Franklin Templeton, one of the world’s largest asset managers,
has announced that Western Asset Diversified Income Fund (the
"Fund") has raised $1,000,000,000 in its initial public offering
(excluding any exercise of the underwriters' option to purchase
additional common shares). The Fund’s common shares began trading
on Friday, June 25, 2021, on the New York Stock Exchange under the
symbol "WDI," and the offering is expected to close on Tuesday,
June 29, 2021, subject to customary closing conditions.
The Fund sold 50,000,000 common shares at $20.00 per share, with
Morgan Stanley, BofA Securities and Wells Fargo Securities acting
as lead underwriters. In addition, the Fund has granted the
underwriters an option to purchase an additional 6,833,830 common
shares at the public offering price within 45 days of the date of
the prospectus, June 24, 2021. If the underwriters exercise in full
their option to purchase additional shares of the Fund, which may
or may not occur, the Fund will have raised approximately
$1,136,676,600 million.
The Fund is a diversified, closed-end fund seeking high current
income and, secondarily, capital appreciation. Legg Mason Partners
Fund Advisor, LLC ("LMPFA") acts as the Fund's investment manager.
The Fund is also sub-advised by Western Asset Management Company,
LLC and its affiliates (collectively, “Western Asset”), a global
active fixed-income manager with 50 years of experience and $476.3
billion in assets under management (AUM) as of March 31, 2021.
Western Asset, which currently manages $181 billion in multi-sector
bond strategies as of March 31, 2021, has been one of Franklin
Templeton’s independent specialist investment managers since July
2020.
“We believe that income investors are facing serious challenges
as yields for traditional bond benchmarks and sovereign debt have
hit historically low levels,” said portfolio manager Michael
Buchanan, who is Deputy Chief Investment Officer of Western Asset.
“This actively managed multi-sector bond strategy is designed to
proactively exploit value opportunities. We’re seeking diversified
sources of income, which means we’re anticipating investing across
the entirety of the global credit markets to enhance portfolio
diversification and return potential.”
LMPFA, an indirect wholly-owned subsidiary of Franklin
Templeton, has agreed to pay up front at closing, from its own
assets, the offering expenses, including compensation to the
underwriters and certain dealers as well as the organizational
expenses and offering costs associated with the offering. The Fund
is not obligated to repay LMPFA for these expenditures.
Fund Investments
Western Asset’s investment process utilizes cross-sector
correlations designed to seek optimized return potential and
diversification within the portfolio. As active managers of the
portfolio, Western Asset will employ its top-down macro view to
drive decisions on value, credit sectors, credit quality and
duration, and its deep research experience and bottom-up analysis
to make sector and security selections.
Under current market conditions, the Fund anticipates it will
initially focus on shorter-duration and floating-rate securities,
which have lower sensitivity to higher interest rates. Its duration
and mix of fixed- and floating-rate investments are subject to
change over time. As market conditions change, Western Asset will
seek to dynamically rotate investments into sectors and securities
that it believes to be undervalued from a fundamental perspective
with an attractive return profile and away from investments that it
believes to be overvalued.
The Fund may invest in both investment grade and below
investment grade corporate debt securities, senior loans, agency
and non-agency residential mortgage-backed securities and
commercial mortgage-backed securities, government (i.e., sovereign)
debt (including U.S. government obligations), floating-rate
securities, bank loans, collateralized loan obligations,
asset-backed securities, private debt and mortgage whole loans.
About Western Asset
Western Asset is one of the world’s leading fixed-income
managers. With a focus on long-term fundamental value investing
that employs a top-down and bottom-up approach, the firm has nine
offices around the globe and deep experience across the range of
fixed-income sectors. Founded in 1971, Western Asset has been
recognized for an approach emphasizing team management and
intensive proprietary research, supported by robust risk
management. To learn more about Western Asset, please visit
www.westernasset.com.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment
management organization with subsidiaries operating as Franklin
Templeton and serving clients in over 165 countries. Franklin
Templeton’s mission is to help clients achieve better outcomes
through investment management expertise, wealth management and
technology solutions. Through its specialist investment managers,
the company brings extensive capabilities in equity, fixed income,
multi-asset solutions and alternatives. With offices in more than
30 countries and approximately 1,300 investment professionals, the
California-based company has over 70 years of investment experience
and approximately $1.5 trillion in assets under management as of
May 31, 2021. For more information, please visit
franklintempleton.com and follow us on LinkedIn, Twitter and
Facebook.
Important Information
A registration statement relating to the Fund's common shares
has been filed with, and declared effective by, the Securities and
Exchange Commission. This press release is not an offer to sell
securities and is not a solicitation of an offer to buy securities,
nor will there be any sales of securities in any jurisdiction where
the offer or sale is not permitted.
Investors should consider the investment objectives, risks,
charges and expenses of the Fund carefully before investing. The
Fund’s prospectus, which contains this and other information about
the Fund, should be read carefully before investing. A copy of the
final prospectus relating to this Fund may be obtained by
contacting your financial advisor or at
www.franklintempleton.com.
All investments involve risk, including loss of principal. Past
performance is no guarantee of future results.
The Fund is newly organized, with a limited history of
operations. Fixed-income securities involve interest rate, credit,
inflation, and reinvestment risks, and possible loss of principal.
As interest rates rise, the value of fixed-income securities falls.
High yield bonds are subject to greater price volatility,
illiquidity, and possibility of default. Asset-backed,
mortgage-backed or mortgage-related securities are subject to
prepayment and extension risks. The Fund may invest in securities
backed by subprime mortgages which involve a higher degree of risk
and chance of loss. International investments are subject to
special risks, including currency fluctuations and social, economic
and political uncertainties, which could increase volatility. These
risks are magnified in emerging markets. Derivatives, such as
options and futures, can be illiquid, may disproportionately
increase losses, and have a potentially large impact on Fund
performance. Leverage may increase volatility and possibility of
loss. Diversification does not guarantee a profit or protect
against a loss. Distributions are not guaranteed and are subject
to change.
Data and commentary provided in this press release are for
informational purposes only. Franklin Resources, Inc. and its
affiliates do not engage in selling shares of the Fund. The Fund’s
common shares are traded on the New York Stock Exchange. Similar to
stocks, the Fund’s share price will fluctuate with market
conditions and, at the time of sale, may be worth more or less than
the original investment. Shares of closed-end funds often trade at
a discount to their net asset value, and can increase an investor’s
risk of loss. All investments are subject to risk, including the
risk of loss.
This press release contains "forward-looking statements" as
defined under the U.S. federal securities laws. Generally, the
words "believe," "expect," "intend," "estimate," "anticipate,"
"project," "will," and similar expressions identify forward looking
statements, which generally are not historical in nature.
Forward-looking statements are subject to certain risks and
uncertainties that could cause actual future results to differ
significantly from the Fund’s present expectations or projections
indicated in any forward-looking statements. These risks include,
but are not limited to, changes in economic and political
conditions; regulatory and legal changes; leverage risk; valuation
risk; interest rate risk; tax risk; the volume of sales and
purchase of shares; the continuation of investment advisory,
administration and other service arrangements; and other risks
discussed in the fund’s filings with the Securities and Exchange
Commission. You should not place undue reliance on forward-looking
statements, which speak only as of the date they are made. The Fund
undertakes no obligation to publicly update or revise any
forward-looking statements made herein. There is no assurance that
the Fund’s investment objectives will be attained.
Any information, statement or opinion set forth herein is
general in nature, is not directed to or based on the financial
situation or needs of any particular investor, and does not
constitute, and should not be construed as, investment advice,
forecast of future events, a guarantee of future results, or a
recommendation with respect to any particular security or
investment strategy or type of retirement account. Investors
seeking financial advice regarding the appropriateness of investing
in any securities or investment strategies should consult their
financial professional.
INVESTMENT PRODUCTS: NOT FDIC INSURED | NO BANK GUARANTEE | MAY
LOSE VALUE
©2021 Legg Mason Investor Services, LLC, member FINRA, SIPC.
Legg Mason Partners Fund Advisor, LLC, Western Asset Management
Company, LLC, and Legg Mason Investor Services are subsidiaries of
Franklin Resources, Inc.
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version on businesswire.com: https://www.businesswire.com/news/home/20210628005076/en/
Franklin Templeton Corporate Communications: Lisa Tibbitts, +1
(917) 674-8060, Lisa.Tibbitts@franklintempleton.com
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