Edgar Filing: WESTERN ASSET PREMIER BOND FUND

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 Securities*^B	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 Securities*^B	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 Securities^K*	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 Bonds^H	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 Bonds^I (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 Bonds^I (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	)

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 LIBOR^C + 160 bp*, due 6/25/35)

June 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

June 25, 2035

2.05%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

February 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

February 25, 2035

2.06%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

October 25, 2034

1.37%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

March 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

March 25, 2035

2.18%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

March 25, 2034

2.20%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

November 25, 2034

1.33%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

November 25, 2034

2.15%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

November 25, 2034

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

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 LIBOR^C + 315 bp*, due 11/25/34)

November 25, 2034

2.18%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

2.08%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

March 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

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

—

Credit Suisse First Boston USA

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

February 25, 2034

2.15%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

February 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

February 25, 2035

2.08%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

December 25, 2034

1.31%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

December 25, 2034

2.08%
Monthly

Specified Amount
upon credit event
notice^B

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 LIBOR^C + 225 bp*, due 9/25/35)

September 25, 2035

2.05%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

April 25, 2035

2.15%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

October 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

October 25, 2035

2.05%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

September 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

2.18%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

August 25, 2034

2.15%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

March 25, 2035

1.31%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

March 25, 2035

2.18%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

June 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

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 LIBOR^C + 195 bp*, due 6/25/35)

June 25, 2035

2.05%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

January 25, 2036

1.36%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

January 25, 2036

2.18%
Monthly

Specified Amount
upon credit event
notice^B

Credit Suisse First Boston USA

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

June 25, 2034

1.37%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

1.28%
Monthly

Specified Amount
upon credit event
notice^B

—

Credit Suisse First Boston USA

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

January 25, 2035

2.05%
Monthly

Specified Amount
upon credit event
notice^B

—

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