WESTERN ASSET TRUST, INC.
Supplement to the Prospectuses Dated October 30, 1997
Recently, the Directors of Western Asset Trust, Inc. (the "Company"),
subject to approval of the affected Portfolio's shareholders, approved changes
to the Company's Charter. The changes to the Company's Charter, among other
things, will permit the issuance of multiple classes of shares, which will
allow the Directors to allocate costs associated with a class (such as
distribution costs) to those investors who purchase the shares of such class.
Each currently operating Portfolio, other than the International Securities
Portfolio, expects to offer two classes of shares. The principal economic
difference between the classes is expected to be that one class will bear a
distribution fee (sometimes referred to as a "12b-1 fee"), while the other
class will not. The creation of an additional class of shares will permit the
distribution fee to be properly allocated to those shareholders who purchase
that class. Only shareholders who purchase the additional class of shares
will pay a 12b-1 fee. In the future, the Directors could determine that other
costs should be specially allocated to a particular class of shares or may
make other changes to the terms of the classes.
The Board of Directors also approved a special shareholders' meeting to
vote on the changes to the Company's Charter as well as other proposals. The
meeting is currently scheduled for May 21, 1998. In addition, the Board of
Directors authorized a ten-for-one stock split of the shares of the Limited
Duration, Intermediate and Core Portfolios and approved a change in each
Portfolio's fiscal year-end to March 31. The financial highlights in the
Prospectus and the financial statements which are incorporated by reference
into the Prospectus and Statement of Additional Information do not reflect the
stock split.
The Date of this Supplement is May 1, 1998.
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WESTERN ASSET TRUST, INC.
Supplement to the Statements of Additional Information Dated October 30, 1997
Recently, the Directors of Western Asset Trust, Inc., (the "Company"),
subject to approval of the affected Portfolio's shareholders, elected three
new directors, John E. Bryson, Anita L. DeFrantz, and Edward A. Taber, III,
and authorized certain changes to the Money Market, Limited Duration,
Intermediate and Core Portfolios fundamental investment policies. The Board
of Directors also approved a special shareholders' meeting to vote on each of
the above matters as well as other proposals. The meeting is currently
scheduled for May 21, 1998. In addition, the Board of Directors authorized a
ten-for-one stock split of the shares of the Limited Duration, Intermediate
and Core Portfolios. The financial statements which are incorporated by
reference into the Statement of Additional Information do not reflect the
stock split.
New Directors. Certain information about Messrs. Bryson and Taber and
Ms. DeFrantz is set forth in the following table. Any capitalized terms used
and not defined herein have the meaning given to them in the SAI. An asterisk
(*) indicates an individual who will be an interested person of the Company as
defined in the 1940 Act. The business address of Mr. Bryson and Ms. DeFrantz
is 117 East Colorado Boulevard, Pasadena, California 91105. The business
address of Mr. Taber is 100 Light Street, Baltimore, Maryland 21202.
Name Age Business Experience
John E. Bryson (1) 54 Chairman and Chief Executive Officer of
Edison International and its principal
subsidiary, Southern California Edison
(both electric utilities companies);
Director of Pacific American Income
Shares, Inc. (closed-end investment
company), The Boeing Company, The Times
Mirror Company, H.F. Ahmanson & Co.
(holding company with respect to
financial services products), and the
W.M. Keck Foundation (philanthropic
organization); Trustee of Stanford
University
Anita L. Defrantz (2) 45 President of the Amateur Athletic
Foundation of Los Angeles; President of
Kids in Sports; Vice President of the
International Olympic Committee;
Director of Pacific American Income
Shares, Inc.; Board Member of the
Amateur Athletic Foundation of Los
Angeles, the International Olympic
Committee, and the United States Olympic
Committee Executive Board.
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Edward A. Taber, III (3)* 54 Senior Executive Vice President of Legg
Mason, Inc.; Director of the Legg Mason
Value Trust, Inc., the Legg Mason Total
Return Trust, Inc. and the Legg Mason
Special Investment Trust, Inc.; Trustee of
the Legg Mason Tax-Free Income Fund and
the Legg Mason Cash Reserve Trust;
President of the Legg Mason Income Trust,
Inc.; President and a Director of the Legg
Mason Global Trust, Inc., LM Institutional
Fund Advisors II, Inc. and the Legg Mason
Investors Trust, Inc.; Director of Western
Asset Management Company (investment
management firm and the current investment
adviser to the Portfolios), Western Asset
Global Management, Limited, Bartlett &
Co., Batterymarch Financial Management,
Inc., Gray, Seifert & Co., Inc.
(investment adviser), GSH & Co. Inc.
(investment adviser holding company),
Fairfield Group, Inc. (investment
adviser), LM Institutional Advisors, Inc.,
and Legg Mason Fund Adviser, Inc.;
formerly director of Taxable Fixed Income
Division of T. Rowe Price.
(1) Member of the Nominating Committee of the Board subject to election
by shareholders. Subject to Mr. Bryson's election by shareholders,
the Nominating Committee of the Board will be comprised of Messrs.
Bryson, Siart and Simpson.
(2) Member of the Audit Committee of the Board subject to election by
shareholders. Subject to Ms. DeFrantz's election by shareholders,
the Audit Committee of the Board will be comprised of Messrs. Gilman,
Olson and Siart and Ms. DeFrantz.
(3) Mr. Taber is an interested person because of his positions with Legg
Mason, Inc. and its affiliates. Legg Mason, Inc. is the parent of LM
Institutional Advisors, Inc. and Western Asset Management Company.
Mr. Taber is also a member of the Executive Committee of the Board
subject to election by shareholders. Subject to Mr. Taber's election
by shareholders, the Executive Committee of the Board will be
comprised of Messrs. McGagh, Arnault, Simpson and Taber.
Changes in Fundamental Investment Policies. Subject to shareholder
approval, the Directors approved a number of changes to the fundamental
investment restrictions of the Core, Intermediate, Limited Duration and Money
Market Portfolios, including the elimination of certain of these restrictions.
The Directors approved the elimination of the fundamental investment
restrictions in the Statement of Additional Information with respect to: 1)
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margin transactions; 2) pledging assets; and 3) investments in certain oil,
gas and other mineral interests. The Directors approved the following
fundamental investment restrictions to replace the relevant existing
investment restriction in the Statement of Additional Information with respect
to: 1) investments in real estate; 2) investments in commodities; 3) making
loans; and 4) borrowing and senior securities.
"The Portfolio may purchase or sell commodities, commodities contracts,
futures contracts, options, forward contracts or real estate to the
fullest extent permitted by the 1940 Act, the rules or regulations
thereunder or applicable orders of the SEC, as such statute, rules,
regulations or orders may be amended from time to time."
"The Portfolio may lend or borrow money and issue senior securities to
the fullest extent permitted by the 1940 Act, the rules or regulations
thereunder or applicable orders of the SEC, as such statute, rules,
regulations or orders may be amended from time to time."
If the last amendment above is approved by shareholders, each Portfolio
will also adhere to the following non-fundamental limitation on borrowing:
"Each Portfolio will limit its investments in reverse repurchase
agreements and other borrowing (including dollar roll transactions) to
no more than one-third of its total assets. To avoid potential
leveraging effects of such borrowing (including reverse repurchase
agreements and dollar roll transactions), a Portfolio will not make
investments while its borrowing is in excess of 5% of its total
assets."
The Date of this Supplement is May 1, 1998.
