|
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 provide common shareholders a high
level of current income exempt from regular federal income taxes*, consistent with prudent investing.
Under normal market conditions, the Fund will
invest at least 80% of its total assets in municipal obligations. In addition, under normal market conditions, the Fund will invest at least 80% of its total assets in debt securities that are, at the time of investment, rated investment grade by a
nationally recognized statistical rating organization or, if unrated, of equivalent quality as determined by the investment manager. The Fund also maintains a dollar-weighted average effective maturity of between three and ten years.
|
|
|
II
|
|
Western Asset Intermediate Muni Fund Inc.
|
Letter from the chairman
Dear Shareholder,
We are pleased to provide the annual report of Western Asset Intermediate Muni Fund Inc. for the twelve-month reporting period ended
November 30, 2020. 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.
Special shareholder notice
On July 31,
2020, Franklin Resources, Inc. (Franklin Resources) acquired Legg Mason, Inc. (Legg Mason) in an all-cash transaction. As a result of the transaction, Legg Mason Partners Fund Advisor,
LLC (LMPFA) and the subadviser became indirect, wholly-owned subsidiaries of Franklin Resources. Under the Investment Company Act of 1940, as amended, consummation of the transaction automatically terminated the management and
subadvisory agreements that were in place for the Fund prior to the transaction. The Funds manager and subadviser continue to provide uninterrupted services with respect to the Fund pursuant to new management and subadvisory agreements that
were approved by Fund shareholders.
Franklin Resources, whose principal executive offices are at One Franklin Parkway, San Mateo, California 94403, is a
global investment management organization operating, together with its subsidiaries, as Franklin Templeton. As of November 30, 2020, after giving effect to the transaction described above, Franklin Templetons asset management operations
had aggregate assets under management of approximately $1.5 trillion.
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
December 31, 2020
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
III
|
Fund overview
Q. What is the Funds investment strategy?
A. The Funds investment objective is to provide common shareholders a high level of current income exempt from regular federal income taxes consistent with prudent investing. Under normal market
conditions, the Fund invests at least 80% of its total assets in municipal obligations. The Fund also maintains a dollar-weighted average effective maturity of between three and ten years. Under normal market conditions, the Fund will invest at
least 80% of its total assets in debt securities that are, at the time of investment, rated investment grade by a nationally recognized statistical rating organization (NRSRO) or, if unrated, of equivalent quality as determined by the
investment manager. In addition, up to 20% of the Funds total assets may be invested in debt securities that are, at the time of investment, rated below investment grade (commonly known as high yield or junk bonds) by
an NRSRO or, if unrated, of equivalent quality as determined by the investment manager. The Fund may use a variety of derivative instruments as part of its investment strategy or for hedging and/or risk management purposes.
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 generally posted mixed results over the twelve-month reporting period ended November 30, 2020. Most spread
sectors (non-Treasuries) lagged equal durationi Treasuries amid periods of heightened volatility. This was driven by a number of factors, including extreme risk aversion as the COVID-19 pandemic escalated, sharply falling
global growth, aggressive monetary policy accommodation from the Federal Reserve Board (the Fed)ii, ongoing trade conflicts and a number of geopolitical issues.
Both short- and long-term U.S. Treasury yields moved
sharply lower during the reporting period. The yield for the two-year Treasury note began the reporting period at 1.61% and rose as high as 1.66% on December 12, 2019. The low for the period of 0.11%
occurred several times toward the end of July 2020, the beginning of August 2020, and the end of September 2020, and ended the period at 0.16%. The yield for the ten-year Treasury began the reporting period at
1.78% and moved as high as 1.93% on December 23, 2019. The low of 0.52% occurred on August 4, 2020 and ended the period at 0.84%.
The municipal bond market produced a positive absolute return but underperformed its taxable bond counterpart during the twelve-month reporting period. Over that time, the Bloomberg Barclays Municipal Bond
Indexiii and the Bloomberg Barclays U.S. Aggregate
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
1
|
Fund overview (contd)
Indexiv returned 4.89% and 7.28%, respectively. Both the taxable and tax-free bond markets were
supported by declining interest rates. While the municipal market generated positive returns during eight of the twelve months of the reporting period, a large portion of its gains were lost in March and April 2020. This setback was due to increased
investor risk aversion, coupled with concerns about market liquidity and municipal finances.
Q. How did we respond to these changing
market conditions?
A. We reduced Funds duration during the reporting period. From a sector positioning perspective, we increased the
Funds allocations to Health Care, Special Tax Obligation bonds and Transportation. In contrast, we reduced its exposures to Industrial Revenue, Water & Sewer and Power. Looking at the Funds quality positioning, we increased the
Funds allocation to securities rated BBB and BB and reduced the Funds exposure to securities rated A. From a state positioning perspective, we increased the Funds allocations to Illinois and New York, while paring the Funds
exposures to Tennessee and California.
The Fund employed the use of U.S. Treasury futures during the reporting period to tactically manage duration.
This strategy detracted from performance.
During the reporting period, we utilized leverage in the Fund. This contributed to performance over the
Funds fiscal year. We ended the period with leverage from preferred shares as a percentage of gross assets of roughly 24% versus approximately 25% when the period began.
Performance review
For the twelve months ended November 30, 2020,
Western Asset Intermediate Muni Fund Inc. returned 2.96% based on its net asset value (NAV)v and 1.66% based on its New York Stock Exchange (NYSE) market price per share. The Funds unmanaged benchmark, the Bloomberg Barclays 1-15 Year Municipal
Bond Indexvi, returned 4.56% for the same period. The Lipper Intermediate
Municipal Debt Closed-End Funds Category Averagevii returned 2.70% over the same time frame. Please note that Lipper performance returns are based on each funds NAV.
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 $0.28 per share.* The performance table shows the Funds
twelve-month total return based on its NAV and market price as of November 30, 2020. Past performance is no guarantee of future results.
*
|
For the tax character of distributions paid during the fiscal year ended November 30, 2020, please refer to page 40 of this report.
|
|
|
|
2
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
|
|
|
|
|
|
Performance Snapshot as
of November 30, 2020
|
|
Price Per Share
|
|
12-Month
Total Return**
|
|
$10.25 (NAV)
|
|
|
2.96
|
%
|
$9.07 (Market Price)
|
|
|
1.66
|
%
|
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 the yield curveviii positioning. In particular, an
overweight to the ten-year portion of the yield curve was additive for performance.
Looking
at sector allocation, overweights to Industrial Revenue and Power were beneficial, as was tactical positioning in the Health Care sector. Security selection in the Pre-Refundedix and Power sectors also contributed to results.
Q. What were the leading detractors from performance?
A. The largest detractor from the
Funds relative performance was its quality biases. In particular, overweights to municipal
securities rated BBB and below investment-grade
securities were negative for results, as lower rated issues underperformed their higher rated counterparts over the twelve-month reporting period.
Having a shorter duration than the benchmark was detrimental, as rates moved lower over the period. In terms of sector allocation, an underweight to State General
Obligation bonds and an overweight to Leasing were not rewarded. Security selection in the Transportation and Leasing sectors was also negative for performance.
Looking for additional information?
The Fund is traded under the symbol SBI and
its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the symbol XSBIX 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).
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
3
|
Fund overview (contd)
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 Intermediate Muni 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
December 15, 2020
RISKS: The Fund is a 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. Diversification does not assure against market loss. 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, bond prices fall, reducing the value of the fixed income securities held by the Fund. Lower-rated, higher-yielding bonds, known as junk bonds, are subject to greater liquidity and credit risk, including the
risk of default, than higher-rated obligations. 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 use derivatives, such as options and futures, which can be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund performance. The Fund 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 operation.
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. 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. For more information on 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.
|
|
|
4
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
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.
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 Bloomberg Barclays Municipal Bond Index is a market value weighted index of investment grade municipal bonds with maturities of one year or more.
|
iv
|
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.
|
v
|
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.
|
vi
|
The Bloomberg Barclays 115 Year Municipal Bond Index is a market value weighted index of investment grade
(Baa3/BBB- or higher) fixed-rate municipal bonds with maturities of one to fifteen years.
|
vii
|
Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the twelve-month period
ended November 30, 2020, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 5 funds in the Funds Lipper category.
|
viii
|
The yield curve is the graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities.
|
ix
|
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).
|
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
5
|
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 November 30, 2020 and November 30, 2019 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.
|
|
Represents less than 0.1%.
|
|
|
|
6
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Schedule of investments (unaudited)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Municipal Bonds 131.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jefferson County, AL, Sewer Revenue, Subordinated Lien Warrants, Series D
|
|
|
5.000
|
%
|
|
|
10/1/21
|
|
|
$
|
1,500,000
|
|
|
$
|
1,555,995
|
|
Tuscaloosa County, AL, IDA Revenue, Hunt Refining Project, Series A, Refunding
|
|
|
4.500
|
%
|
|
|
5/1/32
|
|
|
|
500,000
|
|
|
|
555,395
|
(a)
|
Total Alabama
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,111,390
|
|
Alaska 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alaska State Housing Finance Corp. Revenue, State Capital Project, Series B
|
|
|
4.000
|
%
|
|
|
12/1/36
|
|
|
|
250,000
|
|
|
|
293,368
|
|
Arizona 3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arizona State IDA, Education Revenue, Lincoln South Beltway Project
|
|
|
5.000
|
%
|
|
|
2/1/25
|
|
|
|
500,000
|
|
|
|
589,420
|
|
Chandler, AZ, IDA Revenue, Intel Corp. Project
|
|
|
5.000
|
%
|
|
|
6/3/24
|
|
|
|
1,000,000
|
|
|
|
1,149,750
|
(b)(c)(d)
|
La Paz County, AZ, IDA, Lease Revenue, Charter School Solutions Harmony Public Schools Project
|
|
|
5.000
|
%
|
|
|
2/15/38
|
|
|
|
500,000
|
|
|
|
579,610
|
|
Navajo Nation, AZ, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/25
|
|
|
|
250,000
|
|
|
|
275,940
|
(a)
|
Phoenix, AZ, Civic Improvement Corp., Airport Revenue, Junior Lien, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/27
|
|
|
|
1,000,000
|
|
|
|
1,165,390
|
|
Pinal County, AZ, Electrical District #3, Electric System Revenue, Refunding
|
|
|
4.000
|
%
|
|
|
7/1/23
|
|
|
|
1,000,000
|
|
|
|
1,020,120
|
|
Total Arizona
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,780,230
|
|
California 21.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alameda, CA, Corridor Transportation Authority Revenue, Second Subordinated Lien, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/34
|
|
|
|
500,000
|
|
|
|
587,165
|
|
Anaheim, CA, Public Financing Authority Lease, Refunding, Series A
|
|
|
5.000
|
%
|
|
|
5/1/26
|
|
|
|
2,000,000
|
|
|
|
2,258,620
|
|
Bay Area Toll Authority, CA, Toll Bridge Revenue, San Francisco Bay Area, Series
B-1, (SIFMA Municipal Swap Index Yield + 1.100%)
|
|
|
1.210
|
%
|
|
|
4/1/24
|
|
|
|
2,000,000
|
|
|
|
2,030,020
|
(c)(d)
|
California State, GO, Various Purpose
|
|
|
5.000
|
%
|
|
|
3/1/35
|
|
|
|
500,000
|
|
|
|
671,070
|
|
California State MFA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, LINXS APM Project, Series A
|
|
|
5.000
|
%
|
|
|
12/31/34
|
|
|
|
350,000
|
|
|
|
420,462
|
(b)
|
Senior Lien, LINXS APM Project, Series A
|
|
|
5.000
|
%
|
|
|
12/31/43
|
|
|
|
400,000
|
|
|
|
469,336
|
(b)
|
California State MFA Special Facility Revenue, United Airlines, Inc., Los Angeles International Airport
Project
|
|
|
4.000
|
%
|
|
|
7/15/29
|
|
|
|
250,000
|
|
|
|
261,818
|
(b)
|
California State PCFA Water Furnishing Revenue, Poseidon Resources
|
|
|
5.000
|
%
|
|
|
7/1/27
|
|
|
|
1,750,000
|
|
|
|
1,865,482
|
(a)(b)
|
California Statewide CDA Revenue, Provident Group-Pomona Properties LLC, Series A
|
|
|
5.600
|
%
|
|
|
1/15/36
|
|
|
|
555,000
|
|
|
|
566,505
|
(a)
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
7
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
California continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Golden State, CA, Tobacco Securitization Corp. Revenue, Tobacco Settlement Funded, Series
A-1, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/34
|
|
|
$
|
1,500,000
|
|
|
$
|
1,844,445
|
|
Long Beach, CA, Bond Finance Authority Lease Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/31
|
|
|
|
1,855,000
|
|
|
|
1,989,395
|
|
Los Angeles County, CA, MTA, Sales Tax Revenue, Senior Proposition C, Series B
|
|
|
5.000
|
%
|
|
|
7/1/35
|
|
|
|
1,000,000
|
|
|
|
1,290,970
|
|
Los Angeles County, CA, Public Works Financing Authority, Lease Revenue, Multiple Capital Projects II
|
|
|
5.000
|
%
|
|
|
8/1/22
|
|
|
|
1,000,000
|
|
|
|
1,079,170
|
|
Los Angeles, CA, Department of Airports Revenue, Subordinated, Los Angeles International Airport, Series
D
|
|
|
5.000
|
%
|
|
|
5/15/36
|
|
|
|
1,200,000
|
|
|
|
1,500,000
|
(b)
|
Los Angeles, CA, Department of Water & Power, Power System Revenue, Series C
|
|
|
5.000
|
%
|
|
|
7/1/37
|
|
|
|
750,000
|
|
|
|
939,968
|
|
Modesto, CA, Irrigation District, Electric System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/24
|
|
|
|
2,630,000
|
|
|
|
2,703,193
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/25
|
|
|
|
2,000,000
|
|
|
|
2,055,560
|
|
Morongo Band of Mission Indians, CA, Revenue, Tribal Economic Development, Series A
|
|
|
5.000
|
%
|
|
|
10/1/42
|
|
|
|
100,000
|
|
|
|
110,408
|
(a)
|
M-S-R Energy Authority, CA, Natural Gas
Revenue, Series B
|
|
|
6.125
|
%
|
|
|
11/1/29
|
|
|
|
2,955,000
|
|
|
|
3,785,976
|
|
Northern California Energy Authority, Commodity Supply Revenue, Series A
|
|
|
4.000
|
%
|
|
|
7/1/24
|
|
|
|
500,000
|
|
|
|
558,420
|
(c)(d)
|
River Islands, CA, Public Financing Authority Special Tax, Community Facilities District No. 2003-1, Refunding
|
|
|
5.250
|
%
|
|
|
9/1/34
|
|
|
|
430,000
|
|
|
|
458,681
|
|
Riverside, CA, Electric Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/36
|
|
|
|
750,000
|
|
|
|
977,880
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/43
|
|
|
|
250,000
|
|
|
|
320,330
|
|
Riverside, CA, Sewer Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/35
|
|
|
|
750,000
|
|
|
|
964,537
|
|
San Bernardino City, CA, Unified School District, COP, School Financing Project, AGM
|
|
|
5.000
|
%
|
|
|
10/1/35
|
|
|
|
250,000
|
|
|
|
317,680
|
|
See Notes to Financial
Statements.
|
|
|
8
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
California continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco, CA, City & County Airport Commission, International Airport Revenue, SFO Fuel Company LLC,
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/33
|
|
|
$
|
645,000
|
|
|
$
|
805,837
|
(b)
|
Tobacco Securitization Authority of Southern California Revenue, Asset Backed Refunding, San Diego County Tobacco Asset
Securitization Corporation, Class 1, Series A
|
|
|
5.000
|
%
|
|
|
6/1/25
|
|
|
|
250,000
|
|
|
|
300,080
|
|
Total California
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,133,008
|
|
Colorado 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base Village Metropolitan District #2, CO, GO, Series A, Refunding
|
|
|
5.500
|
%
|
|
|
12/1/36
|
|
|
|
500,000
|
|
|
|
520,675
|
|
Denver, CO, City & County Special Facility Apartment Revenue, United Airlines Inc. Project,
Refunding
|
|
|
5.000
|
%
|
|
|
10/1/32
|
|
|
|
100,000
|
|
|
|
103,298
|
(b)
|
Public Authority for Colorado Energy, Natural Gas Purchase Revenue, Series 2008
|
|
|
6.125
|
%
|
|
|
11/15/23
|
|
|
|
2,580,000
|
|
|
|
2,840,038
|
|
Vauxmont Metropolitan District, CO, GO, Subordinate Limited Tax, Series 2019, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
12/15/28
|
|
|
|
125,000
|
|
|
|
147,453
|
|
Total Colorado
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,611,464
|
|
Connecticut 1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Connecticut State HEFA Revenue, Sacred Heart University Issue, Series I-1,
Refunding
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
250,000
|
|
|
|
298,565
|
|
Connecticut State Special Tax Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Infrastructure, Series A
|
|
|
5.000
|
%
|
|
|
5/1/34
|
|
|
|
600,000
|
|
|
|
793,338
|
|
Transportation Infrastructure, Series A
|
|
|
5.000
|
%
|
|
|
1/1/37
|
|
|
|
500,000
|
|
|
|
619,285
|
|
Connecticut State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
4/15/30
|
|
|
|
400,000
|
|
|
|
525,292
|
|
Series C
|
|
|
4.000
|
%
|
|
|
6/1/38
|
|
|
|
250,000
|
|
|
|
299,875
|
|
Series E
|
|
|
5.000
|
%
|
|
|
10/15/34
|
|
|
|
210,000
|
|
|
|
253,846
|
|
Total Connecticut
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,790,201
|
|
District of Columbia 0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
District of Columbia Revenue, Ingleside Rock Creek Project, Series A
|
|
|
4.125
|
%
|
|
|
7/1/27
|
|
|
|
140,000
|
|
|
|
139,318
|
|
Florida 6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broward County, FL, Airport System Revenue, Series 2017
|
|
|
5.000
|
%
|
|
|
10/1/36
|
|
|
|
250,000
|
|
|
|
301,687
|
(b)
|
Florida State Development Finance Corp., Educational Facilities Revenue, Renaissance Charter School Inc. Projects,
Series A
|
|
|
6.000
|
%
|
|
|
6/15/35
|
|
|
|
150,000
|
|
|
|
169,154
|
(a)
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
9
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Florida continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Florida State Mid-Bay Bridge Authority Revenue, Series A,
Refunding
|
|
|
5.000
|
%
|
|
|
10/1/27
|
|
|
$
|
545,000
|
|
|
$
|
635,721
|
|
Jacksonville, FL, Sales Tax Revenue, Better Jacksonville, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
1,500,000
|
|
|
|
1,616,865
|
|
Miami-Dade County, FL, Aviation Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/31
|
|
|
|
4,000,000
|
|
|
|
4,341,400
|
(b)(e)
|
Miami-Dade County, FL, Expressway Authority Toll System Revenue, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/26
|
|
|
|
1,500,000
|
|
|
|
1,717,470
|
|
Miami-Dade County, FL, Health Facilities Authority Hospital Revenue, Nicklaus Childrens Hospital,
Refunding
|
|
|
5.000
|
%
|
|
|
8/1/36
|
|
|
|
250,000
|
|
|
|
299,592
|
|
Orange County, FL, Health Facilities Authority Revenue, Presbyterian Retirement Communities, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/36
|
|
|
|
250,000
|
|
|
|
274,738
|
|
Palm Beach County, FL, Health Facilities Authority Revenue, Toby & Leon Cooperman Sinai Residences of Boca
Raton Expansion, Series B
|
|
|
2.625
|
%
|
|
|
6/1/25
|
|
|
|
350,000
|
|
|
|
353,486
|
|
Tampa, FL, Hospital Revenue, H. Lee Moffit Cancer Center Project, Series B
|
|
|
5.000
|
%
|
|
|
7/1/40
|
|
|
|
250,000
|
|
|
|
312,647
|
|
Total Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,022,760
|
|
Georgia 0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Main Street Natural Gas Inc., GA, Gas Project Revenue, Series A
|
|
|
5.000
|
%
|
|
|
5/15/33
|
|
|
|
250,000
|
|
|
|
311,223
|
|
Municipal Electric Authority, GA, Subordinated, Project One, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/37
|
|
|
|
250,000
|
|
|
|
320,967
|
|
Private Colleges & Universities Authority, GA, Revenue, Savannah College of Art & Design Inc.
Project
|
|
|
5.000
|
%
|
|
|
4/1/28
|
|
|
|
500,000
|
|
|
|
559,650
|
|
Total Georgia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191,840
|
|
Illinois 19.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chicago, IL, Board of Education, Dedicated Capital Improvement, Special Tax Revenue, Series 2018
|
|
|
5.000
|
%
|
|
|
4/1/38
|
|
|
|
500,000
|
|
|
|
553,740
|
|
Chicago, IL, Board of Education, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dedicated, Series G, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/34
|
|
|
|
270,000
|
|
|
|
292,046
|
|
Series C, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/24
|
|
|
|
250,000
|
|
|
|
272,573
|
|
Series D
|
|
|
5.000
|
%
|
|
|
12/1/46
|
|
|
|
1,500,000
|
|
|
|
1,601,220
|
|
Chicago, IL, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.000
|
%
|
|
|
1/1/40
|
|
|
|
600,000
|
|
|
|
645,288
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/26
|
|
|
|
500,000
|
|
|
|
546,490
|
|
Series B, Refunding
|
|
|
5.500
|
%
|
|
|
1/1/30
|
|
|
|
1,000,000
|
|
|
|
1,078,470
|
|
See Notes to Financial
Statements.
|
|
|
10
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Illinois continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/25
|
|
|
$
|
500,000
|
|
|
$
|
538,470
|
|
Chicago, IL, Metropolitan Water Reclamation District Greater Chicago, GO, Green Bond, Series B
|
|
|
5.000
|
%
|
|
|
12/1/29
|
|
|
|
850,000
|
|
|
|
997,857
|
|
Chicago, IL, OHare International Airport Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, Series D
|
|
|
5.250
|
%
|
|
|
1/1/36
|
|
|
|
500,000
|
|
|
|
603,175
|
|
Senior Lien, Series D
|
|
|
5.250
|
%
|
|
|
1/1/37
|
|
|
|
400,000
|
|
|
|
481,356
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/31
|
|
|
|
1,750,000
|
|
|
|
2,013,882
|
(b)
|
Chicago, IL, Transit Authority Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/45
|
|
|
|
550,000
|
|
|
|
663,454
|
|
Chicago, IL, Wastewater Transmission Revenue, Second Lien, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/36
|
|
|
|
600,000
|
|
|
|
717,852
|
|
Chicago, IL, Waterworks Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Lien, Series 2017, Refunding
|
|
|
5.000
|
%
|
|
|
11/1/29
|
|
|
|
500,000
|
|
|
|
627,080
|
|
Second Lien, Series 2017-2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/32
|
|
|
|
630,000
|
|
|
|
770,849
|
|
Illinois State Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NorthShore University HealthSystem, Refunding, Series A
|
|
|
5.000
|
%
|
|
|
8/15/33
|
|
|
|
250,000
|
|
|
|
330,330
|
|
Southern Illinois Healthcare Enterprises Inc., Refunding
|
|
|
5.000
|
%
|
|
|
3/1/32
|
|
|
|
200,000
|
|
|
|
242,308
|
|
Southern Illinois Healthcare Enterprises Inc., Refunding
|
|
|
5.000
|
%
|
|
|
3/1/34
|
|
|
|
500,000
|
|
|
|
601,640
|
|
Illinois State Sports Facilities Authority Revenue, State Tax Supported, Refunding, AGM
|
|
|
5.250
|
%
|
|
|
6/15/30
|
|
|
|
3,000,000
|
|
|
|
3,373,020
|
|
Illinois State Toll Highway Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/25
|
|
|
|
650,000
|
|
|
|
769,386
|
|
Series C, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/26
|
|
|
|
925,000
|
|
|
|
1,133,060
|
|
Illinois State University, Auxiliary Facilities System Revenue, Series A, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
4/1/28
|
|
|
|
100,000
|
|
|
|
125,981
|
|
Illinois State, GO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2006
|
|
|
5.500
|
%
|
|
|
1/1/30
|
|
|
|
50,000
|
|
|
|
58,212
|
|
Series 2016, Refunding
|
|
|
5.000
|
%
|
|
|
2/1/29
|
|
|
|
500,000
|
|
|
|
548,500
|
|
Series A
|
|
|
5.000
|
%
|
|
|
5/1/36
|
|
|
|
770,000
|
|
|
|
832,955
|
|
Series A
|
|
|
5.000
|
%
|
|
|
5/1/39
|
|
|
|
300,000
|
|
|
|
321,933
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
1,300,000
|
|
|
|
1,445,600
|
|
Series A, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
100,000
|
|
|
|
110,539
|
|
Series B, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/27
|
|
|
|
600,000
|
|
|
|
668,664
|
|
Series D
|
|
|
5.000
|
%
|
|
|
11/1/27
|
|
|
|
850,000
|
|
|
|
937,830
|
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
11
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Illinois continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metropolitan Pier & Exposition Authority, IL, Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McCormick Place Expansion Project, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
6/15/50
|
|
|
$
|
1,200,000
|
|
|
$
|
1,343,640
|
|
McCormick Place Expansion Project, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
12/15/31
|
|
|
|
250,000
|
|
|
|
286,153
|
|
McCormick Place Expansion Project, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
6/15/42
|
|
|
|
500,000
|
|
|
|
572,950
|
|
Regional Transportation Authority, IL, GO, Series A, Refunding, NATL
|
|
|
6.000
|
%
|
|
|
7/1/29
|
|
|
|
1,020,000
|
|
|
|
1,317,320
|
|
Sales Tax Securitization Corp., IL, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/28
|
|
|
|
250,000
|
|
|
|
306,690
|
|
Total Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,730,513
|
|
Indiana 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hammond, IN, Multi-School Building Corp.:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Mortgage Bond, State Intercept Program
|
|
|
5.000
|
%
|
|
|
7/15/34
|
|
|
|
750,000
|
|
|
|
915,915
|
|
First Mortgage Bond, State Intercept Program
|
|
|
5.000
|
%
|
|
|
7/15/35
|
|
|
|
1,035,000
|
|
|
|
1,261,096
|
|
Indiana State Finance Authority Revenue, Marion General Hospital, Series A
|
|
|
4.000
|
%
|
|
|
7/1/45
|
|
|
|
250,000
|
|
|
|
277,035
|
|
Indianapolis, IN, Department of Public Utilities Gas Utility Revenue, Second Lien, Series A, Refunding
|
|
|
5.250
|
%
|
|
|
8/15/29
|
|
|
|
4,000,000
|
|
|
|
4,479,400
|
|
Valparaiso, IN, Exempt Facility Revenue, Pratt Paper LLC Project
|
|
|
5.875
|
%
|
|
|
1/1/24
|
|
|
|
195,000
|
|
|
|
208,591
|
(b)
|
Total Indiana
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,142,037
|
|
Iowa 0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Iowa State Finance Authority Midwestern Disaster Area Revenue, Iowa Fertilizer Company Project,
Refunding
|
|
|
3.125
|
%
|
|
|
12/1/22
|
|
|
|
125,000
|
|
|
|
127,641
|
|
Kentucky 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kentucky State PEA, Gas Supply Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
4.000
|
%
|
|
|
6/1/26
|
|
|
|
1,200,000
|
|
|
|
1,399,236
|
(c)(d)
|
Series C
|
|
|
4.000
|
%
|
|
|
6/1/25
|
|
|
|
1,600,000
|
|
|
|
1,821,552
|
(c)(d)
|
Total Kentucky
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,220,788
|
|
Louisiana 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Orleans, LA, Aviation Board, General Airport Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series B
|
|
|
5.000
|
%
|
|
|
1/1/29
|
|
|
|
2,000,000
|
|
|
|
2,296,420
|
(b)
|
Series B
|
|
|
5.000
|
%
|
|
|
1/1/30
|
|
|
|
2,000,000
|
|
|
|
2,287,820
|
(b)
|
See Notes to Financial
Statements.
|
|
|
12
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Louisiana continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port New Orleans Board of Commissioners, Series B, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
4/1/38
|
|
|
$
|
1,625,000
|
|
|
$
|
1,965,844
|
(b)
|
St. John the Baptist Parish, LA, State Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marathon Oil Corp. Project, Refunding
|
|
|
2.125
|
%
|
|
|
7/1/24
|
|
|
|
400,000
|
|
|
|
407,416
|
(c)(d)
|
Marathon Oil Corp. Project, Refunding
|
|
|
2.200
|
%
|
|
|
7/1/26
|
|
|
|
300,000
|
|
|
|
306,504
|
(c)(d)
|
Total Louisiana
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,264,004
|
|
Massachusetts 2.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Massachusetts State Department of Transportation, Metropolitan Highway System Revenue, Series B-1, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/35
|
|
|
|
350,000
|
|
|
|
454,604
|
|
Massachusetts State DFA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mass General Brigham Issue, Series A-1
|
|
|
5.000
|
%
|
|
|
1/31/30
|
|
|
|
1,000,000
|
|
|
|
1,308,300
|
(c)(d)
|
Partners Healthcare System, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/37
|
|
|
|
250,000
|
|
|
|
309,295
|
|
UMass Boston Student Housing Project
|
|
|
5.000
|
%
|
|
|
10/1/28
|
|
|
|
200,000
|
|
|
|
201,696
|
|
Massachusetts State Port Authority Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
500,000
|
|
|
|
628,455
|
(b)
|
Total Massachusetts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,902,350
|
|
Michigan 3.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detroit, MI, Downtown Development Authority, Tax Increment Revenue, Series A, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
7/1/38
|
|
|
|
250,000
|
|
|
|
280,315
|
|
Great Lakes, MI, Water Authority Water Supply System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, Series C, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/33
|
|
|
|
800,000
|
|
|
|
976,320
|
|
Senior Lien, Series C, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/35
|
|
|
|
350,000
|
|
|
|
425,225
|
|
Michigan Finance Authority Revenue, Tobacco Settlement Asset-Backed, Series A-1,
Refunding
|
|
|
4.000
|
%
|
|
|
6/1/39
|
|
|
|
150,000
|
|
|
|
175,137
|
|
Michigan State Finance Authority Ltd. Authority Obligation Revenue, Higher Education, Thomas M Cooley Law School
Project, Refunding
|
|
|
6.250
|
%
|
|
|
7/1/29
|
|
|
|
600,000
|
|
|
|
626,076
|
(a)
|
Michigan State Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Revenue, Trinity Health Credit Group, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/1/42
|
|
|
|
250,000
|
|
|
|
303,735
|
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Second Lien Local Project, Series C,
Refunding
|
|
|
5.000
|
%
|
|
|
7/1/33
|
|
|
|
275,000
|
|
|
|
322,355
|
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
13
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Michigan continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local Government Loan Program, Detroit, MI, Water & Sewer Department, Series D2, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
7/1/24
|
|
|
$
|
1,000,000
|
|
|
$
|
1,163,450
|
|
Michigan State Strategic Fund Limited Obligation Revenue, I-75 Improvement
Project
|
|
|
5.000
|
%
|
|
|
12/31/43
|
|
|
|
300,000
|
|
|
|
355,365
|
(b)
|
Total Michigan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,627,978
|
|
Missouri 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kansas City, MO, IDA, Airport System Revenue, Kansas City International Airport Terminal Modernization Project, Series
B
|
|
|
5.000
|
%
|
|
|
3/1/35
|
|
|
|
750,000
|
|
|
|
928,065
|
(b)
|
Missouri State Health Senior Living Facilities Revenue, Lutheran Senior Services Projects, Series A
|
|
|
5.000
|
%
|
|
|
2/1/34
|
|
|
|
150,000
|
|
|
|
167,077
|
|
St. Louis County, MO, IDA, Senior Living Facilities Revenue, Friendship Village, St. Louis Obligated Group, Series
A
|
|
|
5.000
|
%
|
|
|
9/1/38
|
|
|
|
300,000
|
|
|
|
327,558
|
|
Total Missouri
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,422,700
|
|
Nebraska 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Plains, NE, Energy Project, Gas Project Revenue, Project #3, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/36
|
|
|
|
500,000
|
|
|
|
703,535
|
|
New Jersey 8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino Reinvestment Development Authority, NJ, Luxury Tax Revenue, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/1/28
|
|
|
|
1,000,000
|
|
|
|
1,126,970
|
|
New Jersey State, GO, COVID-19 Emergency, Series A
|
|
|
5.000
|
%
|
|
|
6/1/26
|
|
|
|
1,400,000
|
|
|
|
1,701,532
|
|
New Jersey State EDA Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
School Facilities Construction, Series NN, Refunding
|
|
|
5.000
|
%
|
|
|
3/1/28
|
|
|
|
2,825,000
|
|
|
|
3,036,621
|
|
School Facilities Construction, Series NN, Refunding
|
|
|
5.000
|
%
|
|
|
3/1/29
|
|
|
|
2,175,000
|
|
|
|
2,332,448
|
|
Transit Transportation Project, Series A
|
|
|
5.000
|
%
|
|
|
11/1/32
|
|
|
|
750,000
|
|
|
|
907,282
|
|
New Jersey State EDA, Special Facility Revenue, Port Newark Container Terminal LLC Project, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/37
|
|
|
|
150,000
|
|
|
|
166,637
|
(b)
|
New Jersey State Transportation Trust Fund Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation System, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/15/25
|
|
|
|
425,000
|
|
|
|
497,764
|
|
Transportation System, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
12/15/28
|
|
|
|
575,000
|
|
|
|
704,381
|
|
See Notes to Financial
Statements.
|
|
|
14
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
New Jersey continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Jersey State Turnpike Authority Revenue, Series G, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/35
|
|
|
$
|
1,000,000
|
|
|
$
|
1,237,990
|
|
Tobacco Settlement Financing Corp., NJ, Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/35
|
|
|
|
500,000
|
|
|
|
625,060
|
|
Total New Jersey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,336,685
|
|
New York 16.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brookhaven, NY, Local Development Corp. Revenue, Long Island Community Hospital Project, Series A,
Refunding
|
|
|
5.000
|
%
|
|
|
10/1/32
|
|
|
|
575,000
|
|
|
|
713,339
|
|
Hudson Yards Infrastructure Corp., NY, Second Indenture Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
2/15/35
|
|
|
|
1,000,000
|
|
|
|
1,206,750
|
(f)
|
MTA, NY, Transportation Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Green Bonds, Series A-2
|
|
|
5.000
|
%
|
|
|
11/15/24
|
|
|
|
125,000
|
|
|
|
136,554
|
|
Green Bonds, Series D-1
|
|
|
5.000
|
%
|
|
|
11/15/43
|
|
|
|
250,000
|
|
|
|
290,640
|
|
Green Bonds, Series E, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/28
|
|
|
|
1,000,000
|
|
|
|
1,162,050
|
|
Series A-2
|
|
|
5.000
|
%
|
|
|
5/15/30
|
|
|
|
400,000
|
|
|
|
467,544
|
(c)(d)
|
New York City, NY, GO, Series D-1
|
|
|
5.000
|
%
|
|
|
3/1/39
|
|
|
|
1,000,000
|
|
|
|
1,273,500
|
|
New York City, NY, Industrial Development Agency Revenue, Yankee Stadium Project, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
3/1/29
|
|
|
|
250,000
|
|
|
|
324,778
|
|
New York City, NY, TFA Revenue, Future Tax Secured, Subordinate, Series
C-1
|
|
|
4.000
|
%
|
|
|
5/1/40
|
|
|
|
2,300,000
|
|
|
|
2,756,872
|
|
New York State Dormitory Authority, Sales Tax Revenue, Bidding Group 3, Series E, Refunding
|
|
|
5.000
|
%
|
|
|
3/15/38
|
|
|
|
1,500,000
|
|
|
|
1,901,145
|
|
New York State Dormitory Authority, School Districts Revenue Financing Program, Series A, AGM
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
750,000
|
|
|
|
964,687
|
|
New York State Dormitory Authority, State Personal Income Tax Revenue, Bidding Group 4, Series A,
Refunding
|
|
|
5.000
|
%
|
|
|
3/15/44
|
|
|
|
750,000
|
|
|
|
934,298
|
|
New York State Thruway Authority General Revenue, Junior Indebtedness Obligations, Junior Lien, Series A
|
|
|
5.000
|
%
|
|
|
1/1/36
|
|
|
|
1,000,000
|
|
|
|
1,180,400
|
|
New York State Thruway Authority, State Personal Income Tax Revenue, Series A
|
|
|
5.000
|
%
|
|
|
3/15/26
|
|
|
|
200,000
|
|
|
|
220,688
|
|
New York State Transportation Development Corp., Special Facilities Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project
|
|
|
5.000
|
%
|
|
|
1/1/30
|
|
|
|
850,000
|
|
|
|
986,552
|
(b)
|
Delta Air Lines Inc., LaGuardia Airport Terminals C and D Redevelopment Project
|
|
|
5.000
|
%
|
|
|
1/1/32
|
|
|
|
1,200,000
|
|
|
|
1,381,476
|
(b)
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
15
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
New York continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LaGuardia Airport Terminal B Redevelopment Project
|
|
|
5.000
|
%
|
|
|
7/1/30
|
|
|
$
|
1,225,000
|
|
|
$
|
1,365,311
|
(b)
|
New York State Urban Development Corp., State Personal Income Tax Revenue, Series A
|
|
|
5.000
|
%
|
|
|
3/15/41
|
|
|
|
750,000
|
|
|
|
974,070
|
|
Niagara Area Development Corp., NY, Solid Waste Disposal Facility Revenue, Covanta Project, Series B,
Refunding
|
|
|
3.500
|
%
|
|
|
11/1/24
|
|
|
|
750,000
|
|
|
|
767,970
|
(a)
|
Port Authority of New York & New Jersey Revenue, Consolidated Series 193, Refunding
|
|
|
5.000
|
%
|
|
|
10/15/30
|
|
|
|
1,500,000
|
|
|
|
1,779,180
|
(b)
|
Triborough Bridge & Tunnel Authority, NY, Revenue, General-MTA
Bridges & Tunnels, Series A
|
|
|
5.000
|
%
|
|
|
11/15/49
|
|
|
|
1,000,000
|
|
|
|
1,287,730
|
|
Utility Debt Securitization Authority, NY, Revenue, Restructuring, Series TE
|
|
|
5.000
|
%
|
|
|
12/15/27
|
|
|
|
1,000,000
|
|
|
|
1,139,500
|
|
Total New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,215,034
|
|
North Carolina 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charlotte, NC, COP, Series P
|
|
|
5.000
|
%
|
|
|
6/1/44
|
|
|
|
250,000
|
|
|
|
317,440
|
|
Charlotte, NC, Airport Revenue, Charlotte Douglas International Airport
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
400,000
|
|
|
|
511,552
|
|
North Carolina State Limited Obligation Revenue, Series A
|
|
|
5.000
|
%
|
|
|
5/1/32
|
|
|
|
750,000
|
|
|
|
995,017
|
|
North Carolina State Turnpike Authority, Triangle Expressway System Revenue, Senior Lien, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/30
|
|
|
|
100,000
|
|
|
|
120,606
|
|
Total North Carolina
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,944,615
|
|
Ohio 1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Municipal Power-Ohio Inc., OH, Revenue, AMP Fremont Energy Center Project, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
2/15/29
|
|
|
|
500,000
|
|
|
|
640,710
|
|
Buckeye, OH, Tobacco Settlement Financing Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Bonds, Series A-2, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/36
|
|
|
|
250,000
|
|
|
|
325,725
|
|
Senior Bonds, Series B-2, Refunding
|
|
|
5.000
|
%
|
|
|
6/1/55
|
|
|
|
500,000
|
|
|
|
562,310
|
|
Ohio State Air Quality Development Authority Revenue, American Electric Company Project, Series B,
Refunding
|
|
|
2.500
|
%
|
|
|
10/1/29
|
|
|
|
350,000
|
|
|
|
378,760
|
(b)(c)(d)
|
Ohio State Higher Educational Facility Revenue, Xavier University Project, Refunding
|
|
|
5.000
|
%
|
|
|
5/1/34
|
|
|
|
525,000
|
|
|
|
672,787
|
|
Total Ohio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,580,292
|
|
See Notes to Financial
Statements.
|
|
|
16
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Oklahoma 0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payne County, OK, EDA Revenue, Epworth Living at The Ranch, Series A
|
|
|
6.250
|
%
|
|
|
11/1/31
|
|
|
$
|
86,511
|
|
|
$
|
433
|
*(g)
|
Oregon 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port of Portland, OR, Airport Revenue, Portland International Airport, Series 26C, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/26
|
|
|
|
250,000
|
|
|
|
305,100
|
(b)
|
Portland, OR, River District Urban Renewal & Redevelopment, Series C
|
|
|
5.000
|
%
|
|
|
6/15/28
|
|
|
|
570,000
|
|
|
|
609,153
|
|
Washington Multnomah & Yamhill Counties, OR, School District #1 West Union, GO, Hillsboro, School Board
Guaranty
|
|
|
5.000
|
%
|
|
|
6/15/34
|
|
|
|
500,000
|
|
|
|
626,700
|
|
Yamhill County, OR, Hospital Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Friendsview Retirement Community, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/31
|
|
|
|
350,000
|
|
|
|
377,755
|
|
Friendsview Retirement Community, Refunding
|
|
|
5.000
|
%
|
|
|
11/15/36
|
|
|
|
325,000
|
|
|
|
346,395
|
|
Total Oregon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,265,103
|
|
Pennsylvania 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commonwealth Financing Authority, PA, Tobacco Master Settlement Payment Revenue
|
|
|
5.000
|
%
|
|
|
6/1/30
|
|
|
|
200,000
|
|
|
|
254,924
|
|
Cumberland County, PA, Municipal Authority Revenue, Diakon Lutheran Social Ministries Project, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/27
|
|
|
|
500,000
|
|
|
|
552,285
|
|
Pennsylvania State Turnpike Commission Revenue, Series B
|
|
|
5.000
|
%
|
|
|
12/1/40
|
|
|
|
750,000
|
|
|
|
971,587
|
|
Philadelphia, PA, Authority for IDR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
City Service Agreement Revenue, Rebuild Project
|
|
|
5.000
|
%
|
|
|
5/1/35
|
|
|
|
500,000
|
|
|
|
607,235
|
|
Lease Revenue, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/30
|
|
|
|
250,000
|
|
|
|
324,245
|
|
Philadelphia, PA, GO, Series B
|
|
|
5.000
|
%
|
|
|
2/1/35
|
|
|
|
250,000
|
|
|
|
318,165
|
|
State Public School Building Authority, PA, Lease Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philadelphia School District Project, Series A, Refunding, AGM, State Aid Withholding
|
|
|
5.000
|
%
|
|
|
6/1/31
|
|
|
|
150,000
|
|
|
|
182,354
|
|
Philadelphia School District Project, Series A, Refunding, AGM, State Aid Withholding
|
|
|
5.000
|
%
|
|
|
6/1/33
|
|
|
|
450,000
|
|
|
|
542,155
|
|
Total Pennsylvania
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,752,950
|
|
Puerto Rico 4.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Puerto Rico Commonwealth Aqueduct & Sewer Authority Revenue, Senior Lien, Series A
|
|
|
5.250
|
%
|
|
|
7/1/42
|
|
|
|
900,000
|
|
|
|
936,000
|
|
Puerto Rico Electric Power Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A
|
|
|
5.050
|
%
|
|
|
7/1/42
|
|
|
|
75,000
|
|
|
|
56,250
|
*(g)
|
Series DDD, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/21
|
|
|
|
280,000
|
|
|
|
210,000
|
*(g)
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
17
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Puerto Rico continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series TT
|
|
|
5.000
|
%
|
|
|
7/1/37
|
|
|
$
|
450,000
|
|
|
$
|
337,500
|
*(g)
|
Series XX
|
|
|
5.250
|
%
|
|
|
7/1/40
|
|
|
|
270,000
|
|
|
|
203,175
|
*(g)
|
Series ZZ, Refunding
|
|
|
5.250
|
%
|
|
|
7/1/18
|
|
|
|
250,000
|
|
|
|
182,188
|
*(h)
|
Puerto Rico Sales Tax Financing Corp., Sales Tax Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAB, Restructured, Series A-1
|
|
|
0.000
|
%
|
|
|
7/1/27
|
|
|
|
220,000
|
|
|
|
193,006
|
|
Restructured, Series A-1
|
|
|
4.550
|
%
|
|
|
7/1/40
|
|
|
|
50,000
|
|
|
|
54,182
|
|
Restructured, Series A-1
|
|
|
5.000
|
%
|
|
|
7/1/58
|
|
|
|
1,050,000
|
|
|
|
1,158,118
|
|
Restructured, Series A-2
|
|
|
4.329
|
%
|
|
|
7/1/40
|
|
|
|
1,340,000
|
|
|
|
1,432,406
|
|
Restructured, Series A-2A
|
|
|
4.550
|
%
|
|
|
7/1/40
|
|
|
|
1,230,000
|
|
|
|
1,332,865
|
|
Total Puerto Rico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,095,690
|
|
South Carolina 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South Carolina State Ports Authority Revenue, Series 2018
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
400,000
|
|
|
|
490,932
|
(b)
|
Tennessee 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Knox County, TN, Health, Educational & Housing Facility Board Revenue, University Health System Inc., Series
A
|
|
|
5.000
|
%
|
|
|
9/1/30
|
|
|
|
250,000
|
|
|
|
307,420
|
|
Metropolitan Government of Nashville & Davidson County, TN, Water & Sewer Revenue, Subordinated, Green
Bonds, Series A
|
|
|
5.000
|
%
|
|
|
7/1/42
|
|
|
|
300,000
|
|
|
|
367,866
|
|
Tennessee State Energy Acquisition Corp., Natural Gas Revenue, Series 2018
|
|
|
4.000
|
%
|
|
|
11/1/25
|
|
|
|
500,000
|
|
|
|
574,060
|
(c)(d)
|
Total Tennessee
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,249,346
|
|
Texas 7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington, TX, Special Tax Revenue, Subordinated Lien, Series C, BAM
|
|
|
5.000
|
%
|
|
|
2/15/41
|
|
|
|
250,000
|
|
|
|
283,273
|
|
Austin, TX, Airport System Revenue, Series 2014
|
|
|
5.000
|
%
|
|
|
11/15/27
|
|
|
|
1,000,000
|
|
|
|
1,154,220
|
(b)
|
Central Texas, Regional Mobility Authority Revenue, Senior Lien, Series E
|
|
|
5.000
|
%
|
|
|
1/1/45
|
|
|
|
250,000
|
|
|
|
312,813
|
|
Harris County, TX, Houston Sports Authority Revenue, Senior Lien, Series A, Refunding, AGM
|
|
|
5.000
|
%
|
|
|
11/15/25
|
|
|
|
1,000,000
|
|
|
|
1,145,890
|
|
Houston, TX, Airport System Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special Facilities, United Airlines Inc., Airport Improvements Project
|
|
|
5.000
|
%
|
|
|
7/15/28
|
|
|
|
500,000
|
|
|
|
549,505
|
(b)
|
Subordinated, Series A
|
|
|
5.000
|
%
|
|
|
7/1/36
|
|
|
|
1,055,000
|
|
|
|
1,291,478
|
(b)
|
Laredo, TX, Waterworks & Sewer System Revenue, Series 2019
|
|
|
5.000
|
%
|
|
|
3/1/33
|
|
|
|
1,000,000
|
|
|
|
1,258,640
|
|
Love Field, TX, Airport Modernization Corp., General Airport Revenue, Series 2017
|
|
|
5.000
|
%
|
|
|
11/1/31
|
|
|
|
90,000
|
|
|
|
106,594
|
(b)
|
See Notes to Financial
Statements.
|
|
|
18
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Texas continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Texas Tollway Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Tier, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/36
|
|
|
$
|
500,000
|
|
|
$
|
611,510
|
|
First Tier, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
1/1/34
|
|
|
|
1,300,000
|
|
|
|
1,503,333
|
|
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility Revenue, Buckner Senior Living
Ventana Project, Series A
|
|
|
6.625
|
%
|
|
|
11/15/37
|
|
|
|
130,000
|
|
|
|
139,820
|
|
Texas Public Finance Authority, Lease Revenue, Refunding
|
|
|
4.000
|
%
|
|
|
2/1/36
|
|
|
|
350,000
|
|
|
|
423,535
|
|
Texas State Municipal Gas Acquisition & Supply Corp. III, Gas Supply Revenue, Series 2012
|
|
|
5.000
|
%
|
|
|
12/15/22
|
|
|
|
2,000,000
|
|
|
|
2,174,800
|
|
Total Texas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,955,411
|
|
U.S. Virgin Islands 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virgin Islands Public Finance Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching Fund Loan, Senior Lien, Series A
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
300,000
|
|
|
|
300,015
|
|
Subordinated, Matching Fund Loan, Cruzan Project, Series A
|
|
|
6.000
|
%
|
|
|
10/1/39
|
|
|
|
330,000
|
|
|
|
316,668
|
|
Subordinated, Matching Fund Loan, Diageo Project, Series A
|
|
|
6.625
|
%
|
|
|
10/1/29
|
|
|
|
150,000
|
|
|
|
150,660
|
|
Total U.S. Virgin Islands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
767,343
|
|
Utah 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utah Infrastructure Agency, Telecommunications Revenue, Series 2019
|
|
|
5.000
|
%
|
|
|
10/15/26
|
|
|
|
250,000
|
|
|
|
287,885
|
|
Utah State Charter School Finance Authority, Charter School Revenue, Syracuse Arts Academy Project, UT
CSCE
|
|
|
5.000
|
%
|
|
|
4/15/37
|
|
|
|
250,000
|
|
|
|
290,168
|
|
Total Utah
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
578,053
|
|
Virginia 3.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington County, VA, IDA, Hospital Revenue, Virginia Hospital Center, Refunding
|
|
|
5.000
|
%
|
|
|
7/1/35
|
|
|
|
200,000
|
|
|
|
260,920
|
|
Virginia Beach, VA, Development Authority, Residential Care Facility Revenue, Westminster- Canterbury on Chesapeake Bay,
Refunding
|
|
|
5.000
|
%
|
|
|
9/1/40
|
|
|
|
1,250,000
|
|
|
|
1,400,675
|
|
Virginia State Small Business Financing Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bon Secours Mercy Health, Series A, Refunding
|
|
|
4.000
|
%
|
|
|
12/1/49
|
|
|
|
500,000
|
|
|
|
569,585
|
|
Second Lien, Elizabeth River Crossings OpCo LLC Project
|
|
|
5.000
|
%
|
|
|
1/1/27
|
|
|
|
2,000,000
|
|
|
|
2,105,820
|
(b)
|
See Notes Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
19
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Maturity
Date
|
|
|
Face
Amount
|
|
|
Value
|
|
Virginia continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Lien, 95 Express Lanes LLC
|
|
|
5.000
|
%
|
|
|
7/1/34
|
|
|
$
|
350,000
|
|
|
$
|
363,842
|
(b)
|
The Obligated Group of National Senior Campuses Inc., Series A
|
|
|
5.000
|
%
|
|
|
1/1/31
|
|
|
|
250,000
|
|
|
|
308,538
|
|
Total Virginia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,009,380
|
|
Washington 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Port of Seattle, WA, Intermediate Lien Revenue, Series 2019
|
|
|
5.000
|
%
|
|
|
4/1/33
|
|
|
|
500,000
|
|
|
|
621,530
|
(b)
|
Washington State Health Care Facilities Authority Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commonspirit Health, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
8/1/26
|
|
|
|
250,000
|
|
|
|
299,643
|
(c)(d)
|
Seattle Cancer Care Alliance, Refunding
|
|
|
5.000
|
%
|
|
|
9/1/38
|
|
|
|
300,000
|
|
|
|
383,808
|
|
Total Washington
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,304,981
|
|
West Virginia 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West Virginia University Revenue, West Virginia Projects, Series B, Refunding
|
|
|
5.000
|
%
|
|
|
10/1/29
|
|
|
|
300,000
|
|
|
|
385,587
|
(c)(d)
|
Wisconsin 3.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Central Brown County, WI, Water Authority System Revenue, Series A, Refunding
|
|
|
5.000
|
%
|
|
|
11/1/35
|
|
|
|
2,105,000
|
|
|
|
2,437,927
|
|
La Crosse, WI, Resource Recovery Revenue, Northern States Power Co. Project, Refunding
|
|
|
6.000
|
%
|
|
|
11/1/21
|
|
|
|
2,000,000
|
|
|
|
2,097,320
|
(b)
|
Public Finance Authority, WI, Limited Obligation Pilot Revenue, American Dream @ Meadowlands Project
|
|
|
6.500
|
%
|
|
|
12/1/37
|
|
|
|
200,000
|
|
|
|
175,236
|
(a)
|
Public Finance Authority, WI, Revenue, Carmelite System Inc. Obligated Group, Series 2020
|
|
|
5.000
|
%
|
|
|
1/1/40
|
|
|
|
150,000
|
|
|
|
171,891
|
|
Village of Mount Pleasant, WI, Tax Increment Revenue, Series A
|
|
|
5.000
|
%
|
|
|
4/1/43
|
|
|
|
500,000
|
|
|
|
597,465
|
|
Total Wisconsin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,479,839
|
|
Total Investments before Short-Term Investments (Cost
$176,351,827)
|
|
|
|
189,626,799
|
|
Short-Term Investments 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pennsylvania 0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lancaster, PA, IDA Revenue, Willow Valley Retirement Communities Project, Series C, LOC - PNC Bank N.A. (Cost
$200,000)
|
|
|
0.120
|
%
|
|
|
12/1/39
|
|
|
|
200,000
|
|
|
|
200,000
|
(i)(j)
|
See Notes to Financial
Statements.
|
|
|
20
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Security
|
|
Rate
|
|
|
Shares
|
|
|
Value
|
|
Money Market Funds 0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
Dreyfus Government Cash Management, Institutional Shares (Cost $34,806)
|
|
|
0.010
|
%
|
|
|
34,806
|
|
|
$
|
34,806
|
|
Total Short-Term Investments (Cost $234,806)
|
|
|
|
234,806
|
|
Total Investments 131.6% (Cost $176,586,633)
|
|
|
|
189,861,605
|
|
Auction Rate Cumulative Preferred Stock, at Liquidation Value (0.4)%
|
|
|
|
(600,000
|
)
|
Variable Rate Demand Preferred Stock, at Liquidation Value (32.9)%
|
|
|
|
(47,400,000
|
)
|
Other Assets in Excess of Liabilities 1.7%
|
|
|
|
2,460,825
|
|
Total Net Assets Applicable to Common Shareholders 100.0%
|
|
|
$
|
144,322,430
|
|
|
Represents less than 0.1%.
|
*
|
Non-income producing security.
|
(a)
|
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.
|
(b)
|
Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (AMT).
|
(c)
|
Maturity date shown represents the mandatory tender date.
|
(d)
|
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.
|
(e)
|
Pre-Refunded bonds are generally escrowed with U.S. government obligations and/or U.S. government agency securities.
|
(f)
|
All or a portion of this security is held at the broker as collateral for open futures contracts.
|
(g)
|
The coupon payment on this security is currently in default as of November 30, 2020.
|
(h)
|
The maturity principal is currently in default as of November 30, 2020.
|
(i)
|
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.
|
(j)
|
Maturity date shown is the final maturity date. The security may be sold back to the issuer before final maturity.
|
See Notes to Financial Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
21
|
Schedule of investments
(unaudited) (contd)
November 30, 2020
Western Asset Intermediate Muni 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
|
|
|
DFA
|
|
Development Finance Agency
|
|
|
EDA
|
|
Economic Development Authority
|
|
|
GO
|
|
General Obligation
|
|
|
HEFA
|
|
Health & Educational Facilities Authority
|
|
|
IDA
|
|
Industrial Development Authority
|
|
|
IDR
|
|
Industrial Development Revenue
|
|
|
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
|
|
|
SIFMA
|
|
Securities Industry and Financial Markets Association
|
|
|
TFA
|
|
Transitional Finance Authority
|
At November 30, 2020, the Fund had the following open futures contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Contracts
|
|
|
Expiration
Date
|
|
|
Notional
Amount
|
|
|
Market
Value
|
|
|
Unrealized
Depreciation
|
|
Contracts to Sell:
|
|
U.S. Treasury Ultra Long-Term Bonds
|
|
|
15
|
|
|
|
3/21
|
|
|
$
|
3,216,677
|
|
|
$
|
3,240,469
|
|
|
$
|
(23,792)
|
|
See Notes to Financial
Statements.
|
|
|
22
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Statement of assets and liabilities (unaudited)
November
30,2020
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
Investments, at value (Cost $176,586,633)
|
|
$
|
189,861,605
|
|
Interest receivable
|
|
|
2,363,342
|
|
Prepaid expenses
|
|
|
18,619
|
|
Total Assets
|
|
|
192,243,566
|
|
|
|
Liabilities:
|
|
|
|
|
Variable Rate Demand Preferred Stock ($25,000 liquidation value per share; 1,896 shares issued and outstanding) (net of
deferred offering costs of $669,858) (Note 5)
|
|
|
46,730,142
|
|
Distributions payable to Common Shareholders
|
|
|
330,934
|
|
Investment management fee payable
|
|
|
86,077
|
|
Directors fees payable
|
|
|
5,112
|
|
Payable to broker net variation margin on open futures contracts
|
|
|
469
|
|
Distributions payable to Auction Rate Cumulative Preferred Stockholders
|
|
|
22
|
|
Accrued expenses
|
|
|
168,380
|
|
Total Liabilities
|
|
|
47,321,136
|
|
Series M Municipal Auction Rate Cumulative Preferred Stock (24 shares authorized and issued at $25,000 per share) (Note
6)
|
|
|
600,000
|
|
Total Net Assets Applicable to Common Shareholders
|
|
$
|
144,322,430
|
|
|
|
Net Assets Applicable to Common Shareholders:
|
|
|
|
|
Common stock par value ($0.001 par value; 14,082,315 shares issued and outstanding; 100,000,000 common shares
authorized)
|
|
$
|
14,082
|
|
Paid-in capital in excess of par value
|
|
|
133,197,675
|
|
Total distributable earnings (loss)
|
|
|
11,110,673
|
|
Total Net Assets Applicable to Common Shareholders
|
|
$
|
144,322,430
|
|
|
|
Common Shares Outstanding
|
|
|
14,082,315
|
|
|
|
Net Asset Value Per Common Share
|
|
$
|
10.25
|
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
23
|
Statement of operations (unaudited)
For the
Year Ended November 30, 2020
|
|
|
|
|
|
|
Investment Income:
|
|
|
|
|
Interest
|
|
$
|
6,328,230
|
|
|
|
Expenses:
|
|
|
|
|
Investment management fee (Note 2)
|
|
|
1,043,283
|
|
Distributions to Variable Rate Demand Preferred Stockholders (Notes 1 and 5)
|
|
|
380,321
|
|
Liquidity fees (Note 5)
|
|
|
368,112
|
|
Legal fees
|
|
|
94,661
|
|
Rating agency fees
|
|
|
84,227
|
|
Directors fees
|
|
|
51,253
|
|
Audit and tax fees
|
|
|
48,191
|
|
Remarketing fees (Note 5)
|
|
|
37,723
|
|
Transfer agent fees
|
|
|
35,793
|
|
Amortization of Variable Rate Demand Preferred Stock offering costs (Note 5)
|
|
|
27,691
|
|
Stock exchange listing fees
|
|
|
23,942
|
|
Fund accounting fees
|
|
|
22,396
|
|
Shareholder reports
|
|
|
21,111
|
|
Auction agent fees
|
|
|
9,590
|
|
Custody fees
|
|
|
4,170
|
|
Insurance
|
|
|
2,821
|
|
Interest expense
|
|
|
354
|
|
Auction participation fees (Note 6)
|
|
|
300
|
|
Miscellaneous expenses
|
|
|
11,130
|
|
Total
Expenses
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
|
2,267,069
(5,214)
|
|
Net Expenses
|
|
|
2,261,855
|
|
Net Investment Income
|
|
|
4,066,375
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts (Notes 1, 3 and 4):
|
|
|
|
|
Net Realized Gain (Loss) From:
|
|
|
|
|
Investment transactions
|
|
|
83,559
|
|
Futures contracts
|
|
|
(1,228,466)
|
|
Net Realized Loss
|
|
|
(1,144,907)
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
|
Investments
|
|
|
1,219,953
|
|
Futures contracts
|
|
|
(23,792)
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
|
1,196,161
|
|
Net Gain on Investments and Futures Contracts
|
|
|
51,254
|
|
Distributions Paid to Auction Rate Cumulative Preferred Stockholders From Net Investment Income (Notes 1 and
6)
|
|
|
(7,182)
|
|
Increase in Net Assets Applicable to Common Shareholders From Operations
|
|
$
|
4,110,447
|
|
See Notes to Financial
Statements.
|
|
|
24
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Statement of changes in net assets (unaudited)
|
|
|
|
|
|
|
|
|
For the Years Ended November 30,
|
|
2020
|
|
|
2019
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
4,066,375
|
|
|
$
|
4,483,471
|
|
Net realized loss
|
|
|
(1,144,907)
|
|
|
|
(90,726)
|
|
Change in net unrealized appreciation (depreciation)
|
|
|
1,196,161
|
|
|
|
7,112,619
|
|
Distributions paid to Auction Rate Cumulative Preferred Stockholders from net investment income
|
|
|
(7,182)
|
|
|
|
(14,870)
|
|
Increase in Net Assets Applicable to Common Shareholders From
Operations
|
|
|
4,110,447
|
|
|
|
11,490,494
|
|
|
|
|
Distributions to Common Shareholders From (Note 1):
|
|
|
|
|
|
|
|
|
Total distributable earnings
|
|
|
(3,971,213)
|
|
|
|
(4,647,164)
|
|
Decrease in Net Assets From Distributions to Common
Shareholders
|
|
|
(3,971,213)
|
|
|
|
(4,647,164)
|
|
Increase in Net Assets Applicable to Common
Shareholders
|
|
|
139,234
|
|
|
|
6,843,330
|
|
|
|
|
Net Assets Applicable to Common Shareholders:
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
144,183,196
|
|
|
|
137,339,866
|
|
End of year
|
|
$
|
144,322,430
|
|
|
$
|
144,183,196
|
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
25
|
Statement of cash flows (unaudited)
For the
Year Ended November 30, 2020
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net increase in net assets applicable to common shareholders resulting from operations
|
|
$
|
4,117,629
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating
activities:
|
|
|
|
|
Purchases of portfolio securities
|
|
|
(51,122,816)
|
|
Sales of portfolio securities
|
|
|
50,553,798
|
|
Net purchases, sales and maturities of short-term investments
|
|
|
(213,650)
|
|
Net amortization of premium (accretion of discount)
|
|
|
1,781,187
|
|
Decrease in interest receivable
|
|
|
51,836
|
|
Decrease in prepaid expenses
|
|
|
45,281
|
|
Amortization of preferred stock offering costs
|
|
|
27,691
|
|
Decrease in investment management fee payable
|
|
|
(689)
|
|
Increase in Directors fees payable
|
|
|
997
|
|
Increase in accrued expenses
|
|
|
96,627
|
|
Increase in payable to broker net variation margin on futures contracts
|
|
|
469
|
|
Net realized gain on investments
|
|
|
(83,559)
|
|
Change in net unrealized appreciation (depreciation) of investments
|
|
|
(1,219,953)
|
|
Net Cash Provided in Operating Activities*
|
|
|
4,034,848
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
Distributions paid on common stock (net of distributions payable)
|
|
|
(4,027,543)
|
|
Distributions paid on Auction Rate Cumulative Preferred Stock (net of distributions payable)
|
|
|
(7,305)
|
|
Net Cash Used by Financing Activities
|
|
|
(4,034,848)
|
|
Cash and restricted cash at beginning of year
|
|
|
|
|
Cash and restricted cash at end of year
|
|
|
|
|
*
|
Included in operating expenses is cash of $354 paid for interest on borrowings and $380,321 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.
|
|
|
|
|
|
|
|
November 30, 2020
|
|
Cash
|
|
|
|
|
Restricted cash
|
|
|
|
|
Total cash and restricted cash shown in the Statement of Cash Flows
|
|
|
|
|
See Notes to Financial
Statements.
|
|
|
26
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Financial highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For a common share of capital stock outstanding throughout each year ended November
30:
|
|
|
|
20201
|
|
|
20191
|
|
|
20181
|
|
|
20171
|
|
|
20161
|
|
|
|
|
|
|
|
Net asset value, beginning of year
|
|
|
$10.24
|
|
|
|
$9.75
|
|
|
|
$10.08
|
|
|
|
$9.97
|
|
|
|
$10.47
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.29
|
|
|
|
0.32
|
|
|
|
0.35
|
|
|
|
0.39
|
|
|
|
0.41
|
|
Net realized and unrealized gain (loss)
|
|
|
0.00
|
2
|
|
|
0.50
|
|
|
|
(0.33)
|
|
|
|
0.15
|
|
|
|
(0.43)
|
|
Distributions paid to Auction Rate Cumulative Preferred Stockholders from net investment income2
|
|
|
(0.00)
|
|
|
|
(0.00)
|
|
|
|
(0.00)
|
|
|
|
(0.00)
|
|
|
|
(0.00)
|
|
Total income (loss) from operations
|
|
|
0.29
|
|
|
|
0.82
|
|
|
|
0.02
|
|
|
|
0.54
|
|
|
|
(0.02)
|
|
|
|
|
|
|
|
Less distributions to common shareholders from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(0.28)
|
|
|
|
(0.33)
|
|
|
|
(0.37)
|
|
|
|
(0.43)
|
|
|
|
(0.48)
|
|
Total distributions to common shareholders
|
|
|
(0.28)
|
|
|
|
(0.33)
|
|
|
|
(0.37)
|
|
|
|
(0.43)
|
|
|
|
(0.48)
|
|
Net increase from tender and repurchase of Auction Rate Cumulative Preferred Shares
|
|
|
|
|
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of year
|
|
|
$10.25
|
|
|
|
$10.24
|
|
|
|
$9.75
|
|
|
|
$10.08
|
|
|
|
$9.97
|
|
Market price, end of year
|
|
|
$9.07
|
|
|
|
$9.21
|
|
|
|
$8.29
|
|
|
|
$9.35
|
|
|
|
$9.53
|
|
Total return, based on NAV3,4
|
|
|
2.96
|
%
|
|
|
8.51
|
%
|
|
|
0.39
|
%5
|
|
|
5.47
|
%
|
|
|
(0.36)
|
%
|
Total return, based on Market Price6
|
|
|
1.66
|
%
|
|
|
15.26
|
%
|
|
|
(7.52)
|
%
|
|
|
2.55
|
%
|
|
|
(0.78)
|
%
|
|
|
|
|
|
|
Net assets applicable to common shareholders, end of year (millions)
|
|
|
$144
|
|
|
|
$144
|
|
|
|
$137
|
|
|
|
$142
|
|
|
|
$140
|
|
|
|
|
|
|
|
Ratios to average net assets:7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
|
1.60
|
%
|
|
|
1.76
|
%
|
|
|
1.76
|
%
|
|
|
1.56
|
%
|
|
|
1.38
|
%
|
Net expenses
|
|
|
1.60
|
8
|
|
|
1.76
|
|
|
|
1.76
|
|
|
|
1.56
|
|
|
|
1.38
|
|
Net investment income
|
|
|
2.87
|
|
|
|
3.15
|
|
|
|
3.57
|
|
|
|
3.80
|
|
|
|
3.83
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
|
27
|
%
|
|
|
18
|
%
|
|
|
27
|
%
|
|
|
11
|
%
|
|
|
13
|
%
|
|
|
|
|
|
|
Supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auction Rate Cumulative Preferred Stock at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation Value, End of Year (000s)
|
|
|
$600
|
|
|
|
$600
|
|
|
|
$600
|
|
|
|
$2,600
|
|
|
|
$2,600
|
|
Variable Rate Demand Preferred Stock at
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liquidation Value, End of Year (000s)
|
|
|
$47,400
|
|
|
|
$47,400
|
|
|
|
$47,400
|
|
|
|
$47,400
|
|
|
|
$47,400
|
|
Asset Coverage Ratio for Auction Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Preferred Stock and Variable Rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand Preferred Stock9
|
|
|
401
|
%
|
|
|
400
|
%
|
|
|
386
|
%
|
|
|
384
|
%
|
|
|
381
|
%
|
Asset Coverage, per $25,000 Liquidation
Value per Share of Auction Rate Cumulative Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock and Variable Rate Demand Preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock9
|
|
|
$100,168
|
|
|
|
$100,095
|
|
|
|
$96,531
|
|
|
|
$95,977
|
|
|
|
$95,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial
Statements.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
27
|
Financial highlights (contd)
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
Amount represents less than $0.005 per share.
|
3
|
The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results.
|
4
|
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.
|
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 0.19%.
|
6
|
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.
|
7
|
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.
|
8
|
Reflects fee waivers and/or expense reimbursements.
|
9
|
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.
|
|
|
28
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Notes to financial statements (unaudited)
1. Organization and significant accounting policies
Western Asset Intermediate Muni Fund Inc. (the Fund) was incorporated in Maryland on December 19, 1991 and is registered as a diversified, closed-end
management investment company under the Investment Company Act of 1940, as amended (the 1940 Act). The Board of Directors authorized 100 million shares of $0.001 par value common stock. The Funds investment objective is to
provide common shareholders a high level of current income exempt from regular federal income taxes consistent with prudent investing. Under normal market conditions, the Fund invests at least 80% of its total assets in municipal obligations. In
addition, under normal market conditions, the Fund will invest at least 80% of its total assets in debt securities that are, at the time of investment, rated investment grade by a nationally recognized statistical rating organization or, if unrated,
of equivalent quality as determined by the investment manager. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. The subadviser determines the credit quality of prefunded bonds based on
the quality of the escrowed collateral and such other factors as the subadviser deems appropriate. Effective April 1, 2020 and 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 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
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
29
|
Notes to financial statements
(unaudited) (contd)
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.
The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (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.
|
|
|
30
|
|
Western Asset Intermediate Muni Fund Inc. 2020 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 and liabilities carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Municipal Bonds
|
|
|
|
|
|
$
|
189,626,799
|
|
|
|
|
|
|
$
|
189,626,799
|
|
Short-Term Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal Bonds
|
|
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
200,000
|
|
Money Market Funds
|
|
$
|
34,806
|
|
|
|
|
|
|
|
|
|
|
|
34,806
|
|
Total Short-Term Investments
|
|
|
34,806
|
|
|
|
200,000
|
|
|
|
|
|
|
|
234,806
|
|
Total Investments
|
|
$
|
34,806
|
|
|
$
|
189,826,799
|
|
|
|
|
|
|
$
|
189,861,605
|
|
|
LIABILITIES
|
|
Description
|
|
Quoted Prices
(Level 1)
|
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
|
Total
|
|
Other Financial Instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Futures Contracts
|
|
$
|
23,792
|
|
|
|
|
|
|
|
|
|
|
$
|
23,792
|
|
|
See Schedule of Investments for additional detailed categorizations.
|
(b) 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 shareholders 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 the deferred offering costs, and (2) the aggregate liquidation value (i.e., $25,000 per outstanding
share) of the Auction Rate Cumulative Preferred Stock (ARCPS).
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
31
|
Notes to financial statements
(unaudited) (contd)
(c) 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.
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.
(d) 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 are presented in the Statement of Cash Flows.
(e) 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.
|
|
|
32
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
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.
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 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 NAV 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
over-the-counter 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 November 30, 2020, the Fund did not have any open OTC derivative transactions with credit related contingent features in a net liability position.
(f) 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.
(g) 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
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
33
|
Notes to financial statements
(unaudited) (contd)
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.
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.
(h) 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.
(i) 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 November 30, 2020, 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.
(j) 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)
|
|
$
|
27,691
|
|
|
$
|
(27,691)
|
|
(a)
|
Reclassifications are due to non-deductible offering costs for tax purposes.
|
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.
|
|
|
34
|
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Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
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 this fee, the aggregate liquidation value of the preferred stock is not deducted in determining the
Funds average daily net assets.
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.
During the year ended November 30, 2020, fees waived and/or expenses reimbursed amounted to $5,214.
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 November 30, 2020, such purchase and sale transactions (excluding accrued interest) were $14,855,000 and $22,758,550, respectively, with a realized gain of $81,033.
3.Investments
During the year ended November 30, 2020, the aggregate cost of purchases
and proceeds from sales of investments (excluding short-term investments) were as follows:
|
|
|
|
|
Purchases
|
|
$
|
51,122,816
|
|
Sales
|
|
|
50,553,798
|
|
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
35
|
Notes to financial statements
(unaudited) (contd)
At November 30, 2020, 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
(Depreciation)
|
|
Securities
|
|
$
|
176,726,888
|
|
|
$
|
13,384,009
|
|
|
$
|
(249,292)
|
|
|
$
|
13,134,717
|
|
Futures contracts
|
|
|
|
|
|
|
|
|
|
|
(23,792)
|
|
|
|
(23,792)
|
|
4. Derivative instruments and hedging activities
Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of Assets and Liabilities at November 30, 2020.
|
|
|
|
|
LIABILITY
DERIVATIVES1
|
|
|
|
Interest
Rate Risk
|
|
Futures contracts2
|
|
$
|
23,792
|
|
1
|
Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation and for liability derivatives is payables/net unrealized
depreciation.
|
2
|
Includes cumulative appreciation (depreciation) of futures contracts as reported in the Schedule of Investments. Only variation margin is reported within the
receivables and/or payables on the Statement of Assets and Liabilities.
|
The following tables provide information about the effect of
derivatives and hedging activities on the Funds Statement of Operations for the year ended November 30, 2020. 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
|
|
$
|
(1,228,466)
|
|
|
|
|
|
|
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
|
|
Interest
Rate Risk
|
|
Futures contracts
|
|
$
|
(23,792)
|
|
|
|
|
36
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
During the year ended November 30, 2020, the volume of derivative activity for the Fund was as follows:
|
|
|
|
|
|
|
Average Market
Value
|
|
Futures contracts (to sell)
|
|
$
|
3,552,349
|
|
5. Variable rate demand preferred stock
On February 25, 2015, the Fund completed a private offering of 1,896 shares of Series 1 VRDPS. Net proceeds from the offering were used by the Fund to repurchase outstanding shares of Series M Municipal 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 November 30, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
|
|
Mandatory
Redemption Date
|
|
|
Shares
|
|
|
Liquidation
Preference
Per Share
|
|
|
Aggregate
Liquidation
Value
|
|
Series 1
|
|
|
2/25/2045
|
|
|
|
1,896
|
|
|
$
|
25,000
|
|
|
$
|
47,400,000
|
|
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.
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.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
37
|
Notes to financial statements
(unaudited) (contd)
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, February 25, 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, 2021. 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.
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 November 30, 2020 was 0.802%. VRDPS shares issued and outstanding remained constant during
the year ended November 30, 2020.
6. Municipal auction rate cumulative preferred stock
On January 28, 2002, the Fund issued 2,000 shares of Series M Municipal 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 20, 2015, the expiration date of the tender offer.
|
|
|
38
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
The Funds tender offer was 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 February 25, 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 1,896 ARCPS, which represented 94.8% of
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.
On
November 27, 2018, the Fund repurchased 80 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 repurchase price of the repurchased 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.
At November 30, 2020, the Fund had 24 shares of ARCPS outstanding with a liquidation preference of $25,000 per
share plus an amount equal to accumulated but unpaid dividends (whether or not earned or declared) and subject to certain restrictions, are redeemable in whole or in part.
The ARCPS dividends are cumulative at a rate determined at an auction and the dividend period is typically 7 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 on February 14, 2008, the Fund pays 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 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. The dividend rates ranged from 0.157% to 8.595% during the year ended November 30, 2020. At November 30, 2020, the dividend rate was
0.188%.
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.
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
39
|
Notes to financial statements
(unaudited) (contd)
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 coverage requirements would restrict the Funds
ability to pay dividends to common shareholders.
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 ARPCS that the
broker/dealer places at the auction. However, on August 3, 2009, CGM reduced its participation fee to an annual rate of 0.05% of the purchase price of the ARCPS, in the case of a failed auction. For the year ended November 30, 2020, CGM
earned $300 as a participating broker/dealer.
7. Distributions to common shareholders subsequent to November 30, 2020
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
|
|
11/20/2020
|
|
|
12/1/2020
|
|
|
$
|
0.0235
|
|
12/23/2020
|
|
|
12/31/2020
|
|
|
$
|
0.0235
|
|
1/22/2021
|
|
|
2/1/2021
|
|
|
$
|
0.0235
|
|
2/19/2021
|
|
|
3/1/2021
|
|
|
$
|
0.0235
|
|
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 November 30, 2020, the Fund did not repurchase any shares.
|
|
|
40
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
9. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended November 30, was as follows:
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Distributions paid from:
|
|
|
|
|
|
|
|
|
Tax exempt income:
|
|
|
|
|
|
|
|
|
Common shareholders
|
|
$
|
3,970,542
|
|
|
$
|
4,646,678
|
|
Auction rate cumulative preferred stockholders
|
|
|
7,181
|
|
|
|
14,864
|
|
Variable rate demand preferred stockholders
|
|
|
380,261
|
|
|
|
779,799
|
|
Total tax exempt distributions
|
|
$
|
4,357,984
|
|
|
$
|
5,441,341
|
|
Taxable income:
|
|
|
|
|
|
|
|
|
Common shareholders
|
|
|
671
|
|
|
|
486
|
|
Auction rate cumulative preferred stockholders
|
|
|
1
|
|
|
|
6
|
|
Variable rate demand preferred stockholders
|
|
|
60
|
|
|
|
80
|
|
Total taxable distributions
|
|
$
|
732
|
|
|
$
|
572
|
|
Total distributions paid
|
|
$
|
4,358,716
|
|
|
$
|
5,441,913
|
|
As of November 30, 2020, the components of distributable earnings (loss) on a tax basis were as follows:
|
|
|
|
|
Undistributed tax-exempt income net
|
|
$
|
6,752
|
|
Undistributed ordinary income net
|
|
|
186,645
|
|
Total undistributed earnings
|
|
$
|
193,397
|
|
Deferred capital losses*
|
|
|
(2,201,264)
|
|
Other book/tax temporary differences(a)
|
|
|
7,615
|
|
Unrealized appreciation (depreciation)(b)
|
|
|
13,110,925
|
|
Total distributable earnings (loss) net
|
|
$
|
11,110,673
|
|
*
|
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 realization for tax purposes of unrealized gains (losses) on certain futures contracts, book/tax
differences in 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 market discount on fixed income securities.
|
10. 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.
* * *
|
|
|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
|
41
|
Notes to financial statements
(unaudited) (contd)
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. Plans are underway to phase out the use of LIBOR by the end of 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.
* * *
On August 14, 2020, the Fund announced that it has elected, by resolution unanimously adopted by the Funds board of directors, to be subject to the Maryland Control Share Acquisition Act (the
MCSAA), effective immediately. The MCSAA protects the interests of all stockholders of a Maryland corporation by providing that any holder of control shares acquired in a control share acquisition will not be
entitled to vote its shares unless the other stockholders of the corporation reinstate those voting rights at a meeting of stockholders by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding the acquiring person (i.e., the holder or group of holders acting in concert that acquires, or proposes to acquire, control shares) and any other holders of interested shares as defined in the MCSAA.
Generally, control shares are shares that, when aggregated with shares already owned by an acquiring person, would entitle the acquiring person to exercise 10% or more, 33 1/3% or more, or a majority of the total voting power of shares
entitled to vote in the election of directors.
Application of the MCSAA seeks to limit the ability of an acquiring person to achieve a short-term gain
at the expense of the Funds ability to pursue its investment objective and policies and seek long-term value for the rest of the Funds stockholders. The above description of the MCSAA is only a high-level summary and does not purport to
be complete. Investors should refer to the actual provisions of the MCSAA and the Funds bylaws for more information, including definitions of key terms, various exclusions and exemptions from the statutes scope, and the procedures by
which stockholders may approve the reinstatement of voting rights to holders of control shares.
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42
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|
Western Asset Intermediate Muni Fund Inc. 2020 Annual Report
|
Report of independent registered public accounting firm
To the Board of Directors and Shareholders of Western Asset
Intermediate Muni 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 II
|
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)
|
|
22
|
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 II
|
Term of office1 and length of time served
|
|
Since 2007
|
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)
|
|
22
|
Other board memberships held by Director during the past five years
|
|
None
|
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
45
|
Additional information
(unaudited) (contd)
Information about Directors and Officers
|
|
|
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 III
|
Term of office1 and length of time served
|
|
Since 2007
|
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)
|
|
22
|
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 II
|
Term of office1 and length of time served
|
|
Since 2007
|
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)
|
|
22
|
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 2007
|
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)
|
|
22
|
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. (banking)
|
|
|
|
46
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
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 I
|
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, 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)
|
|
22
|
Other board memberships held by Director during the past five years
|
|
Trustee of AIG Funds and Anchor Series Trust (since 2018); Hochschild Mining plc (precious metals company) (since 2016); Director of Associated
Banc-Corp (financial services company) (since 2007); Westell Technologies, Inc. (technology company) (2003 to 2016)
|
|
Nisha Kumar
|
|
|
Year of birth
|
|
1970
|
Position(s) held with Fund1
|
|
Director and Member of Nominating, Audit, Compensation and Pricing and Valuation Committees, Class III
|
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)
|
|
22
|
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)
|
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
47
|
Additional information
(unaudited) (contd)
Information about Directors and Officers
|
|
|
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 148 funds associated with Legg
Mason Partners Fund Advisor, LLC (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)
|
|
145
|
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)
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|
|
|
48
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
|
|
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.
|
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
49
|
Additional information
(unaudited) (contd)
Information about Directors and Officers
|
|
|
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 2009
|
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 April 17, 2020, Mr. Jensen became Chief Compliance Officer.
|
**
|
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 2020, 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.
|
|
|
|
50
|
|
Western Asset Intermediate Muni Fund Inc.
|
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.
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
51
|
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.
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|
|
52
|
|
Western Asset Intermediate Muni Fund Inc.
|
Summary of information regarding the Fund (unaudited)
Summary of Recent Changes Regarding the Fund
The following information in this annual report is a summary of certain changes since November 30, 2019. This information may not reflect all of the changes
that have occurred since you purchased shares of this Fund.
Effective May 21, 2020, the Fund updated its investment policy such that it may enter
into tender option bond (TOB) transactions and may invest in inverse floating rate instruments issued in TOB transactions. Additional details regarding the Funds investment policies and strategies, as well as the relevant risks, in
connection with TOB transactions and inverse floating rate instruments issued in TOB transactions, are described below.
Investment
Objective
The Funds investment objective is to provide common shareholders a high level of current income exempt from regular federal income
taxes consistent with prudent investing.
Principal Investment Policies and Strategies
Under normal market conditions, the Fund invests at least 80% of its total assets in municipal obligations. Municipal obligations are issued by or on behalf of
states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, the interest on which, in the opinion of bond counsel or other counsel to the issuer of such
securities is, at the time of issuance, not includable in gross income for federal income tax purposes. The Fund also maintains a dollar-weighted average effective maturity of between three and ten years. For this purpose, any scheduled principal
prepayments on municipal securities will be reflected in the calculation of dollar-weighted average maturity. Western Asset may adjust the average maturity of the Funds portfolio from time to time, depending on its assessment of the relative
yields available on securities of different maturities and its expectations of future changes in interest rates. Under normal market conditions, the Fund will invest at least 80% of its total assets in debt securities that are, at the time of
investment, rated investment grade by a nationally recognized statistical rating organization (NRSRO) or, if unrated, of equivalent quality as determined by the investment manager. In addition, up to 20% of the Funds total assets
may be invested in debt securities that are, at the time of investment, rated below investment grade (high-yield or junk bonds) by an 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.
The Funds policies 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
|
|
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Western Asset Intermediate Muni Fund Inc.
|
|
53
|
Summary of information regarding the Fund (unaudited) (contd)
an 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.
The Fund may use a variety of derivative instruments as part of its investment strategy or for hedging and/or risk
management purposes. As part of its strategies, the Fund may purchase and sell futures contracts, purchase and sell (or write) exchange-listed and over-the-counter put
and call options on securities, financial indices and futures contracts, enter into interest rate and currency transactions and enter into other similar transactions which may be developed in the future to the extent Western Asset determines that
they are consistent with the Funds investment objectives and policies and applicable regulatory requirements. By way of example, the Fund may purchase and sell options (including swaps, caps, floors and collars) on municipal securities and on
indices based on municipal securities. In order to seek to protect the value of its portfolio securities against declines resulting from changes in interest rates or other market changes, the Fund may enter into hedging transactions, including the
use of financial futures contracts and related options contracts. The Fund may use any or all of these techniques at any time, and the use of any particular derivative transaction will depend on market conditions.
The Fund will not engage in over-the-counter (OTC) options transactions
if the amount invested by the Fund in OTC options, plus, with respect to OTC options written by the Fund, the amounts required to be treated as illiquid pursuant to the terms of certain no action letters published by the U.S. Securities and Exchange
Commission staff (and the value of the assets used as cover with respect to OTC option sales which are not within the scope of such letters), plus the amount invested by the Fund in illiquid securities, would exceed 25% of the Funds total
assets. OTC options on securities other than U.S. Government securities, including options on municipal securities, may not be within the scope of such letters and, accordingly, the amount invested by the Fund in OTC options on such other securities
and the value of the assets used as cover with respect to OTC options sales regarding such non-U.S. Government securities will be treated as illiquid and subject to the 25% limitation on the Funds assets
which may be invested in illiquid securities.
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
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54
|
|
Western Asset Intermediate Muni Fund Inc.
|
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 has
not established any limit on the percentage of its portfolio that may be invested in municipal securities subject to the alternative minimum tax provisions of federal tax law, and a substantial portion of the income produced by the Fund may be
taxable under the alternative minimum tax.
The Fund may invest up to 100% of its assets in
non-appropriation lease obligations and in unrated non-appropriation lease obligations believed, at the time of investment, by the investment
manager to have credit characteristics equivalent to, and to be of comparable quality as, securities that are rated investment grade.
Municipal
securities may have fixed or variable interest rates. The Fund may purchase floating and variable rate demand notes, which are municipal securities normally having a stated maturity in excess of one year, but which permit the holder to tender the
notes for purchase at the principal amount thereof.
The Fund may invest in zero coupon bonds. A zero coupon bond pays no interest in cash to its holder
during its life, although interest is accrued during that period.
The Fund generally will not invest more than 25% of its total assets in any industry,
nor will the Fund invest more than 5% of its total assets in the securities of any single issue. Governmental issuers of municipal securities are not considered part of any industry. However, municipal securities backed only by the
assets and revenues of nongovernmental users may for this purpose be deemed to be issued by such nongovernmental users, and the 25% limitation would apply to the industries of such nongovernmental users. It is nonetheless possible that the Fund may
invest more than 25% of its total assets in a broader segment of the municipal securities market, such as: hospital and other health care facilities obligations, housing agency revenue obligations, or airport revenue obligations. The Fund will
invest more than 25% of its assets in such types of municipal securities if Western Asset determines that the yields available from such obligations in a particular segment justify the additional risks associated with a large investment in that
segment. Although these obligations could be supported by the credit of governmental users, or by
|
|
|
Western Asset Intermediate Muni Fund Inc.
|
|
55
|
Summary of information regarding the Fund (unaudited) (contd)
the credit of nongovernmental users engaged in a number of industries, economic, business, political and other developments generally affecting the revenues of such
users (for example, proposed legislation or pending court decisions affecting the financing of such projects and market factors affecting the demand for their services or products) may have a general adverse effect on all such municipal securities
in such a market segment. The Fund may invest more than 25% of its assets in industrial development bonds or in issuers located in the same state.
When
Western Asset believes a temporary defensive posture in the market is warranted
(e.g., times when, in Western Assets opinion, temporary imbalances
of supply and demand or other temporary dislocations in the municipal securities market adversely affect the price at which municipal securities are available), 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 securities. If these high-quality, short-term municipal securities are not available or, in Western Assets 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, 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 Western Asset 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 income exempt from regular federal income taxes.
The Fund may purchase municipal securities on a when-issued and delayed delivery basis. To the extent that the Fund engages in
when-issued and delayed delivery transactions, it will do so for the purpose of acquiring securities for the Funds portfolio consistent with the Funds investment objective and policies.
The Fund may use repurchase agreements to manage its cash position.
The Fund 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 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 are risks
associated with an investment in the Fund. You should consider whether the Fund is an appropriate investment for you. The Fund invests substantially all of its assets in municipal obligations, and circumstances or events that affect the value of
municipal obligations will affect the Funds net asset value.
|
|
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56
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|
Western Asset Intermediate Muni Fund Inc.
|
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.
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.
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.
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.
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Western Asset Intermediate Muni Fund Inc.
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57
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Summary of information regarding the Fund (unaudited) (contd)
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 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.
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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 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.
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)
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Western Asset Intermediate Muni Fund Inc.
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59
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Summary of information regarding the Fund (unaudited) (contd)
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.
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
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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.
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.
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Western Asset Intermediate Muni Fund Inc.
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61
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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 objective. Western Asset will monitor developments and seek to manage the Funds portfolio in a manner consistent with achieving the Funds investment objective, 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 such as financial futures contracts and
options. 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
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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.
Short Sales Risk. If the price of the security sold short increases between the time of the short sale and the time the Fund
replaces the borrowed security, the Fund will realize a loss, which may be substantial. A fund that engages in a short sale or short position may lose more money than the actual cost of the short sale or short position and its potential losses may
be unlimited if the fund does not own the security sold short or the reference instrument and it is unable to close out of the short sale or short position.
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.
Interest Rate Risk. 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.
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.
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Western Asset Intermediate Muni Fund Inc.
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63
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Summary of information regarding the Fund (unaudited) (contd)
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.
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.
Liquidity Risk. The Fund may invest all or a portion of its net assets in illiquid securities. The term illiquid securities for this purpose means 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. Illiquid securities may trade at a discount from comparable, more liquid securities and may be subject to wide fluctuations in
market value. Accordingly, the Fund may be forced to sell these securities at less than fair market value or may not be able to sell them when the Subadviser believes it is desirable to do so.
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
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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.
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.
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.
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Western Asset Intermediate Muni Fund Inc.
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65
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Summary of information regarding the
Fund (unaudited) (contd)
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.
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 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.
Temporary Defensive Strategies Risk. When Western Asset anticipates unusual market or other conditions, the Fund may temporarily depart from its principal
investment strategies as a defensive measure and invest all or a portion of its assets in obligations of the U.S. government, its agencies or instrumentalities; other investment grade debt securities; investment grade commercial paper; certificates
of deposit and bankers acceptances; repurchase agreements with respect to any of the foregoing investments or any other fixed income securities that Western Asset considers consistent with this strategy. To the extent that the Fund invests
defensively, it may not achieve its investment objective.
When-Issued and Delayed Delivery Transactions Risk. The Fund may use when-issued and
delayed delivery transactions to purchase securities. The value of securities purchased in these transactions may decrease before they are delivered to the Fund. Also, the yield on securities purchased in these transactions may be higher in the
market when the delivery takes place.
Repurchase Agreements Risk. The Fund may use repurchase agreements to manage its cash position. If the
other party to the agreement defaults, the Fund may not be able to sell the underlying securities. If the Fund must assert its rights against the other party to recover the securities, the Fund will incur unexpected expenses, risk losing the income
on the security and bear the risk of loss in the value of the security.
Lending Securities Risk. If the party borrowing the Funds
securities fails financially, the Fund may be unable to recover the loaned securities.
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
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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, the Funds manager and subadviser 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, manager and subadviser have limited ability to prevent or mitigate cybersecurity
incidents affecting third party service providers, and such third party service providers may have limited indemnification obligations to the Fund or the manager. 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 in connection with the Funds public offering in April 28, 2001, as amended or superseded by subsequent disclosures. 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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67
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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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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 Intermediate Muni Fund Inc.
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69
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Important tax information (unaudited)
The following information is provided with respect to the distributions paid during the taxable year ended November 30, 2020:
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Common Shareholders
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Record date:
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Monthly
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3/24/2020
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Monthly
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Payable date:
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December 2019
through March 2020
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4/1/2020
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May 2020 through
November 2020
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Tax-Exempt Interest
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100.00%
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99.80%
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100.00%
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Ordinary Income*
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0.20%
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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 following amounts of ordinary income per share:
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Share Class
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Payable
Date
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Ordinary Income
per Share*
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ARCP
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3/31/2020
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$0.047700
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VRDP
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4/1/2020
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$0.031500
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The following information is applicable to non-U.S. resident shareholders:
*
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All of the ordinary income distributions paid monthly 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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70
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Western Asset Intermediate Muni Fund Inc.
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Western Asset
Intermediate Muni 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 Intermediate Muni 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
SBI
*
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Effective April 17, 2020, Mr. Jensen became Chief Compliance Officer.
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**
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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 Intermediate Muni Fund Inc.
Western Asset Intermediate Muni 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 Intermediate Muni 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
WASX010710 1/21 SR20-4056