Western Asset Premier Bond Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number: 811-10603

 

Western Asset Premier Bond Fund

(Exact Name of Registrant as Specified In Its Charter)

 

 

Address of Principal Executive Offices:   

385 East Colorado Boulevard

Pasadena, CA 91101

Registrant’s telephone number, including area code:    (626) 844-9400
Name and address of agent for service:   

Gregory B. McShea

385 East Colorado Boulevard

Pasadena, CA 91101

Date of fiscal year end:    December 31, 2006
Date of reporting period:    September 30, 2006


Item 1 – Schedule of Investments

(Portfolio is inserted here)


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  

Long-Term Securities

   151.6 %          

Corporate Bonds and Notes

   81.7 %          

Advertising

   0.1 %          

Affinion Group, Inc.

     10.125 %   10/15/13    $ 100    $ 105  

Lamar Media Corporation

     6.625 %   8/15/15      120      115  
                  
               220  
                  

Aerospace/Defense

   1.1 %          

Northrop Grumman Corporation

     7.750 %   2/15/31      1,000      1,247  

The Boeing Company

     6.125 %   2/15/33      600      647  

TransDigm Inc.

     7.750 %   7/15/14      40      40 A
                  
               1,934  
                  

Apparel

   0.3 %          

Levi Strauss & Co.

     9.750 %   1/15/15      225      233  

Levi Strauss & Co.

     8.875 %   4/1/16      70      70  

Oxford Industries, Inc.

     8.875 %   6/1/11      270      275  
                  
               578  
                  

Auto Parts and Equipment

   0.7 %          

Commercial Vehicle Group, Inc.

     8.000 %   7/1/13      250      239  

Keystone Automotive Operations Inc.

     9.750 %   11/1/13      480      451  

TRW Automotive Inc.

     11.000 %   2/15/13      90      98  

Visteon Corporation

     7.000 %   3/10/14      185      166  

Visteon Corporation

     8.250 %   8/1/10      245      239  
                  
               1,193  
                  

Automotive

   1.7 %          

Asbury Automotive Group Inc.

     9.000 %   6/15/12      235      241  

DaimlerChrysler NA Holdings Corp.

     7.300 %   1/15/12      1,000      1,063  

DaimlerChrysler NA Holdings Corp.

     8.500 %   1/18/31      1,000      1,188  

General Motors Corporation

     8.375 %   7/15/33      420      363  
                  
               2,855  
                  

Banking and Finance

   3.4 %          

Boeing Capital Corporation

     6.500 %   2/15/12      1,000      1,060  

Boeing Capital Corporation

     5.800 %   1/15/13      400      413  

E*TRADE Financial Corporation

     7.375 %   9/15/13      140      143  

E*TRADE Financial Corporation

     7.875 %   12/1/15      55      58  

Fuji JGB Inv

     9.870 %   6/30/08      790      846 A,B

General Motors Acceptance Corp.

     6.875 %   8/28/12      150      148  

General Motors Acceptance Corp.

     8.000 %   11/1/31      1,530      1,600  

HSBC Finance Corporation

     4.750 %   7/15/13      1,670      1,613  
                  
               5,881  
                  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  
Corporate Bonds and Notes—Continued             

Banks

   0.3 %          

Washington Mutual Bank FA

     5.500 %   1/15/13    $ 440    $ 440  
                  

Builders-Residential/Commercial

   0.3 %          

Beazer Homes USA, Inc.

     8.125 %   6/15/16      145      141  

K Hovnanian Enterprises, Inc.

     8.625 %   1/15/17      430      427  
                  
               568  
                  

Building Materials

   0.5 %          

Associated Materials Inc.

     0.000 %   3/1/14      720      396 C

NTK Holdings Inc.

     0.000 %   3/1/14      405      279 C

Nortek Inc.

     8.500 %   9/1/14      290      274  
                  
               949  
                  

Cable

   2.8 %          

Charter Communication Holdings LLC

     11.750 %   5/15/14      220      157 B

Charter Communication Holdings LLC

     11.000 %   10/1/15      9      8 A

Charter Communication Holdings LLC

     11.000 %   10/1/15      330      300  

Charter Communication Holdings II

     10.250 %   9/15/10      280      286  

Charter Communication Holdings II

     10.250 %   10/1/13      167      170 A

Comcast Cable Communications, Inc.

     6.750 %   1/30/11      500      525  

Comcast Corporation

     5.900 %   3/15/16      400      400  

Comcast Corporation

     7.050 %   3/15/33      1,000      1,071  

CSC Holdings Inc.

     7.250 %   4/15/12      250      249  

CSC Holdings Inc.

     7.875 %   2/15/18      380      394  

EchoStar DBS Corporation

     7.000 %   10/1/13      830      811 A

NTL Cable Plc

     9.125 %   8/15/16      125      129  

LodgeNet Entertainment Corporation

     9.500 %   6/15/13      321      343  
                  
               4,843  
                  

Casino Resorts

   1.2 %          

Inn of The Mountain Gods

     12.000 %   11/15/10      530      555  

MGM Mirage Inc.

     8.375 %   2/1/11      170      177  

Pinnacle Entertainment, Inc.

     8.250 %   3/15/12      250      253  

Premier Entertainment Biloxi LLC

     10.750 %   2/1/12      707      719  

Station Casinos, Inc.

     7.750 %   8/15/16      180      187  

Station Casinos, Inc.

     6.625 %   3/15/18      150      135  
                  
               2,026  
                  

Chemicals

   1.8 %          

Georgia Gulf Corporation

     9.500 %   10/15/14      350      348 A

Lyondell Chemical Company

     10.500 %   6/1/13      135      149  

The Dow Chemical Company

     6.000 %   10/1/12      2,500      2,585  
                  
               3,082  
                  

Coal

   0.4 %          

Alpha Natural Resources

     10.000 %   6/1/12      350      376  

International Coal Group, Inc.

     10.250 %   7/15/14      260      247 A
                  
               623  
                  

Computers Services and Systems

   1.6 %          

Amkor Technology, Inc.

     2.500 %   5/15/11      85      71 D

DynCorp Inc.

     9.500 %   2/15/13      502      520  

Electronic Data Systems Corporation

     7.125 %   10/15/09      700      732  

Electronic Data Systems Corporation

     7.450 %   10/15/29      500      549  

International Business Machines Corporation

     4.750 %   11/29/12      240      235  

Sungard Data Systems Inc.

     10.250 %   8/15/15      630      649  
                  
               2,756  
                  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  
Corporate Bonds and Notes—Continued             

Containers and Packaging

   0.6 %          

Berry Plastics Holding Corp.

     8.875 %   9/15/14    $ 135    $ 136 A

Graham Packaging Company Inc.

     9.875 %   10/15/14      298      293  

Graphic Packaging International Corp.

     8.500 %   8/15/11      40      41  

Graphic Packaging International Corp.

     9.500 %   8/15/13      210      215  

Owens-Brockway Glass Container Inc.

     8.750 %   11/15/12      330      348  
                  
               1,033  
                  

Construction Machinery

   0.1 %          

H&E Equipment Services, Inc.

     8.375 %   7/15/16      90      92 A
                  

Consumer Products

   0.2 %          

American Greetings Corporation

     7.375 %   6/1/16      20      20  

FTD, Inc.

     7.750 %   2/15/14      140      138  

Playtex Products, Inc.

     8.000 %   3/1/11      150      156  

Spectrum Brands, Inc.

     7.375 %   2/1/15      35      28  
                  
               342  
                  

Diversified Financial Services

   3.1 %          

AAC Group Holding Corp.

     0.000 %   10/1/12      440      365 C

ACE Cash Express, Inc.

     10.250 %   10/1/14      70      71 A

CIT Group Inc.

     7.750 %   4/2/12      1,600      1,772  

Citigroup Inc.

     6.625 %   6/15/32      1,000      1,094  

CitiSteel USA Inc.

     12.949 %   9/1/10      350      361 B

General Electric Capital Corporation

     3.750 %   12/15/09      740      711  

General Electric Capital Corporation

     6.000 %   6/15/12      700      727  

General Electric Capital Corporation

     5.450 %   1/15/13      250      253  
                  
               5,354  
                  

Drug & Grocery Store Chains

   1.3 %          

CVS Lease Pass Through

     5.880 %   1/10/28      1,578      1,561 A

Delhaize America, Inc.

     9.000 %   4/15/31      180      211  

Safeway Inc.

     5.800 %   8/15/12      500      501  
                  
               2,273  
                  

Education

   0.1 %          

Education Management LLC

     8.750 %   6/1/14      140      141 A
                  

Electric

   6.7 %          

Dominion Resources, Inc.

     5.700 %   9/17/12      770      775  

Duke Energy Corporation

     6.250 %   1/15/12      250      260  

Edison Mission Energy

     7.500 %   6/15/13      20      20 A

Edison Mission Energy

     7.750 %   6/15/16      180      182 A

Elwood Energy LLC

     8.159 %   7/5/26      353      372  

Exelon Generation Co. LLC

     6.950 %   6/15/11      2,000      2,120  

FirstEnergy Corp.

     6.450 %   11/15/11      610      636  

FirstEnergy Corp.

     7.375 %   11/15/31      3,040      3,515  

IPALCO Enterprises, Inc.

     8.625 %   11/14/11      130      139  

MidAmerican Energy Holdings Company

     5.875 %   10/1/12      250      255  

Niagara Mohawk Power Corporation

     7.750 %   10/1/08      1,500      1,566  

Progress Energy, Inc.

     7.100 %   3/1/11      250      268  

Progress Energy, Inc.

     6.850 %   4/15/12      750      801  

The AES Corporation

     9.000 %   5/15/15      440      474 A

TXU Electric Delivery Company

     7.000 %   9/1/22      250      271  
                  
               11,654  
                  

Energy

   0.8 %          

Midwest Generation LLC

     8.560 %   1/2/16      83      89  

Midwest Generation LLC

     8.750 %   5/1/34      325      347  

Mirant North America LLC

     7.375 %   12/31/13      350      350  

NRG Energy, Inc.

     7.375 %   2/1/16      505      502  

Orion Power Holdings, Inc.

     12.000 %   5/1/10      150      170  
                  
               1,458  
                  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE
 
Corporate Bonds and Notes—Continued             

Entertainment

   0.4 %          

AMC Entertainment Inc.

     11.000 %   2/1/16    $ 425    $ 463  

Cinemark, Inc.

     0.000 %   3/15/14      15      12 C

Warner Music Group

     7.375 %   4/15/14      170      166  
                  
               641  
                  

Environmental Services

   1.4 %          

Waste Management, Inc.

     7.375 %   5/15/29      2,000      2,289  

Waste Management, Inc.

     7.750 %   5/15/32      40      48  
                  
               2,337  
                  

Food, Beverage and Tobacco

   2.3 %          

Alliance One International, Inc.

     11.000 %   5/15/12      130      133  

Altria Group, Inc.

     7.000 %   11/4/13      250      273  

Altria Group, Inc.

     7.750 %   1/15/27      1,000      1,211  

Dole Foods Co.

     7.250 %   6/15/10      285      264  

Kraft Foods Inc.

     5.250 %   10/1/13      400      395  

Nabisco Inc.

     7.550 %   6/15/15      1,500      1,706  
                  
               3,982  
                  

Gaming

   0.2 %          

Isle of Capri Casinos

     9.000 %   3/15/12      20      21  

Isle of Capri Casinos

     7.000 %   3/1/14      60      57  

Pokagon Gaming Authority

     10.375 %   6/15/14      250      267 A
                  
               345  
                  

Gas and Pipeline Utilities

   2.1 %          

Colorado Interstate Gas Company

     6.800 %   11/15/15      150      151  

Duke Energy Field Services Corporation

     7.875 %   8/16/10      750      812  

Kinder Morgan Energy Partners, L.P.

     7.125 %   3/15/12      500      530  

Panhandle Eastern Pipe Line Company

     4.800 %   8/15/08      400      394  

Texas Eastern Transmission

     5.250 %   7/15/07      750      747  

The Williams Companies, Inc.

     7.500 %   1/15/31      902      891  

The Williams Companies, Inc.

     8.750 %   3/15/32      85      93  
                  
               3,618  
                  

Healthcare

   2.1 %          

Fresenius Medical Care Capital Trust II

     7.875 %   2/1/08      250      254  

Tenet Healthcare Corporation

     9.250 %   2/1/15      2,810      2,705  

Vanguard Health Holding Co. II, LLC

     9.000 %   10/1/14      735      713  
                  
               3,672  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE
 
Corporate Bonds and Notes—Continued             

Insurance

   0.2 %          

Crum & Forster Holdings Corporation

     10.375 %   6/15/13    $ 360    $ 369  
                  

Investment Banking/Brokerage

   4.1 %          

Credit Suisse First Boston, USA

     6.500 %   1/15/12      1,125      1,185  

J.P. Morgan Chase & Co.

     5.750 %   1/2/13      1,750      1,790  

J.P. Morgan Chase & Co.

     5.125 %   9/15/14      1,300      1,275  

Morgan Stanley

     6.600 %   4/1/12      1,500      1,593  

The Goldman Sachs Group, Inc.

     6.600 %   1/15/12      1,200      1,266  
                  
               7,109  
                  

Machinery

   0.2 %          

Terex Corporation

     7.375 %   1/15/14      270      271  
                  

Manufacturing (Diversified)

   2.3 %          

Eastman Kodak Co.

     7.250 %   11/15/13      1,800      1,758  

Interface, Inc.

     10.375 %   2/1/10      400      436  

Jacuzzi Brands, Incorporated

     9.625 %   7/1/10      535      567  

Koppers Inc.

     9.875 %   10/15/13      138      149  

Leiner Health Products L.P.

     11.000 %   6/1/12      280      271  

Norcraft Companies, L.P.

     9.000 %   11/1/11      480      487  

Nutro Products Inc.

     10.750 %   4/15/14      115      123 A

Rayovac Corporation

     8.500 %   10/1/13      165      143  

Simmons Company

     0.000 %   12/15/14      90      64 B
                  
               3,998  
                  

Media

   3.5 %          

AOL Time Warner Inc.

     6.150 %   5/1/07      250      251  

AOL Time Warner Inc.

     6.875 %   5/1/12      1,400      1,480  

AOL Time Warner Inc.

     7.700 %   5/1/32      1,150      1,284  

Barrington Broadcasting Group, LLC

     10.500 %   8/15/14      55      54 A

Clear Channel Communications, Inc.

     4.900 %   5/15/15      700      618  

Liberty Media Corporation

     3.750 %   2/15/30      1,860      1,158 D

LIN Television Corporation

     6.500 %   5/15/13      120      112  

News America Holdings Inc.

     6.625 %   1/9/08      300      305  

News America Holdings Inc.

     8.875 %   4/26/23      400      485  

Sinclair Broadcast Group, Inc.

     8.000 %   3/15/12      305      309  
                  
               6,056  
                  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  
Corporate Bonds and Notes—Continued             

Medical Care Facilities

   0.5 %          

DaVita, Inc.

     7.250 %   3/15/15    $ 300    $ 295  

HCA, Inc.

     6.300 %   10/1/12      85      72  

HCA, Inc.

     6.500 %   2/15/16      105      84  

HCA, Inc.

     7.690 %   6/15/25      90      70  

HCA, Inc.

     7.500 %   11/15/95      485      346  
                  
               867  
                  

Metals and Mining

   0.9 %          

Alcoa Inc.

     5.375 %   1/15/13      750      751  

International Steel Group, Inc.

     6.500 %   4/15/14      130      128  

Metals USA, Inc.

     11.125 %   12/1/15      335      367  

Mueller Group Inc.

     10.000 %   5/1/12      20      22  

Mueller Holdings Inc.

     0.000 %   4/15/14      265      233 C
                  
               1,501  
                  

Office Equipment

   0.2 %          

Xerox Corporation

     6.750 %   2/1/17      280      284  
                  

Oil and Gas

   7.4 %          

AmeriGas Partners, L.P.

     7.250 %   5/20/15      90      90  

Belden & Blake Corporation

     8.750 %   7/15/12      750      771  

Chesapeake Energy Corporation

     6.375 %   6/15/15      480      458  

Chesapeake Energy Corporation

     6.625 %   1/15/16      30      29  

Chesapeake Energy Corporation

     6.500 %   8/15/17      140      131  

ConocoPhillips

     4.750 %   10/15/12      1,000      979  

Devon Energy Corporation

     7.950 %   4/15/32      1,000      1,235  

Devon Finance Corp. ULC

     6.875 %   9/30/11      2,000      2,128  

El Paso Corporation

     6.375 %   2/1/09      333      332  

El Paso Corporation

     7.750 %   6/15/10      1,496      1,548  

El Paso Corporation

     7.625 %   7/15/11      500      513  

El Paso Corporation

     7.800 %   8/1/31      210      215  

Encore Acquisition

     6.000 %   7/15/15      45      41  

Hess Corporation

     7.300 %   8/15/31      60      68  

Hess Corporation

     7.875 %   10/1/29      1,640      1,938  

Occidental Petroleum Corporation

     6.750 %   1/15/12      500      534  

Parker Drilling Company

     9.625 %   10/1/13      300      327  

Plains Exploration & Production Company

     7.125 %   6/15/14      190      199  

Pride International, Inc.

     7.375 %   7/15/14      240      247  

SESI LLC

     6.875 %   6/1/14      10      10 A

Suburban Propane Partners, LP

     6.875 %   12/15/13      580      560  

Valero Energy Corporation

     7.500 %   4/15/32      400      463  
                  
               12,816  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE
 
Corporate Bonds and Notes—Continued             

Paper and Forest Products

   2.5 %          

Appleton Papers Inc.

     9.750 %   6/15/14    $ 300    $ 296  

NewPage Corporation

     12.000 %   5/1/13      310      321  

Verso Paper Holdings LLC

     9.125 %   8/1/14      65      65 A

Verso Paper Holdings LLC

     11.375 %   8/1/16      125      124 A

Weyerhaeuser Company

     6.750 %   3/15/12      2,400      2,508  

Weyerhaeuser Company

     7.375 %   3/15/32      1,000      1,036  
                  
               4,350  
                  

Publishing

   0.4 %          

Dex Media East LLC

     12.125 %   11/15/12      122      136  

Houghton Mifflin Co.

     0.000 %   10/15/13      210      183 C

PRIMEDIA Inc.

     8.875 %   5/15/11      315      308  
                  
               627  
                  

Real Estate

   0.2 %          

Kimball Hill Inc.

     10.500 %   12/15/12      170      153  

Ventas, Inc.

     6.625 %   10/15/14      260      261  
                  
               414  
                  

Rental Auto/Equipment

   0.6 %          

Ashtead Capital Inc.

     9.000 %   8/15/16      109      113 A

Hertz Corporation

     10.500 %   1/1/16      645      710 A

Penhall International Corp.

     12.000 %   8/1/14      240      251 A
                  
               1,074  
                  

Retail

   0.6 %          

Blockbuster Inc.

     9.000 %   9/1/12      140      128  

Brookstone, Inc.

     12.000 %   10/15/12      55      50  

EPL Finance Corporation

     11.750 %   11/15/13      195      216 A

Neiman Marcus Group, Inc.

     9.000 %   10/15/15      190      202  

Neiman Marcus Group, Inc.

     10.375 %   10/15/15      200      216  

Stater Bros. Holdings Inc.

     8.890 %   6/15/10      170      172 B
                  
               984  
                  

Retail (Food Chains)

   0.2 %          

Denny’s Corporation/Denny’s Holdings

     10.000 %   10/1/12      90      93  

Domino’s Inc.

     8.250 %   7/1/11      248      260  
                  
               353  
                  

Services (Diversified)

   0.1 %          

Allied Security LLC

     11.375 %   7/15/11      40      40  

Service Corporation International

     7.375 %   10/1/14      5      5 A

Service Corporation International

     7.750 %   6/15/17      140      134 A

Service Corporation International

     7.625 %   10/1/18      5      5 A
                  
               184  
                  

Special Purpose

   1.6 %          

Air 2 U.S.

     8.027 %   10/1/19      580      583 A

CCM Merger, Inc.

     8.000 %   8/1/13      140      134 A

GrafTech Finance Inc.

     10.250 %   2/15/12      70      74  

Hexion US Finance Corp.

     9.000 %   7/15/14      280      286  

Hughes Network Systems

     9.500 %   4/15/14      140      144 A

Milacron Escrow Corp.

     11.500 %   5/15/11      410      390  

Rainbow National Services LLC

     8.750 %   9/1/12      100      107 A

Rainbow National Services LLC

     10.375 %   9/1/14      250      283 A

River Rock Entertainment

     9.750 %   11/1/11      380      404  

UGS Corp.

     10.000 %   6/1/12      305      329  
                  
               2,734  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE
 
Corporate Bonds and Notes—Continued             

Telecommunications

   4.0 %          

BellSouth Corporation

     6.000 %   10/15/11    $ 1,000    $ 1,023  

Cincinnati Bell Inc.

     6.300 %   12/1/28      25      22  

Cincinnati Bell Inc.

     7.000 %   2/15/15      330      323  

Citizens Communications Company

     9.250 %   5/15/11      90      99  

Citizens Communications Company

     9.000 %   8/15/31      80      86  

Qwest Communications International Inc.

     7.250 %   2/15/11      160      160  

Qwest Corporation

     7.875 %   9/1/11      390      410  

Qwest Corporation

     8.875 %   3/15/12      140      153  

Qwest Corporation

     7.500 %   10/1/14      295      305 A

SBC Communications Inc.

     6.250 %   3/15/11      1,000      1,032 E

Sprint Capital Corp.

     6.000 %   1/15/07      1,500      1,502  

Sprint Capital Corp.

     8.375 %   3/15/12      1,450      1,625  

XM Satellite Radio, Inc.

     9.750 %   5/1/14      200      191  
                  
               6,931  
                  

Telecommunications (Cellular/Wireless)

   2.0 %          

AT&T Wireless Services, Inc.

     7.500 %   5/1/07      500      506  

AT&T Wireless Services, Inc.

     8.125 %   5/1/12      500      563  

Cingular Wireless LLC

     6.500 %   12/15/11      250      262  

Hawaiian Telecom Communications, Inc.

     12.500 %   5/1/15      635      667  

L-3 Communications Corporation

     6.375 %   10/15/15      430      418  

Motorola, Inc.

     7.625 %   11/15/10      64      70  

Rural Cellular Corp.

     9.875 %   2/1/10      235      245  

Telcordia Technologies Inc.

     10.000 %   3/15/13      485      323 A

Ubiquitel Operating Co.

     9.875 %   3/1/11      150      163  

Verizon Wireless Capital LLC

     5.375 %   12/15/06      250      250  
                  
               3,467  
                  

Transportation

   12.6 %          

America West Airlines, Inc.

     6.850 %   7/2/09      389      387  

America West Airlines, Inc.

     8.057 %   7/2/20      3,327      3,544  

American Airlines, Inc.

     7.800 %   10/1/06      310      310  

American Commercial Lines/ACL Finance Corp.

     9.500 %   2/15/15      136      148  

Continental Airlines, Inc.

     7.160 %   3/24/13      961      932  

Continental Airlines, Inc.

     6.900 %   1/2/18      1,072      1,103  

Continental Airlines, Inc.

     6.820 %   5/1/18      1,004      1,028  

Continental Airlines, Inc.

     6.545 %   2/2/19      1,919      1,953  

Continental Airlines, Inc.

     8.048 %   11/1/20      744      793  

Continental Airlines, Inc.

     6.703 %   6/15/21      1,046      1,046  

GulfMark Offshore, Inc.

     7.750 %   7/15/14      270      271  

H-Lines Finance Holding Corp.

     0.000 %   4/1/13      247      217 C

Horizon Lines, LLC

     9.000 %   11/1/12      244      251  

Kansas City Southern Railway Co.

     7.500 %   6/15/09      150      150  

Northwest Airlines Inc.

     5.960 %   8/6/13      2,547      2,419  

Union Pacific Corporation

     6.125 %   1/15/12      2,000      2,071  

United Air Lines, Inc.

     7.032 %   10/1/10      372      377  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  
Corporate Bonds and Notes—Continued             

Transportation—Continued

            

United Air Lines, Inc. Series 01-1

     6.602 %   9/1/13    $ 1,598    $ 1,602  

US Airways, Inc. Series 89A2

     9.820 %   1/1/13      473      208 F

US Airways, Inc. Series 93A3

     10.375 %   3/1/13      236      104 F

US Airways, Inc. Series 98-1

     6.850 %   1/30/18      2,824      2,859  
                  
               21,773  
                  
Total Corporate Bonds and Notes             

(Identified Cost—$137,142)

               141,052  
                  
Asset-Backed Securities    8.7 %          

Fixed Rate Securities

   5.3 %          

ACE Securities Corporation 2002-M Trust

     0.000 %   10/13/17      312      6 A,G

BankAmerica Manufactured Housing Contract 1997-2

     6.900 %   4/10/28      100      122  

Captiva CBO 1997-1

     6.860 %   11/30/09      394      393 A,H

Conseco Finance Securitizations Corp. 2002-1

     6.681 %   12/1/33      1,040      1,064  

Contimortgage Home Equity Loan Trust 1997-4

     7.330 %   10/15/28      733      594  

FirstFed Corporation Manufactured Housing Contract 1996-1

     8.060 %   10/15/22      2,100      2,931 A

Green Tree Financial Corporation 1992-2

     9.150 %   1/15/18      576      497  

Green Tree Financial Corporation 1993-1

     8.450 %   4/15/18      758      692  

Green Tree Financial Corporation 1996-D

     8.000 %   9/15/27      213      203  

Green Tree Financial Corporation 1999-4

     6.970 %   5/1/31      327      328  

Mutual Fund Fee 2000-2

     9.550 %   4/30/08      561      38 A,F

Mutual Fund Fee 2000-3

     9.070 %   7/1/08      2,905      349 A

Oakwood Mortgage Investors Inc. 2002-B

     6.060 %   3/15/25      480      429  

Pegasus Aviation Lease Securitization 2000-1

     8.370 %   3/25/30      1,300      819 A

Vanderbilt Mortgage Finance 1997-B

     8.155 %   10/7/26      693      712  
                  
               9,177  
                  

Floating Rate SecuritiesB

   3.3 %          

ACE Securities Corp. 2005-SD1

     5.730 %   11/25/50      603      604  

Banagricola DPR Funding

     6.380 %   3/15/10      1,465      1,465 A,H

Bayview Financial Asset Trust 2004-SSRA

     5.930 %   12/25/39      958      963 A

CS First Boston Mortgage Securities Corporation 2004-CF2

     5.800 %   5/25/44      590      590 A

Residential Asset Securities Corporation 2001-KS3

     5.790 %   9/25/31      813      817  

Saxson Asset Securities Trust 2000-2

     8.870 %   7/25/30      1,183      1,199  
                  
               5,638  
                  

Stripped Securities

   0.1 %          

Oakwood Mortgage Investors Inc. 2002-C

     6.000 %   8/15/10      788      119 I1
                  
Total Asset-Backed Securities             

(Identified Cost—$16,136)

               14,934  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  
Mortgage-Backed Securities    8.6 %          
Fixed Rate Securities    4.1 %          

Asset Securitization Corporation 1996-D2

     6.920 %   2/14/29    $ 35    $ 35  

Bear Stearns Asset Backed Securities, Inc. 2002-AC1

     7.000 %   1/25/32      1,828      1,842 A

Commercial Mortgage Acceptance Corporation 1997-ML1

     6.570 %   12/15/30      1,250      1,258  

Commercial Mortgage Acceptance Corporation 1997-ML1

     6.735 %   12/15/30      1,544      1,557  

Enterprise Mortgage Acceptance Company 1999-1

     6.420 %   10/15/25      250      108 A

GMAC Commercial Mortgage Security Inc. 1998-C1

     6.700 %   5/15/30      439      446  

GMAC Commercial Mortgage Security Inc. 1998-C1

     6.974 %   5/15/30      1,000      1,024  

Metropolitan Asset Funding, Inc. 1998-B1

     8.000 %   11/20/24      1,000      853  
                  
               7,123  
                  

Floating Rate SecuritiesB

   2.6 %          

Banc of America Commercial Mortgage Inc. 2005-5 A4

     5.115 %   10/10/45      1,050      1,033  

Blackrock Capital Finance LP 1997-R2

     6.672 %   12/25/35      895      694 A

Harborview Mortgage Loan Trust 2004-8

     5.730 %   11/19/34      595      597  

Harborview Mortgage Loan Trust 2005-9

     7.080 %   6/20/35      1,500      1,257  

Merit Securities Corporation 11PA

     7.574 %   9/28/32      850      240 A

Washington Mutual 2004-AR12

     5.765 %   10/25/44      664      665  
                  
               4,486  
                  

Stripped Securities

   1.9 %          

Bear Stearns Asset Backed Securities, Inc. 2006-SD3

     0.000 %   8/25/36      2,241      1,441 I2

LB-UBS Commercial Mortgage Trust 2001-C3

     1.189 %   6/15/36      2,749      104 A

Prime Mortgage Trust 2005-2

     1.743 %   10/25/32      4,209      311 I1

Prime Mortgage Trust 2005-5

     0.873 %   7/25/34      23,225      505 I1

Prime Mortgage Trust 2005-5

     1.572 %   7/25/34      3,344      260 I1

Residential Asset Mortgage Products, Inc. 2005-SL2

     0.000 %   2/25/32      824      645 I2
                  
               3,266  
                  

Total Mortgage-Backed Securities

            

(Identified Cost—$14,865)

               14,875  
                  

U.S. Government Securities

   10.8 %          

Fixed Rate Securities

   5.5 %          

United States Treasury Bonds

     5.375 %   2/15/31      2,500      2,700 J

United States Treasury Bonds

     4.500 %   2/15/36      850      814  

United States Treasury Notes

     3.375 %   2/28/07      6,000      5,960 J
                  
               9,474  
                  

Treasury Inflation-Protected SecuritiesK

   5.3 %          

United States Treasury Inflation-Protected Security

     3.625 %   1/15/08      2,300      2,920 J,K

United States Treasury Inflation-Protected Security

     3.000 %   7/15/12      2,550      2,994 J,K

United States Treasury Inflation-Protected Security

     2.000 %   7/15/14      3,000      3,174 J,K
                  
               9,088  
                  

Total U.S. Government Securities

            

(Identified Cost—$18,308)

               18,562  
                  

U.S. Government Agency Mortgage-Backed Securities

   7.7 %          

Fannie Mae

     6.000 %   10/15/36      12,000      12,053  

Fannie Mae

     6.500 %   8/25/44      1,164      1,184  
                  
Total U.S. Government Agency Mortgage-Backed             

Securities

            

(Identified Cost—$13,207)

               13,237  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR    VALUE  

Yankee BondsH

   26.9 %          

Aerospace/Defense

   0.1 %          

Systems 2001 Asset Trust

     6.664 %   9/15/13    $ 252    $ 266 A
                  

Cable

   0.3 %          

Kabel Deutschland GmbH

     10.625 %   7/1/14      430      461 A
                  

Chemicals

   0.1 %          

Montell Finance Co. B.V.

     8.100 %   3/15/27      200      185 A
                  

Electric

   1.0 %          

Hydro-Quebec

     6.300 %   5/11/11      1,700      1,780  
                  

Energy

   0.1 %          

Aquila Canada Finance Corporation

     7.750 %   6/15/11      110      116  
                  

Foreign Government

   15.0 %          

Dominican Republic

     9.500 %   9/27/11      406      437 A

Federative Republic of Brazil

     10.125 %   5/15/27      143      192  

Federative Republic of Brazil

     7.125 %   1/20/37      856      874  

Federative Republic of Brazil

     11.000 %   8/17/40      4,479      5,834  

Republic of Argentina

     5.590 %   8/3/12      818      762 B

Republic of Colombia

     11.750 %   2/25/20      768      1,075  

Republic of Ecuador

     10.000 %   8/15/30      605      554 A,C

Republic of El Salvador

     8.250 %   4/10/32      625      716 A

Republic of Honduras

     4.706 %   10/1/11      184      182 B

Republic of Panama

     9.375 %   4/1/29      1,496      1,930  

Republic of Panama

     6.700 %   1/26/36      431      427  

Republic of Peru

     5.000 %   3/7/17      1,107      1,092 B

Republic of Peru

     8.750 %   11/21/33      950      1,164  

Russian Federation

     5.000 %   3/31/30      7,605      8,488 C

United Mexican States

     7.500 %   4/8/33      1,870      2,157  
                  
               25,884  
                  

Insurance

   0.6 %          

XL Capital Ltd.

     5.250 %   9/15/14      1,000      973  
                  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

    

% OF

NET ASSETS

    RATE     MATURITY
DATE
   PAR    VALUE
 

Yankee BondsI (Continued)

            

Manufacturing (Diversified)

   2.3 %          

Tyco International Group SA

     6.375 %   10/15/11    $ 1,000    $ 1,048  

Tyco International Group SA

     6.875 %   1/15/29      2,615      2,911  
                  
               3,959  
                  

Media

   N.M.            

Quebecor Media Inc.

     7.750 %   3/15/16      55      55  
                  

Metals and Mining

   0.1 %          

Chaparral Steel Co.

     10.000 %   7/15/13      20      22  

RathGibson, Inc.

     11.250 %   2/15/14      170      175 A
                  
               197  
                  

Oil and Gas

   1.6 %          

Anadarko Finance Co.

     6.750 %   5/1/11      750      788  

Anadarko Finance Co.

     7.500 %   5/1/31      1,000      1,143  

Compagnie Generale de Geophysique SA (CGG)

     7.500 %   5/15/15      210      208  

Pogo Producing Co.

     6.875 %   10/1/17      290      277  

Western Oil Sands Inc.

     8.375 %   5/1/12      342      367  
                  
               2,783  
                  

Paper and Forest Products

   0.1 %          

Domtar Inc.

     7.875 %   10/15/11      120      119  
                  

Semiconductor Equipment

   0.1 %          

Magnachip Semiconductor SA

     8.000 %   12/15/14      235      143  
                  

Special Purposes

   2.7 %          

Burlington Resources Finance

     7.400 %   12/1/31      450      546  

Deutsche Telekom International Finance BV

     5.250 %   7/22/13      600      583  

Nell AF S.A.R.L.

     8.375 %   8/15/15      150      149 A

Petrozuata Finance, Inc.

     8.220 %   4/1/17      2,880      2,808 A

UFJ Finance Aruba AEC

     6.750 %   7/15/13      500      535  
                  
               4,621  
                  

Telecommunications

   1.4 %          

Axtel SA

     11.000 %   12/15/13      221      248  

France Telecom SA

     8.750 %   3/1/31      600      783  

INTELSAT

     7.625 %   4/15/12      310      271  

Intelsat Bermuda Ltd.

     9.250 %   6/15/16      225      237 A

Intelsat Bermuda Ltd.

     11.250 %   6/15/16      340      361 A

Wind Acquisition Finance SA

     10.750 %   12/1/15      500      552 A
                  
               2,452  
                  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     % OF
NET ASSETS
    RATE     MATURITY
DATE
   PAR/SHARES     VALUE  

Yankee BondsI (Continued)

           

Telecommunications (Cellular/Wireless)

   0.1 %         

Vodaphone Group PLC

     7.750 %   2/15/10    $ 250     $ 268  
                 

Transportation

   1.3 %         

Canadian Pacific Railroad Co.

     6.250 %   10/15/11      1,000       1,040  

Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (TFM)

     9.375 %   5/1/12      170       180  

Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (TFM)

     12.500 %   6/15/12      750       825  

OMI Corporation

     7.625 %   12/1/13      200       202  
                 
              2,247  
                 
Total Yankee Bonds            

(Identified Cost—$42,051)

              46,509  
                 

Foreign Government Obligations

   0.4 %         

Republic of Argentina

     2.000 %   1/3/10      1,200       762 B,L
                 

Total Foreign Government Obligations

           

(Identified Cost—$755)

              762  
                 

Preferred Stocks

   3.5 %         

Chesapeake Energy Corporation

     6.250 %        .239 shrs     86 M

Fannie Mae

     5.375 %        .015       1,444 M

Freddie Mac

     3.850 %        .1       4 N

Freddie Mac

     5.000 %        .2       9  

General Motors Corporation

     5.250 %        225       4,527 M
                 

Total Preferred Stocks

           

(Identified Cost—$5,140)

              6,070  
                 

Trust Preferred Securities

   3.3 %         

Corporate-Backed Trust Certificates

     7.375 %        34       598  

Corporate-Backed Trust Certificates

     8.000 %        16       294  

CORTS Trust for Ford Motor Co.

     8.000 %        155       2,857  

PreferredPlus TR-CCR1

     8.250 %        5       98  

SATURNS-F 2003-5

     8.125 %        104       1,926  
                 

Total Trust Preferred Securities

           

(Identified Cost—$5,022)

              5,773  
                 

Total Long-Term Securities

           

(Identified Cost—$252,627)

              261,774  
                 

Short-Term Security

   5.5 %         

Repurchase Agreement

           

Merrill Lynch

           

5.27% dated 9/30/06, to be repurchased at $9,584 on 10/2/06

           

(Collateral: $12,900 Resolution Funding Corp. (RFCO) Strips, 4.700%

            9,580       9,580  
                 

due 10/15/12, value $9,772)

           

Total Short-Term Security

           

(Identified Cost—$9,580)

              9,580  
                 

Total Investments

   157.1 %         

(Identified Cost—$262,206)

              271,354  
                 

Other Assets Less Liabilities

   (15.4 )%            (26,664 )

Liquidation Value of Preferred Shares

   (41.7 )%            (72,000 )
                 

Net Assets Applicable to Common Shareholders

   100.0 %          $ 172,690  
                 

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

     EXPIRATION    ACTUAL
CONTRACTS
   APPRECIATION/
(DEPRECIATION)
 

Futures Contracts Written

        

U.S Treasury Note Futures

   December 2006    104    $ (135 )
              
         $ (135 )
              

A 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, which the Fund’s investment adviser has determined to be liquid, represent 15.4% of net assets applicable to common shareholders.
B Floating Rate Security - The rate of interest on this type of security is tied to the London Interbank Offer Rate (LIBOR). The coupon rate is as of September 30, 2006.
C 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.
D Convertible Bond - Bond may be converted into the issuer’s common stock.
E Collateral to cover futures contracts written.
F Bond is in default as of September 30, 2006.
G Zero-Coupon Bond - A bond with no periodic interest payments which is sold at such a discount as to produce a current yield to maturity.
H Yankee Bond - A dollar-denominated bond issued in the U.S. by a foreign entity.
I Stripped Security - Security with interest-only or principal-only payment streams, denoted by a 1 or 2, respectively. For interest-only securities, the amount shown as principal is the notional balance used to calculate the amount of the interest due.
J Position, or a portion thereof, with an aggregate market value of $17,748 have been segregated to collateralize reverse repurchase agreements.
K Treasury Inflation Protected Security - Treasury security whose principal value is adjusted daily in accordance with changes to the Consumer Price Index (CPI) for all Urban Consumers. Interest is calculated on the basis of the current adjusted principal value.
L Denominated in Argentine peso.
M Convertible Preferred Stock - Stock may be converted into the issuer’s common stock.
N Indexed Security - The rate of interest on this type of security is based on the Constant Maturity Treasury (CMT) index. The coupon rate is as of September 30, 2006.
N.M. -Not meaningful.

Notes

Security Valuation

Securities owned by the Fund for which market quotations are readily available are valued at current market value. Securities for which market quotations are not readily available are fair valued by the Board of Trustees or the Fund’s Valuation Committee pursuant to procedures adopted by the Board. In determining fair value, the Board of Trustees or the Fund’s Valuation Committee consider all relevant qualitative and quantitative information available. The factors are subject to change over time and are reviewed periodically. The values assigned to fair value 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, those 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, which may include foreign markets, the securities are generally valued on the market considered by the Fund’s adviser to be the primary market. The Fund will value its foreign securities in U.S. dollars on the basis of the then-prevailing exchange rates.


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

The following is a summary of open swap contracts outstanding at September 30, 2006.

 

Agreement With:

   Termination Date    The Fund
Agrees to Pay
  The Fund Will
Receive
 

Contract

Notional
Amount

   Unrealized
Appreciation/
(Depreciation) A

Credit Suisse First Boston USA

(AAMES Mortgage Investment Trust 2005-1, 1- Month LIBORC + 160 bp*, due 6/25/35)

   June 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
  $ 43    $ —  

Credit Suisse First Boston USA

(AAMES Mortgage Investment Trust 2005-1, 1- Month LIBORC + 250 bp*, due 6/25/35)

   June 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(ACE Securities Corporation, 1- Month LIBORC + 138 bp*, due 2/25/35)

   February 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(ACE Securities Corporation 2005-HE1, 1- Month LIBORC + 220 bp*, due 2/25/35)

   February 25, 2035    2.06%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(Aegis Asset Backed Securities Trust, 1- Month LIBORC + 190 bp*), due 10/25/34)

   October 25, 2034    1.37%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(Aegis Asset Backed Securities Trust 2005-1, 1- Month LIBORC + 130 bp*, due 3/25/35)

   March 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Aegis Asset Backed Securities Trust 2005-1, 1- Month LIBORC + 200 bp*, due 3/25/35)

   March 25, 2035    2.18%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(Argent Securities Inc. 2004-W4, 1- Month LIBORC + 300 bp*, due 3/25/34)

   March 25, 2034    2.20%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(Argent Securities Inc. 2004-W11, 1- Month LIBORC + 225 bp*, due 11/25/34)

   November 25, 2034    1.33%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Argent Securities Inc. 2004-W11, 1- Month LIBORC + 350 bp*, due 11/25/34)

   November 25, 2034    2.15%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(Finance America Mortgage Loan Trust, 1- Month LIBORC + 180 bp*, due 11/25/34)

   November 25, 2034    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

Agreement With:

   Termination Date    The Fund
Agrees to Pay
  The Fund Will
Receive
 

Contract

Notional

Amount

  

Unrealized

Appreciation/
(Depreciation) A

Credit Suisse First Boston USA

(Finance America Mortgage Loan Trust 2004-3, 1- Month LIBORC + 315 bp*, due 11/25/34)

   November 25, 2034    2.18%
Monthly
  Specified Amount
upon credit event
notice
B
  $ 43    $ —  

Credit Suisse First Boston USA

(Fremont Home Loan Trust 2005-A, 1- Month LIBORC + 135 bp*, due 1/25/35)

   January 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Fremont Home Loan Trust 2005-A, 1- Month LIBORC + 200 bp*, due 1/25/35)

   January 25, 2035    2.08%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(INDYMAC Home Equity Loan Asset-Backed Trust 2004-C, 1- Month LIBORC + 190 bp*, due 3/25/35)

   March 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(INDYMAC Home Equity Loan Asset-Backed Trust 2004-C, 1- Month LIBOR1 + 325 bp*, due 3/25/35)

   March 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Long Beach Mortgage Loan Trust 2004-1, 1- Month LIBORC + 350 bp*), due 2/25/34)

   February 25, 2034    2.15%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(Long Beach Mortgage Loan Trust 2005-1, 1- Month LIBORC + 170 bp*, due 2/25/35)

   February 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Long Beach Mortgage Loan Trust 2005-1, 1- Month LIBORC + 275 bp*, due 2/25/35)

   February 25, 2035    2.08%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(MASTR Asset Backed Securities Trust 2005-NC1, 1- Month LIBORC + 153 bp*, due 12/25/34)

   December 25, 2034    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(MASTR Asset Backed Securities Trust 2005-NC1, 1- Month LIBORC + 240 bp*, due 12/25/34)

   December 25, 2034    2.08%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

 


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

Agreement With:

   Termination Date    The Fund
Agrees to Pay
  The Fund Will
Receive
 

Contract

Notional

Amount

  

Unrealized

Appreciation/
(Depreciation) A

Credit Suisse First Boston USA

(Merrill Lynch Mortgage Investors, Inc. 2004-WMC1, 1- Month LIBORC + 225 bp*, due 9/25/35)

   September 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
  $ 43    $ —  

Credit Suisse First Boston USA

(Merrill Lynch Mortgage Investors, Inc. 2004-WMC4, 1- Month LIBORC + 375 bp*, due 4/25/35)

   April 25, 2035    2.15%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(Merrill Lynch Mortgage Investors, Inc. 2005-NC1, 1- Month LIBORC + 130 bp*, due 10/25/35)

   October 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Merrill Lynch Mortgage Investors, Inc. 2005-NC1, 1- Month LIBORC + 205 bp*, due 10/25/35)

   October 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(Merrill Lynch Mortgage Investors, Inc. 2005-WMC1, 1- Month LIBORC + 135 bp*, due 9/25/35)

   September 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Morgan Stanley ABS Capital I 2005-WMC1, 1- Month LIBORC + 130 bp*, due 1/25/35)

   January 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Morgan Stanley ABS Capital I 2005-WMC1, 1- Month LIBORC + 215 bp*, due 1/25/35)

   January 25, 2035    2.18%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(New Century Home Equity Loan Trust 2004-2, 1- Month LIBORC + 325 bp*), due 8/25/34)

   August 25, 2034    2.15%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(New Century Home Equity Loan Trust 2005-1, 1- Month LIBORC + 140 bp*, due 3/25/35)

   March 25, 2035    1.31%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(New Century Home Equity Loan Trust 2005-1, 1- Month LIBORC + 205 bp*, due 3/25/35)

   March 25, 2035    2.18%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(Novastar Home Equity Loan 2005-1, 1- Month LIBORC + 135 bp*, due 6/25/35)

   June 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  


PORTFOLIO OF INVESTMENTS

Western Asset Premier Bond Fund

September 30, 2006 (Unaudited)

(Amounts in thousands)

 

Agreement With:

   Termination Date    The Fund
Agrees to Pay
  The Fund Will
Receive
 

Contract

Notional

Amount

  

Unrealized

Appreciation/

(Depreciation) A

Credit Suisse First Boston USA

(Novastar Home Equity Loan 2005-1, 1- Month LIBORC + 195 bp*, due 6/25/35)

   June 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
  $ 43    $ 1

Credit Suisse First Boston USA

(Park Place Securities, Inc. 2005-WCH1, 1- Month LIBORC + 155 bp*, due 1/25/36)

   January 25, 2036    1.36%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(Park Place Securities, Inc. 2005-WCH1, 1- Month LIBORC + 250 bp*, due 1/25/36)

   January 25, 2036    2.18%
Monthly
  Specified Amount
upon credit event
notice
B
    43      1

Credit Suisse First Boston USA

(People’s Choice Home Loan Securities Trust 2004-1, 1- Month LIBORC + 230 bp*, due 6/25/34)

   June 25, 2034    1.37%
Monthly
  Specified Amount
upon credit event
notice
B
    58      —  

Credit Suisse First Boston USA

(People’s Choice Home Loan Securities Trust 2005-1, 1- Month LIBORC + 165 bp*, due 1/25/35)

   January 25, 2035    1.28%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Credit Suisse First Boston USA

(People’s Choice Home Loan Securities Trust 2005-1, 1- Month LIBORC + 260 bp*, due 1/25/35)

   January 25, 2035    2.05%
Monthly
  Specified Amount
upon credit event
notice
B
    43      —  

Merrill Lynch

(iBoxx CDX NA IG)

   June 20, 2010    Specified
Amount
upon credit
event notice
D
  0.40% Quarterly     15,000      235
                
             $ 245
                

A “-” refers to amounts less than $1,000.
B Upon Bankruptcy or failure to make a scheduled interest payment, the Fund will receive $1,000.
C As of September 30, 2006, the 1 month London Interbank Offered Rate was 5.32%.
D Upon Bankruptcy or failure to make a scheduled interest payment, the Fund will pay $1,000.
* 100 basis points = 1%.


Item 2 – Controls and Procedures

 

  (a) Western Asset Premier Bond Fund’s (the “Registrant”) 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-Q is recorded, processed, summarized and reported within the required time periods in the Securities and Exchange Commission’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-Q 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 last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting.

Item 3 – Exhibits

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – 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 Premier Bond Fund
By:  

/s/ James W. Hirschmann

  James W. Hirschmann
  President
  Western Asset Premier Bond Fund

Date: November 27, 2006

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/ James W. Hirschmann

  James W. Hirschmann
  President
  Western Asset Premier Bond Fund

Date: November 27, 2006

 

By:  

/s/ Marie K. Karpinski

  Marie K. Karpinski
  Principal Financial and Accounting Officer
  Western Asset Premier Bond Fund

Date: November 20, 2006