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Three Western Asset funds announce board approvals of proposed mergers
By Tali Rackner
Norfolk, Va., Feb. 16 – Western Asset Emerging Markets Income Fund Inc. (EMD), Western Asset Worldwide Income Fund Inc. (SBW) and Western Asset Emerging Markets Debt Fund Inc. (ESD) announced approval by each fund’s board of directors of a proposal to merge the funds, according to a press release.
The EMD and SBW would each merge with and into ESD. The approval of each merger is not contingent upon the approval of the other merger.
The mergers are subject to approval by the stockholders of each fund, and are expected to occur during the third quarter.
If the proposed mergers are approved, stockholders of EMD and SBW would receive common stock of ESD, based on each fund’s respective net asset value per share, the release said. In lieu of issuing fractional shares, ESD will pay cash to each former stockholder of EMD and SBW in an amount equal to the value of the fractional shares of ESD common stock that the investor would otherwise have received in the merger.
Management and each board of directors said they believe it is in the best interests of stockholders to merge EMD and SBW with and into ESD in part because the combined fund may benefit from economies of scale, as one set of fixed expenses would be spread over a larger asset base, as well as from enhanced market liquidity, according to the release.
ESD also announced approval by its board of directors of a change to its primary and secondary investment objectives, subject to stockholder approval. If approved, ESD’s primary investment objective would become high current income and its secondary investment objective would become capital appreciation.
Baltimore-based Legg Mason Partners Fund Advisor, LLC is the investment adviser to the funds.
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