Western Asset Managed Municipals Fund Inc. (MMU)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-06629

Western Asset Managed Municipals Fund Inc.

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: (888)-777-0102

Date of fiscal year end: May 31

Date of reporting period: August 31, 2017

 

 

 


 

ITEM 1. SCHEDULE OF INVESTMENTS.


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

FORM N-Q

AUGUST 31, 2017


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  
MUNICIPAL BONDS - 140.0%           

Alabama - 6.2%

          

Jefferson County, AL, Sewer Revenue:

          

AGM

     5.500     10/1/53      $ 1,400,000      $ 1,602,762  

Convertible CAB, Subordinated Lien, Step bond, 0.000% til 10/1/23; 7.900%

     0.000     10/1/50        11,580,000        9,578,050  

Subordinated Lien Warrants

     6.000     10/1/42        9,230,000        10,889,369  

Subordinated Lien Warrants

     6.500     10/1/53        6,900,000        8,327,955  

Lower Alabama Gas District, Gas Project Revenue

     5.000     9/1/46        6,000,000        7,478,760  
          

 

 

 

Total Alabama

             37,876,896  
          

 

 

 

Arizona - 4.5%

          

Navajo Nation, AZ, Revenue

     5.500     12/1/30        950,000        1,055,431 (a) 

Phoenix, AZ, Civic Improvement Corp. Airport Revenue

     5.000     7/1/40        5,000,000        5,468,150  

Salt Verde, AZ, Financial Corp. Senior Gas Revenue

     5.250     12/1/28        2,000,000        2,428,580  

Salt Verde, AZ, Financial Corp. Senior Gas Revenue

     5.000     12/1/32        10,000,000        11,982,400  

Salt Verde, AZ, Financial Corp. Senior Gas Revenue

     5.000     12/1/37        5,500,000        6,697,845  
          

 

 

 

Total Arizona

             27,632,406  
          

 

 

 

California - 21.1%

          

Alameda, CA, Corridor Transportation Authority Revenue, Second Subordinated Lien

     5.000     10/1/34        1,750,000        2,027,585  

Anaheim, CA, Public Financing Authority Lease Revenue

     5.000     5/1/46        2,000,000        2,277,020  

Bay Area Toll Authority, CA, Toll Bridge Revenue:

          

San Francisco Bay Area(SIFMA Municipal Swap Index Yield + 1.100%)

     1.880     4/1/24        5,500,000        5,608,515 (b)(c) 

San Francisco Bay Area

     5.125     4/1/39        19,200,000        20,505,024 (d) 

California State Health Facilities Financing Authority Revenue:

          

Kaiser Permanente

     4.000     11/1/38        1,750,000        1,875,195  

Lucile Salter Packard Children’s Hospital At Stanford

     5.000     11/15/56        750,000        871,545  

Stanford Hospital & Clinics

     5.150     11/15/40        2,000,000        2,211,460  

California State PCFA, Water Furnishing Revenue

     5.000     11/21/45        12,500,000        13,439,000 (a)(e) 

California State PCFA, Water Furnishing Revenue

     5.000     11/21/45        5,000,000        5,005,400 (a) 

California State, GO, Various Purpose

     4.000     11/1/36        1,000,000        1,086,810 (f) 

California Statewide CDA Revenue, Methodist Hospital Project, FHA

     6.625     8/1/29        5,235,000        5,804,358 (d) 

California Statewide CDA, Student Housing Revenue, Provident Group-Pomona Properties LLC

     5.750     1/15/45        1,770,000        1,929,548  

Imperial Irrigation District, CA, Electric Revenue

     5.500     11/1/41        2,750,000        3,142,315 (d) 

Inland Valley, CA, Development Agency, Successor Agency Tax Allocation Revenue

     5.000     9/1/44        2,405,000        2,691,099  

Los Angeles County, CA, Public Works Financing Authority, Lease Revenue:

          

Multiple Capital Project II

     5.000     8/1/32        3,000,000        3,454,590  

Multiple Capital Project II

     5.000     8/1/37        1,000,000        1,143,950  

Los Angeles, CA, Convention & Exhibition Center Authority, Lease Revenue

     5.125     8/15/22        3,500,000        3,642,730 (d) 

Los Angeles, CA, Department of Water & Power Revenue

     5.000     7/1/37        1,000,000        1,207,740  

Los Angeles, CA, Department of Water & Power Revenue

     5.000     7/1/47        2,000,000        2,375,400  

 

See Notes to Schedule of Investments.

 

1


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

California - (continued)

          

Los Angeles, CA, Department of Water & Power Revenue:

          

Power System

     5.000     7/1/38      $ 2,000,000      $ 2,391,260  

Power System

     5.000     7/1/47        4,000,000        4,717,280  

M-S-R Energy Authority, CA, Gas Revenue

     7.000     11/1/34        3,430,000        5,007,628  

M-S-R Energy Authority, CA, Gas Revenue

     6.500     11/1/39        8,000,000        11,645,760  

Modesto, CA, Irrigation District COP:

          

Capital Improvement

     6.000     10/1/39        4,595,000        4,931,630  

Capital Improvement

     6.000     10/1/39        1,905,000        2,057,305 (d) 

River Islands, CA, Public Financing Authority Special Tax, Community Facilities District No. 2003-1

     5.500     9/1/45        2,000,000        2,154,000  

Riverside County, CA, Transportation Commission Sales Tax Revenue, Limited Tax

     5.250     6/1/39        900,000        1,064,169  

Riverside County, CA, Transportation Commission Toll Revenue:

          

Senior Lien

     5.750     6/1/44        200,000        225,294  

Senior Lien

     5.750     6/1/48        600,000        672,552  

San Bernardino County, CA, COP, Arrowhead Project

     5.125     8/1/24        5,185,000        5,565,631  

Shafter Wasco Irrigation District Revenue, CA, COP

     5.000     11/1/40        5,000,000        5,504,300  

University of California, CA, Medical Center Pooled Revenue

     5.000     5/15/32        1,750,000        2,088,310  
          

 

 

 

Total California

             128,324,403  
          

 

 

 

Colorado - 11.0%

          

Base Village Metropolitan District #2 Co., GO

     5.750     12/1/46        500,000        526,520  

Colorado High Performance Transportation Enterprise Revenue, C-470 Express Lanes

     5.000     12/31/51        600,000        665,820  

Colorado State Educational & Cultural Facilities Authority Revenue, University of Denver Project

     5.000     3/1/47        1,600,000        1,853,888  

Colorado State Health Facilities Authority Revenue:

          

Catholic Health Initiatives

     5.000     9/1/41        4,000,000        4,009,600  

Sisters Leavenworth

     5.000     1/1/35        6,000,000        6,427,020  

Denver, CO, City & County Airport Revenue

     6.125     11/15/25        24,575,000        27,305,004 (e)(g) 

Public Authority for Colorado Energy, Natural Gas Purchase Revenue

     6.500     11/15/38        18,000,000        25,758,720  
          

 

 

 

Total Colorado

             66,546,572  
          

 

 

 

District of Columbia - 2.4%

          

District of Columbia Revenue, Ingleside Rock Creek Project

     5.000     7/1/52        400,000        408,064  

District of Columbia, Hospital Revenue, Children’s Hospital Obligation, AGM

     5.450     7/15/35        13,380,000        14,042,711 (d) 
          

 

 

 

Total District of Columbia

             14,450,775  
          

 

 

 

Florida - 10.2%

          

Capital Trust Agency, FL, Senior Living Revenue, Elim Senior Housing Inc.

     5.875     8/1/52        350,000        358,288 (a) 

Florida State Development Finance Corp., Educational Facilities Revenue, Renaissance Charter School Inc. Project

     6.125     6/15/46        555,000        587,800 (a) 

Florida State Development Finance Corp., Senior Living Revenue, Tuscan Isle Champions Gate Project

     6.375     6/1/46        750,000        734,910 (a) 

Florida State Mid-Bay Bridge Authority Revenue

     5.000     10/1/30        2,410,000        2,792,419  

Greater Orlando, FL, Aviation Authority, Airport Facilities Revenue

     5.000     10/1/47        1,500,000        1,726,620 (f) 

 

See Notes to Schedule of Investments.

 

2


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

Florida - (continued)

          

Miami-Dade County, FL, Aviation Revenue

     5.000     10/1/30      $ 3,000,000      $ 3,410,070 (e) 

Miami-Dade County, FL, Aviation Revenue

     5.500     10/1/41        10,000,000        10,856,900  

Miami-Dade County, FL, Aviation Revenue, Miami International Airport

     5.375     10/1/35        10,705,000        11,948,172  

Miami-Dade County, FL, Expressway Authority Toll System Revenue

     5.000     7/1/40        9,000,000        9,803,610  

Miami-Dade County, FL, Health Facilities Authority Hospital Revenue, Nicklaus Children’s Hospital

     5.000     8/1/42        1,250,000        1,436,200  

Orange County, FL, Health Facilities Authority Revenue:

          

Balance Hospital-Orlando Regional Healthcare, AGM

     5.000     11/1/35        2,670,000        2,764,171  

Hospital-Orlando Regional Healthcare, AGM

     5.000     11/1/35        1,875,000        1,964,494 (d) 

Presbyterian Retirement Communities

     5.000     8/1/47        750,000        830,820  

Orange County, FL, School Board, COP, AGC

     5.500     8/1/34        8,000,000        8,692,640 (d) 

Orlando, FL, State Sales Tax Payments Revenue

     5.000     8/1/32        4,000,000        4,068,520 (d) 
          

 

 

 

Total Florida

             61,975,634  
          

 

 

 

Georgia - 4.2%

          

Atlanta, GA, Water & Wastewater Revenue

     6.250     11/1/39        13,000,000        14,476,410 (d) 

DeKalb, Newton & Gwinnett Counties, GA, Joint Development Authority Revenue, GGC Foundation LLC Project

     6.125     7/1/40        6,220,000        6,806,297 (d) 

Main Street Natural Gas Inc., GA, Gas Project Revenue

     5.000     3/15/22        4,000,000        4,492,720  
          

 

 

 

Total Georgia

             25,775,427  
          

 

 

 

Hawaii - 1.3%

          

Hawaii State Airports System Revenue

     5.000     7/1/39        7,000,000        7,690,060  
          

 

 

 

Illinois - 12.1%

          

Chicago, IL, GO

     5.000     1/1/25        3,000,000        3,322,920  

Chicago, IL, GO

     5.500     1/1/32        3,300,000        3,585,054  

Chicago, IL, GO

     5.500     1/1/34        10,000        10,811  

Chicago, IL, GO

     5.500     1/1/37        220,000        236,414  

Chicago, IL, GO

     6.000     1/1/38        1,500,000        1,735,170  

Chicago, IL, O’Hare International Airport Revenue

     5.000     1/1/31        1,000,000        1,154,670 (e) 

Chicago, IL, O’Hare International Airport Revenue

     5.000     1/1/35        7,000,000        7,948,080 (e) 

Chicago, IL, O’Hare International Airport Revenue:

          

General, Senior Lien

     5.000     1/1/41        1,000,000        1,143,870  

Third Lien

     5.625     1/1/35        5,175,000        5,943,436 (d) 

Third Lien

     5.625     1/1/35        1,240,000        1,398,980  

Third Lien

     5.750     1/1/39        5,035,000        5,803,140 (d) 

Third Lien

     5.750     1/1/39        965,000        1,093,943  

Chicago, IL, Wastewater Transmission Revenue:

          

Second Lien

     5.000     1/1/38        750,000        836,243  

Second Lien

     5.000     1/1/44        1,000,000        1,080,800  

Second Lien

     5.000     1/1/47        1,000,000        1,099,980  

Chicago, IL, Waterworks Revenue, Second Lien

     5.000     11/1/29        1,800,000        2,121,642  

Illinois State Finance Authority Revenue:

          

Advocate Health Care & Hospitals Corp. Network

     6.250     11/1/28        2,445,000        2,596,688 (d) 

Depaul University

     6.125     10/1/40        5,000,000        5,869,350 (d) 

Memorial Health System

     5.500     4/1/39        7,000,000        7,401,170  

Illinois State, GO

     5.000     2/1/28        2,840,000        3,147,515  

Illinois State, GO

     5.000     2/1/29        1,660,000        1,818,945  

Illinois State, GO

     5.000     1/1/33        1,500,000        1,587,765  

Metropolitan Pier & Exposition Authority, IL, Dedicated State Tax Revenue, McCormick Project, State Appropriations

     5.250     6/15/50        12,000,000        12,212,640  

Metropolitan Pier & Exposition Authority, IL, Revenue, CAB-McCormick Place Expansion Project

     0.000     12/15/52        3,100,000        434,310  
          

 

 

 

Total Illinois

             73,583,536  
          

 

 

 

 

See Notes to Schedule of Investments.

 

3


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

Indiana - 3.7%

          

Indiana Finance Authority, Wastewater Utility Revenue, CWA Authority

     5.000     10/1/41      $ 5,000,000      $ 5,568,850  

Indiana State Finance Authority Revenue, Private Activity-Ohio River Bridges East End Crossing Project

     5.000     7/1/44        5,000,000        5,418,950 (e) 

Indianapolis, IN, Thermal Energy System Revenue, AGC

     5.000     10/1/25        5,000,000        5,221,500 (d) 

Richmond, IN, Hospital Authority Revenue, Reid Hospital & Health Care Services Inc. Project

     6.625     1/1/39        5,000,000        5,368,350 (d) 

Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project

     7.000     1/1/44        1,000,000        1,191,200 (e) 
          

 

 

 

Total Indiana

             22,768,850  
          

 

 

 

Louisiana - 0.9%

          

St. Charles Parish, LA, Gulf Zone Opportunity Zone Revenue, Valero Refining-New Orleans LLC

     4.000     6/1/22        5,000,000        5,343,500 (b)(c) 
          

 

 

 

Massachusetts - 5.6%

          

Massachusetts State DFA Revenue:

          

Broad Institute Inc.

     5.250     4/1/37        8,000,000        9,000,160  

Milford Regional Medical Center

     5.750     7/15/43        500,000        556,580  

Partners Healthcare System

     5.000     7/1/47        5,750,000        6,553,792  

Suffolk University

     5.750     7/1/39        5,320,000        5,785,553 (d) 

Suffolk University

     5.750     7/1/39        2,680,000        2,874,568  

UMass Boston Student Housing Project

     5.000     10/1/48        750,000        829,388  

Massachusetts State Housing Finance Agency, Housing Revenue

     7.000     12/1/38        4,575,000        4,780,326  

Massachusetts State School Building Authority, Sales Tax Revenue

     5.000     5/15/43        3,000,000        3,419,400  
          

 

 

 

Total Massachusetts

             33,799,767  
          

 

 

 

Michigan - 4.6%

          

Great Lakes, MI, Water Authority Water Supply System Revenue:

          

Senior Lien

     5.000     7/1/35        500,000        573,625  

Senior Lien

     5.000     7/1/46        5,500,000        6,201,195  

Lansing, MI, Board of Water & Light Utility System Revenue

     5.000     7/1/37        7,000,000        7,803,880  

Michigan State Building Authority Revenue, Facilities Program

     5.250     10/15/47        650,000        748,273  

Michigan State Finance Authority Ltd. Obligation Revenue, Higher Education, Thomas M Cooley Law School Project

     6.750     7/1/44        1,600,000        1,626,048 (a) 

Michigan State Finance Authority Revenue:

          

Local Government Loan Program, Detroit Water & Sewer Department

     5.000     7/1/33        625,000        706,869  

Local Government Loan Program, Detroit Water & Sewer Department

     5.000     7/1/34        250,000        280,903  

Senior Lien Detroit Water & Sewer

     5.000     7/1/33        1,270,000        1,424,711  

Senior Lien Detroit Water & Sewer

     5.000     7/1/44        1,320,000        1,416,743  

Royal Oak, MI, Hospital Finance Authority Revenue:

          

William Beaumont Hospital

     5.000     9/1/39        2,500,000        2,784,925  

William Beaumont Hospital

     8.250     9/1/39        4,000,000        4,291,280 (d) 
          

 

 

 

Total Michigan

             27,858,452  
          

 

 

 

 

See Notes to Schedule of Investments.

 

4


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

Minnesota - 0.3%

          

Western Minnesota Municipal Power Agency Revenue

     5.000     1/1/46      $ 1,530,000      $ 1,713,309  
          

 

 

 

Missouri - 2.7%

          

Kansas City, MO, IDA, Senior Living Facilities Revenue, Kansas City United Methodist Retirement Home Inc.

     6.000     11/15/51        900,000        906,264 (a) 

Kansas City, MO, Water Revenue

     5.250     12/1/32        1,000,000        1,052,700  

Missouri State HEFA Revenue:

          

Children’s Mercy Hospital

     5.625     5/15/39        4,980,000        5,372,324 (d) 

Children’s Mercy Hospital

     5.625     5/15/39        1,020,000        1,090,176  

Lutheran Senior Services

     5.000     2/1/44        2,710,000        2,925,147  

Platte County, MO, IDA Revenue, Improvement Zona Rosa Retail Project, GTD

     5.000     12/1/32        5,000,000        5,045,750  
          

 

 

 

Total Missouri

             16,392,361  
          

 

 

 

Nevada - 2.2%

          

Reno, NV, Hospital Revenue:

          

Washoe Medical Center, AGM

     5.500     6/1/33        11,565,000        11,962,952 (d) 

Washoe Medical Center, AGM

     5.500     6/1/33        1,185,000        1,217,943  
          

 

 

 

Total Nevada

             13,180,895  
          

 

 

 

New Jersey - 9.0%

          

New Jersey Institute of Technology Revenue

     5.000     7/1/45        750,000        846,578  

New Jersey State EDA Revenue

     5.000     6/15/26        2,500,000        2,704,600  

New Jersey State EDA Revenue:

          

Continental Airlines Inc. Project

     4.875     9/15/19        990,000        1,023,927 (e) 

Continental Airlines Inc. Project

     5.125     9/15/23        2,000,000        2,208,540 (e) 

Continental Airlines Inc. Project

     5.250     9/15/29        3,000,000        3,293,040 (e) 

Private Activity-The Goethals Bridge Replacement Project, AGM

     5.125     7/1/42        2,500,000        2,792,975 (e) 

School Facilities Construction(SIFMA Municipal Swap Index Yield + 1.600%)

     2.380     3/1/28        15,000,000        14,110,950 (b) 

New Jersey State Health Care Facilities Financing Authority Revenue:

          

Hackensack Meridian Health

     5.000     7/1/38        400,000        465,888  

RWJ Barnabas Health Obligation Group

     5.000     7/1/43        1,200,000        1,356,912  

New Jersey State Higher Education Assistance Authority, Student Loan Revenue

     5.625     6/1/30        12,320,000        13,128,069  

New Jersey State Higher Education Assistance Authority, Student Loan Revenue, AGC

     6.125     6/1/30        5,445,000        5,588,203 (e) 

New Jersey State Housing & Mortgage Finance Agency Revenue

     6.375     10/1/28        225,000        226,508  

New Jersey State Transportation Trust Fund Authority Revenue, Capital Appreciation Transportation System, NATL

     0.000     12/15/31        7,500,000        4,178,475  

New Jersey State Turnpike Authority Revenue (SIFMA Municipal Swap Index Yield + 0.680% )

     1.470     1/1/18        2,500,000        2,500,675 (b)(c) 
          

 

 

 

Total New Jersey

             54,425,340  
          

 

 

 

New Mexico - 0.9%

          

New Mexico State Hospital Equipment Loan Council, Hospital Revenue, Presbyterian Healthcare Services

     6.125     8/1/28        5,000,000        5,238,050 (d) 
          

 

 

 

 

See Notes to Schedule of Investments.

 

5


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

New York - 14.2%

          

Hudson, NY, Yards Infrastructure Corp. Revenue

     5.000     2/15/42      $ 3,000,000      $ 3,517,020  

Liberty, NY, Development Corp. Revenue:

          

Goldman Sachs Headquarters

     5.250     10/1/35        3,045,000        3,891,601  

Goldman Sachs Headquarters

     5.500     10/1/37        1,485,000        1,959,086  

Long Island Power Authority, NY, Electric System Revenue

     6.000     5/1/33        24,570,000        26,646,165 (d) 

MTA Hudson Rail Yards Trust Obligations Revenue

     5.000     11/15/56        2,750,000        3,109,975  

MTA, NY, Dedicated Tax Fund Revenue, Green Bonds

     5.000     11/15/47        1,500,000        1,756,125  

MTA, NY, Revenue

     5.250     11/15/40        5,000,000        5,593,700  

New York City, NY, Municipal Water Finance Authority, Water & Sewer System Revenue, Second General Resolution Fiscal 2013

     5.000     6/15/47        5,000,000        5,708,550  

New York City, NY, TFA, Building Aid Revenue

     5.000     1/15/32        4,000,000        4,212,480  

New York State Liberty Development Corp., Liberty Revenue:

          

3 World Trade Center LLC Project

     5.000     11/15/44        1,750,000        1,908,568 (a) 

4 World Trade Center LLC Project

     5.750     11/15/51        5,000,000        5,818,000  

Second Priority, Bank of America Tower

     5.125     1/15/44        1,000,000        1,085,130  

New York State Transportation Development Corp., Special Facilities Revenue:

          

LaGuardia Airport Terminal B Redevelopment Project

     5.000     7/1/41        8,000,000        8,842,080 (e) 

LaGuardia Airport Terminal B Redevelopment Project

     5.000     7/1/46        1,500,000        1,653,075 (e) 

Port Authority of New York & New Jersey Revenue

     5.000     1/15/41        2,750,000        3,055,443  

Port Authority of New York & New Jersey Revenue

     5.000     10/15/41        6,400,000        7,485,632 (h) 
          

 

 

 

Total New York

             86,242,630  
          

 

 

 

North Carolina - 0.5%

          

North Carolina State Turnpike Authority Monroe Expressway Toll Revenue

     5.000     7/1/47        750,000        834,097  

North Carolina State Turnpike Authority Monroe Expressway Toll Revenue

     5.000     7/1/51        1,500,000        1,663,395  

North Carolina State Turnpike Authority Revenue, Senior Lien

     5.000     1/1/30        300,000        354,336  
          

 

 

 

Total North Carolina

             2,851,828  
          

 

 

 

Ohio - 2.0%

          

JobsOhio Beverage System Statewide Liquor Profits Revenue

     5.000     1/1/38        8,000,000        8,990,080  

Ohio State Water Development Authority, Environmental Improvement Revenue, U.S. Steel Corp. Project

     6.600     5/1/29        3,000,000        3,132,060  
          

 

 

 

Total Ohio

             12,122,140  
          

 

 

 

Oklahoma - 0.1%

          

Payne County, OK, EDA Revenue, Epworth Living at The Ranch

     6.875     11/1/46        575,000        561,160  
          

 

 

 

Oregon - 0.4%

          

Oregon State Facilities Authority Revenue, Legacy Health Project

     5.000     6/1/46        2,000,000        2,272,380  

Umatilla County, OR, Hospital Facility Authority Revenue, Catholic Health Initiatives

     5.000     5/1/32        510,000        514,672  
          

 

 

 

Total Oregon

             2,787,052  
          

 

 

 

 

See Notes to Schedule of Investments.

 

6


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

Pennsylvania - 2.6%

          

Cumberland County, PA, Municipal Authority Revenue, Diakon Lutheran Social Ministries Project

     5.000     1/1/30      $ 2,375,000      $ 2,670,023  

East Hempfield Township, PA, IDA Revenue, Student Services Inc.-Student Housing Project-Millersville University

     5.000     7/1/47        550,000        569,756  

Pennsylvania State Turnpike Commission Revenue

     5.250     12/1/41        6,000,000        6,769,800  

Philadelphia, PA, School District, GO

     5.000     9/1/33        1,755,000        1,953,824  

Philadelphia, PA, Water & Wastewater Revenue

     5.000     7/1/45        1,000,000        1,139,000  

State Public School Building Authority PA, Lease Revenue:

          

Philadelphia School District Project, AGM

     5.000     6/1/31        600,000        697,200  

Philadelphia School District Project, AGM

     5.000     6/1/33        1,780,000        2,049,741  
          

 

 

 

Total Pennsylvania

             15,849,344  
          

 

 

 

Rhode Island - 0.9%

          

Rhode Island State Health & Educational Building Corp. Revenue, Hospital Financing

     7.000     5/15/39        5,000,000        5,518,000 (d) 
          

 

 

 

South Carolina - 0.4%

          

South Carolina State Ports Authority Revenue

     5.250     7/1/40        2,500,000        2,743,975  
          

 

 

 

South Dakota - 0.1%

          

South Dakota State HEFA Revenue, Regional Health

     5.000     9/1/40        500,000        575,930 (f) 
          

 

 

 

Texas - 13.1%

          

Alamo, TX, Regional Mobility Authority Revenue, Senior Lien

     5.000     6/15/46        1,300,000        1,490,697  

Dallas-Fort Worth, TX, International Airport Revenue, Joint Improvement

     5.000     11/1/45        8,500,000        9,373,885  

Grand Parkway Transportation Corp., TX, System Toll Revenue, Convertible CAB, Step bond, 0.000% til 10/1/23; 5.500%

     5.500     10/1/36        4,000,000        3,809,640  

Harris County, TX, Health Facilities Development Corp. Revenue, School Health Care System Revenue

     5.750     7/1/27        1,000,000        1,249,970 (g) 

Houston, TX, Airport Systems Revenue, United Airlines Inc.

     5.000     7/15/30        5,500,000        6,022,720 (e) 

Houston, TX, Utility System Revenue, Combined First Lien

     5.000     11/15/44        1,000,000        1,151,510  

Love Field, TX, Airport Modernization Corp., General Airport Revenue

     5.000     11/1/33        120,000        139,811 (e) 

Love Field, TX, Airport Modernization Corp., General Airport Revenue

     5.000     11/1/35        130,000        150,332 (e) 

Love Field, TX, Airport Modernization Corp., General Airport Revenue

     5.000     11/1/36        120,000        138,457 (e) 

Love Field, TX, Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project

     5.250     11/1/40        14,500,000        16,040,335  

New Hope Cultural Education Facilities Finance Corp., TX, Student Housing Revenue:

          

Collegiate Housing College Station LLC, Texas A&M University Project, AGM

     5.000     4/1/46        750,000        828,465  

NCCD-College Station Properties LLC

     5.000     7/1/47        2,200,000        2,383,216  

North Texas Tollway Authority Revenue

     5.000     1/1/39        825,000        954,855  

North Texas Tollway Authority Revenue

     5.000     1/1/40        2,000,000        2,254,960  

North Texas Tollway Authority Revenue

     5.000     1/1/45        2,105,000        2,375,303  

North Texas Tollway Authority Revenue:

          

System-First Tier

     5.750     1/1/40        7,490,000        7,607,443 (d) 

System-First Tier

     5.750     1/1/40        1,845,000        1,872,251  

 

See Notes to Schedule of Investments.

 

7


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  

Texas - (continued)

          

Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility Revenue, Buckner Senior Living Ventana Project

     6.625     11/15/37      $ 610,000      $ 670,585  

Texas State Municipal Gas Acquisition & Supply Corp. I, Gas Supply Revenue

     5.625     12/15/17        405,000        408,062  

Texas State Municipal Gas Acquisition & Supply Corp. III, Gas Supply Revenue

     5.000     12/15/27        8,550,000        9,626,872  

Texas State Private Activity Bond Surface Transportation Corp. Revenue:

          

LBJ Infrastructure Group LLC

     7.000     6/30/40        7,000,000        7,953,680  

Senior Lien, Blueridge Transportation Group LLC

     5.000     12/31/45        1,600,000        1,774,288 (e) 

Woodloch Health Facilities Development Corp., TX, Senior Housing Revenue:

          

Inspired Living Lewsville Project

     6.750     12/1/51        1,000,000        1,023,290 (a) 

Inspired Living Lewsville Project

     10.000     12/1/51        150,000        150,581  
          

 

 

 

Total Texas

             79,451,208  
          

 

 

 

U.S. Virgin Islands - 0.5%

          

Virgin Islands Public Finance Authority Revenue:

          

Matching Fund Loan

     6.750     10/1/37        2,320,000        1,751,600  

Matching Fund Loan

     6.000     10/1/39        1,475,000        1,062,000  
          

 

 

 

Total U.S. Virgin Islands

             2,813,600  
          

 

 

 

Utah - 0.2%

          

Utah State Charter School Finance Authority, Charter School Revenue, Syracuse Arts Academy Project, UT CSCE

     5.000     4/15/47        1,000,000        1,109,050  
          

 

 

 

Virginia - 1.7%

          

Virginia State Port Authority Port Facility Revenue

     5.000     7/1/41        1,100,000        1,256,497 (e) 

Virginia State Port Authority Port Facility Revenue

     5.000     7/1/45        1,500,000        1,705,980 (e) 

Virginia State Small Business Financing Authority Revenue:

          

Elizabeth River Crossings OpCo LLC Project

     5.250     1/1/32        3,000,000        3,327,660 (e) 

Elizabeth River Crossings OpCo LLC Project

     5.500     1/1/42        2,000,000        2,214,200 (e) 

Senior Lien, 95 Express Lanes LLC

     5.000     1/1/40        1,500,000        1,630,770 (e) 
          

 

 

 

Total Virginia

             10,135,107  
          

 

 

 

Washington - 0.1%

          

Washington State HFC Revenue:

          

Heron’s Key

     6.500     7/1/30        350,000        360,318 (a) 

Heron’s Key

     6.750     7/1/35        370,000        380,341 (a) 
          

 

 

 

Total Washington

             740,659  
          

 

 

 

Wisconsin - 0.3%

          

Public Finance Authority, WI, Education Revenue, North Carolina Charter Educational Foundation Project

     5.000     6/15/46        500,000        470,220 (a) 

Public Finance Authority, WI, Ltd. Obligation Pilot Revenue, American Dream @ Meadowlands Project

     7.000     12/1/50        1,500,000        1,719,765 (a) 
          

 

 

 

Total Wisconsin

             2,189,985  
          

 

 

 

TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS

(Cost - $767,419,733)

             850,267,901  
          

 

 

 

 

See Notes to Schedule of Investments.

 

8


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

SECURITY

   RATE     MATURITY
DATE
     FACE
AMOUNT
     VALUE  
SHORT-TERM INVESTMENTS - 0.1%           

California - 0.0%

          

Alameda County, CA, IDA Revenue, JMS Family Partnership, LOC-Wells Fargo Bank N.A.

     0.830     10/1/25      $ 100,000      $ 100,000 (e)(i)(j) 
          

 

 

 

Massachusetts - 0.0%

          

Massachusetts State HEFA Revenue, Partners Healthcare Systems Inc., SPA-JPMorgan Chase

     0.790     7/1/27        100,000        100,000 (i)(j) 
          

 

 

 

North Carolina - 0.1%

          

Raleigh, NC, COP, Downtown Improvement Project, SPA-Wells Fargo Bank N.A.

     0.790     2/1/34        400,000        400,000 (i)(j) 
          

 

 

 

TOTAL SHORT-TERM INVESTMENTS

(Cost - $600,000)

             600,000  
          

 

 

 

TOTAL INVESTMENTS - 140.1%

(Cost - $768,019,733)

             850,867,901  

Auction Rate Cumulative Preferred Stock, at Liquidation Value - (5.3)%

 

          (32,075,000

Variable Rate Demand Preferred Stock, at Liquidation Value - (35.8)%

 

          (217,575,000

Other Assets in Excess of Liabilities - 1.0%

             5,900,902  
          

 

 

 

TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS - 100.0%

           $ 607,118,803  
          

 

 

 

 

(a) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Directors.

 

(b) Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above.

 

(c) Maturity date shown represents the mandatory tender date.

 

(d) Pre-Refunded bonds are escrowed with U.S. government obligations and/or U.S. government agency securities and are considered by the manager to be triple-A rated even if issuer has not applied for new ratings.

 

(e) Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax (“AMT”).

 

(f) Security is purchased on a when-issued basis.

 

(g) Bonds are escrowed to maturity by government securities and/or U.S. government agency securities and are considered by the manager to be triple-A rated even if issuer has not applied for new ratings.

 

(h) All or a portion of this security is held at the broker as collateral for open futures contracts.

 

(i) Variable rate demand obligations (“VRDOs”) have a demand feature under which the Fund can tender them back to the issuer or liquidity provider on no more than 7 days notice. The interest rate generally resets on a daily or weekly basis and is determined on the specific interest rate reset date by the Remarketing Agent, pursuant to a formula specified in official documents for the VRDO, or set at the highest rate allowable as specified in official documents for the VRDO. VRDOs are benchmarked to the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index. The SIFMA Municipal Swap Index is compiled from weekly interest rate resets of tax-exempt VRDOs reported to the Municipal Securities Rulemaking Board’s Short-term Obligation Rate Transparency System.

 

(j) Maturity date shown is the final maturity date. The security may be sold back to the issuer before final maturity.

 

See Notes to Schedule of Investments.

 

9


WESTERN ASSET MANAGED MUNICIPALS FUND INC.

 

Schedule of investments (unaudited) (cont’d)    August 31, 2017

 

Abbreviations used in this schedule:

 

AGC    — Assured Guaranty Corporation - Insured Bonds
AGM    — Assured Guaranty Municipal Corporation - Insured Bonds
CAB    — Capital Appreciation Bonds
CDA    — Communities Development Authority
COP    — Certificates of Participation
CSCE    — Charter School Credit Enhancement
DFA    — Development Finance Agency
EDA    — Economic Development Authority
FHA    — Federal Housing Administration
GO    — General Obligation
GTD    — Guaranteed
HEFA    — Health & Educational Facilities Authority
HFC    — Housing Finance Commission
IDA    — Industrial Development Authority
LOC    — Letter of Credit
MTA    — Metropolitan Transportation Authority
NATL    — National Public Finance Guarantee Corporation - Insured Bonds
PCFA    — Pollution Control Financing Authority
SIFMA    — Securities Industry and Financial Markets Association
SPA    — Standby Bond Purchase Agreement - Insured Bonds
TFA    — Transitional Finance Authority

At August 31, 2017, the Fund had the following open futures contracts:

 

     Number of
Contracts
     Expiration
Date
     Notional
Amount
     Market
Value
     Unrealized
Appreciation
 
Contracts to Buy:  

U.S. Treasury Long-Term Bonds

     132        12/17      $ 20,481,656      $ 20,604,375      $ 122,719  

This Schedule of Investments is unaudited and is intended to provide information about the Fund’s investments as of the date of the schedule. Other information regarding the Fund is available in the Fund’s most recent annual or semi-annual shareholder report.

 

See Notes to Schedule of Investments.

 

10


Notes to Schedule of Investments (unaudited)

 

1. Organization and significant accounting policies

Western Asset Managed Municipals 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 Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(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 investment’s fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a 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 Fund’s Board of Directors.

The Board of Directors is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Directors, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Directors. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s 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.

 

11


Notes to Schedule of Investments (unaudited) (continued)

 

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 Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets carried at fair value:

 

ASSETS

 

DESCRIPTION

   QUOTED PRICES
(LEVEL 1)
     OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2)
     SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)
     TOTAL  

Municipal Bonds†

     —        $ 850,267,901        —        $ 850,267,901  

Short-Term Investments†

     —          600,000        —          600,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Investments

     —        $ 850,867,901        —        $ 850,867,901  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other Financial Instruments:

 

Futures Contracts

   $ 122,719        —          —          122,719  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 122,719      $ 850,867,901        —        $ 850,990,620  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

See Schedule of Investments for additional detailed categorizations.

 

12


 

ITEM 2. CONTROLS AND PROCEDURES.

 

  (a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

 

  (b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Western Asset Managed Municipals Fund Inc.

 

By   /s/    JANE TRUST        
  Jane Trust
  Chief Executive Officer

Date:

 

October 25, 2017

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By   /s/    JANE TRUST        
  Jane Trust
  Chief Executive Officer

Date:

 

October 25, 2017

By   /s/     RICHARD F. SENNETT        
  Richard F. Sennett
  Principal Financial Officer

Date:

 

October 25, 2017