Western Asset Premier Bond Fund : Annual Report

Annual Report

December 31, 2022

WESTERN ASSET PREMIER BOND FUND (WEA)

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Fund objective

Th e F u n d s i nve st m e n t o bj ect i ve i s to p rov i d e c u rre n t i n co m e a n d ca p i ta l a p p rec i a t i o n by i nve st i n g p r i m a r i l y i n a d i ve rs i fi e d po rtfo l i o of i nve st m e n t g ra d e b o n d s

U n d e r n o rm a l m a r ket co n d i t i o n s t h e F u n d	ex pects to i nve st s u b sta n t i a l l y a l l ( b u t a t l ea st
80 % ) of i ts tota l m a n a g e d a ss ets i n b o n d s	i n c l u d i n g co rpo ra te b o n d s U S g ove rn m e n t a n d

a g ency s ec u r i t i e s a n d m o rtg a g e re l a te d s ec u r i t i e s a n d a t l ea st 6 5 % of i ts tota l m a n a g e d

a ss ets i n b o n d s t h a t a t t h e t i m e of purc h a s e a re of i nve st m e n t g ra d e q u a l i ty Th e F u n d m ay i nve st up to 3 5 % of i ts total m a n a g e d a ss ets i n b o n d s of b e l ow i nve st m e n t gra d e qua l i ty

( co m m o n l y refe rre d to a s	j u n k b o n d s ) a t t h e t i m e of p u rc h a s e	Th e F u n d	m ay i nve st	i n
sec u r i t ies o r i n st rum e n ts ot h e r t h a n b o n d s ( i n c l u d i n g p refe rre d	stoc k) an d	m ay i nve st	u p to
1 0 % of i ts tota l m ana g e d	a ss ets i n inst r u m e n ts d eno m i n a te d i n c u rre n c i e s ot h e r t h a n t h e

U S d o l l a r Th e F u n d m ay i nve st i n a va r i ety of d e r i va t i ve i n st r u m e n ts fo r i nve st m e n t o r r i s k m a n a g e m ent p u rpos e s Th e Fun d ex pects t h a t t h e ave rage effect i ve d u ra t i o n of i ts po rtfo l i o w i l l ra n g e b etwe e n 3 5 a n d s eve n yea rs a l t h o u g h t h i s ta rg et d u ra t i o n m ay c h a n g e f ro m

t i me to t i m e Trust prefe rre d i n te re sts a n d ca p i ta l s ec u r i t i e s a re co n s i d e re d b o n d s a n d	n ot
p refe rre d stoc k fo r p u rpo s e s of t h e fo reg o i n g g u i d e l i n e s
What's inside
Letter from the president	III
Fund overview	1
Fund at a glance	6
Fund performance	7
Schedule of investments	9
Statement of assets and liabilities	27
Statement of operations	28
Statements of changes in net assets	29
Statement of cash flows	30
Financial highlights	31
Notes to financial statements	33
Report of independent registered public accounting firm	50
Additional information	51
Annual chief executive officer and principal financial officer certifications	57
Other shareholder communications regarding accounting matters	58
Summary of information regarding the Fund	59
Dividend reinvestment plan	73
Important tax information	75

1. Western Asset Premier Bond Fund

Letter from the president

Dear Shareholder,

We a re p l ea s e d to p rov i d e t h e a n n ual re po rt of We ste rn Ass et P re m i e r B o n d F u n d fo r t h e

twe l ve m o n t h re po rt i n g pe r i o d e n d e d D ece m b e r 3 1 2 022. P l ea s e rea d o n fo r a d eta i l e d l o o k a t p reva i l i n g eco n o m i c a n d m a r ket co n d i t i o n s dur i n g t h e Fun d s re po rt i n g pe r i o d a n d to l ea rn how t h o s e co n d i t i o n s h ave a ffecte d F u n d pe rfo rman ce

As a l ways we re m a i n co m m i tte d to p rov i d i n g yo u w i t h exce l l e n t s e rv i ce a n d a f u l l

s pect r u m of i nve st m e n t c h o i ce s We a l s o re m a i n co m m i tte d to s u p p l e m e n t i n g t h e s u p po rt you rece i ve f ro m you r fina n c ial adv i s o r O n e way we a cco m p l i s h t h i s i s t h ro ugh o u r we b s i te www f rankl i n te m p l eto n co m H e re yo u ca n g a i n i m m e d i a te a cce ss to m a r ket a n d

i nve st m e n t i n fo rm a t i o n i n c l u d i n g :

• F u n d p r i ce s a n d pe rfo rm a n ce

• M a r ket i n s i g h ts a n d co m m e n tar i e s f ro m our po rtfo l i o m a n a g e rs a n d

• A h o st of e d u ca t i o n a l re s o u rce s

We l o o k fo rwa rd to h e l p i n g yo u m e et yo u r fi n a n c i a l g oa l s

• i n cere l y

Jane Trust, CFA

President and Chief Executive Officer

J a n u a ry 3 1 2 023

Western Asset Premier Bond Fund

III

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Fund overview

Q. What is the Fund's investment strategy?

A Th e F u n d s i nve st m e n t o bj ect i ve i s to p rov i d e c u rre n t i n co m e a n d ca p i ta l a p p rec i a t i o n by i nve st i n g p r i m a r i l y i n a d i ve rs i fi e d po rtfo l i o of i nve st m e n t g ra d e b o n d s U n d e r n o rm a l

m a r ket co n d i t i o n s t h e F u n d ex pects to i nve st s u b sta n t i a l l y a l l ( b u t a t l ea st 80 % ) of i ts tota l m ana g e d a ss ets i i n b ond s i n c l u d i n g co rpo ra te b o n d s U S g ove rnme n t a n d a g e n cy

s ec u rit i e s a n d m o rtg a g e re l a te d s ec u r i t i e s a n d a t l ea st 6 5 % of i ts tota l m a n a g e d a ss ets i n b o n d s t h a t a t t h e t i m e of p u rc h a s e a re of i nve st m e n t g ra d e q u a l i ty Th e F u n d m ay i nve st u p to 3 5 % of i ts tota l m a n a g e d a ss ets i n b o n d s of b e l ow i nve st m e n t g ra d e q u a l i ty ( co m m o n l y

refe rre d to a s	j u n k b o n d s ) a t t h e t i m e of p u rc h a s e Th e F u n d m ay i nve st i n s ec u r i t i e s o r
i n st r u m e n ts ot h e r t h a n b o n d s ( i n c l u d i n g p refe rre d	stoc k) a n d m ay i nve st u p to 1 0 %	of i ts
tota l m a n a g e d	a ss ets i n in st r u m e n ts d e n o m i n a te d	i n c u rre n c i e s ot h e r t h a n t h e U S	d o l l a r
Th e F u n d m ay i nve st i n a va r i ety of d e r i va t i ve i n st r u m e n ts fo r i nve st m e n t o r r i s k
m a n a g e m e n t p u rpo s e s Th e F u n d ex pects t h a t t h e ave ra g e effect i ve d u ra t i o n of i ts po rtfo l i o

w i l l ra n g e b etwe e n 3 5 a n d s eve n years a l t h o u g h t h i s ta rg et d u ra t i o n m ay c h a n g e f ro m

t i m e to t i m e Tr u st p refe rre d i n te re sts a n d ca p i ta l s ec u r i t i e s a re co n s i d e re d b o n d s a n d n ot p refe rre d stoc k fo r p u rpo s e s of t h e fo reg o i n g g u i d e l i n e s I f a s ec u r i ty i s ra te d by m u l t i p l e

n a t i o n a l l y recog n i z e d	sta t i st i ca l ra t i n g o rg a n i za t i o n s ("N R SRO s") a n d	receive s d i ffe re n t
ra t i n g s t h e F u n d	w i l l	t rea t t h e s ec u r i ty a s b e i n g ra te d i n t h e h i g h e st	ra t i n g ca teg o ry
rece i ve d f ro m a n	N R S R O

At We ste rn Ass et M a n a g e m e n t C o m pa ny LLC ( We ste rn Ass et ) t h e F u n d s i nve st m e n t a dvi s e r we ut i l i z e a fi xe d i n co m e tea m a p p roa c h w i t h d ec i s i o n s d e r i ve d f ro m i n te ra ct i o n

a mon g va r ious i nvest m e n t manag e m e n t s ecto r s pec i a l i sts Th e s ecto r tea m s a re co m p r i s e d of We ste rn Ass et s s e n i o r po rtfo l i o m a n a g e m e n t pe rs o n n e l re s ea rc h a n a l ysts a n d a n

in h o u se econ o m i st U n d e r t h i s tea m ap p roac h m a n a g e m e n t of c l i e n t fi xe d i n co m e po rtfo l i o s w i l l ref l ect a co n s e n s u s of i n te rd i sc i p l i n a ry v i ews w i t h i n t h e We ste rn Ass et

o rg ani za t i on Th e i n d i v i d u a l s re s po n s i b l e fo r d eve l o p m e n t of i nve st m e n t st ra tegy d ay to d ay portfo l io m a n a g e m e n t ove rs i g h t an d co o rd i nat i o n of t h e F u n d are S Ke n n et h Le ec h M i c h a e l C B u c h a n a n a n d C h r i sto p h e r F Ki l pa t r i c k

Q. What were the overall market conditions during the Fund's reporting period? A Fi xe d i n co m e m a r kets ex pe r i e n ce d pe r i o d s of vo l a t i l i ty a n d fe l l s h a rp l y ove r t h e twe l ve

m o n t h report i n g per i o d e n d e d D ece m b e r 3 1 2 022 Th e mar ket s d ec l i n e wa s d r i ve n by a

n u m b e r of fa cto rs i n clu din g eleva te d a n d pe rs i ste n t in fla t i o n a g g re ss i ve Fe d e ral	R e s e rve
Boa rd ( t h e Fe d ) m o n eta ry po l i cy t i g h te n i n g t h e re pe rc u ss i o n s f ro m t h e C OVI D 1	9

pa n d e m i c and	i ts va r i ants t h e wea ke n i n g g l o b a l eco n o my a n d t h e wa r i n U kra i n e
Sh o rt term U S	Trea s u ry y i e l d s m ove d s harp l y h igh e r as t h e Fe d b eg an to a g g re ss i ve l y ra i s e

i n te re st ra te s i n M a rc h 2022 i n	a n a tte m pt to re i n i n i n f l a t i o n. Ove r t h e n ext n i n e m o n t h s
t h e ce n t ra l b a n k h i ke d ra te s a n a d d i t i o n a l s i x t i m e s b r i n g i n g t h e fe d e ra l fun d s ra te to a

rang e between 4 2 5 % an d 4 5 0 %	t h e h i g h e st	l eve l s i n ce 2 008 Th e y i e l d fo r t h e two
yea r Trea s u ry n ote b eg a n t h e re po rt i n g pe r i o d a t	0 7 3 % ( t h e l ow fo r t h e re po rt i n g pe r i o d )

a n d en ded t he per i o d a t 4 4 1 % Th e pea k of 4 7 2 % occurre d o n N ove m b e r 7 2 022 Th e

Western Asset Premier Bond Fund 2022 Annual Report

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