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
Name of Fund: Western Asset Premier Bond Fund
Fund Address: 385 East Colorado Boulevard
Pasadena, CA 91101
Name and address of agent for service: Richard M. Wachterman, Esq.
Legg Mason Wood Walker, Incorporated
100 Light Street
Baltimore, MD 21202
Registrant's telephone number, including area code: (410) 539-0000
Date of fiscal year end: 12/31/2004
Date of reporting period: 9/30/2004
Item 1 - Schedule of Investments
SCHEDULE OF INVESTMENTS
Western Asset Premier Bond Fund
September 30, 2004 (Unaudited)
(Amounts in thousands)
----------------------------------------------------------------------------------------------------------------------------------
% OF MATURITY
NET ASSETS RATE DATE PAR VALUE
-----------------------------------------------------------------------------------
Long-Term Securities 138.1%
Corporate Bonds and Notes 85.8%
Advertising 0.2%
Vertis Inc. 10.875% 06/15/09 $ 250 $ 269
-------------------
Aerospace/Defense 2.9%
Armor Holdings, Inc. 8.250% 08/15/13 360 397
Esterline Technologies Corporation 7.750% 06/15/13 230 246
Northrop Grumman Corporation 7.750% 02/15/31 1,000 1,231
Raytheon Company 6.750% 08/15/07 1,000 1,094/B/
Raytheon Company 7.200% 08/15/27 1,000 1,144
TD Funding Corp. 8.375% 07/15/11 200 214
The Boeing Company 6.125% 02/15/33 600 630
-------------------
4,956
-------------------
Apparel 0.5%
Oxford Industries, Inc. 8.875% 06/01/11 270 293
Russell Corporation 9.250% 05/01/10 500 542
-------------------
835
-------------------
Auto Parts and Equipment 0.6%
Keystone Automotive Operations Inc. 9.750% 11/01/13 380 408
TRW Automotive 11.000% 02/15/13 101 120
TRW Automotive 9.375% 02/15/13 285 326
Tenneco Automotive Inc. 10.250% 07/15/13 230 262
-------------------
1,116
-------------------
Automotive 3.1%
Asbury Automotive Group Inc. 9.000% 06/15/12 405 427
DaimlerChrysler NA Holdings Corp. 7.300% 01/15/12 1,000 1,136
DaimlerChrysler NA Holdings Corp. 8.500% 01/18/31 1,000 1,222
Ford Motor Company 7.450% 07/16/31 2,700 2,647
-------------------
5,432
-------------------
Banking and Finance 5.6%
Boeing Capital Corporation 6.500% 02/15/12 1,000 1,119
Boeing Capital Corporation 5.800% 01/15/13 400 429
Ford Motor Credit Company 6.875% 02/01/06 400 419
Ford Motor Credit Company 7.250% 10/25/11 1,700 1,840
Fuji JGB Inv LLC 9.870% 06/30/08 790 927/A,C/
General Motors Acceptance Corporation 6.125% 02/01/07 500 525
General Motors Acceptance Corporation 6.875% 09/15/11 1,175 1,233
General Motors Acceptance Corporation 7.000% 02/01/12 1,500 1,570
Household Finance Corporation 4.750% 07/15/13 1,670 1,653
-------------------
9,715
-------------------
Banks 0.3%
Washington Mutual Bank FA 5.500% 01/15/13 440 456
-------------------
Building Materials 0.7%
Associated Materials Inc. 11.250% 03/01/14 490 356/A,C/
MMI Products, Inc. 11.250% 04/15/07 250 252
Nortek Inc. 8.500% 09/01/14 500 524/A/
-------------------
1,132
-------------------
Cable 2.3%
Charter Communication Holdings Inc. 10.250% 09/15/10 432 441
Charter Communication Holdings, LLC 9.625% 11/15/09 510 402
Comcast Cable Communications, Inc. 6.750% 01/30/11 500 555
Comcast Corporation 6.500% 01/15/15 400 432
Comcast Corporation 7.050% 03/15/33 1,000 1,097
CSC Holdings Inc. 6.750% 04/15/12 250 251/A/
CSC Holdings Inc. 7.875% 02/15/18 130 134
CSC Holdings Inc. 7.625% 07/15/18 253 258
LodgeNet Entertainment Corporation 9.500% 06/15/13 321 350
-------------------
3,920
-------------------
Chemicals 2.2%
FMC Corporation 10.250% 11/01/09 203 237
Huntsman International LLC 10.125% 07/01/09 250 262
Lyondell Chemical Company 9.625% 05/01/07 230 250
Nalco Company 8.875% 11/15/13 160 172
The Dow Chemical Company 6.000% 10/01/12 2,500 2,701
Westlake Chemical Corporation 8.750% 07/15/11 194 218
-------------------
3,840
-------------------
Coal 0.2%
Alpha Natural Resources Corp. 10.000% 06/01/12 350 386/A/
-------------------
Computers Services and Systems 1.0%
Electronic Data Systems Corporation 7.125% 10/15/09 700 752
Electronic Data Systems Corporation 7.450% 10/15/29 500 500
International Business Machines Corporation 4.750% 11/29/12 240 243
Viasystems, Inc. 10.500% 01/15/11 260 247
-------------------
1,742
-------------------
Consumer Cyclical 0.1%
Equinox Holdings Inc. 9.000% 12/15/09 250 257
-------------------
Containers and Packaging 0.5%
Owens-Brockway Glass Container Inc. 8.750% 11/15/12 330 366
Owens-Illinois, Inc. 7.500% 05/15/10 100 102
Solo Cup Company 8.500% 02/15/14 410 404
-------------------
872
-------------------
Construction Machinery 0.2%
H&E Equipment Services LLC 11.125% 06/15/12 360 371
-------------------
Distribution and Wholesale 0.1%
National Waterworks Inc. 10.500% 12/01/12 60 68
-------------------
Diversified Financial Services 2.8%
CIT Group Inc. 7.750% 04/02/12 1,600 1,894
Citigroup Inc. 6.625% 06/15/32 1,000 1,095
General Electric Capital Corporation 4.250% 01/15/08 740 759
General Electric Capital Corporation 6.000% 06/15/12 700 769
General Electric Capital Corporation 5.450% 01/15/13 250 265
-------------------
4,782
-------------------
Diversified Services 1.4%
Loews Corporation 3.125% 09/15/07 2,500 2,447/D/
-------------------
Drug & Grocery Store Chains 0.3%
Safeway Inc. 5.800% 08/15/12 500 524
-------------------
Electric 8.0%
American Electric Power Company, Inc. 6.125% 05/15/06 750 786
Dominion Resources, Inc. 5.700% 09/17/12 770 810
Duke Energy Corporation 6.250% 01/15/12 250 272
Exelon Generation Company LLC 6.950% 06/15/11 2,000 2,260
FirstEnergy Corp. 5.500% 11/15/06 750 781
FirstEnergy Corp. 6.450% 11/15/11 610 665
FirstEnergy Corp. 7.375% 11/15/31 1,790 2,010
MidAmerican Energy Holdings Company 5.875% 10/01/12 250 264
Niagra Mohawk Power Corporation 7.750% 10/01/08 1,500 1,707
Oncor Electric Delivery Company 7.000% 09/01/22 250 282
Orion Power Holdings, Inc. 12.000% 05/01/10 500 625
Progress Energy, Inc. 7.100% 03/01/11 250 282
Progress Energy, Inc. 6.850% 04/15/12 750 838
The AES Corporation 9.000% 05/15/15 850 958/A/
The Cleveland Electric Illuminating Company 5.650% 12/15/13 1,250 1,293
-------------------
13,833
-------------------
Energy 0.7%
Calpine Generation Co. 11.500% 04/01/11 380 332/A/
Midwest Generation LLC 8.750% 05/01/34 255 278
Nevada Power Company 6.500% 04/15/12 250 258/A/
NRG Energy, Inc. 8.000% 12/15/13 375 402/A/
-------------------
1,270
-------------------
Entertainment 0.4%
Cinemark, Inc. 9.750% 03/15/14 330 227/C/
LCE Acquisition Corp. 9.000% 08/01/14 160 165/A/
Six Flags, Inc. 9.750% 04/15/13 80 76
Warner Music Group 7.375% 04/15/14 210 217/A/
-------------------
685
-------------------
Environmental Services 1.7%
Allied Waste North America Incorporated 7.375% 04/15/14 140 135
Waste Management, Inc. 7.375% 05/15/29 2,000 2,297
Waste Management, Inc. 7.750% 05/15/32 40 49
Waste Services, Inc. 9.500% 04/15/14 440 418/A/
-------------------
2,899
-------------------
Food, Beverage and Tobacco 3.2%
Altria Group, Inc. 7.000% 11/04/13 250 261
Altria Group, Inc. 7.750% 01/15/27 1,000 1,056
Kraft Foods Inc. 5.250% 10/01/13 400 407
Nabisco Incorporated 7.550% 06/15/15 1,500 1,794
R.J. Reynolds Tobacco Holdings, Inc. 7.750% 05/15/06 2,000 2,080
-------------------
5,598
-------------------
Gaming 1.3%
Ameristar Casinos, Inc. 10.750% 02/15/09 500 567
Inn of The Mountain Gods 12.000% 11/15/10 400 458
Isle of Capri Casinos, Inc. 9.000% 03/15/12 250 277
Pinnacle Entertainment, Inc. 9.250% 02/15/07 250 256
Premier Entertainment Biloxi LLC 10.750% 02/01/12 187 197
Station Casinos, Inc. 6.875% 03/01/16 120 123
Wynn Las Vegas, LLC 12.000% 11/01/10 335 419
-------------------
2,297
-------------------
Gas and Pipeline Utilities 3.8%
Duke Energy Field Services Corporation LLC 7.875% 08/16/10 750 883
Dynegy Holdings Inc. 8.750% 02/15/12 1,500 1,560
Kinder Morgan Energy Partners, L.P. 7.125% 03/15/12 500 570
Pacific Energy Partners LP/Pacific Energy
Finance Corp. 7.125% 06/15/14 140 152/A/
Panhandle Eastern Pipe Line Company 4.800% 08/15/08 400 410
Texas Eastern Transmission 5.250% 07/15/07 750 780
The Williams Companies, Inc. 7.500% 01/15/31 902 907
The Williams Companies, Inc. 8.750% 03/15/32 1,200 1,341
-------------------
6,603
-------------------
Healthcare 0.5%
Fresenius Medical Care Capital Trust II 7.875% 02/01/08 250 273
Tenet Healthcare Corporation 9.875% 07/01/14 503 526/A/
-------------------
799
-------------------
Home Building 0.5%
Atrium Companies, Inc. 10.500% 05/01/09 500 525
D.R. Horton, Inc. 8.500% 04/15/12 260 294
-------------------
819
-------------------
Investment Banking/Brokerage 4.5%
Credit Suisse First Boston, USA 6.500% 01/15/12 1,125 1,250
JPMorgan Chase & Co. 5.750% 01/02/13 1,750 1,863
JPMorgan Chase & Co. 5.125% 09/15/14 1,300 1,307
Morgan Stanley Dean Witter & Co. 6.600% 04/01/12 1,500 1,673
Refco Finance Holdings LLC 9.000% 08/01/12 250 267/A/
The Goldman Sachs Group, Inc. 6.600% 01/15/12 1,200 1,340
-------------------
7,700
-------------------
Machinery 0.8%
Case New Holland Incorporated 9.250% 08/01/11 400 448/A/
Joy Global Inc. 8.750% 03/15/12 330 373
Terex Corporation 10.375% 04/01/11 500 565
-------------------
1,386
-------------------
Manufacturing (Diversified) 2.3%
American Achievement Corp. 8.250% 04/01/12 200 210
Ames True Temper Inc. 10.000% 07/15/12 250 255/A/
Eastman Kodak Co. 7.250% 11/15/13 850 937
Interface, Inc. 10.375% 02/01/10 400 454
Jacuzzi Brands, Incorporated 9.625% 07/01/10 445 492
Koppers Inc. 9.875% 10/15/13 380 420
Leiner Health Products Inc. 11.000% 06/01/12 210 223/A/
Norcraft Companies, L.P. 9.000% 11/01/11 370 403/A/
Norcraft Holdings L.P. 9.750% 09/01/12 160 116/A,C/
Rayovac Corporation 8.500% 10/01/13 220 239
Samsonite Corporation 8.875% 06/01/11 230 240/A/
-------------------
3,989
-------------------
Materials and Basic Industry 0.1%
Hexcel Corporation 9.875% 10/01/08 169 189
-------------------
Media 3.4%
AOL Time Warner Inc. 6.150% 05/01/07 250 266
AOL Time Warner Inc. 6.875% 05/01/12 1,400 1,562
AOL Time Warner Inc. 7.700% 05/01/32 1,150 1,337
Liberty Media Corporation 2.610% 09/17/06 200 202/E/
Liberty Media Corporation 3.750% 02/15/30 1,860 1,232/D/
News America Holdings Incorporated 6.625% 01/09/08 300 327
News America Holdings Incorporated 8.875% 04/26/23 400 515
Paxson Communications Corporation 10.750% 07/15/08 500 502
-------------------
5,943
-------------------
Medical Care Facilities 0.7%
AmeriPath, Inc. 10.500% 04/01/13 250 255
Ardent Health Services 10.000% 08/15/13 330 333
Extendicare Health Services, Inc. 9.500% 07/01/10 500 561
-------------------
1,149
-------------------
Metals and Mining 0.7%
AK Steel Corp 7.750% 06/15/12 250 244
Alcoa Inc. 5.375% 01/15/13 750 788
Century Aluminum Company 7.500% 08/15/14 240 253/A/
-------------------
1,285
-------------------
Office Equipment 0.1%
Xerox Corporation 6.875% 08/15/11 60 63
Xerox Corporation 7.625% 06/15/13 130 140
-------------------
203
-------------------
Oil and Gas 7.0%
Amerada Hess Corporation 7.300% 08/15/31 1,700 1,853
Belden & Blake Corporation 8.750% 07/15/12 300 320/A/
ConocoPhillips 4.750% 10/15/12 1,000 1,014
Devon Energy Corporation 7.950% 04/15/32 1,000 1,241
Devon Finance Corp. ULC 6.875% 09/30/11 2,000 2,257
El Paso CPG Co. 6.375% 02/01/09 333 320
El Paso CPG Co. 7.750% 06/15/10 1,496 1,496
El Paso Corporation 7.625% 07/15/11 500 493
El Paso Corporation 7.875% 06/15/12 190 189
El Paso Production Holding Company 7.750% 06/01/13 80 80
Evergreen Resources, Inc. 5.875% 03/15/12 270 278
Ferrellgas Partners LP 8.750% 06/15/12 40 44
Ferrellgas Partners LP 6.750% 05/01/14 130 133
Hanover Compressor Company 8.625% 12/15/10 100 108
Occidental Petroleum Corporation 6.750% 01/15/12 500 567
Parker Drilling Company 10.125% 11/15/09 104 110
Parker Drilling Company 6.540% 09/01/10 200 200/A,E/
Plains Exploration & Production Company 7.125% 06/15/14 190 204/A/
Suburban Propane Partners LP 6.875% 12/15/13 250 258
Valero Energy Corporation 7.500% 04/15/32 400 468
Vintage Petroleum, Inc. 7.875% 05/15/11 500 535
-------------------
12,168
-------------------
Paper and Forest Products 2.7%
Georgia-Pacific Corp. 9.500% 12/01/11 240 297
Georgia-Pacific Corp. 9.375% 02/01/13 240 283
Georgia-Pacific Corp. 8.875% 05/15/31 262 318
MeadWestvaco Corporation 6.850% 04/01/12 500 557
Weyerhaeuser Company 6.750% 03/15/12 1,900 2,131
Weyerhaeuser Company 7.375% 03/15/32 1,000 1,147
-------------------
4,733
-------------------
Publishing 0.3%
Dex Media East LLC 9.875% 11/15/09 250 288
Dex Media East LLC 12.125% 11/15/12 122 152
PRIMEDIA Inc. 6.615% 05/15/10 150 151/A,E/
-------------------
591
-------------------
Rental Auto/Equipment 0.2%
NationsRent Inc. 9.500% 10/15/10 340 369
-------------------
Retail 0.5%
Hollywood Entertainment Corporation 9.625% 03/15/11 375 401
Stater Bros. Holdings Inc. 5.060% 06/15/10 170 173/A,E/
Toys "R" Us, Inc. 7.875% 04/15/13 240 239
-------------------
813
-------------------
Retail (Food Chains) 0.2%
Domino's Inc. 8.250% 07/01/11 278 301
-------------------
Special Purpose 1.5%
Air 2 U.S. Series A 8.027% 10/01/19 305 254/A/
Huntsman Advanced Materials LLC 11.000% 07/15/10 90 104/A/
Milacron Escrow Corp. 11.500% 05/15/2011 290 307/A/
Rainbow National Services LLC 8.750% 09/01/12 100 104/A/
Rainbow National Services LLC 10.375% 09/01/14 250 262/A/
River Rock Entertainment 9.750% 11/01/11 230 242
Sensus Metering Systems 8.625% 12/15/13 240 245
UGS Corp. 10.000% 06/01/12 240 262/A/
UCAR Finance Inc. 10.250% 02/15/12 500 573
WII Components, Inc. 10.000% 02/15/12 250 243
-------------------
2,596
-------------------
Storage Facilities 0.2%
Mobile Mini, Inc. 9.500% 07/01/13 319 354
-------------------
Telecommunications 6.0%
Alamosa Delaware Inc. 11.000% 07/31/10 319 361
AT&T Corp. 8.050% 11/15/11 1,000 1,119
BellSouth Corporation 6.000% 10/15/11 1,000 1,089
Cincinnati Bell Inc. 7.250% 07/15/13 129 124
Cincinnati Bell Inc. 8.375% 01/15/14 430 392
Citizens Communications Company 8.500% 05/15/06 250 268
GTE Hawaiian Telephone Company, Incorporated 7.000% 02/01/06 80 83
GTE Hawaiian Telephone Company, Incorporated 7.375% 09/01/06 60 62
Insight Midwest LP/Insight Capital Inc. 10.500% 11/01/10 220 241
Qwest Capital Funding, Inc. 7.750% 02/15/31 1,000 765
Qwest Communications International Inc. 7.250% 02/15/11 500 474/A/
Qwest Corporation 7.875% 09/01/11 390 405/A/
Qwest Services Corp 14.000% 12/15/10 10 12/A/
SBC Communications Inc. 6.250% 03/15/11 1,000 1,097/B/
Sprint Capital Corporation 6.000% 01/15/07 1,500 1,588
Sprint Capital Corporation 8.375% 03/15/12 1,450 1,756
TCI Communications, Inc. 9.650% 03/31/27 500 586
-------------------
10,422
-------------------
Telecommunications (Cellular/Wireless) 2.1%
AT&T Wireless Services, Inc. 7.500% 05/01/07 500 551
AT&T Wireless Services, Inc. 8.125% 05/01/12 500 604
Centennial Communications Corporation 8.125% 02/01/14 390 372/A/
Cingular Wireless LLC 6.500% 12/15/11 250 278
Motorola, Inc. 7.625% 11/15/10 400 468
Nextel Communications, Inc. 5.250% 01/15/10 290 289/D/
Nextel Communications, Inc. 7.375% 08/01/15 160 172
Rural Cellular Corporation 8.250% 03/15/12 200 203/A/
SBA Communications Corp. 9.750% 12/15/11 340 275/C/
US Unwired Inc. 10.000% 06/15/12 210 218
Verizon Wireless Capital LLC 5.375% 12/15/06 250 262
-------------------
3,692
-------------------
Transportation 7.4%
Continental Airlines, Inc. 7.373% 12/15/15 111 87
Continental Airlines, Inc. 8.048% 11/01/20 810 790
Delta Airlines, Inc. 6.718% 01/02/23 3,328 3,420
GulfMark Offshore, Inc. 7.750% 07/15/14 270 273/A/
Horizon Lines, LLC 9.000% 11/01/12 190 200/A/
Kansas City Southern Railway 9.500% 10/01/08 275 301
Union Pacific Corporation 6.125% 01/15/12 2,000 2,160
United Air Lines, Inc. 7.783% 01/01/14 643 528
US Airways, Inc. Escrow 0.000% 01/01/07 1,900 -/F/
US Airways, Inc. Series 89A2 9.820% 01/01/13 470 111/G/
US Airways, Inc. Series 93A3 10.375% 03/01/13 236 69/G/
US Airways, Inc. Series 98-1 6.850% 01/30/18 646 590
US Airways, Inc. Series 99-1 8.360% 01/20/19 4,396 4,245
-------------------
12,774
-------------------
Total Corporate Bonds and Notes
(Identified Cost---($138,938) 148,580
-------------------------------------------------------------------------------------------------------------------------------
Asset-Backed Securities 11.5%
Fixed Rate Securities 9.2%
ACE 2002-M Trust 0.000% 10/13/17 312 6/A,F/
Banagricola DPR Funding 2.910% 03/15/10 2,293 2,287/A,E/
BankAmerica Manufactured Housing Contract 1997-2 6.900% 04/10/28 100 111
Captiva CBO 1997-1 Ltd. 6.860% 11/30/09 583 583/A/
Conseco Finance Securitizations Corp. 2002-1 6.681% 12/01/33 1,742 1,833
Conseco Recreational Enthusiast Consumer Trust 2000-A 8.480% 11/15/20 1,500 1,520
Contimortgage Home Equity Loan Trust 1997-4 7.330% 10/15/28 797 628
Contimortgage Home Equity Loan Trust 1998-3 8.250% 10/15/29 1,980 990
Green Tree Financial Corporation 1992-2 9.150% 01/15/18 1,035 933
Green Tree Financial Corporation 1993-1 8.450% 04/15/18 1,250 1,210
Green Tree Financial Corporation 1999-4 6.970% 05/01/31 1,067 1,104
Mutual Fund Fee 2000-3 9.070% 06/30/08 3,137 1,016
Pegasus Aviation Lease Securitization 2000-1 8.370% 03/25/30 1,300 828/A/
Saxson Asset Securities Trust 2000-2 8.370% 07/25/30 2,000 2,047
Vanderbilt Mortgage Finance 1997-B 8.155% 10/07/26 750 753
-------------------
15,849
-------------------
Floating Rate Securities 2.1%
Countrywide Asset-Backed Certificates 2004-BC2 1.920% 09/25/27 893 893/E/
Korea Asset Funding Ltd. 2000-1A 3.941% 02/10/09 27 27/A,E,H/
Residential Asset Securities Corporation E/
2001-KS3 2.070% 09/25/31 2,691 2,692/
-------------------
3,612
-------------------
Stripped Securities 0.2%
Bayview Financial Acquisition Trust 2002-FA 5.500% 06/25/05 3,333 106/A,I/
Oakwood Mortgage Investors Inc. 2002-C 6.000% 08/15/10 1,040 203/I/
-------------------
309
-------------------
Total Asset-Backed Securities
(Identified Cost---$20,228) 19,770
-------------------------------------------------------------------------------------------------------------------------------
Mortgage-Backed Securities 4.3%
Fixed Rate Securities 3.6%
Asset Securization Corporation 1996-D2 6.920% 02/14/29 539 563
Commercial Mortgage Acceptance Corporation 1997-ML1 6.570% 12/15/30 1,250 1,347
Commercial Mortgage Acceptance Corporation 1997-ML1 6.735% 12/15/30 1,675 1,807
Enterprise Mortgage Acceptance Company 1998-1 6.110% 01/15/25 84 83/A/
Enterprise Mortgage Acceptance Company 1999-1 6.420% 10/15/25 421 181/A/
GMAC Commercial Mortgage Security Inc. 1998-C1 6.700% 05/15/30 631 689
GMAC Commercial Mortgage Security Inc. 1998-C1 6.974% 05/15/30 1,000 1,066
Nomura Asset Securities Corporation 1996-MD5 7.120% 04/13/39 520 551
-------------------
6,287
-------------------
Floating Rate Securities 0.6%
Blackrock Capital Finance LP 1997-R2 5.844% 12/25/35 1,480 1,029/A/
-------------------
Stripped Securities 0.1%
LB-UBS Commercial Mortgage Trust 2001-C3 1.214% 06/15/36 3,204 164/A,I/
-------------------
Total Mortgage-Backed Securities
(Identified Cost---$7,435) 7,480
-------------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities 3.0%
Indexed Securities
United States Treasury Inflation-Protected
Security 1.875% 07/15/13 5,000 5,244/J/
-------------------
Total U.S. Government Securities
(Identified Cost---$5,013) 5,244
-------------------------------------------------------------------------------------------------------------------------------
Yankee Bonds /H/ 33.4%
Aerospace/Defense 0.2%
Systems 2001 Asset Trust 6.664% 09/15/13 286 318/A/
-------------------
Cable 0.3%
Kabel Deutschland GmbH 10.625% 07/01/14 390 425/A/
-------------------
Chemicals 0.5%
Rhodia SA 10.250% 06/01/10 340 352
Rhodia SA 8.875% 06/01/11 584 508
-------------------
860
-------------------
Electric 1.1%
Hydro-Quebec 6.300% 05/11/11 1,700 1,905
-------------------
Energy 1.2%
Calpine Canada Power Ltd. 8.500% 05/01/08 500 345
North America Energy Partners 8.750% 12/01/11 100 98/A/
Petroliam Nasional Berhad 7.750% 08/15/15 1,410 1,698/A/
-------------------
2,141
-------------------
Food, Beverage and Tobacco 1.0%
Bavaria S.A. 8.875% 11/01/10 1,550 1,637/A/
-------------------
Foreign Government 17.9%
Dominican Republic 9.500% 09/27/06 370 316/A/
Federative Republic of Brazil 14.500% 10/15/09 2,120 2,735
Federative Republic of Brazil 12.000% 04/15/10 800 953
Federative Republic of Brazil 2.125% 04/15/12 565 523/E/
Federative Republic of Brazil 8.000% 04/15/14 1,419 1,403
Federative Republic of Brazil 12.750% 01/15/20 280 355
Federative Republic of Brazil 11.000% 08/17/40 1,100 1,233
Morocco A Loan Participation Note 2.781% 01/02/09 257 253/E/
Republic of Bulgaria 8.250% 01/15/15 2,823 3,479/A/
Republic of Colombia 11.750% 02/25/20 2,090 2,555
Republic of Honduras 1.505% 10/01/11 250 243/E/
Republic of Panama 9.625% 02/08/11 1,420 1,629
Republic of Panama 10.750% 05/15/20 1,020 1,224
Republic of Panama 9.375% 01/16/23 340 371
Republic of Peru 5.000% 03/07/17 3,139 2,888/C/
Republic of Peru 8.750% 11/21/33 520 516
Russian Federation 8.250% 03/31/10 330 359
Russian Federation 5.000% 03/31/30 6,170 5,931/C/
Russian Ministry of Finance 3.000% 05/14/06 10 10
United Mexican States 11.500% 05/15/26 2,700 4,064
-------------------
31,040
-------------------
Insurance 0.8%
Residential Reinsurance LTD 6.690% 06/01/05 300 291/A,E/
XL Capital Finance (Europe) plc 6.500% 01/15/12 1,000 1,098
-------------------
1,389
-------------------
Manufacturing (Diversified) 2.3%
Tyco International Group SA 6.375% 10/15/2011 1,000 1,106
Tyco International Group SA 6.875% 01/15/2029 2,615 2,931
-------------------
4,037
-------------------
Metals and Mining 0.2%
Ispat Inland Inc. 9.750% 04/01/14 350 386
-------------------
Oil and Gas 1.6%
Anadarko Finance Company 6.750% 05/01/11 750 849
Anadarko Finance Company 7.500% 05/01/31 1,000 1,223
Gaz Capital SA 8.625% 04/28/34 210 223/A/
Morgan Stanley Bank AG (OAO Gazprom) 9.625% 03/01/13 70 78
Western Oil Sands Inc. 8.375% 05/01/12 332 383
-------------------
2,756
-------------------
Paper and Forest Products 0.2%
Abitibi-Consolidated Inc. 8.550% 08/01/10 140 150
Abitibi-Consolidated Inc. 5.380% 06/15/11 230 232/E/
-------------------
382
-------------------
Services 0.3%
Compagnie Generale de Geophysique SA 10.625% 11/15/07 500 530
-------------------
Special Purposes 3.7%
Arcel Finance Limited 5.984% 02/01/09 1,061 1,110/A/
Burlington Resources Finance 7.400% 12/01/31 450 544
Deutsche Telekom International Finance 5.250% 07/22/13 600 614
Inmarsat Finance PLC 7.625% 06/30/12 330 328/A/
Petrozuata Finance, Inc. 8.220% 04/01/17 3,380 3,329/A/
UFJ Finance Aruba AEC 6.750% 07/15/13 500 554
-------------------
6,479
-------------------
Telecommunications 0.9%
Axtel SA 11.000% 12/15/13 340 349
France Telecom SA 8.500% 03/01/31 600 796
Innova S. de R.L 9.375% 09/19/13 320 348
Nortel Networks LTD 6.125% 02/15/06 120 122
-------------------
1,615
-------------------
Telecommunications (Cellular/Wireless) 0.2%
Rogers Wireless Communications Inc. 9.625% 05/01/11 60 67
Vodaphone Group PLC 7.750% 02/15/10 250 293
-------------------
360
-------------------
Transportation 1.0%
Canadian Pacific Railway 6.250% 10/15/11 1,000 1,103
Grupo Transportacion Ferroviaria Mexicana, S.A C/
de C.V 11.750% 06/15/09 350 354/
OMI Corporation 7.625% 12/01/13 190 195
-------------------
1,652
-------------------
Total Yankee Bonds
(Identified Cost---$51,237) 57,912
-------------------------------------------------------------------------------------------------------------------------------
Preferred Stocks 0.1%
Rural Cellular Corporation .111 shs 93/K/
-------------------
Total Preferred Stocks
(Identified Cost---$103) 93
-------------------------------------------------------------------------------------------------------------------------------
Warrants N.M.
American Tower 0.251 wts 47
-------------------
Total Warrants
(Identified Cost---$16) 47
-------------------------------------------------------------------------------------------------------------------------------
Total Long-Term Securities
(Identified Cost---$222,970) 239,126
-------------------------------------------------------------------------------------------------------------------------------
Short-Term Security 0.6%
Repurchase Agreement
Lehman Brothers
1.86%, dated 09/30/04, to be repurchased at $951 on 10/01/04
(Collateral: Federal National Mortgage Association notes,
due 01/15/30, value $956) 951 951
-------------------
Total Short-Term Security
(Identified Cost---$951) 951
-------------------------------------------------------------------------------------------------------------------------------
Total Investments 138.7%
(Identified Cost---$223,921) 240,077
Other Assets Less Liabilities 2.9% 5,082
Liquidation Value of Preferred Shares -41.6% (72,000)
-------------------
Net Assets Applicable to Common Shareholders 100.0% $ 173,159
===================
ACTUAL
EXPIRATION CONTRACTS DEPRECIATION
----------------------------------------------------
Futures Contracts Written
U.S. Treasury Bond Futures Dec 2004 245 $ (203)
===================
/A/ Rule 144a Security - A security purchased pursuant tp Rule 144a under
the Securities Act of 1933 which may not be resold subject to that rule except
to qualified institutional buyers. These securities represent 17.8% of net
assets applicable to common shareholders.
/B/ Collateral to cover futures.
/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/ 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, 2004.
/F/ 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.
/G/ Bond in default as of September 30, 2004.
/H/ Yankee Bond - A dollar-denominated bond issued in the U.S. by foreign
entities.
/I/ Stripped Security - Security with interest-only payment streams. For
interest-only securities, the amount shown as principal is the notional balance
used to calculate the amount of the interest due.
/J/ Treasury Inflation Protected Security - Treasury security whose
principal value is adjusted daily in accordance with changes to the Consumer
Price Index (CPI). Interest is calculated on the basis of the current adjusted
principal value.
/K/ Pay-in-kind Security - Dividend income is paid with additional shares
instead of receiving cash.
N.M.-Not meaningful
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.
Options, Futures and Swap Agreements
The current market value of a traded option is the last sale price or, in the
absence of a sale, the mean between the closing bid and asked price. Futures
contracts are valued daily at the settlement proce established by the board of
trade or excahnge on which the are traded. Futures contracts are
marked-to-market on a daily basis. As a contract's value fluctuates, payments
known as variation margin are made or received by the Fund each day, depending
on the dailt fluctuation in the value of the contract. The daily changes in
contract value are recorded as unrealized gains or losses, and the Fund
recognizes a gain or loss when the contract is closed. Swap agreements are
priced daily based upon quotations from brokers and the change, if any, is
recorded as unrealized appreciation or depreciation.
Other information regarding the Fund is available in the Fund's most recent
Report to Shareholders. This information is available on the Securities and
Exchange Commission's website (www.sec.gov).
Item 2 - Controls and Procedures
(a) The Registrant's principal executive and principal financial officers
have concluded, based on their evaluation of the Registrant's disclosure
controls and procedures as of a date within 90 days of the filing date of this
report, that the Registrant's disclosure controls and procedures are reasonably
designed to ensure that information required to be disclosed by the Registrant
on Form N-Q is recorded, processed, summarized and reported within the required
time periods 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 Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Western Asset Premier Bond Fund
By: /s/ James W. Hirschmann
---------------------------------
James W. Hirschmann
President, Western Asset Premier Bond Fund
Date: November 22, 2004
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 22, 2004
By: /s/ Marie K. Karpinski
----------------------------------
Marie K. Karpinski
Treasurer and Principal Financial and Accounting Officer,
Western Asset Premier Bond Fund
Date: November 22, 2004