CORRESP 1 filename1.htm CORRESP

Morgan, Lewis & Bockius LLP

One Federal Street

Boston, MA 02110

May 30, 2025

VIA EDGAR

Securities and Exchange Commission

Division of Investment Management

100 F Street, N.E.

Washington, DC 20549

Attention: David Manion, CPA, CAIA

 

Re:

The Registrants (the “Registrants”) and Funds (the “Funds”) Listed in Annex A

Dear Mr. Manion:

On behalf of the Registrants,1 we are filing this letter to respond to the comments you delivered by telephone on April 15, 2025 on behalf of the Staff (the “Staff”) of the Securities and Exchange Commission after the Staff’s review of certain filings made by the Funds, in each case with respect to the fiscal year listed beside the name of the applicable Fund in Annex A hereto. For convenience of reference, summaries of the comments of the Staff have been included herein.2

1. Comment (Western Asset Premier Bond Fund): As of December 31, 2024, the Fund held several CLO positions that were valued at par. Given the prevailing interest rate environment and the credit profile of the underlying investments, please explain why the fair value of these securities should be their par value, and what factors and inputs led to the reported valuations.

Response: The Registrant notes that the Fund held five CLOs that were valued at par as of December 31, 2024. Each security was valued in accordance with applicable Rule 2a-5 valuation procedures. The Registrant notes that four of these securities were externally priced by an approved pricing vendor at par, and the fifth was fair valued at cost based on recent trade at par pending vendor coverage. Accordingly, the Registrant believes that such CLOs were valued appropriately.

2. Comment (Western Asset Intermediate Muni Fund): Please confirm whether the Rule 17a-7 transactions executed by the Fund during the reporting period resulted in any realized gains or losses. Please provide details of any gains or losses generated by these types of transactions in future financial statements.

 
1 

When used in the responses below, term “Fund” refers to the applicable Fund and the term “Registrant” refers to the applicable Registrant listed beside the name of such Fund in Annex A.

2 

Unless otherwise indicated, any reference to a “Section” or a “Rule” relates, as applicable, to a section of the Investment Company Act of 1940, as amended, or to a rule thereunder.

Response: The Registrant advises the Staff that the identified transactions were related to variable rate demand notes and did not result in any realized gains or losses. The Registrant will provide details regarding any gains and losses generated by these types of transactions in future financial statements.

3. Comment (Funds that engaged in dollar roll and TBA transactions, e.g., Western Asset Mortgage Total Return Fund and Western Asset Total Return Unconstrained Fund): Please consider breaking out receivables and/or payables related to dollar roll or TBA transactions separately from other liabilities in the statement of assets and liabilities.

Response: The Registrant advises the Staff that it will break out receivables and payables, as applicable, relating to dollar roll and TBA transactions separately from other liabilities in the statement of assets and liabilities in future reports.

4. Comment (BrandywineGLOBAL – Flexible Bond Fund): As of December 31, 2024, the Fund held common stock of New Fortress Energy Inc. that had an assigned cost of $0. Please explain how the Fund acquired these shares and why no cost was assigned to them. Please include a discussion of how cost basis is assigned to securities received as a result of corporate actions and/or credit events, and cite relevant U.S. Generally Accepted Accounting Principles (GAAP).

Response: The Registrant advises the Staff that common shares in New Fortress Energy were received as a form of consent payment to supporting bond holders in late 2024 when the company exchanged multiple tranches of then outstanding notes for new notes. The Registrant believes the transaction was treated as a debt extinguishment under ASC 470 by the borrower, and the common shares received were a form of non-cash consideration under the same standard. Under ASC 310-20, the Registrant believes the cost of common shares received should have been set to fair value on the date of the transaction and in accordance with the terms of the exchange, with the fair value of non-cash consideration received included in gain/loss on the extinguishment of the original notes. The Registrant notes that the non-cash consideration is not material to the Fund.

5. Comment (Funds that hold senior loans, e.g., BrandywineGLOBAL – Global Opportunities Bond Fund and Western Asset Global Corporate Opportunity Fund Inc.): Please confirm whether the Funds have any unfunded loan commitments. If so, briefly describe the accounting treatment for such unfunded commitments and refer to any applicable U.S.GAAP.

Response: The Registrant advises the Staff that the identified Funds did not have any unfunded loan commitments as of the date of the Funds’ financial statements.

6. Comment (Funds that hold senior loans that contributed significantly to performance, e.g., Western Asset Income Fund): Please confirm whether the Funds have any material investments in equity tranches of CLOs. If so, please include a discussion of how income from these investments is accrued and cite applicable U.S. GAAP supporting the accounting treatment.

Response: The Registrant advises the Staff that the Funds do not have any material investments in equity tranches of CLOs. Investments in such securities by other Funds are also not significant (at most, not more than 2-3% of the Fund’s net asset value). Income from such positions has been immaterial, and the Registrant believes it is appropriate to record any such income on a cash basis.

7. Comment: The Funds have an arrangement with their custodian bank whereby a portion of a Fund’s custodian fees are offset by credits earned on the Fund’s cash balances deposited with the custodian. Please discuss the accounting treatment for custodian fees that are partially offset by credits earned on Fund cash balances deposited with the custodian. Also, please confirm that the Funds comply with Regulation S-X Rule 6-07(2)(g). Please discuss the accounting treatment for custodian fees that are partially offset by credits earned on Fund cash balances deposited with the custodian. Also, confirm that the Funds comply with Rule 6-07(g)(2) of Regulation S-X.

Response: The Registrant advises the Staff that when custody credits are determined to be significant, such expense is presented on a gross basis on the income statement with an offsetting line item for fees earned indirectly (via custody credit offsets). However, most Funds have less than 0.001% in custody credits earned and applied, so it is not often that a Fund will report these credits on the income statement in the manner described above.

In addition, the Registrant confirms that the Funds comply with Regulation S-X Rule 6-07(2)(g).

8. Comment: Please explain how the presentation of negative amounts in the statement of operations and the statement of assets and liabilities is appropriate. (Refer to Rule 4-01(c) of Regulation S-X.)

Response: Rule 4-01(c) of Regulation S-X provides that negative amounts shall be shown in a manner that clearly distinguishes its negative attribute. The Registrant notes that negative amounts are shown in parenthesis in the Funds’ statements of operations and statements of assets and liabilities to clearly distinguish their negative attributes, and respectfully submits that such presentation satisfies the requirements of Rule 4-01(c) of Regulation S-X.

9. Comment: In future shareholder reports, please include the frequency of measurement (e.g., daily, monthly, quarterly, etc.) when disclosing average volumes of derivative activity.

Response: The Registrant advises the Staff that it will disclose in future reports the frequency of measurement when disclosing average volumes of derivatives activity.

Please contact the undersigned at 617-951-8267 with any questions or comments you might have regarding the above.

 

Sincerely,
/s/ Barry N. Hurwitz

Annex A

 

Registrant Name

   

File #

   

CIK

   

Series Name

   

Series ID

   

FYE Reviewed

BrandywineGLOBAL-Global Income Opportunities Fund Inc    811-22491    0001504545    BrandywineGLOBAL-Global Income Opportunities Fund Inc       10/31/2024
Legg Mason Global Asset Management Trust    811-22338    0001474103    BrandywineGLOBAL - Alternative Credit Fund    S000043089    10/31/2024
         BrandywineGLOBAL - Global Unconstrained Bond Fund    S000031479    10/31/2024
         ClearBridge International Growth Fund    S000036166    10/31/2024
         ClearBridge Small Cap Fund    S000036165    10/31/2024
         ClearBridge Value Fund    S000036164    10/31/2024
Legg Mason Partners Investment Trust    811-06444    0000880366    ClearBridge Appreciation Fund    S000016651    10/31/2024
         ClearBridge International Value Fund    S000016247    10/31/2024
         ClearBridge Large Cap Value Fund    S000016669    10/31/2024
         ClearBridge Mid Cap Fund    S000004162    10/31/2024
         ClearBridge Mid Cap Growth Fund    S000029718    10/31/2024
         ClearBridge Select Fund    S000039065    10/31/2024
         ClearBridge Small Cap Growth Fund    S000016663    10/31/2024
         ClearBridge Sustainability Leaders Fund    S000048737    10/31/2024
         ClearBridge Tactical Dividend Income Fund    S000016241    10/31/2024
         Franklin Global Equity Fund    S000016668    10/31/2024
Western Asset Global Corporate Opportunity Fund Inc.    811-22334    0001472341    Western Asset Global Corporate Opportunity Fund Inc.       10/31/2024
Western Asset Municipal High Income Fund Inc.    811-05497    0000830487    Western Asset Municipal High Income Fund Inc.       10/31/2024
ClearBridge Energy Midstream Opportunity Fund Inc.    811-22546    0001517518    ClearBridge Energy Midstream Opportunity Fund Inc.       11/30/2024
Legg Mason Partners Income Trust    811-04254    0000764624    Western Asset Intermediate Maturity New York Municipals Fund    S000016625    11/30/2024
         Western Asset Massachusetts Municipals Fund    S000016629    11/30/2024
         ClearBridge Large Cap Growth Fund    S000004161    11/30/2024
         Franklin U.S. Large Cap Equity Fund    S000022091    11/30/2024
LMP Capital & Income Fund Inc.    811-21467    0001270131    LMP CAPITAL & INCOME FUND INC.       11/30/2024
Western Asset Inflation-Linked Income Fund    811-21403    0001254370    WESTERN ASSET INFLATION-LINKED INCOME FUND       11/30/2024
Western Asset Inflation-Linked Opportunities & Income Fund    811-21477    0001267902    WESTERN ASSET INFLATION-LINKED OPPORTUNITIES & INCOME FUND       11/30/2024
Western Asset Intermediate Muni Fund Inc.    811-06506    0000882300    WESTERN ASSET INTERMEDIATE MUNI FUND INC.       11/30/2024
Western Asset Investment Grade Opportunity Trust Inc.    811-22294    0001462586    Western Asset Investment Grade Opportunity Trust Inc.       11/30/2024
Legg Mason Global Asset Management Trust    811-22338    0001474103    BrandywineGLOBAL - Flexible Bond Fund    S000053934    12/31/2024
         BrandywineGLOBAL - Global Opportunities Bond Fund    S000036894    12/31/2024
         Franklin U.S. Small Cap Equity Fund    S000036895    12/31/2024

Registrant Name

   

File #

   

CIK

   

Series Name

   

Series ID

   

FYE Reviewed

Legg Mason Partners Income Trust    811-04254    0000764624    Western Asset Corporate Bond Fund    S000016627    12/31/2024
         Western Asset Mortgage Total Return Fund    S000016649    12/31/2024
         Western Asset Short-Term Bond Fund    S000016639    12/31/2024
         ClearBridge Dividend Strategy Fund    S000016665    12/31/2024
Legg Mason Partners Variable Equity Trust    811-21128    0001176343    ClearBridge Variable Appreciation Portfolio    S000017013    12/31/2024
         ClearBridge Variable Dividend Strategy Portfolio    S000008304    12/31/2024
         ClearBridge Variable Growth Portfolio    S000016933    12/31/2024
         ClearBridge Variable Large Cap Growth Portfolio    S000016935    12/31/2024
         ClearBridge Variable Large Cap Value Portfolio    S000017019    12/31/2024
         ClearBridge Variable Mid Cap Portfolio    S000016937    12/31/2024
         ClearBridge Variable Small Cap Growth Portfolio    S000017007    12/31/2024
         Franklin Multi-Asset Variable Conservative Growth    S000017009    12/31/2024
         Franklin Multi-Asset Variable Growth    S000017011    12/31/2024
         Franklin Multi-Asset Variable Moderate Growth    S000017010    12/31/2024
Legg Mason Partners Variable Income Trust    811-06310    0000874835    Western Asset Core Plus VIT Portfolio    S000016930    12/31/2024
         Western Asset Variable Global High Yield Bond Portfolio    S000017004    12/31/2024
Western Asset Emerging Markets Debt Fund Inc.    811-21343    0001227862    WESTERN ASSET EMERGING MARKETS DEBT FUND INC.       12/31/2024
Western Asset Funds Inc    811-06110    0000863520    Western Asset Core Bond Fund    S000000713    12/31/2024
         Western Asset Core Plus Bond Fund    S000000714    12/31/2024
         Western Asset Inflation Indexed Plus Bond Fund    S000000715    12/31/2024
Western Asset Investment Grade Income Fund Inc.    811-02351    0000075398    Western Asset Investment Grade Income Fund Inc.       12/31/2024
Western Asset Mortgage Opportunity Fund Inc.    811-22369    0001478102    Western Asset Mortgage Opportunity Fund Inc.       12/31/2024
Western Asset Premier Bond Fund    811-10603    0001163792    WESTERN ASSET PREMIER BOND FUND       12/31/2024
Legg Mason Partners Income Trust    811-04254    0000764624    Western Asset Ultra-Short Income Fund    S000016624    5/31/2024
Western Asset Funds Inc    811-06110    0000863520    Western Asset High Yield Fund    S000000716    5/31/2024
         Western Asset Intermediate Bond Fund    S000000711    5/31/2024
         Western Asset Total Return Unconstrained Fund    S000012738    5/31/2024
Western Asset Global High Income Fund Inc.    811-21337    0001228509    WESTERN ASSET GLOBAL HIGH INCOME FUND INC.       5/31/2024
Western Asset High Yield Defined Opportunity Fund Inc.    811-22444    0001497186    Western Asset High Yield Defined Opportunity Fund Inc.       5/31/2024
Western Asset Managed Municipals Fund Inc.    811-06629    0000886043    WESTERN ASSET MANAGED MUNICIPALS FUND INC.       5/31/2024
Legg Mason Partners Income Trust    811-04254    0000764624    Western Asset Income Fund    S000008972    7/31/2024
         Western Asset Municipal High Income Fund    S000008976    7/31/2024
         Western Asset Short Duration High Income Fund    S000008975    7/31/2024

Registrant Name

   

File #

   

CIK

   

Series Name

   

Series ID

   

FYE Reviewed

Legg Mason Partners Institutional Trust    811-06740    0000889512    Western Asset Institutional Government Reserves    S000016858    8/31/2024
   Western Asset Institutional Liquid Reserves    S000008908    8/31/2024
   Western Asset Institutional U.S. Treasury Obligations Money Market Fund    S000041891    8/31/2024
   Western Asset Institutional U.S. Treasury Reserves    S000008910    8/31/2024
   Western Asset Select Tax Free Reserves    S000008909    8/31/2024
Legg Mason Partners Investment Trust    811-06444    0000880366    ClearBridge Growth Fund    S000016235    8/31/2024
Legg Mason Partners Money Market Trust    811-04052    0000747576    Western Asset Government Reserves    S000016623    8/31/2024
Legg Mason Global Asset Management Trust    811-22338    0001474103    BrandywineGLOBAL - Diversified US Large Cap Value Fund    S000029727    9/30/2024
   ClearBridge Global Infrastructure Income Fund    S000053331    9/30/2024
   Franklin International Equity Fund    S000036893    9/30/2024
   Martin Currie Emerging Markets Fund    S000049068    9/30/2024
Legg Mason Partners Investment Trust    811-06444    0000880366    Franklin S&P 500 Index Fund    S000004163    9/30/2024
Western Asset High Income Opportunity Fund Inc.    811-07920    0000910068    WESTERN ASSET HIGH INCOME OPPORTUNITY FUND INC.       9/30/2024