the Fund because of their status as “affiliated persons” of the Fund. The compliance programs and procedures of the Fund and its investment adviser and investment manager (together, the “Advisers”) and other service providers are designed to prevent, or identify and correct, violations of many of those provisions, although they are not

designed to provide absolute assurance as to those matters. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. See also Section V of this Code.

Although typically not presenting an opportunity for improper personal benefit, conflicts may arise from, or as a result of, the contractual relationship between the Fund and the Advisers, or the Fund and any other service provider to the Fund of which the Covered Officers are also officers or employees (including, without limitation, Legg Mason Fund Adviser, Inc. and Claymore Securities, Inc.). As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether for the Fund, for the Advisers, for such other service provider or any combination thereof), be involved in establishing policies and implementing decisions that will have different effects on the Advisers or such other service provider, on the one hand, and the Fund, on the other hand. The participation of the Covered Officers in such activities is inherent in the contractual relationships between the Fund and its service providers and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if performed in conformity with the provisions of the 1940 Act, the Investment Advisers Act, other applicable law and the Fund’s constitutional documents, such activities will be deemed to have been handled ethically for purposes of this Code. In addition, it is recognized by the Fund’s Board of Trustees (“Board”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes and that such service, by itself, does not give rise to a conflict of interest.

Other conflicts of interest are covered by the Code, even if such conflicts of interest are not the subject of provisions of the 1940 Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund, unless the personal interest has been disclosed to and approved by other officers of the Fund or the Fund’s Board or a committee of the Fund’s Board that has no such personal interest.

*             *             *             *

Each Covered Officer must not:

• use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;

• cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; or

• retaliate against any other Covered Officer or any employee of the Fund or its service providers for reports of potential violations that are made in good faith.

There are some conflict of interest situations that, if material, should always be approved by the Chief Legal Officer of the Fund. These conflict of interest situations are listed below:

• service on the board of directors or governing board of a publicly traded entity;

• the receipt of any non-nominal gifts from persons or entities who have or are seeking business relationships with the Fund;

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

• any ownership interest in, or any consulting or employment relationship with, any entities doing business with the Fund (other than the Advisers or their affiliates or, to the extent that such interest or relationship is disclosed to the Board before such officer is elected, any other Fund service provider or its affiliates). This restriction shall not apply to or otherwise limit the ownership of publicly traded securities so long as the Covered Person’s ownership does not exceed 2% of the outstanding securities of the relevant class.

• a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment with the Advisers or their affiliates (or, to the extent that such employment is disclosed to the Board before such officer is elected, with any other Fund service provider or its affiliates). This restriction shall not apply to or otherwise limit the ownership of publicly traded securities so long as the Covered Person’s ownership does not exceed 2% of the outstanding securities of the relevant class.

III. Disclosure and Compliance

• each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund’s Board and auditors, and to governmental regulators and self-regulatory organizations;

• each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Fund and the Advisers and, as applicable, other Fund service providers or with counsel to the Fund with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund (which, for sake of clarity, does not include any sales literature, omitting prospectuses, or “tombstone” advertising prepared by the Fund’s principal underwriter(s)); and

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

IV. Reporting and Accountability

Each Covered Officer must:

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

• provide full and fair responses to all questions asked in the Fund’s periodic Trustee and Officer Questionnaire as well as with respect to any supplemental request for information; and

• notify the Chief Legal Officer of the Fund promptly if he or she knows of any material violation of this Code.

The Chief Legal Officer of the Fund is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by the Chief Legal Officer, other than those expressly contemplated herein, will be considered by the audit committee (the “Committee”).

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

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

• if, after such investigation, the Chief Legal Officer believes that no material violation has occurred, the Chief Legal Officer is not required to take any further action;

• any matter that the Chief Legal Officer believes is a material violation will be reported to the Committee;

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

• the Committee will be authorized to grant waivers, as it deems appropriate;

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

V. Other Policies and Procedures

This Code shall be the sole code of ethics adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund or the Advisers or other Fund service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they conflict with the provisions of this Code. The Fund’s and its Advisers’ and service providers’ codes of ethics under Rule 17j-1 under the 1940 Act and the Advisers’ and other service providers’ more detailed compliance policies and procedures are separate requirements applying to the Covered Officers and others, and are not part of this Code.

VI. Amendments

Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board.

VII. Confidentiality

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

VIII.  Internal Use

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

Exhibit A

Persons Covered by this Code of Ethics

Principal Executive Officer	Principal Financial Officer	Principal Accounting Officer
Randolph L. Kohn and any successor President or Chief Executive Officer of the Fund	Marie K. Karpinski and any successor Treasurer or Principal Financial and Accounting Officer	Marie K. Karpinski and any successor Treasurer or Principal Financial and Accounting Officer

EX-99.CERT

Certifications Filed as Exhibit 12(a)(2) to Form N-CSR

CERTIFICATION

I, Randolph L. Kohn, certify that:

1. I have reviewed this report on Form N-CSR of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2;

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

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

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

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

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

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

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

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

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

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

Date: February 25, 2005

/s/    RANDOLPH L. KOHN        

Randolph L. Kohn

President

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Certifications Filed as Exhibit 12(a)(2) to Form N-CSR

CERTIFICATION

I, Marie K. Karpinski, certify that:

1. I have reviewed this report on Form N-CSR of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2;

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

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

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

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

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

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

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

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

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

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

Date: February 25, 2005

/s/    MARIE K. KARPINSKI        

Marie K. Karpinski

Treasurer and Principal Financial and Accounting Officer

Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

EX-99.906CERT

Certification Filed as Exhibit 12(b) to Form N-CSR

CERTIFICATION

I, Randolph L. Kohn, President of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (the “Trust”), certify, that to my knowledge:

1. The Trust’s periodic report on Form N-CSR for the period ended December 31, 2004 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or 78o(d)); and

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

/s/    RANDOLPH L. KOHN	February 25, 2005
Randolph L. Kohn	Date
President
Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

Certification Filed as Exhibit 12(b) to Form N-CSR

CERTIFICATION

I, Marie K. Karpinski, Chief Financial Officer of Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (the “Trust”), certify, that to my knowledge:

1. The Trust’s periodic report on Form N-CSR for the period ended December 31, 2004 fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or 78o(d)); and

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

/s/    MARIE K. KARPINSKI	February 25, 2005
Marie K. Karpinski	Date
Chief Financial Officer
Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2

EX-99.PROXY

Exhibit 12(c)

Procedure:	Proxy Voting
Departments Impacted:	Investment Management, Compliance, Investment Support, Client Services
References:	Western Asset Compliance Manual –Section R Proxy Voting Investment Advisers Act Rule 206(4)-6 and Rule 204-2 ERISA DOL Bulletin 94-2 C.F.R. 2509.94-2
Effective:	August 1 2003

Background

Western Asset Management Company (“Western Asset”) has adopted and implemented policies and procedures that we believe are reasonably designed to ensure that proxies are voted in the best interest of clients, in accordance with our fiduciary duties and SEC Rule 206(4)-6 under the Investment Advisers Act of 1940 (“Advisers Act”). Our authority to vote the proxies of our clients is established through investment management agreements or comparable documents, and our proxy voting guidelines have been tailored to reflect these specific contractual obligations. In addition to SEC requirements governing advisers, our proxy voting policies reflect the long-standing fiduciary standards and responsibilities for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the Investment Manager.

In exercising its voting authority, Western Asset will not consult or enter into agreements with officers, directors or employees of Legg Mason Inc. or any of its affiliates (other than Western Asset Management Company Limited) regarding the voting of any securities owned by its clients.

Policy

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

Procedures

Responsibility and Oversight

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

Client Authority

Prior to August 1, 2003, all existing client investment management agreements (“IMAs”) will be reviewed to determine whether Western Asset has authority to vote client proxies. At account start-up, or upon amendment of an IMA, the applicable client IMA are similarly reviewed. If an agreement is silent on proxy voting, but contains an overall delegation of discretionary authority or if the account represents assets of an ERISA plan, Western Asset will assume responsibility for proxy voting. The Client Account Transition Team maintains a matrix of proxy voting authority.

Proxy Gathering

Registered owners of record, client custodians, client banks and trustees (“Proxy Recipients”) that receive proxy materials on behalf of clients should forward them to Corporate Actions. Prior to August 1, 2003, Proxy Recipients of existing clients will be reminded of the appropriate routing to Corporate Actions for proxy materials received and reminded of their responsibility to forward all proxy materials on a timely basis. Proxy Recipients for new clients (or, if Western Asset becomes aware that the applicable Proxy Recipient for an existing client has changed, the Proxy Recipient for the existing client) are notified at start-up of appropriate routing to Corporate Actions of proxy materials received and reminded of their responsibility to forward all proxy materials on a timely basis. If Western Asset personnel other than Corporate Actions receive proxy materials, they should promptly forward the materials to Corporate Actions.

Proxy Voting

Once proxy materials are received by Corporate Actions, they are forwarded to the Compliance Department for coordination and the following actions:

a. Proxies are reviewed to determine accounts impacted.

b. Impacted accounts are checked to confirm Western Asset voting authority.

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c. Compliance Department staff reviews proxy issues to determine any material conflicts of interest. (See conflicts of interest section of these procedures for further information on determining material conflicts of interest.)

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

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

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

Timing

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

Recordkeeping

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

a. A copy of Western Asset’s policies and procedures.

b. Copies of proxy statements received regarding client securities.

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

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

e. A proxy log including:

1. Issuer name;

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

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

4. A brief identification of the matter voted on;

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

6. Whether a vote was cast on the matter;

7. A record of how the vote was cast; and

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

Records are maintained in an easily accessible place for five years, the first two in Western Asset’s offices.

Disclosure

Western Asset’s proxy policies are described in the firm’s Part II of Form ADV. Prior to August 1, 2003, Western Asset will deliver Part II of its revised Form ADV to all existing clients, along with a letter identifying the new disclosure. Clients will be provided a copy of these policies and procedures upon request. In addition, upon request, clients may receive reports on how their proxies have been voted.

Conflicts of Interest

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

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

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

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

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Voting Guidelines

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

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

I. Board Approved Proposals

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

1. Matters relating to the Board of Directors

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

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

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

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

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

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2. Matters relating to Executive Compensation

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

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

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

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

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

3. Matters relating to Capitalization

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

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

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

c. Western Asset votes for proposals authorizing share repurchase programs.

4. Matters relating to Acquisitions, Mergers, Reorganizations and Other Transactions

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

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5. Matters relating to Anti-Takeover Measures

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

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

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

6. Other Business Matters

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

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

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

II. Shareholder Proposals

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

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

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

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

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III. Voting Shares of Investment Companies

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

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

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

IV. Voting Shares of Foreign Issuers

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

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

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

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

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

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