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 COMPANY

Investment Company Act file number 811-02351

Western Asset Income Fund

(Exact name of registrant as specified in charter)

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

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-888-777-0102

Date of fiscal year end: December 31

Date of reporting period: March 31, 2016

ITEM 1.

SCHEDULE OF INVESTMENTS.

WESTERN ASSET INCOME FUND

FORM N-Q

MARCH 31, 2016

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
CORPORATE BONDS & NOTES - 93.6%
CONSUMER DISCRETIONARY - 9.3%
Auto Components - 0.6%
ZF North America Capital Inc., Senior Notes		4.750	%		4/29/25	$	740,000	$	736,300	^(a)

Automobiles - 0.8%
Ford Motor Credit Co., LLC, Senior Notes		8.125	%		1/15/20		410,000		486,893
General Motors Co., Senior Notes		6.600	%		4/1/36		170,000		187,066
General Motors Co., Senior Notes		5.200	%		4/1/45		310,000		291,422
General Motors Co., Senior Notes		6.750	%		4/1/46		80,000		90,941

Total Automobiles									1,056,322

Hotels, Restaurants & Leisure - 0.5%
McDonald’s Corp., Senior Notes		4.700	%		12/9/35		150,000		161,190
McDonald’s Corp., Senior Notes		4.875	%		12/9/45		230,000		251,268
Wynn Macau Ltd., Senior Notes		5.250	%		10/15/21		290,000		273,325	^(a)

Total Hotels, Restaurants & Leisure									685,783

Household Durables - 0.6%
Newell Rubbermaid Inc., Senior Notes		4.200	%		4/1/26		710,000		742,691

Media - 6.7%
21st Century Fox America Inc., Senior Debentures		7.750	%		12/1/45		130,000		171,637
21st Century Fox America Inc., Senior Notes		6.550	%		3/15/33		545,000		653,850
CCO Safari II LLC, Senior Secured Notes		6.384	%		10/23/35		110,000		121,435	^(a)
CCO Safari II LLC, Senior Secured Notes		6.484	%		10/23/45		770,000		856,799	^(a)
Comcast Corp., Bonds		6.400	%		5/15/38		950,000		1,265,307
Comcast Corp., Notes		6.450	%		3/15/37		220,000		291,645
Comcast Corp., Senior Notes		6.950	%		8/15/37		160,000		224,682
Time Warner Cable Inc., Debentures		7.300	%		7/1/38		100,000		117,300
Time Warner Cable Inc., Senior Bonds		6.550	%		5/1/37		160,000		175,334
Time Warner Cable Inc., Senior Notes		8.750	%		2/14/19		690,000		807,913
Time Warner Cable Inc., Senior Notes		5.500	%		9/1/41		50,000		49,586
Time Warner Entertainment Co., LP, Senior Notes		8.375	%		7/15/33		410,000		520,850
Time Warner Inc., Senior Debentures		7.700	%		5/1/32		595,000		763,891
Time Warner Inc., Senior Notes		4.900	%		6/15/42		150,000		152,834
UBM PLC, Notes		5.750	%		11/3/20		570,000		617,403	^(a)
Viacom Inc., Senior Debentures		5.250	%		4/1/44		70,000		62,960
Virgin Media Finance PLC, Senior Notes		6.375	%		4/15/23		1,000,000		1,040,000	^(a)
WPP Finance 2010, Senior Notes		4.750	%		11/21/21		840,000		926,928
WPP Finance 2010, Senior Notes		5.625	%		11/15/43		150,000		155,111

Total Media									8,975,465

Specialty Retail - 0.1%
American Greetings Corp., Senior Notes		7.375	%		12/1/21		160,000		163,600

TOTAL CONSUMER DISCRETIONARY									12,360,161

CONSUMER STAPLES - 5.4%
Beverages - 2.1%
Anheuser-Busch InBev Finance Inc., Senior Notes		4.900	%		2/1/46		1,310,000		1,464,006
Anheuser-Busch InBev Worldwide Inc., Senior Notes		5.375	%		1/15/20		260,000		293,179
Pernod-Ricard SA, Senior Bonds		5.750	%		4/7/21		350,000		398,544	^(a)
Pernod-Ricard SA, Senior Notes		5.500	%		1/15/42		670,000		722,942	^(a)

Total Beverages									2,878,671

Food & Staples Retailing - 0.7%
CVS Health Corp., Senior Notes		4.875	%		7/20/35		180,000		200,694
CVS Health Corp., Senior Notes		5.125	%		7/20/45		340,000		393,761
Whole Foods Market Inc., Senior Notes		5.200	%		12/3/25		330,000		345,810	^(a)

Total Food & Staples Retailing									940,265

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Food Products - 0.4%
Kraft Heinz Foods Co., Senior Notes		5.000	%		7/15/35	$	70,000	$	77,201	^(a)
Kraft Heinz Foods Co., Senior Notes		5.000	%		6/4/42		170,000		185,053
Kraft Heinz Foods Co., Senior Notes		5.200	%		7/15/45		250,000		279,722	^(a)

Total Food Products									541,976

Tobacco - 2.2%
Altria Group Inc., Senior Notes		9.950	%		11/10/38		680,000		1,195,836
Altria Group Inc., Senior Notes		10.200	%		2/6/39		230,000		421,326
Philip Morris International Inc., Senior Notes		4.500	%		3/20/42		170,000		182,753
Reynolds American Inc., Senior Notes		8.125	%		5/1/40		270,000		348,518
Reynolds American Inc., Senior Notes		7.000	%		8/4/41		320,000		378,649
Reynolds American Inc., Senior Notes		5.850	%		8/15/45		320,000		390,771

Total Tobacco									2,917,853

TOTAL CONSUMER STAPLES									7,278,765

ENERGY - 15.7%
Energy Equipment & Services - 1.1%
Baker Hughes Inc., Senior Notes		7.500	%		11/15/18		370,000		414,712
ENSCO International Inc., Senior Bonds		7.200	%		11/15/27		120,000		63,600
Ensco PLC, Senior Notes		5.200	%		3/15/25		480,000		268,800
Halliburton Co., Senior Notes		5.000	%		11/15/45		200,000		195,468
Petrofac Ltd., Senior Notes		3.400	%		10/10/18		310,000		285,426	^(a)
Pride International Inc., Senior Notes		6.875	%		8/15/20		120,000		87,600
Pride International Inc., Senior Notes		7.875	%		8/15/40		130,000		69,875

Total Energy Equipment & Services									1,385,481

Oil, Gas & Consumable Fuels - 14.6%
Anadarko Finance Co., Senior Notes		7.500	%		5/1/31		465,000		503,494
Anadarko Petroleum Corp., Senior Notes		4.850	%		3/15/21		460,000		464,879
Anadarko Petroleum Corp., Senior Notes		5.550	%		3/15/26		460,000		464,050
Apache Corp., Senior Notes		6.900	%		9/15/18		100,000		108,314
Apache Corp., Senior Notes		6.000	%		1/15/37		190,000		189,070
Apache Corp., Senior Notes		5.100	%		9/1/40		160,000		145,175
Apache Corp., Senior Notes		5.250	%		2/1/42		90,000		82,705
ConocoPhillips, Notes		6.500	%		2/1/39		810,000		885,700
ConocoPhillips, Senior Notes		6.000	%		1/15/20		310,000		344,720
Devon Energy Corp., Senior Notes		5.850	%		12/15/25		350,000		337,833
Devon Energy Corp., Senior Notes		5.600	%		7/15/41		320,000		250,624
Devon Energy Corp., Senior Notes		5.000	%		6/15/45		270,000		201,519
Devon Financing Co., LLC, Debentures		7.875	%		9/30/31		380,000		372,619
Ecopetrol SA, Senior Notes		5.375	%		6/26/26		740,000		673,400
Ecopetrol SA, Senior Notes		5.875	%		5/28/45		176,000		138,547
Enbridge Energy Partners LP, Senior Notes		9.875	%		3/1/19		120,000		134,392
Energy Transfer Equity LP, Senior Notes		7.500	%		10/15/20		250,000		240,625
Enterprise Products Operating LLC, Senior Notes		6.125	%		10/15/39		320,000		334,838
EOG Resources Inc., Senior Notes		5.875	%		9/15/17		540,000		571,781
Hess Corp., Notes		7.875	%		10/1/29		1,180,000		1,283,206
Hess Corp., Senior Bonds		6.000	%		1/15/40		300,000		276,414
Kerr-McGee Corp., Notes		6.950	%		7/1/24		1,080,000		1,143,138
Kinder Morgan Inc., Medium-Term Notes		7.800	%		8/1/31		2,000,000		2,210,406
LUKOIL International Finance BV, Senior Notes		3.416	%		4/24/18		300,000		297,975	^(a)
LUKOIL International Finance BV, Senior Notes		4.563	%		4/24/23		200,000		190,958	^(a)
MEG Energy Corp., Senior Notes		6.375	%		1/30/23		600,000		354,000	^(a)
Noble Energy Inc., Senior Notes		6.000	%		3/1/41		390,000		363,651
Noble Energy Inc., Senior Notes		5.250	%		11/15/43		150,000		129,178
Occidental Petroleum Corp., Senior Notes		3.400	%		4/15/26		400,000		403,820
Petrobras Global Finance BV, Senior Notes		7.250	%		3/17/44		280,000		209,300
Petroleos Mexicanos, Senior Bonds		6.625	%		6/15/35		2,635,000		2,529,600
Petroleos Mexicanos, Senior Notes		6.875	%		8/4/26		450,000		487,125	^(a)
Phillips 66, Senior Notes		5.875	%		5/1/42		160,000		173,856
Schlumberger Holdings Corp., Senior Notes		4.000	%		12/21/25		440,000		454,269	^(a)
Shell International Finance BV, Senior Notes		6.375	%		12/15/38		250,000		306,075
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		7.850	%		2/1/26		470,000		537,547	^(a)

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Oil, Gas & Consumable Fuels - (continued)
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		5.400	%		8/15/41	$	310,000	$	265,740
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		4.450	%		8/1/42		450,000		344,328
Williams Cos. Inc., Debentures		7.500	%		1/15/31		47,000		38,188
Williams Cos. Inc., Senior Notes		4.550	%		6/24/24		680,000		516,800
Williams Cos. Inc., Senior Notes		7.750	%		6/15/31		37,000		30,618
Williams Cos. Inc., Senior Notes		8.750	%		3/15/32		610,000		542,900

Total Oil, Gas & Consumable Fuels									19,533,377

TOTAL ENERGY									20,918,858

FINANCIALS - 37.0%
Banks - 20.1%
Bank of America Corp., Junior Subordinated Notes		6.500	%		10/23/24		650,000		670,930	^(b)(c)
Bank of America Corp., Senior Notes		6.500	%		8/1/16		70,000		71,246
Bank of America Corp., Senior Notes		6.400	%		8/28/17		300,000		318,867
Bank of America Corp., Senior Notes		7.625	%		6/1/19		70,000		81,464
Bank of America Corp., Senior Notes		5.625	%		7/1/20		30,000		33,711
Bank of America Corp., Senior Notes		5.875	%		2/7/42		320,000		387,807
Bank of America Corp., Subordinated Notes		5.700	%		5/2/17		1,000,000		1,039,945
Bank of America Corp., Subordinated Notes		6.110	%		1/29/37		320,000		367,960
Bank of America Corp., Subordinated Notes		7.750	%		5/14/38		900,000		1,229,484
Barclays Bank PLC, Subordinated Notes		10.179	%		6/12/21		240,000		304,955	^(a)
Barclays Bank PLC, Subordinated Notes		7.625	%		11/21/22		450,000		483,750
BNP Paribas SA, Junior Subordinated Notes		7.625	%		3/30/21		330,000		331,815	^(a)(b)(c)
BNP Paribas SA, Junior Subordinated Notes		7.375	%		8/19/25		200,000		193,500	^(a)(b)(c)
BPCE SA, Subordinated Notes		5.150	%		7/21/24		410,000		418,785	^(a)
Citigroup Inc., Junior Subordinated Bonds		6.300	%		5/15/24		280,000		268,935	^(b)(c)
Citigroup Inc., Junior Subordinated Bonds		5.950	%		5/15/25		540,000		519,750	^(b)(c)
Citigroup Inc., Junior Subordinated Notes		5.950	%		1/30/23		200,000		192,687	^(b)(c)
Citigroup Inc., Senior Notes		8.125	%		7/15/39		251,000		371,309
Citigroup Inc., Senior Notes		5.875	%		1/30/42		240,000		288,811
Citigroup Inc., Subordinated Notes		5.500	%		9/13/25		750,000		820,732
Citigroup Inc., Subordinated Notes		4.450	%		9/29/27		400,000		402,498
Citigroup Inc., Subordinated Notes		6.125	%		8/25/36		404,000		453,042
Citigroup Inc., Subordinated Notes		6.675	%		9/13/43		370,000		448,451
Cooperatieve Rabobank U.A., Junior Subordinated Notes		11.000	%		6/30/19		708,000		849,529	^(a)(b)(c)
Cooperatieve Rabobank U.A., Senior Notes		5.250	%		5/24/41		570,000		680,160
Cooperatieve Rabobank U.A., Subordinated Notes		5.750	%		12/1/43		450,000		524,274
Cooperatieve Rabobank U.A., Subordinated Notes		5.250	%		8/4/45		340,000		367,697
Credit Agricole SA, Junior Subordinated Notes		8.375	%		10/13/19		560,000		617,512	^(a)(b)(c)
Credit Agricole SA, Junior Subordinated Notes		8.125	%		12/23/25		1,040,000		1,037,483	^(a)(b)(c)
HSBC Holdings PLC, Junior Subordinated Bonds		6.375	%		9/17/24		1,430,000		1,328,113	^(b)(c)
HSBC Holdings PLC, Junior Subordinated Bonds		6.375	%		3/30/25		350,000		330,750	^(b)(c)
HSBC Holdings PLC, Senior Notes		4.300	%		3/8/26		600,000		620,288
HSBC Holdings PLC, Subordinated Notes		4.250	%		8/18/25		210,000		207,453
HSBC Holdings PLC, Subordinated Notes		5.250	%		3/14/44		210,000		212,987
ING Bank NV, Subordinated Notes		5.800	%		9/25/23		600,000		653,813	^(a)
Intesa Sanpaolo SpA, Subordinated Bonds		5.017	%		6/26/24		250,000		234,111	^(a)
JPMorgan Chase & Co., Junior Subordinated Bonds		5.150	%		5/1/23		150,000		144,030	^(b)(c)
JPMorgan Chase & Co., Junior Subordinated Bonds		6.000	%		8/1/23		260,000		261,690	^(b)(c)
JPMorgan Chase & Co., Subordinated Notes		6.125	%		6/27/17		720,000		757,807
JPMorgan Chase & Co., Subordinated Notes		5.625	%		8/16/43		440,000		506,734
JPMorgan Chase & Co., Subordinated Notes		4.950	%		6/1/45		150,000		158,320
Lloyds Banking Group PLC, Subordinated Notes		4.650	%		3/24/26		590,000		584,730
M&T Bank Corp., Junior Subordinated Bonds		6.875	%		6/15/16		880,000		883,300	^(b)

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Banks - (continued)
Royal Bank of Canada, Subordinated Notes		4.650	%		1/27/26	$	50,000	$	50,858
Royal Bank of Scotland Group PLC, Junior Subordinated Bonds		7.648	%		9/30/31		1,360,000		1,591,200	^(b)(c)
Royal Bank of Scotland Group PLC, Subordinated Notes		6.125	%		12/15/22		310,000		328,838
Royal Bank of Scotland Group PLC, Subordinated Notes		6.100	%		6/10/23		1,010,000		1,034,489
Royal Bank of Scotland Group PLC, Subordinated Notes		6.000	%		12/19/23		350,000		354,480
Royal Bank of Scotland NV, Subordinated Bonds		7.750	%		5/15/23		480,000		518,512
Santander UK Group Holdings PLC, Subordinated Notes		4.750	%		9/15/25		210,000		198,627	^(a)
Standard Chartered PLC, Subordinated Notes		5.700	%		3/26/44		410,000		369,136	^(a)
Wachovia Capital Trust III, Junior Subordinated Bonds		5.570	%		5/2/16		1,190,000		1,175,125	^(b)(c)
Wells Fargo & Co., Subordinated Notes		5.375	%		11/2/43		430,000		486,033

Total Banks									26,768,513

Capital Markets - 5.2%
Credit Suisse Group AG, Junior Subordinated Notes		6.250	%		12/18/24		1,170,000		1,074,409	^(a)(b)(c)
Credit Suisse Group Funding Guernsey Ltd., Senior Notes		4.875	%		5/15/45		850,000		809,782
Goldman Sachs Group Inc., Senior Bonds		4.750	%		10/21/45		270,000		282,209
Goldman Sachs Group Inc., Senior Notes		5.375	%		3/15/20		270,000		299,601
Goldman Sachs Group Inc., Senior Notes		6.250	%		2/1/41		570,000		708,702
Goldman Sachs Group Inc., Subordinated Notes		6.750	%		10/1/37		640,000		764,439
Goldman Sachs Group Inc., Subordinated Notes		5.150	%		5/22/45		500,000		507,941
KKR Group Finance Co. III LLC, Senior Bonds		5.125	%		6/1/44		820,000		803,331	^(a)
Morgan Stanley, Medium-Term Notes		6.625	%		4/1/18		100,000		109,254
Morgan Stanley, Senior Notes		5.500	%		7/24/20		100,000		112,431
Morgan Stanley, Senior Notes		6.375	%		7/24/42		90,000		117,992
Pershing Square Holdings Ltd., Senior Notes		5.500	%		7/15/22		1,000,000		917,500	^(a)
UBS AG Stamford CT, Subordinated Notes		7.625	%		8/17/22		340,000		389,412

Total Capital Markets									6,897,003

Consumer Finance - 2.5%
Ally Financial Inc., Subordinated Notes		8.000	%		12/31/18		201,000		217,080
American Express Co., Subordinated Debentures		6.800	%		9/1/66		370,000		370,925	^(c)
Capital One Financial Corp., Senior Notes		6.750	%		9/15/17		230,000		245,009
HSBC Finance Corp., Senior Notes		6.676	%		1/15/21		1,300,000		1,491,118
Navient Corp., Senior Notes		7.250	%		1/25/22		830,000		776,050
Navient Corp., Senior Notes		6.125	%		3/25/24		290,000		249,400

Total Consumer Finance									3,349,582

Diversified Financial Services - 4.5%
Argos Merger Sub Inc., Senior Notes		7.125	%		3/15/23		130,000		138,190	^(a)
Beaver Valley Funding Corp., Senior Secured Bonds		9.000	%		6/1/17		11,000		11,660
Blackstone Holdings Finance Co., LLC, Senior Notes		4.450	%		7/15/45		190,000		179,409	^(a)
Carlyle Holdings II Finance LLC, Senior Secured Notes		5.625	%		3/30/43		220,000		239,149	^(a)
CME Group Inc., Senior Notes		5.300	%		9/15/43		440,000		524,191
ILFC E-Capital Trust I, Junior Subordinated Notes		4.490	%		12/21/65		470,000		380,700	^(a)(c)
ILFC E-Capital Trust II, Bonds		4.740	%		12/21/65		790,000		639,900	^(a)(c)
International Lease Finance Corp., Senior Notes		8.750	%		3/15/17		190,000		200,146
International Lease Finance Corp., Senior Notes		8.875	%		9/1/17		470,000		505,485
International Lease Finance Corp., Senior Notes		6.250	%		5/15/19		130,000		138,613
International Lease Finance Corp., Senior Notes		8.250	%		12/15/20		190,000		221,825
International Lease Finance Corp., Senior Secured Notes		7.125	%		9/1/18		700,000		763,000	^(a)
Voya Financial Inc., Senior Notes		5.700	%		7/15/43		500,000		566,781
ZFS Finance USA Trust II, Bonds		6.450	%		12/15/65		1,440,000		1,437,120	^(a)(c)

Total Diversified Financial Services									5,946,169

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Insurance - 3.6%
AIA Group Ltd., Senior Notes		4.875	%		3/11/44	$	400,000	$	437,128	^(a)
Allstate Corp., Junior Subordinated Debentures		6.500	%		5/15/57		480,000		520,800	^(c)
American Equity Investment Life Holding Co., Senior Notes		6.625	%		7/15/21		60,000		61,650
American International Group Inc., Junior Subordinated Debentures		6.250	%		3/15/37		80,000		82,400
American International Group Inc., Senior Notes		6.400	%		12/15/20		90,000		104,582
Aon PLC, Senior Notes		4.750	%		5/15/45		90,000		91,309
AXA SA, Subordinated Bonds		8.600	%		12/15/30		200,000		263,000
Delphi Financial Group Inc., Senior Notes		7.875	%		1/31/20		170,000		199,627
Fidelity & Guaranty Life Holdings Inc., Senior Notes		6.375	%		4/1/21		190,000		190,950	^(a)
Liberty Mutual Group Inc., Junior Subordinated Bonds		7.800	%		3/15/37		190,000		207,100	^(a)
Liberty Mutual Insurance Co., Subordinated Notes		7.875	%		10/15/26		490,000		602,681	^(a)
MetLife Inc., Junior Subordinated Debentures		6.400	%		12/15/36		1,150,000		1,187,950
Prudential Financial Inc., Junior Subordinated Debentures		8.875	%		6/15/38		340,000		373,150	^(c)
Teachers Insurance & Annuity Association of America, Notes		6.850	%		12/16/39		400,000		514,889	^(a)

Total Insurance									4,837,216

Real Estate Investment Trusts (REITs) - 0.1%
Communications Sales & Leasing Inc., Senior Notes		8.250	%		10/15/23		120,000		111,000
Communications Sales & Leasing Inc., Senior Secured Notes		6.000	%		4/15/23		50,000		48,625	^(a)

Total Real Estate Investment Trusts (REITs)									159,625

Real Estate Management & Development - 0.6%
Caesars Entertainment Resort Properties LLC, Senior Secured Notes		8.000	%		10/1/20		500,000		489,500
Security Capital Group Inc., Senior Notes		7.700	%		6/15/28		280,000		381,533

Total Real Estate Management & Development									871,033

Thrifts & Mortgage Finance - 0.4%
Quicken Loans Inc., Senior Notes		5.750	%		5/1/25		550,000		533,500	^(a)

TOTAL FINANCIALS									49,362,641

HEALTH CARE - 2.5%
Biotechnology - 1.4%
AbbVie Inc., Senior Subordinated Notes		4.700	%		5/14/45		290,000		308,378
Amgen Inc., Senior Notes		5.150	%		11/15/41		420,000		463,490
Celgene Corp., Senior Notes		5.000	%		8/15/45		300,000		324,400
Gilead Sciences Inc., Senior Notes		5.650	%		12/1/41		60,000		72,770
Gilead Sciences Inc., Senior Notes		4.500	%		2/1/45		450,000		476,644
Gilead Sciences Inc., Senior Notes		4.750	%		3/1/46		230,000		251,756

Total Biotechnology									1,897,438

Health Care Providers & Services - 0.6%
Anthem Inc., Senior Notes		5.875	%		6/15/17		290,000		304,998
Catholic Health Initiatives, Secured Bonds		4.350	%		11/1/42		30,000		29,619
Humana Inc., Senior Notes		8.150	%		6/15/38		80,000		109,694
UnitedHealth Group Inc., Senior Notes		6.000	%		11/15/17		31,000		33,281
Universal Hospital Services Inc., Secured Notes		7.625	%		8/15/20		360,000		333,000

Total Health Care Providers & Services									810,592

Pharmaceuticals - 0.5%
Actavis Funding SCS, Senior Notes		4.550	%		3/15/35		190,000		195,759
Actavis Funding SCS, Senior Notes		4.750	%		3/15/45		360,000		378,614
Zoetis Inc., Senior Notes		4.700	%		2/1/43		30,000		28,212

Total Pharmaceuticals									602,585

TOTAL HEALTH CARE									3,310,615

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
INDUSTRIALS - 5.3%
Aerospace & Defense - 0.6%
Lockheed Martin Corp., Senior Notes		3.350	%		9/15/21	$	60,000	$	63,487
Lockheed Martin Corp., Senior Notes		4.500	%		5/15/36		150,000		161,351
Lockheed Martin Corp., Senior Notes		4.700	%		5/15/46		360,000		402,527
United Technologies Corp., Senior Notes		6.125	%		2/1/19		200,000		224,925

Total Aerospace & Defense									852,290

Airlines - 0.9%
Continental Airlines Inc., Pass-Through Certificates, Secured Notes		9.250	%		5/10/17		93,522		99,043
Continental Airlines Inc., Pass-Through Certificates, Secured Notes		6.250	%		4/11/20		126,925		132,637
Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes		6.545	%		2/2/19		87,493		92,471
Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes		7.250	%		11/10/19		158,514		178,725
Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes		7.256	%		3/15/20		95,224		102,009
Delta Air Lines Inc., Pass-Through Certificates, Secured Notes		8.021	%		8/10/22		71,955		81,308
Delta Air Lines Inc., Pass-Through Certificates, Senior Secured Notes		7.750	%		12/17/19		146,300		164,221
United Airlines Inc., Pass-Through Certificates, Secured Notes		9.750	%		1/15/17		45,246		47,517
US Airways, Pass-Through Trust, Senior Secured Bonds		5.900	%		10/1/24		298,975		334,105

Total Airlines									1,232,036

Commercial Services & Supplies - 1.1%
Republic Services Inc., Senior Notes		5.500	%		9/15/19		130,000		144,341
Republic Services Inc., Senior Notes		5.250	%		11/15/21		330,000		375,794
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes		5.250	%		4/15/21		600,000		588,000	^(a)
Waste Management Inc., Senior Notes		7.750	%		5/15/32		250,000		344,657

Total Commercial Services & Supplies									1,452,792

Construction & Engineering - 0.7%
Valmont Industries Inc., Senior Notes		6.625	%		4/20/20		790,000		886,893

Industrial Conglomerates - 1.5%
General Electric Co., Junior Subordinated Bonds		5.000	%		1/21/21		710,000		731,300	^(b)(c)
General Electric Co., Senior Notes		5.875	%		1/14/38		120,000		156,349
General Electric Co., Senior Notes		6.875	%		1/10/39		646,000		935,406
General Electric Co., Subordinated Notes		5.300	%		2/11/21		138,000		160,266

Total Industrial Conglomerates									1,983,321

Machinery - 0.2%
Caterpillar Inc., Senior Notes		4.750	%		5/15/64		220,000		228,898

Road & Rail - 0.3%
Flexi-Van Leasing Inc., Senior Notes		7.875	%		8/15/18		60,000		59,400	^(a)
Union Pacific Corp., Senior Notes		4.375	%		11/15/65		340,000		336,890

Total Road & Rail									396,290

TOTAL INDUSTRIALS									7,032,520

INFORMATION TECHNOLOGY - 3.0%
Communications Equipment - 0.8%
Harris Corp., Senior Notes		5.550	%		10/1/21		520,000		579,669
Harris Corp., Senior Notes		4.854	%		4/27/35		260,000		270,247
Harris Corp., Senior Notes		5.054	%		4/27/45		210,000		223,748

Total Communications Equipment									1,073,664

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
Electronic Equipment, Instruments & Components - 0.2%
Interface Security Systems Holdings Inc./Interface Security Systems LLC, Senior Secured Notes		9.250	%		1/15/18	$	290,000	$	272,600

IT Services - 1.1%
Hewlett-Packard Enterprise Co., Senior Notes		6.350	%		10/15/45		230,000		226,040	^(a)
HP Enterprise Services LLC, Notes		7.450	%		10/15/29		420,000		479,165
Visa Inc., Senior Notes		4.300	%		12/14/45		730,000		798,626

Total IT Services									1,503,831

Semiconductors & Semiconductor Equipment - 0.6%
Intel Corp., Senior Notes		4.900	%		7/29/45		130,000		145,804
KLA-Tencor Corp., Senior Notes		4.650	%		11/1/24		360,000		362,868
National Semiconductor Corp., Senior Notes		6.600	%		6/15/17		110,000		117,256
QUALCOMM Inc., Senior Subordinated Notes		4.800	%		5/20/45		220,000		217,929

Total Semiconductors & Semiconductor Equipment									843,857

Software - 0.0%
Microsoft Corp., Senior Notes		4.750	%		11/3/55		50,000		55,564

Technology Hardware, Storage & Peripherals - 0.3%
HP Inc., Senior Notes		4.650	%		12/9/21		310,000		328,087

TOTAL INFORMATION TECHNOLOGY									4,077,603

MATERIALS - 5.6%
Chemicals - 0.9%
Dow Chemical Co., Debentures		7.375	%		11/1/29		800,000		1,025,591
Ecolab Inc., Senior Notes		5.500	%		12/8/41		140,000		160,694

Total Chemicals									1,186,285

Containers & Packaging - 0.2%
WestRock RKT Co., Senior Notes		4.450	%		3/1/19		230,000		240,490

Metals & Mining - 4.0%
Alcoa Inc., Senior Notes		5.870	%		2/23/22		800,000		799,752
Alcoa Inc., Senior Notes		5.125	%		10/1/24		320,000		303,501
Barrick Gold Corp., Senior Notes		4.100	%		5/1/23		248,000		241,525
BHP Billiton Finance USA Ltd., Senior Notes		5.000	%		9/30/43		100,000		101,731
BHP Billiton Finance USA Ltd., Subordinated Notes		6.750	%		10/19/75		470,000		470,000	^(a)(c)
Freeport-McMoRan Inc., Senior Notes		2.150	%		3/1/17		90,000		85,950
Freeport-McMoRan Inc., Senior Notes		2.300	%		11/14/17		100,000		92,250
Freeport-McMoRan Inc., Senior Notes		2.375	%		3/15/18		80,000		70,800
Freeport-McMoRan Inc., Senior Notes		3.550	%		3/1/22		60,000		41,850
Glencore Finance Canada Ltd., Senior Notes		2.700	%		10/25/17		110,000		107,800	^(a)
Glencore Finance Canada Ltd., Senior Notes		6.900	%		11/15/37		430,000		367,676	^(a)
Rio Tinto Finance USA Ltd., Senior Notes		9.000	%		5/1/19		660,000		781,005
Southern Copper Corp., Senior Notes		5.375	%		4/16/20		150,000		160,586
Southern Copper Corp., Senior Notes		5.250	%		11/8/42		470,000		386,034
Steel Dynamics Inc., Senior Notes		6.125	%		8/15/19		140,000		144,550
Vale Overseas Ltd., Senior Notes		6.875	%		11/21/36		1,148,000		906,575
Yamana Gold Inc., Senior Notes		4.950	%		7/15/24		370,000		312,650

Total Metals & Mining									5,374,235

Paper & Forest Products - 0.5%
Fibria Overseas Finance Ltd., Senior Notes		5.250	%		5/12/24		310,000		300,700
Georgia-Pacific LLC, Senior Bonds		7.375	%		12/1/25		250,000		318,536

Total Paper & Forest Products									619,236

TOTAL MATERIALS									7,420,246

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
TELECOMMUNICATION SERVICES - 7.6%
Diversified Telecommunication Services - 6.1%
AT&T Inc., Senior Notes		4.500	%		5/15/35	$	360,000	$	354,995
AT&T Inc., Senior Notes		5.350	%		9/1/40		300,000		315,439
AT&T Inc., Senior Notes		5.550	%		8/15/41		300,000		322,018
AT&T Inc., Senior Notes		4.750	%		5/15/46		260,000		253,619
British Telecommunications PLC, Bonds		9.625	%		12/15/30		330,000		515,815
Intelsat Jackson Holdings SA, Senior Bonds		5.500	%		8/1/23		750,000		451,875
Koninklijke KPN NV, Senior Notes		8.375	%		10/1/30		200,000		266,870
Qwest Corp., Debentures		6.875	%		9/15/33		850,000		828,784
Telefonica Emisiones SAU, Senior Notes		7.045	%		6/20/36		60,000		75,951
Verizon Communications Inc., Senior Notes		5.150	%		9/15/23		1,790,000		2,066,041
Verizon Communications Inc., Senior Notes		6.550	%		9/15/43		1,256,000		1,654,437
Verizon Communications Inc., Senior Notes		5.012	%		8/21/54		1,059,000		1,062,420

Total Diversified Telecommunication Services									8,168,264

Wireless Telecommunication Services - 1.5%
America Movil SAB de CV, Senior Notes		6.125	%		3/30/40		850,000		1,003,675
Sprint Communications Inc., Senior Notes		9.000	%		11/15/18		50,000		52,375	^(a)
Sprint Corp., Senior Notes		7.250	%		9/15/21		330,000		252,038
Sprint Corp., Senior Notes		7.875	%		9/15/23		400,000		305,916
Telefonica Europe BV, Senior Notes		8.250	%		9/15/30		230,000		321,589

Total Wireless Telecommunication Services									1,935,593

TOTAL TELECOMMUNICATION SERVICES									10,103,857

UTILITIES - 2.2%
Electric Utilities - 1.9%
CenterPoint Energy Houston Electric LLC, Senior Secured Bonds		4.500	%		4/1/44		210,000		231,164
Enersis Americas SA, Notes		7.400	%		12/1/16		452,000		467,938
FirstEnergy Corp., Notes		7.375	%		11/15/31		830,000		1,008,091
Pacific Gas & Electric Co., First Mortgage Bonds		6.050	%		3/1/34		140,000		178,519
PNPP II Funding Corp., Senior Bonds		9.120	%		5/30/16		58,000		58,362
Virginia Electric and Power Co., Senior Notes		8.875	%		11/15/38		390,000		625,920

Total Electric Utilities									2,569,994

Gas Utilities - 0.1%
Southern Natural Gas Co., LLC, Senior Notes		5.900	%		4/1/17		170,000		175,327	^(a)

Multi-Utilities - 0.2%
DTE Energy Co., Senior Notes		6.350	%		6/1/16		260,000		262,124

TOTAL UTILITIES									3,007,445

TOTAL CORPORATE BONDS & NOTES (Cost - $118,743,123)									124,872,711

ASSET-BACKED SECURITIES - 0.8%
Countrywide Asset-Backed Certificates, 2004-6 1A1		0.976	%		12/25/34		514,490		468,187	^(c)
GoldenTree Loan Opportunities Ltd., 2015-10A D		3.974	%		7/20/27		250,000		211,966	^(a)(c)
Madison Park Funding Ltd., 2013-11A C		3.369	%		10/23/25		250,000		236,214	^(a)(c)
Regatta IV Funding Ltd., 2014-1A D		4.119	%		7/25/26		250,000		207,948	^(a)(c)

TOTAL ASSET-BACKED SECURITIES (Cost - $1,201,826)									1,124,315

MUNICIPAL BONDS - 1.1%
California - 0.8%
Los Angeles County, CA, Public Works Financing Authority, Lease Revenue, Build America Bonds, Recovery Zone Economic Development		7.618	%		8/1/40		650,000		952,237
University of California Revenue, Taxable		4.062	%		5/15/33		150,000		156,536

Total California									1,108,773

Illinois - 0.3%
Illinois State, GO, Build America Bonds-Taxable		6.725	%		4/1/35		310,000		338,334

TOTAL MUNICIPAL BONDS (Cost - $1,448,002)									1,447,107

See Notes to Schedule of Investments.

WESTERN ASSET INCOME FUND


Schedule of investments (unaudited) (cont’d)		March 31, 2016


SECURITY	RATE			MATURITY DATE		FACE AMOUNT		VALUE
SOVEREIGN BONDS - 0.9%
Canada - 0.7%
Quebec Province, Notes		7.970	%		7/22/36	$	650,000	$	991,821

Mexico - 0.0%
United Mexican States, Senior Notes		4.750	%		3/8/44		30,000		29,925

Turkey - 0.2%
Republic of Turkey, Senior Bonds		4.250	%		4/14/26		210,000		204,448

TOTAL SOVEREIGN BONDS (Cost - $972,544)									1,226,194

U.S. GOVERNMENT & AGENCY OBLIGATIONS - 0.2%
U.S. Government Obligations - 0.2%
U.S. Treasury Bonds		3.000	%		11/15/45		250,000		269,893
U.S. Treasury Notes		1.625	%		2/15/26		17,000		16,753

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS (Cost - $283,511)									286,646


						SHARES
PREFERRED STOCKS - 1.4%
FINANCIALS - 1.4%
Consumer Finance - 1.0%
GMAC Capital Trust I		6.402	%				52,500		1,286,775	^(c)

Diversified Financial Services - 0.3%
Citigroup Capital XIII		6.988	%				15,253		401,001	^(c)

Insurance - 0.1%
Delphi Financial Group Inc.		7.376	%				5,725		140,084	^(c)

TOTAL PREFERRED STOCKS (Cost - $1,777,407)									1,827,860

TOTAL INVESTMENTS - 98.0% (Cost - $124,426,413#)									130,784,833
Other Assets in Excess of Liabilities - 2.0%									2,662,617

TOTAL NET ASSETS - 100.0%								$	133,447,450

(a)

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

(b)	Security has no maturity date. The date shown represents the next call date.

(c)	Variable rate security. Interest rate disclosed is as of the most recent information available.

#	Aggregate cost for federal income tax purposes is substantially the same.

Abbreviation used in this schedule:



GO		— General Obligation

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

See Notes to Schedule of Investments.

Notes to Schedule of Investments (unaudited)

1. Organization and significant accounting policies

Western Asset Income Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as a closed-end diversified investment company.

The Fund seeks high level of current income, consistent with prudent investment risk. Capital appreciation is a secondary investment objective.

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

(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors.

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

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Directors, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Directors quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

Notes to Schedule of Investments (unaudited) (continued)

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

•

Level 1 – quoted prices in active markets for identical investments

•

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

•

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

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

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities 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†:
Corporate Bonds & Notes		—	$	124,872,711		—	$	124,872,711
Asset-Backed Securities		—		1,124,315		—		1,124,315
Municipal Bonds		—		1,447,107		—		1,447,107
Sovereign Bonds		—		1,226,194		—		1,226,194
U.S. Government & Agency Obligations		—		286,646		—		286,646
Preferred Stocks	$	1,827,860		—		—		1,827,860

Total Investments	$	1,827,860	$	128,956,973		—	$	130,784,833

Other Financial Instruments:
Futures Contracts		258,103		—		—		258,103

Total	$	2,085,963	$	128,956,973		—	$	131,042,936


LIABILITIES
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		TOTAL
Other Financial Instruments:
Futures Contracts	$	112,204		—		—	$	112,204

†	See Schedule of Investments for additional detailed categorizations.

2. Investments

At March 31, 2016, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:


Gross unrealized appreciation	$	10,024,400
Gross unrealized depreciation		(3,665,980	)

Net unrealized appreciation	$	6,358,420

At March 31, 2016, the Fund had the following open futures contracts:


	Number of Contracts		Expiration Date		Basis Value		Market Value		Unrealized Appreciation (Depreciation)
Contracts to Buy:
U.S. Treasury 2-Year Notes		20		6/16	$	4,373,815	$	4,375,000	$	1,185
U.S. Treasury 5-Year Notes		149		6/16		17,803,426		18,053,445		250,019
U.S. Treasury 10-Year Notes		12		6/16		1,557,789		1,564,688		6,899
U.S. Treasury Ultra Long-Term Bonds		5		6/16		868,922		862,656		(6,266	)

										251,837

Contracts to Sell:
U.S. Treasury Long-Term Bonds		129		6/16		21,106,500		21,212,438		(105,938	)

Net unrealized appreciation on open futures contracts									$	145,899

ITEM 2.

CONTROLS AND PROCEDURES.

(a)

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

(b)

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

ITEM 3.

EXHIBITS.

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

SIGNATURES

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

Western Asset Income Fund


By:		/s/ JANE TRUST
		Jane Trust
		Chief Executive Officer

Date:		May 20, 2016

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:		May 20, 2016

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

Date:		May 20, 2016