Form N-CSRS WESTERN ASSET INTERMEDIA For: May 31
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06506
(Exact name of registrant as specified in charter)
One Madison Avenue, 17th Floor, New York, NY 10010
(Address of principal executive offices) (Zip code)
Marc A. De Oliveira
Franklin Templeton
100 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-888-777-0102
Date of fiscal year end: November 30
Date of reporting period:
| ITEM 1. | REPORT TO STOCKHOLDERS. |
(a) The Report to Shareholders is filed herewith
Semi-Annual
Report
May 31, 2026
WESTERN ASSET
INTERMEDIATE MUNI
FUND INC. (SBI)
INTERMEDIATE MUNI
FUND INC. (SBI)
If you need assistance
accessing this content, please reach out to your sales representative or send an email to [email protected].
Fund objective
The Fund’s investment objective
is to provide common shareholders a high level of current income
exempt from regular federal income taxes*, consistent with prudent investing.
Under normal market conditions, the Fund will invest at least 80% of its total assets in municipal obligations. In addition, under normal market conditions, the Fund will invest at least 80% of its total assets in debt securities that are, at the time of investment, rated investment grade by a nationally recognized statistical rating organization or, if unrated, of equivalent quality as determined by the investment manager. The Fund also maintains a dollar-weighted average effective maturity of between three and ten years.
Under normal market conditions, the Fund will invest at least 80% of its total assets in municipal obligations. In addition, under normal market conditions, the Fund will invest at least 80% of its total assets in debt securities that are, at the time of investment, rated investment grade by a nationally recognized statistical rating organization or, if unrated, of equivalent quality as determined by the investment manager. The Fund also maintains a dollar-weighted average effective maturity of between three and ten years.
What’s inside
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III
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IV
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23
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24
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25
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39
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45
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46
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*
Certain investors may be subject to the federal alternative minimum tax (“AMT”), and state and local taxes will apply.
Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.
II
Western
Asset Intermediate Muni Fund Inc.
Letter
from the president
Dear Shareholder,
We are pleased to provide the semi-annual
report of Western Asset Intermediate Muni Fund Inc. for
the six-month reporting period ended May 31, 2026. Please read on for Fund performance
information during the Fund’s reporting period.
As always, we remain committed to
providing you with excellent service and a full spectrum
of investment choices. We also remain committed to supplementing the support you
receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com.
Here you can gain immediate access to market and investment
information, including:
•
Fund
prices and performance,
•
Market
insights and commentaries from our portfolio managers, and
•
A
host of educational resources.
We look forward to helping you meet
your financial goals.
Sincerely,
Jane
Trust, CFA
President and Chief Executive Officer
President and Chief Executive Officer
June 30, 2026
Western
Asset Intermediate Muni Fund Inc.
III
Performance
review
For the six
months ended May 31, 2026, Western Asset Intermediate Muni Fund Inc. returned
1.93% based on its net asset value (NAV)i
and 4.22% based on its New York Stock Exchange (NYSE)
market price per share. The Fund’s unmanaged benchmark, the Bloomberg Municipal
1-15 Year Bond Indexii,
returned 1.06% for the same period.
Certain investors may be subject
to the federal alternative minimum tax, and state and local taxes
will apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal
adviser.
The Fund has a practice of seeking
to maintain a relatively stable level of distributions to shareholders.
This practice has no impact on the Fund’s investment strategy and may reduce the
Fund’s NAV. The Fund’s manager believes the practice helps maintain the Fund’s competitiveness
and may benefit the Fund’s market price and premium/discount to the Fund’s
NAV.
During the six-month period, the
Fund made distributions to shareholders totaling $0.25 per share.
As of May 31, 2026, the Fund estimates that 56% of the distributions were sourced from
net investment income and 44% constituted a return of capital.* The
performance table shows the Fund’s six-month total
return based on its NAV and market price as of May 31,
2026. Past performance is no guarantee of future results.
|
Performance
Snapshot as of May 31, 2026 (unaudited)
| |
|
Price
Per Share |
6-Month
Total
Return** |
|
$8.46
(NAV) |
1.93
%†
|
|
$7.82
(Market Price) |
4.22
%‡
|
All figures represent past performance and are
not a guarantee of future results. Performance figures for periods shorter
than one year represent cumulative figures and are not annualized.
** Total returns are based on changes in NAV or
market price, respectively. Returns reflect the deduction of all Fund
expenses, including management fees, operating expenses, and other Fund expenses.
Returns do not reflect the deduction of brokerage commissions or taxes that investors may
pay on distributions or the sale of shares.
† Total return assumes the reinvestment of
all distributions, including returns of capital, if any, at NAV.
‡ Total return assumes the reinvestment of
all distributions, including returns of capital, if any, in additional
shares in accordance with the Fund’s Dividend Reinvestment Plan.
*
These
estimates are not for tax purposes. The Fund will issue a Form 1099 with final composition of the distributions
for tax purposes after year-end. A return of capital is not taxable and results in a reduction in the tax
basis of a shareholder’s investment. For more information about a distribution’s composition, please refer to the
Fund’s distribution press release or, if applicable, the Section 19 notice located in the press release section of
our website, www.franklintempleton.com.
IV
Western
Asset Intermediate Muni Fund Inc.
Looking for additional information?
The Fund is traded under the symbol
“SBI” and its closing market price is available in most newspapers
under the NYSE listings. The daily NAV is available online under the symbol “XSBIX”
on most financial websites. Barron’s
and The Wall Street Journal’s
Monday edition both carry closed-end fund tables that
provide additional information. In addition, the Fund issues
a quarterly press release that can be found on most major financial websites as well as
www.franklintempleton.com.
In a continuing effort to provide
information concerning the Fund, shareholders may call 1-888-777-0102
(toll free), Monday through Friday from 8:00 a.m. to 5:30 p.m. Eastern Time, for
the Fund’s current NAV, market price and other information.
Thank you for your investment in
the Western Asset Intermediate Muni Fund Inc. As always, we
appreciate that you have chosen us to manage your assets and we remain focused on achieving
the Fund’s investment goals.
Sincerely,
Jane
Trust, CFA
President and Chief Executive Officer
President and Chief Executive Officer
June 30, 2026
RISKS: The
Fund is a diversified closed-end management investment company designed primarily
as a long-term investment and not as a trading vehicle. The Fund is not intended to be a
complete investment program and, due to the uncertainty inherent in all investments, there can be
no assurance that the Fund will achieve its investment objective. The Fund’s common stock is 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. Diversification
does not assure against market loss. The Fund’s investments are subject to a number
of risks, including interest rate risk, credit risk, leveraging risk and management risk. As interest
rates rise, bond prices fall, reducing the value of the fixed income securities held by the Fund.
Lower rated, higher yielding bonds, known as “junk bonds”, are subject to greater liquidity and
credit risk, including the risk of default, than higher rated obligations. Municipal securities purchased
by the Fund may be adversely affected by changes in the financial condition of municipal
issuers and insurers, regulatory and political developments, uncertainties and public perceptions,
and other factors. The Fund may use derivatives, such as options and futures, which can
be illiquid, may disproportionately increase losses, and have a potentially large impact on Fund
performance. The Fund may invest in securities of other investment companies. To the extent
it does, Fund stockholders will indirectly pay a portion of the operating costs of such companies,
in addition to the expenses that the Fund bears directly in connection with its own
Western
Asset Intermediate Muni Fund Inc.
V
Performance
review (cont’d)
operation. Investing
in securities issued by other investment companies, including exchange-traded
funds (“ETFs”) that invest primarily in municipal securities, involves risks similar to those of
investing directly in the securities in which those investment companies invest. Leverage may result
in greater volatility of NAV and market price of common shares and increases a shareholder’s
risk of loss. The Fund may enter into tender option bond (“TOB”) transactions, which
expose the Fund to leverage and credit risk, and generally involve greater risk than investments
in fixed rate municipal bonds, including the risk of loss of principal. The interest payments
that the Fund would typically receive on inverse floaters acquired in such transactions vary
inversely with short-term interest rates and will be reduced (and potentially eliminated) when
short-term interest rates increase. Inverse floaters will generally underperform the market for
fixed rate municipal securities when interest rates rise. The value and market for inverse floaters
can be volatile, and inverse floaters can have limited liquidity. Investments in inverse floaters
issued in TOB transactions are derivative instruments and, therefore, are also subject to the
risks generally applicable to investments in derivatives. The market values of securities or other
assets will fluctuate, sometimes sharply and unpredictably, due to changes in general market
conditions, overall economic trends or events, governmental actions or intervention, actions
taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade
disputes or other factors, political developments, armed conflicts, economic sanctions and countermeasures
in response to sanctions, major cybersecurity events, investor sentiment, the global
and domestic effects of a pandemic, and other factors that may or may not be related to the
issuer of the security or other asset. The Fund may also invest in money market funds, including
funds affiliated with the Fund’s manager and subadviser.
All investments are subject to risk
including the possible loss of principal. Past performance is no guarantee
of future results. All index performance reflects no deduction for fees, expenses or taxes. Please
note that an investor cannot invest directly in an index.
i
Net
asset value (NAV) is calculated by subtracting total liabilities, including liabilities associated with financial leverage
(if any), from the closing value of all securities held by the Fund (plus all other assets) and dividing the result
(total net assets) by the total number of the shares of common stock outstanding. The NAV fluctuates with changes
in the market prices of securities in which the Fund has invested. However, the price at which an investor may
buy or sell shares of the Fund is the Fund’s market price as determined by supply of and demand for the Fund’s shares.
ii
The
Bloomberg Municipal 1-15 Year Bond Index is a market value weighted index of investment-grade fixed-rate municipal
bonds with maturities of 1-15 years.
Important
data provider notices and terms available at www.franklintempletondatasources.com.
VI
Western
Asset Intermediate Muni Fund Inc.
Fund
at a glance† (unaudited)
Investment
breakdown (%) as a percent of total investments
†
The
bar graph above represents the composition of the Fund’s investments as of May 31, 2026, and November
30, 2025. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject
to change at any time.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
1
Schedule
of investments (unaudited)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Municipal
Bonds — 128.6% | |||||
|
Alabama
— 7.6% | |||||
|
Alabama
State Corrections Institution Finance
Authority
Revenue, Series A
|
5.000%
|
7/1/42
|
$750,000
|
$798,138
| |
|
Black
Belt Energy Gas District, AL, Gas Project
Revenue
Bonds: |
|
|
|
| |
|
Series
D-1, Refunding |
5.500%
|
2/1/29
|
200,000
|
209,881
(a)(b)
| |
|
Series
F |
5.500%
|
12/1/28
|
2,000,000
|
2,090,133
(a)(b)
| |
|
Energy
Southeast, AL, A Cooperative District,
Energy
Supply Revenue, Series B-1
|
5.750%
|
11/1/31
|
1,000,000
|
1,096,804
(a)(b)
| |
|
Jefferson
County, AL, Sewer Revenue, Warrants,
Series
2024, Refunding
|
5.250%
|
10/1/45
|
1,500,000
|
1,601,343
| |
|
Mobile
County, AL, IDA Revenue: |
|
|
|
| |
|
Solid
Waste Disposal Facility, Calvert LLC
Project,
Series A |
5.000%
|
6/1/54
|
310,000
|
302,806
(c)
| |
|
Solid
Waste Disposal Facility, Calvert LLC
Project,
Series B |
4.750%
|
12/1/54
|
250,000
|
235,713
(c)
| |
|
Southeast
Alabama Gas Supply District, Gas
Supply
Revenue, Project No 1, Series A,
Refunding
|
5.000%
|
4/1/31
|
400,000
|
421,902
| |
|
Southeast
Energy Authority, AL, Cooperative
District,
Energy Supply Revenue: |
|
|
|
| |
|
Series
B |
5.250%
|
1/1/33
|
575,000
|
596,982
(a)(b)
| |
|
Series
D |
5.000%
|
9/1/35
|
1,600,000
|
1,738,586
| |
|
Total
Alabama |
9,092,288
| ||||
|
Alaska
— 0.2% | |||||
|
Alaska
State Housing Finance Corp. Revenue,
State
Capital Project, Series B, Refunding |
4.000%
|
12/1/36
|
250,000
|
253,360
| |
|
Arizona
— 2.9% | |||||
|
Chandler,
AZ, IDA Revenue: |
|
|
|
| |
|
Intel
Corp. Project |
5.000%
|
9/1/27
|
500,000
|
506,187
(a)(b)(c)
| |
|
Intel
Corp. Project |
3.800%
|
6/15/28
|
500,000
|
505,300
(a)(b)
| |
|
Intel
Corp. Project |
4.100%
|
6/15/28
|
250,000
|
253,045
(a)(b)(c)
| |
|
Intel
Corp. Project |
4.000%
|
6/1/29
|
650,000
|
660,320
(a)(b)(c)
| |
|
La
Paz County, AZ, IDA, Lease Revenue, Charter
School
Solutions Harmony Public Schools Project
|
5.000%
|
2/15/38
|
500,000
|
505,951
| |
|
Phoenix,
AZ, Civic Improvement Corp., Airport
Revenue,
Junior Lien, Refunding
|
5.000%
|
7/1/27
|
1,000,000
|
1,003,492
| |
|
Total
Arizona |
3,434,295
| ||||
See
Notes to Financial Statements.
2
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Arkansas
— 0.3% | |||||
|
Arkansas
State Development Finance Authority,
Environmental
Improvement Revenue,
United
States Steel Corp. Project, Green Bonds |
5.700%
|
5/1/53
|
$350,000
|
$359,227
(c)
| |
|
California
— 12.7% | |||||
|
Alameda,
CA, Corridor Transportation Authority
Revenue,
Second Subordinated Lien, Series B,
Refunding
|
5.000%
|
10/1/34
|
500,000
|
502,790
| |
|
California
State Community Choice Financing
Authority
Revenue: |
|
|
|
| |
|
Clean
Energy Project, Green Bonds, Series B |
5.000%
|
12/1/32
|
1,600,000
|
1,647,357
(a)(b)
| |
|
Clean
Energy Project, Green Bonds, Series B-1 |
5.000%
|
8/1/29
|
600,000
|
627,050
(a)(b)
| |
|
Clean
Energy Project, Green Bonds, Series B-1 |
4.000%
|
8/1/31
|
500,000
|
507,589
(a)(b)
| |
|
Clean
Energy Project, Green Bonds, Series C |
5.000%
|
10/1/32
|
300,000
|
312,865
(a)(b)
| |
|
Clean
Energy Project, Green Bonds, Series E |
5.000%
|
9/1/32
|
1,400,000
|
1,488,479
(a)(b)
| |
|
Clean
Energy Project, Green Bonds, Series G |
5.000%
|
12/1/35
|
600,000
|
658,396
| |
|
Clean
Energy Project, Green Bonds, Series H |
5.000%
|
8/1/33
|
600,000
|
650,462
(a)(b)
| |
|
California
State MFA Revenue: |
|
|
|
| |
|
Senior
Lien, LINXS APM Project, Series A |
5.000%
|
12/31/34
|
350,000
|
359,869
(c)
| |
|
Senior
Lien, LINXS APM Project, Series A |
5.000%
|
12/31/43
|
400,000
|
405,601
(c)
| |
|
SFMTA
Potrero Yard Modernization Project,
Series
A |
5.250%
|
9/1/51
|
500,000
|
532,119
| |
|
California
State MFA Special Facility Revenue,
United
Airlines Inc., Los Angeles International
Airport
Project
|
4.000%
|
7/15/29
|
250,000
|
252,169
(c)
| |
|
California
State PCFA Water Furnishing Revenue,
Poseidon
Resources
|
5.000%
|
7/1/27
|
750,000
|
750,448
(c)(d)
| |
|
Folsom
Cordova, CA, USD: |
|
|
|
| |
|
School
Facilities Improvement District No 4,
GO,
Series A, Refunding |
5.000%
|
10/1/38
|
500,000
|
571,630
| |
|
School
Facilities Improvement District No 5,
GO,
Series B, Refunding |
5.000%
|
10/1/38
|
600,000
|
685,956
| |
|
Los
Angeles, CA, Department of Water & Power,
Power
System Revenue, Series C
|
5.000%
|
7/1/37
|
750,000
|
762,405
| |
|
M-S-R
Energy Authority, CA, Natural Gas
Revenue,
Series B
|
6.125%
|
11/1/29
|
1,980,000
|
2,084,580
| |
|
River
Islands, CA, Public Financing Authority,
Special
Tax Revenue: |
|
|
|
| |
|
Community
Facilities District No 2003-1 |
5.500%
|
9/1/37
|
350,000
|
372,714
| |
|
Community
Facilities District No 2023-1 |
5.500%
|
9/1/43
|
250,000
|
265,816
| |
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
3
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
California
— continued | |||||
|
Riverside,
CA, Electric Revenue: |
|
|
|
| |
|
Series
A, Refunding |
5.000%
|
10/1/36
|
$750,000
|
$793,266
| |
|
Series
A, Refunding |
5.000%
|
10/1/43
|
250,000
|
260,723
| |
|
San
Francisco, CA, City & County Airport
Commission,
International Airport Revenue, SFO
Fuel
Co. LLC, Series A, Refunding
|
5.000%
|
1/1/33
|
645,000
|
681,382
(c)(e)
| |
|
Total
California |
15,173,666
| ||||
|
Colorado
— 2.3% | |||||
|
Base
Village Metropolitan District No 2, CO, GO,
Series
A, Refunding
|
5.500%
|
12/1/36
|
500,000
|
500,409
| |
|
Colorado
State Health Facilities Authority
Revenue:
|
|
|
|
| |
|
Commonspirit
Health Initiatives, Series B-2 |
5.000%
|
8/1/26
|
250,000
|
250,205
(a)(b)
| |
|
Improvement
Second Tier Bonds, Bethesda
Project
|
5.500%
|
9/15/54
|
400,000
|
402,819
| |
|
Denver,
CO, City & County Airport System
Revenue,
Subordinated, Series B, Refunding
|
5.000%
|
11/15/32
|
1,000,000
|
1,101,504
(c)
| |
|
Southern
Ute Indian Tribe Reservation, CO, GO,
Series
A |
5.000%
|
4/1/35
|
350,000
|
378,839
(d)
| |
|
Vauxmont
Metropolitan District, CO, GO,
Subordinate
Limited Tax, Series 2019, Refunding,
AG
|
5.000%
|
12/15/28
|
125,000
|
127,611
| |
|
Total
Colorado |
2,761,387
| ||||
|
Connecticut
— 1.6% | |||||
|
Connecticut
State Special Tax Revenue,
Transportation
Infrastructure, Series A
|
5.000%
|
1/1/37
|
500,000
|
513,570
| |
|
Connecticut
State, GO, Series A
|
5.000%
|
4/15/39
|
1,290,000
|
1,345,999
| |
|
Total
Connecticut |
1,859,569
| ||||
|
Florida
— 4.3% | |||||
|
Broward
County, FL, Airport System Revenue,
Series
2017
|
5.000%
|
10/1/36
|
250,000
|
254,262
(c)
| |
|
Broward
County, FL, Port Facilities Revenue,
Series
2022
|
5.000%
|
9/1/37
|
450,000
|
478,127
(c)
| |
|
Hillsborough
County, FL, Aviation Authority
Revenue,
Tampa International Airport, Series E
|
5.000%
|
10/1/43
|
250,000
|
255,125
(c)
| |
|
Miami-Dade
County HEFA Revenue: |
|
|
|
| |
|
University
of Miami Issue, Series 2026 |
5.000%
|
4/1/36
|
100,000
|
114,537
| |
|
University
of Miami Issue, Series 2026 |
5.000%
|
4/1/46
|
100,000
|
106,377
| |
|
Miami-Dade
County, FL, Seaport Revenue, Senior
Bonds,
Series A, Refunding
|
5.000%
|
10/1/47
|
1,000,000
|
1,016,549
(c)
| |
See
Notes to Financial Statements.
4
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Florida
— continued | |||||
|
Okaloosa
County, FL, IDR, Air Force Enlisted
Village
Inc. Project
|
5.500%
|
5/15/45
|
$100,000
|
$103,691
(d)
| |
|
Orange
County, FL, Health Facilities Authority
Revenue:
|
|
|
|
| |
|
Orlando
Health Inc., Series A, Refunding |
4.500%
|
10/1/56
|
225,000
|
217,941
| |
|
Orlando
Health Obligated Group, Series A |
5.000%
|
10/1/42
|
250,000
|
265,503
| |
|
Palm
Beach County, FL, Health Facilities Authority
Revenue,
Toby & Leon Cooperman Sinai
Residences
of Boca Raton Expansion,
Series
2022, Refunding
|
4.000%
|
6/1/31
|
150,000
|
149,517
| |
|
Pasco
County, FL, Capital Improvement, Cigarette
Tax
Allocation Bonds, H. Lee Moffitt Cancer
Center
Project, Series A, AG
|
5.750%
|
9/1/54
|
1,825,000
|
1,958,503
| |
|
Wildwood,
FL, Village Community Development
District
No 15, Special Assessment Revenue,
Series
2024
|
4.200%
|
5/1/39
|
150,000
|
150,139
(d)
| |
|
Total
Florida |
5,070,271
| ||||
|
Georgia
— 1.7% | |||||
|
Georgia
State Municipal Electric Authority, Power
Revenue:
|
|
|
|
| |
|
Plant
Vogtle Units 3&4, Project M, Series A |
5.250%
|
7/1/64
|
200,000
|
204,968
| |
|
Plant
Vogtle Units 3&4, Project P, Series A |
5.500%
|
7/1/64
|
200,000
|
205,376
| |
|
Main
Street Natural Gas Inc., GA, Gas Project
Revenue:
|
|
|
|
| |
|
Series
A |
5.000%
|
5/15/33
|
250,000
|
258,446
| |
|
Series
B |
5.000%
|
6/1/29
|
1,000,000
|
1,041,514
(a)(b)
| |
|
Series
C |
5.000%
|
9/1/30
|
300,000
|
318,941
(a)(b)
| |
|
Total
Georgia |
2,029,245
| ||||
|
Guam
— 0.2% | |||||
|
Guam
Government, Business Privilege Tax
Revenue,
Series F, Refunding |
4.000%
|
1/1/36
|
200,000
|
199,010
| |
|
Hawaii
— 0.5% | |||||
|
Honolulu,
HI, City & County Wastewater System
Revenue:
|
|
|
|
| |
|
First
Senior Bond Resolution, Series A |
3.000%
|
7/1/41
|
400,000
|
362,547
| |
|
First
Senior Bond Resolution, Series A,
Refunding
|
5.000%
|
7/1/36
|
150,000
|
171,995
| |
|
Total
Hawaii |
534,542
| ||||
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
5
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Illinois
— 18.6% | |||||
|
Chicago,
IL, Board of Education, Dedicated
Capital
Improvement, Special Tax Revenue,
Series
2018
|
5.000%
|
4/1/38
|
$500,000
|
$504,125
| |
|
Chicago,
IL, Board of Education, GO: |
|
|
|
| |
|
Dedicated,
Series A |
5.000%
|
12/1/43
|
1,000,000
|
972,146
| |
|
Dedicated,
Series G, Refunding |
5.000%
|
12/1/34
|
270,000
|
270,619
| |
|
Series
C, Refunding, AG |
5.000%
|
12/1/32
|
2,000,000
|
2,071,103
| |
|
Series
D |
5.000%
|
12/1/46
|
1,500,000
|
1,419,781
| |
|
Chicago,
IL, GO: |
|
|
|
| |
|
Chicago
Works, Series A |
5.500%
|
1/1/39
|
250,000
|
261,146
| |
|
Series
A |
5.500%
|
1/1/35
|
250,000
|
257,523
| |
|
Series
A |
5.000%
|
1/1/40
|
210,000
|
210,470
| |
|
Chicago,
IL, O’Hare International Airport Revenue: |
|
|
|
| |
|
Senior
Lien, Series D |
5.250%
|
1/1/36
|
500,000
|
506,366
| |
|
Senior
Lien, Series D |
5.250%
|
1/1/37
|
400,000
|
404,722
| |
|
Series
C, Refunding |
5.000%
|
1/1/43
|
600,000
|
625,238
(c)
| |
|
Chicago,
IL, Transit Authority, Sales Tax Receipts
Revenue,
Second Lien, Series A, Refunding
|
5.000%
|
12/1/45
|
550,000
|
564,176
| |
|
Chicago,
IL, Wastewater Transmission Revenue: |
|
|
|
| |
|
Second
Lien, Series A |
5.000%
|
1/1/47
|
300,000
|
300,937
| |
|
Second
Lien, Series A, AG |
5.250%
|
1/1/58
|
500,000
|
515,940
| |
|
Second
Lien, Series B, Refunding |
5.000%
|
1/1/36
|
600,000
|
606,008
| |
|
Illinois
State Finance Authority Revenue: |
|
|
|
| |
|
Southern
Illinois Healthcare Enterprises Inc.,
Refunding
|
5.000%
|
3/1/34
|
500,000
|
504,074
| |
|
Surface
Freight Transfer Facilities, Centerpoint
Joliet
Terminal Railroad Project |
4.800%
|
7/2/35
|
450,000
|
465,534
(a)(b)(c)(d)
| |
|
Illinois
State Sports Facilities Authority Revenue,
State
Tax Supported, Refunding, AG
|
5.250%
|
6/15/30
|
3,000,000
|
3,059,321
| |
|
Illinois
State Toll Highway Authority Revenue,
Series
A, Refunding
|
5.000%
|
1/1/37
|
500,000
|
562,205
| |
|
Illinois
State, GO: |
|
|
|
| |
|
Series
2016, Refunding |
5.000%
|
2/1/29
|
500,000
|
507,291
| |
|
Series
A |
5.000%
|
5/1/36
|
770,000
|
790,206
| |
|
Series
A |
5.000%
|
5/1/39
|
300,000
|
306,244
| |
|
Series
A, Refunding |
5.000%
|
10/1/29
|
1,300,000
|
1,360,748
| |
|
Series
B, Refunding |
5.000%
|
9/1/27
|
600,000
|
616,053
| |
|
Series
C |
5.000%
|
12/1/41
|
1,250,000
|
1,324,031
| |
|
Series
D |
5.000%
|
11/1/27
|
300,000
|
309,033
| |
|
Series
D, Refunding |
5.000%
|
7/1/34
|
400,000
|
435,836
| |
See
Notes to Financial Statements.
6
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Illinois
— continued | |||||
|
Metropolitan
Pier & Exposition Authority, IL,
Revenue:
|
|
|
|
| |
|
McCormick
Place Expansion Project, Series A,
Refunding
|
4.000%
|
12/15/42
|
$350,000
|
$337,610
| |
|
McCormick
Place Expansion Project, Series A,
Refunding
|
5.000%
|
6/15/50
|
1,200,000
|
1,206,740
| |
|
McCormick
Place Expansion Project, Series B,
Refunding
|
5.000%
|
12/15/31
|
250,000
|
255,642
| |
|
McCormick
Place Expansion Project, Series B,
Refunding
|
5.000%
|
6/15/42
|
500,000
|
516,960
| |
|
McCormick
Place Expansion Project, Series B,
Refunding,
AG |
0.000%
|
12/15/56
|
500,000
|
113,847
| |
|
Total
Illinois |
22,161,675
| ||||
|
Indiana
— 2.3% | |||||
|
Hammond,
IN, Multi-School Building Corp.: |
|
|
|
| |
|
First
Mortgage Bond, State Intercept Program |
5.000%
|
7/15/34
|
750,000
|
770,983
| |
|
First
Mortgage Bond, State Intercept Program |
5.000%
|
7/15/35
|
1,035,000
|
1,062,604
| |
|
Indiana
State Finance Authority Revenue: |
|
|
|
| |
|
Marion
General Hospital, Series A |
4.000%
|
7/1/45
|
250,000
|
225,498
| |
|
Midwestern
Disaster Relief, Ohio Valley
Electric
Corp. Project, Series A |
4.250%
|
11/1/30
|
200,000
|
206,479
| |
|
Valparaiso,
IN, Exempt Facilities Revenue, Pratt
Paper
LLC Project, Refunding
|
4.500%
|
1/1/34
|
500,000
|
513,508
(c)(d)
| |
|
Total
Indiana |
2,779,072
| ||||
|
Kentucky
— 1.9% | |||||
|
Kentucky
State PEA, Gas Supply Revenue: |
|
|
|
| |
|
Series
A, Refunding |
5.250%
|
12/1/29
|
200,000
|
211,387
(a)(b)
| |
|
Series
C, Refunding |
5.000%
|
5/1/36
|
1,000,000
|
1,063,493
| |
|
Trimble
County, KY, Environmental Facilities
Revenue,
Louisville Gas and Electric Company
Project,
Series A
|
4.700%
|
6/1/27
|
1,000,000
|
1,009,315
(a)(b)(c)
| |
|
Total
Kentucky |
2,284,195
| ||||
|
Louisiana
— 3.0% | |||||
|
Lafayette
Parish, LA, School Board Sales Tax
Revenue,
Series 2023
|
4.000%
|
4/1/48
|
500,000
|
464,500
| |
|
Port
New Orleans, LA, Board of Commissioners,
Revenue,
Series B, Refunding, AG
|
5.000%
|
4/1/38
|
1,625,000
|
1,652,381
(c)
| |
|
St.
John the Baptist Parish, LA, State Revenue: |
|
|
|
| |
|
Marathon
Oil Corp. Project, Series B-2,
Refunding
|
2.375%
|
7/1/26
|
900,000
|
899,335
(a)(b)
| |
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
7
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Louisiana
— continued | |||||
|
Marathon
Oil Corp. Project, Series C,
Refunding
|
3.300%
|
7/3/28
|
$500,000
|
$501,769
(a)(b)
| |
|
Total
Louisiana |
3,517,985
| ||||
|
Maryland
— 0.6% | |||||
|
Maryland
State EDC, Senior Student Housing
Revenue,
Morgan State University Project
|
4.000%
|
7/1/40
|
500,000
|
482,469
| |
|
Maryland
State Stadium Authority, Built to Learn
Revenue,
Series 2021
|
4.000%
|
6/1/46
|
250,000
|
240,969
| |
|
Total
Maryland |
723,438
| ||||
|
Massachusetts
— 4.1% | |||||
|
Massachusetts
State Department of
Transportation,
Metropolitan Highway System
Revenue,
Series B-1, Refunding
|
5.000%
|
1/1/35
|
350,000
|
368,515
| |
|
Massachusetts
State DFA Revenue: |
|
|
|
| |
|
Harvard
University, Series A, Refunding |
4.000%
|
2/15/36
|
200,000
|
216,405
| |
|
Partners
HealthCare System, Mass General
Brigham
Inc., Series S-1, Refunding |
5.000%
|
7/1/37
|
250,000
|
256,381
| |
|
UMass
Boston Student Housing Project |
5.000%
|
10/1/28
|
200,000
|
200,679
| |
|
Massachusetts
State Port Authority Revenue,
Series
E |
5.000%
|
7/1/51
|
500,000
|
505,362
(c)
| |
|
Plymouth,
MA, GO, Refunding
|
3.500%
|
5/1/44
|
2,000,000
|
1,815,460
| |
|
The
Commonwealth of Massachusetts State, GO,
Consolidated
Loan, Series C
|
5.000%
|
2/1/51
|
1,400,000
|
1,470,083
| |
|
Total
Massachusetts |
4,832,885
| ||||
|
Michigan
— 1.5% | |||||
|
Great
Lakes, MI, Water Authority, Water Supply
System
Revenue, Senior Lien, Series B
|
5.000%
|
7/1/42
|
1,000,000
|
1,089,763
| |
|
Michigan
State Finance Authority Revenue: |
|
|
|
| |
|
The
Henry Ford Health Detroit South Campus
Central
Utility Plant Project, Green Bonds,
Series
2024 |
4.375%
|
2/28/54
|
250,000
|
231,084
| |
|
Tobacco
Settlement Asset-Backed, Series A-1,
Refunding
|
4.000%
|
6/1/39
|
150,000
|
149,690
| |
|
Michigan
State Strategic Fund Ltd. Obligation
Revenue,
I-75 Improvement Project
|
5.000%
|
12/31/43
|
300,000
|
302,677
(c)
| |
|
Total
Michigan |
1,773,214
| ||||
|
Mississippi
— 0.2% | |||||
|
Warren
County, MS, Mississippi Gulf Opportunity
Zone
Revenue, International Paper Company
Project,
Refunding |
4.000%
|
9/1/32
|
180,000
|
184,784
| |
See
Notes to Financial Statements.
8
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Missouri
— 0.9% | |||||
|
Kansas
City, MO, IDA, Airport System Revenue,
Kansas
City International Airport Terminal
Modernization
Project, Series B
|
5.000%
|
3/1/35
|
$750,000
|
$777,551
(c)
| |
|
St.
Louis County, MO, IDA, Senior Living Facilities
Revenue,
Friendship Village, St. Louis Obligated
Group,
Series A
|
5.000%
|
9/1/38
|
300,000
|
305,425
| |
|
Total
Missouri |
1,082,976
| ||||
|
Nebraska
— 0.8% | |||||
|
Central
Plains, NE, Energy Project, Gas Project
Revenue,
Project No 3, Series A, Refunding
|
5.000%
|
9/1/37
|
500,000
|
523,146
| |
|
Omaha,
NE, Public Power District, Electric System
Revenue,
Series B, Refunding
|
4.000%
|
2/1/46
|
500,000
|
483,609
| |
|
Total
Nebraska |
1,006,755
| ||||
|
New
Hampshire — 2.4% | |||||
|
National
Finance Authority, NH, Revenue: |
|
|
|
| |
|
Public
Private Development Corp. Lockhart
Housing
Project, Series A-1 |
5.000%
|
12/1/46
|
900,000
|
907,341
| |
|
Winston-Salem
Sustainable Energy
Partners
LLC, Series A |
5.000%
|
12/1/35
|
950,000
|
1,049,243
| |
|
Winston-Salem
Sustainable Energy
Partners
LLC, Series A |
5.000%
|
6/1/55
|
900,000
|
900,624
| |
|
Total
New Hampshire |
2,857,208
| ||||
|
New
Jersey — 5.9% | |||||
|
New
Jersey State EDA Revenue, Special Facility,
Port
Newark Container Terminal LLC Project,
Refunding
|
5.000%
|
10/1/37
|
1,000,000
|
1,013,186
(c)
| |
|
New
Jersey State Transportation Trust Fund
Authority
Revenue: |
|
|
|
| |
|
Transportation
Program, Series AA |
5.000%
|
6/15/36
|
1,000,000
|
1,072,041
| |
|
Transportation
Program, Series CC |
5.000%
|
6/15/40
|
2,000,000
|
2,160,425
| |
|
Transportation
Program, Series CC |
4.125%
|
6/15/50
|
400,000
|
376,354
| |
|
Transportation
Program, Series CC |
5.250%
|
6/15/50
|
500,000
|
526,657
| |
|
Transportation
System, Series A, Refunding |
5.000%
|
12/15/28
|
575,000
|
607,554
| |
|
New
Jersey State Turnpike Authority Revenue,
Series
C, Refunding
|
5.000%
|
1/1/44
|
750,000
|
807,417
| |
|
Tobacco
Settlement Financing Corp., NJ,
Revenue,
Series A, Refunding
|
5.000%
|
6/1/35
|
500,000
|
515,739
| |
|
Total
New Jersey |
7,079,373
| ||||
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
9
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
New
Mexico — 0.4% | |||||
|
New
Mexico State Municipal Energy Acquisition
Authority,
Gas Supply Revenue, Refunding |
5.000%
|
11/1/30
|
$400,000
|
$427,018
(a)(b)
| |
|
New
York — 19.4% | |||||
|
Build
NYC Resource Corp., NY, Revenue, East
Harlem
Scholars Academy Charter School Project
|
5.750%
|
6/1/52
|
350,000
|
343,702
(d)
| |
|
Hudson
Yards Infrastructure Corp., NY, Second
Indenture
Revenue, Series A, Refunding
|
5.000%
|
2/15/35
|
1,000,000
|
1,013,823
| |
|
Long
Island, NY, Power Authority Electric System
Revenue,
Series B
|
3.000%
|
9/1/29
|
250,000
|
249,552
(a)(b)
| |
|
MTA,
NY, Transportation Revenue: |
|
|
|
| |
|
Green
Bonds, Series E, Refunding |
5.000%
|
11/15/28
|
1,000,000
|
1,057,162
| |
|
Series
A-2 |
5.000%
|
5/15/30
|
400,000
|
428,728
(a)(b)
| |
|
New
York City, NY, GO: |
|
|
|
| |
|
Series
A |
5.000%
|
8/1/43
|
250,000
|
267,560
| |
|
Subseries
B-1 |
5.250%
|
10/1/43
|
1,000,000
|
1,074,619
| |
|
New
York City, NY, TFA, Future Tax Secured
Revenue:
|
|
|
|
| |
|
Subseries
A-1 |
5.000%
|
5/1/44
|
2,000,000
|
2,136,536
| |
|
Subseries
C-1 |
4.000%
|
5/1/39
|
2,200,000
|
2,226,609
| |
|
New
York State Dormitory Authority, Sales Tax
Revenue,
Bidding Group 3, Series E, Refunding
|
5.000%
|
3/15/38
|
1,500,000
|
1,556,745
| |
|
New
York State Dormitory Authority, State
Personal
Income Tax Revenue: |
|
|
|
| |
|
Series
A, Refunding |
5.000%
|
3/15/40
|
750,000
|
783,290
| |
|
Series
D, Refunding |
5.000%
|
2/15/41
|
750,000
|
787,062
| |
|
New
York State Transportation Development
Corp.,
Special Facilities Revenue: |
|
|
|
| |
|
Delta
Air Lines Inc., LaGuardia Airport
Terminals
C and D Redevelopment Project |
5.000%
|
1/1/30
|
850,000
|
873,355
(c)
| |
|
Delta
Air Lines Inc., LaGuardia Airport
Terminals
C and D Redevelopment Project |
5.000%
|
1/1/32
|
1,200,000
|
1,228,826
(c)
| |
|
Delta
Air Lines Inc., LaGuardia Airport
Terminals
C and D Redevelopment Project |
6.000%
|
4/1/35
|
250,000
|
275,915
(c)
| |
|
Delta
Air Lines Inc., LaGuardia Airport
Terminals
C and D Redevelopment Project |
5.625%
|
4/1/40
|
250,000
|
265,633
(c)
| |
|
John
F. Kennedy International Airport New
Terminal
One Project, Green Bonds |
6.000%
|
6/30/54
|
2,000,000
|
2,085,250
(c)
| |
|
John
F. Kennedy International Airport New
Terminal
One Project, Green Bonds |
5.375%
|
6/30/60
|
500,000
|
502,408
(c)
| |
See
Notes to Financial Statements.
10
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
New
York — continued | |||||
|
John
F. Kennedy International Airport Terminal
Four
Project, Series C, Refunding |
5.000%
|
12/1/27
|
$500,000
|
$515,785
| |
|
John
F. Kennedy International Airport Terminal
Six
Redevelopment Project, Green Bonds,
Series
A, Refunding |
5.500%
|
12/31/54
|
150,000
|
153,519
(c)
| |
|
John
F. Kennedy International Airport Terminal
Six
Redevelopment Project, Green Bonds,
Series
A, Refunding, AG |
4.500%
|
12/31/54
|
350,000
|
336,911
(c)
| |
|
John
F. Kennedy International Airport Terminal
Six
Redevelopment Project, Green Bonds,
Series
B, Refunding, AG, Step bond (0.000% to
12/31/34
then 5.000%) |
0.000%
|
12/31/54
|
150,000
|
99,507
(c)
| |
|
LaGuardia
Airport Terminal B Redevelopment
Project
|
5.000%
|
7/1/30
|
1,225,000
|
1,226,110
(c)
| |
|
New
York State Urban Development Corp.
Revenue,
Personal Income Tax, Series C,
Refunding
|
4.000%
|
3/15/45
|
550,000
|
523,207
| |
|
Triborough
Bridge & Tunnel Authority, NY,
Revenue:
|
|
|
|
| |
|
MTA
Bridges & Tunnels, Senior Lien, Series
A-1,
Refunding |
5.000%
|
5/15/51
|
1,040,000
|
1,063,413
| |
|
MTA
Bridges & Tunnels, Senior Lien, Series C,
Refunding
|
5.000%
|
5/15/47
|
2,000,000
|
2,089,293
| |
|
Total
New York |
23,164,520
| ||||
|
North
Dakota — 0.4% | |||||
|
Grand
Forks, ND, Health Care System Revenue,
Altru
Health System, Refunding, AG |
3.000%
|
12/1/46
|
700,000
|
532,173
| |
|
Ohio
— 2.1% | |||||
|
American
Municipal Power Inc., OH, Revenue,
AMP
Fremont Energy Center Project, Series A,
Refunding
|
5.000%
|
2/15/29
|
500,000
|
519,508
| |
|
Buckeye,
OH, Tobacco Settlement Financing
Authority
Revenue: |
|
|
|
| |
|
Senior
Bonds, Series A-2, Refunding |
5.000%
|
6/1/33
|
500,000
|
536,844
| |
|
Senior
Bonds, Series B-2, Refunding |
5.000%
|
6/1/55
|
550,000
|
439,779
| |
|
Ohio
State Air Quality Development Authority
Revenue:
|
|
|
|
| |
|
American
Electric Co. Project, Series B |
2.500%
|
10/1/29
|
350,000
|
338,455
(a)(b)(c)
| |
|
AMG
Vanadium Project, Series 2019 |
5.000%
|
7/1/49
|
500,000
|
459,283
(c)(d)
| |
|
Duke
Energy Corp. Project, Series B, Refunding |
4.250%
|
6/1/27
|
250,000
|
251,897
(a)(b)(c)
| |
|
Total
Ohio |
2,545,766
| ||||
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
11
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Oklahoma
— 0.3% | |||||
|
Tulsa,
OK, Municipal Airport Trust Revenue: |
|
|
|
| |
|
American
Airlines Inc. Project, Refunding |
6.250%
|
12/1/35
|
$300,000
|
$338,426
(c)
| |
|
American
Airlines Inc. Project, Refunding |
6.250%
|
12/1/40
|
35,000
|
38,667
(c)
| |
|
Total
Oklahoma |
377,093
| ||||
|
Pennsylvania
— 4.2% | |||||
|
Bucks
County, PA, Water and Sewer Authority,
Sewer
System Revenue, Series A, AG
|
4.000%
|
12/1/42
|
250,000
|
253,822
| |
|
Commonwealth
Financing Authority, PA, Tobacco
Master
Settlement Payment Revenue
|
5.000%
|
6/1/30
|
200,000
|
208,145
| |
|
Pennsylvania
State Economic Development
Financing
Authority Revenue: |
|
|
|
| |
|
Exempt
Facilities Bonds, PPL Energy
Supply
LLC Project, Series B, Refunding |
5.250%
|
6/1/27
|
600,000
|
600,637
(a)(b)
| |
|
Presbyterian
Senior Living Project, Series B-2,
Refunding
|
5.000%
|
7/1/42
|
250,000
|
258,128
| |
|
Tax-Exempt
Private Activity, The Penndot
Major
Bridges Package One Project |
5.500%
|
6/30/41
|
1,500,000
|
1,611,149
(c)
| |
|
Tax-Exempt
Private Activity, The Penndot
Major
Bridges Package One Project |
5.250%
|
6/30/53
|
200,000
|
202,351
(c)
| |
|
Pennsylvania
State Turnpike Commission
Revenue:
|
|
|
|
| |
|
Series
B |
5.000%
|
12/1/45
|
500,000
|
521,443
| |
|
Series
B, Refunding |
5.250%
|
12/1/47
|
250,000
|
265,014
| |
|
Philadelphia,
PA, IDA Revenue, City Service
Agreement,
Rebuild Project
|
5.000%
|
5/1/35
|
500,000
|
516,356
| |
|
State
Public School Building Authority, PA, Lease
Revenue:
|
|
|
|
| |
|
Philadelphia
SD Project, Series A, Refunding,
AG,
State Aid Withholding |
5.000%
|
6/1/31
|
150,000
|
151,634
| |
|
Philadelphia
SD Project, Series A, Refunding,
AG,
State Aid Withholding |
5.000%
|
6/1/33
|
450,000
|
454,520
| |
|
Total
Pennsylvania |
5,043,199
| ||||
|
Puerto
Rico — 6.1% | |||||
|
Puerto
Rico Commonwealth Aqueduct & Sewer
Authority
Revenue: |
|
|
|
| |
|
Senior
Lien, Series A, Refunding |
5.000%
|
7/1/37
|
1,500,000
|
1,575,302
(d)
| |
|
Senior
Lien, Series A, Refunding |
5.000%
|
7/1/47
|
400,000
|
401,342
(d)
| |
|
Puerto
Rico Commonwealth, GO: |
|
|
|
| |
|
CAB,
Restructured, Series A-1 |
0.000%
|
7/1/33
|
14,271
|
10,415
| |
|
Restructured,
Series A-1 |
5.625%
|
7/1/27
|
12,238
|
12,433
| |
See
Notes to Financial Statements.
12
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Puerto
Rico — continued | |||||
|
Restructured,
Series A-1 |
5.625%
|
7/1/29
|
$12,040
|
$12,657
| |
|
Restructured,
Series A-1 |
5.750%
|
7/1/31
|
11,694
|
12,666
| |
|
Restructured,
Series A-1 |
4.000%
|
7/1/33
|
11,089
|
11,115
| |
|
Restructured,
Series A-1 |
4.000%
|
7/1/35
|
229,968
|
229,414
| |
|
Restructured,
Series A-1 |
4.000%
|
7/1/37
|
740,000
|
731,510
| |
|
Restructured,
Series A-1 |
4.000%
|
7/1/41
|
111,631
|
106,395
| |
|
Restructured,
Series A-1 |
4.000%
|
7/1/46
|
12,097
|
10,729
| |
|
Subseries
CW |
0.000%
|
11/1/43
|
42,605
|
29,451
(b)
| |
|
Puerto
Rico Sales Tax Financing Corp., Sales Tax
Revenue:
|
|
|
|
| |
|
CAB,
Restructured, Series A-1 |
0.000%
|
7/1/27
|
157,000
|
151,784
| |
|
Restructured,
Series A-1 |
4.550%
|
7/1/40
|
50,000
|
50,111
| |
|
Restructured,
Series A-2 |
4.329%
|
7/1/40
|
1,490,000
|
1,485,775
| |
|
Restructured,
Series A-2A |
4.550%
|
7/1/40
|
2,380,000
|
2,385,268
| |
|
Total
Puerto Rico |
7,216,367
| ||||
|
Rhode
Island — 0.2% | |||||
|
Rhode
Island State Health & Educational Building
Corp.,
Student Housing Revenue, Rhode Island
Properties
LLC, Senior Series A, AG |
5.000%
|
7/1/45
|
200,000
|
204,995
| |
|
South
Carolina — 1.3% | |||||
|
Patriots
Energy Group Financing Agency, SC, Gas
Supply
Revenue, Subseries B-2, Refunding (SOFR
x
0.670 + 1.900%) |
4.332%
|
3/1/31
|
250,000
|
259,240
(a)(b)
| |
|
South
Carolina State Jobs - EDA Revenue: |
|
|
|
| |
|
Bon
Secours Mercy Health Inc., Series A,
Refunding
|
4.000%
|
12/1/44
|
500,000
|
475,010
| |
|
International
Paper Company Project, Series A,
Refunding
|
3.950%
|
4/1/33
|
350,000
|
350,195
(c)
| |
|
South
Carolina State Ports Authority Revenue,
Series
2018
|
5.000%
|
7/1/36
|
400,000
|
409,900
(c)
| |
|
Total
South Carolina |
1,494,345
| ||||
|
Tennessee
— 3.2% | |||||
|
Clarksville,
TN, Water, Sewer & Gas Revenue,
Series
A |
4.000%
|
2/1/51
|
750,000
|
692,424
| |
|
Tennessee
State Energy Acquisition Corp.,
Natural
Gas Revenue, Series A-1, Refunding
|
5.000%
|
5/1/28
|
3,000,000
|
3,085,899
(a)(b)
| |
|
Total
Tennessee |
3,778,323
| ||||
|
Texas
— 9.7% | |||||
|
Arlington,
TX, Special Tax Revenue, Subordinated
Lien,
Series C, BAM
|
5.000%
|
2/15/41
|
250,000
|
250,090
| |
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
13
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Texas
— continued | |||||
|
Austin,
TX, Airport System Revenue: |
|
|
|
| |
|
Series
2022 |
5.000%
|
11/15/39
|
$350,000
|
$373,418
(c)
| |
|
Series
B, Refunding |
5.000%
|
11/15/42
|
750,000
|
807,485
(c)
| |
|
Central
Texas Regional Mobility Authority
Revenue,
Senior Lien, Series E
|
5.000%
|
1/1/45
|
500,000
|
514,686
| |
|
Central
Texas Turnpike System Revenue, Second
Tier,
Series C, Refunding
|
5.000%
|
8/15/40
|
300,000
|
326,110
| |
|
Elgin,
TX, ISD, GO, Unlimited Tax School Building
Bonds,
PSF - GTD
|
4.000%
|
8/1/49
|
600,000
|
553,317
| |
|
Galveston,
TX, Wharves & Terminal Revenue,
First
Lien, Series A
|
5.250%
|
8/1/35
|
750,000
|
812,814
(c)
| |
|
Harris
County, TX, Cultural Education Facilities
Finance
Corp., Hospital Revenue, Texas Children’s
Hospital,
Series B, Refunding
|
5.000%
|
10/1/31
|
300,000
|
327,119
(a)(b)
| |
|
Harris
County, TX, GO, Certificates of Obligation
|
4.000%
|
9/15/49
|
1,250,000
|
1,158,345
| |
|
Hays,
TX, ISD, GO, Unlimited Tax School Building
Bonds,
PSF - GTD
|
4.000%
|
2/15/47
|
300,000
|
284,104
| |
|
Houston,
TX, Airport System Revenue: |
|
|
|
| |
|
Special
Facilities, United Airlines Inc., Airport
Improvements
Project |
5.000%
|
7/15/28
|
500,000
|
513,394
(c)
| |
|
Special
Facilities, United Airlines Inc., Terminal
Improvement
Project, Series B |
5.500%
|
7/15/38
|
210,000
|
224,438
(c)
| |
|
Special
Facilities, United Airlines Inc., Terminal
Improvement
Project, Series B-1 |
4.000%
|
7/15/41
|
500,000
|
468,585
(c)
| |
|
Subordinated,
Series A, Refunding |
5.000%
|
7/1/36
|
1,055,000
|
1,084,524
(c)
| |
|
Longview,
TX, ISD, GO, Unlimited Tax School
Building
Bonds, PSF - GTD
|
4.000%
|
2/15/49
|
400,000
|
375,925
| |
|
Love
Field, TX, Airport Modernization Corp.,
General
Airport Revenue, Series 2017
|
5.000%
|
11/1/31
|
90,000
|
90,646
(c)
| |
|
Mission,
TX, EDC, Solid Waste Disposal Revenue,
Graphic
Packaging International, LLC Project,
Green
Bonds
|
5.000%
|
6/1/30
|
150,000
|
154,796
(a)(b)(c)
| |
|
Newark,
TX, Higher Education Finance Corp.,
Education
Revenue, TLC Academy, Series A
|
4.000%
|
8/15/31
|
175,000
|
171,127
| |
|
Texas
State Private Activity Bond Surface
Transportation
Corp. Revenue, Senior Lien, NTE
Mobility
Partners Segments 3 LLC, Refunding
|
5.500%
|
6/30/41
|
300,000
|
315,572
(c)
| |
|
Texas
State Transportation Commission Revenue,
Highway
Improvement, GO, Series 2026,
Refunding
|
5.000%
|
4/1/44
|
2,500,000
|
2,760,942
| |
|
Total
Texas |
11,567,437
| ||||
See
Notes to Financial Statements.
14
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Utah
— 0.3% | |||||
|
Utah
State Charter School Finance Authority,
Charter
School Revenue, Syracuse Arts Academy
Project,
UT CSCE
|
5.000%
|
4/15/37
|
$250,000
|
$250,125
| |
|
Utah
State Infrastructure Agency,
Telecommunications
Revenue, Series 2021
|
4.000%
|
10/15/36
|
100,000
|
97,412
| |
|
Total
Utah |
347,537
| ||||
|
Virginia
— 3.2% | |||||
|
Arlington
County, VA, IDA, Hospital Revenue,
Virginia
Hospital Center, Refunding
|
5.000%
|
7/1/35
|
200,000
|
212,322
| |
|
Isle
of Wight County, VA, EDA Revenue, Riverside
Health
System, Series 2023, AG
|
5.250%
|
7/1/48
|
250,000
|
263,534
| |
|
Virginia
Beach, VA, Development Authority,
Residential
Care Facility Revenue, Westminster-
Canterbury
on Chesapeake Bay, Refunding
|
5.000%
|
9/1/40
|
1,250,000
|
1,261,520
| |
|
Virginia
State Small Business Financing Authority
Revenue:
|
|
|
|
| |
|
Senior
Lien, 95 Express Lanes LLC Project,
Refunding
|
5.000%
|
1/1/38
|
1,250,000
|
1,307,771
(c)
| |
|
Senior
Lien, I-495 High Occupancy Toll Lanes
Project,
Refunding |
5.000%
|
12/31/47
|
500,000
|
506,125
(c)
| |
|
The
Obligated Group of National Senior
Campuses
Inc., Series A, Refunding |
5.000%
|
1/1/31
|
250,000
|
262,293
| |
|
Total
Virginia |
3,813,565
| ||||
|
Washington
— 0.9% | |||||
|
Port
of Seattle, WA, Intermediate Lien Revenue,
Series
B, Refunding |
5.000%
|
8/1/37
|
1,000,000
|
1,073,041
(c)
| |
|
West
Virginia — 0.3% | |||||
|
West
Virginia State EDA Revenue: |
|
|
|
| |
|
Solid
Waste Disposal Facility, Commercial
Metals
Co. Project |
4.625%
|
5/15/32
|
150,000
|
153,895
(a)(b)(c)
| |
|
Solid
Waste Disposal Facility, Core Natural
Resources
Inc. Project, Refunding |
5.450%
|
3/27/35
|
170,000
|
184,705
(a)(b)(c)(d)
| |
|
Total
West Virginia |
338,600
| ||||
|
Wisconsin
— 0.1% | |||||
|
Public
Finance Authority, WI, Revenue, The
Carmelite
System Inc. Obligated Group,
Refunding
|
5.000%
|
1/1/45
|
150,000
|
151,451
| |
|
| |||||
|
Total
Municipal Bonds (Cost — $151,505,716) |
153,125,850
| ||||
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
15
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
| |||||
|
Municipal
Bonds Deposited in Tender Option Bond Trusts(f)
— 4.6% | |||||
|
New
York — 4.6% | |||||
|
New
York City, NY, Municipal Water Finance
Authority,
Water & Sewer System Revenue,
Second
General Resolution Fiscal 2023,
Subseries
AA-3, Refunding
|
5.000%
|
6/15/47
|
$1,625,000
|
$1,705,185
| |
|
New
York State Dormitory Authority, State
Personal
Income Tax Revenue, Series A,
Refunding
|
4.000%
|
3/15/45
|
1,925,000
|
1,855,694
| |
|
New
York State Urban Development Corp., State
Sales
Tax Revenue, Series A
|
5.000%
|
3/15/49
|
1,900,000
|
1,970,855
| |
|
| |||||
|
Total
Municipal Bonds Deposited in Tender Option Bond Trusts
(Cost
— $5,517,919) |
5,531,734
| ||||
|
Total
Investments before Short-Term Investments (Cost — $157,023,635) |
158,657,584
| ||||
|
| |||||
|
Short-Term
Investments — 6.8% | |||||
|
Municipal
Bonds — 6.7% | |||||
|
Arizona
— 0.1% | |||||
|
Arizona
State IDA, Hospital Revenue, Phoenix
Children’s
Hospital, Series A, Refunding, LOC - TD
Bank
N.A. |
2.800%
|
2/1/48
|
145,000
|
145,000
(g)(h)
| |
|
California
— 0.2% | |||||
|
San
Francisco, CA, City & County Airport
Commission
of International Airport Revenue,
Second
Series B, LOC - Barclays Bank PLC |
1.150%
|
5/1/58
|
300,000
|
300,000
(g)(h)
| |
|
Colorado
— 0.2% | |||||
|
Colorado
State Educational & Cultural Facilities
Authority
Revenue, National Jewish Federation
Bond
Program, Series F-2, LOC - TD Bank N.A. |
2.800%
|
7/1/41
|
200,000
|
200,000
(g)(h)
| |
|
Connecticut
— 0.2% | |||||
|
Connecticut
State Housing Finance Authority
Revenue,
Housing Mortgage Finance, Series C,
Refunding,
SPA - TD Bank N.A. |
1.570%
|
11/15/48
|
250,000
|
250,000
(g)(h)
| |
|
Florida
— 0.1% | |||||
|
Highlands
County, FL, Health Facilities Authority
Hospital
Revenue, Adventist Health System/
Sunbelt
Obligated Group, Series I-3, Refunding |
1.520%
|
11/15/33
|
100,000
|
100,000
(g)(h)
| |
|
Maryland
— 0.4% | |||||
|
Maryland
State Health & Higher EFA Revenue,
The
Johns Hopkins Health System, Series A,
Refunding,
LOC - TD Bank N.A. |
2.750%
|
6/1/48
|
500,000
|
500,000
(g)(h)
| |
See
Notes to Financial Statements.
16
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Municipal
Bonds — continued | |||||
|
Massachusetts
— 0.1% | |||||
|
Massachusetts
State HEFA Revenue, Baystate
Medical
Center, Series K-1, LOC - TD Bank N.A. |
2.800%
|
7/1/39
|
$100,000
|
$100,000
(g)(h)
| |
|
Mississippi
— 1.9% | |||||
|
Mississippi
State Business Finance Corp., Gulf
Opportunity
Zone, IDR: |
|
|
|
| |
|
Chevron
USA Inc. Project, Series A |
2.850%
|
11/1/35
|
200,000
|
200,000
(g)(h)
| |
|
Chevron
USA Inc. Project, Series C |
2.850%
|
12/1/30
|
1,400,000
|
1,400,000
(g)(h)
| |
|
Chevron
USA Inc. Project, Series E |
2.850%
|
12/1/30
|
400,000
|
400,000
(g)(h)
| |
|
Chevron
USA Inc. Project, Series L |
2.850%
|
11/1/35
|
300,000
|
300,000
(g)(h)
| |
|
Total
Mississippi |
2,300,000
| ||||
|
New
York — 1.3% | |||||
|
MTA,
NY, Dedicated Tax Fund Revenue, Series
A-1,
Refunding, LOC - TD Bank N.A.
|
2.800%
|
11/1/31
|
400,000
|
400,000
(g)(h)
| |
|
New
York City, NY, GO, Subseries E-5, LOC - TD
Bank
N.A.
|
2.800%
|
3/1/48
|
500,000
|
500,000
(g)(h)
| |
|
New
York State HFA Revenue: |
|
|
|
| |
|
363
West 30th Street, Series A, LIQ - FHLMC,
LOC
- FHLMC |
1.690%
|
11/1/32
|
100,000
|
100,000
(c)(g)(h)
| |
|
Weyant
Green Apartments, Series A, LIQ -
FNMA,
LOC - FNMA |
1.450%
|
5/15/37
|
500,000
|
500,000
(c)(g)(h)
| |
|
Total
New York |
1,500,000
| ||||
|
Ohio
— 0.2% | |||||
|
Franklin
County, OH, Hospital Revenue,
Nationwide
Children’s Hospital Project, Series B,
Refunding,
SPA - JPMorgan Chase & Co. |
2.850%
|
11/1/42
|
300,000
|
300,000
(g)(h)
| |
|
Pennsylvania
— 1.3% | |||||
|
Northampton
County, PA, General Purpose
Authority,
Hospital Revenue, St. Luke’s University
Health
Network Project, Series B, LOC - TD Bank
N.A.
|
2.800%
|
8/15/54
|
1,000,000
|
1,000,000
(g)(h)
| |
|
Philadelphia,
PA, IDA, Gift of Life Donor Program
Project,
LOC - TD Bank N.A.
|
1.550%
|
12/1/34
|
300,000
|
300,000
(g)(h)
| |
|
Philadelphia,
PA, IDA Revenue, The Children’s
Hospital
of Philadelphia Project, Series B-1, SPA -
JPMorgan
Chase & Co.
|
2.820%
|
7/1/54
|
200,000
|
200,000
(g)(h)
| |
|
Total
Pennsylvania |
1,500,000
| ||||
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
17
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
(Percentages shown
based on Fund net assets)
|
Security
|
|
Rate
|
Maturity
Date
|
Face
Amount
|
Value
|
|
Municipal
Bonds — continued | |||||
|
Texas
— 0.2% | |||||
|
Tarrant
County, TX, Cultural Education Facilities
Finance
Corp., Hospital Revenue, Baylor Health
Care
System Project, Series C, Refunding, LOC -
TD
Bank N.A. |
2.450%
|
11/15/50
|
$200,000
|
$200,000
(g)(h)
| |
|
Wisconsin
— 0.5% | |||||
|
University
of Wisconsin Hospitals & Clinics
Authority
Revenue, Series B, Refunding, SPA -
JPMorgan
Chase & Co. |
2.850%
|
4/1/48
|
665,000
|
665,000
(g)(h)
| |
|
| |||||
|
Total
Municipal Bonds (Cost — $8,060,000) |
8,060,000
| ||||
|
|
|
|
|
Shares
|
|
|
Money
Market Funds — 0.1% | |||||
|
Western
Asset Premier Institutional Government
Reserves,
Premium Shares (Cost — $91,830)
|
3.568%
|
|
91,830
|
91,830
(i)(j)
| |
|
| |||||
|
Total
Short-Term Investments (Cost — $8,151,830) |
8,151,830
| ||||
|
Total
Investments — 140.0% (Cost — $165,175,465) |
166,809,414
| ||||
|
Variable
Rate Demand Preferred Stock, at Liquidation Value — (39.8)% |
(47,400,000
) | ||||
|
TOB
Floating Rate Notes — (2.5)% |
(3,000,000
) | ||||
|
Other
Assets in Excess of Other Liabilities — 2.3% |
2,712,185
| ||||
|
Total
Net Assets Applicable to Common Shareholders — 100.0% |
$119,121,599
| ||||
See
Notes to Financial Statements.
18
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Western
Asset Intermediate Muni Fund Inc.
|
(a)
|
Maturity
date shown represents the mandatory tender date. |
|
(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)
|
Income
from this issue is considered a preference item for purposes of calculating the alternative minimum tax
(“AMT”).
|
|
(d)
|
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. |
|
(e)
|
Pre-Refunded
bonds are generally escrowed with U.S. government obligations and/or U.S. government agency
securities.
|
|
(f)
|
Represents
securities deposited into a special purpose entity, referred to as a Tender Option Bond (“TOB”)
trust
(Note
1). |
|
(g)
|
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. |
|
(h)
|
Maturity
date shown is the final maturity date. The security may be sold back to the issuer before final maturity. |
|
(i)
|
Rate
shown is one-day yield as of the end of the reporting period.
|
|
(j)
|
In
this instance, as defined in the Investment Company Act of 1940, as amended (the “1940
Act”),
an “Affiliated
Company”
represents Fund ownership of at least 5% of the outstanding voting securities of an issuer, or a
company
which is under common ownership or control with the Fund. At May 31, 2026, the total market value of
investments
in Affiliated Companies was $91,830 and the cost was $91,830 (Note
9). |
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
19
Schedule
of investments (unaudited) (cont’d)
May 31, 2026
Western
Asset Intermediate Muni Fund Inc.
|
Abbreviation(s)
used in this schedule: | ||
|
AG
|
—
|
Assured
Guaranty — Insured
Bonds |
|
BAM
|
—
|
Build
America Mutual — Insured
Bonds |
|
CAB
|
—
|
Capital
Appreciation Bonds |
|
CSCE
|
—
|
Charter
School Credit Enhancement |
|
DFA
|
—
|
Development
Finance Agency |
|
EDA
|
—
|
Economic
Development Authority |
|
EDC
|
—
|
Economic
Development Corporation |
|
EFA
|
—
|
Educational
Facilities Authority |
|
FHLMC
|
—
|
Federal
Home Loan Mortgage Corporation |
|
FNMA
|
—
|
Federal
National Mortgage Association |
|
GO
|
—
|
General
Obligation |
|
GTD
|
—
|
Guaranteed
|
|
HEFA
|
—
|
Health
& Educational Facilities Authority |
|
HFA
|
—
|
Housing
Finance Agency |
|
IDA
|
—
|
Industrial
Development Authority |
|
IDR
|
—
|
Industrial
Development Revenue |
|
ISD
|
—
|
Independent
School District |
|
LIQ
|
—
|
Liquidity
Facility |
|
LOC
|
—
|
Letter
of Credit |
|
MFA
|
—
|
Municipal
Finance Authority |
|
MTA
|
—
|
Metropolitan
Transportation Authority |
|
PCFA
|
—
|
Pollution
Control Financing Authority |
|
PEA
|
—
|
Public
Energy Authority |
|
PSF
|
—
|
Permanent
School Fund |
|
SD
|
—
|
School
District |
|
SOFR
|
—
|
Secured
Overnight Financing Rate |
|
SPA
|
—
|
Standby
Bond Purchase Agreement — Insured
Bonds |
|
TFA
|
—
|
Transitional
Finance Authority |
|
USD
|
—
|
Unified
School District |
See
Notes to Financial Statements.
20
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Statement
of assets and liabilities (unaudited)
May 31, 2026
|
Assets:
|
|
|
Investments
in unaffiliated securities, at value (Cost — $165,083,635) |
$166,717,584
|
|
Investments
in affiliated securities, at value (Cost — $91,830) |
91,830
|
|
Cash
|
7
|
|
Interest
receivable |
2,337,161
|
|
Dividends
receivable from affiliated investments |
149
|
|
Prepaid
expenses |
60,507
|
|
Total
Assets |
169,207,238
|
|
Liabilities:
|
|
|
Variable
Rate Demand Preferred Stock ($25,000 liquidation value per share; 1,896 shares
issued
and outstanding) (net of deferred offering costs of $517,756) (Note
5) |
46,882,244
|
|
TOB
Floating Rate Notes (Note
1) |
3,000,000
|
|
Investment
management fee payable |
77,561
|
|
Interest
expense payable |
29,083
|
|
Accrued
expenses |
96,751
|
|
Total
Liabilities |
50,085,639
|
|
Total
Net Assets Applicable to Common Shareholders |
$119,121,599
|
|
Net
Assets Applicable to Common Shareholders: |
|
|
Common
stock par value ($0.001 par value; 14,082,315 shares issued and outstanding;
100,000,000
common shares authorized)
|
$14,082
|
|
Paid-in
capital in excess of par value |
126,502,588
|
|
Total
distributable earnings (loss)
|
(7,395,071
) |
|
Total
Net Assets Applicable to Common Shareholders |
$119,121,599
|
|
Common
Shares Outstanding |
14,082,315
|
|
Net
Asset Value Per Common Share |
$8.46
|
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
21
Statement
of operations (unaudited)
For the Six Months Ended May 31,
2026
|
Investment
Income: |
|
|
Interest
|
$3,473,437
|
|
Dividends
from affiliated investments |
865
|
|
Total
Investment Income |
3,474,302
|
|
Expenses:
|
|
|
Distributions
to Variable Rate Demand Preferred Stockholders (Notes
1 and 5) |
599,448
|
|
Investment
management fee (Note
2) |
459,062
|
|
Liquidity
fees (Note
5) |
183,050
|
|
Interest
expense (Note 1)
|
44,444
|
|
Rating
agency fees |
32,929
|
|
Legal
fees |
32,635
|
|
Fund
accounting fees |
30,609
|
|
Audit
and tax fees |
24,919
|
|
Directors’
fees |
18,293
|
|
Transfer
agent fees |
16,011
|
|
Amortization
of Variable Rate Demand Preferred Stock offering costs (Note
5) |
13,766
|
|
Shareholder
reports |
13,009
|
|
Remarketing
fees (Note
5) |
11,981
|
|
Stock
exchange listing fees |
6,240
|
|
Custody
fees |
587
|
|
Insurance
|
570
|
|
Miscellaneous
expenses |
12,883
|
|
Total
Expenses |
1,500,436
|
|
Less:
Fee waivers and/or expense reimbursements (Note
2) |
(26
) |
|
Net
Expenses |
1,500,410
|
|
Net
Investment Income |
1,973,892
|
|
Realized
and Unrealized Gain (Loss) on Investments (Notes
1 and 3): | |
|
Net
Realized Loss From Unaffiliated Investment Transactions
|
(24,325
) |
|
Change
in Net Unrealized Appreciation (Depreciation) From Unaffiliated
Investments
|
265,945
|
|
Net
Gain on Investments
|
241,620
|
|
Increase
in Net Assets Applicable to Common Shareholders From Operations |
$2,215,512
|
See
Notes to Financial Statements.
22
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Statements
of changes in net assets
|
For
the Six Months Ended May 31, 2026 (unaudited)
and
the Year Ended November 30, 2025 |
2026
|
2025
|
|
Operations:
|
|
|
|
Net
investment income
|
$1,973,892
|
$3,942,341
|
|
Net
realized loss
|
(24,325
) |
(293,664
) |
|
Change
in net unrealized appreciation (depreciation)
|
265,945
|
(1,967,769
) |
|
Increase
in Net Assets Applicable to Common Shareholders
From
Operations |
2,215,512
|
1,680,908
|
|
Distributions
to Common Shareholders From (Note
1): |
|
|
|
Total
distributable earnings |
(3,548,743
) |
(3,980,511
) |
|
Return
of capital |
—
|
(3,116,976
) |
|
Decrease
in Net Assets From Distributions to Common
Shareholders
|
(3,548,743
) |
(7,097,487
) |
|
Decrease
in Net Assets Applicable to Common Shareholders |
(1,333,231
) |
(5,416,579
) |
|
Net
Assets Applicable to Common Shareholders: |
|
|
|
Beginning
of period |
120,454,830
|
125,871,409
|
|
End
of period |
$119,121,599
|
$120,454,830
|
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
23
Statement
of cash flows (unaudited)
For the Six Months Ended May 31,
2026
|
Increase
(Decrease) in Cash: |
|
|
Cash
Flows from Operating Activities: |
|
|
Net
increase in net assets applicable to common shareholders resulting from operations |
$2,215,512
|
|
Adjustments
to reconcile net increase in net assets resulting from operations to net cash
provided
(used) by operating activities: |
|
|
Purchases
of portfolio securities |
(9,150,306
) |
|
Sales
of portfolio securities |
10,359,227
|
|
Net
purchases, sales and maturities of short-term investments |
498,146
|
|
Net
amortization of premium (accretion of discount) |
392,027
|
|
Decrease
in interest receivable |
118,018
|
|
Increase
in prepaid expenses |
(39,929
) |
|
Decrease
in dividends receivable from affiliated investments |
26
|
|
Amortization
of preferred stock offering costs |
13,766
|
|
Increase
in investment management fee payable |
1,552
|
|
Decrease
in Directors’ fees payable |
(1,023
) |
|
Decrease
in interest expense payable |
(1,018
) |
|
Decrease
in accrued expenses |
(24,172
) |
|
Net
realized loss on investments |
24,325
|
|
Change
in net unrealized appreciation (depreciation) of investments |
(265,945
) |
|
Net
Cash Provided in Operating Activities* |
4,140,206
|
|
Cash
Flows from Financing Activities: |
|
|
Distributions paid on common stock (net of distributions payable)
|
(4,140,200
) |
|
Net
Cash Used by Financing Activities |
(4,140,200
) |
|
Net
Increase in Cash and Restricted Cash |
6
|
|
Cash
and restricted cash at beginning of period |
1
|
|
Cash
and restricted cash at end of period |
$7
|
|
*
|
Included
in operating expenses is $45,462 paid for interest on borrowings and $599,448 paid for distributions to
Variable
Rate Demand Preferred Stockholders. |
The following table provides a reconciliation
of cash and restricted cash reported within the Statement of Assets
and
Liabilities that sums to the total of such amounts shown on the Statement of Cash Flows.
|
|
May
31, 2026 |
|
Cash
|
$7
|
|
Restricted
cash |
—
|
|
Total
cash and restricted cash shown in the Statement of Cash Flows |
$7
|
See
Notes to Financial Statements.
24
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Financial
highlights
|
For
a common share of capital stock outstanding throughout each year ended November 30,
unless
otherwise noted: | ||||||
|
|
20261,2
|
20251
|
20241
|
20231
|
20221
|
20211
|
|
Net
asset value, beginning of period |
$8.55
|
$8.94
|
$8.85
|
$8.90
|
$10.41
|
$10.25
|
|
Income
(loss) from operations: | ||||||
|
Net
investment income |
0.14
|
0.28
|
0.27
|
0.19
|
0.25
|
0.30
|
|
Net
realized and unrealized gain (loss) |
0.02
|
(0.17
) |
0.29
|
0.04
|
(1.48
) |
0.14
|
|
Distributions
paid to Auction Rate
Cumulative
Preferred Stockholders
from
net investment income |
—
|
—
|
—
|
(0.00
)3
|
(0.00
)3
|
(0.00
)3
|
|
Total
income (loss) from
operations
|
0.16
|
0.11
|
0.56
|
0.23
|
(1.23)
|
0.44
|
|
Less
distributions to common
shareholders
from: |
|
|
|
|
|
|
|
Net
investment income |
(0.25
)4
|
(0.28
) |
(0.28
) |
(0.22
) |
(0.28
) |
(0.28
) |
|
Return
of capital |
—
|
(0.22
) |
(0.19
) |
(0.06
) |
—
|
—
|
|
Total
distributions to
common
shareholders
|
(0.25
) |
(0.50
) |
(0.47
) |
(0.28
) |
(0.28
) |
(0.28
) |
|
Net
increase from repurchase of
Auction
Rate Cumulative Preferred
Shares
|
—
|
—
|
—
|
0.00
3
|
0.00
3
|
—
|
|
Net
asset value, end of period |
$8.46
|
$8.55
|
$8.94
|
$8.85
|
$8.90
|
$10.41
|
|
Market
price, end of period |
$7.82
|
$7.75
|
$8.16
|
$7.48
|
$7.72
|
$9.75
|
|
Total
return, based on NAV5,6
|
1.93
% |
1.47
% |
6.47
%7
|
2.65
%8,9
|
(11.87
)%8
|
4.33
% |
|
Total
return, based on Market
Price10
|
4.22
% |
1.35
% |
15.74
% |
0.54
% |
(18.08
)% |
10.72
% |
|
Net
assets applicable to common
shareholders,
end of period
(millions)
|
$119
|
$120
|
$126
|
$125
|
$125
|
$147
|
|
Ratios
to average net assets:11
| ||||||
|
Gross
expenses12
|
2.51
%13
|
2.60
% |
2.69
%7
|
3.01
%9
|
1.70
% |
1.29
% |
|
Net
expenses12,14,15
|
2.51
13
|
2.60
|
2.69
7
|
3.01
9
|
1.70
|
1.29
|
|
Net
investment income |
3.30
13
|
3.28
|
2.96
7
|
2.19
9
|
2.72
|
2.82
|
|
Portfolio
turnover rate |
6
% |
6
% |
14
% |
26
% |
29
% |
11
% |
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
25
Financial
highlights (cont’d)
|
For
a common share of capital stock outstanding throughout each year ended November 30,
unless
otherwise noted: | ||||||
|
|
20261,2
|
20251
|
20241
|
20231
|
20221
|
20211
|
|
Supplemental
data: |
|
|
|
|
|
|
|
Auction
Rate Cumulative Preferred
Stock
at Liquidation Value, End of
Period
(000s) |
—
|
—
|
—
|
—
|
$500
|
$600
|
|
Variable
Rate Demand Preferred Stock
at
Liquidation Value, End of Period
(000s)
|
$47,400
|
$47,400
|
$47,400
|
$47,400
|
$47,400
|
$47,400
|
|
Asset
Coverage Ratio for Auction
Rate
Cumulative Preferred Stock and
Variable
Rate Demand Preferred
Stock16
|
351
% |
354
% |
366
% |
363
% |
362
% |
405
% |
|
Asset
Coverage, per $25,000
Liquidation
Value per Share of
Auction
Rate Cumulative Preferred
Stock
and Variable Rate Demand
Preferred
Stock16
|
$87,828
|
$88,531
|
$91,388
|
$90,751
|
$90,441
|
$101,366
|
See
Notes to Financial Statements.
26
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
|
1
|
Per
share amounts have been calculated using the average shares method. |
|
2
|
For
the six months ended May 31, 2026 (unaudited). |
|
3
|
Amount
represents less than $0.005 or greater than $(0.005) per share. |
|
4
|
The
actual source of the Fund’s current fiscal year distributions may be from net investment income, return of
capital
or a combination of both. Shareholders will be informed of the tax characteristics of the distributions after
the
close of the fiscal year. |
|
5
|
The
total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of
future
results. Total returns for periods of less than one year are not annualized. |
|
6
|
Performance
figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements.
In
the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total
return
would have been lower. Past performance is no guarantee of future results. Total returns for periods of less
than
one year are not annualized. |
|
7
|
Ratios
and total return for the year ended November 30, 2024, include the write-off of certain non-recurring fees
incurred
by the Fund during the period. Without these items, the gross and net expense ratios and the net
investment
income ratio would have been 2.81%, 2.81% and 2.84%, respectively, and total return based on NAV
would
have been 6.35%. |
|
8
|
The
total return based on NAV reflects the impact of the repurchase by the Fund of a portion of its Auction Rate
Cumulative
Preferred Shares at 95% of the per share liquidation preference. Absent this transaction, the total
return
based on NAV would have been the same. |
|
9
|
Ratios
and total return for the year ended November 30, 2023, include certain non-recurring fees incurred by the
Fund
during the period. Without these fees, the gross and net expense ratios and the net investment income ratio
would
have been 2.75%, 2.75% and 2.46%, respectively, and total return based on NAV would have been 2.88%. |
|
10
|
The
total return calculation assumes that distributions are reinvested in accordance with the Fund’s dividend
reinvestment
plan. Past performance is no guarantee of future results. Total returns for periods of less than one
year
are not annualized. |
|
11
|
Calculated
on the basis of average net assets of common stock shareholders. Ratios do not reflect the effect of
dividend
payments to auction rate cumulative preferred stockholders. |
|
12
|
Includes
expenses related to borrowings of 1.43%, 1.56%, 1.74%, 1.68%, 0.72% and 0.33%, for the six months
ended
May 31, 2026, and years ended November 30, 2025, 2024, 2023, 2022 and 2021, respectively. |
|
13
|
Annualized.
|
|
14
|
The
manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management
fee
payable in connection with any investment in an affiliated money market fund. |
|
15
|
Reflects
fee waivers and/or expense reimbursements. |
|
16
|
Represents
value of net assets plus the liquidation value of the auction rate cumulative preferred stock and
variable
rate demand preferred stock, if any, at the end of the period divided by the liquidation value of the auction
rate
cumulative preferred stock and variable rate demand preferred stock, if any, outstanding at the end of the
period.
|
See
Notes to Financial Statements.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
27
Notes
to financial statements (unaudited)
1. Organization
and significant accounting policies
Western Asset Intermediate Muni
Fund Inc. (the “Fund”) was incorporated in Maryland on December
19, 1991, and is registered as a diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended (the “1940 Act”). The Board
of Directors (the “Board”)
authorized 100 million shares of $0.001 par value common stock.
The Fund’s investment objective is to provide common shareholders a high level of current
income exempt from regular federal income taxes consistent with prudent investing. Under
normal market conditions, the Fund invests at least 80% of its total assets in municipal
obligations. In addition, under normal market conditions, the Fund will invest at least
80% of its total assets in debt securities that are, at the time of investment, rated investment
grade by a nationally recognized statistical rating organization or, if unrated, of equivalent
quality as determined by the investment manager. For credit ratings purposes, pre-refunded
bonds are deemed to be unrated. The subadviser determines the credit quality of
prefunded bonds based on the quality of the escrowed collateral and such other factors as
the subadviser deems appropriate.
The Fund follows the accounting
and reporting guidance in Financial Accounting Standards Board
(“FASB”)
Accounting Standards Codification Topic 946, Financial Services –
Investment Companies
(“ASC
946”).
The following are significant accounting policies consistently
followed by the Fund and are in conformity with U.S. generally accepted accounting
principles (“GAAP”), including, but not limited to, ASC 946. Estimates and assumptions
are required to be made regarding assets, liabilities and changes in net assets resulting
from operations when financial statements are prepared. Changes in the economic environment,
financial markets and any other parameters used in determining these estimates
could cause actual results to differ. Subsequent events have been evaluated through
the date the financial statements were issued.
(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 typically 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. Investments in open-end
funds are valued at the closing net asset value per share of each fund on the day of valuation.
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
28
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
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 Board.
Pursuant to policies adopted by
the Board, the Fund’s manager has been designated as the valuation
designee and is responsible for the oversight of the daily valuation process. The Fund’s
manager is assisted by the Global Fund Valuation Committee (the “Valuation
Committee”).
The Valuation Committee is responsible for making fair value determinations, evaluating
the effectiveness of the Fund’s pricing policies, and reporting to the Fund’s manager
and the Board. 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,
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 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.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
29
Notes
to financial statements (unaudited) (cont’d)
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 — unadjusted 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
|
|
Long-Term
Investments†: |
|
|
|
|
|
Municipal
Bonds |
—
|
$153,125,850
|
—
|
$153,125,850
|
|
Municipal
Bonds Deposited in
Tender
Option Bond Trusts |
—
|
5,531,734
|
—
|
5,531,734
|
|
Total
Long-Term Investments |
—
|
158,657,584
|
—
|
158,657,584
|
|
Short-Term
Investments†: |
|
|
|
|
|
Municipal
Bonds |
—
|
8,060,000
|
—
|
8,060,000
|
|
Money
Market Funds |
$91,830
|
—
|
—
|
91,830
|
|
Total
Short-Term Investments |
91,830
|
8,060,000
|
—
|
8,151,830
|
|
Total
Investments |
$91,830
|
$166,717,584
|
—
|
$166,809,414
|
|
†
|
See
Schedule of Investments for additional detailed categorizations. |
(b) Tender
option bonds. The
Fund may enter into tender option bond (“TOB”) transactions and
may invest in inverse floating rate instruments (“Inverse Floaters”) issued in TOB transactions.
The Fund may participate either in structuring an Inverse Floater or purchasing an
Inverse Floater in the secondary market. When structuring an Inverse Floater, the Fund deposits
securities (typically municipal bonds or other municipal securities) (the “Underlying Bonds”)
into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues
floating rate notes (“Floaters”) to third parties and residual interest, Inverse Floaters, to
the Fund. The Floaters issued by the TOB trust have interest rates which reset weekly and
provide the holders of the Floaters the option to tender their notes back to the TOB trust for
redemption at par at each reset date. The net proceeds of the sale of the Floaters, after expenses,
are received by the Fund and may be invested in additional securities. The
30
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Inverse Floaters
are inverse floating rate debt instruments, as the return on those bonds is inversely
related to changes in a specified interest rate. Distributions on any Inverse Floaters
paid to the Fund will be reduced or, in the extreme, eliminated as short-term interest
rates rise and will increase when such interest rates fall. Floaters issued by a TOB trust
may be senior to the Inverse Floaters held by the Fund. The value and market for Inverse
Floaters can be volatile, and Inverse Floaters can have limited liquidity.
An investment in an Inverse Floater
structured by the Fund is accounted for as a secured borrowing.
The Underlying Bonds deposited into the TOB trust are included in the Fund’s Schedule
of Investments and a liability for Floaters (TOB floating rate notes) issued by the TOB
trust is recognized in the Fund’s Statement of Assets and Liabilities. The carrying amount
of the TOB trust’s floating rate note obligations as reported on the Statement of Assets
and Liabilities approximates its fair value. Interest income, including amortization, on
the Underlying Bonds is recognized in the Fund’s Statements of Operations. Interest paid to
holders of the Floaters, as well as other expenses related to administration, liquidity, remarketing
and trustee services of the TOB trust, are recognized in Interest expense in the Fund’s
Statement of Operations. For the six months
ended May 31, 2026, the average daily amount of floating
rate notes outstanding was $3,000,000 and weighted average interest rate
was 2.93%.
(c) Net
asset value. The
net asset value (“NAV”) of the Fund’s common stock is determined
no less frequently than the close of business on the Fund’s last business day of each
week (generally Friday) and on the last business day of the month. It is determined by dividing
the value of the net assets available to common shareholders by the total number of
shares of common stock outstanding. For the purpose of determining the NAV per share of
the common stock, the value of the Fund’s net assets shall be deemed to equal the value of
the Fund’s assets less the Fund’s liabilities including the aggregate liquidation value (i.e., $25,000
per outstanding share) of the Variable Rate Demand Preferred Stock (“VRDPS”),
net of the deferred offering costs.
(d) Cash
flow information. The
Fund invests in securities and distributes dividends from net
investment income and net realized gains, which are paid in cash and may be reinvested
at the discretion of shareholders. These activities are reported in the Statements of
Changes in Net Assets and additional information on cash receipts and cash payments is presented
in the Statement of Cash Flows.
(e) Security
transactions and investment income. Security
transactions are accounted for on a trade date basis.
Interest income (including interest income from payment-in-kind securities)
is recorded on the accrual basis. Amortization of premiums and accretion of discounts
on debt securities are recorded to interest income over the lives of the respective securities,
except for premiums on certain callable debt securities, which are amortized to the
earliest call date. The cost of investments sold is determined by use of the specific identification
method. To the extent any issuer defaults or a credit event occurs that impacts
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
31
Notes
to financial statements (unaudited) (cont’d)
the issuer,
the Fund may halt any additional interest income accruals and consider the realizability
of interest accrued up to the date of default or credit event.
(f) Distributions
to shareholders. Distributions
to common shareholders from net investment income of the
Fund, if any, are declared quarterly and paid on a monthly basis. Distributions
to common shareholders of net realized gains, if any, are taxable and are declared
at least annually. The actual source of the Fund’s monthly distribution may be from net
investment income, realized capital gains, return of capital or a combination of such amounts.
Shareholders will be informed of the tax characteristics of the distributions after the
close of the fiscal year. The Fund intends to satisfy conditions that will enable interest from
municipal securities, which is exempt from federal and certain state income taxes, to retain
such tax-exempt status when distributed to the common shareholders of the Fund. Distributions
to common shareholders of the Fund are recorded on the ex-dividend date and are
determined in accordance with income tax regulations, which may differ from GAAP.
Distributions to holders of VRDPS
are accrued on a daily basis and paid monthly as described
in Note 5 and are treated as an operating expense as required by GAAP. For tax purposes,
the payments made to the holders of the Fund’s VRDPS are treated as dividends or
distributions.
(g) Federal
and other taxes. It
is the Fund’s policy to comply with the federal income and excise
tax requirements of the Internal Revenue Code of 1986, as amended (the “Code”), applicable
to regulated investment companies. Accordingly, the Fund intends to distribute its
taxable income and net realized gains, if any, to shareholders in accordance with timing requirements
imposed by the Code. Therefore, no federal or state income tax provision is required
in the Fund’s financial statements.
Management has analyzed the Fund’s
tax positions taken on income tax returns for all open tax
years and has concluded that as of November 30, 2025, no provision for income tax is required
in the Fund’s financial statements. The Fund’s federal and state income and federal excise
tax returns for the prior three fiscal years are subject to examination by the Internal Revenue
Service and state departments of revenue.
(h) Reclassification. GAAP
requires that certain components of net assets be reclassified to
reflect permanent differences between financial and tax reporting. These reclassifications
have no effect on net assets or net asset value per share.
2. Investment
management agreement and other transactions with affiliates
Franklin Templeton Fund Adviser,
LLC (“FTFA”) is
the Fund’s investment manager and Western Asset
Management Company, LLC (“Western Asset”) is the Fund’s subadviser. FTFA
and Western Asset are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin
Resources”).
32
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
FTFA provides
administrative and certain oversight services to the Fund. The Fund pays FTFA an
investment management fee, calculated daily and paid monthly, at an annual rate of 0.55%
of the Fund’s average daily net assets. For the purposes of calculating this fee, the aggregate
liquidation value of the preferred stock is not deducted in determining the Fund’s average
daily net assets.
FTFA delegates to Western Asset
the day-to-day portfolio management of the Fund. For its services,
FTFA pays Western Asset monthly 70% of the net management fee it receives from
the Fund.
The manager has agreed to waive
the Fund’s management fee to an extent sufficient to offset
the net management fee payable in connection with any investment in an affiliated money
market fund (the “affiliated money market fund waiver”).
During the six months
ended May 31, 2026, fees waived and/or expenses reimbursed amounted
to $26, all of which was an affiliated money market fund waiver.
All officers and one Director of
the Fund are employees of Franklin Resources or its affiliates
and do not receive compensation from the Fund.
The Fund is permitted to purchase
or sell short-term variable rate demand obligations from or
to certain other affiliated funds or portfolios under specified conditions outlined in procedures
adopted by the Board. The procedures have been designed to provide assurance that
any purchase or sale of securities by the Fund from or to another fund or portfolio that is,
or could be considered, an affiliate by virtue of having a common investment manager or subadviser
(or affiliated investment manager or subadviser), common Directors and/or common
officers complies with Rule 17a-7 under the 1940 Act. Further, as defined under the procedures,
each transaction is effected at the current market price. For the six months
ended May 31, 2026, such purchase and sale transactions
(excluding accrued interest) were $15,090,000 and $12,100,000,
respectively. There was no realized gain or loss recognized as
a result of these transactions.
3. Investments
During the six months ended
May 31, 2026, the aggregate cost of purchases and proceeds from
sales of investments (excluding short-term investments) were as follows:
|
Purchases
|
$9,150,306
|
|
Sales
|
10,359,227
|
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
33
Notes
to financial statements (unaudited) (cont’d)
At May 31, 2026,
the aggregate cost of investments and the aggregate gross unrealized appreciation
and depreciation of investments for federal income tax purposes were substantially
as follows:
|
|
Cost*
|
Gross
Unrealized
Appreciation
|
Gross
Unrealized
Depreciation
|
Net
Unrealized
Appreciation
|
|
Securities
|
$162,039,225
|
$2,860,333
|
$(1,090,144)
|
$1,770,189
|
|
*
|
Cost
of investments for federal income tax purposes includes the value of Inverse Floaters issued in TOB
transactions
(Note 1). |
4. Derivative
instruments and hedging activities
During the six months
ended May 31, 2026, the Fund did not invest in derivative instruments.
5. Variable
rate demand preferred stock
On February 25, 2015, the Fund completed
a private offering of 1,896 shares of Series 1 VRDPS.
Net proceeds from the offering were used by the Fund to repurchase outstanding shares
of Series M Municipal Auction Rate Cumulative Preferred Stock (“ARCPS”)
that had been accepted for payment pursuant to the tender
offer (see Note 6). Offering costs incurred by the Fund
in connection with the VRDPS issuance are being amortized to expense over
the life of the VRDPS.
The
table below summarizes the key terms of Series 1 of the VRDPS at May 31, 2026.
|
Series
|
Mandatory
Redemption
Date |
Shares
|
Liquidation
Preference
Per
Share |
Aggregate
Liquidation
Value
|
|
Series
1 |
2/25/2045
|
1,896
|
$25,000
|
$47,400,000
|
The VRDPS shares are not listed
on any securities exchange or automated quotation system.
For financial reporting purposes, the VRDPS shares are considered debt of the Fund; therefore,
the liquidation value, which approximates fair value of the VRDPS shares, is recorded
as a liability on the Statement of Assets and Liabilities.
Holders of VRDPS have the right
to tender their VRDPS shares for remarketing at a price equal
to the liquidation preference amount plus all accumulated but unpaid dividends and at
a date which is no earlier than the seventh day following delivery of the notice to the tender
and paying agent. The VRDPS shares include a liquidity feature that allows VRDPS holders
to have their shares purchased by the liquidity provider with whom the Fund has contracted
in the event of a failed remarketing where purchase orders are not sufficient in number
to be matched with the sale orders. The Fund is required to redeem the VRDPS shares
owned by the liquidity provider after six months of continuous, unsuccessful remarketing.
The Fund pays a monthly remarketing fee at the annual rate of 0.05% of the
34
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
liquidation
value of each VRDPS share outstanding on the first calendar day of the preceding
calendar month. These fees are shown as remarketing fees on the Statement of Operations.
Holders of VRDPS are entitled to
receive monthly cumulative cash dividends, payable on the first
business day of each calendar month, at a variable rate set weekly by the remarketing agent.
The dividend rate is generally based upon a spread over a base rate and cannot exceed
a maximum rate. In the event of a failed remarketing, the dividend rate will reset to the
maximum rate. The maximum rate is determined, in part, based upon the long-term rating
assigned to the VRDPS. In the event the Fund fails to make a scheduled dividend payment,
all outstanding shares of the VRDPS are subject to mandatory tender.
Subject to certain conditions, the
VRDPS shares may be redeemed, in whole or in part, at any
time at the option of the Fund. The redemption price per share is equal to the liquidation
value per share plus any accumulated but unpaid dividends. The Fund is required to
redeem its VRDPS on the mandatory redemption date, February 25, 2045. In addition, the Fund
is required to redeem certain of the VRDPS shares if the Fund fails to maintain certain asset
coverage and rating agency guidelines.
The Fund is a party to a fee agreement
with the liquidity provider that requires monthly payment
of an annual liquidity fee. These fees are shown as liquidity fees on the Statement of
Operations. The fee agreement between the Fund and the liquidity provider is scheduled to
terminate on June 18, 2027. The Fund has the right, which is exercisable 120 to 90 days prior
to the scheduled termination date, to request that the liquidity provider extend the term
of the agreement for an additional period. The Fund may also terminate the agreement early.
In the event the fee agreement is not renewed or is terminated in advance, and the Fund
does not enter into a fee agreement with an alternate liquidity provider, the VRDPS will
be subject to mandatory purchase by the liquidity provider prior to the termination of the
fee agreement. The Fund is required to redeem any VRDPS purchased by the liquidity provider
six months after the purchase date.
The VRDPS ranks senior to the Fund’s
outstanding common stock and on parity with any other
preferred stock. The Fund may not declare dividends or make other distributions on shares
of its common stock unless the Fund has declared and paid full cumulative dividends on
the VRDPS, due on or prior to the date of the common stock dividend or distribution, and meets
the VRDPS asset coverage and rating agency requirements.
The holders of the VRDPS have one
vote per share and vote together with the holders of common
stock of the Fund as a single class except on matters affecting only the holders of VRDPS
or the holders of common stock. Pursuant to the 1940 Act, holders of the VRDPS have
the right to elect two Directors of the Fund, voting separately as a class.
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
35
Notes
to financial statements (unaudited) (cont’d)
The annualized
dividend rate for the VRDPS shares for the six months
ended May 31, 2026 was 2.536%. VRDPS shares issued and
outstanding remained constant during the six months
ended May 31, 2026.
6.
Auction rate cumulative preferred stock
As of and for the period ended May
31, 2026, the Fund had no ARCPS outstanding.
On January 28, 2002, the Fund issued
2,000 shares of Series M Municipal ARCPS.
On January 22, 2015, the Fund announced
that it had commenced an issuer tender offer for up to
100% of its outstanding ARCPS at a price equal to 90% of the liquidation preference of
$25,000 per share (or $22,500 per share), plus any unpaid dividends accrued through February
20, 2015, the expiration date of the tender offer.
The Fund’s tender offer was
conditioned upon the Fund closing on the private offering of VRDPS
with an aggregate liquidation preference at least equal to the aggregate liquidation preference
of ARCPS accepted for tender.
On February 25, 2015, the Fund announced
the final results for its issuer tender offer and all shares
that were validly tendered and not withdrawn during the offering period were accepted
for payment. The Fund accepted for payment 1,896 ARCPS, which represented 94.8%
of outstanding ARCPS. The ARCPS that were not tendered remained outstanding.
On November 27, 2018, the Fund repurchased
80 Series M ARCPS in a private transaction at a price
equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share),
plus any unpaid dividends.
On November 16, 2022, the Fund repurchased
4 Series M ARCPS in a private transaction at a price equal
to 95% of the liquidation preference of $25,000 per share (or $23,750 per share),
plus any unpaid dividends.
On March 1, 2023, the Fund repurchased
20 Series M ARCPS in a private transaction at a price
equal to 95% of the liquidation preference of $25,000 per share (or $23,750 per share),
plus any unpaid dividends.
7. Distributions
to common shareholders subsequent
to May 31, 2026
The following distributions to common
shareholders have been declared by the Board and are payable
subsequent to the period end of this report:
|
Record
Date |
Payable
Date |
Amount
|
|
6/23/2026
|
6/30/2026
|
$0.0420
|
|
7/24/2026
|
7/31/2026
|
$0.0420
|
|
8/24/2026
|
8/31/2026
|
$0.0420
|
36
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
8. Stock
repurchase program
On November 16, 2015, the Fund announced
that the Board had authorized the Fund to repurchase in
the open market up to approximately 10% of the Fund’s outstanding common stock
when the Fund’s shares are trading at a discount to net asset value. The Board has directed
management of the Fund to repurchase shares of common stock at such times and in
such amounts as management reasonably believes may enhance stockholder value. The Fund
is under no obligation to purchase shares at any specific discount levels or in any specific
amounts. During the six months ended May 31, 2026, and the year ended November
30, 2025, the Fund did not repurchase any shares.
9. Transactions
with affiliated company
As defined by the 1940 Act, an affiliated
company is one in which the Fund owns 5% or more of the
outstanding voting securities, or a company which is under common ownership or
control with the Fund. The following company was considered an affiliated company for all
or some portion of the six months
ended May 31, 2026. The following transactions were effected
in such company for the six months
ended May 31, 2026.
|
|
Affiliate
Value at
November 30, 2025
|
Purchased
|
Sold
| ||
|
Cost
|
Shares
|
Proceeds
|
Shares
| ||
|
Western
Asset
Premier
Institutional
Government
Reserves,
Premium
Shares
|
$21,486
|
$1,312,087
|
1,312,087
|
$1,241,743
|
1,241,743
|
|
(cont’d)
|
Realized
Gain (Loss)
|
Dividend
Income
|
Net Increase
(Decrease)
in
Unrealized
Appreciation
(Depreciation)
|
Affiliate
Value at
May 31,
2026
|
|
Western
Asset Premier
Institutional
Government
Reserves,
Premium
Shares |
—
|
$865
|
—
|
$91,830
|
10. Deferred
capital losses
As of November 30, 2025, the Fund
had deferred capital losses of $6,974,624, which have no
expiration date, that will be available to offset future taxable capital gains.
11. Operating
segments
The Fund operates as a single operating
segment, which is an investment portfolio. A management
group assigned to the Fund within the Fund’s investment manager serves as the
Chief Operating Decision Maker (“CODM”) and is responsible for evaluating the Fund’s operating
results and allocating resources in accordance with the Fund’s investment
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
37
Notes
to financial statements (unaudited) (cont’d)
strategy. Internal
reporting provided to the CODM aligns with the accounting policies and measurement
principles used in the financial statements.
For information regarding segment
assets, segment profit or loss, and significant expenses, refer
to the Statement of Assets and Liabilities and the Statement of Operations, along with the
related Notes to Financial Statements. The Fund’s Schedule of Investments provides details
of the Fund’s investments that generate returns such as interest, dividends, and realized
and unrealized gains or losses. Performance metrics, including portfolio turnover and
expense ratios, are disclosed in the Financial Highlights.
38
Western
Asset Intermediate Muni Fund Inc. 2026 Semi-Annual Report
Board
approval of management and
subadvisory agreements (unaudited)
Background
The Investment Company Act of 1940,
as amended (the “1940 Act”), requires that the Board of
Directors (the “Board”) of Western Asset Intermediate Muni Fund Inc. (the “Fund”), including
a majority of its members who are not considered to be “interested persons” under
the 1940 Act (the “Independent Directors”) voting separately, approve on an annual basis
the continuation of the investment management agreement (the “Management Agreement”)
between the Fund and the Fund’s manager, Franklin Templeton Fund Adviser, LLC
(the “Manager”), and the sub-advisory agreement (the “Sub-Advisory Agreement”) between
the Manager and Western Asset Management Company, LLC (the “Sub-Adviser”), an
affiliate of the Manager, with respect to the Fund.
At an in-person meeting (the “Contract
Renewal Meeting”) held on May 12-13, 2026, the Board,
including the Independent Directors, considered and approved the continuation of each
of the Management Agreement and the Sub-Advisory Agreement for an additional one-year
period. To assist in its consideration of the renewal of each of the Management Agreement
and the Sub-Advisory Agreement, the Board received and considered extensive information
(together with the information provided at the Contract Renewal Meeting, the “Contract
Renewal Information”) about the Manager and the Sub-Adviser, as well as the management
and sub-advisory arrangements for the Fund and the other closed-end funds in the
same complex under the Board’s purview (the “Franklin Templeton Closed-end Funds”), certain
portions of which are discussed below.
A presentation made by the Manager
and the Sub-Adviser to the Board at the Contract Renewal
Meeting in connection with the Board’s evaluation of each of the Management Agreement
and the Sub-Advisory Agreement encompassed the Fund and other Franklin Templeton
Closed-end Funds. In addition to the Contract Renewal Information, the Board received
performance and other information throughout the year related to the respective services
rendered by the Manager and the Sub-Adviser to the Fund. The Board’s evaluation took
into account the information received throughout the year and also reflected the knowledge
and experience gained as members of the Boards of the Fund and other Franklin Templeton
Closed-end Funds with respect to the services provided to the Fund by the Manager
and the Sub-Adviser. The information received and considered by the Board (including
its various committees) in conjunction with both the Contract Renewal Meeting and
throughout the year was both written and oral. The contractual arrangements discussed below
are the product of multiple years of review and negotiation and information received and
considered by the Board during each of those years.
At an in-person meeting held on
April 24, 2026, the Independent Directors, in preparation for
the Contract Renewal Meeting, met in a private session with their independent legal counsel
to review the Contract Renewal Information regarding the Franklin Templeton Closed-end
Funds, including the Fund, received to date. No representatives of the Manager
Western
Asset Intermediate Muni Fund Inc.
39
Board
approval of management and
subadvisory agreements (unaudited) (cont’d)
or the Sub-Adviser
participated in this meeting. Following the April 24, 2026 meeting, the Independent
Directors submitted certain questions and requests for additional information to
Fund management. The Independent Directors also met in private sessions with their independent
legal counsel to consider the Contract Renewal Information and Fund management’s
responses to the Independent Directors’ questions and requests for additional
information in advance of and during the Contract Renewal Meeting. The discussion
below reflects all of these reviews.
The Manager provides the Fund with
investment advisory and administrative services pursuant
to the Management Agreement, and the Sub-Adviser provides the Fund with investment
sub-advisory services pursuant to the Sub-Advisory Agreement. The discussion below
covers both the advisory and administrative functions being rendered by the Manager,
each such function being encompassed by the Management Agreement, and the investment
sub-advisory functions being rendered by the Sub-Adviser pursuant to the Sub-Advisory
Agreement.
Board Approval of Management Agreement and Sub-Advisory
Agreement
The Independent Directors were advised
by separate independent legal counsel throughout the process.
Prior to voting, the Independent Directors received a memorandum discussing the
legal standards for their consideration of the proposed continuation of the Management Agreement
and the Sub-Advisory Agreement. The Independent Directors considered the Management
Agreement and Sub-Advisory Agreement separately during the course of their review.
In doing so, they noted the respective roles of the Manager and the Sub-Adviser in providing
services to the Fund.
In approving the continuation of
the Management Agreement and Sub-Advisory Agreement, the
Board, including the Independent Directors, considered a variety of factors, including those
factors discussed below. No single factor reviewed by the Board was identified by the Board
as the principal factor in determining whether to approve the continuation of the Management
Agreement and the Sub-Advisory Agreement. Each Director may have attributed
different weight to the various factors in evaluating the Management Agreement and
the Sub-Advisory Agreement.
After considering all relevant factors
and information, the Board, exercising its reasonable business
judgment, determined that the continuation of the Management Agreement and Sub-Advisory
Agreement was in the best interests of the Fund’s stockholders and approved the
continuation of each such agreement for an additional one-year period.
Nature, Extent and Quality of the Services under
the Management Agreement and Sub-Advisory Agreement
The Board received and considered
Contract Renewal Information regarding the nature, extent,
and quality of services provided to the Fund by the Manager and the Sub-Adviser
40
Western
Asset Intermediate Muni Fund Inc.
under the Management
Agreement and the Sub-Advisory Agreement, respectively, during the
past year. The Board noted information received at regular meetings throughout the year related
to the services provided by the Manager in its management of the Fund’s affairs and the
Manager’s role in coordinating the activities of the Sub-Adviser and the Fund’s other service
providers. The Board observed that the scope of services provided by the Manager and
the Sub-Adviser, and of the undertakings required of the Manager and Sub-Adviser in connection
with those services, including maintaining and monitoring their respective compliance
programs as well as the Fund’s compliance programs had expanded over time as
a result of regulatory, market and other developments. The Board also noted that on a regular
basis it received and reviewed information from the Manager and the Sub-Adviser regarding
the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under
the 1940 Act. The Board also considered the risks borne by the Manager, the Sub-Adviser
and their respective affiliates on behalf of the Fund, including entrepreneurial, operational,
reputational, litigation and regulatory risks, as well as the Manager’s and the Sub-Adviser’s
risk management processes.
The Board reviewed the qualifications,
backgrounds, and responsibilities of the Manager’s senior
personnel and the Sub-Adviser’s portfolio management team primarily responsible for
the day-to-day portfolio management of the Fund. The Board also considered, based on its
knowledge of the Manager and its affiliates, the financial resources of Franklin Resources,
Inc., the parent organization of the Manager and the Sub-Adviser. The Board recognized
the importance of having a fund manager with significant resources.
The Board considered the division
of responsibilities between the Manager and the Sub-Adviser
under the Management Agreement and the Sub-Advisory Agreement, respectively, including
the Manager’s coordination and oversight of the services provided to the Fund by the
Sub-Adviser and other fund service providers. The Management Agreement permits the Manager
to delegate certain of its responsibilities, including its investment advisory duties thereunder,
provided that the Manager, in each case, will supervise the activities of the delegee.
In reaching its determinations regarding
continuation of the Management Agreement and the Sub-Advisory
Agreement, the Board took into account that Fund stockholders, in pursuing
their investment goals and objectives, may have purchased their shares of the Fund
based upon the reputation and the investment style, philosophy and strategy of the Manager
and the Sub-Adviser, as well as the resources available to the Manager and the Sub-Adviser.
The Board concluded that, overall,
the nature, extent, and quality of the management and other
services provided (and expected to be provided) to the Fund, under the Management Agreement
and the Sub-Advisory Agreement were satisfactory.
Western
Asset Intermediate Muni Fund Inc.
41
Board
approval of management and
subadvisory agreements (unaudited) (cont’d)
Fund Performance
The Board received and considered
information regarding Fund performance, including information
and analyses (the “Broadridge Performance Information”) for the Fund, as well as
for any comparable funds (the “Performance Universe”) selected by Broadridge Financial Solutions,
Inc. (“Broadridge”), an independent third-party provider of investment company data.
The Board was provided with a description of the methodology Broadridge used to determine
the similarity of the Fund with any funds included in the Performance Universe. It was
noted that while the Board found the Broadridge Performance Information generally useful,
they recognized its limitations, including that the data may vary depending on the end
date selected, and that the results of the performance comparisons may vary depending on
the selection of the peer group and its composition over time. The Board also noted that Board
members had received and discussed with the Manager and the Sub-Adviser information
throughout the year at periodic intervals comparing the Fund’s performance against
its benchmark and against the Fund’s peers. In addition, the Board considered the Fund’s
performance in view of overall financial market conditions.
The Broadridge Performance Information
comparing the Fund’s performance to that of the fund
group average, regardless of asset size, showed, among other data, that based on net asset
value per share, the Fund’s performance was above the median for the 1-year period ended
December 31, 2025, and was below the median for the 3-, 5- and 10-year periods ended
December 31, 2025. The Board noted the explanations from the Manager and the Sub-Adviser
regarding the Fund’s relative performance versus the funds in the group for the various
periods.
Based on the reviews and discussions
of Fund performance and considering other relevant factors,
including those noted above, the Board concluded, under the circumstances, that continuation
of the Management Agreement and the Sub-Advisory Agreement for an additional
one-year period would be consistent with the interests of the Fund and its stockholders.
Management and Sub-Advisory Fees and Expense Ratios
The Board reviewed and considered
the contractual management fee (the “Contractual Management
Fee”) and the actual management fee (the “Actual Management Fee”) payable
by the Fund to the Manager under the Management Agreement and the sub-advisory
fee (the “Sub-Advisory Fee”) payable by the Manager to the Sub-Adviser under the Sub-Advisory
Agreement in view of the nature, extent and overall quality of the management,
investment advisory and other services provided by the Manager and the Sub-Adviser,
respectively. The Board noted that the Sub-Advisory Fee is paid by the Manager,
not the Fund, and, accordingly, that the retention of the Sub-Adviser does not increase
the fees or expenses otherwise incurred by the Fund’s stockholders.
42
Western
Asset Intermediate Muni Fund Inc.
In addition,
the Board received and considered information and analyses prepared by Broadridge
(the “Broadridge Expense Information”) comparing the Contractual Management Fee
and the Actual Management Fee and the Fund’s actual total expenses with those of funds
in an expense group, as well as a broader group of funds (the “Expense Universe”), each
selected and provided by Broadridge. The comparison was based upon the constituent funds’
latest fiscal years. It was noted that while the Board found the Broadridge Expense Information
generally useful, they recognized its limitations, including that the data may vary
depending on the selection of the peer group.
The Broadridge Expense Information
showed that the Fund’s Contractual Management Fee was
below the Expense Group median. The Broadridge Expense Information also showed that
the Fund’s Actual Management Fee was below the Expense Universe median based on common
share assets and was equal to the Expense Group median based on total managed assets,
which includes common share and leveraged assets. The Broadridge Expense Information
also showed that the Fund’s actual total expenses were above the Expense Group
median based on both common share assets and total managed assets. The Board took
into account management’s discussion of the Fund’s expenses and noted the limited size
of the Expense Group.
The Board also reviewed Contract
Renewal Information regarding fees charged by the Manager
and/or the Sub-Adviser to other U.S. clients investing primarily in an asset class similar
to that of the Fund, including, where applicable, institutional and separate accounts. The
Manager reviewed with the Board the differences in services provided to these different
types of accounts, noting that the Fund is provided with certain administrative services,
office facilities, and Fund officers, and that the Fund is subject not only to heightened
regulatory requirements relative to institutional clients but also to requirements for
listing on the New York Stock Exchange, and that the Manager coordinates and oversees
the provision of services to the Fund by other fund service providers. The Board considered
the fee comparisons in view of the different services provided in managing these
other types of clients and funds.
The Board considered the overall
management fee, the fees of the Sub-Adviser and the amount
of the management fee retained by the Manager after payment of the Sub-Advisory Fee
in each case in view of the services rendered for those amounts. The Board also received
an analysis of complex-wide management fees provided by the Manager, which, among
other things, set out a framework of fees based on asset classes.
Taking all of the above into consideration,
as well as the factors identified below, the Board determined
that the management fee and the Sub-Advisory Fee were reasonable in view of the
nature, extent and overall quality of the management, investment advisory and other services
provided by the Manager and the Sub-Adviser to the Fund under the Management Agreement
and the Sub-Advisory Agreement, respectively.
Western
Asset Intermediate Muni Fund Inc.
43
Board
approval of management and
subadvisory agreements (unaudited) (cont’d)
Manager Profitability
The Board, as part of the Contract
Renewal Information, received an analysis of the profitability
to the Manager and its affiliates in providing services to the Fund for the Manager’s
fiscal years ended September 30, 2025 and September 30, 2024. The Board also received
profitability information with respect to the Franklin Templeton fund complex as a whole.
In addition, the Board received Contract Renewal Information with respect to the Manager’s
revenue and cost allocation methodologies used in preparing such profitability data.
It was noted that the allocation methodologies had been reviewed by an outside consultant.
In response to the Board’s request, the Manager provided, and the Board reviewed,
information comparing the profitability of Franklin Resources, Inc. with that of publicly
traded peer fund management companies. The profitability to the Sub-Adviser was not
considered to be a material factor in the Board’s considerations since the Sub-Advisory Fee
is paid by the Manager, not the Fund, although the Board noted the affiliation of the Manager
with the Sub-Adviser. The profitability of the Manager and its affiliates was considered
by the Board to be reasonable in view of the nature, extent and quality of services
provided to the Fund.
Economies of Scale
The Board received and discussed
Contract Renewal Information concerning whether the Manager
realizes economies of scale if the Fund’s assets grow. The Board noted that because
the Fund is a closed-end fund, it has limited ability to increase its assets. The Board
determined that the management fee structure was appropriate under the circumstances.
For similar reasons as stated above with respect to the Sub-Adviser’s profitability
and the costs of the Sub-Adviser’s provision of services, the Board did not consider
the potential for economies of scale in the Sub-Adviser’s management of the Fund to
be a material factor in the Board’s consideration of the Sub-Advisory Agreement.
Other Benefits to the Manager and the Sub-Adviser
The Board considered other benefits
received by the Manager, the Sub-Adviser and their affiliates
as a result of their relationship with the Fund, including the opportunity to offer additional
products and services to the Fund’s stockholders. In view of the costs of providing investment
management and other services to the Fund and the ongoing commitment of the Manager
and the Sub-Adviser to the Fund, the Board considered that the ancillary benefits received
by the Manager and its affiliates, including the Sub-Adviser, were reasonable.
44
Western
Asset Intermediate Muni Fund Inc.
Additional
shareholder information (unaudited)
Results of annual meeting
of shareholders
The Annual Meeting of Shareholders
of Western Asset Intermediate Muni Fund Inc. was held
on April 17, 2026, for the purpose of considering and voting upon the proposals presented
at the Meeting. The following table provides information concerning the matters voted
upon at the Meeting:
Election of Directors
|
Nominees
|
Common
Shares
and
Preferred
Shares,
voting
together,
Voted
FOR
Election
|
Common
Shares and
Preferred
Shares,
voting
together,
WITHHELD
|
Common
Shares
and
Preferred
Shares,
voting
together,
ABSTAIN
|
Preferred
Shares,
Voted
FOR
Election
|
Preferred
Shares,
WITHHELD
|
Preferred
Shares,
ABSTAIN
|
|
Nisha
Kumar |
11,616,538
|
411,193
|
208,621
|
—
|
—
|
—
|
|
Peter
Mason |
11,784,725
|
243,007
|
208,620
|
—
|
—
|
—
|
At the Meeting, Ms. Kumar and Mr.
Mason were each duly elected by the shareholders to serve
as Class III Directors of the Fund until the 2029 Annual Meeting of Shareholders, or until
their successors have been duly elected and qualified or until their resignation or are otherwise
removed.
At May 31, 2026, in addition to
Ms. Kumar and Mr. Mason, the other Directors of the Fund were
as follows:
Robert
D. Agdern
Carol L. Colman, CFA
Anthony Grillo
Eileen A. Kamerick
Hillary A. Sale
Jane Trust, CFA
Carol L. Colman, CFA
Anthony Grillo
Eileen A. Kamerick
Hillary A. Sale
Jane Trust, CFA
Ratification of Selection of Independent Registered
Public Accountants
To ratify the selection of PricewaterhouseCoopers
LLP (“PwC”) as independent registered public
accountants of the Fund for the fiscal year ended November 30, 2026.
|
FOR
|
AGAINST
|
ABSTAIN
|
BROKER NON-VOTES
|
|
10,472,197
|
1,658,842
|
105,313
|
N/A
|
Western
Asset Intermediate Muni Fund Inc.
45
Dividend
reinvestment plan (unaudited)
Unless you elect
to receive distributions in cash (i.e., opt-out), all dividends, including any capital
gain dividends and return of capital distributions, on your Common Stock will be automatically
reinvested by Computershare Trust Company, N.A., as agent for the stock- holders
(the “Plan Agent”), in additional shares of Common Stock under the Fund’s Dividend Reinvestment
Plan (the “Plan”). You may elect not to participate in the Plan by contacting the
Plan Agent. If you do not participate, you will receive all cash distributions paid by check
mailed directly to you by Computershare Trust Company, N.A., as dividend paying agent.
If you participate in the Plan,
the number of shares of Common Stock you will receive will be
determined as follows:
(1) If the market price of the Common
Stock (plus $0.03 per share commission) on the payment
date (or, if the payment date is not a NYSE trading day, the immediately preceding
trading day) is equal to or exceeds the net asset value per share of the Common
Stock at the close of trading on the NYSE on the payment date, the Fund will issue
new Common Stock at a price equal to the greater of (a) the net asset value per share
at the close of trading on the NYSE on the payment date or (b) 95% of the market
price per share of the Common Stock on the payment date.
(2) If the net asset value per share
of the Common Stock exceeds the market price of the Common
Stock (plus $0.03 per share commission) at the close of trading on the NYSE
on the payment date, the Plan Agent will receive the dividend or distribution in cash
and will buy Common Stock in the open market, on the NYSE or elsewhere, for your
account as soon as practicable commencing on the trading day following the payment
date and terminating no later than the earlier of (a) 30 days after the dividend
or distribution payment date, or (b) the payment date for the next succeeding dividend
or distribution to be made to the stockholders; except when necessary to comply
with applicable provisions of the federal securities laws. If during this period: (i)
the market price (plus $0.03 per share commission) rises so that it equals or exceeds
the net asset value per share of the Common Stock at the close of trading on the
NYSE on the payment date before the Plan Agent has completed the open market purchases
or (ii) if the Plan Agent is unable to invest the full amount eligible to be reinvested
in open market purchases, the Plan Agent will cease purchasing Common Stock
in the open market and the Fund shall issue the remaining Common Stock at a price
per share equal to the greater of (a) the net asset value per share at the close of trading
on the NYSE on the day prior to the issuance of shares for reinvestment or (b)
95% of the then current market price per share.
Common Stock in your account will
be held by the Plan Agent in non-certificated form. Any proxy
you receive will include all shares of Common Stock you have received under the Plan.
You may withdraw from the Plan (i.e., opt-out) by notifying the Plan Agent in writing at P.O.
Box 43006, Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151. Such
withdrawal will be effective immediately if notice is received by the Plan Agent not less
than ten business days prior to any dividend or distribution record date; otherwise such
46
Western
Asset Intermediate Muni Fund Inc.
withdrawal will
be effective as soon as practicable after the Plan Agent’s investment of the most
recently declared dividend or distribution on the Common Stock.
Plan participants who sell their
shares will be charged a service charge (currently $5.00 per transaction)
and the Plan Agent is authorized to deduct brokerage charges actually incurred from
the proceeds (currently $0.05 per share commission). There is no service charge for reinvestment
of your dividends or distributions in Common Stock. However, all participants will
pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes
open market purchases. Because all dividends and distributions will be automatically reinvested
in additional shares of Common Stock, this allows you to add to your investment through
dollar cost averaging, which may lower the average cost of your Common Stock over
time. Dollar cost averaging is a technique for lowering the average cost per share over time
if the Fund’s net asset value declines. While dollar cost averaging has definite advantages,
it cannot assure profit or protect against loss in declining markets.
Automatically reinvesting dividends
and distributions does not mean that you do not have to pay
income taxes due upon receiving dividends and distributions. Investors will be subject to
income tax on amounts reinvested under the Plan.
The Fund reserves the right to amend
or terminate the Plan if, in the judgment of the Board of
Directors, the change is warranted. The Plan may be terminated, amended or supplemented
by the Fund upon notice in writing mailed to stockholders at least 30 days prior
to the record date for the payment of any dividend or distribution by the Fund for which the
termination or amendment is to be effective. Upon any termination, you will be sent cash
for any fractional share of Common Stock in your account. You may elect to notify the Plan
Agent in advance of such termination to have the Plan Agent sell part or all of your Common
Stock on your behalf. Additional information about the Plan and your account may be
obtained from the Plan Agent at P.O. Box 43006, Providence, RI 02940-3078 or by calling the
Plan Agent at 1-888-888-0151.
Western
Asset Intermediate Muni Fund Inc.
47
(This
page intentionally left blank.)
Western Asset
Intermediate
Muni Fund Inc.
Directors
Robert D. Agdern
Carol L. Colman
Anthony Grillo
Eileen A. Kamerick
Chair
Nisha Kumar
Peter Mason
Hillary A. Sale
Jane Trust
Officers
Jane
Trust
President and Chief Executive
Officer
President and Chief Executive
Officer
Christopher
Berarducci
Treasurer and Principal Financial
Officer
Treasurer and Principal Financial
Officer
Fred
Jensen
Chief Compliance Officer
Chief Compliance Officer
Marc
A. De Oliveira
Secretary and Chief Legal Officer
Secretary and Chief Legal Officer
Thomas
C. Mandia
Senior Vice President
Senior Vice President
Jeanne
M. Kelly
Senior Vice President
Senior Vice President
Western Asset Intermediate
Muni Fund Inc.
One
Madison Avenue
17th Floor
New York, NY 10010
17th Floor
New York, NY 10010
Investment manager
Franklin Templeton Fund Adviser,
LLC
Subadviser
Western Asset Management Company,
LLC
Custodian
The Bank of New York Mellon
Transfer agent
Computershare
Inc.
P.O. Box 43006
Providence, RI 02940-3078
P.O. Box 43006
Providence, RI 02940-3078
Independent
registered
public accounting firm
public accounting firm
PricewaterhouseCoopers
LLP
Baltimore, MD
Baltimore, MD
Legal counsel
Simpson
Thacher & Bartlett LLP
900 G Street NW
Washington, DC 20001
900 G Street NW
Washington, DC 20001
New
York Stock
Exchange Symbol
Exchange Symbol
SBI
Western Asset Intermediate
Muni Fund Inc.
Western
Asset Intermediate Muni Fund Inc.
One Madison Avenue
17th Floor
New York, NY 10010
One Madison Avenue
17th Floor
New York, NY 10010
Notice is hereby given in accordance
with Section 23(c) of the Investment Company Act of 1940,
as amended, that from time to time the Fund may purchase,
at market prices, shares of its stock.
The Fund files its complete schedule
of portfolio holdings with the Securities and Exchange
Commission (“SEC”) for the first and third quarters of
each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Forms
N-PORT are available on the SEC’s website at www.sec.gov. To obtain
information on Form N-PORT, shareholders can call the Fund at 1-888-777-0102.
Information on how the Fund voted
proxies relating to portfolio securities during the prior
12-month period ended June 30th of each year and a description
of the policies and procedures that the Fund uses to determine how
to vote proxies related to portfolio transactions are available (1) without
charge, upon request, by calling 1-888-777-0102, (2) at www.franklintempleton.com
and (3) on the SEC’s website at www.sec.gov.
Quarterly performance, semi-annual
and annual reports, current net asset value and other
information regarding the Fund may be found on Franklin Templeton’s website,
which can be accessed at www.franklintempleton.com. Any reference
to Franklin Templeton’s website in this report is intended to allow investors
public access to information regarding the Fund and does not, and is
not intended to, incorporate Franklin Templeton’s website in this report.
This report is transmitted to the
shareholders of Western Asset Intermediate Muni Fund Inc.
for their information. This is not a prospectus, circular
or representation intended for use in the purchase of shares of the Fund
or any securities mentioned in this report.
Computershare
Inc.
P.O. Box 43006
Providence, RI 02940-3078
P.O. Box 43006
Providence, RI 02940-3078
90061-S 7/26
(b) Not applicable
| ITEM 2. | CODE OF ETHICS. |
Not applicable.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
| (a) | Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 1 of this Form N-CSR. |
| (b) | Not applicable. |
| ITEM 7. | FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 8. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 9. | PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 10. | REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 11. | STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT. |
The information is disclosed as part of the Financial Statements included in Item 1 of this Form N-CSR, as applicable.
| ITEM 12. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 13. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 14. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 15. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.
| ITEM 16. | CONTROLS AND PROCEDURES. |
| (a) | The Registrants acknowledge the Staff’s comment. In future filings on Form N-CSR, the certifications required by Rule 30a-2 and Item 19(a)(3) will include the designations “principal executive officer” and “principal financial officer” in the signature blocks, reflecting the capacity in which each signatory executes the certification, in conformity with the language of the Rule and Form N-CSR. The Registrants may also include each signatory’s actual title with respect to the Funds alongside the required designation. |
| (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 period covered by this report that have materially affected or are likely to materially affect the Registrant’s internal control over financial reporting. |
| ITEM 17. | DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 18. | RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION. |
| (a) | Not applicable. |
| (b) | Not applicable. |
| ITEM 19. | EXHIBITS. |
(a) (1) Not applicable.
Exhibit 99.CODE ETH
(a) (3) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.CERT
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.
Exhibit 99.906CERT
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, there unto duly authorized.
Western Asset Intermediate Muni Fund Inc.
| By: | /s/ Jane Trust | |
| Jane Trust | ||
| Chief Executive Officer | ||
| Date: | July 30, 2026 |
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: | July 30, 2026 | |
| By: | /s/ Christopher Berarducci | |
| Christopher Berarducci | ||
| Principal Financial Officer | ||
| Date: | July 30, 2026 |
ATTACHMENTS / EXHIBITS
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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