ITEM 1. REPORT TO STOCKHOLDERS.
The
Annual
Report to Stockholders is filed herewith.
Annual Report May 31, 2013
WESTERN ASSET
GLOBAL HIGH INCOME FUND INC. (EHI)
INVESTMENT PRODUCTS: NOT FDIC INSURED
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NO BANK GUARANTEE
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MAY LOSE VALUE
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Fund objectives
The Funds primary investment objective is high current income. The Funds secondary investment objective is total return.
Whats inside
Letter from the chairman
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II
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Investment commentary
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III
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Fund overview
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Fund at a glance
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Spread duration
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Effective duration
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Schedule of investments
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Statement of assets and liabilities
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Statement of operations
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Statements of changes in net assets
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Statement of cash flows
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Financial highlights
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Notes to financial statements
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Report of independent registered public accounting firm
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Additional information
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Annual chief executive officer and principal financial officer certifications
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Other shareholder communications regarding accounting matters
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Dividend reinvestment plan
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Letter from the chairman
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Dear Shareholder,
We are pleased to provide the annual report of Western Asset Global High Income Fund Inc. for the twelve-month reporting period ended May 31, 2013. 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.
I am pleased to introduce myself as the new Chairman, President and Chief Executive Officer of the Fund, succeeding R. Jay Gerken, as he embarks upon his retirement. Jay has most recently served as Chairman, President and Chief Executive Officer of the Fund and other funds in the Legg Mason complex. On behalf of all our shareholders and the Funds Board of Directors, I would like to thank Jay for his vision and guidance, and wish him all the best.
I am honored to have been appointed to my new role with the Fund. During my 23 year career in the financial industry, I have seen it evolve and expand. Despite these changes, keeping an unwavering focus on our shareholders and their needs remains paramount. This was a consistent focus of Jays, and I look forward to following his lead in the years to come.
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:
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Fund prices and performance,
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Market insights and commentaries from our portfolio managers, and
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A host of educational resources.
We look forward to helping you meet your financial goals.
Sincerely,
Kenneth D. Fuller
Chairman, President and Chief Executive Officer
June 28, 2013
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Western Asset Global High Income Fund Inc.
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Investment commentary
Economic review
The U.S. economy expanded over the twelve months ended May 31, 2013, but the pace was generally far from robust. U.S. gross domestic product (GDP)
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growth, as reported by the U.S. Department of Commerce, was a tepid 1.3% in the second quarter of 2012. Economic growth accelerated to 3.1% in the third quarter, partially due to increased private inventory investment, higher federal government spending and moderating imports. However, economic activity sharply moderated in the fourth quarter, with GDP expanding an anemic 0.4%. This was driven by a reversal of the above factors, as private inventory investment and federal government spending weakened. Economic growth then improved, as the U.S. Department of Commerces final reading for first quarter 2013 GDP growth, released after the reporting period ended, was 1.8%. Accelerating growth was due, in part, to strengthening consumer spending, which rose 2.6% during the first quarter, versus a 1.8% increase during the previous quarter.
While there was some improvement in the U.S. job market, unemployment remained elevated throughout the reporting period. When the period began, unemployment, as reported by the U.S. Department of Labor, was 8.2%. Unemployment then generally declined and was 7.8% in September 2012. The unemployment rate then fluctuated between 7.8% and 7.9% over the next four months. Unemployment then fell to 7.7% in February, 7.6% in March and 7.5% in April, before edging up to 7.6% in May. In an encouraging sign, the number of longer-term unemployed has declined in recent months. In February 2013, more than 40% of the people without a job had been out of work for more than six months. This fell to 37.3% in May 2013.
Meanwhile, the housing market brightened, as sales generally improved and home prices continued to rebound. According to the National Association of Realtors (NAR), existing-home sales rose 4.2% on a seasonally adjusted basis in May 2013 versus the previous month and were 12.9% higher than in May 2012. In addition, the NAR reported that the median existing-home price for all housing types was $208,000 in May 2013, up 15.4% from May 2012. This marked the fifteenth consecutive month that home prices rose compared to the same period a year earlier. While the inventory of homes available for sale rose 3.3% in May 2013 to a 5.1 month supply at the current sales pace, it was 10.1% lower than in May 2012.
The manufacturing sector expanded during the majority of the reporting period, although it experienced several soft patches. Based on the Institute for Supply Managements Purchasing Managers Index (PMI)
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, after expanding 34 consecutive months, the PMI fell to 49.7 in June 2012, which represented the first contraction in the manufacturing sector since July 2009 (a reading below 50 indicates a contraction, whereas a reading above 50 indicates an expansion). Manufacturing continued to contract over the next two months before ticking up to 51.5 in September and 51.7 in October. The PMI fell back to contraction territory with a reading of 49.5 in November. While manufacturing then expanded over the next five months, in May 2013 the PMI fell to 49.0, its lowest level since July 2009.
Growth generally moderated overseas and, in some cases, fell back into a recession. In its April 2013
World Economic Outlook Update
, the International Monetary Fund (IMF) stated that Emerging market and developing economies are still going strong, but in advanced economies, there appears to be a growing bifurcation between the United States on one hand and the euro area on the other. The IMF projects that global growth will increase from 3.2% in 2012 to 3.3% in 2013. From a regional perspective, the IMF anticipates 2013 growth will be -0.3% in the Eurozone. Growth in emerging market countries is expected to remain higher than in their developed country counterparts, and the IMF projects that emerging market growth will increase from 5.1% in 2012 to 5.3% in 2013. In particular, Chinas economy is expected to grow 8.0% in 2013, versus 7.8% in 2012. Elsewhere, the IMF projects that growth in India will increase from 4.0% in 2012 to 5.7% in 2013.
The Federal Reserve Board (Fed)
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took a number of actions as it sought to meet its dual mandate of fostering maximum employment and price stability. As has been the case since December 2008, the Fed
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Western Asset Global High Income Fund Inc.
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Investment commentary (contd)
kept the federal funds rate
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at a historically low range between zero and 0.25%. At its June 2012 meeting, the Fed announced that it would continue its program of purchasing longer-term Treasury securities and selling an equal amount of shorter-term Treasury securities (often referred to as Operation Twist) until the end of 2012. In September, the Fed announced a third round of quantitative easing (QE3), which involves purchasing $40 billion each month of agency mortgage-backed securities (MBS) on an open-end basis. In addition, the Fed further extended the duration that it expects to keep the federal funds rate on hold, until at least mid-2015. At its meeting in December, the Fed announced that it would continue purchasing $40 billion per month of agency MBS, as well as initially purchasing $45 billion a month of longer-term Treasuries. The Fed also said that it would keep the federal funds rate on hold ...as long as the unemployment rate remains above 6.5%, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committees 2.0% longer-run goal, and longer-term inflation expectations continue to be well anchored. At its meeting that ended on June 19, 2013, after the reporting period ended, the Fed did not make any material changes to its official policy statement. However, in a press conference following the meeting, Fed Chairman Bernanke said ...the Committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year; and if the subsequent data remain broadly aligned with our current expectations for the economy, we would continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around midyear. These comments initially triggered a sharp sell-off in both the stock and bond markets. While the stock market subsequently rallied and recouped its losses in early July, the bond market has not rebounded as sharply. As a result, Treasury yields remain higher than they were prior to Chairman Bernankes press conference.
Given the economic challenges in the Eurozone, the European Central Bank (ECB)
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lowered interest rates from 1.00% to 0.75% in July 2012, at the time a record low. In September the ECB introduced its Outright Monetary Transactions (OMT) program. With the OMT, the ECB can purchase an unlimited amount of bonds that are issued by troubled Eurozone countries, provided the countries formally ask to participate in the program and agree to certain conditions. In May 2013, the ECB cut rates to a new record low of 0.50%. In other developed countries, the Bank of England kept rates on hold at 0.50% during the reporting period, as did Japan at a range of zero to 0.10%, its lowest level since 2006. In September, the Bank of Japan announced that it would increase its asset-purchase program and extend its duration by six months until the end of 2013. Then, in January 2013, the Bank of Japan announced that it would raise its target for annual inflation from 1% to 2%, and the Japanese government introduced a ¥10.3 trillion ($116 billion) stimulus package to support its economy. Elsewhere, with growth rates declining, both China and India lowered their cash reserve ratios for banks.
As always, thank you for your confidence in our stewardship of your assets.
Sincerely,
Kenneth D. Fuller
Chairman, President and Chief Executive Officer
July 5, 2013
All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. Forecasts and predictions are inherently limited and should not be relied upon as an indication of actual or future performance.
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Western Asset Global High Income Fund Inc.
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Gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time.
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The Institute for Supply Managements PMI is based on a survey of purchasing executives who buy the raw materials for manufacturing at more than 350 companies. It offers an early reading on the health of the manufacturing sector.
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The Federal Reserve Board (Fed) is responsible for the formulation of policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.
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The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.
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The European Central Bank (ECB) is responsible for the monetary system of the European Union and the euro currency.
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Western Asset Global High Income Fund Inc.
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Fund overview
Q. What is the Funds investment strategy?
A.
The Funds primary investment objective is high current income and its secondary objective is total return. Under normal market conditions, the Fund invests in a global portfolio of securities consisting of below investment grade fixed-income securities, emerging market fixed-income securities and investment grade fixed-income securities. We have broad discretion to allocate the Funds assets among the following segments of the global market for below investment and investment grade fixed-income securities: corporate bonds, loans, preferred stock, mortgage- and asset-backed securities and sovereign debt, and derivative instruments of the foregoing securities. The Fund may use a variety of derivative instruments, such as options, futures contracts, swap agreements and credit default swaps, as part of its investment strategies or for hedging or risk management purposes.
At Western Asset Management Company (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 Stephen A. Walsh, S. Kenneth Leech, Michael C. Buchanan, Keith J. Gardner, Ryan K. Brist and Christopher F. Kilpatrick. It is anticipated that Mr. Walsh will step down as a member of the Funds portfolio management team effective on or about March 31, 2014.
Q. What were the overall market conditions during the Funds reporting period?
A.
The spread sectors (non-Treasuries) overcame several periods of heightened risk aversion and generally outperformed equal-duration
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Treasuries over the twelve months ended May 31, 2013. Risk aversion was prevalent at times given mixed economic data, contagion fears from the European sovereign debt crisis and uncertainties regarding future Federal Reserve Board (Fed)
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actions. However, periodic setbacks were often temporary in nature and spread sector demand was generally solid as investors looked to generate incremental yield in the low interest rate environment.
Both short- and long-term Treasury yields moved higher during the twelve months ended May 31, 2013. Two-year Treasury yields rose from 0.27% at the beginning of the period to 0.30% at the end of the period. Their peak of 0.30% occurred on several occasions and they were as low as 0.20% on April 29, 2013. Ten-year Treasury yields were 1.59% at the beginning of the period and peaked at 2.16% at the end of the period. On July 25, 2012, ten-year Treasuries closed at an all-time low of 1.43%.
The Barclays U.S. Aggregate Index
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returned 0.92% for the twelve months ended May 31, 2013. Investment grade corporate bonds posted solid results, with the Barclay U.S. Credit Index
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gaining 4.26%. Comparatively, riskier fixed-income securities produced robust returns. Over the fiscal year, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index (the Index)
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gained 14.82%. During this period, as measured by the Index, lower-quality CCC-rated bonds outperformed higher-quality BB-rated securities, returning 19.60% and 12.55%, respectively. In contrast, emerging market debt, as measured by the JPMorgan Emerging Markets Bond Index Global (EMBI Global),
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returned 10.41% for the twelve months ended May 31, 2013. At the same time, corporations domiciled in emerging market countries, as measured by the Barclays Emerging Market U.S. Dollar Corporate Index,
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returned 11.17%.
Q. How did we respond to these changing market conditions?
A.
A number of adjustments were made to the Funds portfolio during the reporting period. We slightly increased the Funds modest allocation to investment grade corporate bonds and pared a small amount of its exposure to our largest
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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Fund overview (contd)
allocation, high-yield corporate bonds. However, within the high-yield allocation, we added to the Funds CCC-rated bonds based on valuations, the fundamental backdrop and our belief that CCC-rated bonds tend to have lower durations and would be less sensitive to changes in interest rates. Additionally, we reduced our exposure to BB-rated securities which typically have longer durations versus the high yield market. Within our emerging market allocation, we marginally reduced our sovereign exposure in favor of emerging market corporate bonds. We felt the latter would be more resilient in a rising rate environment and it offered better relative value. We also actively participated in the high yield and investment grade bond and emerging market new issue markets and purchased securities that we felt were attractively valued.
The Fund employed U.S. Treasury futures to manage its yield curve
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positioning and duration. They did not meaningfully impact the Funds performance during the reporting period.
Currency forwards were used to hedge the Funds currency risk and manage our non-U.S. dollar currency exposures. These hedges, which were intended to offset the decline or appreciation in the value of our euro bonds when translated back to U.S. dollars, were a small detractor from performance. Options on high-yield index swaps and high-yield index swaps were used to opportunistically manage the Funds exposure to the high-yield market. These market hedges were intended to protect the portfolio from periods of risk aversion, while maintaining the Funds exposure to higher beta
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(and higher income) idiosyncratic investments. All told, these instruments detracted from performance.
During the reporting period, we tactically utilized leverage in the Fund. We ended the period with leverage as a percentage of gross assets, of approximately 21%, relatively unchanged during the twelve months ended May 31, 2013. The use of leverage was additive for results given the positive performance of high-yield bonds and emerging market debt.
Performance review
For the twelve months ended May 31, 2013, Western Asset Global High Income Fund Inc. returned 16.51% based on its net asset value (NAV)
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and 12.77% based on its New York Stock Exchange (NYSE) market price per share. The Funds unmanaged benchmarks, the Barclays U.S. Aggregate Index, the Barclays U.S. Corporate High Yield 2% Issuer Cap Index and the EMBI Global, returned 0.92%, 14.82% and 10.41%, respectively, for the same period. The Lipper High Yield (Leveraged) Closed-End Funds Category Average
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returned 19.24% over the same time frame. Please note that Lipper performance returns are based on each funds NAV.
During the twelve-month period, the Fund made distributions to shareholders totaling $1.16 per share. The performance table shows the Funds twelve-month total return based on its NAV and market price as of May 31, 2013.
Past performance is no guarantee of future results.
Performance Snapshot
as of May 31, 2013
Price Per Share
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12-Month
Total Return*
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$13.71 (NAV)
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16.51%
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$13.30 (Market Price)
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12.77%
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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.
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Q. What were the leading contributors to performance?
A.
The Funds exposure to high-yield corporate bonds was the largest contributor to performance during the reporting period. Within the high-yield market, we had a bias for lower-quality CCC-rated bonds over higher quality BB-rated securities. This positioning was beneficial, given the significant outperformance of CCC-rated bonds versus their BB-rated counterparts. Our exposure to several high-yield bonds was also additive for performance during the reporting period. Examples of holdings that contributed to performance were Sprint Nextel Corp., Realogy Holdings Corp. and Wind Acquisition Holdings Finance. Bonds issued by Sprint Nextel Corp. (and Sprint Capital Corp.) rallied given their attractive valuation, as well as an improved outlook for the wireless competitive landscape and the pricing environment. In addition, Japans investment grade rated Softbank made a bid to acquire B-rated Sprint Nextel during the reporting period, sending Sprint Nextels bonds higher. Realogy Corp. has a diversified business model that includes real estate franchising, brokerage, relocation and title services. Its business units include Better Homes and Gardens Real Estate, CENTURY 21, Coldwell Banker, Sothebys International Realty and Title Resource Group. Investor sentiment for Realogy Holdings Corp. improved as there were signs of a sustainable recovery in the housing market. In addition, in October 2012 the company went public and raised more than $1 billion in additional capital, which will help support its debt obligations. Wind Acquisition Finance is the third largest wireless provider and the second largest wireline provider in Italy. Its bonds performed poorly earlier in the reporting period. We maintained our position, as we felt the weakness was primarily due to the fact that the company is located in Italy, a peripheral European country that was a key concern in the European sovereign debt crisis. As the period progressed, Wind Acquisition Finances bonds rebounded sharply, as its fundamentals remained intact and the European Central Bank (ECB)
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took actions to support peripheral European countries.
The Funds emerging market debt exposure also contributed to performance. In particular, the Funds Venezuelan hard currency sovereign debt and Mexican local sovereign debt generated strong results. Venezuelan hard currency sovereign bonds, which began the period at cheap valuations, benefited from higher oil prices and increased expectations that President Chavez would not be reelected. While Chavez was reelected in October 2012, it was not enough to offset the countrys sovereign bonds earlier strong results. On March 5, 2013, Chavez died and Venezuelan hard currency sovereign debt rallied sharply. We believe valuations in Venezuela are still very attractive at a yield level of approximately 9% and our belief is that there are both ability and willingness for the country to meet its debt obligations. Mexican local sovereign debt was supported by improving economic growth, led by gains in the manufacturing sector. This also triggered solid demand for the Mexican peso. Allocation to Russia also benefited as Russian sovereign debt and corporate debt all generated strong returns.
Finally, the Funds allocation to investment grade corporate bond market contributed to absolute results. In particular, an allocation to Citigroup, Inc. benefited performance as investor sentiment improved due to continued balance sheet and capital ratio improvement, as well as strengthening fundamentals.
Q. What were the leading detractors from performance?
A.
While the portfolios exposure to emerging market debt added to results on an absolute basis, within the asset class the Funds allocation to Latin American hard currency sovereign debt, in countries such as Brazil, Colombia, Mexico and Peru detracted from performance. Exposure to hard currency sovereign debt in Indonesia also detracted from performance. As previously discussed, emerging market sovereign debt is more sensitive to rising interest rates. With rates rising sharply during the period it negatively impacted the Funds sovereign debt exposure.
Within the high-yield bond market, the Funds relatively modest position in Seat Pagine Gialle SpA was not rewarded. Seat Pagine Gialle SpA is a directories publisher in Italy. The industry has been going through a structural decline over the last few
Western Asset Global High Income Fund Inc. 2013 Annual Report
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Fund overview (contd)
years given the shift in consumers preferences for using the Internet for local searches rather than traditional yellow pages and white pages. While the companys Internet business has been growing, it has not been sufficient to offset the decline in print. In February 2013, Seat Pagine Gialle SpA missed an interest payment and the bonds prices declined as markets were rising.
Finally, in the investment grade corporate bond market, having a position in Cliffs Natural Resources, detracted from results. The company has suffered from a decline in prices for iron-ore and metallurgical coal that is used for producing steel and steel related products. During the first half of the reporting period, its bonds traded down from a premium to a slight discount. We decided to add exposure in November and December of 2012. Thus far in 2013, we have been pleased to see the company manage its balance sheet proactively. The company cut its equity dividend and sold additional common shares to maintain their investment grade rating profile. The market was still unimpressed and its bonds have moved modestly lower. We continue to hold our positions.
Looking for additional information?
The Fund is traded under the symbol EHI and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available on-line under the symbol XEHIX 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.
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 Global High Income 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
June 14, 2013
RISKS:
Fixed-income securities are subject to credit risk, inflation risk, call risk and interest rate risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire principal amount that you invest. As interest rates rise, bond prices fall, reducing the value of the Funds holdings. The Fund may use derivatives, such as options, futures contracts, swap agreements and credit default swaps, which can be illiquid, may disproportionately increase losses and have a potentially large impact on Fund performance. Investing in foreign securities is subject to certain risks not associated with domestic investing, such as currency fluctuations, and changes in political, regulatory and economic conditions. These risks are magnified in emerging or developing markets. High yield bonds involve greater credit risk (risk of default) and liquidity risk than investment grade bonds. Leverage may magnify gains and increase losses in the Funds portfolio.
Portfolio holdings and breakdowns are as of May 31, 2013 and are subject to change and may not be representative of the portfolio managers current or future investments. Please refer to pages 9 through 31 for a list and percentage breakdown of the Funds holdings.
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. The Funds top five sector holdings (as a percentage of net assets) as of May 31, 2013 were: Sovereign Bonds (24.1%), Energy (18.0%), Consumer Discretionary (15.7%), Financials (14.9%) and Materials (14.8%). The Funds portfolio composition is subject to change at any time.
All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results. All index performance reflects no
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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deduction for fees, expenses or taxes. Please note that an investor cannot invest directly in an index.
The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.
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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.
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The Federal Reserve Board (Fed) is responsible for the formulation of policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.
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The 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.
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The Barclays U.S. Credit Index is an index composed of corporate and non-corporate debt issues that are investment grade (rated Baa3/BBB- or higher).
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The Barclays U.S. Corporate High Yield 2% Issuer Cap Index is an index of the 2% Issuer Cap component of the Barclays U.S. Corporate High Yield Index, which covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market.
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The JPMorgan Emerging Markets Bond Index Global (EMBI Global) tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds and local market instruments.
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The Barclays Emerging Market U.S. Dollar Corporate Index is a subset of the Barclays U.S. Emerging Markets Index, which includes fixed- and floating-rate U.S. dollar-denominated debt from emerging markets in the following regions: Americas, Europe, Middle East, Africa, and Asia.
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The yield curve is the graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities.
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Beta measures the sensitivity of the investment to the movements of its benchmark. A beta higher than 1.0 indicates the investment has been more volatile than the benchmark and a beta of less than 1.0 indicates that the investment has been less volatile than the benchmark.
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Net asset value (NAV) is calculated by subtracting total liabilities and outstanding preferred stock (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.
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Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the twelve-month period ended May 31, 2013, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 39 funds in the Funds Lipper category.
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The European Central Bank (ECB) is responsible for the monetary system of the European Union and the euro currency.
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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Fund at a glance
(unaudited)
Investment breakdown
(%) as a percent of total investments
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The bar graph above represents the composition of the Funds investments as of May 31, 2013 and May 31, 2012 and does not include derivatives such as futures contracts, forward foreign currency contracts, written options and swap contracts. The Fund is actively managed. As a result, the composition of the Funds investments is subject to change at any time.
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Represents less than 0.1%.
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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Spread duration (unaudited)
Economic Exposure
May 31, 2013
Total Spread Duration
EHI
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4.51 years
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Benchmark
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4.89 years
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Spread duration measures the sensitivity to changes in spreads. The spread over Treasuries is the annual risk-premium demanded by investors to hold non-Treasury securities. Spread duration is quantified as the % change in price resulting from a 100 basis points change in spreads. For a security with positive spread duration, an increase in spreads would result in a price decline and a decline in spreads would result in a price increase. This chart highlights the market sector exposure of the Funds sectors relative to the selected benchmark sectors as of the end of the reporting period.
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ABS
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Asset Backed Securities
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Benchmark
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1/3 Barclays U.S. Aggregate Index, 1/3 JP Morgan Emerging Markets Bond Index Global and 1/3 Barclays U.S. High Yield 2% Issuer Cap Index
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EHI
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Western Asset Global High Income Fund Inc.
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EM
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Emerging Markets
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HY
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High Yield
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IG Credit
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Investment Grade Credit
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MBS
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Mortgage Backed Securities
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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Effective duration (unaudited)
Interest Rate Exposure
May 31, 2013
Total Effective Duration
EHI
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4.97 years
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Benchmark
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5.62 years
|
Effective duration measures the sensitivity to changes in relevant interest rates. Effective duration is quantified as the % change in price resulting from a 100 basis points change in interest rates. For a security with positive effective duration, an increase in interest rates would result in a price decline and a decline in interest rates would result in a price increase. This chart highlights the interest rate exposure of the Funds sectors relative to the selected benchmark sectors as of the end of the reporting period.
__________________________
Benchmark
|
1/3 Barclays U.S. Aggregate Index, 1/3 JP Morgan Emerging Markets Bond Index Global and 1/3 Barclays U.S. High Yield 2% Issuer Cap Index
|
EHI
|
Western Asset Global High Income Fund Inc.
|
EM
|
Emerging Markets
|
HY
|
High Yield
|
IG Credit
|
Investment Grade Credit
|
MBS
|
Mortgage Backed Securities
|
8
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Schedule of investments
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Corporate Bonds & Notes 95.8%
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary 15.0%
|
|
|
|
|
|
|
|
|
|
Auto Components 0.5%
|
|
|
|
|
|
|
|
|
|
American Axle & Manufacturing Inc., Senior Notes
|
|
6.625
|
%
|
10/15/22
|
|
380,000
|
|
$ 410,875
|
|
Europcar Groupe SA, Senior Notes
|
|
11.500
|
%
|
5/15/17
|
|
200,000
|
EUR
|
289,844
|
(a)
|
Europcar Groupe SA, Senior Notes
|
|
9.375
|
%
|
4/15/18
|
|
1,075,000
|
EUR
|
1,320,383
|
(a)
|
Total Auto Components
|
|
|
|
|
|
|
|
2,021,102
|
|
Automobiles 0.3%
|
|
|
|
|
|
|
|
|
|
Chrysler Group LLC/CG Co.-Issuer Inc., Secured Notes
|
|
8.250
|
%
|
6/15/21
|
|
690,000
|
|
783,150
|
(b)
|
Jaguar Holding Co. II/Jaguar Merger Sub Inc., Senior Notes
|
|
9.500
|
%
|
12/1/19
|
|
290,000
|
|
332,412
|
(a)
|
Total Automobiles
|
|
|
|
|
|
|
|
1,115,562
|
|
Diversified Consumer Services 0.8%
|
|
|
|
|
|
|
|
|
|
Laureate Education Inc., Senior Notes
|
|
9.250
|
%
|
9/1/19
|
|
540,000
|
|
607,500
|
(a)
|
McGraw-Hill Global Education Holdings LLC/McGraw-Hill Global Education Finance, Senior Secured Notes
|
|
9.750
|
%
|
4/1/21
|
|
390,000
|
|
407,062
|
(a)
|
Service Corp. International, Senior Notes
|
|
7.625
|
%
|
10/1/18
|
|
185,000
|
|
219,225
|
(b)
|
Service Corp. International, Senior Notes
|
|
7.500
|
%
|
4/1/27
|
|
480,000
|
|
542,400
|
(b)
|
ServiceMaster Co., Senior Notes
|
|
7.000
|
%
|
8/15/20
|
|
1,180,000
|
|
1,175,575
|
|
StoneMor Partners LP/Cornerstone Family Services of WV, Senior Notes
|
|
7.875
|
%
|
6/1/21
|
|
500,000
|
|
497,500
|
(a)
|
Total Diversified Consumer Services
|
|
|
|
|
|
|
|
3,449,262
|
|
Hotels, Restaurants & Leisure 4.2%
|
|
|
|
|
|
|
|
|
|
Bossier Casino Venture Holdco Inc., Senior Secured Bonds
|
|
14.000
|
%
|
2/9/18
|
|
722,875
|
|
706,200
|
(a)(c)(d)(e)
|
Boyd Gaming Corp., Senior Notes
|
|
9.125
|
%
|
12/1/18
|
|
410,000
|
|
446,900
|
(b)
|
Boyd Gaming Corp., Senior Notes
|
|
9.000
|
%
|
7/1/20
|
|
670,000
|
|
726,950
|
|
Caesars Entertainment Operating Co. Inc., Senior Secured Notes
|
|
10.000
|
%
|
12/15/15
|
|
10,000
|
|
8,825
|
|
Caesars Entertainment Operating Co. Inc., Senior Secured Notes
|
|
11.250
|
%
|
6/1/17
|
|
1,280,000
|
|
1,340,800
|
(b)
|
Caesars Operating Escrow LLC/Caesars Escrow Corp., Senior Secured Notes
|
|
9.000
|
%
|
2/15/20
|
|
580,000
|
|
561,150
|
(a)
|
Caesars Operating Escrow LLC/Caesars Escrow Corp., Senior Secured Notes
|
|
9.000
|
%
|
2/15/20
|
|
60,000
|
|
58,050
|
(a)
|
Carrols Restaurant Group Inc., Senior Secured Notes
|
|
11.250
|
%
|
5/15/18
|
|
770,000
|
|
872,987
|
|
CCM Merger Inc., Senior Notes
|
|
9.125
|
%
|
5/1/19
|
|
940,000
|
|
1,034,000
|
(a)
|
Choctaw Resort Development Enterprise, Senior Notes
|
|
7.250
|
%
|
11/15/19
|
|
503,000
|
|
500,485
|
(a)
|
Downstream Development Quapaw, Senior Secured Notes
|
|
10.500
|
%
|
7/1/19
|
|
700,000
|
|
780,500
|
(a)(b)
|
El Pollo Loco Inc., Secured Notes
|
|
17.000
|
%
|
1/1/18
|
|
1,229,896
|
|
1,317,538
|
(a)(c)
|
Enterprise Inns PLC, Senior Secured Bonds
|
|
6.500
|
%
|
12/6/18
|
|
1,095,000
|
GBP
|
1,703,672
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
9
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Hotels, Restaurants & Leisure continued
|
|
|
|
|
|
|
|
|
|
Hoa Restaurant Group LLC/Hoa Finance Corp., Senior Secured Notes
|
|
11.250
|
%
|
4/1/17
|
|
880,000
|
|
$ 862,400
|
(a)(b)
|
Landrys Holdings II Inc., Senior Notes
|
|
10.250
|
%
|
1/1/18
|
|
420,000
|
|
447,300
|
(a)
|
Landrys Inc., Senior Notes
|
|
9.375
|
%
|
5/1/20
|
|
1,934,000
|
|
2,112,895
|
(a)
|
Mohegan Tribal Gaming Authority, Senior Secured Notes
|
|
10.500
|
%
|
12/15/16
|
|
1,730,000
|
|
1,725,675
|
(a)
|
NCL Corp. Ltd., Senior Notes
|
|
9.500
|
%
|
11/15/18
|
|
1,150,000
|
|
1,302,375
|
|
Rivers Pittsburgh Borrower LP/Rivers Pittsburgh Finance Corp., Senior Secured Notes
|
|
9.500
|
%
|
6/15/19
|
|
180,000
|
|
198,900
|
(a)
|
Seven Seas Cruises S de RL LLC, Senior Secured Notes
|
|
9.125
|
%
|
5/15/19
|
|
1,070,000
|
|
1,174,325
|
|
Total Hotels, Restaurants & Leisure
|
|
|
|
|
|
|
|
17,881,927
|
|
Household Durables 0.2%
|
|
|
|
|
|
|
|
|
|
William Lyon Homes Inc., Senior Notes
|
|
8.500
|
%
|
11/15/20
|
|
830,000
|
|
928,563
|
(a)
|
Media 6.8%
|
|
|
|
|
|
|
|
|
|
Carmike Cinemas Inc., Secured Notes
|
|
7.375
|
%
|
5/15/19
|
|
290,000
|
|
321,175
|
|
CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes
|
|
7.875
|
%
|
4/30/18
|
|
870,000
|
|
921,382
|
(b)
|
CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes
|
|
8.125
|
%
|
4/30/20
|
|
3,990,000
|
|
4,478,775
|
(b)
|
CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes
|
|
7.375
|
%
|
6/1/20
|
|
260,000
|
|
291,525
|
|
Cerved Technologies SpA, Senior Secured Notes
|
|
6.375
|
%
|
1/15/20
|
|
100,000
|
EUR
|
130,300
|
(a)
|
Cerved Technologies SpA, Senior Subordinated Notes
|
|
8.000
|
%
|
1/15/21
|
|
150,000
|
EUR
|
194,962
|
(a)
|
Clear Channel Worldwide Holdings Inc., Senior Notes
|
|
6.500
|
%
|
11/15/22
|
|
530,000
|
|
561,800
|
(a)
|
Clear Channel Worldwide Holdings Inc., Senior Notes
|
|
6.500
|
%
|
11/15/22
|
|
250,000
|
|
263,750
|
(a)
|
Clear Channel Worldwide Holdings Inc., Senior Subordinated Notes
|
|
7.625
|
%
|
3/15/20
|
|
70,000
|
|
74,375
|
|
CSC Holdings Inc., Senior Debentures
|
|
7.875
|
%
|
2/15/18
|
|
1,500,000
|
|
1,770,000
|
(b)
|
DISH DBS Corp., Senior Notes
|
|
7.875
|
%
|
9/1/19
|
|
920,000
|
|
1,036,150
|
(b)
|
DISH DBS Corp., Senior Notes
|
|
6.750
|
%
|
6/1/21
|
|
190,000
|
|
201,875
|
|
Global Generations Merger Subsidiary Inc., Senior Notes
|
|
11.000
|
%
|
12/15/20
|
|
590,000
|
|
681,450
|
(a)
|
Good Sam Enterprises LLC, Secured Notes
|
|
11.500
|
%
|
12/1/16
|
|
910,000
|
|
985,075
|
|
Grupo Televisa SA, Senior Bonds
|
|
6.625
|
%
|
1/15/40
|
|
1,300,000
|
|
1,558,374
|
(b)
|
Lynx II Corp., Senior Notes
|
|
6.375
|
%
|
4/15/23
|
|
1,510,000
|
|
1,581,725
|
(a)
|
Nara Cable Funding Ltd., Senior Secured Notes
|
|
8.875
|
%
|
12/1/18
|
|
1,500,000
|
EUR
|
2,073,913
|
(a)
|
NET Servicos de Comunicacao SA, Bonds
|
|
7.500
|
%
|
1/27/20
|
|
480,000
|
|
535,200
|
|
Ono Finance II PLC, Senior Bonds
|
|
10.875
|
%
|
7/15/19
|
|
1,195,000
|
|
1,269,688
|
(a)
|
Polish Television Holding BV, Senior Secured Bonds, step bond
|
|
11.250
|
%
|
5/15/17
|
|
675,000
|
EUR
|
947,517
|
(a)
|
Seat Pagine Gialle SpA, Senior Secured Notes
|
|
10.500
|
%
|
1/31/17
|
|
366,000
|
EUR
|
126,063
|
(a)(f)
|
Time Warner Inc.
|
|
6.500
|
%
|
11/15/36
|
|
160,000
|
|
190,207
|
(b)
|
TVN Finance Corp. III AB, Senior Notes
|
|
7.875
|
%
|
11/15/18
|
|
225,000
|
EUR
|
308,528
|
(a)
|
See Notes to Financial Statements.
10
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Media continued
|
|
|
|
|
|
|
|
|
|
UBM PLC, Notes
|
|
5.750
|
%
|
11/3/20
|
|
1,500,000
|
|
$ 1,565,581
|
(a)(b)
|
Univision Communications Inc., Senior Notes
|
|
8.500
|
%
|
5/15/21
|
|
710,000
|
|
772,125
|
(a)
|
Univision Communications Inc., Senior Secured Notes
|
|
6.875
|
%
|
5/15/19
|
|
840,000
|
|
896,700
|
(a)(b)
|
Univision Communications Inc., Senior Secured Notes
|
|
7.875
|
%
|
11/1/20
|
|
660,000
|
|
726,000
|
(a)(b)
|
Univision Communications Inc., Senior Secured Notes
|
|
6.750
|
%
|
9/15/22
|
|
90,000
|
|
97,200
|
(a)
|
UPC Holding BV, Senior Notes
|
|
9.875
|
%
|
4/15/18
|
|
330,000
|
|
367,125
|
(a)(b)
|
UPCB Finance II Ltd., Senior Notes
|
|
6.375
|
%
|
7/1/20
|
|
1,250,000
|
EUR
|
1,729,073
|
(a)
|
Ziggo Bond Co. BV, Senior Notes
|
|
8.000
|
%
|
5/15/18
|
|
1,450,000
|
EUR
|
2,049,543
|
(a)
|
Total Media
|
|
|
|
|
|
|
|
28,707,156
|
|
Multiline Retail 0.2%
|
|
|
|
|
|
|
|
|
|
Bon-Ton Department Stores Inc., Secured Notes
|
|
8.000
|
%
|
6/15/21
|
|
790,000
|
|
814,688
|
(a)
|
Neiman Marcus Group Inc., Senior Secured Notes
|
|
7.125
|
%
|
6/1/28
|
|
180,000
|
|
188,100
|
(b)
|
Total Multiline Retail
|
|
|
|
|
|
|
|
1,002,788
|
|
Specialty Retail 1.9%
|
|
|
|
|
|
|
|
|
|
American Greetings Corp., Senior Notes
|
|
7.375
|
%
|
12/1/21
|
|
700,000
|
|
713,125
|
(b)
|
Edcon Pty Ltd., Senior Secured Notes
|
|
9.500
|
%
|
3/1/18
|
|
1,825,000
|
EUR
|
2,419,484
|
(a)
|
Gap Inc., Senior Notes
|
|
5.950
|
%
|
4/12/21
|
|
1,750,000
|
|
2,034,896
|
(b)
|
Gymboree Corp., Senior Notes
|
|
9.125
|
%
|
12/1/18
|
|
1,030,000
|
|
1,002,963
|
|
New Academy Finance Co. LLC/New Academy Finance Corp., Senior Notes
|
|
8.000
|
%
|
6/15/18
|
|
150,000
|
|
155,250
|
(a)(c)
|
Spencer Spirit Holdings Inc., Senior Notes
|
|
9.000
|
%
|
5/1/18
|
|
1,130,000
|
|
1,132,825
|
(a)(c)
|
Spencer Spirit Holdings Inc./Spencer Gifts LLC/Spirit Halloween Superstores, Senior Notes
|
|
11.000
|
%
|
5/1/17
|
|
630,000
|
|
689,850
|
(a)(b)
|
Total Specialty Retail
|
|
|
|
|
|
|
|
8,148,393
|
|
Textiles, Apparel & Luxury Goods 0.1%
|
|
|
|
|
|
|
|
|
|
Empire Today LLC/Empire Today Finance Corp., Senior Secured Notes
|
|
11.375
|
%
|
2/1/17
|
|
650,000
|
|
598,000
|
(a)(b)
|
Total Consumer Discretionary
|
|
|
|
|
|
|
|
63,852,753
|
|
Consumer Staples 2.3%
|
|
|
|
|
|
|
|
|
|
Food Products 1.6%
|
|
|
|
|
|
|
|
|
|
Alicorp SAA, Senior Notes
|
|
3.875
|
%
|
3/20/23
|
|
320,000
|
|
315,200
|
(a)
|
Boparan Holdings Ltd., Senior Notes
|
|
9.875
|
%
|
4/30/18
|
|
900,000
|
GBP
|
1,531,554
|
(a)
|
Chiquita Brands International Inc./Chiquita Brands LLC, Senior Secured Notes
|
|
7.875
|
%
|
2/1/21
|
|
640,000
|
|
689,600
|
(a)
|
Foodcorp Ltd., Senior Secured Notes
|
|
8.750
|
%
|
3/1/18
|
|
650,000
|
EUR
|
940,938
|
(a)
|
Foodcorp Ltd., Senior Secured Notes
|
|
8.750
|
%
|
3/1/18
|
|
500,000
|
EUR
|
723,798
|
(a)
|
Harmony Foods Corp., Senior Secured Notes
|
|
10.000
|
%
|
5/1/16
|
|
306,000
|
|
327,420
|
(a)(b)
|
Marfrig Holding Europe BV, Senior Notes
|
|
8.375
|
%
|
5/9/18
|
|
440,000
|
|
407,000
|
(a)
|
Simmons Foods Inc., Senior Secured Notes
|
|
10.500
|
%
|
11/1/17
|
|
1,180,000
|
|
1,268,500
|
(a)
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
11
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Food Products continued
|
|
|
|
|
|
|
|
|
|
Wells Enterprises Inc., Senior Secured Notes
|
|
6.750
|
%
|
2/1/20
|
|
370,000
|
|
$ 397,750
|
(a)
|
Total Food Products
|
|
|
|
|
|
|
|
6,601,760
|
|
Household Products 0.3%
|
|
|
|
|
|
|
|
|
|
Harbinger Group Inc., Senior Secured Notes
|
|
7.875
|
%
|
7/15/19
|
|
200,000
|
|
214,000
|
(a)
|
Spectrum Brands Escrow Corp., Senior Notes
|
|
6.625
|
%
|
11/15/22
|
|
350,000
|
|
378,875
|
(a)
|
Sun Products Corp., Senior Notes
|
|
7.750
|
%
|
3/15/21
|
|
740,000
|
|
751,100
|
(a)
|
Total Household Products
|
|
|
|
|
|
|
|
1,343,975
|
|
Personal Products 0.1%
|
|
|
|
|
|
|
|
|
|
Hypermarcas SA, Notes
|
|
6.500
|
%
|
4/20/21
|
|
480,000
|
|
516,000
|
(a)(b)
|
Tobacco 0.3%
|
|
|
|
|
|
|
|
|
|
Alliance One International Inc., Senior Notes
|
|
10.000
|
%
|
7/15/16
|
|
1,310,000
|
|
1,383,687
|
(b)
|
Total Consumer Staples
|
|
|
|
|
|
|
|
9,845,422
|
|
Energy 17.4%
|
|
|
|
|
|
|
|
|
|
Energy Equipment & Services 1.4%
|
|
|
|
|
|
|
|
|
|
Atwood Oceanics Inc., Senior Notes
|
|
6.500
|
%
|
2/1/20
|
|
420,000
|
|
452,025
|
(b)
|
Basic Energy Services Inc., Senior Notes
|
|
7.750
|
%
|
10/15/22
|
|
50,000
|
|
52,875
|
|
Gulfmark Offshore Inc., Senior Notes
|
|
6.375
|
%
|
3/15/22
|
|
680,000
|
|
710,600
|
|
Hercules Offshore Inc., Senior Notes
|
|
10.250
|
%
|
4/1/19
|
|
490,000
|
|
558,600
|
(a)
|
Hercules Offshore Inc., Senior Secured Notes
|
|
10.500
|
%
|
10/15/17
|
|
1,375,000
|
|
1,485,000
|
(a)
|
Parker Drilling Co., Senior Notes
|
|
9.125
|
%
|
4/1/18
|
|
910,000
|
|
991,900
|
(b)
|
Petroleum Geo-Services ASA, Senior Notes
|
|
7.375
|
%
|
12/15/18
|
|
570,000
|
|
635,550
|
(a)(b)
|
SESI LLC, Senior Notes
|
|
7.125
|
%
|
12/15/21
|
|
780,000
|
|
879,450
|
|
TMK OAO Via TMK Capital SA, Senior Notes
|
|
6.750
|
%
|
4/3/20
|
|
460,000
|
|
447,925
|
(a)
|
Total Energy Equipment & Services
|
|
|
|
|
|
|
|
6,213,925
|
|
Oil, Gas & Consumable Fuels 16.0%
|
|
|
|
|
|
|
|
|
|
Alliance Oil Co., Ltd., Senior Notes
|
|
7.000
|
%
|
5/4/20
|
|
540,000
|
|
531,225
|
(a)
|
Anadarko Petroleum Corp., Senior Notes
|
|
6.450
|
%
|
9/15/36
|
|
50,000
|
|
61,092
|
|
Apache Corp., Senior Notes
|
|
6.000
|
%
|
1/15/37
|
|
280,000
|
|
332,062
|
(b)
|
Arch Coal Inc., Senior Notes
|
|
8.750
|
%
|
8/1/16
|
|
1,040,000
|
|
1,077,700
|
(b)
|
Arch Coal Inc., Senior Notes
|
|
9.875
|
%
|
6/15/19
|
|
390,000
|
|
403,650
|
(a)
|
Atlas Pipeline Partners LP/Atlas Pipeline Finance Corp., Senior Notes
|
|
6.625
|
%
|
10/1/20
|
|
280,000
|
|
298,900
|
(a)
|
Calumet Specialty Products Partners LP/Calumet Finance Corp., Senior Notes
|
|
9.375
|
%
|
5/1/19
|
|
580,000
|
|
648,150
|
(b)
|
Calumet Specialty Products Partners LP/Calumet Finance Corp., Senior Notes
|
|
9.375
|
%
|
5/1/19
|
|
210,000
|
|
234,675
|
|
Calumet Specialty Products Partners LP/Calumet Finance Corp., Senior Notes
|
|
9.625
|
%
|
8/1/20
|
|
430,000
|
|
490,200
|
(a)
|
Carrizo Oil & Gas Inc., Senior Notes
|
|
7.500
|
%
|
9/15/20
|
|
620,000
|
|
672,700
|
|
Chesapeake Energy Corp., Senior Notes
|
|
6.875
|
%
|
11/15/20
|
|
840,000
|
|
949,200
|
|
See Notes to Financial Statements.
12
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Oil, Gas & Consumable Fuels continued
|
|
|
|
|
|
|
|
|
|
Chesapeake Energy Corp., Senior Notes
|
|
6.125
|
%
|
2/15/21
|
|
730,000
|
|
$ 799,350
|
|
Colorado Interstate Gas Co., Senior Notes
|
|
6.800
|
%
|
11/15/15
|
|
160,000
|
|
182,944
|
(b)
|
Comstock Resources Inc., Senior Notes
|
|
9.500
|
%
|
6/15/20
|
|
600,000
|
|
669,000
|
(b)
|
CONSOL Energy Inc., Senior Notes
|
|
8.250
|
%
|
4/1/20
|
|
790,000
|
|
876,900
|
(b)
|
Corral Petroleum Holdings AB, Senior Notes
|
|
15.000
|
%
|
12/31/17
|
|
519,170
|
|
508,787
|
(a)(c)(e)
|
Crosstex Energy LP/Crosstex Energy Finance Corp., Senior Notes
|
|
7.125
|
%
|
6/1/22
|
|
1,260,000
|
|
1,354,500
|
|
Devon Energy Corp., Debentures
|
|
7.950
|
%
|
4/15/32
|
|
230,000
|
|
315,026
|
(b)
|
Dolphin Energy Ltd., Senior Secured Bonds
|
|
5.888
|
%
|
6/15/19
|
|
990,753
|
|
1,087,351
|
(a)
|
Ecopetrol SA, Senior Notes
|
|
7.625
|
%
|
7/23/19
|
|
1,200,000
|
|
1,470,600
|
(b)
|
EDC Finance Ltd., Senior Notes
|
|
4.875
|
%
|
4/17/20
|
|
900,000
|
|
891,000
|
(a)
|
El Paso Corp., Medium-Term Notes
|
|
7.750
|
%
|
1/15/32
|
|
1,260,000
|
|
1,421,015
|
(b)
|
El Paso Natural Gas Co., Bonds
|
|
8.375
|
%
|
6/15/32
|
|
70,000
|
|
98,659
|
|
Enterprise Products Operating LLC, Senior Bonds
|
|
6.300
|
%
|
9/15/17
|
|
550,000
|
|
653,167
|
(b)
|
EP Energy AS, Senior Secured Notes
|
|
5.875
|
%
|
11/1/19
|
|
690,000
|
EUR
|
991,039
|
(a)
|
EPE Holdings LLC/EP Energy Bond Co. Inc., Senior Notes
|
|
8.125
|
%
|
12/15/17
|
|
620,000
|
|
664,950
|
(a)(c)
|
EXCO Resources Inc., Senior Notes
|
|
7.500
|
%
|
9/15/18
|
|
460,000
|
|
460,000
|
|
GeoPark Latin America Ltd. Agencia en Chile, Senior Secured Notes
|
|
7.500
|
%
|
2/11/20
|
|
420,000
|
|
432,600
|
(a)
|
Halcon Resources Corp., Senior Notes
|
|
9.750
|
%
|
7/15/20
|
|
870,000
|
|
908,062
|
|
Halcon Resources Corp., Senior Notes
|
|
8.875
|
%
|
5/15/21
|
|
730,000
|
|
746,425
|
|
Hiland Partners LP/Hiland Partners Finance Corp., Senior Notes
|
|
7.250
|
%
|
10/1/20
|
|
300,000
|
|
328,500
|
(a)
|
KazMunayGas Finance Sub BV, Senior Notes
|
|
8.375
|
%
|
7/2/13
|
|
2,640,000
|
|
2,653,306
|
(a)(b)
|
Kerr-McGee Corp., Notes
|
|
6.950
|
%
|
7/1/24
|
|
920,000
|
|
1,136,158
|
(b)
|
Kinder Morgan Energy Partners LP, Medium-Term Notes
|
|
6.950
|
%
|
1/15/38
|
|
330,000
|
|
408,627
|
(b)
|
Kodiak Oil & Gas Corp., Senior Notes
|
|
8.125
|
%
|
12/1/19
|
|
770,000
|
|
870,100
|
|
LUKOIL International Finance BV, Bonds
|
|
6.356
|
%
|
6/7/17
|
|
1,542,000
|
|
1,728,967
|
(a)(b)
|
LUKOIL International Finance BV, Bonds
|
|
6.656
|
%
|
6/7/22
|
|
496,000
|
|
567,300
|
(a)
|
Magnum Hunter Resources Corp., Senior Notes
|
|
9.750
|
%
|
5/15/20
|
|
630,000
|
|
655,200
|
(a)
|
Magnum Hunter Resources Corp., Senior Notes
|
|
9.750
|
%
|
5/15/20
|
|
610,000
|
|
634,400
|
(a)
|
MarkWest Energy Partners LP/MarkWest Energy Finance Corp., Senior Notes
|
|
6.750
|
%
|
11/1/20
|
|
490,000
|
|
536,550
|
(b)
|
MarkWest Energy Partners LP/MarkWest Energy Finance Corp., Senior Notes
|
|
6.500
|
%
|
8/15/21
|
|
143,000
|
|
155,513
|
|
Milagro Oil & Gas Inc., Secured Notes
|
|
10.500
|
%
|
5/15/16
|
|
900,000
|
|
742,500
|
|
Murray Energy Corp., Senior Secured Notes
|
|
8.625
|
%
|
6/15/21
|
|
490,000
|
|
506,537
|
(a)
|
Novatek Finance Ltd., Notes
|
|
6.604
|
%
|
2/3/21
|
|
820,000
|
|
929,388
|
(a)
|
Overseas Shipholding Group Inc., Senior Notes
|
|
8.750
|
%
|
12/1/13
|
|
480,000
|
|
406,800
|
(f)
|
Overseas Shipholding Group Inc., Senior Notes
|
|
8.125
|
%
|
3/30/18
|
|
1,060,000
|
|
885,100
|
(f)
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
13
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Oil, Gas & Consumable Fuels continued
|
|
|
|
|
|
|
|
|
|
Pacific Drilling V Ltd., Senior Secured Notes
|
|
7.250
|
%
|
12/1/17
|
|
650,000
|
|
$ 697,125
|
(a)
|
Pacific Rubiales Energy Corp., Senior Notes
|
|
7.250
|
%
|
12/12/21
|
|
780,000
|
|
877,500
|
(a)
|
Pacific Rubiales Energy Corp., Senior Notes
|
|
5.125
|
%
|
3/28/23
|
|
900,000
|
|
911,250
|
(a)
|
Pan American Energy LLC, Senior Notes
|
|
7.875
|
%
|
5/7/21
|
|
382,000
|
|
370,540
|
(a)
|
Pan American Energy LLC, Senior Notes
|
|
7.875
|
%
|
5/7/21
|
|
283,000
|
|
274,510
|
(a)
|
Peabody Energy Corp., Senior Notes
|
|
7.875
|
%
|
11/1/26
|
|
1,040,000
|
|
1,118,000
|
(b)
|
Pemex Project Funding Master Trust, Senior Bonds
|
|
6.625
|
%
|
6/15/35
|
|
3,387,000
|
|
3,895,050
|
(g)
|
Petrobras International Finance Co., Senior Notes
|
|
5.375
|
%
|
1/27/21
|
|
410,000
|
|
435,557
|
(b)
|
Petrobras International Finance Co., Senior Notes
|
|
6.875
|
%
|
1/20/40
|
|
1,620,000
|
|
1,756,859
|
(b)
|
Petroleos Mexicanos, Notes
|
|
8.000
|
%
|
5/3/19
|
|
2,150,000
|
|
2,687,500
|
(b)
|
Petroleos Mexicanos, Senior Bonds
|
|
5.500
|
%
|
6/27/44
|
|
1,220,000
|
|
1,198,650
|
(a)
|
Petroleos Mexicanos, Senior Notes
|
|
5.500
|
%
|
1/21/21
|
|
970,000
|
|
1,081,550
|
(b)
|
Petroleum Co. of Trinidad & Tobago Ltd., Senior Notes
|
|
9.750
|
%
|
8/14/19
|
|
870,000
|
|
1,120,125
|
(a)(b)
|
Petronas Capital Ltd., Senior Notes
|
|
5.250
|
%
|
8/12/19
|
|
2,385,000
|
|
2,747,570
|
(a)(b)
|
Petronas Capital Ltd., Senior Notes
|
|
5.250
|
%
|
8/12/19
|
|
560,000
|
|
645,132
|
(a)
|
Plains Exploration & Production Co., Senior Notes
|
|
8.625
|
%
|
10/15/19
|
|
515,000
|
|
583,237
|
(b)
|
PT Pertamina Persero, Notes
|
|
5.250
|
%
|
5/23/21
|
|
1,040,000
|
|
1,092,000
|
(a)
|
PT Pertamina Persero, Senior Notes
|
|
4.300
|
%
|
5/20/23
|
|
560,000
|
|
541,800
|
(a)
|
Quicksilver Resources Inc., Senior Notes
|
|
11.750
|
%
|
1/1/16
|
|
2,005,000
|
|
2,135,325
|
(b)
|
Range Resources Corp., Senior Subordinated Notes
|
|
8.000
|
%
|
5/15/19
|
|
460,000
|
|
503,700
|
(b)
|
Ras Laffan Liquefied Natural Gas Co., Ltd. III, Senior Secured Bonds
|
|
6.750
|
%
|
9/30/19
|
|
1,007,000
|
|
1,257,491
|
(a)
|
Reliance Holdings USA Inc., Senior Notes
|
|
4.500
|
%
|
10/19/20
|
|
970,000
|
|
1,017,398
|
(a)(b)
|
Samson Investment Co., Senior Notes
|
|
10.000
|
%
|
2/15/20
|
|
1,840,000
|
|
1,927,400
|
(a)(b)
|
SandRidge Energy Inc., Senior Notes
|
|
7.500
|
%
|
3/15/21
|
|
270,000
|
|
279,450
|
|
SandRidge Energy Inc., Senior Notes
|
|
7.500
|
%
|
2/15/23
|
|
560,000
|
|
579,600
|
|
Shelf Drilling Holdings Ltd., Senior Secured Notes
|
|
8.625
|
%
|
11/1/18
|
|
510,000
|
|
540,600
|
(a)
|
Sibur Securities Ltd., Senior Notes
|
|
3.914
|
%
|
1/31/18
|
|
430,000
|
|
414,413
|
(a)
|
Sidewinder Drilling Inc., Senior Notes
|
|
9.750
|
%
|
11/15/19
|
|
310,000
|
|
323,950
|
(a)
|
TNK-BP Finance SA, Senior Notes
|
|
6.625
|
%
|
3/20/17
|
|
300,000
|
|
336,000
|
(a)
|
TNK-BP Finance SA, Senior Notes
|
|
7.875
|
%
|
3/13/18
|
|
1,010,000
|
|
1,194,325
|
(a)(b)
|
Transportadora de Gas del Peru SA, Senior Notes
|
|
4.250
|
%
|
4/30/28
|
|
560,000
|
|
533,400
|
(a)
|
Williams Cos. Inc., Senior Notes
|
|
8.750
|
%
|
3/15/32
|
|
486,000
|
|
650,739
|
(b)
|
Xinergy Ltd., Senior Secured Notes
|
|
9.250
|
%
|
5/15/19
|
|
1,310,000
|
|
975,950
|
(a)
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
|
68,079,571
|
|
Total Energy
|
|
|
|
|
|
|
|
74,293,496
|
|
Financials 13.1%
|
|
|
|
|
|
|
|
|
|
Capital Markets 1.4%
|
|
|
|
|
|
|
|
|
|
Goldman Sachs Group Inc., Senior Notes
|
|
6.150
|
%
|
4/1/18
|
|
330,000
|
|
384,043
|
(b)
|
Goldman Sachs Group Inc., Senior Notes
|
|
7.500
|
%
|
2/15/19
|
|
1,430,000
|
|
1,774,526
|
(b)
|
See Notes to Financial Statements.
14
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Capital Markets continued
|
|
|
|
|
|
|
|
|
|
Goldman Sachs Group Inc., Subordinated Notes
|
|
6.750
|
%
|
10/1/37
|
|
2,500,000
|
|
$ 2,734,960
|
(b)
|
Merrill Lynch & Co. Inc., Notes
|
|
6.875
|
%
|
4/25/18
|
|
390,000
|
|
465,057
|
(b)
|
Morgan Stanley, Medium-Term Notes
|
|
6.625
|
%
|
4/1/18
|
|
470,000
|
|
553,771
|
(b)
|
Total Capital Markets
|
|
|
|
|
|
|
|
5,912,357
|
|
Commercial Banks 2.9%
|
|
|
|
|
|
|
|
|
|
Barclays Bank PLC, Subordinated Notes
|
|
10.179
|
%
|
6/12/21
|
|
2,050,000
|
|
2,737,273
|
(a)(b)
|
Barclays Bank PLC, Subordinated Notes
|
|
7.625
|
%
|
11/21/22
|
|
1,500,000
|
|
1,511,250
|
|
BBVA US Senior SAU, Senior Notes
|
|
4.664
|
%
|
10/9/15
|
|
390,000
|
|
405,876
|
(b)
|
Credit Agricole SA, Subordinated Notes
|
|
8.375
|
%
|
10/13/19
|
|
870,000
|
|
975,487
|
(a)(b)(h)(i)
|
Intesa Sanpaolo SpA, Senior Notes
|
|
3.625
|
%
|
8/12/15
|
|
2,600,000
|
|
2,625,160
|
(a)(b)
|
M&T Bank Corp., Junior Subordinated Notes
|
|
6.875
|
%
|
6/15/16
|
|
1,880,000
|
|
1,966,941
|
(a)(b)(i)
|
Royal Bank of Scotland Group PLC, Junior Subordinated Bonds
|
|
7.648
|
%
|
9/30/31
|
|
460,000
|
|
485,300
|
(b)(h)(i)
|
Royal Bank of Scotland Group PLC, Subordinated Notes
|
|
5.000
|
%
|
10/1/14
|
|
782,000
|
|
809,448
|
(b)
|
Royal Bank of Scotland NV, Subordinated Notes
|
|
7.750
|
%
|
5/15/23
|
|
340,000
|
|
379,602
|
|
Santander Issuances SAU, Notes
|
|
5.911
|
%
|
6/20/16
|
|
600,000
|
|
643,949
|
(a)
|
Total Commercial Banks
|
|
|
|
|
|
|
|
12,540,286
|
|
Consumer Finance 1.3%
|
|
|
|
|
|
|
|
|
|
Ally Financial Inc., Senior Notes
|
|
8.000
|
%
|
11/1/31
|
|
1,957,000
|
|
2,534,315
|
(b)
|
American Express Co., Notes
|
|
7.000
|
%
|
3/19/18
|
|
260,000
|
|
320,131
|
(b)
|
GMAC International Finance BV, Senior Bonds
|
|
7.500
|
%
|
4/21/15
|
|
910,000
|
EUR
|
1,296,200
|
(a)
|
HSBC Finance Corp., Senior Notes
|
|
6.676
|
%
|
1/15/21
|
|
970,000
|
|
1,151,777
|
(b)
|
SLM Corp., Medium-Term Notes, Senior Notes
|
|
8.450
|
%
|
6/15/18
|
|
210,000
|
|
234,150
|
|
Total Consumer Finance
|
|
|
|
|
|
|
|
5,536,573
|
|
Diversified Financial Services 5.5%
|
|
|
|
|
|
|
|
|
|
Bank of America Corp., Senior Notes
|
|
5.650
|
%
|
5/1/18
|
|
490,000
|
|
561,781
|
(b)
|
Bank of America Corp., Senior Notes
|
|
7.625
|
%
|
6/1/19
|
|
1,480,000
|
|
1,866,464
|
(b)
|
Bankrate Inc., Senior Secured Notes
|
|
11.750
|
%
|
7/15/15
|
|
1,466,000
|
|
1,570,452
|
(b)
|
Citigroup Inc., Senior Notes
|
|
8.500
|
%
|
5/22/19
|
|
2,000,000
|
|
2,623,274
|
(b)
|
Compiler Finance Subordinated Inc., Senior Notes
|
|
7.000
|
%
|
5/1/21
|
|
170,000
|
|
169,150
|
(a)
|
General Electric Capital Corp., Senior Notes
|
|
5.625
|
%
|
5/1/18
|
|
650,000
|
|
761,853
|
(b)
|
General Electric Capital Corp., Senior Notes
|
|
4.625
|
%
|
1/7/21
|
|
2,090,000
|
|
2,312,198
|
(b)
|
Globe Luxembourg SCA, Senior Secured Notes
|
|
9.625
|
%
|
5/1/18
|
|
970,000
|
|
993,038
|
(a)
|
ING US Inc., Junior Subordinated Notes
|
|
5.650
|
%
|
5/15/53
|
|
160,000
|
|
161,200
|
(a)(h)
|
International Lease Finance Corp., Senior Notes
|
|
5.750
|
%
|
5/15/16
|
|
500,000
|
|
538,415
|
|
International Lease Finance Corp., Senior Notes
|
|
8.750
|
%
|
3/15/17
|
|
1,620,000
|
|
1,925,775
|
|
International Lease Finance Corp., Senior Notes
|
|
8.250
|
%
|
12/15/20
|
|
2,530,000
|
|
3,073,950
|
|
JPMorgan Chase & Co., Junior Subordinated Bonds
|
|
5.150
|
%
|
5/1/23
|
|
4,780,000
|
|
4,839,750
|
(h)(i)
|
Nationstar Mortgage LLC/Nationstar Capital Corp., Senior Notes
|
|
7.875
|
%
|
10/1/20
|
|
600,000
|
|
660,000
|
(a)
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
15
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Diversified Financial Services continued
|
|
|
|
|
|
|
|
|
|
TransUnion Holding Co. Inc., Senior Notes
|
|
9.625
|
%
|
6/15/18
|
|
740,000
|
|
$ 801,050
|
|
ZFS Finance USA Trust II, Bonds
|
|
6.450
|
%
|
12/15/65
|
|
500,000
|
|
547,500
|
(a)(b)(h)
|
Total Diversified Financial Services
|
|
|
|
|
|
|
|
23,405,850
|
|
Insurance 1.5%
|
|
|
|
|
|
|
|
|
|
American International Group Inc., Senior Notes
|
|
8.250
|
%
|
8/15/18
|
|
4,000,000
|
|
5,094,384
|
(b)
|
Fidelity & Guaranty Life Holdings Inc., Senior Notes
|
|
6.375
|
%
|
4/1/21
|
|
460,000
|
|
476,100
|
(a)
|
ING Capital Funding Trust III, Junior Subordinated Bonds
|
|
3.884
|
%
|
9/30/13
|
|
240,000
|
|
236,400
|
(h)(i)
|
Liberty Mutual Group Inc., Junior Subordinated Bonds
|
|
7.800
|
%
|
3/15/37
|
|
490,000
|
|
588,000
|
(a)
|
Total Insurance
|
|
|
|
|
|
|
|
6,394,884
|
|
Real Estate Investment Trusts (REITs) 0.4%
|
|
|
|
|
|
|
|
|
|
WEA Finance LLC/WT Finance Aust Pty. Ltd., Senior Notes
|
|
6.750
|
%
|
9/2/19
|
|
1,360,000
|
|
1,670,764
|
(a)(b)
|
Real Estate Management & Development 0.1%
|
|
|
|
|
|
|
|
|
|
Country Garden Holdings Co., Ltd., Senior Notes
|
|
11.125
|
%
|
2/23/18
|
|
380,000
|
|
426,550
|
(a)
|
Total Financials
|
|
|
|
|
|
|
|
55,887,264
|
|
Health Care 5.3%
|
|
|
|
|
|
|
|
|
|
Health Care Equipment & Supplies 0.8%
|
|
|
|
|
|
|
|
|
|
Alere Inc., Senior Subordinated Notes
|
|
6.500
|
%
|
6/15/20
|
|
540,000
|
|
544,725
|
(a)
|
Hologic Inc., Senior Notes
|
|
6.250
|
%
|
8/1/20
|
|
380,000
|
|
408,025
|
|
Lantheus Medical Imaging Inc., Senior Notes
|
|
9.750
|
%
|
5/15/17
|
|
990,000
|
|
949,162
|
|
Ontex IV SA, Senior Notes
|
|
9.000
|
%
|
4/15/19
|
|
640,000
|
EUR
|
875,511
|
(a)
|
Ontex IV SA, Senior Notes
|
|
9.000
|
%
|
4/15/19
|
|
400,000
|
EUR
|
547,195
|
(a)
|
Total Health Care Equipment & Supplies
|
|
|
|
|
|
|
|
3,324,618
|
|
Health Care Providers & Services 3.9%
|
|
|
|
|
|
|
|
|
|
Acadia Healthcare Co. Inc., Senior Notes
|
|
12.875
|
%
|
11/1/18
|
|
670,000
|
|
837,500
|
(b)
|
Acadia Healthcare Co. Inc., Senior Notes
|
|
6.125
|
%
|
3/15/21
|
|
190,000
|
|
199,025
|
(a)
|
CHS/Community Health Systems Inc., Senior Notes
|
|
8.000
|
%
|
11/15/19
|
|
980,000
|
|
1,082,900
|
(b)
|
CRC Health Corp., Senior Subordinated Notes
|
|
10.750
|
%
|
2/1/16
|
|
2,520,000
|
|
2,575,125
|
|
Crown Newco 3 PLC, Senior Subordinated Notes
|
|
8.875
|
%
|
2/15/19
|
|
750,000
|
GBP
|
1,176,585
|
(a)
|
DJO Finance LLC/DJO Finance Corp., Senior Notes
|
|
9.875
|
%
|
4/15/18
|
|
730,000
|
|
804,825
|
|
ExamWorks Group Inc., Senior Notes
|
|
9.000
|
%
|
7/15/19
|
|
500,000
|
|
552,500
|
|
Fresenius Medical Care U.S. Finance Inc., Senior Notes
|
|
6.875
|
%
|
7/15/17
|
|
1,080,000
|
|
1,236,600
|
(b)
|
Fresenius U.S. Finance II Inc., Senior Notes
|
|
9.000
|
%
|
7/15/15
|
|
110,000
|
|
127,050
|
(a)(b)
|
HCA Holdings Inc., Senior Notes
|
|
6.250
|
%
|
2/15/21
|
|
40,000
|
|
42,900
|
|
HCA Inc., Senior Secured Notes
|
|
8.500
|
%
|
4/15/19
|
|
1,450,000
|
|
1,584,125
|
(b)
|
Humana Inc., Senior Notes
|
|
7.200
|
%
|
6/15/18
|
|
2,000,000
|
|
2,410,958
|
(b)
|
IASIS Healthcare LLC/IASIS Capital Corp., Senior Notes
|
|
8.375
|
%
|
5/15/19
|
|
430,000
|
|
451,500
|
|
INC Research LLC, Senior Notes
|
|
11.500
|
%
|
7/15/19
|
|
280,000
|
|
302,400
|
(a)
|
Labco SAS, Senior Secured Notes
|
|
8.500
|
%
|
1/15/18
|
|
1,042,000
|
EUR
|
1,445,757
|
(a)
|
Physiotherapy Associates Holdings Inc., Senior Notes
|
|
11.875
|
%
|
5/1/19
|
|
640,000
|
|
486,400
|
(a)(f)
|
See Notes to Financial Statements.
16
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Health Care Providers & Services continued
|
|
|
|
|
|
|
|
|
|
Radnet Management Inc., Senior Notes
|
|
10.375
|
%
|
4/1/18
|
|
860,000
|
|
$ 927,725
|
|
US Oncology Inc. Escrow
|
|
|
|
|
|
150,000
|
|
6,562
|
*
|
Vanguard Health Holdings Co., II LLC, Senior Notes
|
|
8.000
|
%
|
2/1/18
|
|
360,000
|
|
383,850
|
(b)
|
Total Health Care Providers & Services
|
|
|
|
|
|
|
|
16,634,287
|
|
Pharmaceuticals 0.6%
|
|
|
|
|
|
|
|
|
|
ConvaTec Healthcare E SA, Senior Notes
|
|
10.875
|
%
|
12/15/18
|
|
1,460,000
|
EUR
|
2,172,791
|
(a)
|
Rottapharm Ltd., Senior Notes
|
|
6.125
|
%
|
11/15/19
|
|
250,000
|
EUR
|
332,996
|
(a)
|
Total Pharmaceuticals
|
|
|
|
|
|
|
|
2,505,787
|
|
Total Health Care
|
|
|
|
|
|
|
|
22,464,692
|
|
Industrials 12.3%
|
|
|
|
|
|
|
|
|
|
Aerospace & Defense 1.4%
|
|
|
|
|
|
|
|
|
|
Ducommun Inc., Senior Notes
|
|
9.750
|
%
|
7/15/18
|
|
550,000
|
|
613,250
|
(b)
|
Erickson Air-Crane Inc., Senior Secured Notes
|
|
8.250
|
%
|
5/1/20
|
|
1,150,000
|
|
1,188,813
|
(a)
|
GenCorp Inc., Secured Notes
|
|
7.125
|
%
|
3/15/21
|
|
420,000
|
|
451,500
|
(a)
|
Kratos Defense & Security Solutions Inc., Senior Secured Notes
|
|
10.000
|
%
|
6/1/17
|
|
1,550,000
|
|
1,697,250
|
(b)
|
Triumph Group Inc., Senior Notes
|
|
8.625
|
%
|
7/15/18
|
|
460,000
|
|
503,700
|
|
Wyle Services Corp., Senior Subordinated Notes
|
|
10.500
|
%
|
4/1/18
|
|
1,550,000
|
|
1,619,750
|
(a)
|
Total Aerospace & Defense
|
|
|
|
|
|
|
|
6,074,263
|
|
Airlines 1.4%
|
|
|
|
|
|
|
|
|
|
Air Canada, Pass-Through Trust, Secured Notes
|
|
6.625
|
%
|
5/15/18
|
|
310,000
|
|
319,238
|
(a)
|
American Airlines, Pass-Through Trust, Secured Notes
|
|
7.000
|
%
|
1/31/18
|
|
359,591
|
|
382,965
|
(a)(b)
|
American Airlines, Pass-Through Trust, Secured Notes
|
|
6.125
|
%
|
7/15/18
|
|
1,380,000
|
|
1,386,900
|
(a)
|
DAE Aviation Holdings Inc., Senior Notes
|
|
11.250
|
%
|
8/1/15
|
|
821,000
|
|
831,262
|
(a)
|
Delta Air Lines Inc., Pass-Through Certificates
|
|
8.954
|
%
|
8/10/14
|
|
57,298
|
|
60,197
|
|
Delta Air Lines Inc., Pass-Through Certificates, Secured Notes
|
|
8.021
|
%
|
8/10/22
|
|
376,373
|
|
416,833
|
(b)
|
Delta Air Lines Inc., Secured Notes
|
|
6.375
|
%
|
1/2/16
|
|
260,000
|
|
271,700
|
(a)(b)
|
Heathrow Finance PLC, Senior Secured Notes
|
|
7.125
|
%
|
3/1/17
|
|
900,000
|
GBP
|
1,508,171
|
(a)
|
United Airlines Inc., Pass-Through Certificates
|
|
7.373
|
%
|
12/15/15
|
|
143,599
|
|
152,215
|
(b)
|
United Airlines Inc., Pass-Through Certificates, Senior Secured Notes
|
|
6.125
|
%
|
4/29/18
|
|
400,000
|
|
420,000
|
|
United Airlines Inc., Pass-Through Certificates, Subordinated Secured Notes
|
|
7.339
|
%
|
4/19/14
|
|
247,190
|
|
252,752
|
(b)
|
Total Airlines
|
|
|
|
|
|
|
|
6,002,233
|
|
Building Products 0.7%
|
|
|
|
|
|
|
|
|
|
Andrade Gutierrez International SA, Senior Notes
|
|
4.000
|
%
|
4/30/18
|
|
700,000
|
|
695,625
|
(a)
|
Ashton Woods USA LLC/Ashton Woods Finance Co., Senior Notes
|
|
6.875
|
%
|
2/15/21
|
|
560,000
|
|
581,700
|
(a)
|
BC Mountain LLC/BC Mountain Finance Inc., Senior Notes
|
|
7.000
|
%
|
2/1/21
|
|
190,000
|
|
201,875
|
(a)
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
17
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Building Products continued
|
|
|
|
|
|
|
|
|
|
Builders FirstSource Inc., Senior Secured Notes
|
|
7.625
|
%
|
6/1/21
|
|
260,000
|
|
$
|
261,950
|
(a)
|
Rearden G Holdings EINS GmbH, Senior Notes
|
|
7.875
|
%
|
3/30/20
|
|
360,000
|
|
393,300
|
(a)(b)
|
Spie BondCo 3 SCA, Secured Notes
|
|
11.000
|
%
|
8/15/19
|
|
613,000
|
EUR
|
865,466
|
(a)
|
Total Building Products
|
|
|
|
|
|
|
|
2,999,916
|
|
Commercial Services & Supplies 1.7%
|
|
|
|
|
|
|
|
|
|
Altegrity Inc., Senior Subordinated Notes
|
|
10.500
|
%
|
11/1/15
|
|
571,000
|
|
541,022
|
(a)
|
ARC Document Solutions Inc., Senior Notes
|
|
10.500
|
%
|
12/15/16
|
|
1,170,000
|
|
1,208,025
|
|
JM Huber Corp., Senior Notes
|
|
9.875
|
%
|
11/1/19
|
|
460,000
|
|
532,450
|
(a)(b)
|
Monitronics International Inc., Senior Notes
|
|
9.125
|
%
|
4/1/20
|
|
1,470,000
|
|
1,594,950
|
|
RSC Equipment Rental Inc./RSC Holdings III LLC, Senior Notes
|
|
8.250
|
%
|
2/1/21
|
|
430,000
|
|
478,375
|
(b)
|
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes
|
|
7.750
|
%
|
4/15/20
|
|
956,000
|
|
1,070,720
|
(a)(b)
|
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes
|
|
7.750
|
%
|
4/15/20
|
|
309,000
|
|
346,080
|
(a)
|
United Rentals North America Inc., Senior Notes
|
|
7.625
|
%
|
4/15/22
|
|
948,000
|
|
1,054,650
|
(b)
|
United Rentals North America Inc., Senior Subordinated Notes
|
|
8.375
|
%
|
9/15/20
|
|
270,000
|
|
295,650
|
|
Total Commercial Services & Supplies
|
|
|
|
|
|
|
|
7,121,922
|
|
Construction & Engineering 0.9%
|
|
|
|
|
|
|
|
|
|
Abengoa Finance SAU, Senior Notes
|
|
8.875
|
%
|
11/1/17
|
|
770,000
|
|
743,050
|
(a)(b)
|
Odebrecht Finance Ltd., Senior Notes
|
|
4.375
|
%
|
4/25/25
|
|
2,610,000
|
|
2,538,225
|
(a)
|
PH Holding LLC, Secured Notes
|
|
9.750
|
%
|
12/31/17
|
|
550,000
|
|
581,369
|
(d)(e)
|
Total Construction & Engineering
|
|
|
|
|
|
|
|
3,862,644
|
|
Electrical Equipment 0.5%
|
|
|
|
|
|
|
|
|
|
313 Group Inc., Senior Secured Notes
|
|
6.375
|
%
|
12/1/19
|
|
500,000
|
|
501,250
|
(a)
|
International Wire Group Holdings Inc., Senior Secured Notes
|
|
8.500
|
%
|
10/15/17
|
|
560,000
|
|
579,600
|
(a)
|
NES Rentals Holdings Inc., Senior Secured Notes
|
|
7.875
|
%
|
5/1/18
|
|
770,000
|
|
795,025
|
(a)
|
Trionista Holdco GmbH, Senior Secured Notes
|
|
5.000
|
%
|
4/30/20
|
|
100,000
|
EUR
|
133,224
|
(a)
|
Trionista TopCo GmbH, Senior Subordinated Notes
|
|
6.875
|
%
|
4/30/21
|
|
100,000
|
EUR
|
132,575
|
(a)
|
Total Electrical Equipment
|
|
|
|
|
|
|
|
2,141,674
|
|
Industrial Conglomerates 0.3%
|
|
|
|
|
|
|
|
|
|
Leucadia National Corp., Senior Notes
|
|
8.125
|
%
|
9/15/15
|
|
540,000
|
|
615,600
|
|
Sinochem Overseas Capital Co., Ltd., Senior Notes
|
|
4.500
|
%
|
11/12/20
|
|
780,000
|
|
834,042
|
(a)(b)
|
Total Industrial Conglomerates
|
|
|
|
|
|
|
|
1,449,642
|
|
Machinery 1.3%
|
|
|
|
|
|
|
|
|
|
Dematic SA/DH Services Luxembourg Sarl, Senior Notes
|
|
7.750
|
%
|
12/15/20
|
|
1,490,000
|
|
1,612,925
|
(a)
|
Global Brass and Copper Inc., Senior Secured Notes
|
|
9.500
|
%
|
6/1/19
|
|
680,000
|
|
768,400
|
(a)(b)
|
KION Finance SA, Senior Secured Notes
|
|
6.750
|
%
|
2/15/20
|
|
1,620,000
|
EUR
|
2,308,258
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
18
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Machinery continued
|
|
|
|
|
|
|
|
|
|
KM Germany Holdings GmbH, Senior Secured Notes
|
|
8.750
|
%
|
12/15/20
|
|
380,000
|
EUR
|
$
|
526,008
|
(a)
|
SPL Logistics Escrow LLC, Senior Secured Notes
|
|
8.875
|
%
|
8/1/20
|
|
480,000
|
|
505,200
|
(a)
|
Total Machinery
|
|
|
|
|
|
|
|
5,720,791
|
|
Marine 0.8%
|
|
|
|
|
|
|
|
|
|
Horizon Lines LLC, Secured Notes
|
|
13.000
|
%
|
10/15/16
|
|
848,035
|
|
797,153
|
(c)
|
Horizon Lines LLC, Senior Secured Notes
|
|
11.000
|
%
|
10/15/16
|
|
511,000
|
|
512,277
|
|
Navios Maritime Acquisition Corp./Navios Acquisition Finance U.S. Inc., Senior Secured Notes
|
|
8.625
|
%
|
11/1/17
|
|
1,580,000
|
|
1,643,200
|
(b)
|
Ultrapetrol Bahamas Ltd., Senior Secured Mortgage Notes
|
|
8.875
|
%
|
6/15/21
|
|
490,000
|
|
501,025
|
(a)
|
Total Marine
|
|
|
|
|
|
|
|
3,453,655
|
|
Road & Rail 1.2%
|
|
|
|
|
|
|
|
|
|
Florida East Coast Holdings Corp., Senior Notes
|
|
10.500
|
%
|
8/1/17
|
|
1,694,143
|
|
1,770,379
|
(c)
|
Gategroup Finance Luxembourg SA, Senior Notes
|
|
6.750
|
%
|
3/1/19
|
|
1,200,000
|
EUR
|
1,598,692
|
(a)
|
Gategroup Finance Luxembourg SA, Senior Notes
|
|
6.750
|
%
|
3/1/19
|
|
210,000
|
EUR
|
279,771
|
(a)
|
Jack Cooper Holdings Corp., Senior Secured Notes
|
|
13.750
|
%
|
12/15/15
|
|
160,000
|
|
170,800
|
(a)(d)
|
Quality Distribution LLC/QD Capital Corp., Secured Notes
|
|
9.875
|
%
|
11/1/18
|
|
1,090,000
|
|
1,223,525
|
(b)
|
Total Road & Rail
|
|
|
|
|
|
|
|
5,043,167
|
|
Trading Companies & Distributors 0.3%
|
|
|
|
|
|
|
|
|
|
H&E Equipment Services Inc., Senior Notes
|
|
7.000
|
%
|
9/1/22
|
|
980,000
|
|
1,063,300
|
|
Transportation 1.7%
|
|
|
|
|
|
|
|
|
|
CMA CGM, Senior Notes
|
|
8.500
|
%
|
4/15/17
|
|
910,000
|
|
764,400
|
(a)
|
CMA CGM, Senior Notes
|
|
8.875
|
%
|
4/15/19
|
|
1,500,000
|
EUR
|
1,652,307
|
(a)
|
Hapag-Lloyd AG, Senior Notes
|
|
9.750
|
%
|
10/15/17
|
|
910,000
|
|
964,600
|
(a)(b)
|
Neovia Logistics Intermediate Holdings LLC/Logistics Intermediate Finance Corp., Senior Notes
|
|
10.000
|
%
|
2/15/18
|
|
1,090,000
|
|
1,090,000
|
(a)(c)
|
Syncreon Global Ireland Ltd./Syncreon Global Finance US Inc., Senior Notes
|
|
9.500
|
%
|
5/1/18
|
|
1,640,000
|
|
1,787,600
|
(a)(b)
|
Syncreon Global Ireland Ltd./Syncreon Global Finance US Inc., Senior Notes
|
|
9.500
|
%
|
5/1/18
|
|
100,000
|
|
109,000
|
(a)
|
Watco Cos., LLC/Watco Finance Corp., Senior Notes
|
|
6.375
|
%
|
4/1/23
|
|
710,000
|
|
750,825
|
(a)
|
Total Transportation
|
|
|
|
|
|
|
|
7,118,732
|
|
Transportation Infrastructure 0.1%
|
|
|
|
|
|
|
|
|
|
Aguila 3 SA, Senior Secured Notes
|
|
7.875
|
%
|
1/31/18
|
|
430,000
|
|
464,938
|
(a)
|
Total Industrials
|
|
|
|
|
|
|
|
52,516,877
|
|
Information Technology 1.7%
|
|
|
|
|
|
|
|
|
|
Communications Equipment 0.2%
|
|
|
|
|
|
|
|
|
|
CyrusOne LP/CyrusOne Finance Corp., Senior Notes
|
|
6.375
|
%
|
11/15/22
|
|
620,000
|
|
664,950
|
(a)
|
Computers & Peripherals 0.6%
|
|
|
|
|
|
|
|
|
|
Hewlett-Packard Co., Senior Notes
|
|
4.650
|
%
|
12/9/21
|
|
2,500,000
|
|
2,578,895
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
19
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Electronic Equipment, Instruments & Components 0.1%
|
|
|
|
|
|
|
|
|
|
Techem GmbH, Senior Secured Notes
|
|
6.125
|
%
|
10/1/19
|
|
350,000
|
EUR
|
$
|
493,580
|
(a)
|
Internet Software & Services 0.1%
|
|
|
|
|
|
|
|
|
|
Zayo Group LLC/Zayo Capital Inc., Senior Secured Notes
|
|
8.125
|
%
|
1/1/20
|
|
540,000
|
|
602,100
|
|
IT Services 0.2%
|
|
|
|
|
|
|
|
|
|
First Data Corp., Senior Secured Notes
|
|
6.750
|
%
|
11/1/20
|
|
1,020,000
|
|
1,071,000
|
(a)(b)
|
Semiconductors & Semiconductor Equipment 0.3%
|
|
|
|
|
|
|
|
|
|
Freescale Semiconductor Inc., Senior Subordinated Notes
|
|
10.125
|
%
|
12/15/16
|
|
602,000
|
|
620,060
|
|
STATS ChipPAC Ltd., Senior Notes
|
|
4.500
|
%
|
3/20/18
|
|
563,000
|
|
561,592
|
(a)
|
Total Semiconductors & Semiconductor Equipment
|
|
|
|
|
|
|
|
1,181,652
|
|
Software 0.2%
|
|
|
|
|
|
|
|
|
|
Interface Security Systems Holdings Inc./Interface Security Systems LLC, Senior Secured Notes
|
|
9.250
|
%
|
1/15/18
|
|
680,000
|
|
714,000
|
(a)
|
Total Information Technology
|
|
|
|
|
|
|
|
7,306,177
|
|
Materials 14.5%
|
|
|
|
|
|
|
|
|
|
Chemicals 1.5%
|
|
|
|
|
|
|
|
|
|
Alpek SA de CV, Senior Notes
|
|
4.500
|
%
|
11/20/22
|
|
382,000
|
|
388,685
|
(a)
|
Braskem Finance Ltd., Senior Notes
|
|
7.000
|
%
|
5/7/20
|
|
890,000
|
|
1,001,250
|
(a)
|
INEOS Group Holdings SA, Senior Notes
|
|
7.875
|
%
|
2/15/16
|
|
655,000
|
EUR
|
864,106
|
(a)
|
Kerling PLC, Senior Secured Notes
|
|
10.625
|
%
|
2/1/17
|
|
792,000
|
EUR
|
1,098,886
|
(a)
|
Kloeckner Pentaplast GmbH & Co. KG, Senior Secured Notes
|
|
11.625
|
%
|
7/15/17
|
|
370,000
|
EUR
|
545,926
|
(a)
|
Kloeckner Pentaplast GmbH & Co. KG, Senior Secured Notes
|
|
11.625
|
%
|
7/15/17
|
|
290,000
|
EUR
|
427,888
|
(a)
|
Mexichem SAB de CV, Senior Notes
|
|
4.875
|
%
|
9/19/22
|
|
549,000
|
|
570,960
|
(a)
|
Mexichem SAB de CV, Senior Notes
|
|
4.875
|
%
|
9/19/22
|
|
250,000
|
|
260,000
|
(a)
|
Styrolution GmbH, Senior Secured Notes
|
|
7.625
|
%
|
5/15/16
|
|
360,000
|
EUR
|
493,411
|
(a)
|
Styrolution Group GmbH, Senior Secured Notes
|
|
7.625
|
%
|
5/15/16
|
|
370,000
|
EUR
|
507,117
|
(a)
|
Total Chemicals
|
|
|
|
|
|
|
|
6,158,229
|
|
Construction Materials 0.7%
|
|
|
|
|
|
|
|
|
|
Cementos Pacasmayo SAA, Senior Notes
|
|
4.500
|
%
|
2/8/23
|
|
360,000
|
|
351,000
|
(a)
|
Cemex Finance LLC, Senior Secured Notes
|
|
9.375
|
%
|
10/12/22
|
|
550,000
|
|
618,750
|
(a)
|
Cemex Finance LLC, Senior Secured Notes
|
|
9.375
|
%
|
10/12/22
|
|
450,000
|
|
506,250
|
(a)
|
Cemex SAB de CV, Senior Secured Notes
|
|
9.000
|
%
|
1/11/18
|
|
1,370,000
|
|
1,472,750
|
(a)
|
Total Construction Materials
|
|
|
|
|
|
|
|
2,948,750
|
|
Containers & Packaging 2.8%
|
|
|
|
|
|
|
|
|
|
Ardagh Packaging Finance PLC, Senior Notes
|
|
9.250
|
%
|
10/15/20
|
|
1,700,000
|
EUR
|
2,419,484
|
(a)
|
Ardagh Packaging Finance PLC/Ardagh MP Holdings USA Inc., Senior Notes
|
|
9.125
|
%
|
10/15/20
|
|
1,080,000
|
|
1,188,000
|
(a)
|
Beverage Packaging Holdings Luxembourg II SA, Senior Notes
|
|
9.500
|
%
|
6/15/17
|
|
2,000,000
|
EUR
|
2,686,998
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
20
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Containers & Packaging continued
|
|
|
|
|
|
|
|
|
|
Longview Fibre Paper & Packaging Inc., Senior Secured Notes
|
|
8.000
|
%
|
6/1/16
|
|
660,000
|
|
$
|
688,875
|
(a)(b)
|
Pactiv LLC, Senior Notes
|
|
7.950
|
%
|
12/15/25
|
|
520,000
|
|
496,600
|
|
Pretium Packaging LLC/Pretium Finance Inc., Senior Secured Notes
|
|
11.500
|
%
|
4/1/16
|
|
1,210,000
|
|
1,312,850
|
|
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/ Reynolds Group Issuer (Luxembourg) SA, Senior Notes
|
|
8.500
|
%
|
5/15/18
|
|
420,000
|
|
443,100
|
|
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/ Reynolds Group Issuer (Luxembourg) SA, Senior Notes
|
|
9.000
|
%
|
4/15/19
|
|
540,000
|
|
569,700
|
|
Suzano Trading Ltd., Senior Notes
|
|
5.875
|
%
|
1/23/21
|
|
850,000
|
|
862,750
|
(a)(b)
|
Viskase Cos. Inc., Senior Secured Notes
|
|
9.875
|
%
|
1/15/18
|
|
1,330,000
|
|
1,426,425
|
(a)(b)
|
Total Containers & Packaging
|
|
|
|
|
|
|
|
12,094,782
|
|
Metals & Mining 8.2%
|
|
|
|
|
|
|
|
|
|
ArcelorMittal, Senior Notes
|
|
5.000
|
%
|
2/25/17
|
|
500,000
|
|
521,250
|
|
ArcelorMittal, Senior Notes
|
|
6.000
|
%
|
3/1/21
|
|
1,080,000
|
|
1,125,900
|
|
Barminco Finance Pty Ltd., Senior Notes
|
|
9.000
|
%
|
6/1/18
|
|
630,000
|
|
620,550
|
(a)
|
Cliffs Natural Resources Inc., Senior Notes
|
|
3.950
|
%
|
1/15/18
|
|
30,000
|
|
29,735
|
|
Cliffs Natural Resources Inc., Senior Notes
|
|
4.800
|
%
|
10/1/20
|
|
70,000
|
|
67,544
|
|
Cliffs Natural Resources Inc., Senior Notes
|
|
4.875
|
%
|
4/1/21
|
|
2,290,000
|
|
2,201,938
|
(b)
|
Coeur Mining Inc., Senior Notes
|
|
7.875
|
%
|
2/1/21
|
|
1,500,000
|
|
1,593,750
|
(a)(b)
|
CSN Resources SA, Senior Bonds
|
|
6.500
|
%
|
7/21/20
|
|
452,000
|
|
458,780
|
(a)
|
CSN Resources SA, Senior Bonds
|
|
6.500
|
%
|
7/21/20
|
|
450,000
|
|
456,750
|
(a)
|
Evraz Group SA, Notes
|
|
8.250
|
%
|
11/10/15
|
|
230,000
|
|
250,183
|
(a)
|
Evraz Group SA, Notes
|
|
6.750
|
%
|
4/27/18
|
|
2,040,000
|
|
2,040,000
|
(a)(b)
|
Evraz Group SA, Senior Notes
|
|
9.500
|
%
|
4/24/18
|
|
940,000
|
|
1,050,450
|
(a)
|
FMG Resources (August 2006) Pty Ltd., Senior Notes
|
|
7.000
|
%
|
11/1/15
|
|
390,000
|
|
403,650
|
(a)(b)
|
FMG Resources (August 2006) Pty Ltd., Senior Notes
|
|
6.375
|
%
|
2/1/16
|
|
450,000
|
|
459,563
|
(a)
|
FMG Resources (August 2006) Pty Ltd., Senior Notes
|
|
8.250
|
%
|
11/1/19
|
|
1,120,000
|
|
1,187,200
|
(a)(b)
|
Gerdau Trade Inc., Senior Notes
|
|
4.750
|
%
|
4/15/23
|
|
440,000
|
|
433,722
|
(a)
|
JW Aluminum Co., Senior Secured Notes
|
|
11.500
|
%
|
11/15/17
|
|
950,000
|
|
973,750
|
(a)
|
Midwest Vanadium Pty Ltd., Senior Secured Notes
|
|
11.500
|
%
|
2/15/18
|
|
1,460,000
|
|
985,500
|
(a)(d)
|
Mirabela Nickel Ltd., Senior Notes
|
|
8.750
|
%
|
4/15/18
|
|
430,000
|
|
361,200
|
(a)
|
Molycorp Inc., Senior Secured Notes
|
|
10.000
|
%
|
6/1/20
|
|
730,000
|
|
733,650
|
|
New World Resources NV, Senior Notes
|
|
7.875
|
%
|
1/15/21
|
|
800,000
|
EUR
|
634,278
|
(a)
|
Noranda Aluminum Acquisition Corp., Senior Notes
|
|
11.000
|
%
|
6/1/19
|
|
620,000
|
|
612,250
|
(a)
|
Optima Specialty Steel Inc., Senior Secured Notes
|
|
12.500
|
%
|
12/15/16
|
|
850,000
|
|
926,500
|
(a)
|
Prince Mineral Holding Corp., Senior Secured Notes
|
|
11.500
|
%
|
12/15/19
|
|
690,000
|
|
764,175
|
(a)
|
Rain CII Carbon LLC/CII Carbon Corp., Senior Secured Notes
|
|
8.250
|
%
|
1/15/21
|
|
1,250,000
|
|
1,343,750
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
21
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Metals & Mining continued
|
|
|
|
|
|
|
|
|
|
Ryerson Inc./Joseph T Ryerson & Son Inc., Senior Secured Notes
|
|
9.000
|
%
|
10/15/17
|
|
540,000
|
|
$
|
585,225
|
(a)
|
Samarco Mineracao SA, Senior Notes
|
|
4.125
|
%
|
11/1/22
|
|
670,000
|
|
633,150
|
(a)
|
Severstal OAO Via Steel Capital SA, Senior Notes
|
|
4.450
|
%
|
3/19/18
|
|
500,000
|
|
485,880
|
(a)
|
Southern Copper Corp., Senior Notes
|
|
5.375
|
%
|
4/16/20
|
|
360,000
|
|
398,958
|
|
Southern Copper Corp., Senior Notes
|
|
6.750
|
%
|
4/16/40
|
|
1,150,000
|
|
1,213,603
|
(b)
|
Southern Copper Corp., Senior Notes
|
|
5.250
|
%
|
11/8/42
|
|
760,000
|
|
662,590
|
(b)
|
St. Barbara Ltd., Senior Secured Notes
|
|
8.875
|
%
|
4/15/18
|
|
740,000
|
|
720,575
|
(a)
|
Steel Dynamics Inc., Senior Notes
|
|
6.125
|
%
|
8/15/19
|
|
370,000
|
|
404,225
|
(a)
|
SunCoke Energy Partners LP/SunCoke Energy Partners Finance Corp., Senior Notes
|
|
7.375
|
%
|
2/1/20
|
|
340,000
|
|
362,100
|
(a)
|
Tempel Steel Co., Senior Secured Notes
|
|
12.000
|
%
|
8/15/16
|
|
360,000
|
|
349,200
|
(a)(b)
|
Thompson Creek Metals Co. Inc., Senior Notes
|
|
12.500
|
%
|
5/1/19
|
|
550,000
|
|
573,375
|
|
Thompson Creek Metals Co. Inc., Senior Secured Notes
|
|
9.750
|
%
|
12/1/17
|
|
750,000
|
|
822,187
|
|
Vale Overseas Ltd., Notes
|
|
8.250
|
%
|
1/17/34
|
|
2,983,000
|
|
3,673,239
|
(g)
|
Vale Overseas Ltd., Notes
|
|
6.875
|
%
|
11/21/36
|
|
819,000
|
|
883,102
|
(b)
|
Vale Overseas Ltd., Senior Notes
|
|
4.375
|
%
|
1/11/22
|
|
150,000
|
|
149,736
|
|
Vedanta Resources PLC, Senior Notes
|
|
8.750
|
%
|
1/15/14
|
|
1,290,000
|
|
1,333,602
|
(a)(b)
|
Vedanta Resources PLC, Senior Notes
|
|
6.750
|
%
|
6/7/16
|
|
830,000
|
|
875,650
|
(a)(b)
|
Vedanta Resources PLC, Senior Notes
|
|
9.500
|
%
|
7/18/18
|
|
160,000
|
|
184,400
|
(a)
|
Vedanta Resources PLC, Senior Notes
|
|
6.000
|
%
|
1/31/19
|
|
460,000
|
|
459,355
|
(a)
|
Total Metals & Mining
|
|
|
|
|
|
|
|
35,006,170
|
|
Paper & Forest Products 1.3%
|
|
|
|
|
|
|
|
|
|
Appleton Papers Inc., Senior Secured Notes
|
|
10.500
|
%
|
6/15/15
|
|
530,000
|
|
561,137
|
(a)
|
Appleton Papers Inc., Senior Secured Notes
|
|
11.250
|
%
|
12/15/15
|
|
914,000
|
|
1,053,385
|
|
Celulosa Arauco y Constitucion SA, Senior Notes
|
|
7.250
|
%
|
7/29/19
|
|
202,000
|
|
236,845
|
(b)
|
Celulosa Arauco y Constitucion SA, Senior Notes
|
|
4.750
|
%
|
1/11/22
|
|
245,000
|
|
251,595
|
|
Fibria Overseas Finance Ltd., Senior Notes
|
|
7.500
|
%
|
5/4/20
|
|
197,000
|
|
216,700
|
(a)
|
Fibria Overseas Finance Ltd., Senior Notes
|
|
6.750
|
%
|
3/3/21
|
|
280,000
|
|
309,400
|
(a)(b)
|
Inversiones CMPC SA
|
|
4.375
|
%
|
5/15/23
|
|
260,000
|
|
255,812
|
(a)
|
Inversiones CMPC SA, Notes
|
|
4.750
|
%
|
1/19/18
|
|
460,000
|
|
486,506
|
(a)(b)
|
Inversiones CMPC SA, Senior Notes
|
|
4.500
|
%
|
4/25/22
|
|
310,000
|
|
311,537
|
(a)
|
Resolute Forest Products Inc., Senior Notes
|
|
5.875
|
%
|
5/15/23
|
|
820,000
|
|
796,425
|
(a)
|
Verso Paper Holdings LLC/Verso Paper Inc., Senior Secured Notes
|
|
11.750
|
%
|
1/15/19
|
|
640,000
|
|
680,000
|
|
Verso Paper Holdings LLC/Verso Paper Inc., Senior Secured Notes
|
|
11.750
|
%
|
1/15/19
|
|
117,000
|
|
87,165
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
22
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Paper & Forest Products continued
|
|
|
|
|
|
|
|
|
|
Verso Paper Holdings LLC/Verso Paper Inc., Senior Subordinated Notes
|
|
11.375
|
%
|
8/1/16
|
|
144,000
|
|
$
|
79,920
|
|
Total Paper & Forest Products
|
|
|
|
|
|
|
|
5,326,427
|
|
Total Materials
|
|
|
|
|
|
|
|
61,534,358
|
|
Telecommunication Services 9.5%
|
|
|
|
|
|
|
|
|
|
Diversified Telecommunication Services 6.4%
|
|
|
|
|
|
|
|
|
|
AT&T Inc., Senior Notes
|
|
4.350
|
%
|
6/15/45
|
|
231,000
|
|
215,188
|
(a)
|
Axtel SAB de CV, Senior Secured Notes, step bond
|
|
7.000
|
%
|
1/31/20
|
|
2,233,000
|
|
2,143,680
|
(a)
|
British Telecommunications PLC, Bonds
|
|
9.625
|
%
|
12/15/30
|
|
240,000
|
|
372,777
|
(b)
|
Cogent Communications Group Inc., Senior Secured Notes
|
|
8.375
|
%
|
2/15/18
|
|
900,000
|
|
1,008,000
|
(a)(b)
|
Inmarsat Finance PLC, Senior Notes
|
|
7.375
|
%
|
12/1/17
|
|
230,000
|
|
242,650
|
(a)(b)
|
Intelsat Jackson Holdings SA, Senior Notes
|
|
7.500
|
%
|
4/1/21
|
|
1,920,000
|
|
2,119,200
|
(b)
|
Intelsat Jackson Holdings SA, Senior Notes
|
|
5.500
|
%
|
8/1/23
|
|
770,000
|
|
756,525
|
(a)
|
Intelsat Luxembourg SA, Senior Notes
|
|
11.250
|
%
|
2/4/17
|
|
1,021,000
|
|
1,081,494
|
|
Koninklijke KPN NV, Senior Notes
|
|
8.375
|
%
|
10/1/30
|
|
190,000
|
|
246,230
|
(b)
|
Level 3 Financing Inc., Senior Notes
|
|
8.625
|
%
|
7/15/20
|
|
1,320,000
|
|
1,456,950
|
|
Qtel International Finance Ltd., Senior Notes
|
|
4.750
|
%
|
2/16/21
|
|
400,000
|
|
437,000
|
(a)(b)
|
Telefonica Emisiones SAU, Senior Notes
|
|
5.134
|
%
|
4/27/20
|
|
3,000,000
|
|
3,210,600
|
(b)
|
Telemar Norte Leste SA, Senior Notes
|
|
5.500
|
%
|
10/23/20
|
|
690,000
|
|
693,450
|
(a)(b)
|
TW Telecom Holdings Inc., Senior Notes
|
|
8.000
|
%
|
3/1/18
|
|
500,000
|
|
540,000
|
(b)
|
TW Telecom Holdings Inc., Senior Notes
|
|
5.375
|
%
|
10/1/22
|
|
640,000
|
|
665,600
|
|
UBS Luxembourg SA for OJSC Vimpel Communications, Loan Participation Notes
|
|
8.250
|
%
|
5/23/16
|
|
358,000
|
|
397,380
|
(a)
|
Unitymedia GmbH, Senior Secured Bonds
|
|
8.125
|
%
|
12/1/17
|
|
386,117
|
EUR
|
533,849
|
(a)
|
Unitymedia GmbH, Senior Subordinated Notes
|
|
9.625
|
%
|
12/1/19
|
|
913,000
|
EUR
|
1,327,648
|
(a)
|
Unitymedia KabelBW GmbH, Senior Secured Notes
|
|
9.500
|
%
|
3/15/21
|
|
1,250,000
|
EUR
|
1,879,844
|
(a)
|
Unitymedia KabelBW GmbH, Senior Secured Notes
|
|
9.500
|
%
|
3/15/21
|
|
400,000
|
EUR
|
601,550
|
(a)
|
Wind Acquisition Holdings Finance SpA, Senior Notes
|
|
12.250
|
%
|
7/15/17
|
|
2,884,650
|
EUR
|
3,983,655
|
(a)(c)
|
Windstream Corp., Senior Notes
|
|
7.500
|
%
|
4/1/23
|
|
3,170,000
|
|
3,344,350
|
(b)
|
Total Diversified Telecommunication Services
|
|
|
|
|
|
|
|
27,257,620
|
|
Wireless Telecommunication Services 3.1%
|
|
|
|
|
|
|
|
|
|
America Movil SAB de CV, Senior Notes
|
|
5.625
|
%
|
11/15/17
|
|
504,000
|
|
584,831
|
(b)
|
Indosat Palapa Co. BV, Senior Notes
|
|
7.375
|
%
|
7/29/20
|
|
900,000
|
|
984,375
|
(a)(b)
|
Matterhorn Midco & Cy SCA, Senior Notes
|
|
7.750
|
%
|
2/15/20
|
|
760,000
|
EUR
|
1,007,566
|
(a)
|
Oi S.A., Senior Notes
|
|
5.750
|
%
|
2/10/22
|
|
450,000
|
|
451,125
|
(a)
|
Phones4u Finance PLC, Senior Secured Notes
|
|
9.500
|
%
|
4/1/18
|
|
740,000
|
GBP
|
1,173,602
|
(a)
|
Softbank Corp., Senior Notes
|
|
4.500
|
%
|
4/15/20
|
|
790,000
|
|
801,820
|
(a)
|
Sprint Capital Corp., Senior Notes
|
|
6.875
|
%
|
11/15/28
|
|
1,190,000
|
|
1,195,950
|
(b)
|
Sprint Capital Corp., Senior Notes
|
|
8.750
|
%
|
3/15/32
|
|
3,140,000
|
|
3,673,800
|
(b)
|
Sprint Nextel Corp., Senior Notes
|
|
9.000
|
%
|
11/15/18
|
|
1,780,000
|
|
2,162,700
|
(a)(b)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
23
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Wireless Telecommunication Services continued
|
|
|
|
|
|
|
|
|
|
Syniverse Holdings Inc., Senior Notes
|
|
9.125
|
%
|
1/15/19
|
|
875,000
|
|
$
|
960,312
|
|
Total Wireless Telecommunication Services
|
|
|
|
|
|
|
|
12,996,081
|
|
Total Telecommunication Services
|
|
|
|
|
|
|
|
40,253,701
|
|
Utilities 4.7%
|
|
|
|
|
|
|
|
|
|
Electric Utilities 1.4%
|
|
|
|
|
|
|
|
|
|
AES Red Oak LLC, Secured Notes
|
|
9.200
|
%
|
11/30/29
|
|
1,180,000
|
|
1,309,800
|
(b)
|
Centrais Eletricas Brasileiras SA, Senior Notes
|
|
6.875
|
%
|
7/30/19
|
|
380,000
|
|
426,550
|
(a)
|
DPL Inc., Senior Notes
|
|
7.250
|
%
|
10/15/21
|
|
470,000
|
|
509,950
|
|
FirstEnergy Corp., Notes
|
|
7.375
|
%
|
11/15/31
|
|
270,000
|
|
305,557
|
|
GenOn REMA LLC, Pass-Through Certificates
|
|
9.237
|
%
|
7/2/17
|
|
329,067
|
|
361,974
|
(b)
|
GenOn REMA LLC, Pass-Through Certificates
|
|
9.681
|
%
|
7/2/26
|
|
1,550,000
|
|
1,689,500
|
(b)
|
Majapahit Holding BV, Senior Notes
|
|
7.750
|
%
|
1/20/20
|
|
370,000
|
|
450,475
|
(a)
|
Midwest Generation LLC, Pass-Through Certificates
|
|
8.560
|
%
|
1/2/16
|
|
483,705
|
|
470,403
|
(b)(f)
|
State Grid Overseas Investment 2013 Ltd., Senior Bonds
|
|
3.125
|
%
|
5/22/23
|
|
300,000
|
|
290,615
|
(a)
|
Total Electric Utilities
|
|
|
|
|
|
|
|
5,814,824
|
|
Gas Utilities 0.2%
|
|
|
|
|
|
|
|
|
|
Gas Natural de Lima y Callao SA, Senior Notes
|
|
4.375
|
%
|
4/1/23
|
|
320,000
|
|
318,400
|
(a)
|
Transportadora de Gas Internacional SA ESP, Senior Notes
|
|
5.700
|
%
|
3/20/22
|
|
480,000
|
|
523,200
|
(a)
|
Total Gas Utilities
|
|
|
|
|
|
|
|
841,600
|
|
Independent Power Producers & Energy Traders 3.0%
|
|
|
|
|
|
|
|
|
|
AES Gener SA, Notes
|
|
5.250
|
%
|
8/15/21
|
|
450,000
|
|
486,634
|
(a)(b)
|
Atlantic Power Corp., Senior Notes
|
|
9.000
|
%
|
11/15/18
|
|
640,000
|
|
672,000
|
|
Calpine Corp., Senior Secured Notes
|
|
7.875
|
%
|
7/31/20
|
|
162,000
|
|
179,010
|
(a)
|
Calpine Corp., Senior Secured Notes
|
|
7.875
|
%
|
1/15/23
|
|
891,000
|
|
984,555
|
(a)(b)
|
Colbun SA, Senior Notes
|
|
6.000
|
%
|
1/21/20
|
|
750,000
|
|
835,220
|
(a)
|
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc., Secured Notes
|
|
12.250
|
%
|
3/1/22
|
|
1,390,000
|
|
1,589,813
|
(a)
|
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc., Senior Secured Notes
|
|
6.875
|
%
|
8/15/17
|
|
2,270,000
|
|
2,417,550
|
(a)(b)
|
First Wind Holdings Inc., Senior Secured Notes
|
|
10.250
|
%
|
6/1/18
|
|
940,000
|
|
1,008,150
|
(a)(b)
|
Foresight Energy LLC/Foresight Energy Corp., Senior Notes
|
|
9.625
|
%
|
8/15/17
|
|
1,360,000
|
|
1,482,400
|
(a)
|
Mirant Americas Generation LLC, Senior Notes
|
|
9.125
|
%
|
5/1/31
|
|
2,320,000
|
|
2,633,200
|
(b)
|
Mirant Mid Atlantic LLC, Pass-Through Certificates
|
|
9.125
|
%
|
6/30/17
|
|
142,878
|
|
161,274
|
|
Mirant Mid Atlantic LLC, Pass-Through Certificates
|
|
10.060
|
%
|
12/30/28
|
|
282,545
|
|
319,453
|
|
Total Independent Power Producers & Energy Traders
|
|
|
|
|
|
|
|
12,769,259
|
|
Multi-Utilities 0.1%
|
|
|
|
|
|
|
|
|
|
Empresas Publicas de Medellin ESP, Senior Notes
|
|
7.625
|
%
|
7/29/19
|
|
410,000
|
|
496,100
|
(a)
|
Total Utilities
|
|
|
|
|
|
|
|
19,921,783
|
|
Total Corporate Bonds & Notes (Cost $381,778,825)
|
|
|
|
|
|
|
|
407,876,523
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
24
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Asset-Backed Securities 0.3%
|
|
|
|
|
|
|
|
|
|
Finance America Net Interest Margin Trust, 2004-1 A
|
|
5.250
|
%
|
6/27/34
|
|
110,125
|
|
$
|
1
|
(a)(d)(f)
|
Greenpoint Manufactured Housing, 1999-2 A2
|
|
2.960
|
%
|
3/18/29
|
|
425,000
|
|
389,401
|
(h)
|
Greenpoint Manufactured Housing, 1999-3 2A2
|
|
3.592
|
%
|
6/19/29
|
|
200,000
|
|
185,383
|
(h)
|
Greenpoint Manufactured Housing, 1999-4 A2
|
|
3.699
|
%
|
2/20/30
|
|
200,000
|
|
185,857
|
(h)
|
Greenpoint Manufactured Housing, 2001-2 IA2
|
|
3.699
|
%
|
2/20/32
|
|
350,000
|
|
315,085
|
(h)
|
Greenpoint Manufactured Housing, 2001-2 IIA2
|
|
3.700
|
%
|
3/13/32
|
|
475,000
|
|
418,666
|
(h)
|
SAIL Net Interest Margin Notes, 2003-6A A
|
|
7.000
|
%
|
7/27/33
|
|
14,101
|
|
0
|
(a)(d)(f)(j)
|
SAIL Net Interest Margin Notes, 2003-7A A
|
|
7.000
|
%
|
7/27/33
|
|
42,974
|
|
0
|
(a)(d)(f)(j)
|
Total Asset-Backed Securities (Cost $1,564,314)
|
|
|
|
|
|
|
|
1,494,393
|
|
Senior Loans 2.7%
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary 0.7%
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure 0.6%
|
|
|
|
|
|
|
|
|
|
El Pollo Loco Inc., First Lien Term Loan
|
|
9.250
|
%
|
7/14/17
|
|
254,867
|
|
261,239
|
(k)
|
Equinox Holdings Inc., Second Lien Term Loan
|
|
9.750
|
%
|
7/31/20
|
|
710,000
|
|
731,300
|
(k)
|
Stockbridge/SBE Holdings LLC, Term Loan B
|
|
13.000
|
%
|
5/2/17
|
|
1,450,000
|
|
1,544,250
|
(k)
|
Total Hotels, Restaurants & Leisure
|
|
|
|
|
|
|
|
2,536,789
|
|
Specialty Retail 0.1%
|
|
|
|
|
|
|
|
|
|
Gymboree Corp., Initial Term Loan
|
|
5.000
|
%
|
2/23/18
|
|
340,000
|
|
335,018
|
(k)
|
Total Consumer Discretionary
|
|
|
|
|
|
|
|
2,871,807
|
|
Consumer Staples 0.4%
|
|
|
|
|
|
|
|
|
|
Food Products 0.4%
|
|
|
|
|
|
|
|
|
|
AdvancePierre Foods Inc., Second Lien Term Loan
|
|
9.500
|
%
|
10/10/17
|
|
310,000
|
|
319,300
|
(k)
|
H.J. Heinz Co., Bridge Loan
|
|
|
|
11/13/13
|
|
1,310,000
|
|
1,310,000
|
(d)(e)(l)
|
Total Consumer Staples
|
|
|
|
|
|
|
|
1,629,300
|
|
Energy 0.4%
|
|
|
|
|
|
|
|
|
|
Energy Equipment & Services 0.0%
|
|
|
|
|
|
|
|
|
|
Frac Tech International LLC, Term Loan B
|
|
8.500
|
%
|
5/6/16
|
|
70,000
|
|
69,190
|
(k)
|
Oil, Gas & Consumable Fuels 0.4%
|
|
|
|
|
|
|
|
|
|
Chesapeake Energy Corp., New Term Loan
|
|
5.750
|
%
|
12/1/17
|
|
540,000
|
|
555,670
|
(k)
|
Rice Energy LLC, Second Lien Term Loan
|
|
|
|
10/11/18
|
|
190,000
|
|
191,900
|
(l)
|
Sanchez Energy Corp., Bridge Loan
|
|
|
|
7/1/13
|
|
1,100,000
|
|
1,100,000
|
(d)(e)(l)
|
Total Oil, Gas & Consumable Fuels
|
|
|
|
|
|
|
|
1,847,570
|
|
Total Energy
|
|
|
|
|
|
|
|
1,916,760
|
|
Industrials 0.6%
|
|
|
|
|
|
|
|
|
|
Machinery 0.6%
|
|
|
|
|
|
|
|
|
|
Gardner Denver Inc., Bridge Term Loan
|
|
|
|
5/6/16
|
|
1,320,000
|
|
1,320,000
|
(d)(e)(l)
|
Intelligrated Inc., Second Lien Term Loan
|
|
10.500
|
%
|
1/30/20
|
|
1,190,000
|
|
1,223,097
|
(k)
|
Total Machinery
|
|
|
|
|
|
|
|
2,543,097
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
25
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Information Technology 0.1%
|
|
|
|
|
|
|
|
|
|
IT Services 0.1%
|
|
|
|
|
|
|
|
|
|
First Data Corp., Extended Term Loan B
|
|
4.195
|
%
|
3/23/18
|
|
636,236
|
|
$
|
634,760
|
(k)
|
Materials 0.3%
|
|
|
|
|
|
|
|
|
|
Chemicals 0.3%
|
|
|
|
|
|
|
|
|
|
Kerling PLC, Term Loan
|
|
10.000
|
%
|
6/30/16
|
|
400,000
|
EUR
|
531,598
|
(k)
|
Kronos Inc., Second Lien Term Loan
|
|
9.750
|
%
|
4/30/20
|
|
540,000
|
|
568,012
|
(k)
|
Total Materials
|
|
|
|
|
|
|
|
1,099,610
|
|
Telecommunication Services 0.2%
|
|
|
|
|
|
|
|
|
|
Wireless Telecommunication Services 0.2%
|
|
|
|
|
|
|
|
|
|
Vodafone Americas Finance 2 Inc., PIK Term Loan
|
|
6.875
|
%
|
8/11/15
|
|
684,194
|
|
696,168
|
(k)
|
Total Senior Loans (Cost $11,036,852)
|
|
|
|
|
|
|
|
11,391,502
|
|
Convertible Bonds & Notes 0.1%
|
|
|
|
|
|
|
|
|
|
Telecommunication Services 0.1%
|
|
|
|
|
|
|
|
|
|
Axtel SAB de CV, Senior Secured Notes (Cost $398,916)
|
|
7.000
|
%
|
1/31/20
|
|
2,546,000
|
MXN
|
268,981
|
(a)
|
Sovereign Bonds 24.1%
|
|
|
|
|
|
|
|
|
|
Argentina 0.1%
|
|
|
|
|
|
|
|
|
|
Republic of Argentina, Senior Bonds
|
|
7.000
|
%
|
10/3/15
|
|
470,000
|
|
408,587
|
|
Brazil 1.8%
|
|
|
|
|
|
|
|
|
|
Brazil Nota do Tesouro Nacional, Notes
|
|
10.000
|
%
|
1/1/14
|
|
1,164,000
|
BRL
|
547,316
|
|
Brazil Nota do Tesouro Nacional, Notes
|
|
10.000
|
%
|
1/1/17
|
|
13,828,000
|
BRL
|
6,512,499
|
|
Brazil Nota do Tesouro Nacional, Notes
|
|
10.000
|
%
|
1/1/21
|
|
1,220,000
|
BRL
|
563,171
|
|
Total Brazil
|
|
|
|
|
|
|
|
7,622,986
|
|
Chile 0.7%
|
|
|
|
|
|
|
|
|
|
Corporacion Nacional del Cobre de Chile, Senior Notes
|
|
3.750
|
%
|
11/4/20
|
|
360,000
|
|
370,938
|
(a)(b)
|
Corporacion Nacional del Cobre de Chile, Senior Notes
|
|
3.875
|
%
|
11/3/21
|
|
1,000,000
|
|
1,030,627
|
(a)(b)
|
Corporacion Nacional del Cobre de Chile, Senior Notes
|
|
3.000
|
%
|
7/17/22
|
|
640,000
|
|
612,447
|
(a)
|
Republic of Chile, Senior Notes
|
|
3.875
|
%
|
8/5/20
|
|
765,000
|
|
831,937
|
|
Total Chile
|
|
|
|
|
|
|
|
2,845,949
|
|
Colombia 1.2%
|
|
|
|
|
|
|
|
|
|
Republic of Colombia
|
|
11.750
|
%
|
2/25/20
|
|
544,000
|
|
830,960
|
|
Republic of Colombia, Senior Bonds
|
|
7.375
|
%
|
9/18/37
|
|
2,392,000
|
|
3,283,020
|
|
Republic of Colombia, Senior Bonds
|
|
6.125
|
%
|
1/18/41
|
|
330,000
|
|
396,825
|
|
Republic of Colombia, Senior Notes
|
|
7.375
|
%
|
3/18/19
|
|
498,000
|
|
624,243
|
|
Total Colombia
|
|
|
|
|
|
|
|
5,135,048
|
|
Croatia 0.2%
|
|
|
|
|
|
|
|
|
|
Republic of Croatia, Notes
|
|
5.500
|
%
|
4/4/23
|
|
850,000
|
|
871,463
|
(a)
|
Indonesia 1.9%
|
|
|
|
|
|
|
|
|
|
Republic of Indonesia, Notes
|
|
3.750
|
%
|
4/25/22
|
|
1,590,000
|
|
1,572,112
|
(a)
|
Republic of Indonesia, Notes
|
|
5.250
|
%
|
1/17/42
|
|
6,290,000
|
|
6,242,825
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
26
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Indonesia continued
|
|
|
|
|
|
|
|
|
|
Republic of Indonesia, Senior Bonds
|
|
6.875
|
%
|
1/17/18
|
|
165,000
|
|
$
|
195,319
|
(a)
|
Republic of Indonesia, Senior Bonds
|
|
6.625
|
%
|
2/17/37
|
|
170,000
|
|
202,938
|
(a)
|
Total Indonesia
|
|
|
|
|
|
|
|
8,213,194
|
|
Malaysia 0.0%
|
|
|
|
|
|
|
|
|
|
Government of Malaysia, Senior Bonds
|
|
4.262
|
%
|
9/15/16
|
|
250,000
|
MYR
|
83,082
|
|
Mexico 2.4%
|
|
|
|
|
|
|
|
|
|
Mexican Bonos, Bonds
|
|
8.000
|
%
|
6/11/20
|
|
47,832,800
|
MXN
|
4,405,207
|
|
Mexican Bonos, Bonds
|
|
6.500
|
%
|
6/9/22
|
|
8,317,900
|
MXN
|
702,830
|
|
Mexican Bonos, Bonds
|
|
10.000
|
%
|
12/5/24
|
|
8,750,000
|
MXN
|
947,245
|
|
Mexican Bonos, Bonds
|
|
8.500
|
%
|
11/18/38
|
|
11,620,000
|
MXN
|
1,146,796
|
|
United Mexican States, Medium-Term Notes
|
|
5.625
|
%
|
1/15/17
|
|
4,000
|
|
4,540
|
|
United Mexican States, Medium-Term Notes
|
|
6.050
|
%
|
1/11/40
|
|
124,000
|
|
147,560
|
(b)
|
United Mexican States, Senior Notes
|
|
5.125
|
%
|
1/15/20
|
|
360,000
|
|
412,200
|
(b)
|
United Mexican States, Senior Notes
|
|
3.625
|
%
|
3/15/22
|
|
1,840,000
|
|
1,909,000
|
(b)
|
United Mexican States, Senior Notes
|
|
4.750
|
%
|
3/8/44
|
|
770,000
|
|
766,150
|
(b)
|
Total Mexico
|
|
|
|
|
|
|
|
10,441,528
|
|
Panama 0.4%
|
|
|
|
|
|
|
|
|
|
Republic of Panama, Senior Bonds
|
|
9.375
|
%
|
4/1/29
|
|
975,000
|
|
1,546,350
|
|
Republic of Panama, Senior Bonds
|
|
6.700
|
%
|
1/26/36
|
|
9,000
|
|
11,543
|
|
Republic of Panama, Senior Bonds
|
|
4.300
|
%
|
4/29/53
|
|
290,000
|
|
258,100
|
|
Total Panama
|
|
|
|
|
|
|
|
1,815,993
|
|
Peru 1.3%
|
|
|
|
|
|
|
|
|
|
Republic of Peru, Bonds
|
|
6.550
|
%
|
3/14/37
|
|
1,083,000
|
|
1,394,362
|
|
Republic of Peru, Global Senior Bonds
|
|
7.350
|
%
|
7/21/25
|
|
50,000
|
|
67,825
|
|
Republic of Peru, Senior Bonds
|
|
8.750
|
%
|
11/21/33
|
|
2,314,000
|
|
3,627,195
|
|
Republic of Peru, Senior Bonds
|
|
5.625
|
%
|
11/18/50
|
|
259,000
|
|
294,613
|
|
Total Peru
|
|
|
|
|
|
|
|
5,383,995
|
|
Philippines 0.5%
|
|
|
|
|
|
|
|
|
|
Republic of the Philippines, Senior Bonds
|
|
5.500
|
%
|
3/30/26
|
|
1,640,000
|
|
1,955,700
|
(b)
|
Poland 1.3%
|
|
|
|
|
|
|
|
|
|
Republic of Poland, Senior Notes
|
|
6.375
|
%
|
7/15/19
|
|
1,660,000
|
|
2,004,450
|
(b)
|
Republic of Poland, Senior Notes
|
|
5.125
|
%
|
4/21/21
|
|
890,000
|
|
1,014,600
|
(b)
|
Republic of Poland, Senior Notes
|
|
5.000
|
%
|
3/23/22
|
|
2,082,000
|
|
2,352,660
|
(b)
|
Total Poland
|
|
|
|
|
|
|
|
5,371,710
|
|
Russia 4.0%
|
|
|
|
|
|
|
|
|
|
RSHB Capital, Loan Participation Notes, Senior Notes
|
|
6.299
|
%
|
5/15/17
|
|
470,000
|
|
512,206
|
(a)
|
RSHB Capital, Loan Participation Notes, Senior Secured Bonds
|
|
6.299
|
%
|
5/15/17
|
|
409,000
|
|
445,728
|
(a)
|
RSHB Capital, Loan Participation Notes, Senior Secured Notes
|
|
9.000
|
%
|
6/11/14
|
|
340,000
|
|
365,177
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
27
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
Security
|
|
Rate
|
|
Maturity
Date
|
|
Face
Amount
|
|
Value
|
|
Russia continued
|
|
|
|
|
|
|
|
|
|
Russian Federal Bond OFZ, Bonds
|
|
7.400
|
%
|
6/14/17
|
|
104,942,000
|
RUB
|
$
|
3,403,222
|
|
Russian Foreign Bond Eurobond, Senior Bonds
|
|
7.500
|
%
|
3/31/30
|
|
6,134,702
|
|
7,465,933
|
(a)(g)
|
Russian Foreign Bond Eurobond, Senior Notes
|
|
5.625
|
%
|
4/4/42
|
|
4,600,000
|
|
5,048,500
|
(a)
|
Total Russia
|
|
|
|
|
|
|
|
17,240,766
|
|
Turkey 3.8%
|
|
|
|
|
|
|
|
|
|
Republic of Turkey, Bonds
|
|
9.000
|
%
|
3/8/17
|
|
6,007,900
|
TRY
|
3,489,234
|
|
Republic of Turkey, Notes
|
|
6.750
|
%
|
5/30/40
|
|
812,000
|
|
1,022,105
|
|
Republic of Turkey, Notes
|
|
4.875
|
%
|
4/16/43
|
|
7,500,000
|
|
7,462,500
|
(b)
|
Republic of Turkey, Senior Bonds
|
|
5.625
|
%
|
3/30/21
|
|
500,000
|
|
585,000
|
|
Republic of Turkey, Senior Notes
|
|
7.500
|
%
|
7/14/17
|
|
3,000,000
|
|
3,641,250
|
(b)
|
Total Turkey
|
|
|
|
|
|
|
|
16,200,089
|
|
Venezuela 4.5%
|
|
|
|
|
|
|
|
|
|
Bolivarian Republic of Venezuela, Collective Action Securities, Senior Notes
|
|
10.750
|
%
|
9/19/13
|
|
875,000
|
|
889,875
|
|
Bolivarian Republic of Venezuela, Global Senior Bonds
|
|
8.500
|
%
|
10/8/14
|
|
365,000
|
|
373,577
|
|
Bolivarian Republic of Venezuela, Senior Bonds
|
|
5.750
|
%
|
2/26/16
|
|
14,261,000
|
|
13,334,035
|
(a)(b)
|
Bolivarian Republic of Venezuela, Senior Bonds
|
|
9.250
|
%
|
9/15/27
|
|
240,000
|
|
219,600
|
|
Bolivarian Republic of Venezuela, Senior Bonds
|
|
9.375
|
%
|
1/13/34
|
|
1,608,000
|
|
1,439,160
|
(b)
|
Bolivarian Republic of Venezuela, Senior Notes
|
|
7.750
|
%
|
10/13/19
|
|
2,700,000
|
|
2,430,000
|
(a)
|
Bolivarian Republic of Venezuela, Senior Notes
|
|
7.650
|
%
|
4/21/25
|
|
475,000
|
|
382,375
|
|
Total Venezuela
|
|
|
|
|
|
|
|
19,068,622
|
|
Total Sovereign Bonds (Cost $98,462,231)
|
|
|
|
|
|
|
|
102,658,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
Common Stocks 1.7%
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary 0.0%
|
|
|
|
|
|
|
|
|
|
Hotels, Restaurants & Leisure 0.0%
|
|
|
|
|
|
|
|
|
|
Bossier Casino Venture Holdco Inc.
|
|
|
|
|
|
46,209
|
|
92,418
|
*
(d)(e)
|
Household Durables 0.0%
|
|
|
|
|
|
|
|
|
|
William Lyon Homes, Class A Shares
|
|
|
|
|
|
1,804
|
|
46,994
|
*
|
Total Consumer Discretionary
|
|
|
|
|
|
|
|
139,412
|
|
Financials 1.2%
|
|
|
|
|
|
|
|
|
|
Diversified Financial Services 0.9%
|
|
|
|
|
|
|
|
|
|
Citigroup Inc.
|
|
|
|
|
|
75,394
|
|
3,919,734
|
(b)
|
Real Estate Management & Development 0.3%
|
|
|
|
|
|
|
|
|
|
Realogy Holdings Corp.
|
|
|
|
|
|
17,234
|
|
889,964
|
*
|
Realogy Holdings Corp.
|
|
|
|
|
|
6,390
|
|
329,997
|
*
(d)(e)
|
Total Real Estate Management & Development
|
|
|
|
|
|
|
|
1,219,961
|
|
Total Financials
|
|
|
|
|
|
|
|
5,139,695
|
|
See Notes to Financial Statements.
28
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Security
|
|
|
|
|
|
Shares
|
|
Value
|
|
Industrials 0.5%
|
|
|
|
|
|
|
|
|
|
Building Products 0.0%
|
|
|
|
|
|
|
|
|
|
Nortek Inc.
|
|
|
|
|
|
247
|
|
$
|
17,450
|
*
|
Marine 0.5%
|
|
|
|
|
|
|
|
|
|
DeepOcean Group Holding AS
|
|
|
|
|
|
56,705
|
|
1,305,349
|
*
(d)(e)
|
Horizon Lines Inc., Class A Shares
|
|
|
|
|
|
402,515
|
|
583,647
|
*
|
Total Marine
|
|
|
|
|
|
|
|
1,888,996
|
|
Total Industrials
|
|
|
|
|
|
|
|
1,906,446
|
|
Total Common Stocks (Cost $6,612,769)
|
|
|
|
|
|
|
|
7,185,553
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate
|
|
|
|
|
|
Convertible Preferred Stocks 0.0%
|
|
|
|
|
|
|
|
|
|
Materials 0.0%
|
|
|
|
|
|
|
|
|
|
Metals & Mining 0.0%
|
|
|
|
|
|
|
|
|
|
ArcelorMittal (Cost $145,000)
|
|
|
|
6.000
|
%
|
5,800
|
|
122,322
|
|
Preferred Stocks 0.8%
|
|
|
|
|
|
|
|
|
|
Energy 0.2%
|
|
|
|
|
|
|
|
|
|
Oil, Gas & Consumable Fuels 0.2%
|
|
|
|
|
|
|
|
|
|
Sanchez Energy Corp., Series B
|
|
|
|
6.500
|
%
|
12,500
|
|
748,438
|
(a)
|
Financials 0.6%
|
|
|
|
|
|
|
|
|
|
Consumer Finance 0.6%
|
|
|
|
|
|
|
|
|
|
GMAC Capital Trust I
|
|
|
|
8.125
|
%
|
90,029
|
|
2,396,572
|
(h)
|
Diversified Financial Services 0.0%
|
|
|
|
|
|
|
|
|
|
Citigroup Capital XIII
|
|
|
|
7.875
|
%
|
5,950
|
|
167,135
|
(h)
|
Total Financials
|
|
|
|
|
|
|
|
2,563,707
|
|
Total Preferred Stocks (Cost $2,962,850)
|
|
|
|
|
|
|
|
3,312,145
|
|
|
|
|
|
Expiration
Date
|
|
Warrants
|
|
|
|
Warrants 0.0%
|
|
|
|
|
|
|
|
|
|
Bolivarian Republic of Venezuela, Oil-linked payment obligations
|
|
|
|
4/15/20
|
|
2,675
|
|
72,559
|
|
SemGroup Corp.
|
|
|
|
11/30/14
|
|
3,390
|
|
98,378
|
*
(d)(e)
|
Total Warrants (Cost $82,925)
|
|
|
|
|
|
|
|
170,937
|
|
Total Investments 125.5% (Cost $503,044,682#)
|
|
|
|
|
|
|
|
534,481,068
|
|
Liabilities in Excess of Other Assets (25.5)%
|
|
|
|
|
|
|
|
(108,691,132
|
)
|
Total Net Assets 100.0%
|
|
|
|
|
|
|
|
$
|
425,789,936
|
|
|
|
|
|
|
|
|
|
|
|
|
Face amount denominated in U.S. dollars, unless otherwise noted.
* 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, unless otherwise noted.
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
29
|
Schedule of investments (contd)
May 31, 2013
Western Asset Global High Income Fund Inc.
(b)
All or a portion of this security is pledged as collateral pursuant to the loan agreement (See Note 5).
(c)
Payment-in-kind security for which part of the income earned may be paid as additional principal.
(d)
Illiquid security (unaudited).
(e)
Security is valued in good faith in accordance with procedures approved by the Board of Directors (See Note 1).
(f)
The coupon payment on these securities is currently in default as of May 31, 2013.
(g)
All or a portion of this security is held by the counterparty as collateral for open reverse repurchase agreements.
(h)
Variable rate security. Interest rate disclosed is as of the most recent information available.
(i)
Security has no maturity date. The date shown represents the next call date.
(j)
Value is less than $1.
(k)
Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to multiple contracts under the same loan.
(l)
All or a portion of this loan is unfunded as of May 31, 2013. The interest rate for fully unfunded term loans is to be determined.
# Aggregate cost for federal income tax purposes is $504,857,057.
Abbreviations used in this schedule:
BRL
|
Brazilian Real
|
EUR
|
Euro
|
GBP
|
British Pound
|
MXN
|
Mexican Peso
|
MYR
|
Malaysian Ringgit
|
OJSC
|
Open Joint Stock Company
|
RUB
|
Russian Ruble
|
TRY
|
Turkish Lira
|
Schedule of Written Options
Security
|
|
Expiration
Date
|
|
Strike
Price
|
|
Notional
Amount
1
|
|
Value
|
|
Credit default swaption with BNP Paribas to buy protection on Markit CDX.NA.HY.20 Index, Call (Premiums received $74,700)
|
|
6/19/13
|
|
$
|
104.00
|
|
9,000,000
|
|
$
|
110,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
In the event an option is exercised and a credit event occurs as defined under the terms of the swap agreement, the notional amount is the maximum potential amount that could be required to be paid as a seller of credit protection or received as a buyer of credit protection.
Notional amount denominated in U.S dollars, unless otherwise noted.
See Notes to Financial Statements.
30
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Western Asset Global High Income Fund Inc.
Summary of Investments by Country (unaudited)**
United States
|
|
47.2
|
%
|
Mexico
|
|
5.6
|
|
Russia
|
|
4.7
|
|
Brazil
|
|
4.0
|
|
Luxembourg
|
|
3.9
|
|
Venezuela
|
|
3.6
|
|
United Kingdom
|
|
3.0
|
|
Turkey
|
|
3.0
|
|
Indonesia
|
|
2.1
|
|
Colombia
|
|
1.8
|
|
Ireland
|
|
1.6
|
|
Germany
|
|
1.6
|
|
Netherlands
|
|
1.4
|
|
Italy
|
|
1.3
|
|
Peru
|
|
1.3
|
|
France
|
|
1.2
|
|
Chile
|
|
1.1
|
|
Poland
|
|
1.0
|
|
Spain
|
|
0.9
|
|
Australia
|
|
0.9
|
|
Cayman Islands
|
|
0.8
|
|
South Africa
|
|
0.8
|
|
Malaysia
|
|
0.7
|
|
India
|
|
0.6
|
|
Canada
|
|
0.6
|
|
Panama
|
|
0.6
|
|
Kazakhstan
|
|
0.5
|
|
Philippines
|
|
0.4
|
|
Norway
|
|
0.4
|
|
Bermuda
|
|
0.3
|
|
Qatar
|
|
0.3
|
|
Marshall Islands
|
|
0.3
|
|
United Arab Emirates
|
|
0.3
|
|
Jersey
|
|
0.3
|
|
Belgium
|
|
0.3
|
|
China
|
|
0.2
|
|
Trinidad and Tobago
|
|
0.2
|
|
Argentina
|
|
0.2
|
|
Czech Republic
|
|
0.2
|
|
Croatia
|
|
0.2
|
|
Sweden
|
|
0.2
|
|
Japan
|
|
0.1
|
|
Singapore
|
|
0.1
|
|
Bahamas
|
|
0.1
|
|
British Virgin Islands
|
|
0.1
|
|
|
|
100.0
|
%
|
** As a percentage of total investments. Please note that the Fund holdings are as of May 31, 2013 and are subject to change.
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
31
|
Statement of assets and liabilities
May 31, 2013
Assets:
|
|
|
|
Investments, at value (Cost $503,044,682)
|
|
$534,481,068
|
|
Foreign currency, at value (Cost $160,766)
|
|
160,419
|
|
Interest receivable
|
|
9,622,522
|
|
Deposits with brokers for swap contracts
|
|
1,620,000
|
|
Receivable for securities sold
|
|
1,342,890
|
|
Unrealized appreciation on forward foreign currency contracts
|
|
526,111
|
|
Prepaid expenses
|
|
25,639
|
|
Other receivables
|
|
71,175
|
|
Total Assets
|
|
547,849,824
|
|
|
|
|
|
Liabilities:
|
|
|
|
Loan payable (Note 5)
|
|
100,000,000
|
|
Payable for open reverse repurchase agreements
|
|
12,443,478
|
|
Payable for securities purchased
|
|
7,267,717
|
|
Swaps, at value (net premiums received $35,133)
|
|
908,502
|
|
Investment management fee payable
|
|
373,674
|
|
Due to custodian
|
|
361,934
|
|
Unrealized depreciation on forward foreign currency contracts
|
|
251,197
|
|
Written options, at value (premiums received $74,700)
|
|
110,051
|
|
Payable for open swap contracts
|
|
96,194
|
|
Interest payable
|
|
90,473
|
|
Accrued expenses
|
|
156,668
|
|
Total Liabilities
|
|
122,059,888
|
|
Total Net Assets
|
|
$425,789,936
|
|
|
|
|
|
Net Assets:
|
|
|
|
Par value ($0.001 par value; 31,053,250 shares issued and outstanding; 100,000,000 shares authorized) (Note 7)
|
|
$ 31,053
|
|
Paid-in capital in excess of par value
|
|
441,388,200
|
|
Undistributed net investment income
|
|
12,113,011
|
|
Accumulated net realized loss on investments, futures contracts, written options, swap contracts and foreign currency transactions
|
|
(58,501,941)
|
|
Net unrealized appreciation on investments, written options, swap contracts and foreign currencies
|
|
30,759,613
|
|
Total Net Assets
|
|
$425,789,936
|
|
|
|
|
|
Shares Outstanding
|
|
31,053,250
|
|
|
|
|
|
Net Asset Value
|
|
$13.71
|
|
See Notes to Financial Statements.
32
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Statement of operations
For the Year Ended May 31, 2013
Investment Income:
|
|
|
|
Interest
|
|
$40,176,373
|
|
Dividends
|
|
378,606
|
|
Less: Foreign taxes withheld
|
|
(32,174)
|
|
Total Investment Income
|
|
40,522,805
|
|
|
|
|
|
Expenses:
|
|
|
|
Investment management fee (Note 2)
|
|
4,528,764
|
|
Interest expense (Notes 3 and 5)
|
|
1,132,140
|
|
Excise tax (Note 1)
|
|
380,113
|
|
Legal fees
|
|
98,342
|
|
Audit and tax
|
|
73,850
|
|
Transfer agent fees
|
|
70,632
|
|
Directors fees
|
|
65,817
|
|
Custody fees
|
|
57,335
|
|
Shareholder reports
|
|
46,776
|
|
Stock exchange listing fees
|
|
26,839
|
|
Insurance
|
|
9,916
|
|
Miscellaneous expenses
|
|
12,600
|
|
Total Expenses
|
|
6,503,124
|
|
Less: Fee waivers and/or expense reimbursements (Note 2)
|
|
(266,398)
|
|
Net Expenses
|
|
6,236,726
|
|
Net Investment Income
|
|
34,286,079
|
|
|
|
|
|
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options, Swap Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
|
|
|
|
Net Realized Gain (Loss) From:
|
|
|
|
Investment transactions
|
|
4,819,444
|
|
Futures contracts
|
|
(27,587)
|
|
Written options
|
|
926,132
|
|
Swap contracts
|
|
(3,753,316)
|
|
Foreign currency transactions
|
|
777,971
|
|
Net Realized Gain
|
|
2,742,644
|
|
Change in Net Unrealized Appreciation (Depreciation) From:
|
|
|
|
Investments
|
|
30,660,202
|
|
Futures contracts
|
|
61,954
|
|
Written options
|
|
7,810
|
|
Swap contracts
|
|
(1,251,815)
|
|
Foreign currencies
|
|
(2,705,284)
|
|
Change in Net Unrealized Appreciation (Depreciation)
|
|
26,772,867
|
|
Net Gain on Investments, Futures Contracts, Written Options, Swap Contracts and Foreign Currency Transactions
|
|
29,515,511
|
|
Increase in Net Assets From Operations
|
|
$63,801,590
|
|
See Notes to Financial Statements.
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
33
|
Statements of changes in net assets
For the Years Ended May 31,
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
Net investment income
|
|
$ 34,286,079
|
|
$ 36,601,908
|
|
Net realized gain
|
|
2,742,644
|
|
4,528,276
|
|
Change in net unrealized appreciation (depreciation)
|
|
26,772,867
|
|
(30,611,590)
|
|
Increase in Net Assets From Operations
|
|
63,801,590
|
|
10,518,594
|
|
|
|
|
|
|
|
Distributions to Shareholders From (Note 1):
|
|
|
|
|
|
Net investment income
|
|
(35,747,410)
|
|
(35,490,043)
|
|
Decrease in Net Assets From Distributions to Shareholders
|
|
(35,747,410)
|
|
(35,490,043)
|
|
|
|
|
|
|
|
Fund Share Transactions:
|
|
|
|
|
|
Reinvestment of distributions (197,110 and 198,433 shares issued, respectively)
|
|
2,642,319
|
|
2,492,351
|
|
Increase in Net Assets From Fund Share Transactions
|
|
2,642,319
|
|
2,492,351
|
|
Increase (Decrease) in Net Assets
|
|
30,696,499
|
|
(22,479,098)
|
|
|
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
Beginning of year
|
|
395,093,437
|
|
417,572,535
|
|
End of year*
|
|
$425,789,936
|
|
$395,093,437
|
|
* Includes undistributed net investment income of:
|
|
$12,113,011
|
|
$13,574,883
|
|
See Notes to Financial Statements.
34
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Statement of cash flows
For the Year Ended May 31, 2013
Increase (Decrease) in Cash:
Cash Provided (Used) by Operating Activities:
|
|
|
|
Net increase in net assets resulting from operations
|
|
$ 63,801,590
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating activities:
|
|
|
|
Purchases of portfolio securities
|
|
(210,283,101)
|
|
Proceeds from sales of portfolio securities
|
|
207,193,378
|
|
Cash paid for purchased options
|
|
(798,435)
|
|
Net amortization of premium (accretion of discount)
|
|
(105,635)
|
|
Payment-in-kind
|
|
(1,168,678)
|
|
Decrease in receivable for securities sold
|
|
193,638
|
|
Decrease in interest receivable
|
|
777,070
|
|
Decrease in prepaid expenses
|
|
1,553
|
|
Decrease in receivable from principal paydown
|
|
5,169
|
|
Increase in other receivable
|
|
(22,646)
|
|
Decrease in deposits with brokers for futures contracts
|
|
160,000
|
|
Increase in deposits with brokers for swap contracts
|
|
(1,620,000)
|
|
Upfront premiums received for swap contracts
|
|
558,194
|
|
Decrease in payable for open swap contracts
|
|
(46,617)
|
|
Decrease in payable for securities purchased
|
|
(519,601)
|
|
Increase in investment management fee payable
|
|
23,782
|
|
Decrease in interest payable
|
|
(40,669)
|
|
Decrease in accrued expenses
|
|
(9,212)
|
|
Decrease in premiums received from written options
|
|
(385,192)
|
|
Decrease in payable to broker variation margin on open futures contracts
|
|
(8,414)
|
|
Net realized gain on investments
|
|
(4,819,444)
|
|
Change in unrealized appreciation of investments, written options, swap contracts and forward foreign currency transactions
|
|
(26,577,377)
|
|
Net Cash Provided by Operating Activities*
|
|
26,309,353
|
|
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
|
Distributions paid on common stock
|
|
(33,105,091)
|
|
Due to custodian
|
|
361,934
|
|
Decrease in payable for reverse repurchase agreements
|
|
(176,399)
|
|
Net Cash Used in Financing Activities
|
|
(32,919,556)
|
|
Net Decrease in Cash
|
|
(6,610,203)
|
|
Cash at Beginning of Year
|
|
6,770,622
|
|
Cash at End of Year
|
|
$ 160,419
|
|
|
|
|
|
Non-Cash Financing Activities:
|
|
|
|
Proceeds from reinvestment of distributions
|
|
$ 2,642,319
|
|
* Included in operating expenses is cash of $1,172,809 paid for interest on borrowings.
See Notes to Financial Statements.
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
35
|
Financial highlights
For a share of capital stock outstanding throughout each year ended May 31:
|
|
2013
1
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of year
|
|
$12.80
|
|
$13.62
|
|
$12.08
|
|
$10.23
|
|
$13.36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
1.11
|
|
1.19
|
|
1.19
|
|
1.06
|
|
0.87
|
|
Net realized and unrealized gain (loss)
|
|
0.96
|
|
(0.85)
|
|
1.47
|
|
1.83
|
|
(2.98)
|
|
Total income (loss) from operations
|
|
2.07
|
|
0.34
|
|
2.66
|
|
2.89
|
|
(2.11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less distributions from:
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
(1.16)
|
|
(1.16)
|
|
(1.12)
|
|
(1.04)
|
|
(1.02)
|
|
Total distributions
|
|
(1.16)
|
|
(1.16)
|
|
(1.12)
|
|
(1.04)
|
|
(1.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of year
|
|
$13.71
|
|
$12.80
|
|
$13.62
|
|
$12.08
|
|
$10.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price, end of year
|
|
$13.30
|
|
$12.85
|
|
$13.38
|
|
$10.73
|
|
$8.83
|
|
Total return, based on NAV
2,3
|
|
16.51
|
%
|
2.81
|
%
|
22.75
|
%
|
28.83
|
%
|
(15.05)
|
%
|
Total return, based on Market Price
4
|
|
12.77
|
%
|
5.32
|
%
|
36.14
|
%
|
33.89
|
%
|
(17.37)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (000s)
|
|
$425,790
|
|
$395,093
|
|
$417,573
|
|
$369,751
|
|
$313,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
Gross expenses
|
|
1.53
|
%
|
1.56
|
%
|
1.59
|
%
|
1.74
|
%
|
3.14
|
%
|
Net expenses
5,6
|
|
1.47
|
7
|
1.50
|
7
|
1.53
|
7
|
1.72
|
7
|
3.14
|
|
Net investment income
|
|
8.08
|
|
9.26
|
|
9.03
|
|
8.96
|
|
8.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover rate
|
|
40
|
%
|
33
|
%
|
75
|
%
|
85
|
%
8
|
35
|
%
8
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental data:
|
|
|
|
|
|
|
|
|
|
|
|
Loans outstanding, end of year (000s)
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
Asset coverage (000s)
|
|
$525,790
|
|
$495,093
|
|
$517,572
|
|
$469,751
|
|
$413,209
|
|
Asset coverage for loan outstanding
|
|
526
|
%
|
495
|
%
|
518
|
%
|
470
|
%
|
413
|
%
|
Weighted average loan (000s)
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
$100,000
|
|
Weighted average interest rate on loans
|
|
1.08
|
%
|
1.10
|
%
|
1.36
|
%
|
1.36
|
%
|
2.85
|
%
|
1
|
Per share amounts have been calculated using the average shares method.
|
2
|
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.
|
3
|
The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of future results.
|
4
|
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.
|
5
|
Ratio includes commitment fees incurred on the line of credit, if any.
|
6
|
The impact of compensating balance arrangements, if any, was less than 0.01%.
|
7
|
Reflects fee waivers and/or expense reimbursements.
|
8
|
Excluding mortgage dollar roll transactions. If mortgage dollar roll transactions had been included, the portfolio turnover rate would have been 172% and 341% for the years ended May 31, 2010 and 2009, respectively.
|
See Notes to Financial Statements.
36
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Notes to financial statements
1. Organization and significant accounting policies
Western Asset Global High Income Fund Inc. (the Fund) was incorporated in Maryland and is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the 1940 Act). The Board of Directors authorized 100 million shares of $0.001 par value common stock. The Funds primary investment objective is high current income. The Funds secondary objective is total return.
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. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investments fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Funds Board of Directors.
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 American 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
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
37
|
Notes to financial statements (contd)
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.
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.
38
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
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
|
|
Long-term investments
:
|
|
|
|
|
|
|
|
|
|
Corporate bonds & notes
|
|
|
|
$406,080,167
|
|
$1,796,356
|
|
$407,876,523
|
|
Asset-backed securities
|
|
|
|
1,494,393
|
|
|
|
1,494,393
|
|
Senior loans
|
|
|
|
11,391,502
|
|
|
|
11,391,502
|
|
Convertible bonds & notes
|
|
|
|
268,981
|
|
|
|
268,981
|
|
Sovereign bonds
|
|
|
|
102,658,712
|
|
|
|
102,658,712
|
|
Common stocks:
|
|
|
|
|
|
|
|
|
|
Consumer discretionary
|
|
$ 46,994
|
|
|
|
92,418
|
|
139,412
|
|
Financials
|
|
4,809,698
|
|
329,997
|
|
|
|
5,139,695
|
|
Industrials
|
|
601,097
|
|
|
|
1,305,349
|
|
1,906,446
|
|
Convertible preferred stocks
|
|
122,322
|
|
|
|
|
|
122,322
|
|
Preferred stocks
|
|
2,563,707
|
|
748,438
|
|
|
|
3,312,145
|
|
Warrants
|
|
|
|
170,937
|
|
|
|
170,937
|
|
Total investments
|
|
$8,143,818
|
|
$523,143,127
|
|
$3,194,123
|
|
$534,481,068
|
|
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
Forward foreign currency contracts
|
|
|
|
$ 526,111
|
|
|
|
$ 526,111
|
|
Total
|
|
$8,143,818
|
|
$523,669,238
|
|
$3,194,123
|
|
$535,007,179
|
|
LIABILITIES
Description
|
|
Quoted Prices
(Level 1)
|
|
Other Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Total
|
|
Other financial instruments:
|
|
|
|
|
|
|
|
|
|
Written options
|
|
|
|
$ 110,051
|
|
|
|
$ 110,051
|
|
Forward foreign currency contracts
|
|
|
|
251,197
|
|
|
|
251,197
|
|
Credit default swaps on credit indices buy protection
|
|
|
|
908,502
|
|
|
|
908,502
|
|
Total
|
|
|
|
$1,269,750
|
|
|
|
$1,269,750
|
|
See Schedule of Investments for additional detailed categorizations.
Values include any premiums paid or received with respect to swap contracts.
(b) Repurchase agreements.
The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Funds holding period. When entering into repurchase agreements, it is the Funds policy that its custodian or a third party custodian, acting on the Funds behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
39
|
Notes to financial statements (contd)
has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.
(c) Reverse repurchase agreements.
The Fund may enter into reverse repurchase agreements. Under the terms of a typical reverse repurchase agreement, a fund sells a security subject to an obligation to repurchase the security from the buyer at an agreed-upon time and price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, the Funds use of the proceeds of the agreement may be restricted pending a determination by the counterparty, or its trustee or receiver, whether to enforce the Funds obligation to repurchase the securities. In entering into reverse repurchase agreements, the Fund will maintain cash, U.S. government securities or other liquid debt obligations at least equal in value to its obligations with respect to reverse repurchase agreements or will take other actions permitted by law to cover its obligations.
(d) Futures contracts.
The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.
Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents 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. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. 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.
(e) Forward foreign currency contracts.
The Fund enters into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of a foreign currency denominated portfolio. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.
Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise
40
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
(f) Foreign currency translation.
Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.
(g) Swap agreements.
The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes. The use of swaps involves risks that are different from those associated with other portfolio transactions.
Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Funds custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments and restricted cash, if any, is identified on the Statement of Assets and Liabilities. Risks may exceed amounts recorded in the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts terms, and the possible lack of liquidity with respect to the swap agreements.
Payments received or made at the beginning of the measurement period are reflected as a premium or deposit, respectively, on the Statement of Assets and Liabilities. These upfront payments are amortized over the life of the swap and are recognized as realized gain or loss in the Statement of Operations. Net periodic payments received or paid by the Fund are recognized as a realized gain or loss in the Statement of Operations.
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
41
|
Notes to financial statements (contd)
The Funds maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of May 31, 2013, the fund did not hold any credit default swaps to sell protection.
For average notional amounts of swaps held during the year ended May 31, 2013, see Note 4.
Credit default swaps
The Fund enters into credit default swap (CDS) contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically corporate or sovereign issuers, on a specified obligation, or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index. The Fund may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk where the Fund has exposure to an issuer) or to take an active long or short position with respect to the likelihood of a particular issuers default. As a seller of protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap provided that there is no credit event. If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the maximum potential amount of future payments (undiscounted) that the Fund could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. These amounts of potential payments will be partially offset by any recovery of values from the respective referenced obligations. As a seller of protection, the Fund effectively adds leverage to its portfolio because, in addition to its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.
Implied spreads are the theoretical prices a lender receives for credit default protection. When spreads rise, market perceived credit risk rises and when spreads fall, market perceived credit risk falls. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and decreasing market values, when compared to the notional amount of the swap, represent a deterioration of the referenced entitys credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. Credit spreads utilized in determining the period end market value of credit default swap agreements on corporate or sovereign issues are disclosed in the Notes to Financial Statements and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values, particularly in relation to the notional amount of the contract as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.
The Funds maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Funds exposure to the counterparty). As the protection seller, the Funds maximum risk is the notional amount of the contract. Credit default swaps are considered to have credit risk-related contingent features since they require payment by the protection seller to the protection buyer upon the occurrence of a defined credit event.
42
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Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Entering into a CDS agreement involves, to varying degrees, elements of credit, market and documentation risk in excess of the related amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates.
(h) Written options.
When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the premium received is recorded as a realized gain. When a written call option is exercised, the difference between the premium received plus the option exercise price and the Funds basis in the underlying security (in the case of a covered written call option), or the cost to purchase the underlying security (in the case of an uncovered written call option), including brokerage commission, is recognized as a realized gain or loss. When a written put option is exercised, the amount of the premium received is subtracted from the cost of the security purchased by the Fund from the exercise of the written put option to form the Funds basis in the underlying security purchased. The writer or buyer of an option traded on an exchange can liquidate the position before the exercise of the option by entering into a closing transaction. The cost of a closing transaction is deducted from the original premium received resulting in a realized gain or loss to the Fund.
The risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. The risk in writing an uncovered call option is that the Fund is exposed to the risk of loss if the market price of the underlying security increases. 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.
(i) Swaptions.
The Fund purchases and writes swaption contracts to manage exposure to an underlying instrument. The Fund may also purchase or write options to manage exposure to fluctuations in interest rates or to enhance yield. Swaption contracts written by the Fund represent an option that gives the purchaser the right, but not the obligation, to enter into a previously agreed upon swap contract at a future date. Swaption contracts purchased by the Fund represent an option that gives the Fund the right, but not the obligation, to enter into a previously agreed upon swap contract at a future date.
When the Fund writes a swaption, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the swaption written. If the swaption expires, the Fund realizes a gain equal to the amount of the premium received.
When the Fund purchases a swaption, an amount equal to the premium paid by the Fund is recorded as an investment on the Statement of Assets and Liabilities, the value of which is marked-to-market daily to reflect the current market value of the swaption purchased. If the swaption expires, the Fund realizes a loss equal to the amount of the premium paid.
Swaptions are marked-to-market daily based upon quotations from market makers. Changes in the value of the swaption are reported as unrealized gains or losses in the Statement of Operations.
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
43
|
Notes to financial statements (contd)
(j) Loan participations.
The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Funds investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of off-set against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.
The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower. In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any off-set between the lender and the borrower.
(k) Unfunded loan commitments.
The Fund may enter into certain credit agreements all or a portion of which may be unfunded. The Fund is obligated to fund these commitments at the borrowers discretion. The commitments are disclosed in the accompanying Schedule of Investments. At May 31, 2013, the Fund had sufficient cash and/or securities to cover these commitments.
(l) 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.
(m) Foreign investment risks.
The Funds investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.
(n) 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 investment manager 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 investment manager. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.
The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events 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
44
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Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.
As of May 31, 2013, the Fund held written options, forward foreign currency contracts and credit default swaps with credit related contingent features which had a liability position of $1,269,750. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties. As of May 31, 2013, the Fund had posted with its counterparties cash and/or securities as collateral to cover the net liability of these derivatives amounting to $1,620,000, which could be used to reduce the required payment.
(o) Security transactions and investment income.
Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. 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.
(p) 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.
(q) Distributions to shareholders.
Distributions from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. Distributions of net realized gains, if any, are declared at least annually. Distributions to 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.
(r) 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.
However, due to the timing of when distributions are made by the Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Funds annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable income and realized gains for the calendar year. The Fund paid $380,113 of Federal excise taxes attributable to calendar year 2012 in March 2013.
Management has analyzed the Funds tax positions taken on income tax returns for all open tax years and has concluded that as of May 31, 2013, 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.
Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
45
|
Notes to financial statements (contd)
(s) 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 values per share. During the current year, the following reclassifications have been made:
|
|
Undistributed Net
Investment Income
|
|
Accumulated Net
Realized Loss
|
|
Paid-in Capital
|
(a)
|
|
$380,113
|
|
|
|
|
|
$(380,113
|
)
|
(b)
|
|
(380,654
|
)
|
|
$380,654
|
|
|
|
|
(a)
|
Reclassifications are primarily due to a non-deductible excise tax paid by the Fund.
|
(b)
|
Reclassifications are primarily due to foreign currency transactions treated as ordinary income for tax purposes, differences between book and tax amortization of premium on fixed income securities and book/tax differences in the treatment of swaps.
|
2. Investment management agreement and other transactions with affiliates
Legg Mason Partners Fund Advisor, LLC (LMPFA) is the Funds investment manager. Western Asset Management Company (Western Asset), Western Asset Management Company Limited (Western Asset Limited) and Western Asset Management Company Pte. Ltd. (Western Singapore) are the Funds subadvisers. LMPFA, Western Asset, Western Asset Limited and Western Singapore are wholly-owned subsidiaries of Legg Mason, Inc. (Legg Mason).
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 0.85% of the Funds average daily net assets plus the proceeds of any outstanding borrowings. LMPFA implemented a voluntary investment management fee waiver of 0.05% beginning on March 1, 2010 and then continuing through December 31, 2013, which reduced the annual rate of that fee to 0.80%.
LMPFA delegates to Western Asset the day-to-day portfolio management of the Fund. Western Asset Limited and Western Singapore provide certain advisory services to the Fund relating to currency transactions and investment in non-U.S. dollar denominated securities. Western Asset Limited and Western Singapore do not receive any compensation from the Fund and are compensated by Western Asset for its services to the Fund. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Fund. In turn, Western Asset pays Western Asset Limited and Western Singapore a subadvisory fee of 0.30% on assets managed by each subadviser.
During the periods in which the Fund is utilizing borrowings, the fee which is payable to the investment manager as a percentage of the Funds assets will be higher than if the Fund did not utilize borrowings because the fee is calculated as a percentage of the Funds net assets, including those investments purchased with borrowings. Borrowings for the purpose of the calculation of the management fee include loans from certain financial institutions, the use of mortgage dollar roll transactions and reverse repurchase agreements, if any.
During the year ended May 31, 2013, fees waived and/or expenses reimbursed amounted to $266,398.
All officers and one Director of the Fund are employees of Legg Mason or its affiliates and do not receive compensation from the Fund.
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Western Asset Global High Income Fund Inc. 2013 Annual Report
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|
|
3. Investments
During the year ended May 31, 2013, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows:
Purchases
|
|
$210,283,101
|
|
Sales
|
|
207,193,378
|
|
At May 31, 2013, the aggregate g ross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:
Gross unrealized appreciation
|
|
$ 40,158,015
|
|
Gross unrealized depreciation
|
|
(10,534,004
|
)
|
Net unrealized appreciation
|
|
$ 29,624,011
|
|
Transactions in reverse repurchase agreements for the Fund during the year ended May 31, 2013 were as follows:
Average Daily
Balance*
|
|
Weighted Average
Interest Rate*
|
|
Maximum Amount
Outstanding
|
$8,380,573
|
|
0.60%
|
|
$12,619,877
|
* Averages based on the number of days that Fund had reverse repurchase agreements outstanding.
Interest rates on reverse repurchase agreements ranged from 0.55% to 0.65% during the year ended May 31, 2013. Interest expense incurred on reverse repurchase agreements totaled $50,114.
At May 31, 2013, the Fund had the following open reverse repurchase agreements:
Counterparty
|
|
Rate
|
|
Effective Date
|
|
Maturity Date
|
|
Face Amount of
Reverse Repurchase
Agreements
|
Deutsche Bank Securities Inc.
|
|
0.60%
|
|
7/18/2012
|
|
TBD*
|
|
$ 5,451,830
|
|
Deutsche Bank Securities Inc.
|
|
0.55%
|
|
2/25/2013
|
|
TBD*
|
|
6,991,648
|
|
|
|
|
|
|
|
|
|
$12,443,478
|
|
*
|
TBD To Be Determined; These reverse repurchase agreements have no maturity dates because they are renewed daily and can be terminated by either the Fund or the counterparty in accordance with the terms of the agreements.
|
On May 31, 2013, the total market value of underlying collateral (refer to the Schedule of Investments for positions held at the counterparty as collateral for reverse repurchase agreements) for open reverse repurchase agreements was $13,039,559.
During the year ended May 31, 2013, written option transactions for the Fund were as follows:
|
|
Number of Contracts/
Notional Amount
|
|
Premiums
|
Written options, outstanding as of May 31, 2012
|
|
34,766,000
|
|
|
$459,892
|
|
Options written
|
|
163,932,400
|
|
|
811,844
|
|
Options bought back
|
|
|
|
|
|
|
Options exercised
|
|
(45,265,700
|
)
|
|
(270,904
|
)
|
Options expired
|
|
(144,432,700
|
)
|
|
(926,132
|
)
|
Written options, outstanding as of May 31, 2013
|
|
9,000,000
|
|
|
$ 74,700
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
47
|
Notes to financial statements (contd)
At May 31, 2013, the Fund had the following open forward foreign currency contracts:
Foreign Currency
|
|
Counterparty
|
|
Local
Currency
|
|
Market
Value
|
|
Settlement
Date
|
|
Unrealized
Gain (Loss)
|
|
Contracts to Buy:
|
|
|
|
|
|
|
|
|
|
|
|
British Pound
|
|
Citibank N.A.
|
|
305,581
|
|
$ 464,077
|
|
8/16/13
|
|
$ (8,734
|
)
|
Euro
|
|
Citibank N.A.
|
|
225,076
|
|
292,667
|
|
8/16/13
|
|
1,731
|
|
Mexican Peso
|
|
Morgan Stanley & Co.
|
|
50,397,085
|
|
3,918,494
|
|
8/16/13
|
|
(242,463
|
)
|
|
|
|
|
|
|
|
|
|
|
(249,466
|
)
|
Contracts to Sell:
|
|
|
|
|
|
|
|
|
|
|
|
British Pound
|
|
Credit Suisse
|
|
1,583,000
|
|
2,404,054
|
|
8/16/13
|
|
53,007
|
|
British Pound
|
|
UBS AG
|
|
2,093,971
|
|
3,180,051
|
|
8/16/13
|
|
57,082
|
|
Euro
|
|
Citibank N.A.
|
|
11,821,983
|
|
15,372,182
|
|
8/16/13
|
|
152,682
|
|
Euro
|
|
Credit Suisse
|
|
4,060,753
|
|
5,280,217
|
|
8/16/13
|
|
48,409
|
|
Euro
|
|
UBS AG
|
|
22,952,855
|
|
29,845,709
|
|
8/16/13
|
|
191,545
|
|
Polish Zloty
|
|
Citibank N.A.
|
|
1,742,895
|
|
527,340
|
|
8/16/13
|
|
21,655
|
|
|
|
|
|
|
|
|
|
|
|
524,380
|
|
Net unrealized gain on open forward foreign currency contracts
|
|
$ 274,914
|
|
At May 31, 2013, the Fund held the following open swap contracts:
CREDIT DEFAULT SWAPS ON CREDIT INDICES BUY PROTECTION
1
Swap Counterparty
(Reference Entity)
|
|
Notional
Amount
2
|
|
Termination
Date
|
|
Periodic
Payments
Made
by the
Fund
|
|
Market
Value
3
|
|
Upfront
Premiums
Paid
(Received)
|
|
Unrealized
Depreciation
|
|
BNP Paribas (Markit CDX.NA.HY.18 Index)
|
|
$ 3,217,500
|
|
6/20/17
|
|
5.000% quarterly
|
|
$(225,107
|
)
|
$ 118,103
|
|
|
$(343,210
|
)
|
Barclays Capital Inc. (Markit CDX.NA.HY.18 Index)
|
|
2,227,500
|
|
6/20/17
|
|
5.000% quarterly
|
|
(155,844
|
)
|
24,201
|
|
|
(180,045
|
)
|
Bank of America Securities LLC (Markit CDX.NA.HY.18 Index)
|
|
326,700
|
|
6/20/17
|
|
5.000% quarterly
|
|
(22,857
|
)
|
1,278
|
|
|
(24,135
|
)
|
Barclays Capital Inc. (Markit CDX.NA.HY.18 Index)
|
|
2,574,000
|
|
6/20/17
|
|
5.000% quarterly
|
|
(180,086
|
)
|
11,639
|
|
|
(191,725
|
)
|
Credit Suisse (Markit CDX.NA.HY.19)
|
|
5,210,000
|
|
12/20/17
|
|
5.000% quarterly
|
|
(324,608
|
)
|
(190,354
|
)
|
|
(134,254
|
)
|
Total
|
|
$13,555,700
|
|
|
|
|
|
$(908,502
|
)
|
$ (35,133
|
)
|
|
$(873,369
|
)
|
1
|
If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or the underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or the underlying securities comprising the referenced index.
|
2
|
The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.
|
3
|
The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement been closed/sold as of the period end. Decreasing market values (sell protection) or increasing market values (buy protection) when compared to the notional amount of the swap, represent a deterioration of the referenced entitys credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.
|
|
Percentage shown is an annual percentage rate.
|
48
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Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
4. Derivative instruments and hedging activities
GAAP requires enhanced disclosure about an entitys derivative 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 May 31, 2013.
|
|
Foreign Exchange Risk
|
|
|
|
|
|
Forward foreign currency contracts
|
|
$526,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Risk
|
|
Credit Risk
|
|
Total
|
|
Written swaptions
|
|
|
|
|
$ 110,051
|
|
$ 110,051
|
|
Swap contracts
2
|
|
|
|
|
908,502
|
|
908,502
|
|
Forward foreign currency contracts
|
|
$251,197
|
|
|
|
|
251,197
|
|
Total
|
|
$251,197
|
|
|
$1,018,553
|
|
$1,269,750
|
|
1
|
Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation (depreciation) and for liability derivatives is payables/net unrealized appreciation (depreciation).
|
2
|
Values include premiums paid (received) on swap contracts which are shown separately in 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 May 31, 2013. 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
|
|
Foreign
Exchange Risk
|
|
Credit Risk
|
|
Total
|
|
Purchased options
1
|
|
|
|
|
|
|
|
$(1,627,383
|
)
|
|
$(1,627,383
|
)
|
Written options
|
|
|
|
|
|
|
|
926,132
|
|
|
926,132
|
|
Futures contracts
|
|
$(27,587
|
)
|
|
|
|
|
|
|
|
(27,587
|
)
|
Swap contracts
|
|
|
|
|
|
|
|
(3,753,316
|
)
|
|
(3,753,316
|
)
|
Forward foreign currency contracts
|
|
|
|
|
$927,576
|
|
|
|
|
|
927,576
|
|
Total
|
|
$(27,587
|
)
|
|
$927,576
|
|
|
$(4,454,567
|
)
|
|
$(3,554,578
|
)
|
1
|
Net realized gain (loss) from purchased options is reported in net realized gain (loss) from investment transactions in the Statement of Operations.
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
49
|
Notes to financial statements (contd)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
|
|
Interest
Rate Risk
|
|
Foreign
Exchange Risk
|
|
Credit Risk
|
|
Total
|
|
Purchased options
1
|
|
|
|
|
|
|
|
$ 30,477
|
|
|
$ 30,477
|
|
|
Written options
|
|
|
|
|
|
|
|
7,810
|
|
|
7,810
|
|
|
Futures contracts
|
|
$61,954
|
|
|
|
|
|
|
|
|
61,954
|
|
|
Swap contracts
|
|
|
|
|
|
|
|
(1,251,815
|
)
|
|
(1,251,815
|
)
|
|
Forward foreign currency contracts
|
|
|
|
|
$(2,838,820
|
)
|
|
|
|
|
(2,838,820
|
)
|
|
Total
|
|
$61,954
|
|
|
$(2,838,820
|
)
|
|
$(1,213,528
|
)
|
|
$(3,990,394
|
)
|
|
1
|
The change in unrealized appreciation (depreciation) from purchased options is reported in the change in net unrealized appreciation (depreciation) from investments in the Statement of Operations.
|
During the year ended May 31, 2013, the volume of derivative activity for the Fund was as follows:
|
|
Average Market
Value
|
|
Purchased options
|
|
$ 169,721
|
|
|
Written options
|
|
202,454
|
|
|
Futures contracts (to sell)
|
|
3,872,827
|
|
|
Forward foreign currency contracts (to buy)
|
|
7,324,956
|
|
|
Forward foreign currency contracts (to sell)
|
|
60,712,709
|
|
|
|
|
|
|
|
|
|
Average
Notional Balance
|
|
Credit default swap contracts (to buy protection)
|
|
$22,511,162
|
|
|
|
At May 31, 2013, there were no open positions held in this derivative.
|
5. Loan
The Fund has a revolving credit agreement with a financial institution that allows the Fund to borrow up to an aggregate amount of $100,000,000 and renews daily for a 270-day term unless notice to the contrary is given to the Fund. The Fund pays a commitment fee at an annual rate of 0.10%, on the unutilized portion of the loan. The interest on the loan is calculated at a variable rate based on the LIBOR, Fed Funds or Prime Rates plus any applicable margin. Interest expense related to the loan for the year ended May 31, 2013 was $1,082,026. For the year ended May 31, 2013, the Fund did not incur a commitment fee. At May 31, 2013, the Fund had $100,000,000 of borrowings outstanding per this credit agreement. Securities held by the Fund are subject to a lien, granted to the lenders, to the extent of the borrowing outstanding and any additional expenses. For the year ended May 31, 2013, based on the number of days during the reporting period that the Fund had a loan balance outstanding, the average daily loan balance was $100,000,000 and the weighted average interest rate was 1.08%.
6. Distributions subsequent to May 31, 2013
On May 17, 2013, the Funds Board of Directors declared three distributions, each in the amount of $0.09625 per share, payable on June 28, 2013, July 26, 2013 and August 30, 2013 to shareholders of record on June 21, 2013, July 19, 2013 and August 23, 2013, respectively.
50
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
7. Capital shares
On October 22, 2003, the Funds Board authorized the Fund to repurchase from time to time in the open market up to 3,000,000 shares of the Funds common stock. The Board directed the management of the Fund to repurchase shares of the Funds common stock at such times and in such amounts as management believes will enhance shareholder value, subject to review by the Funds Board. Since the inception of the repurchase plan, the Fund has not repurchased any shares.
8. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended May 31, was as follows:
|
|
2013
|
|
2012
|
|
Distributions paid from:
|
|
|
|
|
|
Ordinary income
|
|
$35,747,410
|
|
$35,490,043
|
|
As of May 31, 2013, the components of accumulated earnings on a tax basis were as follows:
Undistributed ordinary income net
|
|
$ 12,598,979
|
|
Capital loss carryforward*
|
|
(56,075,737
|
)
|
Other book/tax temporary differences
a
|
|
(1,099,797
|
)
|
Unrealized appreciation (depreciation)
b
|
|
28,947,238
|
|
Total accumulated earnings (losses) net
|
|
$(15,629,317
|
)
|
*
|
During the taxable year ended May 31, 2013, the Fund utilized $ 4,189,402 of its capital loss carryforward available from prior years. As of May 31, 2013, the Fund had the following net capital loss carryforward remaining:
|
Year of Expiration
|
|
Amount
|
|
5/31/2018
|
|
$(56,075,737
|
)
|
This amount will be available to offset any future taxable capital gains.
a
|
Other book/tax temporary differences are attributable primarily to the tax deferral of losses on straddles, the realization for tax purposes of unrealized gains on certain foreign currency contracts, the deferral of post-October capital losses for tax purposes, book/tax difference 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 primarily to the tax deferral of losses on wash sales and the difference between book and tax amortization methods for premiums on fixed income securities.
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
51
|
Report of independent registered public accounting firm
The Board of Directors and Shareholders
Western Asset Global High Income Fund Inc.:
We have audited the accompanying statement of assets and liabilities of Western Asset Global High Income Fund Inc. (the Fund), including the schedule of investments, as of May 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, the statement of cash flows for the year then ended, and the financial highlights for each of the years in the five year period then ended. These financial statements and financial highlights are the responsibility of the Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2013, by correspondence with the custodian and brokers or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Western Asset Global High Income Fund Inc. as of May 31, 203, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, its cash flows for the year then ended and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
New York, New York
July 19, 2013
52
|
|
Western Asset Global High Income Fund Inc. 2013 Annual Report
|
|
|
Additional information (unaudited)
Information about Directors and Officers
The business and affairs of Western Asset Global High Income Fund Inc. (the Fund) are conducted by management under the supervision and subject to the direction of its Board of Directors. The business address of each Director is c/o Kenneth D. Fuller, 100 International Drive, 5th Floor, Baltimore, Maryland 10018. Information pertaining to the Directors and officers of the Fund is set forth below.
Independent Directors
:
Carol L. Colman
|
|
|
Year of birth
|
|
1946
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class I
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
President, Colman Consulting Company (consulting)
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
None
|
|
|
|
Daniel P. Cronin
|
|
|
Year of birth
|
|
1946
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class I
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during 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)
|
|
29
|
Other board memberships held by Director
|
|
None
|
|
|
|
Paolo M. Cucchi
|
|
|
Year of birth
|
|
1941
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class I
|
Term of office
1
and length of time served
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Professor of French and Italian at Drew University; formerly, Vice President and Dean of College of Liberal Arts at Drew University (1984 to 2009)
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
None
|
|
|
Western Asset Global High Income Fund Inc.
|
|
53
|
Additional information (unaudited) (contd)
Information about Directors and Officers
Independent Directors contd
Leslie H. Gelb
|
|
|
Year of birth
|
|
1937
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class II
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
President Emeritus and Senior Board Fellow (since 2003), The Council on Foreign Relations; formerly, President, (prior to 2003), the Council on Foreign Relations; formerly, Columnist, Deputy Editorial Page Editor and Editor, Op-Ed Page, The New York Times
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
Director of two registered investment companies advised by Aberdeen Asset Management Asia Limited; India Fund, Inc. and Asia Tigers Fund, Inc. (since 1994)
|
|
|
|
William R. Hutchinson
|
|
|
Year of birth
|
|
1942
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class II
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
President, W.R. Hutchinson & Associates Inc. (Consulting) (since 2001)
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
Director (Non-Executive Chairman of the Board (since December 1, 2009)), Associated Banc Corp. (banking) (since 1994)
|
54
|
|
Western Asset Global High Income Fund Inc.
|
|
|
Independent Directors contd
Eileen A. Kamerick
2
|
|
|
Year of birth
|
|
1958
|
Position(s) held with Fund
|
|
Director and Member of Nominating and Audit Committees, Class III
|
Term of office
1
and length of time served
|
|
Since 2013
|
Principal occupation(s) during past five years
|
|
CFO, Press Ganey Associates (health care informatics company) (since 2012); formerly Managing Director and CFO, Houlihan Lokey (international investment bank) (2010 to 2012); Senior Vice President, CFO & CLO, Tecta America Corp. (commercial roofing company) (2008 to 2010); Executive Vice President and CFO, Bearing Point Inc. (management and technology consulting firm) (2008); Executive Vice President, CFO and CAO Heidrick & Struggles (international executive search and leadership consulting firm) (2004 to 2008)
|
Number of portfolios in fund complex
everseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
Director of Associated Banc-Corp (financial services company) (since 2007); Westell Technologies, Inc. (technology company) (since 2003)
|
|
|
|
Riordan Roett
|
|
|
Year of birth
|
|
1938
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class III
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
The Sarita and Don Johnston Professor of Political Science and Director of Western Hemisphere Studies, Paul H. Nitze School of Advanced International Studies, The John Hopkins University (since 1973)
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
None
|
|
|
Western Asset Global High Income Fund Inc.
|
|
55
|
Additional information (unaudited) (contd)
Information about Directors and Officers
Independent Directors contd
Jeswald W. Salacuse
|
|
|
Year of birth
|
|
1938
|
Position(s) held with Fund
1
|
|
Director and Member of the Nominating and Audit Committees, Class III
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
Henry J. Braker Professor of Commercial Law, The Fletcher School of Law and Diplomacy, Tufts University (since 1986); President and Member, Arbitration Tribunal, World Bank/ICSID (since 2004)
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
29
|
Other board memberships held by Director
|
|
Director of two registered investment companies advised by Aberdeen Asset Management Asia Limited; India Fund, Inc. and Asia Tigers Fund, Inc. (since 1993)
|
|
|
|
Interested Director and Officer:
|
|
|
|
|
|
Kenneth D. Fuller
3
|
|
|
Year of birth
|
|
1958
|
Position(s) held with Fund
1
|
|
Director, Chairman, President and Chief Executive Officer, Class II
|
Term of office
1
and length of time served
|
|
Since 2013
|
Principal occupation(s) during past five years
|
|
Managing Director of Legg Mason & Co., LLC (Legg Mason & Co.) (since 2013); Officer and/or Trustee/Director of 162 funds associated with Legg Mason Partners Fund Advisor, LLC (LMPFA) or its affiliates (since 2013); President and Chief Executive Officer of LM Asset Services, LLC (LMAS) (formerly, a registered investment adviser) (since 2013); formerly, Senior Vice President of LMPFA (2012 to 2013); formerly, Director of Legg Mason & Co. (2012 to 2013); formerly, Vice President of Legg Mason & Co. (2009 to 2012); formerly, Vice President Equity Division of T. Rowe Price Associates (1993 to 2009), as well as Investment Analyst and Portfolio Manager for certain asset allocation accounts (2004 to 2009).
|
Number of portfolios in fund complex
overseen by Director (including the Fund)
|
|
151
|
Other board memberships held by Director
|
|
None
|
56
|
|
Western Asset Global High Income Fund Inc.
|
|
|
Additional Officers:
Ted P. Becker
|
|
|
Legg Mason
|
|
|
620 Eighth Avenue, 49th Floor, New York, NY 10018
|
Year of birth
|
|
1951
|
Position(s) held with Fund
1
|
|
Chief Compliance Officer
|
Term of office
1
and length of time served
|
|
Since 2006
|
Principal occupation(s) during past five years
|
|
Director of Global Compliance at Legg Mason (since 2006); Chief Compliance Officer of LMPFA (since 2006); Managing Director of Compliance of Legg Mason & Co. (since 2005); Chief Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)
|
|
|
|
Vanessa A. Williams
|
|
|
Legg Mason
|
|
|
100 First Stamford Place, 6th Floor, Stamford, CT 06902
|
Year of birth
|
|
1979
|
Position(s) with Fund
1
|
|
Identity Theft Prevention Officer
|
Term of office
1
and length of time served
|
|
Since 2011
|
Principal occupation(s) during past five years
|
|
Vice President of Legg Mason & Co. (since 2012); Identity Theft Prevention Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011); Chief Anti-Money Laundering Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011); formerly, Senior Compliance Officer of Legg Mason & Co. (2006 to 2008) and Legg Mason & Co. predecessors (prior to 2006)
|
|
|
|
Robert I. Frenkel
|
|
|
Legg Mason
|
|
|
100 First Stamford Place, 6th Floor, Stamford, CT 06902
|
Year of birth
|
|
1954
|
Position(s) held with Fund
1
|
|
Secretary and Chief Legal Officer
|
Term of office
1
and length of time served
|
|
Since 2003
|
Principal occupation(s) during past five years
|
|
Vice President and Deputy General Counsel of Legg Mason (since 2006); Managing Director and General Counsel of Global Mutual Funds for Legg Mason & Co. (since 2006) and Legg Mason & Co. predecessors (since 1994); Secretary and Chief Legal Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)
|
|
|
Western Asset Global High Income Fund Inc.
|
|
57
|
Additional information (unaudited) (contd)
Information about Directors and Officers
Additional Officers contd
Thomas C. Mandia
|
|
|
Legg Mason
|
|
|
100 First Stamford Place, 6th Floor, Stamford, CT 06902
|
Year of birth
|
|
1962
|
Position(s) held with Fund
1
|
|
Assistant Secretary
|
Term of office
1
and length of time served
|
|
Since 2006
|
Principal occupation(s) during past five years
|
|
Managing Director and Deputy General Counsel of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); Secretary of LMPFA (since 2006); Assistant Secretary of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006); Secretary of LMAS (since 2002)
|
|
|
|
Richard F. Sennett
|
|
|
Legg Mason
|
|
|
100 International Drive, 5th Floor, Baltimore, MD 21202
|
Year of birth
|
|
1970
|
Position(s) held with Fund
1
|
|
Principal Financial Officer
|
Term of office
1
and length of time served
|
|
Since 2011
|
Principal occupation(s) during past five years
|
|
Principal Financial Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011); Managing Director of Legg Mason & Co. and Senior Manager of the Treasury Policy group for Legg Mason & Co.s Global Fiduciary Platform (since 2011); formerly, Chief Accountant within the SECs Division of Investment Management (2007 to 2011); formerly, Assistant Chief Accountant within the SECs Division of Investment Management (2002 to 2007)
|
|
|
|
Steven Frank
|
|
|
Legg Mason
|
|
|
620 Eighth Avenue, 49th Floor, New York, NY 10018
|
Year of birth
|
|
1967
|
Position(s) held with Fund
1
|
|
Treasurer
|
Term of office
1
and length of time served
|
|
Since 2010
|
Principal occupation(s) during past five years
|
|
Vice President of Legg Mason & Co. and Legg Mason & Co. predecessors (since 2002); Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2010); formerly, Controller of certain mutual funds associated with Legg Mason & Co. or its affiliates (prior to 2010)
|
58
|
|
Western Asset Global High Income Fund Inc.
|
|
|
Additional Officers contd
Jeanne M. Kelly
|
|
|
Legg Mason
|
|
|
620 Eighth Avenue, 49th Floor, New York, NY 10018
|
Year of birth
|
|
1951
|
Position(s) with Fund
1
|
|
Senior Vice President
|
Term of office
1
and length of time served
|
|
Since 2007
|
Principal occupation(s) during past five years
|
|
Senior Vice President of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); Managing Director of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005)
|
Directors who are not interested persons of the Fund within the meaning of Section (a)(19) of the 1940 Act.
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 2014, year 2015 and year 2013, respectively, or thereafter in each case when their respective successors are duly elected and qualified. The Funds executive officers are chosen each year at the first meeting of the Funds Board of Directors following the Annual Meeting of Stockholders, to hold office until the meeting of the Board following the next Annual Meeting of Stockholders and until their successors are duly elected and qualified.
2
Effective February 1, 2013, Ms. Kamerick became a Director.
3
Effective June 1, 2013, Mr. Fuller was appointed to the position of Chairman, President and Chief Executive Officer. Prior to this date, R. Jay Gerken served as Chairman, President and Chief Executive Officer. Mr. Gerken retired effective May 31, 2013, Mr. Fuller is an interested person of the Fund as defined in the 1940 Act because Mr. Fuller is an officer of LMPFA and certain of its affiliates.
|
|
Western Asset Global High Income Fund Inc.
|
|
59
|
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.
60
|
|
Western Asset Global High Income Fund Inc.
|
|
|
Other shareholder communications regarding accounting matters (unaudited)
The Funds Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (collectively, Accounting Matters). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Chief Compliance Officer (CCO). Persons who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Funds Audit Committee Chair (together with the CCO, Complaint Officers). Complaints may be submitted on an anonymous basis.
The CCO may be contacted at:
Legg Mason & Co., LLC
Compliance Department
620 Eighth Avenue, 49th Floor
New York, New York 10018
Complaints may also be submitted by telephone at 1-800-742-5274. Complaints submitted through this number will be received by the CCO.
|
|
Western Asset Global High Income Fund Inc.
|
|
61
|
Dividend reinvestment plan (unaudited)
Unless you elect to receive distributions in cash, all distributions, on your Common Shares will be automatically reinvested by American Stock Transfer & Trust Company (AST), as agent for the Common Shareholders (the Plan Agent), in additional Common Shares under the 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 AST as distribution paying agent.
If you participate in the Plan, the number of Common Shares you will receive will be determined as follows:
(1) If the market price of the Common Shares on the record date (or, if the record date is not a New York Stock Exchange trading day, the immediately preceding trading day) for determining shareholders eligible to receive the relevant distribution (the determination date) is equal to or exceeds 98% of the net asset value per share of the Common Shares, the Fund will issue new Common Shares at a price equal to the greater of (a) 98% of the net asset value per share at the close of trading on the Exchange on the determination date or (b) 95% of the market price per share of the Common Shares on the determination date.
(2) If 98% of the net asset value per share of the Common Shares exceeds the market price of the Common Shares on the determination date, the Plan Agent will receive the distribution in cash and will buy Common Shares in the open market, on the Exchange or elsewhere, for your account as soon as practicable commencing on the trading day following the determination date and terminating no later than the earlier of (a) 30 days after the distribution payment date, or (b) the record date for the next succeeding distribution to be made to the Common Shareholders; except when necessary to comply with applicable provisions of the federal securities laws. If during this period: (i) the market price rises so that it equals or exceeds 98% of the net asset value per share of the Common Shares at the close of trading on the Exchange on the determination 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 Shares in the open market and the Fund shall issue the remaining Common Shares at a price per share equal to the greater of (a) 98% of the net asset value per share at the close of trading on the Exchange on the determination date or (b) 95% of the then current market price per share.
The Plan Agent maintains all participants accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Common Shares you have received under the Plan.
You may withdraw from the Plan by notifying the Plan Agent in writing at 6201 15th Avenue, Brooklyn, New York 11219 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 distribution record date; otherwise such withdrawal will be effective as soon as practicable after the Plan Agents investment of the most recently declared distribution on the Common Shares. The Plan may be terminated by the Fund upon notice in writing mailed to Common Shareholders at least 30 days prior to the record date for the payment of any distribution by the Fund for which the termination is to be effective. Upon any termination, you will be sent a certificate or certificates for
62
|
|
Western Asset Global High Income Fund Inc.
|
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the full Common Shares held for you under the Plan and cash for any fractional Common Shares. You may elect to notify the Plan Agent in advance of such termination to have the Plan Agent sell part or all of your shares on your behalf. You will be charged $5.00 plus a $0.05 per Common Share service charge and the Plan Agent is authorized to deduct brokerage charges actually incurred for this transaction from the proceeds.
There is no service charge for reinvestment of your distributions in Common Shares. 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 distributions will be automatically reinvested in additional Common Shares, this allows you to add to your investment through dollar cost averaging, which may lower the average cost of your Common Shares over time.
Automatically reinvesting distributions does not mean that you do not have to pay income taxes due upon receiving distributions.
The Fund reserves the right to amend or terminate the Plan if, in the judgment of the Board of Directors, the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan and your account may be obtained from the Plan Agent at 1-888-888-0151.
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Western Asset Global High Income Fund Inc.
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63
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Western Asset
Global High Income Fund Inc.
Directors
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Western Asset Global High Income Fund Inc.
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Independent registered public accounting firm
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Carol L. Colman
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620 Eighth Avenue
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KPMG LLP
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Daniel P. Cronin
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49th Floor
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345 Park Avenue
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Paolo M. Cucchi
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New York, NY 10018
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New York, NY 10154
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Kenneth D. Fuller*
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Chairman
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Investment manager
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Legal counsel
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Leslie H. Gelb
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Legg Mason Partners Fund Advisor, LLC
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Simpson Thacher & Bartlett LLP
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William R. Hutchinson
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425 Lexington Avenue
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Eileen A. Kamerick**
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Subadvisers
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New York, NY 10017
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Riordan Roett
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Western Asset Management Company
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Jeswald W. Salacuse
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Western Asset Management Company Limited
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New York Stock Exchange Symbol
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Western Asset Management Company Pte. Ltd.
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EHI
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Officers
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Kenneth D. Fuller*
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Custodian
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President and Chief Executive Officer
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State Street Bank and Trust Company
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Richard F. Sennett
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1 Lincoln Street
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Principal Financial Officer
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Boston, MA 02111
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Ted P. Becker
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Chief Compliance Officer
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Transfer agent
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Vanessa A. Williams
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American Stock Transfer & Trust Company
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Identity Theft Prevention Officer
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6201 15th Avenue
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Robert I. Frenkel
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Brooklyn, NY 11219
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Secretary and Chief Legal Officer
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Thomas C. Mandia
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Assistant Secretary
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Steven Frank
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Treasurer
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Jeanne M. Kelly
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Senior Vice President
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*
Effective June 1, 2013, Mr. Fuller became Chairman, President and Chief Executive Officer.
**
Effective February 1, 2013, Ms. Kamerick became a Director.
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 and certain closed-end funds managed or sub-advised by Legg Mason or its affiliates. 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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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.).
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 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 marketing services solely for the Funds;
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The Funds representatives such as legal counsel, accountants and auditors; and
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Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.
Except as otherwise permitted by applicable law, companies acting on the Funds behalf 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.
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NOT PART OF THE ANNUAL REPORT
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Legg Mason Funds Privacy and Security Notice (contd)
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, or if you have questions about the Funds privacy practices, 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 2011
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NOT PART OF THE ANNUAL REPORT
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Western Asset Global High Income Fund Inc.
Western Asset Global High Income Fund Inc.
620 Eighth Avenue
49th 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 Common Stock in the open market.
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 on Form N-Q. The Funds Forms N-Q are available on the SECs website at www.sec.gov. The Funds Forms N-Q may be reviewed and copied at the SECs Public Reference Room in Washington D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q from the Fund, shareholders can call 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 relating to portfolio transactions are available (1) without charge, upon request, by calling 1-888-777-0102, (2) on the Funds website at www.lmcef.com and (3) on the SECs website at www.sec.gov.
This report is transmitted to the shareholders of Western Asset Global High Income 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.
American Stock
Transfer & Trust Company
6201 15th Avenue
Brooklyn, NY 11219
WASX010005 7/13 SR13-1970