Investment Commentary and Annual Report to ... - Western Asset

Annual Report to ShareholdersCorporate Bonds and Notes—Continued%OFNET ASSETSRATEMATURITYDATEPAR/SHARESVALUEElectric Utilities—ContinuedIPALCO Enterprises Inc. 8.625% 11/14/11 $ 130,000 $ 121,550 GOrion Power Holdings Inc. 12.000% 5/1/10 150,000 150,000Progress Energy Inc. 6.850% 4/15/12 750,000 752,131TXU Electric Delivery Co. 7.000% 9/1/22 250,000 233,6025,735,122Energy Equipment and Services 1.3%Complete Production Services Inc. 8.000% 12/15/16 150,000 94,500EEB International Ltd. 8.750% 10/31/14 820,000 760,550 AGulfmark Offshore Inc. 7.750% 7/15/14 270,000 191,700Pride International Inc. 7.375% 7/15/14 240,000 223,2001,269,950Food and Staples Retailing 3.9%CVS Caremark Corp. 6.943% 1/10/30 1,964,217 1,235,041 ACVS Corp. 5.789% 1/10/26 868,350 660,973 ACVS Lease Pass-Through Trust 5.880% 1/10/28 948,793 734,929 ACVS Lease Pass-Through Trust 6.036% 12/10/28 953,697 580,067 ADelhaize America Inc. 9.000% 4/15/31 166,000 167,879Safeway Inc. 5.800% 8/15/12 500,000 497,0853,875,974Food Products 0.2%Dole Food Co. Inc. 7.250% 6/15/10 285,000 198,788Gas Utilities 0.5%Southern Natural Gas Co. 8.000% 3/1/32 20,000 16,665Suburban Propane Partners LP 6.875% 12/15/13 580,000 475,600492,265Health Care Providers and Services 3.7%Community Health Systems Inc. 8.875% 7/15/15 200,000 184,000DaVita Inc. 6.625% 3/15/13 70,000 66,500DaVita Inc. 7.250% 3/15/15 300,000 285,000HCA Inc. 6.250% 2/15/13 85,000 53,125HCA Inc. 6.375% 1/15/15 430,000 262,300HCA Inc. 9.250% 11/15/16 195,000 178,912HCA Inc. 9.625% 11/15/16 380,000 296,400 BHCA Inc. 7.690% 6/15/25 90,000 42,251HCA Inc. 7.500% 11/15/95 185,000 78,388Tenet Healthcare Corp. 9.250% 2/1/15 2,810,000 2,262,0503,708,92611