Edgar Filing: Western Asset Income Fund

Western Asset Income Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-02351

Western Asset Income Fund

(Exact Name of Registrant as Specified In Its Charter)


Address of Principal Executive Offices:		385 East Colorado Boulevard
		Pasadena, CA 91101

Name and address of agent for service:		Charles A. Ruys de Perez
		385 East Colorado Boulevard
		Pasadena, CA 91101

Registrant’s telephone number, including area code: (626) 844-9400

Date of fiscal year end: December 31, 2008

Date of reporting period: March 31, 2008

Item 1 – Schedule of Investments

Western Asset Income Fund

March 31, 2008 (Unaudited)


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — 97.8%
Corporate Bonds and Notes — 73.2%
Aerospace and Defense — 0.2%
L-3 Communications Corp.	7.625	%	6/15/12	$	275,000	$	281,531

Airlines — 0.6%
Continental Airlines Inc.	6.545	%	2/2/19		164,859		158,575
Continental Airlines Inc.	7.256	%	3/15/20		193,739		190,591
Delta Air Lines Inc.	7.111	%	9/18/11		400,000		394,000

							743,166

Automobiles — 5.7%
Ford Motor Co.	7.450	%	7/16/31		8,050,000		5,313,000	^A
General Motors Corp.	8.250	%	7/15/23		3,450,000		2,415,000	^A

							7,728,000

Building Products — 0.5%
American Standard Inc.	8.250	%	6/1/09		500,000		526,645
Nortek Inc.	8.500	%	9/1/14		225,000		166,500

							693,145

Capital Markets — 4.9%
BankAmerica Capital III	4.828	%	1/15/27		215,000		162,525	^B
Deutsche Bank AG	5.375	%	10/12/12		330,000		344,884
Goldman Sachs Capital II	5.793	%	12/29/49		920,000		612,812	^C
Lehman Brothers Holdings Capital Trust VII	5.857	%	11/29/49		1,590,000		1,005,675	^C
Lehman Brothers Holdings Inc.	6.500	%	7/19/17		110,000		104,461
Merrill Lynch and Co. Inc.	6.050	%	8/15/12		400,000		406,256
Merrill Lynch and Co. Inc.	5.700	%	5/2/17		1,000,000		949,940
Merrill Lynch and Co. Inc.	6.400	%	8/28/17		300,000		296,042
Merrill Lynch and Co. Inc.	6.110	%	1/29/37		320,000		252,930
Morgan Stanley	5.050	%	1/21/11		1,180,000		1,183,781
Morgan Stanley	4.750	%	4/1/14		60,000		55,697
Morgan Stanley	6.625	%	4/1/18		100,000		100,035
The Bear Stearns Cos. Inc.	5.550	%	1/22/17		720,000		642,843	^A
The Goldman Sachs Group Inc.	6.345	%	2/15/34		555,000		480,572	^A

							6,598,453

Chemicals — 0.6%
The Dow Chemical Co.	7.375	%	11/1/29		800,000		858,227

Commercial Banks — 3.3%
Comerica Capital Trust II	6.576	%	2/20/37		360,000		239,765	^C
Rabobank Capital Funding Trust II	5.260	%	12/31/49		115,000		98,724	^C,D
Rabobank Capital Funding Trust III	5.254	%	12/31/16		1,145,000		951,007	^C,D
RBS Capital Trust III	5.512	%	9/29/49		1,460,000		1,199,260	^C
SunTrust Capital VIII	6.100	%	12/15/36		560,000		443,408	^C
Wachovia Capital Trust III	5.800	%	3/15/42		410,000		292,125	^C
Wells Fargo and Co.	5.250	%	10/23/12		790,000		819,289


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Commercial Banks — Continued
Wells Fargo Capital X	5.950	%	12/15/36	$	450,000	$	405,445	^C

							4,449,023

Commercial Services and Supplies — 0.3%
Waste Management Inc.	7.375	%	5/15/29		415,000		443,435

Communications Equipment — N.M.
Motorola Inc.	7.625	%	11/15/10		56,000		58,037

Consumer Finance — 2.6%
American Express Co.	6.800	%	9/1/66		1,120,000		1,053,058	^C
Capital One Financial Corp.	6.750	%	9/15/17		230,000		218,171
GMAC LLC	8.000	%	11/1/31		1,610,000		1,153,874
Nelnet Inc.	7.400	%	9/29/36		460,000		299,686	^C
SLM Corp.	5.000	%	10/1/13		810,000		609,688
SLM Corp.	5.050	%	11/14/14		130,000		94,546
SLM Corp.	5.625	%	8/1/33		180,000		122,728

							3,551,751

Containers and Packaging — 0.1%
Graphic Packaging International Corp.	9.500	%	8/15/13		200,000		192,000

Diversified Financial Services — 9.9%
AGFC Capital Trust I	6.000	%	1/15/67		300,000		247,216	^C,D
AIG SunAmerica Global Financing VI	6.300	%	5/10/11		1,880,000		1,975,636	^D
BAC Capital Trust XIV	5.630	%	12/31/49		580,000		424,093	^C
Bank of America Corp.	8.000	%	12/29/49		150,000		150,180	^C
Beaver Valley II Funding	9.000	%	6/1/17		294,000		326,907
Capital One Bank	6.500	%	6/13/13		330,000		311,482	^A
Capital One Capital IV	6.745	%	2/17/37		390,000		278,482	^A,C
Capmark Financial Group Inc.	5.875	%	5/10/12		350,000		221,752	^D,E
Chase Capital II	3.739	%	2/1/27		725,000		576,509	^B
Citigroup Capital XXI	8.300	%	12/21/57		320,000		315,319	^C
Citigroup Inc.	6.125	%	8/25/36		550,000		483,032
Deutsche Bank Capital Funding Trust	5.628	%	1/19/49		670,000		579,843	^C,D
General Electric Capital Corp.	6.375	%	11/15/67		600,000		587,111	^C
Glen Meadow Pass-Through Certificates	6.505	%	2/12/67		310,000		264,604	^C,D
HSBC Finance Capital Trust IX	5.911	%	11/30/35		1,350,000		1,094,774	^C
HSBC Finance Corp.	5.700	%	6/1/11		1,730,000		1,740,422
ILFC E-Capital Trust II	6.250	%	12/21/65		790,000		705,968	^C,D
Kaupthing Bank Hf	7.625	%	2/28/15		620,000		583,606	^D
Mizuho Preferred Capital Co. LLC	8.790	%	12/29/49		110,000		110,542	^C,D
TNK-BP Finance SA	7.875	%	3/13/18		100,000		92,375	^D
UBS Preferred Funding Trust V	6.243	%	5/12/49		1,120,000		936,743	^C
ZFS Finance USA Trust II	6.450	%	12/15/65		1,440,000		1,309,033	^C,D

							13,315,629

Diversified Telecommunication Services — 1.6%
AT&T Corp.	8.000	%	11/15/31		440,000		514,144
Embarq Corp.	7.082	%	6/1/16		330,000		312,423
Qwest Corp.	6.875	%	9/15/33		1,000,000		800,000
Verizon Global Funding Corp.	5.850	%	9/15/35		570,000		519,243

							2,145,810


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Electric Utilities — 5.0%
Commonwealth Edison Co.	5.800	%	3/15/18	$	560,000	$	557,056
Exelon Corp.	6.750	%	5/1/11		550,000		580,353
FirstEnergy Corp.	6.450	%	11/15/11		60,000		62,806
FirstEnergy Corp.	7.375	%	11/15/31		395,000		429,681
Pacific Gas and Electric Co.	6.050	%	3/1/34		800,000		784,267
PNPP II Funding Corp.	9.120	%	5/30/16		2,186,000		2,613,057	^A
Sithe/Independence Funding Corp.	9.000	%	12/30/13		1,424,557		1,492,651
Tampa Electric Co.	6.375	%	8/15/12		145,000		155,850

							6,675,721

Energy Equipment and Services — 0.2%
EEB International Ltd.	8.750	%	10/31/14		260,000		267,800	^D

Food and Staples Retailing — 0.3%
Wal-Mart Stores Inc.	6.500	%	8/15/37		380,000		399,005

Food Products — 0.3%
Tyson Foods Inc.	6.850	%	4/1/16		340,000		340,412	^E

Gas Utilities — 0.1%
Southern Natural Gas Co.	5.900	%	4/1/17		170,000		166,180	^D

Health Care Equipment and Supplies — 0.2%
Hospira Inc.	6.050	%	3/30/17		290,000		287,427

Health Care Providers and Services — 4.6%
Cardinal Health Inc.	5.800	%	10/15/16		410,000		411,905
Coventry Health Care Inc.	5.950	%	3/15/17		440,000		415,774
HCA Inc.	7.875	%	2/1/11		250,000		245,625
HCA Inc.	6.300	%	10/1/12		180,000		160,200	^A
HCA Inc.	6.250	%	2/15/13		930,000		809,100
HCA Inc.	5.750	%	3/15/14		65,000		53,625
HCA Inc.	9.125	%	11/15/14		400,000		412,000
HCA Inc.	9.250	%	11/15/16		500,000		518,750
Humana Inc.	6.450	%	6/1/16		220,000		223,036
Tenet Healthcare Corp.	6.375	%	12/1/11		1,465,000		1,322,163	^A
UnitedHealth Group Inc.	6.000	%	11/15/17		520,000		507,738
Universal Health Services Inc.	7.125	%	6/30/16		520,000		542,770
WellPoint Inc.	5.875	%	6/15/17		540,000		528,515

							6,151,201

Hotels, Restaurants and Leisure — 0.2%
Caesars Entertainment Inc.	8.125	%	5/15/11		250,000		210,000

Household Durables — 0.6%
DR Horton Inc.	5.250	%	2/15/15		410,000		340,300
Pulte Homes Inc.	6.250	%	2/15/13		145,000		131,950
The Black and Decker Corp.	5.750	%	11/15/16		290,000		278,936

							751,186

Independent Power Producers and Energy Traders — 2.7%
Dynegy Holdings Inc.	6.875	%	4/1/11		1,300,000		1,277,250
Dynegy Holdings Inc.	8.750	%	2/15/12		735,000		755,213	^A
The AES Corp.	9.500	%	6/1/09		39,000		40,248
TXU Corp.	5.550	%	11/15/14		1,500,000		1,171,261


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Independent Power Producers and Energy Traders — Continued
TXU Corp.	6.500	%	11/15/24	$	520,000	$	369,241

							3,613,213

Insurance — 3.3%
Ace Ina Holdings Inc.	5.700	%	2/15/17		240,000		238,947
Allstate Corp.	6.500	%	5/15/57		480,000		395,297	^A,C
American International Group Inc.	5.850	%	1/16/18		180,000		176,641
American International Group Inc.	6.250	%	3/15/37		80,000		64,808	^C
ASIF Global Financing XIX	4.900	%	1/17/13		30,000		29,546	^D
Everest Reinsurance Holdings Inc.	6.600	%	5/15/37		260,000		219,149	^C
Liberty Mutual Group	5.750	%	3/15/14		270,000		278,952	^D
Liberty Mutual Group	7.800	%	3/15/37		300,000		252,921	^D
MetLife Inc.	6.400	%	12/15/36		1,160,000		921,782	^C
Prudential Financial Inc.	5.700	%	12/14/36		340,000		289,644
The Chubb Corp.	6.375	%	3/29/67		320,000		298,074	^C
The Travelers Cos. Inc.	6.250	%	3/15/37		620,000		546,855	^C
The Travelers Cos. Inc.	6.250	%	6/15/37		280,000		259,533
Willis North America Inc.	5.125	%	7/15/10		280,000		282,607
Willis North America Inc.	5.625	%	7/15/15		230,000		228,824

							4,483,580

IT Services — 0.8%
Electronic Data Systems Corp.	7.125	%	10/15/09		600,000		611,949
Electronic Data Systems Corp.	7.450	%	10/15/29		420,000		397,259

							1,009,208

Leisure Equipment and Products — 0.3%
Hasbro Inc.	6.300	%	9/15/17		320,000		334,342	^E

Media — 2.8%
AMFM Inc.	8.000	%	11/1/08		210,000		216,731
Clear Channel Communications Inc.	5.500	%	9/15/14		365,000		262,800
Comcast Cable Holdings LLC	9.800	%	2/1/12		375,000		427,719
Comcast Corp.	6.450	%	3/15/37		380,000		358,089
Comcast Corp.	6.950	%	8/15/37		160,000		160,321
Liberty Media LLC	8.500	%	7/15/29		130,000		111,075	^A
Liberty Media LLC	8.250	%	2/1/30		65,000		54,549	^A
News America Inc.	6.550	%	3/15/33		545,000		534,482	^A
TCI Communications Inc.	8.750	%	8/1/15		160,000		180,989
Time Warner Entertainment Co. LP	8.375	%	7/15/33		530,000		596,347
Time Warner Inc.	9.125	%	1/15/13		240,000		268,973
Time Warner Inc.	7.700	%	5/1/32		595,000		626,420

							3,798,495

Metals and Mining — 1.9%
Freeport-McMoRan Copper & Gold Inc.	8.375	%	4/1/17		1,730,000		1,835,962
GTL Trade Finance Inc.	7.250	%	10/20/17		737,000		776,900	^D

							2,612,862

Multi-Utilities — 1.1%
Centerpoint Energy Inc.	6.850	%	6/1/15		1,150,000		1,210,883


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Multi-Utilities — Continued
DTE Energy Co.	6.375	%	4/15/33	$	330,000	$	319,660

							1,530,543

Multiline Retail — 0.8%
Federated Retail Holdings Inc.	5.350	%	3/15/12		270,000		257,254
Macy’s Retail Holdings Inc.	5.875	%	1/15/13		330,000		317,412
May Department Stores Co.	5.750	%	7/15/14		400,000		365,392	^A
May Department Stores Co.	6.650	%	7/15/24		180,000		152,996

							1,093,054

Oil, Gas and Consumable Fuels — 10.4%
Apache Corp.	6.000	%	1/15/37		230,000		232,185
DCP Midstream LLC	6.750	%	9/15/37		420,000		410,382	^D
Devon Financing Corp. ULC	7.875	%	9/30/31		350,000		430,053
Duke Capital LLC	6.250	%	2/15/13		1,200,000		1,243,802
El Paso Corp.	7.800	%	8/1/31		2,000,000		2,053,478
EOG Resources Inc.	5.875	%	9/15/17		540,000		566,103
Hess Corp.	7.875	%	10/1/29		1,450,000		1,720,774
Kerr-McGee Corp.	6.950	%	7/1/24		300,000		318,038
Kerr-McGee Corp.	7.875	%	9/15/31		1,225,000		1,434,493
Kinder Morgan Energy Partners LP	7.125	%	3/15/12		530,000		563,084
Peabody Energy Corp.	6.875	%	3/15/13		285,000		289,275
Pemex Project Funding Master Trust	6.625	%	6/15/35		2,635,000		2,726,901	^A
The Williams Cos. Inc.	7.500	%	1/15/31		102,000		106,335
The Williams Cos. Inc.	8.750	%	3/15/32		1,250,000		1,443,750
XTO Energy Inc.	6.100	%	4/1/36		440,000		435,339

							13,973,992

Paper and Forest Products — 0.6%
Georgia-Pacific Corp.	9.500	%	12/1/11		325,000		330,687
Georgia-Pacific Corp.	7.375	%	12/1/25		250,000		207,500
Weyerhaeuser Co.	6.750	%	3/15/12		235,000		247,085

							785,272

Pharmaceuticals — 0.1%
Wyeth	5.950	%	4/1/37		170,000		166,099

Real Estate Investment Trusts — 0.4%
Health Care REIT Inc.	5.875	%	5/15/15		130,000		120,406
iStar Financial Inc.	5.950	%	10/15/13		590,000		430,700

							551,106

Real Estate Management and Development — 0.2%
Forest City Enterprises Inc.	7.625	%	6/1/15		225,000		213,750

Thrifts and Mortgage Finance — 3.5%
BB&T Capital Trust II	6.750	%	6/7/36		640,000		555,123
Countrywide Financial Corp.	5.800	%	6/7/12		950,000		860,688
Residential Capital LLC	7.828	%	4/17/09		4,420,000		1,635,400	^B,D
Residential Capital LLC	8.000	%	2/22/11		1,680,000		823,200	^E
Residential Capital LLC	8.500	%	6/1/12		90,000		44,100	^E


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Thrifts and Mortgage Finance — Continued
Washington Mutual Inc.	7.250	%	11/1/17	$	950,000	$	743,375	^A

							4,661,886

Tobacco — 1.1%
Reynolds American Inc.	7.250	%	6/1/12		1,360,000		1,438,618

Wireless Telecommunication Services — 1.4%
New Cingular Wireless Services Inc.	8.750	%	3/1/31		475,000		576,457
Nextel Communications Inc.	5.950	%	3/15/14		88,000		65,120
Nextel Communications Inc.	7.375	%	8/1/15		285,000		219,450
Sprint Capital Corp.	6.900	%	5/1/19		330,000		259,875
Sprint Capital Corp.	8.750	%	3/15/32		940,000		794,300

							1,915,202

Total Corporate Bonds and Notes (Cost — $105,423,603)							98,488,361

Mortgage-Backed Securities — 0.7%
Variable Rate Securities^F — 0.7%
Thornburg Mortgage Securities Trust 2007-4 2A1	6.225	%	9/25/37		546,306		508,148
Thornburg Mortgage Securities Trust 2007-4 3A1	6.217	%	9/25/37		509,468		459,694

Total Mortgage-Backed Securities (Cost — $1,046,288)							967,842

U.S. Government Agency Mortgage-Backed Securities — N.M.
Fixed Rate Securities — N.M.
Freddie Mac	10.250	%	5/1/09		2,401		2,531

Total U.S. Government Agency Mortgage-Backed Securities (Cost — $2,316)							2,531

Yankee Bonds^G — 23.4%
Aerospace and Defense — 0.3%
Systems 2001 Asset Trust	6.664	%	9/15/13		381,958		392,462	^D

Commercial Banks — 9.8%
AES El Salvador Trust	6.750	%	2/1/16		750,000		723,039	^D
ATF Capital BV	9.250	%	2/21/14		810,000		800,766	^A,D
Banco Mercantil del Norte SA	6.135	%	10/13/16		750,000		735,529	^C,D
Barclays Bank PLC	7.434	%	9/29/49		910,000		822,716	^C,D
Glitnir Banki Hf	6.330	%	7/28/11		400,000		343,492	^D
Glitnir Banki Hf	6.693	%	6/15/16		680,000		548,090	^C,D
Glitnir Banki Hf	7.451	%	12/14/49		210,000		170,331	^C,D
HBOS Capital Funding LP	6.071	%	6/30/49		560,000		491,856	^C,D
HSBK Europe BV	7.250	%	5/3/17		490,000		423,850	^D
ICICI Bank Ltd.	6.375	%	4/30/22		200,000		171,999	^C,D
ICICI Bank Ltd.	6.375	%	4/30/22		100,000		86,933	^A,C,D
Kaupthing Bank Hf	5.750	%	10/4/11		480,000		383,154	^D
Kaupthing Bank Hf	7.125	%	5/19/16		1,250,000		843,455	^D
Landsbanki Islands Hf	7.431	%	12/31/49		730,000		611,133	^C,D
Mizuho Financial Group	5.790	%	4/15/14		1,100,000		1,154,119	^D
Resona Preferred Global Securities	7.191	%	12/29/49		1,095,000		956,294	^C,D
Royal Bank of Scotland Group PLC	7.640	%	3/17/49		100,000		86,119	^C
RSHB Capital SA	7.175	%	5/16/13		1,340,000		1,365,125	^D
RSHB Capital SA	6.299	%	5/15/17		380,000		351,975	^D
Shinsei Finance Cayman Ltd.	6.418	%	1/29/49		1,210,000		802,002	^C,D


	Rate		Maturity Date	Par/Shares		Value
Long-Term Securities — Continued
Yankee Bonds — Continued
Commercial Banks — Continued
Sumitomo Mitsui Banking Corp.	5.625	%	12/31/49	$	270,000	$	228,372	^C,D
TuranAlem Finance BV	8.250	%	1/22/37		740,000		580,382	^D
VTB Capital SA for Vneshtorgbank	3.839	%	8/1/08		560,000		553,700	^B,D

							13,234,431

Consumer Finance — 0.8%
Aiful Corp.	6.000	%	12/12/11		1,095,000		1,015,559	^D

Diversified Financial Services — 1.4%
Lukoil International Finance BV	6.356	%	6/7/17		310,000		287,525	^D
Petroplus Finance Ltd.	7.000	%	5/1/17		600,000		535,500	^D
SMFG Preferred Capital	6.078	%	1/29/49		380,000		297,920	^C,D
TNK-BP Finance SA	7.500	%	7/18/16		360,000		334,350	^D
UFJ Finance Aruba AEC	6.750	%	7/15/13		355,000		394,893

							1,850,188

Diversified Telecommunication Services — 2.1%
British Telecommunications PLC	9.125	%	12/15/30		330,000		409,852	^E
Deutsche Telekom International Finance BV	5.750	%	3/23/16		160,000		158,188
Deutsche Telekom International Finance BV	8.250	%	6/15/30		500,000		599,792	^E
Koninklijke (Royal) KPN NV	8.375	%	10/1/30		240,000		274,629
Telecom Italia Capital	7.200	%	7/18/36		760,000		717,758
Telefonica Emisiones S.A.U.	7.045	%	6/20/36		600,000		627,329

							2,787,548

Electric Utilities — 0.6%
Enersis SA	7.375	%	1/15/14		317,000		349,693	^A
Enersis SA/Cayman Island	7.400	%	12/1/16		452,000		488,503

							838,196

Food and Staples Retailing — 0.2%
Delhaize Group	6.500	%	6/15/17		290,000		299,484

Foreign Governments — 1.1%
Quebec Province	7.970	%	7/22/36		650,000		953,302
Russian Federation	7.500	%	3/31/30		269,280		310,076	^D
United Mexican States	6.750	%	9/27/34		235,000		262,142

							1,525,520

Gas Utilities — 0.2%
Intergas Finance BV	6.375	%	5/14/17		270,000		235,575	^D

Industrial Conglomerates — 1.1%
Tyco International Group SA	6.375	%	10/15/11		1,450,000		1,444,906

Insurance — 0.4%
Axa	8.600	%	12/15/30		550,000		591,878

Media — 0.2%
Rogers Cable Inc.	6.250	%	6/15/13		250,000		261,016

Metals and Mining — 0.8%
Vale Overseas Ltd.	6.875	%	11/21/36		1,148,000		1,120,121

Oil, Gas and Consumable Fuels — 3.8%
Anadarko Finance Co.	7.500	%	5/1/31		130,000		146,262


	Rate		Maturity Date	Par/Shares			Value
Long-Term Securities — Continued
Yankee Bonds — Continued
Oil, Gas and Consumable Fuels — Continued
Gazprom	9.625	%	3/1/13	$	50,000		$	56,063	^D
Gazprom	9.625	%	3/1/13		20,000			22,462	^D
Gazprom	6.212	%	11/22/16		450,000			416,250	^D
Gazprom	6.510	%	3/7/22		400,000			356,500	^D
Petrobras International Finance Co.	5.875	%	3/1/18		879,000			846,078
Petrozuata Finance Inc.	8.220	%	4/1/17		3,205,000			3,225,031	^D

								5,068,646

Wireless Telecommunication Services — 0.6%
America Movil SA de CV	5.625	%	11/15/17		520,000			514,080
Rogers Wireless Inc.	6.375	%	3/1/14		300,000			297,438

								811,518

Total Yankee Bonds (Cost — $33,111,876)								31,477,048

Preferred Stocks — 0.5%
Fannie Mae	8.250	%			11,700	shs		281,385	^C
Freddie Mac	8.375	%			16,625			405,650	^C

Total Preferred Stocks (Cost — $708,125)								687,035

Total Long-Term Securities (Cost — $140,292,208)								131,622,817

Investment of Collateral From Securities Lending — 6.9%
State Street Navigator Securities Lending Prime Portfolio				$	9,303,865			9,303,865

Total Investment of Collateral From Securities Lending (Cost — $9,303,865)								9,303,865

Short-Term Securities — 0.2%
Repurchase Agreements — 0.2%
Merrill Lynch Government Securities Inc. 2.25%, dated 3/31/08, to be repurchased at $339,021 on 4/1/08 (Collateral: $347,000 Freddie Mac zero-coupon note, due 4/30/08 , value $345,779 )					339,000			339,000

Total Short-Term Securities (Cost — $339,000)								339,000

Total Investments — 104.9% (Cost — $149,935,073) ^H								141,265,682
Obligation to Return Collateral For Securities Loaned — (6.9)%								(9,303,865	)
Other Assets Less Liabilities — 2.0%								2,644,607

							$	134,606,424

Net Assets — 100.0%
Net Asset Value per Common Share:							$	14.34

N.M.	Not Meaningful.

A	All or a portion of this security is on loan.

B	Indexed Security - The rates of interest earned on these securities are tied to the London Interbank Offered Rate (“LIBOR”), the Consumer Price Index (“CPI”), or the one-year Treasury Bill Rate. The coupon rates are the rates as of March 31, 2008.

C	Stepped Coupon Security - A security with a predetermined schedule of interest or dividend rate changes at which time it begins to accrue interest or pay dividends according to the predetermined schedule.

D	Rule 144a Security - A security purchased pursuant to Rule 144a under the Securities Act of 1933 which may not be resold subject to that rule except to qualified institutional buyers. These securities, which the Fund’s investment adviser has determined to be liquid, represent 23.47% of net assets.

E	Credit Linked Security - The rates of interest earned on these securities are tied to the credit rating assigned by Standard & Poor’s Rating Service and/or Moody’s Investors Services.

F	The coupon rates shown on variable rate securities are the rates at March 31, 2008. These rates vary with the weighted average coupon of the underlying loans.

G	Yankee Bond - A dollar-denominated bond issued in the U.S. by foreign entities.

H	At March 31, 2008, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:


Gross unrealized appreciation	$	3,180,088
Gross unrealized depreciation		(11,849,479	)

Net unrealized depreciation	$	(8,669,391	)

Investment Valuation

Effective January 1, 2008, the Fund adopted Statement of Financial Accounting Standards No. 157 (“FAS 157”). FAS 157 establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Fund’s investments, and requires additional disclosure about fair value. The hierarchy of inputs is summarized below.

•

Level 1 – quoted prices in active markets for identical investments

•

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

•

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

Debt securities are valued at the last quoted bid prices provided by an independent pricing service that are based on transactions in debt obligations, quotations from bond dealers, market transactions in comparable securities and various other relationships between securities. Equity securities for which market quotations are available are valued at the last sale price or official closing price on the primary market or exchange on which they trade. When prices are not readily available, or are determined not to reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund may value these securities at fair value as determined in accordance with the procedures approved by the Fund’s Board of Directors.

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


	[3/31/2008]		Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Investments in Securities	$	141,265,682	$	—	$	141,265,682	$	—
Other Financial Instruments*		—		—		—		—

Total	$	141,265,682	$	—	$	141,265,682	$	—

*	Other financial instruments may include options, futures and swaps.

Securities Lending

The Fund may lend its securities to approved brokers to earn additional income, and will receive cash and U.S. government securities as collateral against the loans. Cash collateral received is invested in a money market pooled account by the Fund’s lending agent. Collateral is maintained over the life of the loan in an amount not less than 100% of the value of the loaned securities.

At March 31, 2008, the market value of the securities on loan to broker-dealers was $9,114,395 for which the fund received collateral of $9,303,865 in cash. Such collateral is in the possession of the Fund’s custodian. The cash invested in the State Street Navigator Securities Lending Prime Portfolio is included in the Fund’s portfolio of investments. As wish other extensions of credit, the Fund may bear the risk of delay in recovery or even loss of rights to the collateral should the borrower of the securities fail financially.

Other information regarding the Fund is available in the Fund’s most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov).

Item 2 – Controls and Procedures

(a)

Western Asset Income Fund (the “Registrant”) principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the required time periods in the Securities and Exchange Commission’s rules and forms and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-Q is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)

There were no changes in the Registrant’s internal control over financial reporting during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3 – Exhibits

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – filed as an exhibit hereto.

SIGNATURES

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


Western Asset Income Fund

By:		/s/ R. Jay Gerken
		R. Jay Gerken
		President
		Western Asset Income Fund
Date:		May 21, 2008

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/ R. Jay Gerken
		R. Jay Gerken
		President
		Western Asset Income Fund
Date:		May 21, 2008

By:		/s/ Marie K. Karpinski
		Marie K. Karpinski
		Principal Financial and Accounting Officer
		Western Asset Income Fund
Date:		May 21, 2008