Edgar Filing: Western Asset Investment Grade Defined Opportunity Trust Inc.

Western Asset Investment Grade Defined Opportunity Trust Inc. (IGI)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22294

Western Asset Investment Grade Defined Opportunity Trust Inc.

(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: (888)777-0102

Date of fiscal year end: November 30

Date of reporting period: May 31, 2016

ITEM 1.

REPORT TO STOCKHOLDERS.

The Semi-Annual Report to Stockholders is filed herewith.

LOGO


Semi-Annual Report		May 31, 2016

WESTERN ASSET

INVESTMENT GRADE

DEFINED OPPORTUNITY

TRUST INC. (IGI)

LOGO

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE


What’s inside
Letter from the chairman			II
Investment commentary			III
Fund at a glance			1
Spread duration			2
Effective duration			3
Schedule of investments			4
Statement of assets and liabilities			16
Statement of operations			17
Statements of changes in net assets			18
Financial highlights			19
Notes to financial statements			20
Additional shareholder information			36
Dividend reinvestment plan			37

Fund objectives

The Fund’s primary investment objective is to provide current income and then to liquidate and distribute substantially all of the Fund’s net assets to stockholders on or about December 2, 2024. As a secondary investment objective, the Fund will seek capital appreciation. There can be no assurance the Fund will achieve its investment objectives.

The Fund seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its net assets in investment grade corporate fixed-income securities of varying maturities.

Letter from the chairman

LOGO

Dear Shareholder,

We are pleased to provide the semi-annual report of Western Asset Investment Grade Defined Opportunity Trust Inc. for the six-month reporting period ended May 31, 2016. Please read on for Fund performance information and a detailed look at prevailing economic and market conditions 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.lmcef.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,

LOGO

Jane Trust, CFA

Chairman, President and Chief Executive Officer

June 30, 2016


II		Western Asset Investment Grade Defined Opportunity Trust Inc.

Investment commentary

Economic review

The pace of U.S. economic activity moderated during the six months ended May 31, 2016 (the “reporting period”). Looking back, the U.S. Department of Commerce reported that third quarter 2015 U.S. gross domestic product (“GDP”)ⁱ growth was 2.0%. The U.S. Department of Commerce then reported that fourth quarter 2015 GDP growth was 1.4%. Slower growth was attributed to downturns in nonresidential fixed investment and state and local government spending, along with a deceleration in personal consumption expenditures (“PCE”) and less export activity. The U.S. Department of Commerce’s final reading for first quarter 2016 GDP growth — released after the reporting period ended — was 1.1%. This further slowdown was attributed to a number of factors, including a deceleration in PCE, a larger decrease in nonresidential fixed investment and a downturn in federal government spending.

Job growth in the U.S. was generally solid and was a tailwind for the economy during the reporting period. When the period began, unemployment was 5.0%, as reported by the U.S. Department of Labor. By May 2016, unemployment was 4.7%, its lowest level since December 2007.


Western Asset Investment Grade Defined Opportunity Trust Inc.		III

Investment commentary (cont’d)

Market review

Q. How did the Federal Reserve Board (“Fed”)ⁱⁱ respond to the economic environment?

A. After an extended period of maintaining the federal funds rateⁱⁱⁱ at a historically low range between zero and 0.25%, the Fed increased the rate at its meeting on December 16, 2015. This marked the first rate hike since 2006. In particular, the U.S. central bank raised the federal funds rate to a range between 0.25% and 0.50%. In its official statement after the December 2015 meeting, the Fed said, “The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation….The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” At its meetings that concluded on January 27, 2016, March 16, 2016, April 27, 2016, and June 15, 2016 (after the reporting period ended), the Fed kept rates on hold.

Q. Did Treasury yields trend higher or lower during the six months ended May 31, 2016?

A. Both short-term and long-term Treasury yields declined during the reporting period. When the period began, the yield on the two-year Treasury note was 0.94%. Its low for the period was 0.64% on February 11, 2016, and it peaked at 1.09% on December 29, 2015. The yield on the two-year Treasury note ended the period at 0.87%. The yield on the ten-year Treasury note began the period at 2.21%. Its peak of 2.32% occurred on December 29, 2015, and its low of 1.63% was on February 11, 2016. The yield on the ten-year Treasury note ended the period at 1.84%.

Q. What factors impacted the spread sectors (non-Treasuries) during the reporting period?

A. The spread sectors generally posted positive results during the reporting period. Performance fluctuated with investor sentiment given the uncertainties regarding future Fed monetary policy, along with concerns over global growth and geopolitical issues. The broad U.S. bond market, as measured by the Barclays U.S. Aggregate Index^iv, returned 3.12% during the six months ended May 31, 2016.

Q. How did the high-yield bond market perform over the six months ended May 31, 2016?

A. The U.S. high-yield bond market, as measured by the Barclays U.S. Corporate High Yield — 2% Issuer Cap Index^v, gained 5.34% for the six months ended May 31, 2016. The high-yield market declined during the first two months of the reporting period. This was triggered by a number of factors, including falling oil prices and poor investor demand. After stabilizing in February 2016, the high-yield market rallied sharply over the last four months of the reporting period. This turnaround occurred as oil prices started to rebound and the Fed reduced its expectations for rate hikes in 2016.

Q. How did the emerging markets debt asset class perform over the reporting period?

A. The JPMorgan Emerging Markets Bond Index Global (“EMBI Global”)^vi gained 5.30% during the six months ended May 31, 2016. The asset class declined over the first two months of the reporting period due to


IV		Western Asset Investment Grade Defined Opportunity Trust Inc.

concerns over economic growth in China, falling commodity prices and expectations for future Fed rate hikes. The asset class then rallied sharply over the last four months of the reporting period, as oil prices moved higher, global monetary policy remained accommodative and investor risk appetite improved.

Performance review

For the six months ended May 31, 2016, Western Asset Investment Grade Defined Opportunity Trust Inc. returned 4.08% based on its net asset value (“NAV”)^vii and 5.71% based on its New York Stock Exchange (“NYSE”) market price per share. The Fund’s unmanaged benchmark, the Barclays U.S. Credit Index^viii, returned 4.34% for the same period. The Lipper Corporate Debt BBB-Rated Closed-End Funds Category Average^ix returned 3.67% over the same time frame. Please note that Lipper performance returns are based on each fund’s NAV.

During this six-month period, the Fund made distributions to shareholders totaling $0.60 per share. As of May 31, 2016, the Fund estimates that all of the distributions were sourced from net investment income.* The performance table shows the Fund’s six-month total return based on its NAV and market price as of May 31, 2016. Past performance is no guarantee of future results.


Performance Snapshot as of May 31, 2016 (unaudited)
Price Per Share	6-Month Total Return**
$20.48 (NAV)		4.08	%†
$21.30 (Market Price)		5.71	%‡

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.

Looking for additional information?

The Fund is traded under the symbol “IGI” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available on-line under the symbol “XIGIX” 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

This estimate is 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.lmcef.com (click on the name of the Fund).


Western Asset Investment Grade Defined Opportunity Trust Inc.		V

Investment commentary (cont’d)

release that can be found on most major financial websites as well as www.lmcef.com (click on the name of the Fund).

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 Western Asset Investment Grade Defined Opportunity Trust 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,

LOGO

Jane Trust, CFA

Chairman, President and

Chief Executive Officer

June 30, 2016

RISKS: The Fund’s investments are subject to credit risk, inflation risk and interest rate risk. As interest rates rise, bond prices fall, reducing the value of the Fund’s holdings. The Fund may invest in lower-rated high-yield bonds or “junk bonds”, which are subject to greater credit risk (risk of default) than higher-rated obligations. 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 or engage in transactions that have the economic effects of leverage which can increase the risk and volatility of the Fund.

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.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.


VI		Western Asset Investment Grade Defined Opportunity Trust Inc.

ⁱ	Gross domestic product (“GDP”) is the market value of all final goods and services produced within a country in a given period of time.

ⁱⁱ	The Federal Reserve Board (“Fed”) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.

ⁱⁱⁱ	The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Fed) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.

^iv	The Barclays U.S. Aggregate Index is a broad-based bond index comprised of government, corporate, mortgage- and asset-backed issues, rated investment grade or higher, and having at least one year to maturity.

^v	The Barclays U.S. Corporate High Yield — 2% Issuer Cap Index is an index of the 2% Issuer Cap component of the Barclays U.S. Corporate High Yield Index, which covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market.

^vi	The JPMorgan Emerging Markets Bond Index Global (“EMBI Global”) tracks total returns for U.S. dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities: Brady bonds, loans, Eurobonds and local market instruments.

^vii

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 common shares 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.

^viii

The Barclays U.S. Credit Index is an index composed of corporate and non-corporate debt issues that are investment grade (rated Baa3/BBB- or higher).

^ix

Lipper, Inc., a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments. Returns are based on the six-month period ended May 31, 2016, including the reinvestment of all distributions, including returns of capital, if any, calculated among the 7 funds in the Fund’s Lipper category.


Western Asset Investment Grade Defined Opportunity Trust Inc.		VII

Fund at a glance^† (unaudited)

Investment breakdown (%) as a percent of total investments

LOGO

†

The bar graph above represents the composition of the Fund’s investments as of May 31, 2016 and November 30, 2015 and does not include derivatives, such as futures contracts, swap contracts and forward foreign currency contracts. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		1

Spread duration (unaudited)

Economic exposure — May 31, 2016

LOGO


Total Spread Duration
IGI		— 6.79 years
Benchmark		— 7.03 years

Spread duration measures the sensitivity to changes in spreads. The spread over Treasuries is the annual risk-premium demanded by investors to hold non-Treasury securities. Spread duration is quantified as the % change in price resulting from a 100 basis points change in spreads. For a security with positive spread duration, an increase in spreads would result in a price decline and a decline in spreads would result in a price increase. This chart highlights the market sector exposure of the Fund’s sectors relative to the selected benchmark sectors as of the end of the reporting period.


Benchmark		— Barclays U.S. Credit Index
EM		— Emerging Markets
HY		— High Yield
IG Credit		— Investment Grade Credit
IGI		— Western Asset Investment Grade Defined Opportunity Trust Inc.


2		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Effective duration (unaudited)

Interest rate exposure — May 31, 2016

LOGO


Total Effective Duration
IGI		— 6.88 years
Benchmark		— 7.17 years

Effective duration measures the sensitivity to changes in relevant interest rates. Effective duration is quantified as the % change in price resulting from a 100 basis points change in interest rates. For a security with positive effective duration, an increase in interest rates would result in a price decline and a decline in interest rates would result in a price increase. This chart highlights the interest rate exposure of the Fund’s sectors relative to the selected benchmark sectors as of the end of the reporting period.


Benchmark		— Barclays U.S. Credit Index
EM		— Emerging Markets
HY		— High Yield
IG Credit		— Investment Grade Credit
IGI		— Western Asset Investment Grade Defined Opportunity Trust Inc.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		3

Schedule of investments (unaudited)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Corporate Bonds & Notes — 91.3%
Consumer Discretionary — 11.6%
Auto Components — 0.4%
ZF North America Capital Inc., Senior Notes		4.500	%		4/29/22	$	300,000	$	302,775	^(a)
ZF North America Capital Inc., Senior Notes		4.750	%		4/29/25		590,000		592,212	^(a)
Total Auto Components									894,987
Automobiles — 2.2%
Ford Motor Co., Senior Bonds		9.215	%		9/15/21		1,140,000		1,461,198
Ford Motor Credit Co., LLC, Senior Notes		8.125	%		1/15/20		640,000		760,950
General Motors Co., Senior Notes		4.875	%		10/2/23		1,470,000		1,564,236
General Motors Co., Senior Notes		6.600	%		4/1/36		290,000		333,475
General Motors Co., Senior Notes		5.200	%		4/1/45		490,000		478,470
General Motors Co., Senior Notes		6.750	%		4/1/46		130,000		152,844
Total Automobiles									4,751,173
Hotels, Restaurants & Leisure — 0.5%
GLP Capital LP/GLP Financing II Inc., Senior Notes		5.375	%		4/15/26		280,000		292,600
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., Senior Notes		5.625	%		10/15/21		170,000		176,214
McDonald’s Corp., Senior Notes		4.700	%		12/9/35		260,000		280,747
McDonald’s Corp., Senior Notes		4.875	%		12/9/45		370,000		412,925
Total Hotels, Restaurants & Leisure									1,162,486
Household Durables — 0.9%
Newell Brands Inc., Senior Notes		4.200	%		4/1/26		1,150,000		1,220,064
Newell Brands Inc., Senior Notes		5.500	%		4/1/46		600,000		687,249
Total Household Durables									1,907,313
Media — 7.5%
21st Century Fox America Inc., Senior Notes		6.650	%		11/15/37		2,400,000		3,071,206
Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes		6.384	%		10/23/35		180,000		206,595	^(a)
Charter Communications Operating LLC/Charter Communications Operating Capital Corp., Senior Secured Notes		6.484	%		10/23/45		420,000		483,990	^(a)
Comcast Corp., Bonds		6.400	%		5/15/38		2,500,000		3,344,265
Comcast Corp., Senior Notes		5.700	%		7/1/19		1,500,000		1,683,975
DISH DBS Corp., Senior Notes		7.875	%		9/1/19		1,250,000		1,382,812
Time Warner Cable Inc., Debentures		7.300	%		7/1/38		160,000		193,222
Time Warner Cable Inc., Senior Bonds		6.550	%		5/1/37		370,000		418,370
Time Warner Cable Inc., Senior Notes		8.750	%		2/14/19		1,390,000		1,620,669
Time Warner Cable Inc., Senior Notes		5.500	%		9/1/41		200,000		202,402
Time Warner Entertainment Co., LP, Senior Notes		8.375	%		7/15/33		370,000		483,012

See Notes to Financial Statements.


4		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Media — continued
Time Warner Inc., Senior Notes		4.900	%		6/15/42	$	250,000	$	264,510
UBM PLC, Notes		5.750	%		11/3/20		740,000		790,555	^(a)
Viacom Inc., Senior Debentures		5.250	%		4/1/44		120,000		108,501
Virgin Media Finance PLC, Senior Notes		6.375	%		4/15/23		2,000,000		2,074,240	^(a)
WPP Finance 2010, Senior Notes		5.625	%		11/15/43		260,000		289,935
Total Media									16,618,259
Specialty Retail — 0.1%
American Greetings Corp., Senior Notes		7.375	%		12/1/21		280,000		287,350
Total Consumer Discretionary									25,621,568
Consumer Staples — 3.9%
Beverages — 0.8%
Anheuser-Busch InBev Worldwide Inc., Senior Notes		7.750	%		1/15/19		450,000		519,164
Constellation Brands Inc., Senior Notes		4.250	%		5/1/23		140,000		144,900
Pernod-Ricard SA, Senior Notes		5.500	%		1/15/42		960,000		1,087,235	^(a)
Total Beverages									1,751,299
Food & Staples Retailing — 0.5%
CVS Health Corp., Senior Notes		5.125	%		7/20/45		540,000		630,483
Walgreens Boots Alliance Inc., Senior Notes		3.450	%		6/1/26		510,000		510,956
Total Food & Staples Retailing									1,141,439
Food Products — 0.6%
Kraft Heinz Foods Co., Senior Notes		5.000	%		7/15/35		110,000		121,574	^(a)
Kraft Heinz Foods Co., Senior Notes		5.000	%		6/4/42		280,000		306,319
Kraft Heinz Foods Co., Senior Notes		5.200	%		7/15/45		420,000		473,954	^(a)
Kraft Heinz Foods Co., Senior Notes		4.375	%		6/1/46		500,000		507,973	^(a)
Total Food Products									1,409,820
Tobacco — 2.0%
Altria Group Inc., Senior Notes		9.250	%		8/6/19		1,000,000		1,231,593
Altria Group Inc., Senior Notes		9.950	%		11/10/38		430,000		765,216
Altria Group Inc., Senior Notes		10.200	%		2/6/39		280,000		507,677
Reynolds American Inc., Senior Notes		8.125	%		5/1/40		470,000		632,262
Reynolds American Inc., Senior Notes		7.000	%		8/4/41		510,000		611,114
Reynolds American Inc., Senior Notes		5.850	%		8/15/45		520,000		638,203
Total Tobacco									4,386,065
Total Consumer Staples									8,688,623
Energy — 12.2%
Energy Equipment & Services — 0.6%
ENSCO International Inc., Senior Bonds		7.200	%		11/15/27		200,000		143,750
Ensco PLC, Senior Notes		4.700	%		3/15/21		20,000		15,725

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		5

Schedule of investments (unaudited) (cont’d)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Energy Equipment & Services — continued
Ensco PLC, Senior Notes		5.200	%		3/15/25	$	790,000	$	525,942
Halliburton Co., Senior Notes		5.000	%		11/15/45		330,000		338,848
Pride International Inc., Senior Notes		8.500	%		6/15/19		130,000		128,407
Pride International Inc., Senior Notes		6.875	%		8/15/20		40,000		35,600
Pride International Inc., Senior Notes		7.875	%		8/15/40		150,000		102,863
Total Energy Equipment & Services									1,291,135
Oil, Gas & Consumable Fuels — 11.6%
Anadarko Petroleum Corp., Senior Notes		4.850	%		3/15/21		750,000		778,148
Anadarko Petroleum Corp., Senior Notes		5.550	%		3/15/26		750,000		801,459
Apache Corp., Senior Notes		6.000	%		1/15/37		150,000		163,773
Apache Corp., Senior Notes		5.100	%		9/1/40		280,000		280,259
Apache Corp., Senior Notes		5.250	%		2/1/42		160,000		159,328
Apache Corp., Senior Notes		4.750	%		4/15/43		670,000		648,940
ConocoPhillips, Notes		6.500	%		2/1/39		1,500,000		1,858,086
Devon Energy Corp., Senior Notes		5.850	%		12/15/25		560,000		584,750
Devon Energy Corp., Senior Notes		5.600	%		7/15/41		20,000		17,586
Devon Energy Corp., Senior Notes		5.000	%		6/15/45		430,000		365,391
Devon Financing Co., LLC, Debentures		7.875	%		9/30/31		1,080,000		1,158,836
Ecopetrol SA, Senior Notes		5.875	%		5/28/45		754,000		611,569
Energy Transfer Equity LP, Senior Notes		7.500	%		10/15/20		420,000		430,500
EOG Resources Inc., Senior Notes		6.875	%		10/1/18		800,000		885,729
Freeport-McMoRan Oil & Gas LLC/FCX Oil & Gas Inc., Senior Notes		6.500	%		11/15/20		32,000		30,880
Hess Corp., Notes		8.125	%		2/15/19		1,400,000		1,555,747
Hess Corp., Notes		7.875	%		10/1/29		440,000		499,703
Hess Corp., Senior Bonds		6.000	%		1/15/40		520,000		518,358
Kerr-McGee Corp., Notes		6.950	%		7/1/24		1,320,000		1,466,127
Kerr-McGee Corp., Notes		7.875	%		9/15/31		710,000		801,550
Kinder Morgan Energy Partners LP, Senior Notes		5.950	%		2/15/18		800,000		841,484
LUKOIL International Finance BV, Senior Notes		4.563	%		4/24/23		940,000		929,146	^(a)
MEG Energy Corp., Senior Notes		6.375	%		1/30/23		280,000		215,600	^(a)
MEG Energy Corp., Senior Notes		7.000	%		3/31/24		620,000		480,500	^(a)
Noble Energy Inc., Senior Notes		6.000	%		3/1/41		660,000		652,865
Noble Energy Inc., Senior Notes		5.250	%		11/15/43		240,000		229,476
Occidental Petroleum Corp., Senior Notes		3.400	%		4/15/26		650,000		663,075
Petroleos Mexicanos, Senior Bonds		6.625	%		6/15/35		1,000,000		984,900
Petroleos Mexicanos, Senior Notes		5.500	%		1/21/21		250,000		260,000
Petroleos Mexicanos, Senior Notes		6.875	%		8/4/26		730,000		795,043	^(a)

See Notes to Financial Statements.


6		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Oil, Gas & Consumable Fuels — continued
Petroleos Mexicanos, Senior Notes		6.375	%		1/23/45	$	80,000	$	75,304
Schlumberger Holdings Corp., Senior Notes		4.000	%		12/21/25		710,000		741,343	^(a)
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		7.850	%		2/1/26		760,000		914,668	^(a)
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		5.400	%		8/15/41		10,000		9,486
Transcontinental Gas Pipe Line Co., LLC, Senior Notes		4.450	%		8/1/42		860,000		733,367
Valero Energy Corp., Senior Notes		9.375	%		3/15/19		700,000		828,467
Williams Cos. Inc., Senior Notes		7.875	%		9/1/21		952,000		1,009,120
Williams Cos. Inc., Senior Notes		4.550	%		6/24/24		1,130,000		991,575
Williams Cos. Inc., Senior Notes		7.750	%		6/15/31		62,000		61,380
Williams Cos. Inc., Senior Notes		8.750	%		3/15/32		148,000		153,550
Williams Partners LP, Senior Notes		5.250	%		3/15/20		460,000		463,421
Total Oil, Gas & Consumable Fuels									25,650,489
Total Energy									26,941,624
Financials — 32.6%
Banks — 15.8%
Banco Nacional de Costa Rica, Senior Notes		5.875	%		4/25/21		500,000		504,000	^(a)
Bank of America Corp., Junior Subordinated Bonds		6.100	%		3/17/25		650,000		666,453	^(b)(c)
Bank of America Corp., Junior Subordinated Notes		6.250	%		9/5/24		970,000		994,250	^(b)(c)
Bank of America Corp., Junior Subordinated Notes		6.500	%		10/23/24		400,000		422,500	^(b)(c)
Bank of America Corp., Notes		6.875	%		4/25/18		990,000		1,081,159
Bank of America Corp., Senior Notes		7.625	%		6/1/19		2,760,000		3,187,069
Bank of America Corp., Senior Notes		5.875	%		2/7/42		1,340,000		1,652,666
Bank of America Corp., Subordinated Notes		7.750	%		5/14/38		670,000		925,785
Barclays Bank PLC, Subordinated Notes		7.625	%		11/21/22		830,000		907,294
BNP Paribas SA, Junior Subordinated Notes		7.625	%		3/30/21		240,000		247,500	^(a)(b)(c)
BNP Paribas SA, Junior Subordinated Notes		7.375	%		8/19/25		1,870,000		1,867,662	^(a)(b)(c)
CIT Group Inc., Secured Notes		6.625	%		4/1/18		480,000		507,451	^(a)
CIT Group Inc., Senior Notes		5.000	%		8/1/23		350,000		357,875
Citigroup Inc., Junior Subordinated Bonds		6.300	%		5/15/24		1,350,000		1,350,000	^(b)(c)
Citigroup Inc., Junior Subordinated Bonds		6.250	%		8/15/26		1,100,000		1,138,280	^(b)(c)
Citigroup Inc., Senior Notes		8.125	%		7/15/39		752,000		1,142,349
Citigroup Inc., Subordinated Notes		4.600	%		3/9/26		490,000		509,584
Citigroup Inc., Subordinated Notes		6.675	%		9/13/43		630,000		781,349
Cooperatieve Rabobank U.A., Subordinated Notes		5.750	%		12/1/43		750,000		888,805
Cooperatieve Rabobank U.A., Subordinated Notes		5.250	%		8/4/45		560,000		619,843
Credit Agricole SA, Junior Subordinated Notes		8.375	%		10/13/19		500,000		566,250	^(a)(b)(c)
Credit Agricole SA, Junior Subordinated Notes		8.125	%		12/23/25		1,370,000		1,425,896	^(a)(b)(c)
HSBC Holdings PLC, Junior Subordinated Bonds		6.375	%		9/17/24		800,000		754,000	^(b)(c)

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		7

Schedule of investments (unaudited) (cont’d)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Banks — continued
HSBC Holdings PLC, Junior Subordinated Bonds		6.375	%		3/30/25	$	200,000	$	192,000	^(b)(c)
JPMorgan Chase & Co., Junior Subordinated Bonds		6.000	%		8/1/23		700,000		724,283	^(b)(c)
JPMorgan Chase & Co., Senior Notes		6.400	%		5/15/38		1,500,000		2,009,257
JPMorgan Chase & Co., Subordinated Notes		5.625	%		8/16/43		760,000		886,902
JPMorgan Chase & Co., Subordinated Notes		4.950	%		6/1/45		150,000		161,133
M&T Bank Corp., Junior Subordinated Bonds		6.875	%		6/27/16		1,060,000		1,063,975	^(c)
Royal Bank of Scotland Group PLC, Junior Subordinated Bonds		7.648	%		9/30/31		710,000		839,575	^(b)(c)
Royal Bank of Scotland Group PLC, Subordinated Notes		6.100	%		6/10/23		840,000		880,881
Royal Bank of Scotland Group PLC, Subordinated Notes		6.000	%		12/19/23		150,000		156,957
Royal Bank of Scotland NV, Subordinated Bonds		7.750	%		5/15/23		820,000		903,766
Santander UK Group Holdings PLC, Subordinated Notes		4.750	%		9/15/25		200,000		197,650	^(a)
Standard Chartered PLC, Subordinated Notes		5.700	%		3/26/44		410,000		404,682	^(a)
Wachovia Capital Trust III, Junior Subordinated Bonds		5.570	%		6/27/16		410,000		407,684	^(b)(c)
Wachovia Corp., Senior Notes		5.750	%		2/1/18		3,180,000		3,403,102
Wells Fargo & Co., Junior Subordinated Bonds		5.875	%		6/15/25		140,000		149,975	^(b)(c)
Total Banks									34,879,842
Capital Markets — 7.9%
Bear Stearns Cos. LLC, Senior Notes		7.250	%		2/1/18		1,570,000		1,711,798
Credit Suisse Group Funding Guernsey Ltd., Senior Notes		4.550	%		4/17/26		300,000		309,368	^(a)
Goldman Sachs Group Inc., Senior Notes		5.950	%		1/18/18		4,250,000		4,537,168
Goldman Sachs Group Inc., Senior Notes		7.500	%		2/15/19		500,000		570,053
Goldman Sachs Group Inc., Senior Notes		6.250	%		2/1/41		2,550,000		3,258,579
Goldman Sachs Group Inc., Subordinated Notes		5.150	%		5/22/45		70,000		72,319
KKR Group Finance Co. III LLC, Senior Bonds		5.125	%		6/1/44		1,300,000		1,268,719	^(a)
Morgan Stanley, Medium-Term Notes		6.625	%		4/1/18		1,750,000		1,902,092
Morgan Stanley, Senior Notes		5.500	%		1/26/20		1,950,000		2,161,998
Morgan Stanley, Senior Notes		6.375	%		7/24/42		140,000		183,059
Pershing Square Holdings Ltd., Senior Notes		5.500	%		7/15/22		1,100,000		1,039,500	^(a)
UBS AG Stamford CT, Subordinated Notes		7.625	%		8/17/22		330,000		379,858
Total Capital Markets									17,394,511
Consumer Finance — 1.6%
HSBC Finance Corp., Senior Notes		6.676	%		1/15/21		1,620,000		1,838,392
Navient Corp., Senior Notes		7.250	%		1/25/22		1,430,000		1,381,738
Navient Corp., Senior Notes		6.125	%		3/25/24		480,000		425,250
Total Consumer Finance									3,645,380
Diversified Financial Services — 2.9%
Argos Merger Sub Inc., Senior Notes		7.125	%		3/15/23		150,000		152,250	^(a)
Blackstone Holdings Finance Co., LLC, Senior Notes		4.450	%		7/15/45		310,000		298,430	^(a)

See Notes to Financial Statements.


8		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Diversified Financial Services — continued
Carlyle Holdings II Finance LLC, Senior Secured Notes		5.625	%		3/30/43	$	360,000	$	389,741	^(a)
CME Group Inc., Senior Notes		5.300	%		9/15/43		750,000		920,629
ILFC E-Capital Trust I, Junior Subordinated Notes		4.240	%		12/21/65		800,000		644,000	^(a)(b)
International Lease Finance Corp., Senior Notes		8.875	%		9/1/17		810,000		868,725
International Lease Finance Corp., Senior Notes		6.250	%		5/15/19		220,000		238,150
International Lease Finance Corp., Senior Notes		8.250	%		12/15/20		330,000		389,400
International Lease Finance Corp., Senior Secured Notes		6.750	%		9/1/16		670,000		677,118	^(a)
International Lease Finance Corp., Senior Secured Notes		7.125	%		9/1/18		1,200,000		1,314,000	^(a)
ZFS Finance USA Trust II, Bonds		6.450	%		12/15/65		500,000		503,250	^(a)(b)
Total Diversified Financial Services									6,395,693
Insurance — 3.7%
American Equity Investment Life Holding Co., Senior Notes		6.625	%		7/15/21		90,000		92,475
American International Group Inc., Senior Notes		6.400	%		12/15/20		1,000,000		1,156,374
Delphi Financial Group Inc., Senior Notes		7.875	%		1/31/20		290,000		333,591
Fidelity & Guaranty Life Holdings Inc., Senior Notes		6.375	%		4/1/21		330,000		331,650	^(a)
Liberty Mutual Group Inc., Junior Subordinated Bonds		7.800	%		3/15/37		330,000		365,475	^(a)
Liberty Mutual Insurance Co., Subordinated Notes		7.875	%		10/15/26		840,000		1,042,363	^(a)
MetLife Inc., Senior Notes		6.817	%		8/15/18		1,300,000		1,447,342
Nationwide Mutual Insurance Co., Notes		9.375	%		8/15/39		520,000		778,266	^(a)
Teachers Insurance & Annuity Association of America, Notes		6.850	%		12/16/39		1,050,000		1,366,853	^(a)
Teachers Insurance & Annuity Association of America, Subordinated Notes		4.900	%		9/15/44		660,000		718,838	^(a)
Travelers Cos. Inc., Senior Notes		6.250	%		6/15/37		400,000		539,951
Total Insurance									8,173,178
Real Estate Investment Trusts (REITs) — 0.1%
Communications Sales & Leasing Inc., Senior Notes		8.250	%		10/15/23		160,000		151,600
Communications Sales & Leasing Inc., Senior Secured Notes		6.000	%		4/15/23		90,000		89,775	^(a)
Total Real Estate Investment Trusts (REITs)									241,375
Real Estate Management & Development — 0.3%
Security Capital Group Inc., Senior Notes		7.700	%		6/15/28		460,000		629,106
Thrifts & Mortgage Finance — 0.3%
Quicken Loans Inc., Senior Notes		5.750	%		5/1/25		770,000		733,425	^(a)
Total Financials									72,092,510
Health Care — 3.6%
Biotechnology — 1.3%
AbbVie Inc., Senior Subordinated Notes		4.700	%		5/14/45		290,000		296,911
Amgen Inc., Senior Notes		5.150	%		11/15/41		700,000		770,277
Celgene Corp., Senior Notes		5.000	%		8/15/45		480,000		512,172

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		9

Schedule of investments (unaudited) (cont’d)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Biotechnology — continued
Gilead Sciences Inc., Senior Notes		5.650	%		12/1/41	$	100,000	$	120,541
Gilead Sciences Inc., Senior Notes		4.500	%		2/1/45		700,000		719,551
Gilead Sciences Inc., Senior Notes		4.750	%		3/1/46		400,000		429,093
Total Biotechnology									2,848,545
Health Care Providers & Services — 0.9%
Catholic Health Initiatives, Secured Bonds		4.350	%		11/1/42		60,000		59,647
Humana Inc., Senior Notes		7.200	%		6/15/18		1,000,000		1,104,869
UnitedHealth Group Inc., Senior Notes		4.750	%		7/15/45		220,000		252,513
Universal Hospital Services Inc., Secured Notes		7.625	%		8/15/20		590,000		553,862
Total Health Care Providers & Services									1,970,891
Pharmaceuticals — 1.4%
Actavis Funding SCS, Senior Notes		4.550	%		3/15/35		790,000		783,316
Pfizer Inc., Senior Notes		7.200	%		3/15/39		560,000		819,180
Wyeth LLC, Notes		5.950	%		4/1/37		1,100,000		1,424,916
Zoetis Inc., Senior Notes		4.700	%		2/1/43		40,000		39,412
Total Pharmaceuticals									3,066,824
Total Health Care									7,886,260
Industrials — 5.1%
Aerospace & Defense — 0.3%
Lockheed Martin Corp., Senior Notes		3.350	%		9/15/21		100,000		105,587
Lockheed Martin Corp., Senior Notes		4.500	%		5/15/36		50,000		55,217
Lockheed Martin Corp., Senior Notes		4.700	%		5/15/46		520,000		585,521
Total Aerospace & Defense									746,325
Air Freight & Logistics — 0.4%
United Parcel Service Inc., Senior Notes		6.200	%		1/15/38		700,000		967,728
Airlines — 1.3%
American Airlines, Pass-Through Trust, Senior Secured Bonds		5.600	%		7/15/20		450,883		463,846	^(a)
Continental Airlines Inc., Pass-Through Certificates, Secured Notes		9.250	%		5/10/17		138,540		146,194
Continental Airlines Inc., Pass-Through Certificates, Secured Notes		6.250	%		4/11/20		201,823		213,680
Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes		6.545	%		2/2/19		149,585		158,567
Continental Airlines Inc., Pass-Through Certificates, Senior Secured Notes		7.250	%		11/10/19		560,825		633,031
Delta Air Lines Inc., Pass-Through Certificates, Secured Notes		8.021	%		8/10/22		125,920		144,487
Delta Air Lines Inc., Pass-Through Certificates, Senior Secured Notes		7.750	%		12/17/19		391,705		439,200
United Airlines Inc., Pass-Through Certificates, Secured Notes		9.750	%		1/15/17		80,797		84,130

See Notes to Financial Statements.


10		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Airlines — continued
United Airlines Inc., Pass-Through Certificates, Senior Secured Notes		10.400	%		11/1/16	$	36,993	$	38,519
US Airways, Pass-Through Trust, Senior Secured Bonds		5.900	%		10/1/24		487,661		554,349
Total Airlines									2,876,003
Commercial Services & Supplies — 0.8%
Republic Services Inc., Senior Notes		5.500	%		9/15/19		220,000		243,608
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes		5.250	%		4/15/21		900,000		906,750	^(a)
Waste Management Inc., Senior Notes		7.750	%		5/15/32		500,000		694,043
Total Commercial Services & Supplies									1,844,401
Construction & Engineering — 0.1%
Valmont Industries Inc., Senior Notes		6.625	%		4/20/20		180,000		201,958
Industrial Conglomerates — 1.5%
General Electric Co., Junior Subordinated Bonds		5.000	%		1/21/21		1,307,000		1,370,716	^(b)(c)
General Electric Co., Senior Notes		5.875	%		1/14/38		190,000		249,776
General Electric Co., Senior Notes		6.875	%		1/10/39		1,018,000		1,492,911
General Electric Co., Subordinated Notes		5.300	%		2/11/21		130,000		149,532
Total Industrial Conglomerates									3,262,935
Machinery — 0.2%
Caterpillar Inc., Senior Notes		4.750	%		5/15/64		360,000		387,219
Road & Rail — 0.5%
CSX Corp., Senior Notes		3.950	%		5/1/50		300,000		288,864
Flexi-Van Leasing Inc., Senior Notes		7.875	%		8/15/18		100,000		98,500	^(a)
Florida East Coast Holdings Corp., Senior Notes		9.750	%		5/1/20		40,000		33,400	^(a)
Florida East Coast Holdings Corp., Senior Secured Notes		6.750	%		5/1/19		50,000		50,000	^(a)
Union Pacific Corp., Senior Notes		4.375	%		11/15/65		530,000		543,311
Total Road & Rail									1,014,075
Total Industrials									11,300,644
Information Technology — 2.7%
Communications Equipment — 0.8%
Harris Corp., Senior Notes		5.550	%		10/1/21		885,000		983,659
Harris Corp., Senior Notes		4.854	%		4/27/35		430,000		462,954
Harris Corp., Senior Notes		5.054	%		4/27/45		340,000		375,820
Total Communications Equipment									1,822,433
Electronic Equipment, Instruments & Components — 0.2%
Interface Security Systems Holdings Inc./Interface Security Systems LLC, Senior Secured Notes		9.250	%		1/15/18		340,000		333,625

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		11

Schedule of investments (unaudited) (cont’d)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
IT Services — 0.9%
First Data Corp., Senior Secured Notes		6.750	%		11/1/20	$	91,000	$	95,925	^(a)
Visa Inc., Senior Notes		4.150	%		12/14/35		590,000		644,727
Visa Inc., Senior Notes		4.300	%		12/14/45		1,200,000		1,329,530
Total IT Services									2,070,182
Semiconductors & Semiconductor Equipment — 0.3%
Intel Corp., Senior Notes		4.900	%		7/29/45		220,000		246,743
National Semiconductor Corp., Senior Notes		6.600	%		6/15/17		360,000		379,679
QUALCOMM Inc., Senior Subordinated Notes		4.800	%		5/20/45		80,000		81,107
Total Semiconductors & Semiconductor Equipment									707,529
Technology Hardware, Storage & Peripherals — 0.5%
Diamond 1 Finance Corp./Diamond 2 Finance Corp., Senior Secured Notes		4.420	%		6/15/21		1,010,000		1,031,306	^(a)
Total Information Technology									5,965,075
Materials — 5.1%
Chemicals — 0.1%
Ecolab Inc., Senior Notes		5.500	%		12/8/41		260,000		309,085
Metals & Mining — 4.8%
Alcoa Inc., Senior Notes		5.870	%		2/23/22		1,200,000		1,239,000
Alcoa Inc., Senior Notes		5.125	%		10/1/24		520,000		504,239
Barrick Gold Corp., Senior Notes		5.250	%		4/1/42		1,200,000		1,103,220
BHP Billiton Finance USA Ltd., Subordinated Notes		6.750	%		10/19/75		780,000		810,030	^(a)(b)
Freeport-McMoRan Inc., Senior Notes		2.150	%		3/1/17		140,000		139,300
Freeport-McMoRan Inc., Senior Notes		2.300	%		11/14/17		160,000		156,800
Freeport-McMoRan Inc., Senior Notes		2.375	%		3/15/18		140,000		136,500
Freeport-McMoRan Inc., Senior Notes		3.550	%		3/1/22		100,000		84,250
Glencore Finance Canada Ltd., Senior Bonds		5.800	%		11/15/16		1,200,000		1,221,519	^(a)
Glencore Finance Canada Ltd., Senior Notes		2.700	%		10/25/17		180,000		179,161	^(a)
Rio Tinto Finance USA Ltd., Senior Notes		9.000	%		5/1/19		2,000,000		2,373,802
Southern Copper Corp., Senior Notes		5.375	%		4/16/20		260,000		280,452
Steel Dynamics Inc., Senior Notes		6.125	%		8/15/19		240,000		249,600
Vale Overseas Ltd., Senior Notes		4.375	%		1/11/22		2,100,000		1,892,898
Yamana Gold Inc., Senior Notes		4.950	%		7/15/24		140,000		132,517
Total Metals & Mining									10,503,288
Paper & Forest Products — 0.2%
Fibria Overseas Finance Ltd., Senior Notes		5.250	%		5/12/24		510,000		517,650
Total Materials									11,330,023

See Notes to Financial Statements.


12		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Telecommunication Services — 7.5%
Diversified Telecommunication Services — 6.3%
AT&T Inc., Global Notes		5.600	%		5/15/18	$	1,500,000	$	1,615,481
AT&T Inc., Senior Notes		4.500	%		5/15/35		370,000		371,686
AT&T Inc., Senior Notes		5.550	%		8/15/41		440,000		482,238
AT&T Inc., Senior Notes		4.750	%		5/15/46		60,000		59,828
British Telecommunications PLC, Bonds		9.625	%		12/15/30		2,000,000		3,155,978
Embarq Corp., Notes		7.995	%		6/1/36		1,500,000		1,502,250
Intelsat Jackson Holdings SA, Senior Notes		7.500	%		4/1/21		1,130,000		774,050
Koninklijke KPN NV, Senior Notes		8.375	%		10/1/30		330,000		450,972
Telecom Italia SpA, Senior Notes		5.303	%		5/30/24		830,000		838,823	^(a)
Telefonica Emisiones SAU, Senior Notes		7.045	%		6/20/36		140,000		175,698
Verizon Communications Inc., Senior Notes		5.150	%		9/15/23		2,460,000		2,825,895
Verizon Communications Inc., Senior Notes		5.050	%		3/15/34		300,000		328,046
Verizon Communications Inc., Senior Notes		5.012	%		8/21/54		1,208,000		1,251,933
Total Diversified Telecommunication Services									13,832,878
Wireless Telecommunication Services — 1.2%
Rogers Communications Inc., Senior Notes		6.800	%		8/15/18		1,000,000		1,107,303
Sprint Communications Inc., Senior Notes		9.000	%		11/15/18		360,000		384,300	^(a)
Sprint Corp., Senior Notes		7.250	%		9/15/21		680,000		554,200
Sprint Corp., Senior Notes		7.875	%		9/15/23		120,000		94,200
Telefonica Europe BV, Senior Notes		8.250	%		9/15/30		390,000		545,860
Total Wireless Telecommunication Services									2,685,863
Total Telecommunication Services									16,518,741
Utilities — 7.0%
Electric Utilities — 5.7%
Berkshire Hathaway Energy Co., Bonds		6.125	%		4/1/36		1,000,000		1,289,052
Berkshire Hathaway Energy Co., Senior Notes		5.750	%		4/1/18		1,000,000		1,077,483
CenterPoint Energy Houston Electric LLC, Senior Secured Bonds		4.500	%		4/1/44		530,000		591,738
Commonwealth Edison Co., First Mortgage Bonds		5.800	%		3/15/18		600,000		646,734
Commonwealth Edison Co., First Mortgage Bonds		6.450	%		1/15/38		600,000		827,211
Exelon Corp., Senior Notes		3.400	%		4/15/26		1,050,000		1,062,642
FirstEnergy Corp., Notes		7.375	%		11/15/31		3,040,000		3,716,540
NRG REMA LLC, Pass-Through Certificates, Senior Secured Bonds		9.681	%		7/2/26		2,000,000		1,922,500
Pacific Gas & Electric Co., Senior Notes		8.250	%		10/15/18		600,000		691,826
Virginia Electric and Power Co., Senior Notes		8.875	%		11/15/38		500,000		820,292
Total Electric Utilities									12,646,018

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		13

Schedule of investments (unaudited) (cont’d)

May 31, 2016

Western Asset Investment Grade Defined Opportunity Trust Inc.


Security	Rate			Maturity Date		Face Amount		Value
Gas Utilities — 0.7%
Southern Natural Gas Co., LLC, Senior Notes		8.000	%		3/1/32	$	1,500,000	$	1,625,213
Independent Power and Renewable Electricity Producers — 0.6%
AES Corp., Senior Notes		8.000	%		6/1/20		1,100,000		1,289,750
Total Utilities									15,560,981
Total Corporate Bonds & Notes (Cost — $184,696,508)									201,906,049
Municipal Bonds — 0.4%
California — 0.1%
University of California Revenue, Taxable		4.062	%		5/15/33		220,000		230,611
Illinois — 0.3%
Illinois State, GO, Build America Bonds-Taxable		6.725	%		4/1/35		530,000		582,968
Total Municipal Bonds (Cost — $823,712)									813,579
Senior Loans — 0.3%
Industrials — 0.3%
Commercial Services & Supplies — 0.3%
Nielsen Finance LLC, USD Term Loan B2 (Cost — $630,369)		3.437	%		4/15/21		630,369		633,856	^(d)(e)
Sovereign Bonds — 2.0%
Argentina — 1.6%
Provincia de Buenos Aires, Senior Notes		9.125	%		3/16/24		1,350,000		1,447,875	^(a)
Republic of Argentina, Senior Notes		6.250	%		4/22/19		340,000		355,980	^(a)
Republic of Argentina, Senior Notes		6.875	%		4/22/21		720,000		756,000	^(a)
Republic of Argentina, Senior Notes		7.500	%		4/22/26		940,000		988,880	^(a)
Total Argentina									3,548,735
Colombia — 0.2%
Republic of Colombia, Senior Bonds		5.625	%		2/26/44		431,000		428,845
Turkey — 0.2%
Republic of Turkey, Senior Bonds		4.250	%		4/14/26		520,000		506,458
Total Sovereign Bonds (Cost — $4,365,527)									4,484,038
U.S. Government & Agency Obligations — 1.2%
U.S. Government Obligations — 1.2%
U.S. Treasury Bonds		3.000	%		11/15/45		1,895,000		2,039,901
U.S. Treasury Bonds		2.500	%		2/15/46		540,000		524,982
U.S. Treasury Notes		1.625	%		2/15/26		70,000		68,616
Total U.S. Government & Agency Obligations (Cost — $2,598,701)									2,633,499

						Shares
Common Stocks — 0.6%
Financials — 0.6%
Banks — 0.6%
Citigroup Inc. (Cost — $1,474,006)							29,728		1,384,433

See Notes to Financial Statements.


14		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Western Asset Investment Grade Defined Opportunity Trust Inc.

Security

Rate

Value

Preferred Stocks — 1.3%

Financials — 1.3%

Consumer Finance — 1.0%

GMAC Capital Trust I

6.411

85,800

2,148,861

^(b)

Diversified Financial Services — 0.2%

Citigroup Capital XIII

7.008

17,525

456,877

^(b)

Insurance — 0.1%

Delphi Financial Group Inc.

7.376

9,325

220,012

^(b)

Total Preferred Stocks (Cost — $2,747,824)

2,825,750

Total Investments before Short-Term Investments (Cost — $197,336,647)

214,681,204

Maturity
Date

Face
Amount

Short-Term Investments — 1.9%

Repurchase Agreements — 1.4%

Royal Bank of Scotland repurchase agreement dated 5/31/16; Proceeds at maturity — $3,000,021; (Fully collateralized by U.S. government obligations, 0.875% due 9/15/16; Market Value — $3,060,000) (Cost — $3,000,000)

0.250

6/1/16

3,000,000

3,000,000

Money Market Funds — 0.5%

State Street Institutional U.S. Government Money Market Fund, Premier Class (Cost — $1,111,876)

0.239

1,111,876

1,111,876

Total Short-Term Investments (Cost — $4,111,876)

4,111,876

Total Investments — 99.0% (Cost — $201,448,523#)

218,793,080

Other Assets in Excess of Liabilities — 1.0%

2,227,526

Total Net Assets — 100.0%

221,020,606

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

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

^(d)	Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to multiple contracts under the same loan.

^(e)	Senior loans may be considered restricted in that the Fund ordinarily is contractually obligated to receive approval from the agent bank and/or borrower prior to the disposition of a senior loan.

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


Abbreviation used in this schedule:
GO		— General Obligation

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		15

Statement of assets and liabilities (unaudited)

May 31, 2016



Assets:
Investments, at value (Cost — $201,448,523)	$	218,793,080
Cash		361,950
Interest receivable		3,048,762
Receivable for securities sold		1,939,640
Deposits with brokers for open futures contracts		218,893
Deposits with brokers for centrally cleared swap contracts		180,507
Unrealized appreciation on forward foreign currency contracts		65,422
Prepaid expenses		17,046
*Total Assets*		*224,625,300*

Liabilities:
Payable for securities purchased		3,388,150
Investment management fee payable		121,587
OTC swaps, at value (premiums received — $12,742)		18,598
Unrealized depreciation on forward foreign currency contracts		10,442
Payable to broker — variation margin on centrally cleared swaps		7,087
Payable to broker — variation margin on open futures contracts		3,953
Directors’ fees payable		2,583
Payable for open OTC swap contracts		1,713
Accrued expenses		50,581
*Total Liabilities*		*3,604,694*
Total Net Assets	$	221,020,606

Net Assets:
Par value ($0.001 par value; 10,794,414 shares issued and outstanding; 100,000,000 shares authorized)	$	10,794
Paid-in capital in excess of par value		205,554,843
Undistributed net investment income		644,107
Accumulated net realized loss on investments, futures contracts, swap contracts and foreign currency transactions		(2,408,996)
Net unrealized appreciation on investments, futures contracts, swap contracts and foreign currencies		17,219,858
Total Net Assets	$	221,020,606

Shares Outstanding		10,794,414

Net Asset Value		$20.48

See Notes to Financial Statements.


16		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Statement of operations (unaudited)

For the Six Months Ended May 31, 2016



Investment Income:
Interest	$	6,110,475
Dividends		118,754
*Total Investment Income*		*6,229,229*

Expenses:
Investment management fee (Note 2)		699,656
Audit and tax fees		29,160
Excise tax (Note 1)		27,817
Directors’ fees		27,071
Transfer agent fees		24,653
Shareholder reports		13,659
Legal fees		11,367
Fund accounting fees		11,124
Stock exchange listing fees		10,658
Custody fees		2,434
Insurance		2,185
Miscellaneous expenses		5,444
*Total Expenses*		*865,228*
Net Investment Income		5,364,001

Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Swap Contracts and Foreign Currency Transactions (Notes 1, 3 and 4):
Net Realized Loss From:
Investment transactions		(507,785)
Futures contracts		(467,447)
Swap contracts		(25,328)
Foreign currency transactions		(82,508)
*Net Realized Loss*		*(1,083,068)*
Change in Net Unrealized Appreciation (Depreciation) From:
Investments		4,753,444
Futures contracts		16,175
Swap contracts		(202,761)
Foreign currencies		(303,534)
*Change in Net Unrealized Appreciation (Depreciation)*		*4,263,324*
Net Gain on Investments, Futures Contracts, Swap Contracts and Foreign Currency Transactions		3,180,256
Increase in Net Assets From Operations	$	8,544,257

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		17

Statements of changes in net assets


For the Six Months Ended May 31, 2016 (unaudited) and the Year Ended November 30, 2015	2016		2015

Operations:
Net investment income	$	5,364,001	$	10,597,228
Net realized gain (loss)		(1,083,068)		1,040,417
Change in net unrealized appreciation (depreciation)		4,263,324		(13,090,621)
*Increase (Decrease) in Net Assets From Operations*		*8,544,257*		*(1,452,976)*

Distributions to Shareholders From (Note 1):
Net investment income		(6,472,733)		(12,925,001)
*Decrease in Net Assets From Distributions to Shareholders*		*(6,472,733)*		*(12,925,001)*

Fund Share Transactions:
Reinvestment of distributions (11,331 and 19,442 shares issued, respectively)		223,579		397,294
*Increase in Net Assets From Fund Share Transactions*		*223,579*		*397,294*
*Increase (Decrease) in Net Assets*		*2,295,103*		*(13,980,683)*

Net Assets:
Beginning of period		218,725,503		232,706,186
End of period*	$	221,020,606	$	218,725,503
*Includes undistributed net investment income of:		$644,107		$1,752,839

See Notes to Financial Statements.


18		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Financial highlights


For a share of capital stock outstanding throughout each year ended November 30, unless otherwise noted:
	2016^1,2			2015¹			2014¹			2013¹			2012¹			2011¹

Net asset value, beginning of period		$20.28			$21.62			$21.53			$22.67			$20.64			$21.35

Income (loss) from operations:
Net investment income		0.50			0.98			1.02			1.03			1.09			1.15
Net realized and unrealized gain (loss)		0.30			(1.12)			0.58			(0.90)			2.33			(0.57)
*Total income (loss) from operations*		*0.80*			*(0.14)*			*1.60*			*0.13*			*3.42*			*0.58*

Less distributions from:
Net investment income		(0.60)	³		(1.20)			(1.14)			(0.94)			(1.25)			(1.07)
Net realized gains		—			—			(0.37)			(0.33)			(0.14)			(0.22)
*Total distributions*		*(0.60)*			*(1.20)*			*(1.51)*			*(1.27)*			*(1.39)*			*(1.29)*

Net asset value, end of period		$20.48			$20.28			$21.62			$21.53			$22.67			$20.64

Market price, end of period		$21.30			$20.77			$20.87			$19.59			$23.69			$21.55
*Total return, based on NAV^4,5*		*4.08*	%		*(0.69)*	%		*7.70*	%		*0.63*	%		*17.12*	%		*2.96*	%
*Total return, based on Market Price⁶*		*5.71*	%		*5.49*	%		*14.69*	%		*(12.18)*	%		*17.28*	%		*10.40*	%

Net assets, end of period (000s)		$221,021			$218,726			$232,706			$231,736			$243,472			$220,354

Ratios to average net assets:
Gross expenses		0.80	%⁷		0.83	%		0.80	%		0.84	%		0.78	%		0.80	%
Net expenses		0.80	⁷		0.83			0.80			0.84			0.78			0.80
Net investment income		4.98	⁷		4.67			4.69			4.69			5.01			5.43

Portfolio turnover rate		22	%		43	%		38	%		68	%		82	%		49	%

¹	Per share amounts have been calculated using the average shares method.

²	For the six months ended May 31, 2016 (unaudited).

³	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.

⁴

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.

⁵

The total return calculation assumes that distributions are reinvested at NAV. Prior to January 1, 2012, the total return calculation assumed the reinvestment of all distributions 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.

⁶	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.

⁷	Annualized.

See Notes to Financial Statements.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		19

Notes to financial statements (unaudited)

1. Organization and significant accounting policies

Western Asset Investment Grade Defined Opportunity Trust Inc. (the “Fund”) was incorporated in Maryland on April 24, 2009 and is registered as a non-diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund’s primary investment objective is to provide current income and then to liquidate and distribute substantially all of the Fund’s net assets to stockholders on or about December 2, 2024. As a secondary investment objective, the Fund will seek capital appreciation. There can be no assurance the Fund will achieve its investment objectives. The Fund seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its net assets in investment grade corporate fixed-income securities of varying maturities.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). 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 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. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. 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


20		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

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.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		21

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 — 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		—	$	201,906,049		—	$	201,906,049
Municipal bonds		—		813,579		—		813,579
Senior loans		—		633,856		—		633,856
Sovereign bonds		—		4,484,038		—		4,484,038
U.S. government & agency obligations		—		2,633,499		—		2,633,499
Common stocks	$	1,384,433		—		—		1,384,433
Preferred stocks		2,605,738		220,012		—		2,825,750
Total long-term investments	$	3,990,171	$	210,691,033		—	$	214,681,204
Short-term investments†:
Repurchase agreements		—	$	3,000,000		—	$	3,000,000
Money market funds	$	1,111,876		—		—		1,111,876
Total other financial instruments	$	1,111,876	$	3,000,000		—	$	4,111,876
Total investments	$	5,102,047	$	213,691,033		—	$	218,793,080
Other financial instruments:
Futures contracts	$	8,466		—		—	$	8,466
Forward foreign currency contracts		—	$	65,422		—		65,422
Total other financial instruments	$	8,466	$	65,422		—	$	73,888
Total	$	5,110,513	$	213,756,455		—	$	218,866,968


22		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report


LIABILITIES
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Other financial instruments:
Futures contracts	$	32,816		—		—	$	32,816
Forward foreign currency contracts		—	$	10,442		—		10,442
Centrally cleared credit default swaps on credit indices — buy protection		—		25,010		—		25,010
Centrally cleared interest rate swaps		—		124,463		—		124,463
OTC credit default swaps on corporate issues — buy protection‡		—		18,598		—		18,598
Total	$	32,816	$	178,513		—	$	211,329

†	See Schedule of Investments for additional detailed categorizations.

‡	Value includes any premium paid or received with respect to swap contracts.

The Fund’s policy is to recognize transfers between levels as of the end of the reporting period. At May 31, 2016, securities valued at $220,012 were transferred from Level 1 to Level 2 within the fair value hierarchy because of the unavailability of a quoted price in an active market for an identical investment.

(b) Repurchase agreements. The Fund may enter into repurchase agreements with institutions that its subadviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents with a broker in an amount equal to a certain percentage of the contract amount.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		23

Notes to financial statements (unaudited) (cont’d)

This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. The daily changes in contract value are recorded as unrealized gains or losses in the Statement of Operations and the Fund recognizes a realized gain or loss when the contract is closed.

Futures contracts involve, to varying degrees, risk of loss in excess of the amounts reflected in the financial statements. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(d) Forward foreign currency contracts. The Fund enters into a forward foreign currency contracts to hedge against, or manage exposure to, foreign issuers or markets. The Fund may also enter into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of a foreign currency denominated portfolio transaction. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.

Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected on the Statement of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(e) Swap agreements. The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes, including to increase the Fund’s return. The use of swaps involves risks that are different from those associated with other portfolio transactions. Swap agreements are privately negotiated in the over-the-counter market and may be entered into as a bilateral contract (“OTC Swaps”) or centrally cleared (“Centrally Cleared Swaps”). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.

In a Centrally Cleared Swap, immediately following execution of the swap, the swap agreement is submitted to a clearinghouse or central counterparty (the “CCP”) and the CCP becomes the ultimate counterparty of the swap agreement. The Fund is required to interface with the CCP through a broker, acting in an agency capacity. All payments are settled with the CCP through the broker. Upon entering into a Centrally Cleared Swap, the Fund is required to deposit initial margin with the broker in the form of cash or securities.


24		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of Centrally Cleared Swaps, if any, is recorded as a receivable or payable for variation margin on the Statement of Assets and Liabilities. Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Fund’s custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments and restricted cash, if any, is identified on the Statement of Assets and Liabilities. Risks may exceed amounts recorded in the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts’ terms, and the possible lack of liquidity with respect to the swap agreements.

OTC swap payments received or made at the beginning of the measurement period are reflected as a premium or deposit, respectively, on the Statement of Assets and Liabilities. These upfront payments are amortized over the life of the swap and are recognized as realized gain or loss in the Statement of Operations. Net periodic payments received or paid by the Fund are recognized as a realized gain or loss in the Statement of Operations.

The Fund’s maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. As of May 31, 2016, the Fund did not hold any credit default swaps to sell protection.

For average notional amounts of swaps held during the six months ended May 31, 2016, see Note 4.

Credit default swaps

The Fund enters into credit default swap (“CDS”) contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically corporate or sovereign issuers, on a specified obligation, or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index. The Fund may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk where the Fund has exposure to an issuer) or to take an active long or short position with respect to the likelihood of a particular issuer’s default. As a seller of protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap provided that there is no credit event. If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the maximum potential amount of future payments (undiscounted) that the Fund could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. These amounts of potential payments will be partially offset by any recovery of values from the respective referenced obligations. As a seller of protection, the Fund effectively adds leverage to its portfolio because, in addition to its total net assets, the


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		25

Notes to financial statements (unaudited) (cont’d)

Fund is subject to investment exposure on the notional amount of the swap. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied spreads are the theoretical prices a lender receives for credit default protection. When spreads rise, market perceived credit risk rises and when spreads fall, market perceived credit risk falls. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and decreasing market values, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. Credit spreads utilized in determining the period end market value of credit default swap agreements on corporate or sovereign issues are disclosed in the Notes to Financial Statements and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values, particularly in relation to the notional amount of the contract as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.

The Fund’s maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty). As the protection seller, the Fund’s maximum risk is the notional amount of the contract. Credit default swaps are considered to have credit risk-related contingent features since they require payment by the protection seller to the protection buyer upon the occurrence of a defined credit event.

Entering into a CDS agreement involves, to varying degrees, elements of credit, market and documentation risk in excess of the related amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates.

Interest rate swaps

The Fund enters into interest rate swap contracts to manage its exposure to interest rate risk. Interest rate swaps are agreements between two parties to exchange cash flows based on a notional principal amount. The Fund may elect to pay a fixed rate and receive a floating rate, or receive a fixed rate and pay a floating rate, on a notional principal amount. Interest rate swaps are marked-to-market daily based upon quotations from market makers and the change, if any, is recorded as an unrealized gain or loss in the Statement of Operations. When a swap contract is terminated early, the Fund records a realized gain or loss equal to the difference between the original cost and the settlement amount of the closing transaction.


26		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

The risks of interest rate swaps include changes in market conditions that will affect the value of the contract or changes in the present value of the future cash flow streams and the possible inability of the counterparty to fulfill its obligations under the agreement. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from the counterparty over the contract’s remaining life, to the extent that that amount is positive. This risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty.

(f) Loan participations. The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Fund’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of off-set against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.

The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower. In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any off-set between the lender and the borrower.

(g) Credit and market risk. The Fund invests in high-yield instruments that are subject to certain credit and market risks. The yields of high-yield obligations reflect, among other things, perceived credit and market risks. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading.

(h) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.

(i) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s subadviser attempts to mitigate counterparty risk by


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		27

Notes to financial statements (unaudited) (cont’d)

(i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the subadviser. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or NAV over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearinghouse for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Cash collateral that has been pledged to cover obligations of the Fund under derivative contracts, if any, will be reported separately in the Statement of Assets and Liabilities. Securities pledged as collateral, if any, for the same purpose are noted in the Schedule of Investments.

Absent an event of default by the counterparty or a termination of the agreement, the terms of the master agreements do not result in an offset of reported amounts of financial assets and financial liabilities in the Statement of Assets and Liabilities across transactions between the Fund and the applicable counterparty. The enforceability of the right to offset may vary by jurisdiction.

As of May 31, 2016, the Fund held forward foreign currency contracts and OTC credit default swaps with credit related contingent features which had a liability position of $29,040. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties.

(j) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.

The Fund does not isolate that portion of the results of operations resulting from fluctuations in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, including gains and losses on forward foreign currency contracts, currency gains or losses realized


28		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the values of assets and liabilities, other than investments in securities, on the date of valuation, resulting from changes in exchange rates.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

(k) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income, adjusted for amortization of premium and accretion of discount, is recorded on the accrual basis. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as practicable after the Fund determines the existence of a dividend declaration after exercising reasonable due diligence. 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 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.

(l) Distributions to shareholders. Distributions from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. The actual source of the Fund’s monthly 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. Distributions of net realized gains, if any, are declared at least annually. Distributions to 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.

(m) Compensating balance arrangements. The Fund has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Fund’s cash on deposit with the bank.

(n) 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 (the “Code”), as amended, 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. However, due to the timing of when distributions are made by the Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Fund’s annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable income and realized gains for the calendar year. The Fund paid $65,461 of federal excise taxes attributable to calendar year 2015 in March 2016.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		29

Notes to financial statements (unaudited) (cont’d)

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, 2015, 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 tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

(o) 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

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Fund’s investment manager. Western Asset Management Company (“Western Asset”), Western Asset Management Company Pte. Ltd. (“Western Singapore”), Western Asset Management Company Ltd (“Western Japan”) and Western Asset Management Company Limited (“Western Asset Limited”) are the Fund’s subadvisers. LMPFA, Western Asset, Western Singapore, Western Japan and Western Asset Limited are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

LMPFA provides administrative and certain oversight services to the Fund. The Fund pays LMPFA an investment management fee, calculated daily and paid monthly, at an annual rate of 0.65% of the Fund’s average daily net assets.

LMPFA delegates to Western Asset the day-to-day portfolio management of the Fund. Western Singapore, Western Japan and Western Asset Limited provide certain subadvisory services to the Fund relating to currency transactions and investment in non-U.S. dollar denominated debt securities. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Fund. In turn, Western Asset pays Western Singapore, Western Japan and Western Asset Limited a fee for their services at no additional expense to the Fund. Each of Western Singapore, Western Japan and Western Asset Limited receives a fee from Western Asset, payable monthly, in an amount equal to 70% of the Fund’s fee paid to LMPFA by the Fund related to the Fund’s assets that Western Asset allocates to Western Singapore, Western Japan and Western Asset Limited, respectively, to manage.

All officers and one Director of the Fund are employees of Legg Mason or its affiliates and do not receive compensation from the Fund.


30		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

3. Investments

During the six months ended May 31, 2016, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) and U.S. Government & Agency Obligations were as follows:


	Investments		U.S. Government & Agency Obligations
Purchases	$	37,248,864	$	9,576,669
Sales		44,318,027		7,436,555

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


Gross unrealized appreciation	$	20,009,841
Gross unrealized depreciation		(2,665,284)
Net unrealized appreciation	$	17,344,557

At May 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 Ultra Long-Term Bonds		21		9/16	$	3,669,159	$	3,677,625	$	8,466

Contracts to Sell:
U.S. Treasury 5-Year Notes		20		9/16		2,399,254		2,402,344		(3,090)
U.S. Treasury 10-Year Notes		87		9/16		11,268,936		11,282,813		(13,877)
U.S. Treasury Long-Term Bonds		33		9/16		5,373,463		5,389,312		(15,849)
										(32,816)
Net unrealized depreciation on open futures contracts									$	(24,350)

At May 31, 2016, the Fund had the following open forward foreign currency contracts:

Currency
Purchased

Currency
Sold

Counterparty

Settlement
Date

Unrealized
Appreciation
(Depreciation)

JPY

180,850,000

USD

1,644,779

Bank of America N.A.

7/14/16

(9,241)

USD

594,313

EUR

520,994

Bank of America N.A.

7/14/16

13,785

USD

1,230,390

JPY

135,640,000

Bank of America N.A.

7/14/16

3,714

USD

1,644,795

JPY

179,480,000

Bank of America N.A.

7/14/16

21,647

INR

123,400

USD

1,839

Citibank N.A.

7/14/16

(19)

USD

1,062,548

EUR

930,000

Citibank N.A.

7/14/16

26,276

USD

441,775

JPY

48,980,000

Citibank N.A.

7/14/16

(1,182)

Total

54,980


Abbreviations used in this table:
EUR		— Euro
INR		— Indian Rupee
JPY		— Japanese Yen
USD		— United States Dollar


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		31

Notes to financial statements (unaudited) (cont’d)

At May 31, 2016, the Fund had the following open swap contracts:

CENTRALLY CLEARED INTEREST RATE SWAPS

Central Counterparty

Notional
Amount

Termination
Date

Payments
Made by
the Fund†

Payments
Received by
the Fund†

Upfront
Premiums
Paid
(Received)

Unrealized
Depreciation

Chicago Mercantile Exchange

2,192,000

2/15/41

2.442% semi-annually

3-Month LIBOR
quarterly

(9,794)

(124,463)


OTC CREDIT DEFAULT SWAPS ON CORPORATE ISSUES — BUY PROTECTION¹
Swap Counterparty (Reference Entity)	Notional Amount²		Termination Date		Implied Credit Spread at May 31, 2016³	Periodic Payments Made by the Fund†		Market Value		Upfront Premiums Paid (Received)		Unrealized Depreciation
Goldman Sachs Group Inc. (PPG Industries Inc., 6.650%, due 3/15/18)	$	856,423		3/20/19	0.22%		1.000% quarterly	$	(18,598)	$	(12,742)	$	(5,856)


CENTRALLY CLEARED CREDIT DEFAULT SWAPS ON CREDIT INDICES — BUY PROTECTION¹
Central Counterparty (Reference Entity)	Notional Amount²		Termination Date		Periodic Payments Made by the Fund†	Market Value⁴		Upfront Premiums Paid (Received)		Unrealized Depreciation
Chicago Mercantile Exchange (Markit CDX.NA.HY.26 Index)	$	2,190,000		6/20/21	5.000% quarterly	$	(60,582)	$	(35,572)	$	(25,010)

If the Fund is a buyer of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and deliver the referenced obligation or the underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or the underlying securities comprising the referenced index.

²	The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

Implied credit spreads, utilized in determining the market value of credit default swap agreements on corporate or sovereign issues as of period end, serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation.

⁴

The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative had the notional amount of the swap agreement been closed/sold as of the period end. Decreasing market values (sell protection) or increasing market values (buy protection) when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

†	Percentage shown is an annual percentage rate.


32		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

4. Derivative instruments and hedging activities

Below is a table, grouped by derivative type, that provides information about the fair value and the location of derivatives within the Statement of Assets and Liabilities at May 31, 2016.


ASSET DERIVATIVES¹
	Interest Rate Risk		Foreign Exchange Risk		Total
Futures contracts²	$	8,466		—	$	8,466
Forward foreign currency contracts		—	$	65,422		65,422
Total	$	8,466	$	65,422	$	73,888


LIABILITY DERIVATIVES¹
	Interest Rate Risk		Foreign Exchange Risk		Credit Risk		Total
Futures contracts²	$	32,816		—		—	$	32,816
OTC swap contracts³		—		—	$	18,598		18,598
Centrally cleared swap contracts⁴		124,463		—		25,010		149,473
Forward foreign currency contracts		—	$	10,442		—		10,442
Total	$	157,279	$	10,442	$	43,608	$	211,329

¹	Generally, the balance sheet location for asset derivatives is receivables/net unrealized appreciation (depreciation) and for liability derivatives is payables/net unrealized appreciation (depreciation).

²	Includes cumulative appreciation (depreciation) of futures contracts as reported in the footnotes. Only variation margin is reported within the receivables and/or payables on the Statement of Assets and Liabilities.

³	Values include premiums paid (received) on swap contracts which are shown separately in the Statement of Assets and Liabilities.

⁴	Includes cumulative appreciation (depreciation) of centrally cleared swap contracts as reported in the footnotes. Only variation margin is reported within the receivables and/or payables on the Statement of Assets and Liabilities.

The following tables provide information about the effect of derivatives and hedging activities on the Fund’s Statement of Operations for the six months ended May 31, 2016. The first table provides additional detail about the amounts and sources of gains (losses) realized on derivatives during the period. The second table provides additional information about the change in unrealized appreciation (depreciation) resulting from the Fund’s derivatives and hedging activities during the period.


AMOUNT OF REALIZED GAIN (LOSS) ON DERIVATIVES RECOGNIZED
	Interest Rate Risk		Foreign Exchange Risk		Credit Risk		Total
Futures contracts	$	(467,447)		—		—	$	(467,447)
Swap contracts		(20,692)		—	$	(4,636)		(25,328)
Forward foreign currency contracts¹		—	$	(82,508)		—		(82,508)
Total	$	(488,139)	$	(82,508)	$	(4,636)	$	(575,283)

¹	Net realized gain (loss) from forward foreign currency contracts is reported in net realized gain (loss) from foreign currency transactions in the Statement of Operations.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		33

Notes to financial statements (unaudited) (cont’d)


CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON DERIVATIVES RECOGNIZED
	Interest Rate Risk		Foreign Exchange Risk		Credit Risk		Total
Futures contracts	$	16,175		—		—	$	16,175
Swap contracts		(177,683)		—	$	(25,078)		(202,761)
Forward foreign currency contracts¹		—	$	(303,534)		—		(303,534)
Total	$	(161,508)	$	(303,534)	$	(25,078)	$	(490,120)

¹	The change in unrealized appreciation (depreciation) from forward foreign currency contracts is reported in the change in net unrealized appreciation (depreciation) from foreign currencies in the Statement of Operations.

During the six months ended May 31, 2016, the volume of derivative activity for the Fund was as follows:


	Average Market Value
Futures contracts (to buy)	$	4,023,299
Futures contracts (to sell)		28,950,301
Forward foreign currency contracts (to buy)		1,330,574
Forward foreign currency contracts (to sell)		5,492,272

	Average Notional Balance
Interest rate swap contracts	$	2,192,000
Credit default swap contracts (to buy protection)		1,169,280

The following table presents by financial instrument, the Fund’s derivative assets net of the related collateral received by the Fund at May 31, 2016:


	Gross Amount of Derivative Assets in the Statement of Assets and Liabilities¹		Collateral Received		Net Amount
Forward foreign currency contracts	$	65,422		—	$	65,422

The following table presents by financial instrument, the Fund’s derivative liabilities net of the related collateral pledged by the Fund at May 31, 2016:


	Gross Amount of Derivative Liabilities in the Statement of Assets and Liabilities¹		Collateral Pledged^2,3		Net Amount
Futures contracts⁴	$	3,953	$	(3,953)		—
Centrally cleared swap contracts⁴		7,087		(7,087)		—
OTC swap contracts		18,598		—	$	18,598
Forward foreign currency contracts		10,442		—		10,442
Total	$	40,080	$	(11,040)	$	29,040

¹	Absent an event of default or early termination, derivative assets and liabilities are presented gross and not offset in the Statement of Assets and Liabilities.

²	Gross amounts are not offset in the Statement of Assets and Liabilities.

³	In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization.

⁴	Amount represents the current day’s variation margin as reported in the Statement of Assets and Liabilities. It differs from the cumulative appreciation (depreciation) presented in the previous table.


34		Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report

5. Distributions subsequent to May 31, 2016

The following distributions have been declared by the Fund’s Board of Directors and are payable subsequent to the period end of this report:


Record Date	Payable Date		Amount
6/17/16		6/24/16	$	0.1000	*
7/22/16		7/29/16	$	0.1000
8/19/16		8/26/16	$	0.1000

*	Distribution comprised of $0.0656 from income and $0.0344 from long-term capital gains.

6. Stock repurchase program

On November 16, 2015, the Fund announced that the Fund’s Board of Directors (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, 2016, the Fund did not repurchase any shares.


Western Asset Investment Grade Defined Opportunity Trust Inc. 2016 Semi-Annual Report		35

Additional shareholder information (unaudited)

Results of annual meeting of shareholders

The Annual Meeting of Shareholders of Western Asset Investment Grade Defined Opportunity Trust Inc. was held on April 1, 2016 for the purpose of considering and voting upon the election of Directors. The following table provides information concerning the matter voted upon at the Meeting:

Election of directors


Nominees	Votes For		Votes Withheld
Carol L. Colman		9,450,982		168,330
Daniel P. Cronin		9,464,253		155,059
Paolo M. Cucchi		9,422,856		196,456
Jane Trust		9,449,379		169,933

At May 31, 2016, in addition to Carol L. Colman, Daniel P. Cronin, Paolo M. Cucchi and Jane Trust, the other Directors of the Fund were as follows:

Robert D. Agdern

Leslie H. Gelb

William R. Hutchinson

Eileen A. Kamerick

Riordan Roett


36		Western Asset Investment Grade Defined Opportunity Trust Inc.

Dividend reinvestment plan (unaudited)

Unless you elect to receive distributions in cash (i.e., opt-out), all dividends, including any capital gain dividends, on your Common Stock will be automatically reinvested by Computershare Inc. (“Computershare”), as agent for the stockholders (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, 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 on the record date (or, if the record date is not a NYSE trading day, the immediately preceding trading day) for determining stockholders eligible to receive the relevant dividend or distribution (the “determination date”) is equal to or exceeds 98% of the net asset value per share of the Common Stock, the Fund will issue new Common Stock at a price equal to the greater of (a) 98% of the net asset value per share at the close of trading on the NYSE on the determination date or (b) 95% of the market price per share of the Common Stock on the determination date.

(2) If 98% of the net asset value per share of the Common Stock exceeds the market price of the Common Stock on the determination 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 determination date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the record 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 rises so that it equals or exceeds 98% of the net asset value per share of the Common Stock at the close of trading on the NYSE on the determination 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) 98% of the net asset value per share at the close of trading on the Exchange on the determination date 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 211 Quality Circle, Suite 210, College Station, TX 77845-4470 or by telephone at 1-888-888-0151. Such withdrawal will be effective immediately if notice is received by the


Western Asset Investment Grade Defined Opportunity Trust Inc.		37

Dividend reinvestment plan (unaudited) (cont’d)

Plan Agent not less than ten business days prior to any dividend or distribution record date; otherwise such 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. The Plan may be terminated 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 is to be effective. Upon any termination, you will be sent a certificate or certificates for the full number of shares of Common Stock held for you under the Plan and cash for any fractional share of Common Stock. 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. You will be charged a service charge and the Plan Agent is authorized to deduct brokerage charges actually incurred for this transaction from the proceeds.

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. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan and your account may be obtained from the Plan Agent at 1-888-888-0151.


38		Western Asset Investment Grade Defined Opportunity Trust Inc.

Western Asset

Investment Grade Defined Opportunity Trust Inc.

Directors

Robert D. Agdern

Carol L. Colman

Daniel P. Cronin

Paolo M. Cucchi

Leslie H. Gelb

William R. Hutchinson

Eileen A. Kamerick

Riordan Roett

Jane Trust

Chairman

Officers

Jane Trust

President and Chief Executive Officer

Richard F. Sennett

Principal Financial Officer

Ted P. Becker

Chief Compliance Officer

Jenna Bailey

Identity Theft Prevention Officer

Robert I. Frenkel

Secretary and Chief Legal Officer

Thomas C. Mandia

Assistant Secretary

Steven Frank

Treasurer

Jeanne M. Kelly

Senior Vice President

Western Asset Investment Grade Defined Opportunity Trust Inc.

620 Eighth Avenue

49th Floor

New York, NY 10018

Investment manager

Legg Mason Partners Fund Advisor, LLC

Subadvisers

Western Asset Management Company

Western Asset Management Company Limited

Western Asset Management Company Ltd

Western Asset Management Company Pte. Ltd.

Custodian

State Street Bank and Trust Company

1 Lincoln Street Boston, MA 02111

Transfer agent

Computershare Inc.*

211 Quality Circle, Suite 210

College Station, TX 77845-4470

*	Effective March 14, 2016, Computershare Inc. serves as the Fund’s transfer agent.

Independent registered public accounting firm

KPMG LLP

345 Park Avenue

New York, NY 10154

Legal counsel

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

New York Stock Exchange Symbol

IGI

Legg Mason Funds Privacy and Security Notice

Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds

This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds’ distributor, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds and certain closed-ends funds managed or sub-advised by Legg Mason or its affiliates. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information the Funds Collect About You

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

•

Personal information included on applications or other forms;

•

Account balances, transactions, and mutual fund holdings and positions;

•

Online account access user IDs, passwords, security challenge question responses; and

•

Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual’s total debt, payment history, etc.).

How the Funds Use Nonpublic Personal Information About You

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law. The Funds may disclose information about you to:

•

Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business or comply with obligations to government regulators;

•

Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform marketing services solely for the Funds;

•

The Funds’ representatives such as legal counsel, accountants and auditors; and

•

Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

NOT PART OF THE SEMI-ANNUAL REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.

The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

Keeping You Informed of the Funds’ Privacy and Security Practices

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.

The Funds’ Security Practices

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, or if you have questions about the Funds’ privacy practices, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.leggmason.com, or contact the Fund at 1-888-777-0102.

NOT PART OF THE SEMI-ANNUAL REPORT

Western Asset Investment Grade Defined Opportunity Trust Inc.

Western Asset Investment Grade Defined Opportunity Trust Inc.

620 Eighth Avenue

49^th Floor

New York, NY 10018

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 on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q from the Fund, shareholders can call 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.lmcef.com and (3) on the SEC’s website at www.sec.gov.

This report is transmitted to the shareholders of Western Asset Investment Grade Defined Opportunity Trust 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.

211 Quality Circle, Suite 210

College Station, TX 77845-4470

WASX012742 7/16 SR16-2811

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.

Included herein under Item 1.

ITEM 7.

DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not Applicable.

ITEM 9.

PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 11.

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 second fiscal quarter of 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 12.

EXHIBITS.

(a) (1) Not applicable.

Exhibit 99.CODE ETH

(a) (2) 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 Investment Grade Defined Opportunity Trust Inc.


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

Date:		July 25, 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:		July 25, 2016

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

Date:		July 25, 2016