|
INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE
VALUE
|
*
|
Certain investors may be subject to the federal alternative minimum tax (AMT), and state and local taxes will apply. Capital gains, if any,
are fully taxable. Please consult your personal tax or legal adviser.
|
Fund objective
The Funds investment objective is to seek as high a level of current income exempt from federal income tax* as is consistent with preservation of capital.
When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of
principal.
The Fund seeks to achieve its objective by investing primarily in long-term investment grade municipal debt securities issued by state and
local governments, political subdivisions, agencies and public authorities (municipal obligations). Under normal market conditions, the Fund will invest at least 80% of its total assets in municipal obligations rated investment grade at the time of
investment.
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|
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II
|
|
Western Asset Managed Municipals Fund Inc.
|
Letter from the chairman
Dear Shareholder,
We are pleased to provide the annual report of Western Asset Managed Municipals Fund Inc. for the twelve-month reporting period ended May 31,
2021. Please read on for a detailed look at prevailing economic and market conditions during the Funds reporting period and to learn how those conditions have affected Fund performance.
As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One
way we accomplish this is through our website, www.lmcef.com. Here you can gain immediate access to market and investment information, including:
|
|
Fund prices and performance,
|
|
|
Market insights and commentaries from our portfolio managers, and
|
|
|
A host of educational resources.
|
We look
forward to helping you meet your financial goals.
Sincerely,
Jane Trust, CFA
Chairman, President and Chief Executive Officer
June 30, 2021
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
III
|
Fund overview
Q. What is the Funds investment strategy?
A. The Funds investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital. When pursuing its investment objective, the
Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal. We select securities primarily by identifying undervalued sectors and individual securities, while also selecting securities that
we believe will benefit from changes in market conditions.
Under normal market conditions, the Fund invests primarily in investment grade municipal
bonds, but it can also invest up to 20% of its total assets in municipal bonds rated below investment grade by a nationally recognized statistical rating organization or, if unrated, determined to be of equivalent quality. The Fund may also use a
variety of derivative instruments for investment purposes, as well as for hedging or risk management purposes. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. The subadvisor determines the credit quality of pre-refunded
bonds based on the quality of the escrowed collateral and such other factors as the subadvisor deems appropriate.
At Western Asset Management Company,
LLC (Western Asset), the Funds subadviser, we utilize a fixed income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western
Assets senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed income portfolios will reflect a consensus of interdisciplinary views within the Western Asset
organization. The individuals responsible for development of investment strategy, day-to-day portfolio management, oversight and coordination of the Fund are S. Kenneth Leech, Robert E. Amodeo and David T. Fare.
Q. What were the overall market conditions during the Funds reporting
period?
A. Fixed income markets experienced periods of elevated
volatility and, overall, modestly declined over the twelve-month reporting period ended May 31, 2021. Volatility was driven by a number of factors, including risk aversion as the COVID-19 pandemic escalated, sharply falling and then rising
global growth, trade conflicts, inflation concerns, and a number of geopolitical events. Most spread sectors (non-Treasuries) outperformed similar durationi Treasuries, especially as the reporting period progressed. This was driven by continued monetary policy accommodation from the
Federal Reserve Board (the Fed)ii and the rollout of several
COVID-19 vaccines which triggered increased investor risk appetite.
Short-term U.S. Treasury yields edged lower, as the Fed held
the federal funds rateiii in a range between 0.00% and 0.25%. The yield for
the two-year Treasury note began the reporting period at 0.16% and ended the period at 0.14%. The low of 0.09% occurred on February 5, 2021 and the high of 0.22% took place on June 5 and June 8, 2020. In contrast, long-term U.S.
Treasury yields moved sharply higher, as positive economic data triggered inflationary concerns and fears that the Fed may remove its monetary policy accommodations sooner than previously anticipated. The yield for the ten-year Treasury note began
the reporting period at 0.65%. The low of 0.52% occurred on August 4, 2020, and the high of 1.74% took place on March 19 and March 31, 2021. The ten-year Treasury yield then ended the period at 1.58%.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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1
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Fund overview (contd)
The municipal bond market posted a positive return and
significantly outperformed its taxable bond counterpart during the twelve-month reporting period. Over that time, the Bloomberg Barclays Municipal Bond Indexiv and the Bloomberg Barclays U.S. Aggregate Indexv returned 4.74% and -0.40%, respectively. Both the taxable and tax-free markets were initially supported by falling yields, but
were then hurt as longer-term yields moved higher. While the municipal market generated positive absolute returns during nine of the twelve months of the reporting period, a portion of its gains were lost during the other three months.
Q. How did we respond to these changing market conditions?
A. A number of adjustments were made to the Funds portfolio during the reporting period. We reduced the Funds duration versus that of the benchmark. From a sector perspective, we increased the
Funds allocations to the State General Obligation bonds and Transportation sectors, while reducing its exposures to Industrial Revenue and Pre-Refundedvi securities. In terms of the Funds quality positioning, we increased its exposure to securities rated BBB and
below-investment-grade securities, and reduced its allocations to securities rated AA and A.
We employed the use of U.S. Treasury futures during the
reporting period to manage duration. This strategy modestly contributed to the Funds performance.
During the reporting period, we utilized
leverage in the Fund. We ended the period with leverage as a percentage of gross assets of approximately 28%, versus roughly 30% at the beginning of the period. The use of leverage contributed to performance over the reporting period.
Performance review
For
the twelve months ended May 31, 2021, Western Asset Managed Municipals Fund Inc. returned 13.09% based on its net asset value (NAV)vii and 16.67% based on its New York Stock Exchange (NYSE) market price per share. The Funds unmanaged benchmark,
the Bloomberg Barclays Municipal Bond Index, returned 4.74% for the same period. The Lipper General & Insured Municipal Debt (Leveraged) Closed-End Funds Category Averageviii returned 13.44% over the same time frame. Please note that Lipper performance returns are based on each funds NAV.
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2
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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Certain investors may be subject to the
federal alternative minimum tax, and state and local taxes will apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.
During the twelve-month period, the Fund made distributions to shareholders totaling $0.53 per share.* The performance table shows the Funds twelve-month total return based on its NAV and market price as of
May 31, 2021. Past performance is no guarantee of future results.
|
|
|
|
|
Performance Snapshot as
of May 31, 2021
|
|
Price Per Share
|
|
12-Month
Total Return
|
|
$14.19 (NAV)
|
|
|
13.09
|
%**
|
$ 13.46 (Market Price)
|
|
|
16.67
|
%
|
All figures represent past performance and are not a guarantee of future results.
Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees,
operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.
Total return assumes the reinvestment of all distributions at NAV.
Total return
assumes the reinvestment of all distributions in additional shares in accordance with the Funds Dividend Reinvestment Plan.
Q. What were the leading contributors to performance?
A. The largest contributor to the Funds relative performance during the reporting period was its security selection. In particular, holdings in the Industrial Revenue, Leasing and State General
Obligation bond sectors were additive for results. The Funds quality biases were also rewarded, driven by overweights to securities rated BBB and below-investment-grade securities, as they outperformed their higher quality counterparts. From a
sector allocation perspective, overweights to the Industrial Revenue and Transportation sectors contributed to returns.
Q. What were
the leading detractors from performance?
A. The largest detractor from the Funds relative performance during the
reporting period was its yield curveix positioning. This was due to an
overweight to the ten-year portion of the municipal yield curve. Looking at sector allocation, an underweight to the Health Care sector and an overweight to the Water & Sewer sector were headwind for results. There were meaningful
detractors from performance from a security selection perspective among sectors.
*
|
For the character of distributions paid during the fiscal year ended May 31, 2021, please refer to page 50 of this report.
|
**
|
The total return based on the NAV reflects the impact of the tender and repurchase by the Fund of a portion of its Auction Rate Cumulative Preferred
Stock at 85% of the per share liquidation preference. Absent this transaction, the total return based on the NAV would have been the same.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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3
|
|
Fund overview (contd)
Looking for additional information?
The Fund is traded under the symbol MMU and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available
online under the symbol XMMUX on most financial websites. Barrons and The Wall Street Journals Monday edition both carry closed-end fund tables that provide additional information. In addition, the Fund issues a
quarterly press release that can be found on most major financial websites as well as www.lmcef.com (click on the name of the fund.)
In a continuing
effort to provide information concerning the Fund, shareholders may call 1-888-777-0102 (toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern Time, for the Funds current NAV, market price and other information.
Thank you for your investment in Western Asset Managed Municipals Fund Inc. As always, we appreciate that you have chosen us to manage your assets and we remain
focused on achieving the Funds investment goals.
Sincerely,
Western Asset Management Company, LLC
June 16, 2021
RISKS: The Fund is a non-diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading
vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objective. The Funds common stock is traded on
the New York Stock Exchange. Similar to stocks, the Funds share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount
to their net asset value. Because the Fund is non-diversified, it may be more susceptible to economic, political or regulatory events than a diversified fund. The Funds investments are subject to a number of risks, including interest rate
risk, credit risk, leveraging risk and management risk. As interest rates rise, the price of fixed income investments declines. Lower rated, higher-yielding bonds, known as high yield or junk bonds, are subject to greater
liquidity and credit risk than higher-rated investment grade securities. Municipal securities purchased by the Fund may be adversely affected by changes in the financial condition of municipal issuers and insurers, regulatory and political
developments, uncertainties and public perceptions, and other factors. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately increase losses and could have a potentially
large impact on Fund performance. To the extent the Fund enters into tender option bond (TOB) transactions, such TOB transactions expose the Fund to leverage and credit risk, and generally involve greater risk than investments in fixed
rate municipal bonds, including the risk of loss of principal. The Fund
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4
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
may invest in securities of other
investment companies. To the extent it does, Fund stockholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in connection with its own operations. Investing in
securities issued by other investment companies, including exchange-traded funds (ETFs) that invest primarily in municipal securities, involves risks similar to those of investing directly in the securities in which those investment
companies invest. To the extent the Fund invests in securities of other investment companies, Fund stockholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in
connection with its own operation. Leverage may result in greater volatility of NAV and market price of common shares and increases a shareholders risk of loss. The Fund may also invest in money market funds, including funds affiliated with
the Funds manager and subadviser. The Fund may enter into tender option bond (TOB) transactions, which expose the Fund to leverage and credit risk, and generally involve greater risk than investments in fixed rate municipal bonds,
including the risk of loss of principal. The interest payments that the Fund would typically receive on inverse floaters acquired in such transactions vary inversely with short-term interest rates and will be reduced (and potentially eliminated)
when short-term interest rates increase. Inverse floaters will generally underperform the market for fixed rate municipal securities when interest rates rise. The value and market for inverse floaters can be volatile, and inverse floaters can have
limited liquidity. Investments in inverse floaters issued in TOB transactions are derivative instruments and, therefore, are also subject to the risks generally applicable to investments in derivatives. For more information on Fund risks, see
Summary of information regarding the Fund -Principal Risk Factors in this report.
The mention of sector breakdowns is for informational purposes
only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice
regarding the appropriateness of investing in any securities or investment strategies discussed should consult their financial professional. Portfolio holdings are subject to change at any time and may not be representative of the portfolio
managers current or future investments. The Funds portfolio composition is subject to change at any time.
All investments are subject to
risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.
The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from
those of the firm as a whole.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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5
|
|
Fund overview (contd)
i
|
Duration is the measure of the price sensitivity of a fixed income security to an interest rate change of 100 basis points. Calculation is based on the weighted
average of the present values for all cash flows.
|
ii
|
The Federal Reserve Board (the Fed) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable
prices, and a sustainable pattern of international trade and payments.
|
iii
|
The federal funds rate is the target interest rate set by the Federal Open Market Committee at which commercial banks borrow and lend their excess reserves to
each other overnight.
|
iv
|
The Bloomberg Barclays Municipal Bond Index is a market value weighted index of investment grade municipal bonds with maturities of one year or more.
|
v
|
The Bloomberg Barclays U.S. Aggregate Index is a broad-based bond index comprised of government, corporate, mortgage- and asset-backed issues, rated investment
grade or higher, and having at least one year to maturity.
|
vi
|
A pre-refunded bond is a bond in which the original security has been replaced by an escrow, usually consisting of treasuries or agencies, which has been
structured to pay principal and interest and any call premium, either to a call date (in the case of a pre-refunded bond), or to maturity (in the case of an escrowed to maturity bond).
|
vii
|
Net asset value (NAV) is calculated by subtracting total liabilities, including liabilities associated with financial leverage (if any), from the
closing value of all securities held by the Fund (plus all other assets) and dividing the result (total net assets) by the total number of the common shares outstanding. The NAV fluctuates with changes in the market prices of securities in which the
Fund has invested. However, the price at which an investor may buy or sell shares of the Fund is the Funds market price as determined by supply of and demand for the Funds shares.
|
viii
|
Lipper, Inc., a wholly-owned subsidiary of Refinitiv, provides independent insight on global collective investments. Returns are based on the period ended May
31, 2021, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 59 funds for the six-month period and among the 57 funds for the twelve-month period in the Funds Lipper category.
|
ix
|
The yield curve is the graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities.
|
|
|
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6
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Fund at a
glance (unaudited)
Investment breakdown (%) as a percent of total investments
|
The bar graph above represents the composition of the Funds investments as of May 31, 2021 and May 31, 2020 and does not include
derivatives, such as futures contracts. The Fund is actively managed. As a result, the composition of the Funds investments is subject to change at any time.
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|
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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7
|
|
Schedule of investments
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Municipal Bonds 133.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama 6.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hoover, AL, IDA Revenue, United States Steel Corp. Project, Series 2019
|
|
|
5.750
|
%
|
|
|
10/1/49
|
|
|
$
|
700,000
|
|
|
$
|
844,371
|
(a)
|
Jefferson County, AL, Sewer Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible CAB, Subordinated Lien, Warrants, Step bond, Series F, Refunding (0.000% to 10/1/23 then
7.900%)
|
|
|
0.000
|
%
|
|
|
10/1/50
|
|
|
|
11,580,000
|
|
|
|
11,899,413
|
|
Senior Lien, Warrants, Series A, Refunding, AGM
|
|
|
5.500
|
%
|
|
|
10/1/53
|
|
|
|
1,400,000
|
|
|
|
1,574,920
|
|
Subordinated Lien, Warrants, Series D, Refunding
|
|
|
6.000
|
%
|
|
|
10/1/42
|
|
|
|
9,230,000
|
|
|
|
10,757,659
|
|
Subordinated Lien, Warrants, Series D, Refunding
|
|
|
6.500
|
%
|
|
|
10/1/53
|
|
|
|
6,900,000
|
|
|
|
8,121,657
|
|
Southeast Alabama Gas Supply District, Gas Supply Revenue, Series 2018A
|
|
|
4.000
|
%
|
|
|
6/1/24
|
|
|
|
5,690,000
|
|
|
|
6,253,821
|
(b)(c)
|
Total Alabama
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,451,841
|
|
Alaska 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alaska State Housing Finance Corp. Revenue, State Capital Project II, Series B
|
|
|
5.000
|
%
|
|
|
12/1/38
|
|
|
|
750,000
|
|
|
|
949,634
|
|
Anchorage, AK, Port Revenue, Series A
|
|
|
5.000
|
%
|
|
|
12/1/50
|
|
|
|
1,000,000
|
|
|
|
1,201,746
|
(a)
|
Total Alaska
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,151,380
|
|
Arizona 5.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arizona State IDA, Education Revenue, Basis School Project, Credit Enhanced, Series F, Refunding, SD Credit
Program
|
|
|
5.000
|
%
|
|
|
7/1/52
|
|
|
|
725,000
|
|
|
|
837,395
|
|
Chandler, AZ, IDA Revenue, Intel Corp. Project
|
|
|
5.000
|
%
|
|
|
6/3/24
|
|
|
|
4,120,000
|
|
|
|
4,666,235
|
(a)(b)(c)
|
Navajo Nation, AZ, Revenue, Series A, Refunding
|
|
|
5.500
|
%
|
|
|
12/1/30
|
|
|
|
950,000
|
|
|
|
1,077,507
|
(d)
|
Queen Creek, AZ, Excise Tax & State Shared Revenue, Series A
|
|
|
5.000
|
%
|
|
|
8/1/42
|
|
|
|
750,000
|
|
|
|
931,891
|
|
Salt Verde, AZ, Financial Corp., Natural Gas Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2007
|
|
|
5.250
|
%
|
|
|
12/1/28
|
|
|
|
2,000,000
|
|
|
|
2,538,068
|
|
Series 2007
|
|
|
5.000
|
%
|
|
|
12/1/32
|
|
|
|
10,000,000
|
|
|
|
13,295,822
|
|
Series 2007
|
|
|
5.000
|
%
|
|
|
12/1/37
|
|
|
|
5,500,000
|
|
|
|
7,753,250
|
|
Total Arizona
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,100,168
|
|
California 17.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alameda, CA, Corridor Transportation Authority Revenue, Second Subordinated Lien, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/34
|
|
|
|
1,750,000
|
|
|
|
2,076,374
|
|
See Notes to Financial
Statements.
|
|
|
|
|
8
|
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
California continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anaheim, CA, Public Financing Authority Lease Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
5/1/46
|
|
|
$
|
2,000,000
|
|
|
$
|
2,179,430
|
|
Bay Area Toll Authority, CA, San Francisco Bay Area, Toll Bridge Revenue, Series B-1, (SIFMA Municipal Swap Index Yield
+ 1.100%)
|
|
|
1.150
|
%
|
|
|
4/1/24
|
|
|
|
5,500,000
|
|
|
|
5,594,091
|
(b)(c)
|
California State Health Facilities Financing Authority Revenue, Lucile Salter Packard Childrens Hospital at
Stanford
|
|
|
5.000
|
%
|
|
|
11/15/56
|
|
|
|
500,000
|
|
|
|
608,414
|
|
California State MFA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, LINXS APM Project, Series A
|
|
|
5.000
|
%
|
|
|
12/31/43
|
|
|
|
1,500,000
|
|
|
|
1,825,813
|
(a)
|
Senior Lien, LINXS APM Project, Series A
|
|
|
5.000
|
%
|
|
|
12/31/47
|
|
|
|
1,900,000
|
|
|
|
2,305,758
|
(a)
|
California State PCFA Water Furnishing Revenue, Poseidon Resources Desalination Project
|
|
|
5.000
|
%
|
|
|
11/21/45
|
|
|
|
12,500,000
|
|
|
|
13,208,570
|
(a)(d)
|
California State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Various Purpose, Refunding
|
|
|
4.000
|
%
|
|
|
11/1/36
|
|
|
|
1,000,000
|
|
|
|
1,183,239
|
|
Various Purpose, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/41
|
|
|
|
3,250,000
|
|
|
|
4,268,935
|
(e)
|
California Statewide CDA Revenue, Provident Group-Pomona Properties LLC, Series A
|
|
|
5.750
|
%
|
|
|
1/15/45
|
|
|
|
1,770,000
|
|
|
|
1,867,056
|
(d)
|
Chino Valley, CA, USD, GO, Series B
|
|
|
5.000
|
%
|
|
|
8/1/55
|
|
|
|
1,250,000
|
|
|
|
1,606,265
|
|
Golden State, CA, Tobacco Securitization Corp. Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tobacco Settlement Funded, Series A-1, Refunding
|
|
|
5.250
|
%
|
|
|
6/1/47
|
|
|
|
2,855,000
|
|
|
|
2,966,663
|
|
Tobacco Settlement Funded, Series A-2, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/47
|
|
|
|
550,000
|
|
|
|
569,595
|
|
Inland Valley, CA, Development Agency, Successor Agency Tax Allocation Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/44
|
|
|
|
2,405,000
|
|
|
|
2,628,156
|
|
Los Angeles County, CA, Public Works Financing Authority Revenue, Multiple Capital Project II
|
|
|
5.000
|
%
|
|
|
8/1/37
|
|
|
|
1,000,000
|
|
|
|
1,054,676
|
|
Los Angeles, CA, Department of Airports Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Los Angeles International Airport, Subordinated, Series D
|
|
|
5.000
|
%
|
|
|
5/15/39
|
|
|
|
500,000
|
|
|
|
628,717
|
(a)
|
Los Angeles International Airport, Subordinated, Series D
|
|
|
5.000
|
%
|
|
|
5/15/49
|
|
|
|
2,500,000
|
|
|
|
3,095,347
|
(a)
|
Los Angeles International Airport, Subordinated, Series F
|
|
|
5.000
|
%
|
|
|
5/15/27
|
|
|
|
5,565,000
|
|
|
|
6,911,713
|
(a)
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
9
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
California continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Los Angeles International Airport, Subordinated, Series F
|
|
|
4.000
|
%
|
|
|
5/15/49
|
|
|
$
|
2,000,000
|
|
|
$
|
2,293,082
|
(a)
|
Los Angeles, CA, Department of Water & Power Waterworks Revenue, Series A
|
|
|
5.000
|
%
|
|
|
7/1/48
|
|
|
|
2,500,000
|
|
|
|
3,082,963
|
|
Los Angeles, CA, Department of Water & Power, Power System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
7/1/47
|
|
|
|
4,000,000
|
|
|
|
4,876,096
|
|
Series C
|
|
|
5.000
|
%
|
|
|
7/1/37
|
|
|
|
1,000,000
|
|
|
|
1,247,753
|
|
Series C
|
|
|
5.000
|
%
|
|
|
7/1/42
|
|
|
|
2,000,000
|
|
|
|
2,480,904
|
|
Los Angeles, CA, Wastewater System Revenue, Green Bonds, Subordinated, Series A
|
|
|
5.000
|
%
|
|
|
6/1/48
|
|
|
|
1,500,000
|
|
|
|
1,862,061
|
|
M-S-R Energy Authority, CA, Natural Gas Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
7.000
|
%
|
|
|
11/1/34
|
|
|
|
3,430,000
|
|
|
|
5,426,906
|
|
Series B
|
|
|
6.500
|
%
|
|
|
11/1/39
|
|
|
|
8,000,000
|
|
|
|
13,189,114
|
|
Regents of the University of California Medical Center Pooled Revenue, Series L, Refunding
|
|
|
5.000
|
%
|
|
|
5/15/32
|
|
|
|
1,750,000
|
|
|
|
2,105,430
|
|
River Islands, CA, Public Financing Authority, Special Tax Revenue, Community Facilities District No. 2003-1,
Refunding
|
|
|
5.500
|
%
|
|
|
9/1/45
|
|
|
|
2,000,000
|
|
|
|
2,111,298
|
|
Riverside County, CA, Transportation Commission Sales Tax Revenue, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/37
|
|
|
|
1,900,000
|
|
|
|
2,397,033
|
|
Riverside County, CA, Transportation Commission Toll Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, Series A
|
|
|
5.750
|
%
|
|
|
6/1/44
|
|
|
|
200,000
|
|
|
|
217,745
|
|
Senior Lien, Series A
|
|
|
5.750
|
%
|
|
|
6/1/48
|
|
|
|
600,000
|
|
|
|
653,211
|
|
San Bernardino, CA, USD Revenue, COP, 2019 School Financing Project, AGM
|
|
|
5.000
|
%
|
|
|
10/1/36
|
|
|
|
1,000,000
|
|
|
|
1,237,709
|
|
San Diego County, CA, Regional Transportation Commission, Sales Tax Revenue, Series A
|
|
|
5.000
|
%
|
|
|
4/1/48
|
|
|
|
2,500,000
|
|
|
|
2,970,740
|
|
San Francisco, CA, City & County Airport Commission, International Airport Revenue, SFO Fuel Company LLC,
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/47
|
|
|
|
1,500,000
|
|
|
|
1,831,197
|
(a)
|
San Mateo County, CA, Joint Powers Financing Authority Lease Revenue, Capital Project, Series A
|
|
|
5.000
|
%
|
|
|
7/15/43
|
|
|
|
1,000,000
|
|
|
|
1,229,207
|
|
See Notes to Financial
Statements.
|
|
|
|
|
10
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
California continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tobacco Securitization Authority of Southern California Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Backed Refunding, San Diego County Tobacco Asset Securitization Corporation, Class 1, Series A
|
|
|
5.000
|
%
|
|
|
6/1/39
|
|
|
$
|
500,000
|
|
|
$
|
636,383
|
|
Asset Backed Refunding, San Diego County Tobacco Asset Securitization Corporation, Class 1, Series A
|
|
|
5.000
|
%
|
|
|
6/1/48
|
|
|
|
500,000
|
|
|
|
624,653
|
|
Total California
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105,052,297
|
|
Colorado 6.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Village Metropolitan District #2, CO, GO, Series A, Refunding
|
|
|
5.750
|
%
|
|
|
12/1/46
|
|
|
|
500,000
|
|
|
|
521,439
|
|
Colorado State Educational & Cultural Facilities Authority Revenue, University of Denver Project, Series
A
|
|
|
5.000
|
%
|
|
|
3/1/47
|
|
|
|
1,600,000
|
|
|
|
1,948,040
|
|
Colorado State Health Facilities Authority Revenue, Commonspirit Health Project, Series A-1
|
|
|
4.000
|
%
|
|
|
8/1/44
|
|
|
|
1,900,000
|
|
|
|
2,161,228
|
|
Colorado State High Performance Transportation Enterprise Revenue, C-470 Express Lanes
|
|
|
5.000
|
%
|
|
|
12/31/51
|
|
|
|
600,000
|
|
|
|
690,080
|
|
Denver, CO, Airport System Revenue, Series C
|
|
|
6.125
|
%
|
|
|
11/15/25
|
|
|
|
10,945,000
|
|
|
|
12,562,297
|
(a)(f)
|
Public Authority for Colorado Energy, Natural Gas Purchase Revenue
|
|
|
6.500
|
%
|
|
|
11/15/38
|
|
|
|
12,200,000
|
|
|
|
19,045,272
|
|
Total Colorado
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,928,356
|
|
Connecticut 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Connecticut State Special Tax Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Infrastructure, Series A
|
|
|
5.000
|
%
|
|
|
1/1/37
|
|
|
|
1,500,000
|
|
|
|
1,849,363
|
|
Transportation Infrastructure, Series A
|
|
|
5.000
|
%
|
|
|
5/1/38
|
|
|
|
2,750,000
|
|
|
|
3,565,715
|
|
Connecticut State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
4/15/35
|
|
|
|
1,650,000
|
|
|
|
2,107,698
|
|
Series E
|
|
|
5.000
|
%
|
|
|
10/15/34
|
|
|
|
930,000
|
|
|
|
1,127,706
|
|
Harbor Point, CT, Infrastructure Improvement District, Special Obligation Revenue, Harbor Point Project Ltd.,
Refunding
|
|
|
5.000
|
%
|
|
|
4/1/39
|
|
|
|
900,000
|
|
|
|
1,041,432
|
(d)
|
Total Connecticut
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,691,914
|
|
District of Columbia 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
District of Columbia Revenue, KIPP DC Project, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/48
|
|
|
|
2,800,000
|
|
|
|
3,283,048
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
11
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Florida 3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broward County, FL, Airport System Revenue, Series 2017
|
|
|
5.000
|
%
|
|
|
10/1/47
|
|
|
$
|
1,250,000
|
|
|
$
|
1,514,715
|
(a)
|
Florida State Development Finance Corp., Educational Facilities Revenue, Renaissance Charter School Inc. Projects,
Series A
|
|
|
6.125
|
%
|
|
|
6/15/46
|
|
|
|
555,000
|
|
|
|
628,195
|
(d)
|
Florida State Mid-Bay Bridge Authority, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
2,410,000
|
|
|
|
2,783,083
|
|
Greater Orlando, FL, Aviation Authority, Airport Facilities Revenue, Priority Subordinated, Series A
|
|
|
5.000
|
%
|
|
|
10/1/47
|
|
|
|
1,500,000
|
|
|
|
1,817,657
|
(a)
|
Miami-Dade County, FL, Aviation Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/49
|
|
|
|
3,000,000
|
|
|
|
3,696,755
|
(a)
|
Miami-Dade County, FL, Expressway Authority, Series A
|
|
|
5.000
|
%
|
|
|
7/1/40
|
|
|
|
9,000,000
|
|
|
|
9,024,960
|
|
Orange County, FL, Health Facilities Authority Revenue, Presbyterian Retirement Communities, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/47
|
|
|
|
750,000
|
|
|
|
817,756
|
|
Palm Beach County, FL, Health Facilities Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acts Retirement-Life Communities
|
|
|
5.000
|
%
|
|
|
11/15/45
|
|
|
|
750,000
|
|
|
|
866,685
|
|
Toby & Leon Cooperman Sinai Residences of Boca Raton Expansion, Series B-1
|
|
|
3.000
|
%
|
|
|
6/1/27
|
|
|
|
1,500,000
|
|
|
|
1,568,796
|
|
Tampa, FL, Hospital Revenue, H. Lee Moffitt Cancer Center Project, Series B
|
|
|
5.000
|
%
|
|
|
7/1/50
|
|
|
|
1,000,000
|
|
|
|
1,250,304
|
|
Total Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,968,906
|
|
Georgia 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fulton County, GA, Development Authority Revenue, Georgia Institute of Technology
|
|
|
5.000
|
%
|
|
|
6/15/44
|
|
|
|
1,000,000
|
|
|
|
1,252,852
|
|
Georgia State Municipal Electric Authority Power Revenue, Project One, Series A
|
|
|
5.000
|
%
|
|
|
1/1/50
|
|
|
|
1,000,000
|
|
|
|
1,258,603
|
|
Main Street Natural Gas Inc., GA, Gas Project Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
5/15/43
|
|
|
|
800,000
|
|
|
|
965,329
|
|
Series B
|
|
|
5.000
|
%
|
|
|
3/15/22
|
|
|
|
4,000,000
|
|
|
|
4,147,054
|
|
Series C
|
|
|
4.000
|
%
|
|
|
9/1/26
|
|
|
|
560,000
|
|
|
|
649,679
|
(b)(c)
|
Total Georgia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,273,517
|
|
Guam 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guam Government, Business Privilege Tax Revenue, Series F, Refunding
|
|
|
4.000
|
%
|
|
|
1/1/42
|
|
|
|
1,000,000
|
|
|
|
1,140,051
|
(e)
|
See Notes to Financial
Statements.
|
|
|
|
|
12
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Idaho 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Idaho State Health Facilities Authority Revenue, Trinity Health Credit Group, Series A
|
|
|
5.000
|
%
|
|
|
12/1/47
|
|
|
$
|
1,100,000
|
|
|
$
|
1,338,665
|
|
Illinois 16.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chicago, IL, Board of Education, Dedicated Capital Improvement, Special Tax Revenue, Series 2018
|
|
|
5.000
|
%
|
|
|
4/1/42
|
|
|
|
1,500,000
|
|
|
|
1,765,147
|
|
Chicago, IL, Board of Education, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dedicated, Series G, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/34
|
|
|
|
100,000
|
|
|
|
120,297
|
|
Dedicated, Series G, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/44
|
|
|
|
420,000
|
|
|
|
495,799
|
|
Dedicated, Series H
|
|
|
5.000
|
%
|
|
|
12/1/36
|
|
|
|
500,000
|
|
|
|
598,977
|
|
Dedicated, Series H
|
|
|
5.000
|
%
|
|
|
12/1/46
|
|
|
|
150,000
|
|
|
|
176,697
|
|
Series D
|
|
|
5.000
|
%
|
|
|
12/1/46
|
|
|
|
6,435,000
|
|
|
|
7,733,525
|
|
Chicago, IL, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2002B
|
|
|
5.500
|
%
|
|
|
1/1/37
|
|
|
|
220,000
|
|
|
|
247,380
|
|
Series A
|
|
|
5.000
|
%
|
|
|
1/1/44
|
|
|
|
1,000,000
|
|
|
|
1,190,201
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/26
|
|
|
|
2,250,000
|
|
|
|
2,637,172
|
|
Series A, Refunding
|
|
|
6.000
|
%
|
|
|
1/1/38
|
|
|
|
1,500,000
|
|
|
|
1,825,924
|
|
Series B
|
|
|
5.500
|
%
|
|
|
1/1/32
|
|
|
|
3,300,000
|
|
|
|
3,737,648
|
|
Series C, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/25
|
|
|
|
3,000,000
|
|
|
|
3,427,654
|
|
Series D, Refunding
|
|
|
5.500
|
%
|
|
|
1/1/34
|
|
|
|
10,000
|
|
|
|
11,286
|
|
Chicago, IL, OHare International Airport Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Senior Lien, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/41
|
|
|
|
1,000,000
|
|
|
|
1,181,530
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/31
|
|
|
|
1,000,000
|
|
|
|
1,143,506
|
(a)
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/35
|
|
|
|
7,000,000
|
|
|
|
7,962,054
|
(a)
|
TrIPS Obligated Group
|
|
|
5.000
|
%
|
|
|
7/1/48
|
|
|
|
700,000
|
|
|
|
832,796
|
(a)
|
Chicago, IL, Transit Authority, Sales Tax Receipts Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien
|
|
|
5.000
|
%
|
|
|
12/1/51
|
|
|
|
1,000,000
|
|
|
|
1,189,779
|
|
Second Lien, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
12/1/55
|
|
|
|
1,300,000
|
|
|
|
1,479,266
|
|
Second Lien, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/55
|
|
|
|
500,000
|
|
|
|
615,321
|
|
Chicago, IL, Wastewater Transmission Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien
|
|
|
5.000
|
%
|
|
|
1/1/44
|
|
|
|
1,000,000
|
|
|
|
1,107,672
|
|
Second Lien, Series A
|
|
|
5.000
|
%
|
|
|
1/1/47
|
|
|
|
1,000,000
|
|
|
|
1,183,564
|
|
Second Lien, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/38
|
|
|
|
750,000
|
|
|
|
901,984
|
|
Chicago, IL, Waterworks Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien, Series 2017, Refunding
|
|
|
5.000
|
%
|
|
|
11/1/29
|
|
|
|
1,800,000
|
|
|
|
2,262,015
|
|
Second Lien, Series 2017-2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/33
|
|
|
|
1,290,000
|
|
|
|
1,604,346
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
13
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Illinois continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien, Series 2017-2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/36
|
|
|
$
|
1,110,000
|
|
|
$
|
1,372,774
|
|
Second Lien, Series 2017-2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/37
|
|
|
|
2,500,000
|
|
|
|
3,085,466
|
|
Second Lien, Series 2017-2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/38
|
|
|
|
2,000,000
|
|
|
|
2,465,239
|
|
Cook County, IL, Sales Tax Revenue, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
11/15/40
|
|
|
|
1,750,000
|
|
|
|
2,092,154
|
|
Illinois State Finance Authority Revenue, Northshore University Health System, Refunding
|
|
|
4.000
|
%
|
|
|
8/15/40
|
|
|
|
1,900,000
|
|
|
|
2,278,235
|
|
Illinois State Finance Authority, Student Housing & Academic Facilities Revenue, CHF Chicago LLC, University of
Illinois Chicago Project
|
|
|
5.000
|
%
|
|
|
2/15/50
|
|
|
|
500,000
|
|
|
|
560,099
|
|
Illinois State Sports Facilities Authority Revenue, Sport Facilities Project, Series 2019, Refunding,
BAM
|
|
|
5.000
|
%
|
|
|
6/15/28
|
|
|
|
750,000
|
|
|
|
935,126
|
|
Illinois State Toll Highway Authority Revenue, Series A
|
|
|
4.000
|
%
|
|
|
1/1/39
|
|
|
|
4,000,000
|
|
|
|
4,677,346
|
|
Illinois State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2006
|
|
|
5.500
|
%
|
|
|
1/1/30
|
|
|
|
250,000
|
|
|
|
328,033
|
|
Series 2016
|
|
|
5.000
|
%
|
|
|
1/1/33
|
|
|
|
1,500,000
|
|
|
|
1,714,579
|
|
Series 2016
|
|
|
5.000
|
%
|
|
|
11/1/33
|
|
|
|
2,350,000
|
|
|
|
2,746,014
|
|
Series 2016, Refunding
|
|
|
5.000
|
%
|
|
|
2/1/29
|
|
|
|
1,660,000
|
|
|
|
1,980,435
|
|
Series A
|
|
|
5.000
|
%
|
|
|
3/1/36
|
|
|
|
1,500,000
|
|
|
|
1,913,684
|
|
Series A
|
|
|
5.000
|
%
|
|
|
5/1/36
|
|
|
|
690,000
|
|
|
|
828,203
|
|
Series A
|
|
|
5.000
|
%
|
|
|
5/1/39
|
|
|
|
2,000,000
|
|
|
|
2,384,748
|
|
Series A
|
|
|
5.000
|
%
|
|
|
3/1/46
|
|
|
|
1,750,000
|
|
|
|
2,175,975
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
3,795,000
|
|
|
|
4,698,867
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
500,000
|
|
|
|
614,787
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
750,000
|
|
|
|
928,630
|
|
Series D
|
|
|
5.000
|
%
|
|
|
11/1/27
|
|
|
|
3,325,000
|
|
|
|
4,095,789
|
|
Metropolitan Pier & Exposition Authority, IL, Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCormick Place Expansion Project, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
6/15/50
|
|
|
|
1,500,000
|
|
|
|
1,722,569
|
|
See Notes to Financial
Statements.
|
|
|
|
|
14
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Illinois continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCormick Place Expansion Project, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
6/15/50
|
|
|
$
|
7,150,000
|
|
|
$
|
8,767,172
|
|
Regional Transportation Authority, IL, GO, Series A, Refunding, NATL
|
|
|
6.000
|
%
|
|
|
7/1/29
|
|
|
|
4,450,000
|
|
|
|
5,738,251
|
|
Total Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103,535,715
|
|
Indiana 2.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indiana State Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marion General Hospital, Series A
|
|
|
4.000
|
%
|
|
|
7/1/45
|
|
|
|
900,000
|
|
|
|
1,039,715
|
|
Private Activity-Ohio River Bridges East End Crossing Project
|
|
|
5.000
|
%
|
|
|
7/1/44
|
|
|
|
5,000,000
|
|
|
|
5,439,859
|
(a)
|
Second Lien, CWA Authority, Series B
|
|
|
5.000
|
%
|
|
|
10/1/41
|
|
|
|
5,000,000
|
|
|
|
5,076,246
|
|
Indianapolis, IN, Local Public Improvement Bond Bank, Courthouse and Jail Project, Series A
|
|
|
4.000
|
%
|
|
|
2/1/44
|
|
|
|
2,000,000
|
|
|
|
2,352,945
|
|
Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project
|
|
|
7.000
|
%
|
|
|
1/1/44
|
|
|
|
1,000,000
|
|
|
|
1,124,046
|
(a)
|
Total Indiana
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,032,811
|
|
Iowa 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iowa State Finance Authority, Midwestern Disaster Area Revenue, Iowa Fertilizer Company Project,
Refunding
|
|
|
3.125
|
%
|
|
|
12/1/22
|
|
|
|
430,000
|
|
|
|
438,700
|
|
Iowa State Tobacco Settlement Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Backed Senior Bonds, Class 1, Series A-2, Refunding
|
|
|
4.000
|
%
|
|
|
6/1/49
|
|
|
|
500,000
|
|
|
|
580,373
|
|
Asset Backed Senior Bonds, Class 2, Series B-1, Refunding
|
|
|
4.000
|
%
|
|
|
6/1/49
|
|
|
|
750,000
|
|
|
|
874,219
|
|
Total Iowa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,893,292
|
|
Kentucky 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kentucky State Economic Development Finance Authority Revenue, Louisville Arena, Louisville Arena Authority Inc.,
Refunding, AGM
|
|
|
5.000
|
%
|
|
|
12/1/45
|
|
|
|
1,000,000
|
|
|
|
1,220,191
|
|
Kentucky State PEA, Gas Supply Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
4.000
|
%
|
|
|
6/1/26
|
|
|
|
5,000,000
|
|
|
|
5,776,833
|
(b)(c)
|
Series C
|
|
|
4.000
|
%
|
|
|
6/1/25
|
|
|
|
5,800,000
|
|
|
|
6,538,598
|
(b)(c)
|
Total Kentucky
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,535,622
|
|
Louisiana 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port New Orleans, LA, Board of Commissioners Revenue, Series B, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
4/1/43
|
|
|
|
2,000,000
|
|
|
|
2,382,006
|
(a)
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
15
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Louisiana continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
St. Charles Parish, LA, Gulf Opportunity Zone Revenue, Valero Energy Corp., Convertible
|
|
|
4.000
|
%
|
|
|
6/1/22
|
|
|
$
|
5,000,000
|
|
|
$
|
5,178,770
|
(b)(c)
|
St. John the Baptist Parish, LA, State Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marathon Oil Corp. Project, Refunding
|
|
|
2.200
|
%
|
|
|
7/1/26
|
|
|
|
1,300,000
|
|
|
|
1,354,727
|
(b)(c)
|
Marathon Oil Corp. Project, Series B-2, Refunding
|
|
|
2.375
|
%
|
|
|
7/1/26
|
|
|
|
1,750,000
|
|
|
|
1,838,663
|
(b)(c)
|
Total Louisiana
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,754,166
|
|
Maryland 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maryland EDC, Senior Student Housing Revenue, Morgan State University Project
|
|
|
5.000
|
%
|
|
|
7/1/50
|
|
|
|
1,150,000
|
|
|
|
1,415,838
|
|
Massachusetts 1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts State DFA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broad Institute Inc., Refunding
|
|
|
5.000
|
%
|
|
|
4/1/36
|
|
|
|
1,000,000
|
|
|
|
1,233,273
|
|
Milford Regional Medical Center, Series F
|
|
|
5.750
|
%
|
|
|
7/15/43
|
|
|
|
500,000
|
|
|
|
536,732
|
|
UMass Boston Student Housing Project
|
|
|
5.000
|
%
|
|
|
10/1/48
|
|
|
|
750,000
|
|
|
|
844,602
|
|
Wellforce Issue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/44
|
|
|
|
500,000
|
|
|
|
606,525
|
|
Massachusetts State Port Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bosfuel Project, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
7/1/44
|
|
|
|
1,100,000
|
|
|
|
1,261,490
|
(a)
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
1,700,000
|
|
|
|
2,141,469
|
(a)
|
Series E
|
|
|
5.000
|
%
|
|
|
7/1/46
|
|
|
|
1,500,000
|
|
|
|
1,923,738
|
(a)
|
Massachusetts State School Building Authority, Sales Tax Revenue, Senior, Series A
|
|
|
5.000
|
%
|
|
|
5/15/43
|
|
|
|
3,000,000
|
|
|
|
3,286,085
|
(g)
|
Total Massachusetts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,833,914
|
|
Michigan 4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detroit, MI, Downtown Development Authority Revenue, Catalyst Development, Series A, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
7/1/48
|
|
|
|
1,000,000
|
|
|
|
1,119,991
|
|
Great Lakes, MI, Water Authority Water Supply System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, Series A
|
|
|
5.000
|
%
|
|
|
7/1/46
|
|
|
|
5,500,000
|
|
|
|
6,513,795
|
|
Senior Lien, Series C, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/35
|
|
|
|
500,000
|
|
|
|
605,052
|
|
Lansing, MI, Board of Water & Light Utility System Revenue, Series A
|
|
|
5.000
|
%
|
|
|
7/1/37
|
|
|
|
2,000,000
|
|
|
|
2,007,956
|
(g)
|
Michigan State Finance Authority Limited Obligation Revenue, Higher Education, Thomas M Cooley Law School Project,
Refunding
|
|
|
6.750
|
%
|
|
|
7/1/44
|
|
|
|
425,000
|
|
|
|
451,448
|
(d)
|
Michigan State Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Facilities Program, Series 1-A, Refunding
|
|
|
5.250
|
%
|
|
|
10/15/47
|
|
|
|
650,000
|
|
|
|
720,104
|
|
See Notes to Financial
Statements.
|
|
|
|
|
16
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Michigan continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Second Lien Local Project, Series C,
Refunding
|
|
|
5.000
|
%
|
|
|
7/1/33
|
|
|
$
|
625,000
|
|
|
$
|
732,135
|
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Series C-1, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/44
|
|
|
|
1,320,000
|
|
|
|
1,389,982
|
(g)
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Series C-6, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/33
|
|
|
|
1,160,000
|
|
|
|
1,316,989
|
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Series D-2, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/34
|
|
|
|
250,000
|
|
|
|
292,414
|
|
Tobacco Settlement Asset Backed Senior Bonds, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
6/1/49
|
|
|
|
500,000
|
|
|
|
576,294
|
|
Tobacco Settlement Asset Backed Senior Bonds, Series B-1, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/49
|
|
|
|
400,000
|
|
|
|
484,828
|
|
Michigan State Hospital Finance Authority Revenue, Ascension Health Senior Credit Group, Series 2010F-4,
Refunding
|
|
|
5.000
|
%
|
|
|
11/15/47
|
|
|
|
3,000,000
|
|
|
|
3,806,357
|
|
Michigan State Strategic Fund Limited Obligation Revenue, I-75 Improvement Project
|
|
|
5.000
|
%
|
|
|
12/31/43
|
|
|
|
1,400,000
|
|
|
|
1,699,924
|
(a)
|
Royal Oak, MI, Hospital Finance Authority Revenue, Beaumont Health Credit Group, Series D, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/39
|
|
|
|
2,500,000
|
|
|
|
2,778,578
|
|
Total Michigan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,495,847
|
|
Minnesota 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Minnesota Municipal Power Agency Revenue, Series A
|
|
|
5.000
|
%
|
|
|
1/1/46
|
|
|
|
1,530,000
|
|
|
|
1,718,931
|
(g)
|
Missouri 0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri State HEFA Revenue, Senior Living Facilities, Lutheran Senior Services, Refunding
|
|
|
5.000
|
%
|
|
|
2/1/44
|
|
|
|
2,710,000
|
|
|
|
2,927,149
|
|
St. Louis County, MO, IDA, Senior Living Facilities Revenue, Friendship Village, St. Louis Obligated Group, Series
A
|
|
|
5.000
|
%
|
|
|
9/1/38
|
|
|
|
1,250,000
|
|
|
|
1,414,877
|
|
Total Missouri
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,342,026
|
|
New Jersey 10.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey Institute of Technology, GO, Series A
|
|
|
5.000
|
%
|
|
|
7/1/45
|
|
|
|
750,000
|
|
|
|
868,933
|
|
New Jersey State EDA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cigarette Tax, Refunding
|
|
|
5.000
|
%
|
|
|
6/15/26
|
|
|
|
2,500,000
|
|
|
|
2,592,513
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
17
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
New Jersey continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Activity-The Goethals Bridge Replacement Project, AGM
|
|
|
5.125
|
%
|
|
|
7/1/42
|
|
|
$
|
2,500,000
|
|
|
$
|
2,793,340
|
(a)
|
School Facilities Construction, Series BBB, Refunding
|
|
|
5.500
|
%
|
|
|
6/15/31
|
|
|
|
750,000
|
|
|
|
917,726
|
|
School Facilities Construction, Series I, Refunding, State Appropriations (SIFMA Municipal Swap Index Yield +
1.600%)
|
|
|
1.650
|
%
|
|
|
3/1/28
|
|
|
|
15,000,000
|
|
|
|
15,252,582
|
(c)
|
Transit Transportation Project, Series A
|
|
|
5.000
|
%
|
|
|
11/1/32
|
|
|
|
1,000,000
|
|
|
|
1,267,276
|
|
New Jersey State EDA, Lease Revenue, State House Project, Series B
|
|
|
5.000
|
%
|
|
|
6/15/43
|
|
|
|
4,000,000
|
|
|
|
4,905,704
|
|
New Jersey State EDA, Special Facility Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continental Airlines Inc. Project
|
|
|
5.250
|
%
|
|
|
9/15/29
|
|
|
|
3,000,000
|
|
|
|
3,178,611
|
(a)
|
Port Newark Container Terminal LLC Project, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/37
|
|
|
|
650,000
|
|
|
|
762,859
|
(a)
|
New Jersey State Health Care Facilities Financing Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hackensack Meridian Health, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/38
|
|
|
|
400,000
|
|
|
|
484,242
|
|
RWJ Barnabas Health Obligation Group, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/43
|
|
|
|
1,200,000
|
|
|
|
1,434,916
|
|
New Jersey State Transportation Trust Fund Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Program, Series AA
|
|
|
5.250
|
%
|
|
|
6/15/43
|
|
|
|
1,500,000
|
|
|
|
1,865,980
|
|
Transportation Program, Series AA
|
|
|
5.000
|
%
|
|
|
6/15/45
|
|
|
|
7,500,000
|
|
|
|
9,356,218
|
|
Transportation Program, Series BB
|
|
|
4.000
|
%
|
|
|
6/15/36
|
|
|
|
2,250,000
|
|
|
|
2,590,922
|
|
Transportation System, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/15/25
|
|
|
|
1,885,000
|
|
|
|
2,251,619
|
|
Transportation System, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/15/28
|
|
|
|
2,615,000
|
|
|
|
3,322,198
|
|
New Jersey State Turnpike Authority Revenue, Series G, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/35
|
|
|
|
2,675,000
|
|
|
|
3,279,064
|
|
New Jersey State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COVID-19 Emergency, Series A
|
|
|
5.000
|
%
|
|
|
6/1/28
|
|
|
|
3,500,000
|
|
|
|
4,457,281
|
|
COVID-19 Emergency, Series A
|
|
|
5.000
|
%
|
|
|
6/1/29
|
|
|
|
2,500,000
|
|
|
|
3,251,250
|
|
Tobacco Settlement Financing Corp., NJ, Revenue, Series A, Refunding
|
|
|
5.250
|
%
|
|
|
6/1/46
|
|
|
|
600,000
|
|
|
|
731,114
|
|
Total New Jersey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,564,348
|
|
New York 18.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brookhaven, NY, Local Development Corp. Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Island Community Hospital Project, Series A
|
|
|
5.000
|
%
|
|
|
10/1/31
|
|
|
|
1,280,000
|
|
|
|
1,642,470
|
|
See Notes to Financial
Statements.
|
|
|
|
|
18
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
New York continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Island Community Hospital Project, Series A
|
|
|
4.000
|
%
|
|
|
10/1/45
|
|
|
$
|
1,250,000
|
|
|
$
|
1,413,406
|
|
MTA, NY, Dedicated Tax Fund Revenue, Green Bonds, Subseries A-2
|
|
|
5.000
|
%
|
|
|
11/15/47
|
|
|
|
1,500,000
|
|
|
|
1,786,173
|
|
MTA, NY, Transportation Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Green Bonds, Series A-2
|
|
|
5.000
|
%
|
|
|
11/15/24
|
|
|
|
500,000
|
|
|
|
577,070
|
|
Green Bonds, Series C-1, Refunding
|
|
|
4.000
|
%
|
|
|
11/15/37
|
|
|
|
500,000
|
|
|
|
567,444
|
|
Green Bonds, Series D-1
|
|
|
5.000
|
%
|
|
|
11/15/43
|
|
|
|
500,000
|
|
|
|
626,439
|
|
Green Bonds, Series D-3
|
|
|
4.000
|
%
|
|
|
11/15/49
|
|
|
|
1,000,000
|
|
|
|
1,146,394
|
|
Green Bonds, Series E, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/30
|
|
|
|
1,500,000
|
|
|
|
1,984,337
|
|
Green Bonds, Series E, Refunding
|
|
|
4.000
|
%
|
|
|
11/15/45
|
|
|
|
1,250,000
|
|
|
|
1,438,485
|
|
Series A-2
|
|
|
5.000
|
%
|
|
|
5/15/30
|
|
|
|
1,800,000
|
|
|
|
2,335,578
|
(b)(c)
|
Series C-1
|
|
|
5.000
|
%
|
|
|
11/15/33
|
|
|
|
350,000
|
|
|
|
419,453
|
|
New York City, NY, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subseries D-1
|
|
|
5.000
|
%
|
|
|
3/1/43
|
|
|
|
2,000,000
|
|
|
|
2,530,148
|
|
Subseries F-1
|
|
|
5.000
|
%
|
|
|
3/1/50
|
|
|
|
2,000,000
|
|
|
|
2,551,218
|
|
New York City, NY, Industrial Development Agency Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yankee Stadium Project, Refunding
|
|
|
4.000
|
%
|
|
|
3/1/45
|
|
|
|
500,000
|
|
|
|
570,742
|
|
Yankee Stadium Project, Refunding, AGM
|
|
|
4.000
|
%
|
|
|
3/1/45
|
|
|
|
750,000
|
|
|
|
877,220
|
|
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second General Resolution Fiscal 2013, Unrefunded
|
|
|
5.000
|
%
|
|
|
6/15/47
|
|
|
|
2,650,000
|
|
|
|
2,882,796
|
|
Subordinated, Series BB-1
|
|
|
5.000
|
%
|
|
|
6/15/46
|
|
|
|
1,500,000
|
|
|
|
1,847,064
|
|
New York City, NY, TFA Future Tax Secured Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated, Series B-1
|
|
|
5.000
|
%
|
|
|
8/1/45
|
|
|
|
3,000,000
|
|
|
|
3,706,807
|
|
Subordinated, Series C-1
|
|
|
4.000
|
%
|
|
|
5/1/46
|
|
|
|
7,000,000
|
|
|
|
8,305,348
|
|
New York State Dormitory Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bidding Group 3, Series A
|
|
|
5.000
|
%
|
|
|
3/15/42
|
|
|
|
1,000,000
|
|
|
|
1,243,652
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
2/15/43
|
|
|
|
5,000
|
|
|
|
6,299
|
(g)
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
2/15/43
|
|
|
|
2,995,000
|
|
|
|
3,679,077
|
|
New York State Dormitory Authority, Sales Tax Revenue, Bidding Group 4, Series E, Refunding
|
|
|
5.000
|
%
|
|
|
3/15/44
|
|
|
|
2,000,000
|
|
|
|
2,512,401
|
|
New York State Dormitory Authority, School Districts Revenue Financing Program, Series A, AGM
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
3,250,000
|
|
|
|
4,207,456
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
19
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
New York continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Dormitory Authority, State Personal Income Tax Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bidding Group 4, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
3/15/46
|
|
|
$
|
2,500,000
|
|
|
$
|
2,951,431
|
|
Bidding Group 4, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
3/15/46
|
|
|
|
3,250,000
|
|
|
|
4,033,744
|
|
New York State Liberty Development Corp., Liberty Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 World Trade Center Project, Class 1, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/44
|
|
|
|
1,750,000
|
|
|
|
1,936,640
|
(d)
|
4 World Trade Center Project, Refunding
|
|
|
5.750
|
%
|
|
|
11/15/51
|
|
|
|
5,000,000
|
|
|
|
5,118,945
|
|
New York State Liberty Development Corp., Revenue, Goldman Sachs Headquarters
|
|
|
5.500
|
%
|
|
|
10/1/37
|
|
|
|
1,485,000
|
|
|
|
2,245,037
|
|
New York State Thruway Authority General Revenue, Junior Indebtedness Obligations, Subordinated, Series B,
Refunding
|
|
|
4.000
|
%
|
|
|
1/1/50
|
|
|
|
3,000,000
|
|
|
|
3,468,912
|
|
New York State Transportation Development Corp., Special Facilities Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project
|
|
|
5.000
|
%
|
|
|
1/1/33
|
|
|
|
1,750,000
|
|
|
|
2,128,414
|
(a)
|
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project
|
|
|
4.375
|
%
|
|
|
10/1/45
|
|
|
|
1,500,000
|
|
|
|
1,780,437
|
(a)
|
Terminal 4 John F. Kennedy International Airport Project, Series C, Refunding
|
|
|
4.000
|
%
|
|
|
12/1/39
|
|
|
|
1,800,000
|
|
|
|
2,149,565
|
|
LaGuardia Airport Terminal B Redevelopment Project, Series A
|
|
|
5.000
|
%
|
|
|
7/1/41
|
|
|
|
9,250,000
|
|
|
|
10,481,627
|
(a)
|
LaGuardia Airport Terminal B Redevelopment Project, Series A
|
|
|
5.000
|
%
|
|
|
7/1/46
|
|
|
|
250,000
|
|
|
|
282,898
|
(a)
|
LaGuardia Airport Terminal B Redevelopment Project, Series A
|
|
|
5.250
|
%
|
|
|
1/1/50
|
|
|
|
1,000,000
|
|
|
|
1,136,523
|
(a)
|
Port Authority of New York & New Jersey Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Series 194, Refunding
|
|
|
5.000
|
%
|
|
|
10/15/41
|
|
|
|
6,400,000
|
|
|
|
7,528,034
|
|
Series 221
|
|
|
4.000
|
%
|
|
|
7/15/55
|
|
|
|
3,600,000
|
|
|
|
4,152,898
|
(a)
|
Triborough Bridge & Tunnel Authority, NY, Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General-MTA Bridges & Tunnels, Series A
|
|
|
5.000
|
%
|
|
|
11/15/49
|
|
|
|
2,250,000
|
|
|
|
2,874,211
|
|
General-MTA Bridges & Tunnels, Series A
|
|
|
5.000
|
%
|
|
|
11/15/51
|
|
|
|
1,000,000
|
|
|
|
1,287,171
|
|
General-MTA Bridges & Tunnels, Series A
|
|
|
4.000
|
%
|
|
|
11/15/54
|
|
|
|
1,250,000
|
|
|
|
1,466,624
|
|
General-MTA Bridges & Tunnels, Series A
|
|
|
5.000
|
%
|
|
|
11/15/54
|
|
|
|
7,350,000
|
|
|
|
9,327,040
|
|
General-MTA Bridges & Tunnels, Series A
|
|
|
5.000
|
%
|
|
|
11/15/56
|
|
|
|
2,500,000
|
|
|
|
3,182,614
|
|
Total New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,390,242
|
|
See Notes to Financial
Statements.
|
|
|
|
|
20
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
North Carolina 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charlotte, NC, Airport Revenue, Charlotte Douglas International Airport, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/49
|
|
|
$
|
1,750,000
|
|
|
$
|
2,196,306
|
|
Charlotte, NC, Lease Revenue, COP, Convention Facility Project, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
6/1/49
|
|
|
|
750,000
|
|
|
|
882,856
|
|
North Carolina State Medical Care Commission, Retirement Facilities Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Forest at Duke Project
|
|
|
4.000
|
%
|
|
|
9/1/41
|
|
|
|
500,000
|
|
|
|
581,957
|
(e)
|
The Forest at Duke Project
|
|
|
4.000
|
%
|
|
|
9/1/46
|
|
|
|
715,000
|
|
|
|
824,273
|
(e)
|
The Forest at Duke Project
|
|
|
4.000
|
%
|
|
|
9/1/51
|
|
|
|
1,000,000
|
|
|
|
1,146,967
|
(e)
|
North Carolina State Turnpike Authority, Monroe Expressway Toll Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/47
|
|
|
|
750,000
|
|
|
|
858,575
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/51
|
|
|
|
1,500,000
|
|
|
|
1,712,693
|
|
Total North Carolina
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,203,627
|
|
Ohio 2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckeye, OH, Tobacco Settlement Financing Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Bonds, Series A-2, Refunding
|
|
|
4.000
|
%
|
|
|
6/1/48
|
|
|
|
1,250,000
|
|
|
|
1,447,095
|
|
Senior Bonds, Series B-2, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/55
|
|
|
|
2,400,000
|
|
|
|
2,782,172
|
|
JobsOhio Beverage System, Senior Lien, Series A
|
|
|
5.000
|
%
|
|
|
1/1/38
|
|
|
|
8,000,000
|
|
|
|
8,618,927
|
(g)
|
Ohio State Air Quality Development Authority Revenue, American Electric Company Project, Series B,
Refunding
|
|
|
2.500
|
%
|
|
|
10/1/29
|
|
|
|
1,500,000
|
|
|
|
1,658,752
|
(a)(b)(c)
|
Ohio State Water Development Authority, U.S. Steel Corp. Project, Refunding
|
|
|
6.600
|
%
|
|
|
5/1/29
|
|
|
|
3,000,000
|
|
|
|
3,059,033
|
|
Total Ohio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,565,979
|
|
Oklahoma 0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payne County, OK, EDA Revenue, Epworth Living at The Ranch, Series A
|
|
|
6.875
|
%
|
|
|
11/1/46
|
|
|
|
332,733
|
|
|
|
1,664
|
*(h)
|
Oregon 0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oregon State Facilities Authority Revenue, Legacy Health Project, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/46
|
|
|
|
2,000,000
|
|
|
|
2,355,337
|
|
Port of Portland, OR, Airport Revenue, Portland International Airport, Series C, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/24
|
|
|
|
1,000,000
|
|
|
|
1,135,994
|
(a)
|
Total Oregon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,491,331
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
21
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Pennsylvania 4.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commonwealth Financing Authority, PA, Tobacco Master Settlement Payment Revenue Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2018
|
|
|
5.000
|
%
|
|
|
6/1/32
|
|
|
$
|
250,000
|
|
|
$
|
309,040
|
|
Series 2018
|
|
|
5.000
|
%
|
|
|
6/1/33
|
|
|
|
500,000
|
|
|
|
615,713
|
|
Cumberland County, PA, Municipal Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diakon Lutheran Social Ministries, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/30
|
|
|
|
375,000
|
|
|
|
435,244
|
(g)
|
Diakon Lutheran Social Ministries, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/30
|
|
|
|
2,000,000
|
|
|
|
2,243,859
|
|
East Hempfield Township, PA, IDA Revenue, Student Services Inc. Student Housing Project - Millersville
University
|
|
|
5.000
|
%
|
|
|
7/1/47
|
|
|
|
550,000
|
|
|
|
590,189
|
|
Pennsylvania State Higher EFA Revenue, Trustees of University of Pennsylvania, Series A
|
|
|
5.000
|
%
|
|
|
2/15/48
|
|
|
|
1,250,000
|
|
|
|
1,528,230
|
|
Pennsylvania State Turnpike Commission Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated, Series B
|
|
|
5.250
|
%
|
|
|
12/1/41
|
|
|
|
2,275,000
|
|
|
|
2,333,691
|
(g)
|
Subordinated, Series B
|
|
|
5.250
|
%
|
|
|
12/1/41
|
|
|
|
3,725,000
|
|
|
|
3,820,148
|
(g)
|
Subordinated, Series B
|
|
|
5.000
|
%
|
|
|
12/1/48
|
|
|
|
2,900,000
|
|
|
|
3,571,067
|
|
Subordinated, Series B
|
|
|
5.000
|
%
|
|
|
12/1/50
|
|
|
|
1,000,000
|
|
|
|
1,277,193
|
|
Philadelphia, PA, Authority for IDR, Lease Revenue, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
1,200,000
|
|
|
|
1,527,170
|
|
Philadelphia, PA, SD, GO, Series A, State Aid Withholding
|
|
|
5.000
|
%
|
|
|
9/1/33
|
|
|
|
1,755,000
|
|
|
|
2,064,098
|
|
Philadelphia, PA, Water & Wastewater Revenue, Series A
|
|
|
5.000
|
%
|
|
|
7/1/45
|
|
|
|
1,000,000
|
|
|
|
1,122,261
|
|
State Public School Building Authority, PA, Lease Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philadelphia SD Project, Series A, Refunding, AGM, State Aid Withholding
|
|
|
5.000
|
%
|
|
|
6/1/31
|
|
|
|
600,000
|
|
|
|
732,275
|
|
Philadelphia SD Project, Series A, Refunding, AGM, State Aid Withholding
|
|
|
5.000
|
%
|
|
|
6/1/33
|
|
|
|
1,780,000
|
|
|
|
2,164,945
|
|
Total Pennsylvania
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,335,123
|
|
Puerto Rico 5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue, Senior Lien, Series A
|
|
|
5.250
|
%
|
|
|
7/1/42
|
|
|
|
3,920,000
|
|
|
|
4,148,771
|
|
See Notes to Financial
Statements.
|
|
|
|
|
22
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Puerto Rico continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto Rico Commonwealth Public Improvement Bonds, GO, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/41
|
|
|
$
|
1,250,000
|
|
|
$
|
1,006,250
|
*(h)
|
Puerto Rico Electric Power Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
7/1/42
|
|
|
|
2,200,000
|
|
|
|
2,106,500
|
*(h)
|
Series A
|
|
|
5.050
|
%
|
|
|
7/1/42
|
|
|
|
350,000
|
|
|
|
335,125
|
*(h)
|
Series XX
|
|
|
5.250
|
%
|
|
|
7/1/40
|
|
|
|
3,495,000
|
|
|
|
3,355,200
|
*(h)
|
Series ZZ, Refunding
|
|
|
5.250
|
%
|
|
|
7/1/18
|
|
|
|
1,250,000
|
|
|
|
1,182,812
|
*(i)
|
Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAB, Restructured, Series A-1
|
|
|
0.000
|
%
|
|
|
7/1/27
|
|
|
|
960,000
|
|
|
|
862,831
|
|
CAB, Restructured, Series A-1
|
|
|
0.000
|
%
|
|
|
7/1/46
|
|
|
|
1,040,000
|
|
|
|
338,593
|
|
CAB, Restructured, Series A-1
|
|
|
0.000
|
%
|
|
|
7/1/51
|
|
|
|
10,200,000
|
|
|
|
2,412,129
|
|
Restructured, Series A-1
|
|
|
4.550
|
%
|
|
|
7/1/40
|
|
|
|
230,000
|
|
|
|
258,452
|
|
Restructured, Series A-1
|
|
|
5.000
|
%
|
|
|
7/1/58
|
|
|
|
6,600,000
|
|
|
|
7,529,316
|
|
Restructured, Series A-2
|
|
|
4.329
|
%
|
|
|
7/1/40
|
|
|
|
5,380,000
|
|
|
|
5,969,256
|
|
Restructured, Series A-2A
|
|
|
4.550
|
%
|
|
|
7/1/40
|
|
|
|
3,550,000
|
|
|
|
3,989,156
|
|
Total Puerto Rico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,494,391
|
|
South Carolina 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Carolina State Ports Authority Revenue, Series 2018
|
|
|
5.000
|
%
|
|
|
7/1/48
|
|
|
|
1,750,000
|
|
|
|
2,146,513
|
(a)
|
South Dakota 0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Dakota State HEFA Revenue, Regional Health
|
|
|
5.000
|
%
|
|
|
9/1/40
|
|
|
|
500,000
|
|
|
|
602,326
|
|
Tennessee 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knox County, TN, Health, Educational & Housing Facility Board Revenue, University Health System Inc., Series
A
|
|
|
5.000
|
%
|
|
|
9/1/40
|
|
|
|
1,200,000
|
|
|
|
1,455,154
|
|
Metropolitan Government of Nashville & Davidson County, TN, Water & Sewer Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated, Green Bonds, Series A
|
|
|
5.000
|
%
|
|
|
7/1/42
|
|
|
|
500,000
|
|
|
|
617,893
|
|
Subordinated, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/46
|
|
|
|
1,000,000
|
|
|
|
1,236,307
|
|
Tennessee State Energy Acquisition Corp.,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Revenue, Series 2018
|
|
|
4.000
|
%
|
|
|
11/1/25
|
|
|
|
6,500,000
|
|
|
|
7,365,516
|
(b)(c)
|
Total Tennessee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,674,870
|
|
Texas 7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alamo, TX, Regional Mobility Authority, Vehicle Registration Fee Revenue, Senior Lien
|
|
|
5.000
|
%
|
|
|
6/15/46
|
|
|
|
1,300,000
|
|
|
|
1,494,375
|
|
Arlington, TX, Special Tax Revenue, Senior Lien, Series A, AGM
|
|
|
5.000
|
%
|
|
|
2/15/48
|
|
|
|
1,250,000
|
|
|
|
1,514,028
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
23
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Texas continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Texas Regional Mobility Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, Series B
|
|
|
4.000
|
%
|
|
|
1/1/51
|
|
|
$
|
750,000
|
|
|
$
|
880,102
|
|
Senior Lien, Series E
|
|
|
4.000
|
%
|
|
|
1/1/50
|
|
|
|
2,500,000
|
|
|
|
2,897,166
|
|
City of Austin, TX, Airport System Revenue, Series B
|
|
|
5.000
|
%
|
|
|
11/15/37
|
|
|
|
2,050,000
|
|
|
|
2,593,954
|
(a)
|
Forney, TX, ISD, GO, School Building, Series 2019, PSF - GTD
|
|
|
5.000
|
%
|
|
|
2/15/49
|
|
|
|
500,000
|
|
|
|
595,495
|
|
Grand Parkway Transportation Corp., TX, System Toll Revenue, Convertible CAB, Step bond, Series A, B and C, (0.000% to
10/1/23 then 5.500%)
|
|
|
0.000
|
%
|
|
|
10/1/36
|
|
|
|
4,000,000
|
|
|
|
4,634,210
|
|
Harris County, TX, Health Facilities Development Corp. Revenue, School Health Care System, Series B
|
|
|
5.750
|
%
|
|
|
7/1/27
|
|
|
|
910,000
|
|
|
|
1,101,842
|
(f)
|
Houston, TX, Airport Systems Revenue, Series B-1
|
|
|
5.000
|
%
|
|
|
7/15/30
|
|
|
|
5,500,000
|
|
|
|
6,183,569
|
(a)
|
Houston, TX, Combined Utility System Revenue, First Lien, Series D, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/44
|
|
|
|
1,000,000
|
|
|
|
1,133,210
|
|
Love Field, TX, Airport Modernization Corp., General Airport Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2017
|
|
|
5.000
|
%
|
|
|
11/1/33
|
|
|
|
120,000
|
|
|
|
144,952
|
(a)
|
Series 2017
|
|
|
5.000
|
%
|
|
|
11/1/36
|
|
|
|
120,000
|
|
|
|
144,957
|
(a)
|
Love Field, TX, Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project
|
|
|
5.250
|
%
|
|
|
11/1/40
|
|
|
|
14,250,000
|
|
|
|
14,536,610
|
|
New Hope Cultural Education Facilities Finance Corp., TX, Student Housing Revenue, Collegiate Housing College Station,
AGM
|
|
|
5.000
|
%
|
|
|
4/1/46
|
|
|
|
750,000
|
|
|
|
833,670
|
|
North Texas Tollway Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/39
|
|
|
|
825,000
|
|
|
|
968,982
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/40
|
|
|
|
2,000,000
|
|
|
|
2,142,898
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/45
|
|
|
|
2,105,000
|
|
|
|
2,397,490
|
|
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility Revenue, Buckner Senior Living
Ventana Project, Series A
|
|
|
6.625
|
%
|
|
|
11/15/37
|
|
|
|
610,000
|
|
|
|
698,228
|
|
Texas State Private Activity Bond Surface Transportation Corp. Revenue, Senior Lien, Blueridge Transportation Group
LLC
|
|
|
5.000
|
%
|
|
|
12/31/45
|
|
|
|
1,600,000
|
|
|
|
1,809,879
|
(a)
|
See Notes to Financial
Statements.
|
|
|
|
|
24
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Texas continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodloch, TX, Health Facilities Development Corp., Senior Housing Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inspired Living at Lewisville Project, Series A-1
|
|
|
6.750
|
%
|
|
|
12/1/51
|
|
|
$
|
500,000
|
|
|
$
|
349,156
|
*(d)(h)
|
Subordinated, Inspired Living at Lewisville Project, Series B
|
|
|
10.000
|
%
|
|
|
12/1/51
|
|
|
|
150,000
|
|
|
|
75,625
|
*(h)
|
Total Texas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,130,398
|
|
U.S. Virgin Islands 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virgin Islands Public Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching Fund Loan, Senior Lien, Series A
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
710,000
|
|
|
|
711,604
|
|
Subordinated, Matching Fund Loan, Cruzan Project, Series A
|
|
|
6.000
|
%
|
|
|
10/1/39
|
|
|
|
1,435,000
|
|
|
|
1,438,164
|
|
Subordinated, Matching Fund Loan, Diageo Project, Series A
|
|
|
6.750
|
%
|
|
|
10/1/37
|
|
|
|
1,200,000
|
|
|
|
1,209,412
|
|
Total U.S. Virgin Islands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,359,180
|
|
Utah 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salt Lake City, UT, Airport Revenue, Salt Lake City International Airport, Series A
|
|
|
5.000
|
%
|
|
|
7/1/43
|
|
|
|
5,250,000
|
|
|
|
6,361,472
|
(a)
|
Utah Infrastructure Agency, Telecommunications Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2019
|
|
|
4.000
|
%
|
|
|
10/15/42
|
|
|
|
1,200,000
|
|
|
|
1,374,924
|
|
Series 2021
|
|
|
4.000
|
%
|
|
|
10/15/38
|
|
|
|
500,000
|
|
|
|
585,879
|
|
Utah State Charter School Finance Authority, Charter School Revenue, Syracuse Arts Academy Project, UT
CSCE
|
|
|
5.000
|
%
|
|
|
4/15/47
|
|
|
|
1,000,000
|
|
|
|
1,128,517
|
|
Total Utah
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,450,792
|
|
Virginia 2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington County, VA, IDA, Hospital Revenue, Virginia Hospital Center, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/35
|
|
|
|
700,000
|
|
|
|
916,352
|
|
Virginia State Port Authority, Port Facilities Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/41
|
|
|
|
1,100,000
|
|
|
|
1,293,859
|
(a)
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/45
|
|
|
|
1,500,000
|
|
|
|
1,750,715
|
(a)
|
Virginia State Small Business Financing Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bon Secours Mercy Health, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
12/1/49
|
|
|
|
2,000,000
|
|
|
|
2,330,306
|
|
National Senior Campuses, Inc., Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/32
|
|
|
|
500,000
|
|
|
|
613,254
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
25
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Virginia continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
National Senior Campuses, Inc., Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/34
|
|
|
$
|
300,000
|
|
|
$
|
365,927
|
|
Senior Lien, Elizabeth River Crossing OpCo LLC Project
|
|
|
5.250
|
%
|
|
|
1/1/32
|
|
|
|
3,000,000
|
|
|
|
3,149,006
|
(a)
|
Senior Lien, Elizabeth River Crossing OpCo LLC Project
|
|
|
5.500
|
%
|
|
|
1/1/42
|
|
|
|
2,000,000
|
|
|
|
2,102,480
|
(a)
|
Total Virginia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,521,899
|
|
Washington 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port of Seattle, WA, Intermediate Lien Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2019
|
|
|
5.000
|
%
|
|
|
5/1/43
|
|
|
|
1,500,000
|
|
|
|
1,768,407
|
(a)
|
Series 2019
|
|
|
4.000
|
%
|
|
|
4/1/44
|
|
|
|
750,000
|
|
|
|
851,004
|
(a)
|
Series 2019
|
|
|
5.000
|
%
|
|
|
4/1/44
|
|
|
|
1,500,000
|
|
|
|
1,833,902
|
(a)
|
Washington State Health Care Facilities Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commonspirit Health, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/26
|
|
|
|
1,000,000
|
|
|
|
1,199,446
|
(b)(c)
|
Seattle Cancer Care Alliance, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/32
|
|
|
|
225,000
|
|
|
|
298,406
|
|
Seattle Cancer Care Alliance, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/33
|
|
|
|
245,000
|
|
|
|
323,862
|
|
Seattle Cancer Care Alliance, Refunding
|
|
|
4.000
|
%
|
|
|
12/1/45
|
|
|
|
1,200,000
|
|
|
|
1,406,878
|
|
Seattle Cancer Care Alliance, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/55
|
|
|
|
1,500,000
|
|
|
|
1,889,910
|
|
Total Washington
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,571,815
|
|
West Virginia 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Virginia University Revenue, West Virginia Projects, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
1,250,000
|
|
|
|
1,607,123
|
(b)(c)
|
Wisconsin 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mount Pleasant, WI, Tax Increment Revenue, Series A
|
|
|
5.000
|
%
|
|
|
4/1/48
|
|
|
|
2,500,000
|
|
|
|
2,973,292
|
|
Public Finance Authority, WI, Limited Obligation Pilot Revenue, American Dream @ Meadowlands Project, Series
2017
|
|
|
7.000
|
%
|
|
|
12/1/50
|
|
|
|
1,500,000
|
|
|
|
1,732,054
|
(d)
|
Public Finance Authority, WI, Revenue, Carmelite System Inc., Obligated Group, Series 2020
|
|
|
5.000
|
%
|
|
|
1/1/40
|
|
|
|
500,000
|
|
|
|
605,374
|
|
Total Wisconsin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,310,720
|
|
Total Municipal Bonds (Cost $732,624,373)
|
|
|
|
822,360,646
|
|
See Notes to Financial
Statements.
|
|
|
|
|
26
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Municipal Bonds Deposited in Tender Option Bond
Trust(j) 1.7%
|
|
|
|
|
|
|
|
|
|
New York 1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York State Urban Development Corp. Revenue, State Personal Income Tax Revenue Bonds, Bidding Group 3, Series E,
Refunding
(Cost $9,994,789)
|
|
|
4.000
|
%
|
|
|
3/15/41
|
|
|
$
|
8,480,000
|
|
|
$
|
10,048,215
|
|
Total Investments before Short-Term Investments (Cost
$742,619,162)
|
|
|
|
832,408,861
|
|
Short-Term Investments 5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds 5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Florida 0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
St. Lucie County, FL, Solid Waste Disposal Revenue, Florida Power & Light Co. Project,
Refunding
|
|
|
0.060
|
%
|
|
|
5/1/24
|
|
|
|
700,000
|
|
|
|
700,000
|
(a)(k)(l)
|
Massachusetts 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts State DFA Revenue, Boston University, Series U-6E, Refunding, LOC - TD Bank N.A.
|
|
|
0.010
|
%
|
|
|
10/1/42
|
|
|
|
3,300,000
|
|
|
|
3,300,000
|
(k)(l)
|
Mississippi 0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mississippi State Business Finance Corp., Gulf Opportunity Zone, IDR, Chevron USA Inc. Project, Series E
|
|
|
0.010
|
%
|
|
|
12/1/30
|
|
|
|
200,000
|
|
|
|
200,000
|
(k)(l)
|
New York 4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York City, NY, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated, Subseries I-4, LOC - TD Bank N.A.
|
|
|
0.020
|
%
|
|
|
4/1/36
|
|
|
|
1,140,000
|
|
|
|
1,140,000
|
(k)(l)
|
Subseries E-5, LOC - TD Bank N.A.
|
|
|
0.020
|
%
|
|
|
3/1/48
|
|
|
|
13,600,000
|
|
|
|
13,600,000
|
(k)(l)
|
New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Second General Resolution
Fiscal 2014, Series AA-5, Refunding, SPA - Mizuho Bank Ltd.
|
|
|
0.020
|
%
|
|
|
6/15/48
|
|
|
|
2,245,000
|
|
|
|
2,245,000
|
(k)(l)
|
New York City, NY, TFA Revenue Future Tax Secured, Subseries D-3, SPA - Mizuho Bank Ltd.
|
|
|
0.030
|
%
|
|
|
2/1/44
|
|
|
|
8,700,000
|
|
|
|
8,700,000
|
(k)(l)
|
New York State HFA Revenue, 455 West 37th Street Housing, Series A, LOC - Landesbank Hessen-Thueringen
|
|
|
0.030
|
%
|
|
|
5/1/41
|
|
|
|
4,200,000
|
|
|
|
4,200,000
|
(a)(k)(l)
|
Total New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,885,000
|
|
Texas 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harris County, TX, Solid Waste Disposal Revenue, Industrial Development Corp. Project
|
|
|
0.020
|
%
|
|
|
4/1/32
|
|
|
|
1,200,000
|
|
|
|
1,200,000
|
(a)(k)(l)
|
Total Municipal Bonds (Cost $35,285,000)
|
|
|
|
35,285,000
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
27
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
|
|
|
Shares
|
|
|
Value
|
|
Money Market Funds 0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Asset Premier Institutional Government Reserves, Premium Shares (Cost $58,968)
|
|
|
0.010
|
%
|
|
|
|
|
|
|
58,968
|
|
|
$
|
58,968
|
(m)
|
Total Short-Term Investments (Cost $35,343,968)
|
|
|
|
35,343,968
|
|
Total Investments 141.0% (Cost $777,963,130)
|
|
|
|
867,752,829
|
|
Auction Rate Cumulative Preferred Stock, at Liquidation Value (4.5)%
|
|
|
|
(27,625,000)
|
|
Variable Rate Demand Preferred Stock, at Liquidation Value (35.4)%
|
|
|
|
(217,575,000)
|
|
TOB Floating Rate Notes (1.0)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,360,000)
|
|
Other Liabilities in Excess of Other Assets (0.1)%
|
|
|
|
(704,486)
|
|
Total Net Assets Applicable to Common Shareholders 100.0%
|
|
|
$
|
615,488,343
|
|
See Notes to Financial
Statements.
|
|
|
|
|
28
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Western Asset Managed Municipals Fund Inc.
|
Represents less than 0.1%.
|
*
|
Non-income producing security.
|
(a)
|
Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (AMT).
|
(b)
|
Maturity date shown represents the mandatory tender date.
|
(c)
|
Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published
reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.
|
(d)
|
Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from
registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.
|
(e)
|
Securities traded on a when-issued or delayed delivery basis.
|
(f)
|
Bonds are generally escrowed to maturity by government securities and/or U.S. government agency securities.
|
(g)
|
Pre-Refunded bonds are generally escrowed with U.S. government obligations and/or U.S. government agency securities.
|
(h)
|
The coupon payment on this security is currently in default as of May 31, 2021.
|
(i)
|
The maturity principal is currently in default as of May 31, 2021.
|
(j)
|
Represents securities deposited into a special purpose entity, referred to as a Tender Option Bond (TOB) trust (Note 1).
|
(k)
|
Variable rate demand obligations (VRDOs) have a demand feature under which the Fund can tender them back to the issuer or liquidity provider on no
more than 7 days notice. The interest rate generally resets on a daily or weekly basis and is determined on the specific interest rate reset date by the remarketing agent, pursuant to a formula specified in official documents for the VRDO, or set at
the highest rate allowable as specified in official documents for the VRDO. VRDOs are benchmarked to the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Index. The SIFMA Municipal Swap Index is compiled from
weekly interest rate resets of tax-exempt VRDOs reported to the Municipal Securities Rulemaking Boards Short-term Obligation Rate Transparency System.
|
(l)
|
Maturity date shown is the final maturity date. The security may be sold back to the issuer before final maturity.
|
(m)
|
In this instance, as defined in the Investment Company Act of 1940, an Affiliated Company represents Fund ownership of at least 5% of the outstanding
voting securities of an issuer, or a company which is under common ownership or control with the Fund. At May 31, 2021, the total market value of investments in Affiliated Companies was $58,968 and the cost was $58,968 (Note 9).
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
29
|
|
Schedule of investments (contd)
May 31, 2021
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
Abbreviation(s) used in this schedule:
|
|
|
|
AGM
|
|
|
|
Assured Guaranty Municipal Corporation Insured Bonds
|
|
|
|
BAM
|
|
|
|
Build America Mutual Insured Bonds
|
|
|
|
CAB
|
|
|
|
Capital Appreciation Bonds
|
|
|
|
CDA
|
|
|
|
Communities Development Authority
|
|
|
|
COP
|
|
|
|
Certificates of Participation
|
|
|
|
CSCE
|
|
|
|
Charter School Credit Enhancement
|
|
|
|
CWA
|
|
|
|
Clean Water Act
|
|
|
|
DFA
|
|
|
|
Development Finance Agency
|
|
|
|
EDA
|
|
|
|
Economic Development Authority
|
|
|
|
EDC
|
|
|
|
Economic Development Corporation
|
|
|
|
EFA
|
|
|
|
Educational Facilities Authority
|
|
|
|
GO
|
|
|
|
General Obligation
|
|
|
|
GTD
|
|
|
|
Guaranteed
|
|
|
|
HEFA
|
|
|
|
Health & Educational Facilities Authority
|
|
|
|
HFA
|
|
|
|
Housing Finance Agency
|
|
|
|
IDA
|
|
|
|
Industrial Development Authority
|
|
|
|
IDR
|
|
|
|
Industrial Development Revenue
|
|
|
|
ISD
|
|
|
|
Independent School District
|
|
|
|
LOC
|
|
|
|
Letter of Credit
|
|
|
|
MFA
|
|
|
|
Municipal Finance Authority
|
|
|
|
MTA
|
|
|
|
Metropolitan Transportation Authority
|
|
|
|
NATL
|
|
|
|
National Public Finance Guarantee Corporation Insured Bonds
|
|
|
|
PCFA
|
|
|
|
Pollution Control Financing Authority
|
|
|
|
PEA
|
|
|
|
Public Energy Authority
|
|
|
|
PSF
|
|
|
|
Permanent School Fund
|
|
|
|
SD
|
|
|
|
School District
|
|
|
|
SIFMA
|
|
|
|
Securities Industry and Financial Markets Association
|
|
|
|
SPA
|
|
|
|
Standby Bond Purchase Agreement Insured Bonds
|
|
|
|
TFA
|
|
|
|
Transitional Finance Authority
|
|
|
|
USD
|
|
|
|
Unified School District
|
See Notes to Financial
Statements.
|
|
|
|
|
30
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Statement of assets and liabilities
May 31, 2021
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Investments in unaffiliated securities, at value (Cost $777,904,162)
|
|
$
|
867,693,861
|
|
Investments in affiliated securities, at value (Cost $58,968)
|
|
|
58,968
|
|
Cash
|
|
|
410
|
|
Interest receivable
|
|
|
9,792,613
|
|
Prepaid expenses
|
|
|
62,697
|
|
Total Assets
|
|
|
877,608,549
|
|
|
|
Liabilities:
|
|
|
|
|
Variable Rate Demand Preferred Stock ($25,000 liquidation value per share; 8,703 shares issued and outstanding) (net of
deferred offering costs of $1,314,595) (Note 5)
|
|
|
216,260,405
|
|
Payable for securities purchased
|
|
|
7,872,309
|
|
TOB Floating Rate Notes (Note 1)
|
|
|
6,360,000
|
|
Distributions payable to Common Shareholders
|
|
|
1,843,134
|
|
Investment management fee payable
|
|
|
401,048
|
|
Directors fees payable
|
|
|
22,314
|
|
Interest expense payable
|
|
|
8,340
|
|
Distributions payable to Auction Rate Cumulative Preferred Stockholders
|
|
|
371
|
|
Accrued expenses
|
|
|
1,727,285
|
|
Total Liabilities
|
|
|
234,495,206
|
|
Series M, T, W, Th and F Auction Rate Cumulative Preferred Stock (1,105 shares authorized and issued at $25,000 per
share) (Note 6)
|
|
|
27,625,000
|
|
Total Net Assets Applicable to Common Shareholders
|
|
$
|
615,488,343
|
|
|
|
Net Assets Applicable to Common Shareholders:
|
|
|
|
|
Common stock par value ($0.001 par value; 43,367,851 shares issued and outstanding; 500,000,000 common shares
authorized)
|
|
$
|
43,368
|
|
Paid-in capital in excess of par value
|
|
|
526,810,124
|
|
Total distributable earnings (loss)
|
|
|
88,634,851
|
|
Total Net Assets Applicable to Common Shareholders
|
|
$
|
615,488,343
|
|
|
|
Common Shares Outstanding
|
|
|
43,367,851
|
|
|
|
Net Asset Value Per Common Share
|
|
|
$14.19
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
31
|
|
Statement of operations
For the Year Ended May 31, 2021
|
|
|
|
|
|
|
Investment Income:
|
|
|
|
|
Interest
|
|
$
|
30,876,300
|
|
|
|
Expenses:
|
|
|
|
|
Investment management fee (Note 2)
|
|
|
4,642,405
|
|
Liquidity fees (Note 5)
|
|
|
1,685,085
|
|
Distributions to Variable Rate Demand Preferred Stockholders (Notes 1 and 5)
|
|
|
388,178
|
|
Legal fees
|
|
|
236,267
|
|
Directors fees
|
|
|
217,502
|
|
Rating agency fees
|
|
|
145,037
|
|
Remarketing fees (Note 5)
|
|
|
117,552
|
|
Transfer agent fees
|
|
|
83,697
|
|
Fund accounting fees
|
|
|
66,423
|
|
Amortization of Variable Rate Demand Preferred Stock offering costs (Note 5)
|
|
|
55,291
|
|
Audit and tax fees
|
|
|
52,080
|
|
Auction agent fees
|
|
|
51,352
|
|
Stock exchange listing fees
|
|
|
25,809
|
|
Interest expense (Note 1)
|
|
|
18,960
|
|
Shareholder reports
|
|
|
18,242
|
|
Auction participation fees (Note 6)
|
|
|
14,053
|
|
Insurance
|
|
|
8,202
|
|
Custody fees
|
|
|
7,464
|
|
Miscellaneous expenses
|
|
|
14,203
|
|
Total Expenses
|
|
|
7,847,802
|
|
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
|
(2,910)
|
|
Net Expenses
|
|
|
7,844,892
|
|
Net Investment Income
|
|
|
23,031,408
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts (Notes 1, 3 and 4):
|
|
|
|
|
Net Realized Gain From:
|
|
|
|
|
Investment transactions
|
|
|
13,507,356
|
|
Futures contracts
|
|
|
334,163
|
|
Net Realized Gain
|
|
|
13,841,519
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
|
Investments
|
|
|
36,308,127
|
|
Futures contracts
|
|
|
(10,786)
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
|
36,297,341
|
|
Net Gain on Investments and Futures Contracts
|
|
|
50,138,860
|
|
Distributions Paid to Auction Rate Cumulative Preferred Stockholders From Net Investment Income (Notes 1 and
6)
|
|
|
(46,675)
|
|
Increase in Net Assets Applicable to Common Shareholders From Operations
|
|
$
|
73,123,593
|
|
See Notes to Financial
Statements.
|
|
|
|
|
32
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Statements of changes in net assets
|
|
|
|
|
|
|
|
|
For the Years Ended May 31,
|
|
2021
|
|
|
2020
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
23,031,408
|
|
|
$
|
22,224,665
|
|
Net realized gain (loss)
|
|
|
13,841,519
|
|
|
|
(6,272,322)
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
36,297,341
|
|
|
|
(20,345,255)
|
|
Distributions paid to Auction Rate Cumulative Preferred Stockholders from net investment income
|
|
|
(46,675)
|
|
|
|
(639,895)
|
|
Increase (Decrease) in Net Assets Applicable to Common Shareholders From
Operations
|
|
|
73,123,593
|
|
|
|
(5,032,807)
|
|
|
|
|
Distributions to Common Shareholders From (Note 1):
|
|
|
|
|
|
|
|
|
Total distributable earnings
|
|
|
(23,093,381)
|
|
|
|
(25,820,170)
|
|
Decrease in Net Assets From Distributions to Common
Shareholders
|
|
|
(23,093,381)
|
|
|
|
(25,820,170)
|
|
|
|
|
Fund Share Transactions:
|
|
|
|
|
|
|
|
|
Reinvestment of distributions (0 and 62,595 shares issued, respectively)
|
|
|
|
|
|
|
867,329
|
|
Net increase from tender and repurchase of Auction Rate Cumulative Preferred Shares (Note 6)
|
|
|
3,750
|
|
|
|
60,000
|
|
Increase in Net Assets From Fund Share Transactions
|
|
|
3,750
|
|
|
|
927,329
|
|
Increase (Decrease) in Net Assets Applicable to Common
Shareholders
|
|
|
50,033,962
|
|
|
|
(29,925,648)
|
|
|
|
|
Net Assets Applicable to Common Shareholders:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
565,454,381
|
|
|
|
595,380,029
|
|
End of year
|
|
$
|
615,488,343
|
|
|
$
|
565,454,381
|
|
See Notes to Financial
Statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
33
|
|
Statement of cash flows
For the Year Ended May 31, 2021
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net increase in net assets applicable to common shareholders resulting from operations*
|
|
$
|
73,170,268
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating
activities:
|
|
|
|
|
Purchases of portfolio securities
|
|
|
(131,537,924)
|
|
Sales of portfolio securities
|
|
|
148,901,962
|
|
Net purchases, sales and maturities of short-term investments
|
|
|
(33,173,450)
|
|
Net amortization of premium (accretion of discount)
|
|
|
3,674,160
|
|
Decrease in interest receivable
|
|
|
187,013
|
|
Increase in prepaid expenses
|
|
|
(17,974)
|
|
Increase in payable for securities purchased
|
|
|
3,802,204
|
|
Amortization of preferred stock offering costs
|
|
|
55,291
|
|
Increase in investment management fee payable
|
|
|
29,064
|
|
Increase in Directors fees payable
|
|
|
11,913
|
|
Increase in interest expense payable
|
|
|
8,340
|
|
Increase in accrued expenses
|
|
|
1,643,148
|
|
Decrease in payable to broker net variation margin on open futures contracts
|
|
|
(27,844)
|
|
Net realized gain on investments
|
|
|
(13,507,356)
|
|
Change in net unrealized appreciation (depreciation) of investments
|
|
|
(36,308,127)
|
|
Net Cash Provided in Operating Activities**
|
|
|
16,910,688
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Distributions paid on common stock (net of distributions payable)
|
|
|
(23,201,800)
|
|
Distributions paid on Auction Rate Cumulative Preferred Stock (net of distributions payable)
|
|
|
(47,228)
|
|
Repurchase of Auction Rate Cumulative Preferred Stock
|
|
|
(21,250)
|
|
Proceeds from TOB Floating Rate Notes
|
|
|
6,360,000
|
|
Net Cash Used by Financing Activities
|
|
|
(16,910,278)
|
|
Net Increase in Cash and Restricted Cash
|
|
|
410
|
|
Cash and restricted cash at beginning of year
|
|
|
|
|
Cash and restricted cash at end of year
|
|
$
|
410
|
|
*
|
Does not include distributions paid to Auction Rate Cumulative Preferred Stockholders.
|
**
|
Included in operating expenses is cash of $10,620 paid for interest on borrowings and $388,178 paid for distributions to Variable Rate Demand Preferred
Stockholders.
|
|
The following table provides a reconciliation of cash and restricted cash reported within the Statement of Assets and Liabilities that sums to the total
of such amounts shown on the Statement of Cash Flows.
|
|
|
|
|
|
|
|
May 31, 2021
|
|
Cash
|
|
$
|
410
|
|
Restricted cash
|
|
|
|
|
Total cash and restricted cash shown in the Statement of Cash Flows
|
|
$
|
410
|
|
See Notes to Financial
Statements.
|
|
|
|
|
34
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Financial highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a common share of capital stock outstanding throughout each year ended
May 31:
|
|
|
|
20211
|
|
|
20201
|
|
|
20191
|
|
|
20181
|
|
|
20171
|
|
|
|
|
|
|
|
Net asset value, beginning of year
|
|
|
$13.04
|
|
|
|
$13.75
|
|
|
|
$13.51
|
|
|
|
$13.99
|
|
|
|
$14.60
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.53
|
|
|
|
0.51
|
|
|
|
0.63
|
|
|
|
0.66
|
|
|
|
0.71
|
|
Net realized and unrealized gain (loss)
|
|
|
1.15
|
|
|
|
(0.61)
|
|
|
|
0.32
|
|
|
|
(0.37)
|
|
|
|
(0.54)
|
|
Distributions paid to Auction Rate Cumulative Preferred Stockholders from net investment income
|
|
|
(0.00)
|
2
|
|
|
(0.01)
|
|
|
|
(0.02)
|
|
|
|
(0.01)
|
|
|
|
(0.01)
|
|
Total income (loss) from operations
|
|
|
1.68
|
|
|
|
(0.11)
|
|
|
|
0.93
|
|
|
|
0.28
|
|
|
|
0.16
|
|
|
|
|
|
|
|
Less distributions to common shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.53)
|
|
|
|
(0.60)
|
|
|
|
(0.70)
|
|
|
|
(0.76)
|
|
|
|
(0.77)
|
|
Total distributions to common shareholders
|
|
|
(0.53)
|
|
|
|
(0.60)
|
|
|
|
(0.70)
|
|
|
|
(0.76)
|
|
|
|
(0.77)
|
|
|
|
|
|
|
|
Net increase from tender and repurchase of Auction Rate Cumulative Preferred Shares
|
|
|
0.00
|
2
|
|
|
0.00
|
2
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of year
|
|
|
$14.19
|
|
|
|
$13.04
|
|
|
|
$13.75
|
|
|
|
$13.51
|
|
|
|
$13.99
|
|
|
|
|
|
|
|
Market price, end of year
|
|
|
$13.46
|
|
|
|
$12.03
|
|
|
|
$13.73
|
|
|
|
$12.71
|
|
|
|
$13.84
|
|
Total return, based on NAV3,4
|
|
|
13.09
|
%5
|
|
|
(0.89)
|
%5
|
|
|
7.23
|
%6
|
|
|
2.01
|
%
|
|
|
1.16
|
%
|
Total return, based on Market Price7
|
|
|
16.67
|
%
|
|
|
(8.35)
|
%
|
|
|
14.03
|
%
|
|
|
(2.89)
|
%
|
|
|
(1.31)
|
%
|
|
|
|
|
|
|
Net assets applicable to common shareholders, end of year (millions)
|
|
|
$615
|
|
|
|
$565
|
|
|
|
$595
|
|
|
|
$585
|
|
|
|
$604
|
|
|
|
|
|
|
|
Ratios to average net assets:8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.31
|
%
|
|
|
1.76
|
%
|
|
|
1.85
|
%
|
|
|
1.68
|
%
|
|
|
1.48
|
%
|
Net expenses
|
|
|
1.31
|
9
|
|
|
1.76
|
9
|
|
|
1.85
|
|
|
|
1.68
|
|
|
|
1.48
|
|
Net investment income
|
|
|
3.85
|
|
|
|
3.76
|
|
|
|
4.74
|
|
|
|
4.80
|
|
|
|
5.04
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
16
|
%
|
|
|
32
|
%
|
|
|
21
|
%
|
|
|
19
|
%
|
|
|
12
|
%
|
See Notes to Financial
Statements.
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
35
|
Financial highlights (contd)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a common share of capital stock outstanding throughout each year ended
May 31:
|
|
|
|
20211
|
|
|
20201
|
|
|
20191
|
|
|
20181
|
|
|
20171
|
|
|
|
|
|
|
|
Supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction Rate Cumulative Preferred Stock at Liquidation Value, End of Year (000s)
|
|
|
$27,625
|
|
|
|
$27,650
|
|
|
|
$28,050
|
|
|
|
$32,075
|
|
|
|
$32,075
|
|
Variable Rate Demand Preferred Stock at Liquidation Value, End of Year (000s)
|
|
|
$217,575
|
|
|
|
$217,575
|
|
|
|
$217,575
|
|
|
|
$217,575
|
|
|
|
$217,575
|
|
Asset Coverage Ratio for Auction Rate Cumulative Preferred Stock and Variable Rate Demand Preferred Stock10
|
|
|
351
|
%
|
|
|
331
|
%
|
|
|
342
|
%
|
|
|
334
|
%
|
|
|
342
|
%
|
Asset Coverage, per $25,000 Liquidation Value per Share of Auction Rate Cumulative Preferred Stock and Variable Rate
Demand Preferred Stock10
|
|
|
$87,754
|
|
|
|
$82,646
|
|
|
|
$85,598
|
|
|
|
$83,585
|
|
|
|
$85,485
|
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
Amount represents less than $0.005 per share.
|
3
|
Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance
arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.
|
4
|
The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results.
|
5
|
The total return based on NAV reflects the impact of the tender and repurchase by the Fund of a portion of its Auction Rate Cumulative Preferred Shares at 85% of
the per share liquidation preference. Absent this transaction, the total return based on NAV would have been the same.
|
6
|
The total return based on NAV reflects the impact of the tender and repurchase by the Fund of a portion of its Auction Rate Cumulative Preferred Shares at 85% of
the per share liquidation preference. Absent this transaction, the total return based on NAV would have been 7.15%.
|
7
|
The total return calculation assumes that distributions are reinvested in accordance with the Funds dividend reinvestment plan. Past performance is no
guarantee of future results.
|
8
|
Calculated on the basis of average net assets of common stock shareholders. Ratios do not reflect the effect of dividend payments to auction rate cumulative
preferred stockholders.
|
9
|
Reflects fee waivers and/or expense reimbursements.
|
10
|
Represents value of net assets plus the liquidation value of the auction rate cumulative preferred stock and variable rate demand preferred stock, if any, at the
end of the period divided by the liquidation value of the auction rate cumulative preferred stock and variable rate demand preferred stock, if any, outstanding at the end of the period.
|
See Notes to Financial Statements.
|
|
|
|
|
36
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Notes to financial statements
1. Organization and significant accounting policies
Western Asset Managed Municipals Fund Inc. (the Fund) was incorporated in Maryland and is registered as a non-diversified, closed-end management
investment company under the Investment Company Act of 1940, as amended (the 1940 Act). The Funds investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation
of capital. When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal. On August 14, 2020, the Board of Directors of the Fund approved
amendments to the Funds bylaws. The amended and restated bylaws were subsequently filed on Form 8-K and are available on the Securities and Exchange Commissions website at www.sec.gov.
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles
(GAAP). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.
(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal,
mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer
quotations or a variety of valuation techniques and methodologies. The independent third party pricing services typically use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads,
default rates and quoted prices for similar securities. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. Futures contracts are valued daily at the settlement price established by
the board of trade or exchange on which they are traded. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may
be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices
are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the
Fund values these securities as determined in accordance with procedures approved by the Funds Board of Directors.
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
37
|
Notes to financial statements (contd)
The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the
Global Fund Valuation Committee (formerly known as Legg Mason North Atlantic Fund Valuation Committee prior to March 1, 2021) (the Valuation Committee). The Valuation Committee, pursuant to the policies adopted by the Board of
Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Funds pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for
investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.
The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible
methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or
fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the
issuers financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts research and observations from financial institutions;
information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable
companies; and the existence of a shelf registration for restricted securities.
For each portfolio security that has been fair valued pursuant to the
policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are
reported to the Board of Directors quarterly.
The Fund uses valuation techniques to measure fair value that are consistent with the market approach
and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income
approach uses valuation techniques to discount estimated future cash flows to present value.
|
|
|
|
|
38
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed
below:
|
|
Level 1 quoted prices in active markets for identical investments
|
|
|
Level 2 other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
|
|
|
Level 3 significant unobservable inputs (including the Funds own assumptions in determining the fair value of investments)
|
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those
securities.
The following is a summary of the inputs used in valuing the Funds assets carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs (Level
3)
|
|
|
Total
|
|
Long-Term Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
|
|
|
|
$
|
822,360,646
|
|
|
|
|
|
|
$
|
822,360,646
|
|
Municipal Bonds Deposited in Tender Option Bond Trust
|
|
|
|
|
|
|
10,048,215
|
|
|
|
|
|
|
|
10,048,215
|
|
Total Long-Term Investments
|
|
|
|
|
|
|
832,408,861
|
|
|
|
|
|
|
|
832,408,861
|
|
Short-Term Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
|
|
|
|
|
35,285,000
|
|
|
|
|
|
|
|
35,285,000
|
|
Money Market Funds
|
|
$
|
58,968
|
|
|
|
|
|
|
|
|
|
|
|
58,968
|
|
Total Short-Term Investments
|
|
|
58,968
|
|
|
|
35,285,000
|
|
|
|
|
|
|
|
35,343,968
|
|
Total Investments
|
|
$
|
58,968
|
|
|
$
|
867,693,861
|
|
|
|
|
|
|
$
|
867,752,829
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
(b) Tender option bonds. The Fund may enter into tender option bond (TOB) transactions and may invest in inverse floating rate
instruments (Inverse Floaters) issued in TOB transactions. The Fund may participate either in structuring an Inverse Floater or purchasing an Inverse Floater in the secondary market. When structuring an Inverse Floater, the Fund deposits
securities (typically municipal bonds or other municipal securities) (the Underlying Bonds) into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues floating rate notes (Floaters) to third
parties and residual interest, Inverse Floaters, to the Fund. The Floaters issued by the TOB trust have interest rates which reset weekly and provide the holders of the Floaters the option to tender their notes back to the TOB trust for redemption
at par at each reset date. The net proceeds of the sale of the Floaters, after expenses, are received by the Fund and may be invested in additional securities. The Inverse Floaters are inverse floating rate debt instruments, as the return on those
bonds is
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
39
|
Notes to financial statements (contd)
inversely related to changes in a specified interest rate. Distributions on any Inverse Floaters paid to the Fund will be reduced or, in
the extreme, eliminated as short-term interest rates rise and will increase when such interest rates fall. Floaters issued by a TOB trust may be senior to the Inverse Floaters held by the Fund. The value and market for Inverse Floaters can be
volatile, and Inverse Floaters can have limited liquidity.
An investment in an Inverse Floater structured by the Fund is accounted for as a secured
borrowing. The Underlying Bonds deposited into the TOB trust are included in the Funds Schedule of Investments and a liability for Floaters (TOB floating rate notes) issued by the TOB trust is recognized in the Funds Statement of Assets
and Liabilities. The carrying amount of the TOB trusts floating rate note obligations as reported on the Statement of Assets and Liabilities approximates its fair value. Interest income, including amortization, on the Underlying Bonds is
recognized in the Funds Statements of Operations. Interest paid to holders of the Floaters, as well as other expenses related to administration, liquidity, remarketing and trustee services of the TOB trust, are recognized in Interest expense
in the Funds Statement of Operations.
(c) Net asset value. The net asset
value (NAV) of the Funds common stock is determined no less frequently than the close of business on the Funds last business day of each week (generally Friday) and on the last business day of the month. It is determined by
dividing the value of the net assets available to common stock by the total number of shares of common stock outstanding. For the purpose of determining the NAV per share of the common stock, the value of the Funds net assets shall be deemed
to equal the value of the Funds assets less (1) the Funds liabilities including the aggregate liquidation value (i.e., $25,000 per outstanding share) of the Variable Rate Demand Preferred Stock (VRDPS), net of deferred
offering costs, and (2) the aggregate liquidation value (i.e., $25,000 per outstanding share) of the Auction Rate Cumulative Preferred Stock (ARCPS).
(d) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain
exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.
Upon entering into a futures contract, the Fund is required to deposit cash or securities with a broker in an amount equal to a certain percentage of the contract
amount. This is known as the initial margin and subsequent payments (variation margin) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For
certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. The daily changes in contract value are recorded as unrealized gains or losses in the
Statement of Operations and the Fund recognizes a realized gain or loss when the contract is closed.
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40
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. In addition, there is the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market.
(e) Securities traded on a when-issued and delayed delivery basis. The Fund may trade securities on a when-issued or delayed delivery basis. In when-issued and delayed delivery transactions, the securities are purchased or sold by the Fund with payment and delivery taking place in
the future in order to secure what is considered to be an advantageous price and yield to the Fund at the time of entering into the transaction.
Purchasing such securities involves risk of loss if the value of the securities declines prior to settlement. These securities are subject to market fluctuations
and their current value is determined in the same manner as for other securities.
(f) Cash flow information. The Fund invests in securities and distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are
reported in the Statement of Changes in Net Assets and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows.
(g) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or
engage in other transactions where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other
transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Funds subadviser attempts to mitigate counterparty risk
by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the
counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose
the Fund to increased risk of loss.
With exchange traded and centrally cleared derivatives, there is less counterparty risk to the Fund since the
exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, the credit risk is limited to failure of the clearinghouse.
While offset rights may exist under applicable law, the Fund does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default of the clearing broker or clearinghouse.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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41
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Notes to financial statements (contd)
The Fund has entered into master agreements, such as an International Swaps and Derivatives Association, Inc. Master Agreement
(ISDA Master Agreement) or similar agreement, with certain of its derivative counterparties that govern over-the-counter (OTC) derivatives and provide for general obligations, representations, agreements, collateral posting
terms, netting provisions in the event of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Funds net assets or net asset value
per share over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.
Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments payables
and/or receivables with collateral held and/or posted and create one single net payment. However, absent an event of default by the counterparty or a termination of the agreement, the terms of the ISDA Master Agreements do not result in an offset of
reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.
Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange
traded derivatives while collateral terms are contract specific for OTC traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any, will be reported separately in the Statement of
Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.
As of May 31,
2021, the Fund did not have any open OTC derivative transactions with credit related contingent features in a net liability position.
(h) Security transactions and investment income. Security transactions are accounted for on a
trade date basis. Interest income (including interest income from payment-in-kind securities), adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. The cost of investments sold is determined by use of the
specific identification method. To the extent any issuer defaults or a credit event occurs that impacts the issuer, the Fund may halt any additional interest income accruals and consider the realizability of interest accrued up to the date of
default or credit event.
(i) Distributions to shareholders. Distributions to
common shareholders from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. The Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from federal and
certain state income taxes, to retain such tax-exempt status when distributed to the common shareholders of the Fund. Distributions to common shareholders of net realized gains, if any, are taxable and are declared at least annually. Distributions
to common shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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Distributions to holders of ARCPS are accrued daily and paid on a weekly basis and are determined as described in Note 6. Distributions to holders of VRDPS are accrued on a daily basis and paid monthly as described
in Note 5 and are treated as an operating expense as required by GAAP. For tax purposes, the payments made to the holders of the Funds VRDPS are treated as dividends or distributions.
(j) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodians fees is
paid indirectly by credits earned on the Funds cash on deposit with the bank.
(k) Federal and other taxes. It is the Funds policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the Code), as amended, applicable to regulated investment companies.
Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the
Funds financial statements.
Management has analyzed the Funds tax positions taken on income tax returns for all open tax years and has
concluded that as of May 31, 2021, no provision for income tax is required in the Funds financial statements. The Funds federal and state income and federal excise tax returns for tax years for which the applicable statutes of
limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
(l)
Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on
net assets or net asset value per share. During the current year, the following reclassifications have been made:
|
|
|
|
|
|
|
|
|
|
|
Total Distributable
Earnings (Loss)
|
|
|
Paid-in
Capital
|
|
(a)
|
|
$
|
55,291
|
|
|
$
|
(55,291)
|
|
(a)
|
Reclassifications are due to non-deductible offering costs.
|
2. Investment management agreement and other transactions with affiliates
Legg Mason Partners
Fund Advisor, LLC (LMPFA) is the Funds investment manager and Western Asset Management Company, LLC (Western Asset) is the Funds subadviser. As of July 31, 2020, LMPFA and Western Asset are indirect,
wholly-owned subsidiaries of Franklin Resources, Inc. (Franklin Resources). Prior to July 31, 2020, LMPFA and Western Asset were wholly-owned subsidiaries of Legg Mason, Inc. (Legg Mason). As of July 31, 2020, Legg
Mason is a subsidiary of Franklin Resources.
LMPFA provides administrative and certain oversight services to the Fund. The Fund pays LMPFA an investment
management fee, calculated daily and paid monthly, at an annual rate of 0.55% of the Funds average daily net assets. For the purposes of calculating the investment management fee, the aggregate liquidation value of the Preferred Stock is not
deducted in determining the Funds average daily net assets.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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43
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Notes to financial statements (contd)
LMPFA delegates to Western Asset the day-to-day portfolio management of the Fund. For its services, LMPFA pays Western Asset monthly 70%
of the net management fee it receives from the Fund.
The manager has agreed to waive the Funds management fee to an extent sufficient to offset
the net management fee payable in connection with any investment in an affiliated money market fund.
During the year ended May 31, 2021, fees
waived and/or expenses reimbursed amounted to $2,910.
As of July 31, 2020, all officers and one Director of the Fund are employees of Franklin
Resources or its affiliates and do not receive compensation from the Fund. Prior to July 31, 2020, all officers and one Director of the Fund were employees of Legg Mason and did not receive compensation from the Fund.
The Fund is permitted to purchase or sell securities, typically short-term variable rate demand obligations, from or to certain other affiliated funds or portfolios
under specified conditions outlined in procedures adopted by the Board of Directors. The procedures have been designed to provide assurance that any purchase or sale of securities by the Fund from or to another fund or portfolio that is, or could be
considered, an affiliate by virtue of having a common investment manager or subadviser (or affiliated investment manager or subadviser), common Directors and/or common officers complies with Rule 17a-7 under the 1940 Act. Further, as defined under
the procedures, each transaction is effected at the current market price. For the year ended May 31, 2021, such purchase and sale transactions (excluding accrued interest) were $47,910,000 and $56,470,000, respectively.
3. Investments
During the year ended
May 31, 2021, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:
|
|
|
|
|
Purchases
|
|
$
|
131,537,924
|
|
Sales
|
|
|
148,901,962
|
|
At May 31, 2021, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
Gross
Unrealized
Appreciation
|
|
|
Gross
Unrealized
Depreciation
|
|
|
Net
Unrealized
Appreciation
|
|
Securities
|
|
$
|
770,262,804
|
|
|
$
|
91,677,496
|
|
|
$
|
(547,471)
|
|
|
$
|
91,130,025
|
|
|
|
|
|
|
44
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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4. Derivative
instruments and hedging activities
At May 31, 2021, the Fund did not have any derivative instruments outstanding.
The following tables provide information about the effect of derivatives and hedging activities on the Funds Statement of Operations for the year ended
May 31, 2021. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information about the change in unrealized appreciation
(depreciation) resulting from the Funds derivatives and hedging activities during the period.
|
|
|
|
|
|
|
|
|
|
AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
|
|
|
|
|
|
|
Interest
Rate Risk
|
|
Futures contracts
|
|
|
|
|
|
$
|
334,163
|
|
|
|
|
|
|
|
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
|
|
Interest
Rate Risk
|
|
Futures contracts
|
|
$
|
(10,786)
|
|
During the year ended May 31, 2021, the volume of derivative activity for the Fund was as follows:
|
|
|
|
|
|
|
Average Market
Value
|
|
Futures contracts (to sell)
|
|
$
|
1,654,998
|
|
|
At May 31, 2021, there were no open positions held in this derivative.
|
5. Variable rate demand preferred stock
On March 4, 2015, the Fund completed a private
offering of 8,703 shares of Series 1 VRDPS. Net proceeds from the offering were used by the Fund to repurchase outstanding shares of Series M, Series T, Series W, Series TH and Series F ARCPS that had been accepted for payment pursuant to the tender
offer (see Note 6). Offering costs incurred by the Fund in connection with the VRDPS issuance are being amortized to expense over the life of the VRDPS.
The table below summarizes the key terms of Series 1 of the VRDPS at May 31, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Mandatory
Redemption
Date
|
|
|
Shares
|
|
|
Liquidation
Preference
Per Share
|
|
|
Aggregate
Liquidation
Value
|
|
Series 1
|
|
|
3/4/2045
|
|
|
|
8,703
|
|
|
$
|
25,000
|
|
|
$
|
217,575,000
|
|
The VRDPS shares are not listed on any securities exchange or automated quotation system. For financial reporting purposes, the
VRDPS shares are considered debt of the Fund; therefore, the liquidation value, which approximates fair value of the VRDPS shares, is recorded as a liability on the Statement of Assets and Liabilities.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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45
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Notes to financial statements (contd)
Holders of VRDPS have the right to tender their VRDPS shares for remarketing at a price equal to the liquidation preference amount plus
all accumulated but unpaid dividends and at a date which is no earlier than the seventh day following delivery of the notice to the tender and paying agent. The VRDPS shares include a liquidity feature that allows VRDPS holders to have their shares
purchased by the liquidity provider with whom the Fund has contracted in the event of a failed remarketing where purchase orders are not sufficient in number to be matched with the sale orders. The Fund is required to redeem the VRDPS shares owned
by the liquidity provider after six months of continuous, unsuccessful remarketing. The Fund pays a monthly remarketing fee at the annual rate of 0.05% of the liquidation value of each VRDPS share outstanding on the first calendar day of the
preceding calendar month. These fees are shown as remarketing fees on the Statement of Operations. Prior to June 25, 2020, the Fund paid a monthly remarketing fee at an annual rate of 0.10% of the liquidation value of each VRDPS share
outstanding on the first calendar day of the preceding calendar month.
Holders of VRDPS are entitled to receive monthly cumulative cash dividends,
payable on the first business day of each calendar month, at a variable rate set weekly by the remarketing agent. The dividend rate is generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed
remarketing, the dividend rate will reset to the maximum rate. The maximum rate is determined, in part, based upon the long-term rating assigned to the VRDPS. In the event the Fund fails to make a scheduled dividend payment, all outstanding shares
of the VRDPS are subject to mandatory tender.
Subject to certain conditions, the VRDPS shares may be redeemed, in whole or in part, at any time at the
option of the Fund. The redemption price per share is equal to the liquidation value per share plus any accumulated but unpaid dividends. The Fund is required to redeem its VRDPS on the mandatory redemption date, March 4, 2045. In addition, the
Fund is required to redeem certain of the VRDPS shares if the Fund fails to maintain certain asset coverage and rating agency guidelines.
The Fund is a
party to a fee agreement with the liquidity provider that requires monthly payment of an annual liquidity fee. These fees are shown as liquidity fees on the Statement of Operations. The fee agreement between the Fund and the liquidity provider is
scheduled to terminate on June 24, 2022. Prior to June 25, 2020, the Fund was a party to a fee agreement with a former liquidity provider (the former liquidity agreement) that was subject to a June 30, 2020 scheduled
termination. The terms of the current fee agreement are substantially the same as the terms of the former liquidity agreement. The Fund has the right, which is exercisable 120 to 90 days prior to the scheduled termination date, to request that the
liquidity provider extend the term of the agreement for an additional period. The Fund may also terminate the agreement early. In the event the fee agreement is not renewed or is terminated in advance, and the Fund does not enter into a fee
agreement with an alternate liquidity provider, the VRDPS will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. The Fund is required to redeem any VRDPS purchased by the liquidity provider six
months after the purchase date.
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46
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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The VRDPS ranks senior to the Funds
outstanding common stock and on parity with any other preferred stock. The Fund may not declare dividends or make other distributions on shares of its common stock unless the Fund has declared and paid full cumulative dividends on the VRDPS, due on
or prior to the date of the common stock dividend or distribution, and meets the VRDPS asset coverage and rating agency requirements.
The holders of the
VRDPS have one vote per share and vote together with the holders of common stock of the Fund as a single class except on matters affecting only the holders of VRDPS or the holders of common stock. Pursuant to the 1940 Act, holders of the VRDPS have
the right to elect two Directors of the Fund, voting separately as a class.
The annualized dividend rate for the VRDPS shares for the year ended
May 31, 2021 was 0.178%. VRDPS shares issued and outstanding remained constant during the year ended May 31, 2021.
6.
Auction rate cumulative preferred stock
As of May 31, 2021, the Fund had 47 shares outstanding of Series M, 283 shares outstanding of Series T,
276 shares outstanding of Series W, 438 shares outstanding of Series Th and 61 shares outstanding of Series F, each of Auction Rate Cumulative Preferred Stock (ARCPS).
On January 22, 2015, the Fund announced that it had commenced an issuer tender offer for up to 100% of its outstanding ARCPS at a price equal to 90% of the liquidation preference of $25,000 per share (or
$22,500 per share), plus any unpaid dividends accrued through February 27, 2015, the expiration date of the tender offer.
The Funds tender
offers were conditioned upon the Fund closing on the private offering of VRDPS with an aggregate liquidation preference at least equal to the aggregate liquidation preference of ARCPS accepted for tender.
On March 4, 2015, the Fund announced the final results for its issuer tender offer and all shares that were validly tendered and not withdrawn during the
offering period were accepted for payment. The Fund accepted for payment 1,871 Series M ARCPS, 1,717 Series T ARCPS, 1,710 Series W ARCPS, 1,466 Series Th ARCPS and 1,939 Series F ARCPS, which represented 93.55% of outstanding Series M ARCPS, 85.85%
of outstanding Series T ARCPS, 85.50% of outstanding Series W ARCPS, 73.30% of outstanding Series Th ARCPS, and 96.95% of outstanding Series F ARCPS. In aggregate, the Fund accepted for payment 8,703 ARCPS, which represented 87.03% of the
outstanding ARCPS. The ARCPS that were not tendered will remain outstanding. The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the Statement of Changes in
Net Assets as an increase in net assets applicable to common shares resulting from the tender and repurchase of the ARCPS by the Fund.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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|
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|
47
|
|
Notes to financial statements (contd)
In September 2015, the Fund repurchased 14 Series W ARCPS in a private transaction at a price equal to 90% of the liquidation preference
of $25,000 per share (or $22,500 per share), plus any unpaid dividends. The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the Statement of Changes in Net
Assets as an increase in the assets applicable to common shares resulting from the tender and repurchase of the ARCPS by the Fund.
On November 27,
2018, the Fund repurchased 80 Series M and 80 Series Th ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends. The difference between the
liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the Statement of Changes in Net Assets as an increase in the assets applicable to common shares resulting from the tender and
repurchase of the ARCPS by the Fund.
On January 23, 2019, the Fund repurchased 1 Series M ARCPS in a private transaction at a price equal to 85% of
the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends. The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the
Statement of Changes in Net Assets as an increase in the assets applicable to common shares resulting from the tender and repurchase of the ARCPS by the Fund.
On November 20, 2019, the Fund repurchased 16 Series Th ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid
dividends. The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the Statement of Changes in Net Assets as an increase in the assets applicable to common
shares resulting from the tender and repurchase of the ARCPS by the Fund.
On November 17, 2020, the Fund repurchased 1 Series M ARCPS in a private
transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends. The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered
ARCPS was recognized by the Fund in the Statement of Changes in Net Assets as an increase in the assets applicable to common shares resulting from the tender and repurchase of the ARCPS by the Fund.
The ARCPS dividends are cumulative at a rate determined at an auction and the dividend period is typically seven days. The dividend rate cannot exceed a
certain maximum rate, including in the event of a failed auction, unless the Board of Directors of the Fund authorizes an increased maximum rate. To the extent capital gains and other taxable income are allocated to holders of ARCPS for tax
purposes, the Fund will likely have to pay higher dividends to holders of ARCPS to compensate them for the increased tax liability to them resulting from such allocation. Due to failed auctions experienced by the Funds ARCPS starting
February 14, 2008, the Fund paid the applicable maximum rate, which is calculated using the higher of 110% of the taxable equivalent of the short-term municipal bond rate and 110% of the prevailing 30-days AA Financial Composite
Commercial Paper Rate. The Fund may pay higher maximum rates if the rating of the Funds ARCPS were to be lowered by the rating agencies.
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Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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The dividend rates ranged from 0.066% to
0.393% during the year ended May 31, 2021. At May 31, 2021, the dividend rates in effect were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series M
|
|
|
Series T
|
|
|
Series W
|
|
|
Series Th
|
|
|
Series F
|
|
Dividend Rate
|
|
|
0.095
|
%
|
|
|
0.095
|
%
|
|
|
0.095
|
%
|
|
|
0.095
|
%
|
|
|
0.095
|
%
|
The ARCPS are redeemable under certain conditions by the Fund, or subject to mandatory redemption (if the Fund is in default of
certain coverage requirements) at a redemption price equal to the liquidation preference, which is the sum of $25,000 per share plus accumulated and unpaid dividends.
The Fund is required to maintain certain asset coverages with respect to the ARCPS. If the Fund fails to maintain these coverages and does not cure any such failure within the required time period, the Fund is
required to redeem a requisite number of the ARCPS in order to meet the applicable requirement. Additionally, failure to meet the foregoing asset requirements would restrict the Funds ability to pay dividends to common stock shareholders.
The holders of the ARCPS have one vote per share and vote together with the holders of common stock of the Fund as a single class except on matters
affecting only the holders of preferred stock or the holders of common stock. Pursuant to the 1940 Act, holders of the preferred stock have the right to elect two Directors of the Fund, voting separately as a class.
Citigroup Global Markets Inc. (CGM), an indirect wholly-owned subsidiary of Citigroup, Inc., acts as a broker/dealer in connection with the auction of
ARCPS. For all previous periods since the ARCPS have been outstanding, the participation fee has been paid at the annual rate of 0.25% of the purchase price of the ARCPS that the broker/dealer places at the auction. However, on August 3, 2009,
CGM reduced the participation fee to annual rate of 0.05% of the purchase price of the ARCPS, in the case of a failed auction. For the year ended May 31, 2021, CGM earned $14,053 as a participating broker/dealer.
7. Distributions to common shareholders subsequent to May 31, 2021
The following distributions to common shareholders have been declared by the Funds Board of Directors and are payable subsequent to the period end of this report:
|
|
|
|
|
|
|
|
|
Record Date
|
|
Payable Date
|
|
|
Amount
|
|
5/21/2021
|
|
|
6/1/2021
|
|
|
$
|
0.0425
|
|
6/23/2021
|
|
|
7/1/2021
|
|
|
$
|
0.0425
|
|
7/23/2021
|
|
|
8/2/2021
|
|
|
$
|
0.0425
|
|
8/24/2021
|
|
|
9/1/2021
|
|
|
$
|
0.0425
|
|
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
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|
|
|
|
49
|
|
Notes to financial statements (contd)
8. Stock repurchase program
On November 16, 2015, the Fund announced that the Funds Board of Directors (the Board) had authorized the Fund to repurchase in the open market up to approximately 10% of the Funds
outstanding common stock when the Funds shares are trading at a discount to net asset value. The Board has directed management of the Fund to repurchase shares of common stock at such times and in such amounts as management reasonably believes
may enhance stockholder value. The Fund is under no obligation to purchase shares at any specific discount levels or in any specific amounts. During the year ended May 31, 2021, the Fund did not repurchase any shares.
9. Transactions with affiliated company
As
defined by the 1940 Act, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control with the Fund. The following company was considered an affiliated
company for all or some portion of the year ended May 31, 2021. The following transactions were effected in such company for the year ended May 31, 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate
Value at
May 31,
2020
|
|
|
Purchased
|
|
|
Sold
|
|
|
|
Cost
|
|
|
Shares
|
|
|
Cost
|
|
|
Shares
|
|
Western Asset Premier Institutional Government Reserves, Premium Shares
|
|
|
|
|
|
$
|
58,968
|
|
|
|
58,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(contd)
|
|
Realized
Gain (Loss)
|
|
|
Interest
Income
|
|
|
Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
|
|
|
Affiliate
Value at
May 31,
2021
|
|
Western Asset Premier Institutional Government Reserves, Premium Shares
|
|
|
|
|
|
$
|
0
|
*
|
|
|
|
|
|
$
|
58,968
|
|
*
|
Amount represents less than $1.
|
|
|
|
|
|
50
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
10. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended May 31, was as follows:
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
Tax-exempt income
|
|
$
|
23,093,360
|
|
|
$
|
25,819,709
|
|
Auction rate cumulative preferred stockholders
|
|
|
46,675
|
|
|
|
639,881
|
|
Variable rate demand preferred stockholders
|
|
|
388,177
|
|
|
|
3,179,969
|
|
Total tax exempt distributions
|
|
$
|
23,528,212
|
|
|
$
|
29,639,559
|
|
Taxable income:
|
|
|
|
|
|
|
|
|
Common shareholders
|
|
|
21
|
|
|
|
461
|
|
Auction rate cumulative preferred stockholders
|
|
|
|
|
|
|
14
|
|
Variable rate demand preferred stockholders
|
|
|
1
|
|
|
|
68
|
|
Total taxable distributions
|
|
$
|
22
|
|
|
$
|
543
|
|
Total distributions paid
|
|
$
|
23,528,234
|
|
|
$
|
29,640,102
|
|
As of May 31, 2021, the components of distributable earnings (loss) on a tax basis were as follows:
|
|
|
|
|
Deferred capital losses*
|
|
$
|
(1,946,531)
|
|
Other book/tax temporary differences(a)
|
|
|
(548,643)
|
|
Unrealized appreciation (depreciation)(b)
|
|
|
91,130,025
|
|
Total distributable earnings (loss) net
|
|
$
|
88,634,851
|
|
*
|
These capital losses have been deferred in the current year as either short-term or long-term losses. The losses will be deemed to occur on the first
day of the next taxable year in the same character as they were originally deferred and will be available to offset future taxable capital gains.
|
(a)
|
Other book/tax temporary differences are attributable to the difference between cash and accrual basis distributions paid, the accrual of interest income on
securities in default and book/tax differences in the timing of the deductibility of various expenses.
|
(b)
|
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to the tax deferral of losses on wash sales and the
difference between book and tax accretion methods for discount on fixed income securities.
|
11. Recent accounting
pronouncement
In March 2020, the Financial Accounting Standards Board issued Accounting Standards Update No. 2020-04, Reference Rate Reform
(Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (the ASU). The amendments in the ASU provide optional temporary financial reporting relief from the effect of certain types of contract
modifications due to the planned discontinuation of the London Interbank Offered Rate and other interbank-offered based reference rates as of the end of 2021. The ASU is effective for certain reference rate-related contract modifications that occur
during the period March 12, 2020 through December 31, 2022. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
|
|
|
|
51
|
|
Notes to financial statements (contd)
12. Other matters
The outbreak of the respiratory illness COVID-19 (commonly referred to as coronavirus) has continued to rapidly spread around the world, causing
considerable uncertainty for the global economy and financial markets. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The COVID-19 pandemic could
adversely affect the value and liquidity of the Funds investments and negatively impact the Funds performance. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services
provided to the Fund by its service providers.
* * *
The Funds investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or
LIBOR, which is the offered rate for short-term Eurodollar deposits between major international banks. On March 5, 2021, the ICE Benchmark Administration, the administrator of LIBOR, stated that it will cease the publication of
(i) the overnight and one-, three-, six- and twelve-month USD LIBOR settings immediately following the LIBOR publication on Friday, June 30, 2023 and (ii) all other LIBOR settings, including the one-week and two-month USD LIBOR
settings, immediately following the LIBOR publication on Friday, December 31, 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Funds transactions and the
financial markets generally. As such, the potential effect of a transition away from LIBOR on the Fund or the Funds investments cannot yet be determined.
|
|
|
|
|
52
|
|
|
|
Western Asset Managed Municipals Fund Inc. 2021 Annual Report
|
Report of independent registered public accounting firm
To the Board of Directors and Shareholders of Western Asset Managed
Municipals Fund Inc.
|
|
|
Independent Directors
|
|
|
|
|
Robert D. Agdern
|
|
|
|
|
Year of birth
|
|
1950
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Audit, Compensation and Pricing and Valuation Committees, and Compliance Liaison, Class III
|
Term of office1 and length of time served
|
|
Since 2015
|
Principal occupation(s) during the past five years
|
|
Member of the Advisory Committee of the Dispute Resolution Research Center at the Kellogg Graduate School of Business, Northwestern University (2002
to 2016); formerly, Deputy General Counsel responsible for western hemisphere matters for BP PLC (1999 to 2001); Associate General Counsel at Amoco Corporation responsible for corporate, chemical, and refining and marketing matters and special
assignments (1993 to 1998) (Amoco merged with British Petroleum in 1998 forming BP PLC)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
Carol L. Colman
|
|
|
|
|
Year of birth
|
|
1946
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Audit and Compensation Committees, and Chair of Pricing and Valuation Committee, Class I
|
Term of office1 and length of time served
|
|
Since 2006
|
Principal occupation(s) during the past five years
|
|
President, Colman Consulting Company (consulting)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
|
|
|
56
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
Independent Directors (contd)
|
|
|
|
|
Daniel P. Cronin
|
|
|
|
|
Year of birth
|
|
1946
|
Position(s) held with Fund1
|
|
Director and Member of Audit, Compensation and Pricing and Valuation Committees, and Chair of Nominating Committee, Class II
|
Term of office1 and length of time served
|
|
Since 2006
|
Principal occupation(s) during the past five years
|
|
Retired; formerly, Associate General Counsel, Pfizer Inc. (prior to and including 2004)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
Paolo M. Cucchi
|
|
|
|
|
Year of birth
|
|
1941
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Audit, and Pricing and Valuation Committees, and Chair of Compensation Committee, Class I
|
Term of office1 and length of time served
|
|
Since 2001
|
Principal occupation(s) during the past five years
|
|
Emeritus Professor of French and Italian (since 2014) and formerly, Vice President and Dean of The College of Liberal Arts (1984 to 2009) and
Professor of French and Italian (2009 to 2014) at Drew University
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
William R. Hutchinson
|
|
|
|
|
Year of birth
|
|
1942
|
Position(s) held with Fund1
|
|
Lead Independent Director and Member of Nominating, Audit, Compensation and Pricing and Valuation Committees, Class III
|
Term of office1 and length of time served
|
|
Since 1995
|
Principal occupation(s) during the past five years
|
|
President, W.R. Hutchinson & Associates Inc. (consulting) (since 2001)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
Director (since 1994) and formerly, Non-Executive Chairman of the Board (December 2009 to April 2020), Associated Banc-Corp. (financial services
company)
|
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
57
|
|
Additional information
(unaudited) (contd)
Information about Directors and Officers
|
|
|
Independent Directors (contd)
|
|
|
|
|
Eileen A. Kamerick
|
|
|
|
|
Year of birth
|
|
1958
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Compensation and Pricing and Valuation Committees, and Chair of Audit Committee, Class II
|
Term of office1 and length of time served
|
|
Since 2013
|
Principal occupation(s) during the past five years
|
|
Chief Executive Officer, The Governance Partners, LLC (consulting firm) (since 2015); National Association of Corporate Directors Board Leadership
Fellow (since 2016) and financial expert; Adjunct Professor, Georgetown University Law Center (since 2021); Adjunct Professor, The University of Chicago Law School (since 2018); Adjunct Professor, Washington University in St. Louis and University of
Iowa law schools (since 2007); formerly, Senior Advisor to the Chief Executive Officer and Executive Vice President and Chief Financial Officer of ConnectWise, Inc. (software and services company) (2015 to 2016); Chief Financial Officer, Press Ganey
Associates (health care informatics company) (2012 to 2014); Managing Director and Chief Financial Officer, Houlihan Lokey (international investment bank) and President, Houlihan Lokey Foundation (2010 to 2012)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
Director of ACV Auctions Inc. (since 2021); Trustee of AIG Funds and Anchor Series Trust (since 2018); Director of Hochschild Mining plc (precious
metals company) (since 2016); Director of Associated Banc-Corp (financial services company) (since 2007)
|
|
|
Nisha Kumar
|
|
|
|
|
Year of birth
|
|
1970
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Audit, Compensation and Pricing and Valuation Committees, Class II
|
Term of office1 and length of time served
|
|
Since 2019
|
Principal occupation(s) during the past five years
|
|
Managing Director and the Chief Financial Officer and Chief Compliance Officer of Greenbriar Equity Group, LP (since 2011); formerly, Chief
Financial Officer and Chief Administrative Officer of Rent the Runway, Inc. (2011); Executive Vice President and Chief Financial Officer of AOL LLC, a subsidiary of Time Warner Inc. (2007 to 2009), Member of the Council of Foreign
Relations
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
19
|
Other board memberships held by Director during the past five years
|
|
Director of The India Fund, Inc. (since 2016); formerly, Director of Aberdeen Income Credit Strategies Fund (2017-2018); and Director of The Asia
Tigers Fund, Inc. (2016 to 2018)
|
|
|
|
|
|
58
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
Interested Director and Officer
|
|
|
|
|
Jane Trust, CFA2
|
|
|
|
|
Year of birth
|
|
1962
|
Position(s) held with Fund1
|
|
Director, Chairman, President and Chief Executive Officer, Class I
|
Term of office1 and length of time served
|
|
Since 2015
|
Principal occupation(s) during the past five years
|
|
Senior Vice President, Fund Board Management, Franklin Templeton (since 2020); Officer and/or Trustee/Director of 145 funds associated with LMPFA or
its affiliates (since 2015); President and Chief Executive Officer of LMPFA (since 2015); formerly, Senior Managing Director (2018 to 2020) and Managing Director (2016 to 2018) of Legg Mason & Co., LLC (Legg Mason & Co.); Senior
Vice President of LMPFA (2015)
|
Number of portfolios in fund complex overseen by Director (including the Fund)
|
|
143
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
|
Additional Officers
|
|
|
|
|
Fred Jensen
|
|
|
|
|
Franklin Templeton
|
|
|
|
620 Eighth Avenue, 47th Floor, New York, NY 10018
|
|
|
Year of birth
|
|
1963
|
Position(s) held with Fund1
|
|
Chief Compliance Officer
|
Term of office1 and length of time served
|
|
Since 2020
|
Principal occupation(s) during the past five years
|
|
Director - Global Compliance of Franklin Templeton (since 2020); Managing Director of Legg Mason & Co. (2006 to 2020); Director of Compliance,
Legg Mason Office of the Chief Compliance Officer (2006 to 2020); formerly, Chief Compliance Officer of Legg Mason Global Asset Allocation (prior to 2014); Chief Compliance Officer of Legg Mason Private Portfolio Group (prior to 2013); formerly,
Chief Compliance Officer of The Reserve Funds (investment adviser, funds and broker-dealer) (2004) and Ambac Financial Group (investment adviser, funds and broker-dealer) (2000 to 2003)
|
|
|
Jenna Bailey
|
|
|
|
Franklin Templeton
|
|
100 First Stamford Place, 5th Floor, Stamford, CT 06902
|
|
|
Year of birth
|
|
1978
|
Position(s) held with Fund1
|
|
Identity Theft Prevention Officer
|
Term of office1 and length of time served
|
|
Since 2015
|
Principal occupation(s) during the past five years
|
|
Senior Compliance Analyst of Franklin Templeton (since 2020); Identity Theft Prevention Officer of certain funds associated with Legg Mason &
Co. or its affiliates (since 2015); formerly, Compliance Officer of Legg Mason & Co. (2013 to 2020); Assistant Vice President of Legg Mason & Co. (2011 to 2020)
|
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
59
|
|
Additional information
(unaudited) (contd)
Information about Directors and Officers
|
|
|
Additional Officers (contd)
|
|
|
|
|
George P. Hoyt*
|
|
|
|
|
Franklin Templeton
|
|
|
|
100 First Stamford Place, 6th Floor, Stamford, CT 06902
|
|
|
Year of birth
|
|
1965
|
Position(s) held with Fund1
|
|
Secretary and Chief Legal Officer
|
Term of office1 and length of time served
|
|
Since 2020
|
Principal occupation(s) during the past five years
|
|
Associate General Counsel of Franklin Templeton (since 2020); Secretary and Chief Legal Officer of certain mutual funds associated with Legg Mason
& Co. or its affiliates (since 2020); formerly, Managing Director (2016 to 2020) and Associate General Counsel for Legg Mason & Co. and Assistant Secretary of certain mutual funds associated with Legg Mason & Co. or its affiliates (2006
to 2020)
|
|
|
Thomas C. Mandia
|
|
|
|
|
Franklin Templeton
|
|
|
|
100 First Stamford Place, 6th Floor, Stamford, CT 06902
|
|
|
Year of birth
|
|
1962
|
Position(s) held with Fund1
|
|
Assistant Secretary
|
Term of office1 and length of time served
|
|
Since 2006
|
Principal occupation(s) during the past five years
|
|
Senior Associate General Counsel of Franklin Templeton (since 2020); Secretary of LMPFA (since 2006); Assistant Secretary of certain funds
associated with Legg Mason & Co. or its affiliates (since 2006); Secretary of LM Asset Services, LLC (LMAS) (since 2002) and Legg Mason Fund Asset Management, Inc. (LMFAM) (since 2013) (formerly registered investment
advisers); formerly, Managing Director and Deputy General Counsel of Legg Mason & Co. (2005 to 2020)
|
|
|
Christopher Berarducci
|
|
|
|
|
Franklin Templeton
|
|
|
|
620 Eighth Avenue, 47th Floor, New York, NY 10018
|
|
|
Year of birth
|
|
1974
|
Position(s) held with Fund1
|
|
Treasurer and Principal Financial Officer
|
Term of office1 and length of time served
|
|
Since 2019
|
Principal occupation(s) during the past five years
|
|
Vice President, Fund Administration and Reporting, Franklin Templeton (since 2020); Treasurer (since 2010) and Principal Financial Officer (since
2019) of certain funds associated with Legg Mason & Co. or its affiliates; formerly, Managing Director (2020), Director (2015 to 2020), and Vice President (2011 to 2015) of Legg Mason & Co.
|
|
|
|
|
|
60
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
Additional Officers (contd)
|
|
|
|
|
Jeanne M. Kelly
|
|
|
|
|
Franklin Templeton
|
|
|
|
620 Eighth Avenue, 47th Floor, New York, NY 10018
|
|
|
Year of birth
|
|
1951
|
Position(s) held with Fund1
|
|
Senior Vice President
|
Term of office1 and length of time served
|
|
Since 2007
|
Principal occupation(s) during the past five years
|
|
U.S. Fund Board Team Manager, Franklin Templeton (since 2020); Senior Vice President of certain funds associated with Legg Mason & Co. or its
affiliates (since 2007); Senior Vice President of LMPFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); formerly, Managing Director of Legg Mason & Co. (2005 to 2020); Senior Vice President of LMFAM (2013 to
2015)
|
|
Directors who are not interested persons of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the 1940 Act).
|
*
|
Effective August 13, 2020, Mr. Hoyt became Secretary and Chief Legal Officer.
|
1
|
The Funds Board of Directors is divided into three classes: Class I, Class II and Class III. The terms of office of the Class I, II and III Directors
expire at the Annual Meetings of Stockholders in the year 2021, year 2022 and year 2023, respectively, or thereafter in each case when their respective successors are duly elected and qualified. The Funds executive officers are chosen each
year, to hold office until their successors are duly elected and qualified.
|
2
|
Ms. Trust is an interested person of the Fund as defined in the 1940 Act because Ms. Trust is an officer of LMPFA and certain of its
affiliates.
|
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
61
|
|
Annual chief executive officer and principal financial officer
certifications (unaudited)
The Funds Chief Executive Officer (CEO) has submitted to the NYSE the required annual certification and the Fund also has included the
Certifications of the Funds CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Funds Form N-CSR filed with the SEC for the period of this report.
|
|
|
|
|
62
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
Other shareholder communications regarding accounting matters (unaudited)
The Funds Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters (collectively, Accounting Matters). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Chief Compliance Officer (CCO). Persons
who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Funds Audit Committee Chair. Complaints may be submitted on an anonymous basis.
The CCO may be contacted at:
Legg Mason & Co., LLC
Compliance Department
620 Eighth Avenue, 47th Floor
New York, New York 10018
Complaints may also be
submitted by telephone at 1-800-742-5274. Complaints submitted through this number will be received by the CCO.
|
|
|
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
|
|
|
|
63
|
|
Summary of information regarding the Fund (unaudited)
Investment Objective
The Funds
investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital.
When
pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal.
Principal Investment Policies and Strategies
The Fund invests primarily in long-term
investment grade municipal debt securities issued by state and local governments, political subdivisions, agencies and public authorities (municipal obligations). The Funds policy under normal market conditions is to invest at least 80% of its
total assets in investment grade municipal obligations. This policy is fundamental. All other policies and percentage limitations of the Fund as described below may be modified by the Funds board of directors if, in the reasonable exercise of
its business judgment, it determines that modification is necessary or appropriate to carry out the Funds investment objective.
The Fund defines
municipal obligations to include bonds and notes such as:
|
|
general obligation bonds issued for various public purposes and supported by the municipal issuers credit and taxing power;
|
|
|
revenue bonds whose principal and interest is payable only from the revenues of a particular project or facility. Industrial revenue bonds depend on the credit
standing of a private issuer and may be subject to the federal alternative minimum tax, or AMT; and
|
|
|
notes that are short-term obligations of municipalities or agencies sold in anticipation of a bond sale, collection of taxes or receipt of other revenues.
|
Municipal obligations may have all types of interest rate payment and reset terms, including fixed rate, floating and variable rate,
zero coupon, payment in kind and auction rate features.
Under normal market conditions, the Fund is obligated to invest at least 80% of its total assets
in municipal securities rated, at the time of investment, no lower than BBB, SP-2 or A-1 by S&P or Baa, MIG3 or Prime-1 by Moodys, or BBB or F1 by Fitch. The Fund may, under normal market conditions, invest up 20% of its total assets in
municipal obligations that are, at the time of investment, rated below investment grade (high-yield) by a nationally recognized statistical rating organization (NRSRO) or, if unrated, of equivalent quality as determined by
the investment manager. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. Western Asset determines the credit quality of pre-refunded bonds based on the quality of the escrowed collateral and such other factors as Western
Asset deems appropriate
|
|
|
|
|
64
|
|
|
|
Western Asset Managed Municipals Fund Inc.
|
The Funds policy on the credit
quality of its investments apply only at the time of the purchase of a security, and the Fund is not required to dispose of securities in the event that S&P or Moodys or any other NRSRO downgrades its assessment of the credit
characteristics of a particular issuer or in the event the manager reassesses its view with respect to the credit quality of the issuer thereof.
In
addition, the Fund has the ability to invest in participation interests in municipal bonds, including industrial development bonds, private activity bonds and floating and variable rate securities. The Fund may also invest in non-appropriation
municipal lease obligations.
The Fund may enter into TOB transactions and may invest in inverse floating rate instruments issued in TOB transactions. In
a TOB transaction, the Fund transfers securities (typically municipal bonds or other municipal securities) into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues floating rate notes to third parties and residual
interest TOBs to the Fund. The net proceeds of the sale of the floating rate notes, after expenses, are received by the Fund and may be invested in additional securities. The residual interest TOBs are inverse floating rate debt instruments
(inverse floaters), as the return on those bonds is inversely related to changes in a specified interest rate. Distributions on the inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term interest
rates rise and will increase when such interest rates fall. Floating rate notes issued by a TOB trust may be senior to the inverse floaters held by the Fund. The Fund may enter into TOB transactions on either a non-recourse or recourse basis. If the
Fund invests in a TOB trust on a recourse basis, it will bear the risk of loss with respect to any liquidation of the TOB trust. The Fund will look through to the underlying securities held by a TOB trust for purposes of calculating compliance with
the Funds 80% policy. TOB transactions create leverage to the extent the Fund invests the net proceeds of the floating rate notes in additional securities. The Fund currently intends to segregate or earmark liquid assets or otherwise cover its
obligations with respect to its investments in TOB trusts.
The Fund uses leverage from the offering of preferred stock in an effort to increase the
Funds income available for distribution to holders of its common stock.
The Fund invests with the objective that dividends paid by the Fund may be
excluded by shareholders from their gross incomes for federal income tax purposes. A portion of the Funds dividends may be taxable. The Fund may invest without limit in private activity bonds. Income from these bonds may be a special
preference item for purposes of the AMT. The Fund may not be a suitable investment if you are subject to the AMT.
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Western Asset Managed Municipals Fund Inc.
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65
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Summary of information regarding the Fund (unaudited) (contd)
The Fund is classified as a non-diversified fund under the Investment Company Act, which means that the Fund is not limited by the Investment Company Act in the
proportion of its assets that it may invest in the obligations of a single issuer. The Fund intends to conduct its operations, however, so as to qualify as a regulated investment company for purposes of the Code, which will relieve the
Fund of any liability for federal income tax to the extent its earnings are distributed to shareholders. To qualify as a regulated investment company, the Fund will, among other things, limit its investments so that, at the close of each quarter of
its taxable year (1) not more than 25% of the market value of the Funds total assets will be invested in the securities of a single issuer and (2) with respect to 50% of the market value of its total assets, not more than 5% of the
market value of its total assets will be invested in the securities of a single issuer.
The Fund may not borrow money, except for temporary or emergency
purposes, and then not in amounts that are greater than 15% of total assets (including the amount borrowed). The Fund also may not buy more securities if the Fund has borrowed money in amounts greater than 5% of net assets.
The Fund generally will not invest more than 25% of its total assets in any single industry. Governmental issuers of municipal obligations are not considered part
of any industry. Municipal obligations backed only by the assets and revenues of non-governmental users may be deemed to be issued by the non-governmental users, and would be subject to the Funds 25% industry limitation. The Fund
may invest more than 25% of its total assets in a broad segment of the municipal obligations market, if Western Asset determines that the yields available from obligations in a particular segment of the market justify the additional risks associated
with a large investment in the segment. The Fund reserves the right to invest more than 25% of its assets in industrial development bonds or in issuers located in the same state, although neither has a current intention of investing more than 25% of
its assets in issuers located in the same state. If the Fund was to invest more than 25% of its total assets in issuers located in the same state, it would be more susceptible to adverse economic, business or regulatory conditions in that state.
Municipal obligations are classified as general obligation bonds, revenue bonds and notes. General obligation bonds are secured by the issuers
pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenue derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special
excise tax or other specific revenue source, but not from the general taxing power. Notes are short-term obligations of issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or receipt of other revenues.
Municipal obligations bear fixed, floating and variable rates of interest, and variations exist in the security of municipal obligations, both within a particular classification and between classifications.
The yields on, and values of, municipal obligations are dependent on a variety of factors, including general economic and monetary conditions, money market factors,
conditions in the municipal obligations markets, size of a particular offering, maturity of the obligation and rating of the issue. Consequently, municipal obligations with the same maturity, coupon and rating may have different yields or values,
whereas obligations of the same maturity and coupon with different ratings may have the same yield or value.
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Opinions relating to the validity of
municipal obligations and to the exemption of interest on them from federal income taxes are rendered by bond counsel to the respective issuers at the time of issuance. Neither the Fund nor Western Asset will review the procedures relating to the
issuance of municipal obligations or the basis for opinions of counsel. Issuers of municipal obligations may be subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors. In addition, the
obligations of those issuers may become subject to laws enacted in the future by Congress, state legislatures or referenda extending the time for payment of principal and/or interest, or imposing other constraints upon enforcement of the obligations
or upon the ability of municipalities to levy taxes. The possibility also exists that, as a result of litigation or other conditions, the power or ability of any issuer to pay, when due, the principal of, and interest on its obligations may be
materially affected.
Under normal conditions, the Fund may hold up to 20% of its total assets in cash or money market instruments, including taxable
money market instruments (collectively, taxable investments). In addition, the Fund may take a temporary defensive posture and invest without limitation in short-term municipal obligations and taxable investments, upon a determination by
the manager that market conditions warrant such a posture. To the extent the Fund holds taxable investments, the Fund may not be fully achieving its investment objective.
The Fund may invest in securities of other investment companies. To the extent it does, Fund shareholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the
Fund bears directly in connection with its own operation. Investing in securities issued by other investment companies, including exchange-traded funds that invest primarily in municipal securities, involves risks similar to those of investing
directly in the securities in which those investment companies invest.
Principal Risk Factors
There is no assurance that the Fund will meet its investment objectives. You may lose money on your investment in the Fund. The value of the Funds shares may
go up or down, sometimes rapidly and unpredictably. Market conditions, financial conditions of issuers represented in the Funds portfolio, investment strategies, portfolio management, and other factors affect the volatility of the Funds
shares. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. The following summarizes the principal risks of investing in the Fund.
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Western Asset Managed Municipals Fund Inc.
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67
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Summary of information regarding the
Fund (unaudited) (contd)
Investment and Market Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Your
investment in the Common Stock represents an indirect investment in the fixed income securities and other investments owned by the Fund, most of which could be purchased directly. The value of the Funds portfolio securities may move up or
down, sometimes rapidly and unpredictably. At any point in time, your Common Stock may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.
Interest Rate Risk. The Fund expects that under normal market circumstances at least 80% of its assets will consist of investment grade tax-exempt
securities, the market value of which generally varies inversely with changes in prevailing interest rates. The market value of the Funds investments will change in response to changes in interest rates and other factors. During periods of
declining interest rates, the values of fixed-income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. The magnitude of these fluctuations is generally greater for
securities with longer maturities. The subadvisers judgment about interest rate trends may prove to be incorrect.
Tax-Exempt Securities
Risks. In general, the secondary market for tax-exempt securities is less liquid than that for taxable fixed-income securities. Consequently, the ability of the Fund to buy and sell tax-exempt securities may, at any particular time and with
respect to any particular securities, be limited. The amount of information about the financial condition of an issuer of tax-exempt securities may not be as extensive as information about corporations whose securities are publicly traded.
Obligations of issuers of tax-exempt securities may be subject to the provisions of bankruptcy, insolvency and the United States Bankruptcy Code and applicable state laws, which could limit the ability of the Fund to recover payments of principal or
interest on such securities.
Certain tax-exempt securities which may be held by the Fund may permit the issuer at its option to call, or
redeem, its securities. If an issuer were to redeem tax-exempt securities held by the Fund during a time of declining interest rates, the Fund may realize a capital loss on its investment if the security was purchased at a premium and may not be
able to reinvest the proceeds in tax-exempt securities providing as high a level of investment return as the securities redeemed.
Municipal
Securities Risk. Liquidity in the municipal securities market may vary from time to time. At times of decreased liquidity, the ability of the Fund to buy and sell municipal securities may, with respect to any particular securities, be limited.
The amount of information about the financial condition of an issuer of municipal securities may not be as extensive as information about corporations whose securities are publicly traded, and the Funds performance may therefore be more
dependent on the sub-advisers analytical abilities than if the Fund were to invest in stocks or taxable bonds. The secondary market for municipal securities, particularly the below investment grade municipal securities in which the Fund may
invest, also tends to be less developed or liquid than many other securities markets, which may adversely affect the Funds ability to sell its municipal securities at attractive prices.
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Obligations of issuers of municipal
securities may be subject to the provisions of bankruptcy, insolvency and the United States Bankruptcy Code and applicable state laws, which could limit the ability of the Fund to recover payments of principal or interest on such securities.
Certain municipal securities which may be held by the Fund may permit the issuer at its option to call, or redeem, its securities. If an
issuer were to redeem municipal securities held by the Fund during a time of declining interest rates, the Fund may realize a capital loss on its investment if the security was purchased at a premium and may not be able to reinvest the proceeds in
municipal securities providing as high a level of investment return as the securities redeemed.
Inverse Floating Rate Securities and TOBs Risk.
Subject to certain limitations, the Fund may invest in inverse floating rate securities. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a tender option bond trust)
formed by a third party sponsor for the purpose of holding municipal bonds purchased from the Fund or from another third party. An investment in an inverse floating rate security may involve greater risk than an investment in a fixed-rate bond.
Because changes in the interest rate on the underlying security or index inversely affect the residual interest paid on the inverse floating rate security, the value of an inverse floating rate security is generally more volatile than that of a
fixed-rate bond.
Inverse floating rate securities have interest rate adjustment formulas which generally reduce or, in the extreme, eliminate the
interest paid to the Fund when short-term interest rates rise, and increase the interest paid to the Fund when short-term interest rates fall. Inverse floating rate securities have varying degrees of liquidity, and the market for these securities is
relatively volatile. These securities tend to underperform the market for fixed-rate bonds in a rising interest rate environment, but tend to outperform the market for fixed-rate bonds when interest rates decline. Shifts in long-term interest rates
may, however, alter this tendency.
During times of reduced market liquidity, such as at the present, the Fund may not be able to sell municipal
securities readily at prices reflecting the values at which the securities are carried on the Funds books. Sales of large blocks of municipal securities by market participants, such as the Fund, that are seeking liquidity can further reduce
municipal security prices in an illiquid market. The Fund may seek to make sales of large blocks of municipal securities as part of its investment strategy or it may be required to raise cash to
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Western Asset Managed Municipals Fund Inc.
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Summary of information regarding the
Fund (unaudited) (contd)
re-collateralize, unwind or collapse tender option bond trusts that issued inverse floating rate securities to the Fund or to make payments to such
trusts to enable them to pay for tenders of the short-term securities they have issued if the remarketing agents for those municipal securities are unable to sell the short-term securities in the marketplace to other buyers (typically tax-exempt
money market funds). The Funds potential exposure to losses related to or on inverse floating rate securities may increase beyond the value of the Funds inverse floater investments as the Fund may potentially be liable to fulfill all
amounts owed to holders of the floating rate certificates.
Although volatile, inverse floating rate securities typically offer the potential for yields
exceeding the yields available on fixed-rate bonds with comparable credit quality, coupon, call provisions and maturity. These securities usually permit the investor to convert the floating rate to a fixed rate (normally adjusted downward), and this
optional conversion feature may provide a partial hedge against rising rates if exercised at an opportune time.
Investment in inverse floating rate
securities may amplify the effects of the Funds use of leverage. Any economic effect of leverage through the Funds purchase of inverse floating rate securities will create an opportunity for increased Common Stock net income and returns,
but may also result in losses if the cost of leverage exceeds the return on the inverse floating rate securities purchased by the Fund.
TOB transactions
expose the Fund to leverage and credit risk, and generally involve greater risk than investments in fixed rate municipal bonds, including the risk of loss of principal. The interest payments that the Fund would typically receive on inverse floaters
acquired in such transactions vary inversely with short-term interest rates and will be reduced (and potentially eliminated) when short-term interest rates increase. Inverse floaters will generally underperform the market for fixed rate municipal
securities when interest rates rise. The value and market for inverse floaters can be volatile, and inverse floaters can have limited liquidity. Investments in inverse floaters issued in TOB transactions are derivative instruments and, therefore,
are also subject to the risks generally applicable to investments in derivatives.
Insurance Risk. The Fund may purchase municipal securities that
are secured by insurance, bank credit agreements or escrow accounts. The credit quality of the companies that provide such credit enhancements will affect the value of those securities. Certain significant providers of insurance for municipal
securities have recently incurred significant losses as a result of exposure to sub-prime mortgages and other lower credit quality investments that have experienced recent defaults or otherwise suffered extreme credit deterioration. As a result,
such losses have reduced the insurers capital and called into question their continued ability to perform their obligations under such insurance if they are called upon to do so in the future. While an insured municipal security will typically
be deemed to have the rating of its insurer, if the insurer of a municipal security suffers a
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downgrade in its credit rating or the
market discounts the value of the insurance provided by the insurer, the rating of the underlying municipal security will be more relevant and the value of the municipal security would more closely, if not entirely, reflect such rating. In such a
case, the value of insurance associated with a municipal security would decline, and the insurance may not add any value. The insurance feature of a municipal security does not guarantee the full payment of principal and interest through the life of
an insured obligation, the market value of the insured obligation or the net asset value of the Common Stock represented by such insured obligation.
Leverage Risk. The value of your investment may be more volatile due to the Funds leveraged capital structure and use of instruments that have a
leveraging effect on the Funds portfolio. The Fund may also have to sell assets at inopportune times to satisfy its obligations created by the use of leverage or derivatives. The use of leverage is considered to be a speculative investment
practice and may result in the loss of a substantial amount, and possibly all, of the Funds assets.
Special Risks Related to Certain Municipal
Securities. The Fund may invest in municipal leases and certificates of participation in such leases. Municipal leases and certificates of participation involve special risks not normally associated with general obligations or revenue bonds.
Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment
without meeting the constitutional and statutory requirements for the issuance of debt. The debt issuance limitations are deemed to be inapplicable because of the inclusion in many leases or contracts of non-appropriation clauses that
relieve the governmental issuer of any obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate governmental body on a yearly or other periodic basis. In addition, such leases or
contracts may be subject to the temporary abatement of payments in the event the governmental issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment. Although the obligations may be secured by the
leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover the
Funds original investment. In the event of non-appropriation, the issuer would be in default and taking ownership of the assets may be a remedy available to the Fund, although the Fund does not anticipate that such a remedy would normally be
pursued. To the extent that the Fund invests in unrated municipal leases or participates in such leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. Certificates of participation,
which represent interests in unmanaged pools of municipal leases or installment contracts, involve the same risks as the underlying municipal leases. In addition, the Fund may be dependent upon the municipal authority issuing the certificates of
participation to exercise remedies with respect to the underlying securities. Certificates of participation also entail a risk of default or bankruptcy, both of the issuer of the municipal lease and also the municipal agency issuing the certificate
of participation.
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Western Asset Managed Municipals Fund Inc.
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71
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Summary of information regarding the Fund (unaudited) (contd)
Alternative Minimum Tax and Taxable Income Risk. The Fund will qualify to pay exempt-interest dividends, which are exempt from regular U.S.
federal income tax, for any taxable year only if at least 50% of the value of its assets, as of the close of each quarter of the taxable year, consists of state or local obligations described in Section 103(a) of the Internal Revenue Code of
1986, as amended (the Code). Assuming that the Fund qualifies to pay exempt-interest dividends, it is anticipated that certain of the Funds distributions will nevertheless constitute taxable income. Moreover, a portion of the
Funds exempt-interest dividends may be subject to federal alternative minimum tax, and all or a portion of such dividends may be subject to state and local taxation.
A portion of the Funds distributions may be taxable to Common Stockholders. In particular, the Fund may use a variety of derivative instruments and may sell certain fixed-income securities short including,
but not limited to, U.S. Treasuries, for investment and/or hedging purposes. To the extent that the Fund utilizes these strategies the Fund could generate taxable income and gains. Distributions of any capital gain or other taxable income (including
gains and market discount realized by the Fund on the sale of municipal securities) will be taxable to Common Stockholders. The Fund may not be a suitable investment for investors subject to the federal alternative minimum tax or who
would become subject to such tax by investing in the Fund. The suitability of an investment in Common Stock will depend upon a comparison of the after tax yield likely to be provided from the Fund with that from comparable tax-exempt investments not
subject to the alternative minimum tax, and from comparable fully taxable investments, in light of each such investors tax position. Special considerations apply to corporate investors.
Certain provisions of the Code relating to the issuance of municipal obligations impose restrictions on the volume of municipal obligations qualifying for federal tax exemption. One effect of these provisions could
be to increase the cost of the municipal securities available for purchase by the Fund and thus reduce available yield. Legislative proposals that may further restrict or eliminate the federal income tax exemption for interest on municipal
obligations may be introduced in the future. The value of the Funds investments and its net asset value may be adversely affected by changes in tax rates and policies. Because interest income from municipal securities normally is not subject
to regular federal income taxation, the attractiveness of municipal securities in relation to other investment alternatives is affected by changes in federal income tax rates or changes in the tax-exempt status of interest income from municipal
securities. Any proposed or actual changes in such rates or exempt status, therefore, can significantly affect the demand for and supply, liquidity and marketability of municipal securities. This could in turn affect the Funds net asset value
and ability to acquire and dispose of municipal securities at desirable yield and price levels.
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Below Investment Grade (High Yield or
Junk Bond) Securities Risk. The Fund may invest up to 20% of its assets in municipal obligations of below investment grade quality. High yield debt securities are generally subject to greater credit risks than higher-grade debt securities,
including the risk of default on the payment of interest or principal. High yield debt securities are considered speculative, typically have lower liquidity and are more difficult to value than higher grade bonds. High yield debt securities tend to
be volatile and more susceptible to adverse events, credit downgrades and negative sentiments and may be difficult to sell at a desired price, or at all, during periods of uncertainty or market turmoil.
Credit Crisis Liquidity and Volatility Risk. The markets for credit instruments, including fixed income securities, have experienced periods of extreme
illiquidity and volatility. General market uncertainty and consequent repricing risk have led to market imbalances of sellers and buyers, which in turn have also resulted in significant valuation uncertainties in a variety of debt securities,
including certain fixed income securities. These conditions resulted, and in many cases continue to result in greater volatility, less liquidity, widening credit spreads and a lack of price transparency, with many debt securities remaining illiquid
and of uncertain value. During times of reduced market liquidity, the Fund may not be able to sell securities readily at prices reflecting the values at which the securities are carried on the Funds books. Sales of large blocks of securities
by market participants, such as the Fund, that are seeking liquidity can further reduce security prices in an illiquid market. These market conditions may make valuation of some of the Funds securities uncertain and/or result in sudden and
significant valuation increases or decreases in its holdings. Illiquidity and volatility in the credit markets may directly and adversely affect the setting of dividend rates on the Common Stock.
Liquidity Risk. The Fund may invest, without limitation, in illiquid securities. Illiquid securities are securities that cannot be disposed of within seven
days in the ordinary course of business at approximately the value at which the Fund has valued the securities. Liquidity risk exists when particular investments are difficult to sell. Securities may become illiquid after purchase by the Fund,
particularly during periods of market turmoil. When the Fund holds illiquid investments, the portfolio may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments in order to segregate assets or for
other cash needs, the Fund may suffer a loss.
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Western Asset Managed Municipals Fund Inc.
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73
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Summary of information regarding the
Fund (unaudited) (contd)
Government Intervention in Financial Markets Risk. The instability in the financial markets has led the U.S. government and foreign governments to take a
number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and in some cases a lack of liquidity. U.S. federal and state governments and foreign
governments, their regulatory agencies or self regulatory organizations may take additional actions that affect the regulation of the securities in which the Fund invests, or the issuers of such securities, in ways that are unforeseeable. Issuers of
corporate fixed income securities might seek protection under the bankruptcy laws. Legislation or regulation may also change the way in which the Fund itself is regulated. Such legislation or regulation could limit or preclude the Funds
ability to achieve its investment objectives. Western Asset will monitor developments and seek to manage the Funds portfolio in a manner consistent with achieving the Funds investment objectives, but there can be no assurance that it
will be successful in doing so.
Derivatives Risk. The Fund may utilize a variety of derivative instruments for investment or risk management
purposes, such as options, futures contracts, swap agreements and credit default swaps. Using derivatives can increase Fund losses and reduce opportunities for gains when market prices, interest rates, currencies, or the derivatives themselves
behave in a way not anticipated by the Fund. Using derivatives also can have a leveraging effect and increase Fund volatility. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Derivatives
may not be available at the time or price desired, may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the Fund. Derivatives are generally subject to the risks applicable to the assets, rates, indices or
other indicators underlying the derivative. The value of a derivative may fluctuate more than the underlying assets, rates, indices or other indicators to which it relates. Use of derivatives may have different tax consequences for the Fund than an
investment in the underlying security, and those differences may affect the amount, timing and character of income distributed to shareholders. The U.S. government and foreign governments are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements. The ultimate impact of the regulations remains unclear. Additional regulation of derivatives may make derivatives more costly,
limit their availability or utility, otherwise adversely affect their performance or disrupt markets.
The Securities and Exchange Commission adopted a
new rule on October 28, 2020 that mandates that a funds derivatives risk management program provide for specific items as required by the rule, including compliance with a VaR test. Compliance with these new requirements will be required
after an eighteen-month transition period following the effective date of the adopted rule. Following the compliance date, these requirements may limit the ability of the Fund to use derivatives and reverse repurchase agreements and similar
financing transactions as part of its investment strategies. These requirements may increase the cost of the Funds investments in derivatives, which could adversely affect shareholders.
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Lending Securities. The risks in
lending portfolio securities, as with other extensions of credit, consist of possible delays in recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. Although voting rights, or rights to
consent, with respect to the loaned securities pass to the borrower, the Fund retains the right to call the loans at any time on reasonable notice, and it will do so in order that the securities may be voted by the Fund if the holders of such
securities are asked to vote upon or consent to matters materially affecting the investment. The Fund also may call such loans in order to sell the securities involved.
Counterparty Risk. The Fund may enter into transactions with counterparties that become unable or unwilling to fulfill their contractual obligations. There can be no assurance that any such counterparty will
not default on its obligations to the Fund. In the event of a counterparty default, the Fund may be hindered or delayed in exercising rights against a counterparty and may experience significant losses. To the extent that the Fund enters into
multiple transactions with a single or small set of counterparties, the Fund will be subject to increased counterparty risk.
Credit Risk. If an
issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults or its credit is downgraded, or is perceived to be less creditworthy, or if the value of the assets underlying a security declines,
the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. Subordinated
securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer and will be disproportionately affected by a default, downgrade or perceived decline in creditworthiness.
Prepayment Risk. Prepayments may cause losses on securities purchased at a premium. At times, some of the securities in which the Fund may invest may have
higher than market interest rates and therefore may be purchased at a premium above their par value. Unscheduled prepayments, which are made at par, may cause the Fund to experience a loss equal to any unamortized premium. In addition, a reduction
in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the
volatility of the Fund.
Inflation/Deflation Risk. Inflation risk is the risk that the value of certain assets or income from the Funds
investments will be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Common Stock and distributions on the Common Stock can decline. In addition, during any periods of rising
inflation, the dividend rates or borrowing costs associated with the Funds use of leverage would likely increase, which would tend to further reduce returns to stockholders. Deflation risk is the risk that prices throughout the economy decline
over timethe opposite of inflation.
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Western Asset Managed Municipals Fund Inc.
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Summary of information regarding the
Fund (unaudited) (contd)
Deflation may have an adverse affect on the creditworthiness of issuers and may make issuer defaults more likely, which may result in a decline in the value of the
Funds portfolio.
Market Events Risk. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably,
due to changes in general market conditions, overall economic trends or events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes or other factors,
political developments, investor sentiment, the global and domestic effects of a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. Economies and financial markets throughout the world are
increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, public health events, terrorism, natural disasters and other circumstances in one country or region could have profound impacts on global
economies or markets. As a result, whether or not the Fund invests in securities of issuers located in or with significant exposure to the countries directly affected, the value and liquidity of the Funds investments may be negatively
affected.
The rapid and global spread of a highly contagious novel coronavirus respiratory disease, designated COVID-19, first detected in China in
December 2019, has resulted in extreme volatility in the financial markets and severe losses; reduced liquidity of many instruments; restrictions on international and, in some cases, local travel, significant disruptions to business operations
(including business closures); strained healthcare systems; disruptions to supply chains, consumer demand and employee availability; and widespread uncertainty regarding the duration and long-term effects of this pandemic. Some sectors of the
economy and individual issuers have experienced particularly large losses. In addition, the COVID-19 pandemic may result in a sustained economic downturn or a global recession, domestic and foreign political and social instability, damage to
diplomatic and international trade relations and increased volatility and/or decreased liquidity in the securities markets. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual
issuers, are not known. Certain risks, such as interest rate risk, credit risk, liquidity risk and counterparty risk, may be heightened as a result of such market events. The U.S. government and the Federal Reserve, as well as certain foreign
governments and central banks, are taking extraordinary actions to support local and global economies and the financial markets in response to the COVID-19 pandemic, including by pushing interest rates to very low levels. This and other government
intervention into the economy and financial markets to address the COVID-19 pandemic may not work as intended, particularly if the efforts are perceived by investors as being unlikely to achieve the desired results. The COVID-19 pandemic could
adversely affect the value and liquidity of the Funds investments and negatively impact the Funds performance. In addition, the outbreak of COVID-19, and measures taken to mitigate its effects, could result in disruptions to the services
provided to the Fund by its service providers.
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Western Asset Managed Municipals Fund Inc.
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Anti-Takeover Provisions Risk. The
Funds Charter and Bylaws include provisions that are designed to limit the ability of other entities or persons to acquire control of the Fund for short-term objectives, including by converting the Fund to open-end status or changing the
composition of the Board, that may be detrimental to the Funds ability to achieve its primary investment objective. Such provisions may limit the ability of shareholders to sell their shares at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control of the Fund. There can be no assurance, however, that such provisions will be sufficient to deter activist investors that seek to cause the Fund to take actions that may not be aligned with
the interests of long-term shareholders.
Portfolio Turnover Risk. Changes to the investments of the Fund may be made regardless of the length of
time particular investments have been held. A high portfolio turnover rate may result in increased transaction costs for the Fund in the form of increased dealer spreads and other transactional costs, which may have an adverse impact on performance.
The portfolio turnover rate of the Fund will vary from year to year, as well as within a year.
Management Risk. The Fund is subject to management
risk because it is an actively managed investment portfolio. The subadviser and each individual portfolio manager will apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that
these will produce the desired results.
Market Price Discount from Net Asset Value Risk. Shares of closed-end investment companies frequently
trade at a discount from their net asset value. This risk is separate and distinct from the risk that the Funds net asset value could decrease as a result of its investment activities and may be a greater risk to investors expecting to sell
their Common Stock in a relatively short period following completion of this offering. Whether investors will realize gains or losses upon the sale of the Common Stock will depend not upon the Funds net asset value but upon whether the market
price of the Common Stock at the time of sale is above or below the investors purchase price for the Common Stock.
Because the market price of the
Common Stock will be determined by factors such as relative supply of and demand for the Common Stock in the market, general market and economic conditions and other factors beyond the control of the Fund, the Fund cannot predict whether the Common
Stock will trade at, above or below net asset value or at, above or below the initial public offering price. The Funds Common Stock is designed primarily for long term investors and you should not view the Fund as a vehicle for trading
purposes.
Temporary Defensive Strategies Risk. When the manager believes a temporary defensive posture in the market is warranted (e.g., times
when, in the managers opinion, temporary imbalances of supply and demand or other temporary dislocations in the municipal obligations market adversely affect the price at which municipal obligations are available),
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Western Asset Managed Municipals Fund Inc.
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77
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Summary of information regarding the
Fund (unaudited) (contd)
and in order to keep cash on hand fully invested, the Fund may temporarily invest to a substantial degree in high quality, short-term municipal obligations. If
these high-quality, short-term municipal obligations are not available or, in the managers judgment, do not afford sufficient protection against adverse market conditions, the Fund may invest in the following taxable securities: obligations of
the U.S. Government and its agencies or instrumentalities; other debt securities rated within the four highest categories by an NRSRO; commercial paper rated in the highest category by an NRSRO; certificates of deposit, time deposits and
bankers acceptances; or repurchase agreements with respect to any of the foregoing investments or any other fixed-income securities that the manager considers consistent with such strategy. To the extent the Fund invests in taxable securities,
the Fund will not at such times be able to achieve its investment objective of earning income that is exempt from regular federal income taxes.
LIBOR
Risk. The Funds investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or LIBOR, which is the offered rate for short-term Eurodollar deposits between
major international banks. On March 5, 2021, the ICE Benchmark Administration, the administrator of LIBOR, stated that it will cease the publication of (i) the overnight and one-, three-, six- and twelve-month USD LIBOR settings
immediately following the LIBOR publication on Friday, June 30, 2023 and (ii) all other LIBOR settings, including the one-week and two-month USD LIBOR settings, immediately following the LIBOR publication on Friday, December 31, 2021.
There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Funds transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on
the Fund or the Funds investments cannot yet be determined.
Operational Risk. The valuation of the Funds investments may be
negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by
third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures.
The Fund and its shareholders could be negatively impacted as a result.
Cybersecurity Risk. Cybersecurity incidents, both intentional and
unintentional, may allow an unauthorized party to gain access to Fund assets, Fund or proprietary information, cause the Fund, LMPFA and Western Asset and/or their service providers to suffer data breaches, data corruption or loss of operational
functionality or prevent Fund investors from purchasing, redeeming or exchanging shares or receiving distributions. The Fund, LMPFA and Western Asset have limited ability to prevent or mitigate cybersecurity incidents
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78
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Western Asset Managed Municipals Fund Inc.
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affecting third party service providers,
and such third party service providers may have limited indemnification obligations to the Fund or LMPFA. Cybersecurity incidents may result in financial losses to the Fund and its shareholders, and substantial costs may be incurred in order to
prevent any future cybersecurity incidents. Issuers of securities in which the Fund invests are also subject to cybersecurity risks, and the value of these securities could decline if the issuers experience cybersecurity incidents.
More Information
For a complete list of the
Funds fundamental investment restrictions and more detailed descriptions of the Funds investment policies, strategies and risks, see the Funds registration statement on Form N-2 that was filed with the SEC on May 16, 2002. The
Funds fundamental investment restrictions may not be changed without the approval of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act.
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Western Asset Managed Municipals Fund Inc.
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79
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Dividend reinvestment plan (unaudited)
Unless you elect to receive distributions in cash (i.e., opt-out), all dividends, including any capital gain dividends and return of capital distributions, on your
Common Stock will be automatically reinvested by Computershare Trust Company, N.A., as agent for the stockholders (the Plan Agent), in additional shares of Common Stock under the Funds Dividend Reinvestment Plan (the
Plan). You may elect not to participate in the Plan by contacting the Plan Agent. If you do not participate, you will receive all cash distributions paid by check mailed directly to you by Computershare Trust Company, N.A., as dividend
paying agent.
If you participate in the Plan, the number of shares of Common Stock you will receive will be determined as follows:
(1) If the market price of the Common Stock (plus $0.03 per share commission) on the payment date (or, if the payment date is not a NYSE trading
day, the immediately preceding trading day) is equal to or exceeds the net asset value per share of the Common Stock at the close of trading on the NYSE on the payment date, the Fund will issue new Common Stock at a price equal to the greater of
(a) the net asset value per share at the close of trading on the NYSE on the payment date or (b) 95% of the market price per share of the Common Stock on the payment date.
(2) If the net asset value per share of the Common Stock exceeds the market price of the Common Stock (plus $0.03 per share commission) at the close
of trading on the NYSE on the payment date, the Plan Agent will receive the dividend or distribution in cash and will buy Common Stock in the open market, on the NYSE or elsewhere, for your account as soon as practicable commencing on the trading
day following the payment date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the payment date for the next succeeding dividend or distribution to be made to the
stockholders; except when necessary to comply with applicable provisions of the federal securities laws. If during this period: (i) the market price (plus $0.03 per share commission) rises so that it equals or exceeds the net asset value per
share of the Common Stock at the close of trading on the NYSE on the payment date before the Plan Agent has completed the open market purchases or (ii) if the Plan Agent is unable to invest the full amount eligible to be reinvested in open
market purchases, the Plan Agent will cease purchasing Common Stock in the open market and the Fund shall issue the remaining Common Stock at a price per share equal to the greater of (a) the net asset value per share at the close of trading on
the NYSE on the day prior to the issuance of shares for reinvestment or (b) 95% of the then current market price per share.
Common Stock in your
account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all shares of Common Stock you have received under the Plan. You may withdraw from the Plan (i.e., opt-out) by notifying the Plan Agent in writing at
462 South 4th Street, Suite 1600, Louisville, KY 40202 or by calling the Plan Agent at 1-888-888-0151. Such withdrawal will be effective immediately if notice is received by the Plan Agent not less than ten business days prior to any dividend or
distribution record date; otherwise such withdrawal will be effective as soon as practicable after the Plan Agents investment of the most recently declared dividend or distribution on the Common Stock.
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80
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Western Asset Managed Municipals Fund Inc.
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Plan participants who sell their shares will be charged a service charge (currently $5.00 per transaction) and the
Plan Agent is authorized to deduct brokerage charges actually incurred from the proceeds (currently $0.05 per share commission). There is no service charge for reinvestment of your dividends or distributions in Common Stock. However, all
participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases. Because all dividends and distributions will be automatically reinvested in additional shares of Common Stock, this
allows you to add to your investment through dollar cost averaging, which may lower the average cost of your Common Stock over time. Dollar cost averaging is a technique for lowering the average cost per share over time if the Funds net asset
value declines. While dollar cost averaging has definite advantages, it cannot assure profit or protect against loss in declining markets.
Automatically
reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Investors will be subject to income tax on amounts reinvested under the Plan.
The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board of Directors, the change is warranted. The Plan may be terminated,
amended or supplemented by the Fund upon notice in writing mailed to stockholders at least 30 days prior to the record date for the payment of any dividend or distribution by the Fund for which the termination or amendment is to be effective. Upon
any termination, you will be sent cash for any fractional share of Common Stock in your account. You may elect to notify the Plan Agent in advance of such termination to have the Plan Agent sell part or all of your Common Stock on your behalf.
Additional information about the Plan and your account may be obtained from the Plan Agent at 462 South 4th Street, Suite 1600, Louisville, KY 40202 or by calling the Plan Agent at 1-888-888-0151.
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Western Asset Managed Municipals Fund Inc.
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81
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Important tax information (unaudited)
The following information is provided with respect to the distributions paid during the taxable year ended May 31, 2021:
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Record date:
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Monthly
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4/23/2021
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Payable date:
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June 2020 through
April 2021
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5/3/2021
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Tax-exempt interest
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100.00%
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99.99%
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Taxable income*
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0.01%
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All of the distributions paid to holders of Variable Rate Demand Preferred Stock and holders of Auction Rate Cumulative Preferred
Stock consist of tax-exempt income, except for the distributions listed below, which the Fund designates as taxable ordinary income:
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Record
Date
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Payable
Date
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Ex-Dividend
Date
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Taxable Ordinary
Income*
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Variable Rate Demand Preferred Stock
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Daily
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Daily
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5/31/2021
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$
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1
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*
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All of the taxable ordinary income distributions paid by the Fund represent Interest- related dividends eligible for exemption from U.S. withholding tax
for nonresident shareholders and foreign corporations.
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82
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Western Asset Managed Municipals Fund Inc.
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Western Asset
Managed Municipals Fund Inc.
Directors
Robert D. Agdern
Carol L. Colman
Daniel P. Cronin
Paolo M. Cucchi
William R. Hutchinson
Eileen A. Kamerick
Nisha Kumar
Jane Trust
Chairman
Officers
Jane Trust
President and Chief Executive Officer
Christopher Berarducci
Treasurer and Principal Financial Officer
Fred Jensen
Chief Compliance Officer
Jenna Bailey
Identity Theft Prevention Officer
George P.
Hoyt*
Secretary and Chief Legal Officer
Thomas
C. Mandia
Assistant Secretary
Jeanne M. Kelly
Senior Vice President
Western Asset Managed Municipals Fund Inc.
620 Eighth Avenue
47th Floor
New York, NY 10018
Investment manager
Legg Mason Partners Fund Advisor, LLC
Subadviser
Western Asset Management Company,
LLC
Custodian
The Bank of New
York Mellon
Transfer agent
Computershare Inc.
462 South 4th Street, Suite 1600
Louisville, KY 40202
Auction agent
Deutsche Bank
60 Wall Street
New York, NY 10005
Independent registered public
accounting firm
PricewaterhouseCoopers LLP
Baltimore, MD
Legal counsel
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
New York Stock
Exchange Symbol
MMU
*
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Effective August 13, 2020, Mr. Hoyt became Secretary and Chief Legal Officer.
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Legg Mason Funds Privacy and Security Notice
Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds
This Privacy and Security Notice (the Privacy Notice) addresses the Legg Mason Funds privacy and data protection practices with respect to
nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds distributor, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds. The provisions of this Privacy Notice
apply to your information both while you are a shareholder and after you are no longer invested with the Funds.
The Type of
Nonpublic Personal Information the Funds Collect About You
The Funds collect and maintain nonpublic personal information about you in connection
with your shareholder account. Such information may include, but is not limited to:
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Personal information included on applications or other forms;
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Account balances, transactions, and mutual fund holdings and positions;
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Bank account information, legal documents, and identity verification documentation;
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Online account access user IDs, passwords, security challenge question responses; and
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Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individuals total debt,
payment history, etc.).
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How the Funds Use Nonpublic Personal Information About You
The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial
institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have
authorized or as permitted or required by law.
The Funds may disclose information about you to:
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Employees, agents, and affiliates on a need to know basis to enable the Funds to conduct ordinary business, or to comply with obligations to
government regulators;
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Service providers, including the Funds affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or
processing or servicing your account with us) or otherwise perform services on the Funds behalf, including companies that may perform statistical analysis, market research and marketing services solely for the Funds;
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Permit access to transfer, whether in the United States or countries outside of the United States to such Funds employees, agents and affiliates and
service providers as required to enable the Funds to conduct ordinary business, or to comply with obligations to government regulators;
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The Funds representatives such as legal counsel, accountants and auditors to enable the Funds to conduct ordinary business, or to comply with obligations
to government regulators;
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Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.
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NOT PART OF THE ANNUAL REPORT
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Legg Mason Funds Privacy and Security Notice (contd)
Except as otherwise permitted by applicable law, companies acting on the Funds
behalf, including those outside the United States, are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them
to perform. The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory
request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds
practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.
Keeping You Informed of the Funds Privacy and Security Practices
The Funds will notify
you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.
The Funds Security Practices
The
Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds internal data security policies restrict access to your nonpublic personal information to authorized
employees, who may use your nonpublic personal information for Fund business purposes only.
Although the Funds strive to protect your nonpublic personal
information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds
will attempt to notify you as necessary, so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the
most current email address you have on record with them.
In order for the Funds to provide effective service to you, keeping your account information
accurate is very important. If you believe that your account information is incomplete, not accurate or not current, if you have questions about the Funds privacy practices, or our use of your nonpublic personal information, write the Funds
using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds website at www.leggmason.com, or contact the Fund at 1-888-777-0102.
Revised April 2018
Legg Mason California
Consumer Privacy Act Policy
Although much of the personal information we collect is nonpublic personal information subject to federal
law, residents of California may, in certain circumstances, have additional rights under the California Consumer Privacy Act (CCPA). For example, if you are a broker,
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NOT PART OF THE ANNUAL REPORT
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Legg Mason Funds Privacy and Security Notice (contd)
dealer, agent, fiduciary, or representative acting by or on behalf of, or for, the
account of any other person(s) or household, or a financial advisor, or if you have otherwise provided personal information to us separate from the relationship we have with personal investors, the provisions of this Privacy Policy apply to your
personal information (as defined by the CCPA).
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In addition to the provisions of the Legg Mason Funds Security and Privacy Notice, you may have the right to know the categories and specific pieces of personal
information we have collected about you.
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You also have the right to request the deletion of the personal information collected or maintained by the Funds.
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If you wish to exercise any of the rights you have in respect of your personal information, you should advise the Funds by contacting them as set forth below. The
rights noted above are subject to our other legal and regulatory obligations and any exemptions under the CCPA. You may designate an authorized agent to make a rights request on your behalf, subject to the identification process described below. We
do not discriminate based on requests for information related to our use of your personal information, and you have the right not to receive discriminatory treatment related to the exercise of your privacy rights.
We may request information from you in order to verify your identity or authority in making such a request. If you have appointed an authorized agent to make a
request on your behalf, or you are an authorized agent making such a request (such as a power of attorney or other written permission), this process may include providing a password/passcode, a copy of government issued identification, affidavit or
other applicable documentation, i.e. written permission. We may require you to verify your identity directly even when using an authorized agent, unless a power of attorney has been provided. We reserve the right to deny a request submitted by an
agent if suitable and appropriate proof is not provided.
For the 12-month period prior to the date of this Privacy Policy, the Legg Mason Funds have not
sold any of your personal information; nor do we have any plans to do so in the future.
Contact Information
Address: Data Privacy Officer, 100 International Dr., Baltimore, MD 21202
Email: DataProtectionOfficer@franklintempleton.com
Phone: 1-800-396-4748
Revised October 2020
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NOT PART OF THE ANNUAL REPORT
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Western Asset Managed Municipals Fund Inc.
Western Asset Managed Municipals Fund Inc.
620 Eighth Avenue
47th Floor
New York, NY 10018
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that from time to time the Fund may purchase, at
market prices, shares of its stock.
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission
(SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds Forms N-PORT are available on the SECs website at www.sec.gov. To obtain information on Form N-PORT,
shareholders can call the Fund at 1-888-777-0102.
Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month
period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling
1-888-777-0102, (2) at www.lmcef.com and (3) on the SECs website at www.sec.gov.
This report is transmitted to the shareholders of
Western Asset Managed Municipals Fund Inc. for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report.
Computershare Inc.
462 South 4th Street, Suite 1600
Louisville, KY 40202
WASX010003 7/21 SR21-4193