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 811-06629

 

Western Asset Managed Municipals Fund Inc.

(Exact name of registrant as specified in charter)

 

One Madison Avenue, 17th Floor, New York, NY 10010

(Address of principal executive offices) (Zip code)

 

Marc A. De Oliveira

Franklin Templeton

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

 

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

 

Date of fiscal year end: May 31

 

Date of reporting period: May 31, 2026

 

 
 

 

 

ITEM 1. REPORT TO STOCKHOLDERS

 

(a) The Report to Shareholders is filed herewith

 

Annual Report
May 31, 2026
 
WESTERN ASSET
MANAGED MUNICIPALS
FUND INC. (MMU)
 
 
If you need assistance accessing this content, please reach out to your sales representative or send an email to accessibility@franklintempleton.com.
 
 
Fund objective
The Fund’s investment objective is to seek as high a level of current income exempt from federal income tax* as is consistent with preservation of capital.
 
When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal.
 
The Fund seeks to achieve its objective by investing primarily in long-term investment grade municipal debt securities issued by state and local governments, political subdivisions, agencies and public authorities (municipal obligations). Under normal market conditions, the Fund will invest at least 80% of its total assets in municipal obligations rated investment grade at the time of investment.
What’s inside
 
* Certain investors may be subject to the federal alternative minimum tax (“AMT”), and state and local taxes will apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.
II
Western Asset Managed Municipals Fund Inc.
Letter from the president
 
Dear Shareholder,
We are pleased to provide the annual report of Western Asset Managed Municipals Fund Inc. for the twelve-month reporting period ended May 31, 2026. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.
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.franklintempleton.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,
 
Jane Trust, CFA

President and Chief Executive Officer
June 30, 2026 
Western Asset Managed Municipals Fund Inc.
III
(This page intentionally left blank.)
Fund overview
Q. What is the Fund’s investment strategy?
A. The Fund’s investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital. When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal. We select securities primarily by identifying undervalued sectors and individual securities, while also selecting securities that we believe will benefit from changes in market conditions.
Under normal market conditions, the Fund invests primarily in investment-grade municipal bonds, but it can also invest up to 20% of its total assets in municipal bonds rated below investment-grade by a nationally recognized statistical rating organization or, if unrated, determined to be of equivalent quality. The Fund may also use a variety of derivative instruments for investment purposes, as well as for hedging or risk management purposes. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. The subadvisor determines the credit quality of pre-refunded bonds based on the quality of the escrowed collateral and such other factors as the subadvisor deems appropriate.
At Western Asset Management Company, LLC (Western Asset), the Fund’s subadvisor, we utilize a fixed income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western Asset’s senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed income portfolios will reflect a consensus of interdisciplinary views within the Western Asset organization. The individuals responsible for development of investment strategy, day-to-day portfolio management, oversight and coordination of the Fund are Michael Buchanan, Robert E. Amodeo, Ryan Brist, David T. Fare and John Mooney.
Q. What were the overall market conditions during the Fund’s reporting period?
A. The overall U.S. fixed income market experienced periods of elevated volatility but generated a positive return over the twelve-months ended May 31, 2026. The market was driven by several factors, including overall resilient U.S. economic growth, inflation pressures, U.S. Federal Reserve (Fed) monetary policy, global trade tensions, a 43-day government shutdown, the war in Iran, and several other geopolitical issues.
Looking back, the Fed lowered interest rates in September 2024 (the first reduction since 2020) and again in November and December 2024. The December reduction put the federal funds target rate at 4.25%-4.50%, the lowest level since December 2022. The Fed then remained on hold at its first five meetings in 2025, as it weighed the impact of U.S. President’s tariffs on the economy and inflation. The Fed then lowered rates at its September, October and December 2025 meetings, citing concerns over the labor market. However, thus far in 2026 the Fed has remained on hold.
The two-year U.S. Treasury yield began the reporting period at 3.89% and ended at 3.98%, whereas the ten-year Treasury yield began the reporting period at 4.41% and ended at
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
1
Fund overview (cont’d)
4.45%. The municipal bond (muni) outperformed its taxable bond counterpart during the twelve-month reporting period. Over that time, the Bloomberg Municipal Bond Indexi and the Bloomberg U.S. Aggregate Indexii returned 6.67% and 5.13%, respectively.
Q. How did we respond to these changing market conditions?
A. A number of adjustments were made to the Fund during the reporting period. We trimmed but maintained an overweight duration versus the benchmark. We maintained our overweight to higher beta revenue backed sectors and underweight to the general obligation sectors. Finally, we reduced the Fund’s overweight exposure to high-yield securities.
During the reporting period, we utilized leverage in the Fund. We ended the period with liabilities as a percentage of total assets of approximately 32%, versus roughly 32% when the period began. The use of leverage contributed to results.
Performance review
For the twelve months ended May 31, 2026, Western Asset Managed Municipals Fund Inc. returned 9.15% based on its net asset value (NAV)iii and 10.86% based on its New York Stock Exchange (NYSE) market price per share. The Fund’s unmanaged benchmark, the Bloomberg Municipal Bond Index, returned 6.67% for the same period.
The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund’s investment strategy and may reduce the Fund’s NAV. The Fund’s manager believes the practice helps maintain the Fund’s competitiveness and may benefit the Fund’s market price and premium/discount to the Fund’s NAV.
Certain investors may be subject to the federal alternative minimum tax, and state and local taxes will apply. Capital gains, if any, are fully taxable. Please consult your personal tax or legal adviser.
During the twelve-month period, the Fund made distributions to shareholders totaling $0.65 per share of which $0.30 will be treated as a return of capital for tax purposes.1 The performance table shows the Fund’s twelve-month total return based on its NAV and market price as of May 31, 2026. Past performance is no guarantee of future results.
 
Performance Snapshot as of May 31, 2026
Price Per Share
12-Month
Total Return**
$10.98 (NAV)
9.15
%†
$10.31 (Market Price)
10.86
%‡
All figures represent past performance and are not a guarantee of future results.
1
For the tax character of distributions paid during the fiscal year ended May 31, 2026, please refer to page 50 of this report.
2
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
** 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, at NAV.
‡ Total return assumes the reinvestment of all distributions, including returns of capital, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan.
Q. What were the leading contributors to performance?
A. Among the largest contributors to the Fund’s relative performance during the reporting period were our rates positioning. An overweight allocation to high-yield securities was beneficial, as were overweight to the industrial revenue sector. Finally, issue selection within the industrial revenue and power sectors contributed to performance.
Q. What were the leading detractors from performance?
A. Among the largest detractors from the Fund’s relative performance during the reporting period was its issue selection within the education, leasing and local general obligation sectors.
Looking for additional information?
The Fund is traded under the symbol “MMU” and its closing market price is available in most newspapers under the NYSE listings. The daily NAV is available online under the symbol “XMMUX” 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 release that can be found on most major financial websites as well as www.franklintempleton.com.
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 the Western Asset Managed Municipals Fund 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,
Western Asset Management Company, LLC
 June 16, 2026
RISKS: The Fund is a diversified, closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objective. The Fund’s common stock is traded on the New York Stock Exchange. Similar to stocks, the Fund’s share price will fluctuate
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
3
Fund overview (cont’d)
with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. Diversification does not assure against market loss. The Fund’s investments are subject to a number of risks, including interest rate risk, credit risk, leveraging risk and management risk. As interest rates rise, the price of fixed income investments declines. Lower rated, higher-yielding bonds, known as “high yield” or “junk” bonds, are subject to greater liquidity and credit risk than higher-rated investment grade securities. Municipal securities purchased by the Fund may be adversely affected by changes in the financial condition of municipal issuers and insurers, regulatory and political developments, uncertainties and public perceptions, and other factors. The Fund may make significant investments in derivative instruments. Derivative instruments can be illiquid, may disproportionately increase losses and could have a potentially large impact on Fund performance. The Fund may enter into tender option bond (“TOB”) transactions, which expose the Fund to leverage and credit risk, and generally involve greater risk than investments in fixed rate municipal bonds, including the risk of loss of principal. The interest payments that the Fund would typically receive on inverse floaters acquired in such transactions vary inversely with short-term interest rates and will be reduced (and potentially eliminated) when short-term interest rates increase. Inverse floaters will generally underperform the market for fixed rate municipal securities when interest rates rise. The value and market for inverse floaters can be volatile, and inverse floaters can have limited liquidity. Investments in inverse floaters issued in TOB transactions are derivative instruments and, therefore, are also subject to the risks generally applicable to investments in derivatives. The Fund may invest in securities of other investment companies. To the extent it does, Fund stockholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in connection with its own operations. Investing in securities issued by other investment companies, including exchange-traded funds (“ETFs”) that invest primarily in municipal securities, involves risks similar to those of investing directly in the securities in which those investment companies invest. To the extent the Fund invests in securities of other investment companies, Fund stockholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in connection with its own operation. Leverage may result in greater volatility of NAV and market price of common shares and increases a shareholder’s risk of loss. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to changes in general market conditions, overall economic trends or events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes or other factors, political developments, armed conflicts, economic sanctions and countermeasures in response to sanctions, major cybersecurity events, investor sentiment, the global and domestic effects of a pandemic, and other factors that may or may not be related to the issuer of the security or other asset. The Fund may also invest in money market funds, including funds affiliated with the Fund’s manager and subadviser. For more information on Fund risks, see Summary of information regarding the Fund - Principal Risk Factors in this report.
The mention of sector breakdowns is for informational purposes only and should not be construed as a recommendation to purchase or sell any securities. The information provided regarding such sectors is not a sufficient basis upon which to make an investment decision. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies discussed should
4
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
consult their financial professional. Portfolio holdings are subject to change at any time and may not be representative of the portfolio managers’ current or future investments. The Fund’s portfolio composition is subject to change at any time.
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.
i
The Bloomberg Municipal Bond Index is a broad measure of the municipal bond market with maturities of at least one year.
ii
The Bloomberg 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.
iii
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.
 Important data provider notices and terms available at www.franklintempletondatasources.com.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
5
Fund at a glance† (unaudited)
Investment breakdown (%) as a percent of total investments
 
†
The bar graph above represents the composition of the Fund’s investments as of May 31, 2026, and May 31, 2025. The Fund is actively managed. As a result, the composition of the Fund’s investments is subject to change at any time.
6
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
Fund performance (unaudited)
 
 Net Asset Value
Average annual total returns1
Twelve Months Ended 5/31/26
9.15
%
Five Years Ended 5/31/26
-0.39
Ten Years Ended 5/31/26
1.98
Cumulative total returns1
5/31/16 through 5/31/26
21.66
%
 
 Market Price
Average annual total returns2
Twelve Months Ended 5/31/26
10.86
%
Five Years Ended 5/31/26
-0.13
Ten Years Ended 5/31/26
1.50
Cumulative total returns2
5/31/16 through 5/31/26
16.08
%
All figures represent past performance and are not a guarantee of future results. 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. 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. 
1
Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value.
2
Assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in
accordance with the Fund’s Dividend Reinvestment Plan.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
7
Fund performance (unaudited) (cont’d)
Historical performance
Value of $10,000 invested in
Western Asset Managed Municipals Fund Inc. vs. Bloomberg Municipal Bond Index† — May 2016 - May 2026
 
All figures represent past performance and are not a guarantee of future results. 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. 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.
†
Hypothetical illustration of $10,000 invested in Western Asset Managed Municipals Fund Inc. on May 31, 2016, assuming the reinvestment of all distributions, including returns of capital, if any, at net asset value and also assuming the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund’s Dividend Reinvestment Plan through May 31, 2026. The hypothetical illustration also assumes a $10,000 investment in the Bloomberg Municipal Bond Index. The Bloomberg Municipal Bond Index
(the “Index”) is a market value weighted index of investment grade municipal bonds with maturities of one year or more. The Index is unmanaged. Please note that an investor cannot invest directly in an index.
8
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
Schedule of investments
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)  
Security
 
Rate
Maturity
Date
Face
Amount
Value
Municipal Bonds — 141.9%
Alabama — 3.9%
Black Belt Energy Gas District, AL, Gas Project
Revenue Bonds:
Project No 6, Series B
4.000%
12/1/26
$710,000
$711,941
  (a)(b)
Series D, Refunding
5.000%
8/1/35
2,250,000
2,397,954
  (a)(b)
Series D, Refunding
5.000%
8/1/35
500,000
531,776
  
Series D-1, Refunding
5.500%
2/1/29
1,050,000
1,101,874
  (a)(b)
Series F
5.500%
12/1/28
2,250,000
2,351,400
  (a)(b)
Hoover, AL, IDA Revenue, United States Steel
Corp. Project, Series 2019
5.750%
10/1/49
900,000
923,332
  (c)
Jefferson County, AL, Sewer Revenue:
Warrants, Series 2024, Refunding
5.250%
10/1/45
1,500,000
1,601,343
  
Warrants, Series 2024, Refunding
5.250%
10/1/49
3,500,000
3,636,691
  
Warrants, Series 2024, Refunding
5.500%
10/1/53
2,110,000
2,205,473
  
Mobile County, AL, IDA Revenue:
Solid Waste Disposal Facility, Calvert LLC
Project, Series A
5.000%
6/1/54
1,670,000
1,631,247
  (c)
Solid Waste Disposal Facility, Calvert LLC
Project, Series B
4.750%
12/1/54
1,250,000
1,178,564
  (c)
Southeast Alabama Gas Supply District, Gas
Supply Revenue, Project No 1, Series A,
Refunding
5.000%
4/1/32
2,000,000
2,121,258
  
Southeast Energy Authority, AL, Cooperative
District, Energy Supply Revenue, Series B
5.250%
1/1/33
3,050,000
3,166,603
  (a)(b)
Total Alabama
23,559,456
Alaska — 0.7%
Alaska State Housing Finance Corp. Revenue,
State Capital Project II, Series B, Refunding
5.000%
12/1/38
750,000
786,410
  
Anchorage, AK, Port Revenue, Series A
5.000%
12/1/50
1,300,000
1,312,962
  (c)
Northern Tobacco Securitization Corp., AK,
Revenue:
Asset Backed Senior Bonds, Class 1, Series A,
Refunding
4.000%
6/1/41
1,690,000
1,673,970
  
Asset Backed Senior Bonds, Class 1, Series A,
Refunding
4.000%
6/1/50
750,000
638,386
  
Total Alaska
4,411,728
Arizona — 5.0%
Arizona State IDA, Education Revenue, Basis
School Project, Credit Enhanced, Series F,
Refunding, SD Credit Program
5.000%
7/1/52
725,000
722,464
  
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
9
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Arizona — continued
Chandler, AZ, IDA Revenue:
Intel Corp. Project
3.800%
6/15/28
$1,750,000
$1,768,552
  (a)(b)
Intel Corp. Project
4.100%
6/15/28
1,300,000
1,315,836
  (a)(b)(c)
Intel Corp. Project
4.000%
6/1/29
3,400,000
3,453,981
  (a)(b)(c)
Navajo Nation, AZ, Revenue, Series A,
Refunding
5.500%
12/1/30
1,225,000
1,226,384
  (d)
Queen Creek, AZ, Excise Tax & State Shared
Revenue, Series A
5.000%
8/1/42
750,000
774,386
  
Salt Verde, AZ, Financial Corp., Natural Gas
Revenue:
Series 2007
5.250%
12/1/28
2,000,000
2,084,883
  
Series 2007
5.000%
12/1/32
12,000,000
12,710,964
  
Series 2007
5.000%
12/1/37
5,500,000
5,805,745
  
Total Arizona
29,863,195
Arkansas — 1.2%
Arkansas State Development Finance Authority,
Environmental Improvement Revenue:
United States Steel Corp. Project, Green
Bonds
5.700%
5/1/53
1,050,000
1,077,681
  (c)
United States Steel Corp. Project, Series A
4.000%
3/1/33
5,800,000
5,816,993
  (a)(b)(c)(d)
Total Arkansas
6,894,674
California — 18.2%
Alameda, CA, Corridor Transportation Authority
Revenue:
Convertible CAB, Series C, AG
5.000%
10/1/52
2,650,000
2,731,228
  
Second Subordinated Lien, Series B,
Refunding
5.000%
10/1/34
2,250,000
2,262,555
  
California State Community Choice Financing
Authority Revenue:
Clean Energy Project, Green Bonds, Series A-1
4.000%
8/1/28
850,000
860,298
  (a)(b)
Clean Energy Project, Green Bonds, Series B
5.000%
12/1/32
8,500,000
8,751,584
  (a)(b)
Clean Energy Project, Green Bonds, Series B-1
5.000%
8/1/29
3,100,000
3,239,758
  (a)(b)
Clean Energy Project, Green Bonds, Series C
5.000%
10/1/32
1,500,000
1,564,325
  (a)(b)
Clean Energy Project, Green Bonds, Series E
5.000%
9/1/32
7,400,000
7,867,674
  (a)(b)
Clean Energy Project, Green Bonds, Series G
5.000%
12/1/35
3,250,000
3,566,310
  
Clean Energy Project, Green Bonds, Series H
5.000%
8/1/33
3,200,000
3,469,131
  (a)(b)
California State Health Facilities Financing
Authority Revenue, Lucile Salter Packard
Children’s Hospital at Stanford
5.000%
11/15/56
500,000
502,881
  
See Notes to Financial Statements.
10
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
California — continued
California State MFA Revenue:
Senior Lien, LINXS APM Project, Series A
5.000%
12/31/43
$4,400,000
$4,461,605
  (c)
SFMTA Potrero Yard Modernization Project,
Series A
5.500%
9/1/56
2,500,000
2,700,570
  
California State PCFA Water Furnishing Revenue,
Poseidon Resources Desalination Project
5.000%
11/21/45
13,500,000
13,501,493
  (c)(d)
Folsom Cordova, CA, USD:
School Facilities Improvement District No 4,
GO, Series A, Refunding
5.000%
10/1/37
1,730,000
1,993,397
  
School Facilities Improvement District No 5,
GO, Series B, Refunding
5.000%
10/1/37
2,175,000
2,506,149
  
School Facilities Improvement District No 5,
GO, Series B, Refunding
5.000%
10/1/38
1,795,000
2,052,153
  
Los Angeles, CA, Department of Airports
Revenue:
Los Angeles International Airport,
Subordinated, Series C, Refunding
4.000%
5/15/36
800,000
810,531
  (c)
Los Angeles International Airport,
Subordinated, Series C, Refunding
4.000%
5/15/37
500,000
504,243
  (c)
Los Angeles International Airport,
Subordinated, Series D
5.000%
5/15/38
500,000
515,789
  (c)
Los Angeles International Airport,
Subordinated, Series F, Refunding
4.000%
5/15/49
2,000,000
1,822,787
  (c)
Los Angeles, CA, Department of Water & Power,
Power System Revenue, Series C
5.000%
7/1/42
2,000,000
2,025,439
  
Los Angeles, CA, Department of Water & Power,
Waterworks Revenue, Series A
5.000%
7/1/48
2,000,000
2,020,851
  
M-S-R Energy Authority, CA, Natural Gas
Revenue:
Series A
7.000%
11/1/34
3,430,000
4,132,691
  
Series B
7.000%
11/1/34
2,490,000
3,000,117
  
Series B
6.500%
11/1/39
8,000,000
9,865,387
  
Series C
6.500%
11/1/39
2,000,000
2,466,347
  
River Islands, CA, Public Financing Authority,
Special Tax Revenue:
Community Facilities District No 2003-1
5.500%
9/1/37
545,000
580,369
  
Community Facilities District No 2003-1
5.750%
9/1/52
1,400,000
1,431,978
  
Community Facilities District No 2023-1
5.625%
9/1/53
1,065,000
1,089,560
  
San Diego County, CA, Regional Airport
Authority Revenue, Series B
5.000%
7/1/46
1,500,000
1,539,138
  (c)
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
11
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
California — continued
San Francisco, CA, City & County Airport
Commission, International Airport Revenue:
Second Series A, Unrefunded
5.000%
5/1/47
$10,635,000
$10,657,189
  (c)
SFO Fuel Company LLC, Series A, Refunding
5.000%
1/1/47
1,500,000
1,584,608
  (c)(e)
Tobacco Securitization Authority of Southern
California Revenue:
Asset Backed Refunding, San Diego County
Tobacco Asset Securitization Corp., Class 1,
Series A
5.000%
6/1/39
500,000
525,396
  
Asset Backed Refunding, San Diego County
Tobacco Asset Securitization Corp., Class 1,
Series A
5.000%
6/1/48
800,000
806,445
  
Tulare, CA, Sewer Revenue, Refunding, AG
5.000%
11/15/41
2,000,000
2,002,387
  
Total California
109,412,363
Colorado — 5.5%
Base Village Metropolitan District No 2, CO, GO,
Series A, Refunding
5.750%
12/1/46
1,000,000
1,000,443
  
Colorado State Educational & Cultural Facilities
Authority Revenue, University of Denver Project,
Series A
5.000%
3/1/47
1,600,000
1,607,358
  
Colorado State Health Facilities Authority
Revenue:
Commonspirit Health Initiatives, Series B-2
5.000%
8/1/26
1,300,000
1,301,065
  (a)(b)
Commonspirit Health Project, Series A-2,
Refunding
4.000%
8/1/49
2,500,000
2,200,913
  
Improvement Second Tier Bonds, Bethesda
Project
5.500%
9/15/54
2,200,000
2,215,505
  
Colorado State High Performance Transportation
Enterprise Revenue, C-470 Express Lanes
5.000%
12/31/51
800,000
796,638
  
Denver, CO, Airport System Revenue,
Subordinated, Series B, Refunding
5.250%
11/15/34
3,000,000
3,356,419
  (c)
Public Authority for Colorado Energy, Natural
Gas Purchase Revenue
6.500%
11/15/38
15,700,000
18,869,868
  
Southern Ute Indian Tribe Reservation, CO, GO,
Series A
5.000%
4/1/35
1,750,000
1,894,196
  (d)
Total Colorado
33,242,405
Connecticut — 0.3%
Connecticut State, GO, Series A
4.000%
4/15/37
500,000
506,783
  
See Notes to Financial Statements.
12
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Connecticut — continued
Harbor Point, CT, Infrastructure Improvement
District, Special Obligation Revenue, Harbor
Point Project Ltd., Refunding
5.000%
4/1/39
$1,150,000
$1,159,414
  (d)
Total Connecticut
1,666,197
Delaware — 0.1%
Delaware State Health Facilities Authority
Revenue, Beebe Medical Center Project
5.000%
6/1/48
500,000
492,179
  
District of Columbia — 1.1%
District of Columbia Revenue:
KIPP DC Issue, Series A, Refunding
5.000%
7/1/37
800,000
809,324
  
KIPP DC Project, Series B, Refunding
5.000%
7/1/48
2,800,000
2,770,598
  
Metropolitan Washington, DC, Airports Authority
Aviation Revenue:
Series A, Refunding
5.000%
10/1/29
1,500,000
1,596,518
  (c)
Series A, Refunding
5.000%
10/1/30
1,500,000
1,618,866
  (c)
Total District of Columbia
6,795,306
Florida — 6.0%
Broward County, FL, Airport System Revenue:
Series 2017
5.000%
10/1/47
1,600,000
1,602,545
  (c)
Series A
5.000%
10/1/45
1,000,000
1,000,996
  (c)
Broward County, FL, Port Facilities Revenue,
Series 2022
5.000%
9/1/37
400,000
425,001
  (c)
Fort Pierce, FL, Utilities Authority Revenue,
Series A, Refunding, AG
4.000%
10/1/52
900,000
802,176
  
Greater Orlando, FL, Aviation Authority, Airport
Facilities Revenue:
Priority Subordinated, Series A
5.000%
10/1/42
500,000
505,964
  (c)
Priority Subordinated, Series A
5.000%
10/1/47
1,500,000
1,504,690
  (c)
Hillsborough County, FL, Aviation Authority
Revenue, Tampa International Airport, Series E
5.000%
10/1/43
1,250,000
1,275,627
  (c)
Miami-Dade County, FL, Aviation Revenue,
Series A, Refunding
5.000%
10/1/41
3,000,000
3,013,349
  
Miami-Dade County, FL, EFA Revenue:
University of Miami, Series 2026
5.000%
4/1/37
500,000
568,245
  
University of Miami, Series 2026
5.000%
4/1/47
750,000
790,930
  
Miami-Dade County, FL, Expressway Authority,
Series A, Refunding
5.000%
7/1/40
9,000,000
9,005,522
  
Miami-Dade County, FL, Seaport Revenue:
Senior Bonds, Series A, Refunding
5.000%
10/1/47
2,000,000
2,033,097
  (c)
Senior Bonds, Series A, Refunding
5.250%
10/1/52
2,500,000
2,544,934
  (c)
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
13
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Florida — continued
Okaloosa County, FL, IDR, Air Force Enlisted
Village Inc. Project
5.750%
5/15/55
$200,000
$203,496
  (d)
Orange County, FL, Health Facilities Authority
Revenue:
Orlando Health Inc., Series A
5.000%
10/1/53
1,300,000
1,321,680
  
Orlando Health Inc., Series A, Refunding
4.500%
10/1/56
1,150,000
1,113,923
  
Palm Beach County, FL, Health Facilities
Authority Revenue:
Acts Retirement-Life Communities
5.000%
11/15/45
750,000
755,224
  
Jupiter Medical Center Project, Series A
5.000%
11/1/52
2,850,000
2,778,925
  
Toby & Leon Cooperman Sinai Residences of
Boca Raton Expansion, Refunding
4.000%
6/1/41
650,000
594,880
  
Pasco County, FL, Capital Improvement, Cigarette
Tax Allocation Bonds, H. Lee Moffitt Cancer
Center Project, Series A, AG
5.750%
9/1/54
2,175,000
2,334,106
  
Volusia County, FL, EFA Revenue, Educational
Facilities Embry-Riddle Aeronautical
University Inc. Project, Refunding
5.000%
10/15/47
1,000,000
1,006,874
  
Wildwood, FL, Village Community Development
District No 15, Special Assessment Revenue,
Series 2024
4.800%
5/1/55
790,000
753,266
  (d)
Total Florida
35,935,450
Georgia — 1.5%
Cobb County, GA, Kennestone Hospital Authority
Revenue, Wellstar Health System Inc. Project,
Series A, Refunding
5.000%
4/1/50
1,250,000
1,266,160
  
Georgia State Municipal Electric Authority,
Power Revenue:
Plant Vogtle Units 3&4, Project M, Series A
5.250%
7/1/64
1,150,000
1,178,564
  
Plant Vogtle Units 3&4, Project P, Series A
5.500%
7/1/64
750,000
770,162
  
Plant Vogtle Units 3&4, Project P, Series A,
Refunding
5.000%
1/1/56
1,295,000
1,274,372
  
Project One, Series A, Refunding
5.000%
1/1/50
1,250,000
1,269,211
  
Main Street Natural Gas Inc., GA, Gas Project
Revenue:
Series A
5.000%
5/15/43
1,450,000
1,471,925
  
Series C
5.000%
9/1/30
1,600,000
1,701,018
  (a)(b)
Total Georgia
8,931,412
See Notes to Financial Statements.
14
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Guam — 0.2%
Guam Government, Business Privilege Tax
Revenue, Series F, Refunding
4.000%
1/1/36
$1,230,000
$1,223,908
  
Hawaii — 0.4%
Honolulu, HI, City & County Wastewater System
Revenue:
First Senior Bond Resolution, Series A
3.000%
7/1/41
2,000,000
1,812,735
  
First Senior Bond Resolution, Series A,
Refunding
5.000%
7/1/36
700,000
802,644
  
Total Hawaii
2,615,379
Idaho — 0.2%
Idaho State Health Facilities Authority Revenue,
Trinity Health Credit Group, Series A
5.000%
12/1/47
1,100,000
1,109,160
  
Illinois — 13.0%
Chicago, IL, Board of Education, Dedicated
Capital Improvement, Special Tax Revenue,
Series 2018
5.000%
4/1/42
2,000,000
2,003,390
  
Chicago, IL, Board of Education, GO:
Dedicated, Series A
5.875%
12/1/47
3,000,000
3,055,447
  
Dedicated, Series G, Refunding
5.000%
12/1/34
100,000
100,229
  
Dedicated, Series G, Refunding
5.000%
12/1/44
750,000
719,175
  
Dedicated, Series H
5.000%
12/1/36
500,000
502,048
  
Dedicated, Series H
5.000%
12/1/46
4,750,000
4,495,972
  
Series D
5.000%
12/1/46
8,435,000
7,983,900
  
Chicago, IL, GO:
Series A
5.500%
1/1/35
1,000,000
1,030,092
  
Series A
5.500%
1/1/49
305,000
305,829
  
Chicago, IL, O’Hare International Airport
Revenue:
General Senior Lien, Series C, Refunding
5.000%
1/1/44
2,500,000
2,579,046
  (c)
Senior Lien, Series D
5.000%
1/1/52
500,000
501,107
  
Series C, Refunding
5.000%
1/1/43
750,000
781,547
  (c)
TrIPS Obligated Group
5.000%
7/1/48
900,000
899,973
  (c)
Chicago, IL, Transit Authority, Sales Tax Receipts
Revenue:
Second Lien
5.000%
12/1/51
1,250,000
1,251,944
  
Second Lien, Series A, Refunding
5.000%
12/1/45
500,000
512,888
  
Second Lien, Series A, Refunding
4.000%
12/1/55
1,900,000
1,596,301
  
Chicago, IL, Wastewater Transmission Revenue:
Second Lien, Series A
5.000%
1/1/47
2,700,000
2,708,432
  
Second Lien, Series A, AG
5.250%
1/1/53
500,000
519,080
  
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
15
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Illinois — continued
Second Lien, Series B, Refunding
5.000%
1/1/38
$1,500,000
$1,513,444
  
Cook County, IL, Sales Tax Revenue, Series A,
Refunding
4.000%
11/15/41
2,500,000
2,449,318
  
Illinois State Finance Authority Revenue:
Northshore University Healthsystem, Series
A, Refunding
4.000%
8/15/40
2,400,000
2,322,164
  
Surface Freight Transfer Facilities,
Centerpoint Joliet Terminal Railroad Project
4.800%
7/2/35
2,100,000
2,172,490
  (a)(b)(c)(d)
Illinois State Finance Authority, Student Housing
& Academic Facilities Revenue, CHF
Chicago LLC, University of Illinois Chicago
Project
5.000%
2/15/50
500,000
464,374
  
Illinois State Sports Facilities Authority Revenue:
Sport Facilities Project, Series 2019,
Refunding, BAM
5.000%
6/15/28
750,000
777,018
  
Sport Facilities Project, Series 2019,
Refunding, BAM
5.000%
6/15/29
250,000
263,020
  
Illinois State Toll Highway Authority Revenue,
Series A
4.000%
1/1/46
4,000,000
3,796,976
  
Illinois State, GO:
Series 2016
5.000%
1/1/33
2,000,000
2,002,480
  
Series 2016
5.000%
11/1/33
3,000,000
3,019,331
  
Series 2016, Refunding
5.000%
2/1/29
2,100,000
2,130,623
  
Series A
5.000%
3/1/34
2,000,000
2,145,728
  
Series A
5.000%
5/1/36
940,000
964,667
  
Series A
5.000%
3/1/37
750,000
794,147
  
Series A
5.000%
5/1/39
2,600,000
2,654,117
  
Series A
5.000%
3/1/46
2,250,000
2,293,533
  
Series A, Refunding
5.000%
10/1/29
5,095,000
5,333,085
  
Series A, Refunding
5.000%
10/1/30
500,000
522,441
  
Series C
5.000%
12/1/41
4,000,000
4,236,898
  
Series D
5.000%
11/1/28
750,000
772,961
  
Metropolitan Pier & Exposition Authority, IL,
Revenue:
McCormick Place Expansion Project, Series A,
Refunding
4.000%
12/15/42
2,100,000
2,025,661
  
McCormick Place Expansion Project, Series A,
Refunding
4.000%
12/15/47
1,500,000
1,346,801
  
McCormick Place Expansion Project, Series B,
Refunding
5.000%
6/15/42
1,500,000
1,550,881
  
See Notes to Financial Statements.
16
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Illinois — continued
McCormick Place Expansion Project, Series
B-1, Refunding, AG
0.000%
6/15/47
$3,000,000
$1,145,217
  
Total Illinois
78,243,775
Indiana — 1.7%
Indiana State Finance Authority Revenue:
BHI Senior Living Inc., Series A, Refunding
4.000%
11/15/41
2,250,000
2,163,521
  
Marion General Hospital, Series A
4.000%
7/1/45
1,200,000
1,082,390
  
Midwestern Disaster Relief, Ohio Valley
Electric Corp. Project, Series A
4.250%
11/1/30
1,150,000
1,187,254
  
Indianapolis, IN, Local Public Improvement Bond
Bank:
Courthouse & Jail Project, Series A
4.000%
2/1/44
2,000,000
1,954,471
  
Courthouse & Jail Project, Series A
5.000%
2/1/54
850,000
862,777
  
Valparaiso, IN, Exempt Facilities Revenue:
Pratt Paper LLC Project, Refunding
4.500%
1/1/34
1,200,000
1,232,419
  (c)(d)
Pratt Paper LLC Project, Refunding
4.875%
1/1/44
1,500,000
1,533,151
  (c)(d)
Total Indiana
10,015,983
Iowa — 0.1%
Iowa State Tobacco Settlement Authority
Revenue, Asset Backed Senior Bonds, Class 1,
Series A-2, Refunding
4.000%
6/1/49
750,000
655,611
  
Kentucky — 1.3%
Kentucky State Economic Development Finance
Authority Revenue, Louisville Arena, Louisville
Arena Authority Inc., Refunding, AG
5.000%
12/1/45
1,000,000
1,009,769
  
Kentucky State PEA, Gas Supply Revenue:
Series A, Refunding
5.250%
12/1/29
1,200,000
1,268,323
  (a)(b)
Series C, Refunding
5.000%
5/1/36
5,000,000
5,317,462
  
Total Kentucky
7,595,554
Louisiana — 2.0%
Port New Orleans, LA, Board of Commissioners
Revenue, Series B, Refunding, AG
5.000%
4/1/43
2,500,000
2,528,297
  (c)
St. John the Baptist Parish, LA, State Revenue:
Marathon Oil Corp. Project, Series A-3,
Refunding
2.200%
7/1/26
2,250,000
2,248,014
  (a)(b)
Marathon Oil Corp. Project, Series B-2,
Refunding
2.375%
7/1/26
4,650,000
4,646,561
  (a)(b)
Marathon Oil Corp. Project, Series C,
Refunding
3.300%
7/3/28
2,500,000
2,508,847
  (a)(b)
Total Louisiana
11,931,719
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
17
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Maryland — 0.6%
Maryland State EDC, Senior Student Housing
Revenue:
Morgan State University Project
4.000%
7/1/40
$500,000
$482,470
  
Morgan State University Project
5.000%
7/1/50
1,150,000
1,141,501
  
Maryland State Stadium Authority, Built to Learn
Revenue, Series 2021
4.000%
6/1/46
1,845,000
1,778,349
  
Total Maryland
3,402,320
Massachusetts — 3.8%
Massachusetts State DFA Revenue:
Harvard University, Series A, Refunding
4.000%
2/15/36
1,000,000
1,082,025
  
International Charter School, Refunding
5.000%
4/15/40
1,875,000
1,874,895
  
Northeastern University, Refunding
5.000%
10/1/44
2,750,000
2,917,568
  
UMass Boston Student Housing Project
5.000%
10/1/48
950,000
911,195
  
Massachusetts State Port Authority Revenue:
Bosfuel Project, Series A, Refunding
5.000%
7/1/49
1,500,000
1,510,973
  (c)
Series A, Refunding
5.000%
7/1/36
1,700,000
1,772,237
  (c)
Series E
5.000%
7/1/46
5,000,000
5,128,170
  (c)
The Commonwealth of Massachusetts State,
GO, Consolidated Loan, Series C
5.000%
2/1/51
7,250,000
7,612,931
  
Total Massachusetts
22,809,994
Michigan — 1.7%
Great Lakes, MI, Water Authority, Sewage
Disposal System Revenue, Senior Lien, Series C
5.250%
7/1/53
2,000,000
2,100,897
  
Great Lakes, MI, Water Authority, Water Supply
System Revenue, Senior Lien, Series A
5.000%
7/1/38
1,000,000
1,110,909
  
Kent County, MI, Gerald R. Ford International
Airport, GO, Authority Revenue, County GTD
5.000%
1/1/51
1,000,000
1,012,139
  (c)
Michigan State Finance Authority Revenue:
The Henry Ford Health Detroit South Campus
Central Utility Plant Project, Act 38 Facilities,
Senior Green Bonds
5.500%
2/28/57
1,000,000
1,029,447
  
Tobacco Settlement Asset Backed Senior
Bonds, Series B-1, Refunding
5.000%
6/1/49
90,000
90,000
  
Michigan State HFA Revenue:
Ascension Health Senior Credit Group Project
Bonds, Series F4, Refunding
5.000%
11/15/47
865,000
936,903
  (e)
Ascension Health Senior Credit Group Project
Bonds, Series F4, Unrefunded
5.000%
11/15/47
2,135,000
2,182,798
  
See Notes to Financial Statements.
18
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Michigan — continued
Michigan State Strategic Fund Ltd. Obligation
Revenue, I-75 Improvement Project
5.000%
12/31/43
$1,800,000
$1,816,061
  (c)
Total Michigan
10,279,154
Missouri — 0.3%
Missouri State HEFA Revenue, Senior Living
Facilities, Lutheran Senior Services Projects,
Series A
5.000%
2/1/42
150,000
152,294
  
St. Louis County, MO, IDA, Senior Living
Facilities Revenue, Friendship Village, St. Louis
Obligated Group, Series A
5.000%
9/1/38
1,600,000
1,628,932
  
Total Missouri
1,781,226
Nebraska — 0.3%
Omaha, NE, Public Power District, Electric
System Revenue, Series B, Refunding
4.000%
2/1/46
2,000,000
1,934,435
  
New Hampshire — 2.6%
National Finance Authority, NH, Revenue:
Presbyterian Senior Living Project, Series A
5.250%
7/1/48
950,000
963,626
  
Public Private Development Corp. Lockhart
Housing Project, Series A-1
5.000%
12/1/46
4,600,000
4,637,519
  
Winston-Salem Sustainable Energy
Partners LLC, Series A
5.000%
12/1/35
4,900,000
5,411,884
  
Winston-Salem Sustainable Energy
Partners LLC, Series A
5.000%
6/1/55
4,750,000
4,753,297
  
Total New Hampshire
15,766,326
New Jersey — 7.7%
New Jersey State EDA Revenue:
Continental Airlines Inc. Project
5.250%
9/15/29
3,530,000
3,534,532
  (c)
Private Activity-The Goethals Bridge
Replacement Project
5.375%
1/1/43
1,000,000
1,001,117
  (c)
Private Activity-The Goethals Bridge
Replacement Project, AG
5.125%
7/1/42
2,500,000
2,516,989
  (c)
Provident Group-Rowan Properties LLC,
Rowan University Housing Project
5.000%
1/1/48
500,000
493,690
  
Special Facility, Port Newark Container
Terminal LLC Project, Refunding
5.000%
10/1/37
3,500,000
3,546,150
  (c)
New Jersey State EDA, Lease Revenue, State
House Project, Series B
5.000%
6/15/43
4,000,000
4,136,858
  
New Jersey State EFA Revenue, Stevens
Institute of Technology, Refunding
5.000%
7/1/42
3,000,000
3,028,936
  
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
19
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
New Jersey — continued
New Jersey State Transportation Trust Fund
Authority Revenue:
Transportation Program, Series AA
5.000%
6/15/39
$2,125,000
$2,254,808
  
Transportation Program, Series AA
5.000%
6/15/50
1,195,000
1,321,040
  (e)
Transportation Program, Series AA, Refunding
5.000%
6/15/36
4,000,000
4,374,438
  
Transportation Program, Series AA, Refunding
5.000%
6/15/38
3,000,000
3,288,488
  
Transportation Program, Series AA, Refunding
5.000%
6/15/42
600,000
652,682
  
Transportation Program, Series AA,
Unrefunded
5.000%
6/15/50
4,325,000
4,410,831
  
Transportation Program, Series BB
4.000%
6/15/36
2,250,000
2,267,354
  
Transportation Program, Series BB
5.000%
6/15/44
2,000,000
2,058,238
  
Transportation System, Series A, Refunding
5.000%
12/15/28
1,050,000
1,109,447
  
Transportation System, Series A, Refunding
4.250%
6/15/40
750,000
757,653
  
New Jersey State Turnpike Authority Revenue,
Series C, Refunding
5.000%
1/1/44
4,000,000
4,306,226
  
Tobacco Settlement Financing Corp., NJ,
Revenue, Series A, Refunding
5.250%
6/1/46
800,000
801,051
  
Total New Jersey
45,860,528
New Mexico — 0.4%
New Mexico State Municipal Energy Acquisition
Authority, Gas Supply Revenue, Refunding
5.000%
11/1/30
2,200,000
2,348,598
  (a)(b)
New York — 23.9%
Brookhaven, NY, Local Development Corp.
Revenue, Long Island Community Hospital
Project, Series A, Refunding
4.000%
10/1/45
1,250,000
1,186,823
  
Long Island, NY, Power Authority Electric System
Revenue, Series B
3.000%
9/1/29
1,250,000
1,247,759
  (a)(b)
MTA, NY, Dedicated Tax Fund Revenue:
Green Bonds, Series A
5.000%
11/15/47
2,000,000
2,012,739
  
Green Bonds, Subseries B-1, Refunding
4.000%
11/15/54
4,600,000
4,154,994
  
MTA, NY, Transportation Revenue:
Green Bonds, Series C-1, Refunding
4.000%
11/15/37
500,000
500,958
  
Green Bonds, Series E, Refunding
5.000%
11/15/30
1,750,000
1,915,370
  
Green Bonds, Series E, Refunding
4.000%
11/15/45
1,750,000
1,631,440
  
Series A-2
5.000%
5/15/30
2,300,000
2,465,188
  (a)(b)
Series B, Refunding
5.000%
11/15/37
250,000
251,575
  
Series C-1, Refunding
5.000%
11/15/33
350,000
352,864
  
New York City, NY, GO:
Series A
5.000%
8/1/51
2,500,000
2,565,054
  
Subseries A-1
4.000%
8/1/40
1,250,000
1,245,698
  
See Notes to Financial Statements.
20
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
New York — continued
Subseries A-1
5.000%
8/1/47
$2,070,000
$2,125,746
  
New York City, NY, Industrial Development
Agency Revenue:
Yankee Stadium Project, Refunding
4.000%
3/1/45
900,000
839,387
  
Yankee Stadium Project, Refunding, AG
4.000%
3/1/45
750,000
720,499
  
New York City, NY, Municipal Water Finance
Authority, Water & Sewer System Revenue:
Second General Resolution Fiscal 2017,
Series CC-1, Refunding
5.000%
6/15/46
2,000,000
2,001,759
  
Second General Resolution Fiscal 2018,
Series CC
5.000%
6/15/48
600,000
605,541
  
Second General Resolution Fiscal 2022,
Series AA, Subseries AA-1
4.000%
6/15/51
5,800,000
5,291,881
  
Second General Resolution Fiscal 2023,
Series AA, Subseries AA-1
5.250%
6/15/52
2,020,000
2,124,278
  
New York City, NY, TFA, Future Tax Secured
Revenue:
Subordinated, Series F, Subseries F-1
5.000%
2/1/47
10,250,000
10,580,373
  
Subordinated, Subseries F-1
5.000%
5/1/42
3,000,000
3,036,641
  
New York State Dormitory Authority Revenue:
Non-State Supported Debt, Memorial Sloan-
Kettering Cancer Center, Series B-1
4.000%
7/1/51
2,500,000
2,270,667
  
Non-State Supported Debt, SD, Series A,
Refunding, AG
5.000%
10/1/29
5,000
5,269
  (e)
New York State Dormitory Authority, Sales Tax
Revenue, Bidding Group 4, Series A
5.000%
3/15/45
1,000,000
1,019,184
  
New York State Dormitory Authority, State
Personal Income Tax Revenue:
Bidding Group 3, Series B, Refunding
5.000%
2/15/41
5,000
5,143
  (e)
Bidding Group 3, Series B, Refunding
5.000%
2/15/43
5,000
5,143
  (e)
Bidding Group 3, Series B, Unrefunded
5.000%
2/15/41
2,990,000
3,037,488
  
Bidding Group 4, Series A, Refunding
4.000%
3/15/45
2,475,000
2,385,782
  
Bidding Group 4, Series A, Refunding
4.000%
3/15/46
7,240,000
6,857,119
  
Bidding Group 4, Series D, Refunding
4.000%
2/15/40
3,100,000
3,102,797
  
New York State Liberty Development Corp.
Revenue:
3 World Trade Center Project, Class 1,
Refunding
5.000%
11/15/44
2,240,000
2,241,820
  (d)
7 World Trade Center Project, Class 2,
Refunding
3.250%
9/15/52
5,000,000
3,697,767
  
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
21
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
New York — continued
Goldman Sachs Headquarters
5.500%
10/1/37
$1,485,000
$1,736,955
  
New York State Thruway Authority General
Revenue, Junior Indebtedness Obligations,
Junior Lien, Series B, Refunding
4.000%
1/1/45
4,000,000
3,880,003
  
New York State Transportation Development
Corp., Special Facilities Revenue:
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
5.000%
1/1/30
500,000
513,738
  (c)
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
5.000%
1/1/32
650,000
665,614
  (c)
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
5.000%
1/1/33
1,750,000
1,788,428
  (c)
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
6.000%
4/1/35
2,750,000
3,035,068
  (c)
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
5.625%
4/1/40
2,200,000
2,337,569
  (c)
Delta Air Lines Inc., LaGuardia Airport
Terminals C and D Redevelopment Project
4.375%
10/1/45
1,750,000
1,676,035
  (c)
John F. Kennedy International Airport New
Terminal One Project, Green Bonds
6.000%
6/30/54
2,150,000
2,241,644
  (c)
John F. Kennedy International Airport New
Terminal One Project, Green Bonds
5.375%
6/30/60
6,600,000
6,631,790
  (c)
John F. Kennedy International Airport New
Terminal One Project, Green Bonds, AG
5.125%
6/30/60
5,250,000
5,280,153
  (c)
John F. Kennedy International Airport Terminal
Four Project, Series C, Refunding
4.000%
12/1/41
2,160,000
2,094,645
  
John F. Kennedy International Airport Terminal
Six Redevelopment Project, Green Bonds,
Series A, Refunding
5.500%
12/31/54
850,000
869,943
  (c)
John F. Kennedy International Airport Terminal
Six Redevelopment Project, Green Bonds,
Series A, Refunding, AG
4.500%
12/31/54
2,000,000
1,925,208
  (c)
John F. Kennedy International Airport Terminal
Six Redevelopment Project, Green Bonds,
Series B, Refunding, AG, Step bond (0.000%
to 12/31/34 then 5.000%)
0.000%
12/31/54
850,000
563,874
  (c)
LaGuardia Airport Terminal B Redevelopment
Project, Series A
5.000%
7/1/41
1,550,000
1,550,531
  (c)
LaGuardia Airport Terminal B Redevelopment
Project, Series A
5.000%
7/1/46
11,850,000
11,849,937
  (c)
See Notes to Financial Statements.
22
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
New York — continued
New York State Urban Development Corp.
Revenue, Personal Income Tax, Series C,
Refunding
4.000%
3/15/45
$3,250,000
$3,091,677
  
Port Authority of New York & New Jersey
Revenue:
Consolidated Series 218
4.000%
11/1/47
2,600,000
2,385,075
  (c)
Consolidated Series 221
4.000%
7/15/45
1,000,000
949,169
  (c)
Consolidated Series 221
4.000%
7/15/55
1,000,000
884,685
  (c)
Triborough Bridge & Tunnel Authority, NY,
Revenue:
General-MTA Bridges & Tunnels, Series A
5.000%
11/15/45
250,000
255,525
  
General-MTA Bridges & Tunnels, Series A
5.000%
11/15/49
8,950,000
9,162,848
  
General-MTA Bridges & Tunnels, Series A
5.000%
11/15/51
1,950,000
1,995,454
  
General-MTA Bridges & Tunnels, Series A
4.000%
11/15/56
2,000,000
1,781,983
  
MTA Bridges & Tunnels, Senior Lien, Series
A-1, Refunding
5.000%
5/15/51
2,500,000
2,556,281
  
Total New York
143,188,578
North Carolina — 0.8%
North Carolina State Medical Care Commission,
Retirement Facilities Revenue:
The Forest at Duke Project
4.000%
9/1/41
500,000
473,703
  
The Forest at Duke Project
4.000%
9/1/46
715,000
630,515
  
The Forest at Duke Project
4.000%
9/1/51
1,000,000
832,230
  
North Carolina State Turnpike Authority, Monroe
Expressway Toll Revenue:
Series A, Refunding
5.000%
7/1/47
1,500,000
1,500,061
  
Series A, Refunding
5.000%
7/1/51
1,500,000
1,491,639
  
Total North Carolina
4,928,148
North Dakota — 0.5%
Grand Forks, ND, Health Care System Revenue,
Altru Health System, Refunding, AG
3.000%
12/1/46
3,550,000
2,698,877
  
Ohio — 1.7%
Buckeye, OH, Tobacco Settlement Financing
Authority Revenue, Senior Bonds, Series B-2,
Refunding
5.000%
6/1/55
3,425,000
2,738,625
  
Ohio State Air Quality Development Authority
Revenue:
American Electric Co. Project, Series B
2.500%
10/1/29
1,950,000
1,885,676
  (a)(b)(c)
American Electric Co. Project, Series D,
Refunding
3.700%
10/1/28
720,000
725,495
  (c)
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
23
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Ohio — continued
AMG Vanadium Project, Series 2019
5.000%
7/1/49
$2,650,000
$2,434,201
  (c)(d)
Duke Energy Corp. Project, Series B,
Refunding
4.250%
6/1/27
1,300,000
1,309,865
  (a)(b)(c)
Port of Greater Cincinnati Development Authority
Revenue, OH, Tax-Exempt Parking Revenue,
3CDC Obligated Group Parking Facilities, Series
A, Refunding, AG
5.000%
12/1/60
1,250,000
1,268,452
  
Total Ohio
10,362,314
Oklahoma — 0.3%
Tulsa, OK, Municipal Airport Trust Revenue:
American Airlines Inc. Project, Refunding
6.250%
12/1/35
1,500,000
1,692,132
  (c)
American Airlines Inc. Project, Refunding
6.250%
12/1/40
185,000
204,382
  (c)
Total Oklahoma
1,896,514
Oregon — 1.0%
Oregon State Business Development
Commission Revenue, Recovery Zone Facility
Bonds, Intel Corp. Project, Series 232
3.800%
6/15/28
3,100,000
3,135,885
  (a)(b)
Oregon State Facilities Authority Revenue,
Legacy Health Project, Series A, Refunding
5.000%
6/1/46
2,600,000
2,600,701
  
Total Oregon
5,736,586
Pennsylvania — 6.7%
Allegheny County, PA, HDA Revenue, University
of Pittsburgh Medical Center, Series A,
Refunding
4.000%
7/15/39
500,000
489,690
  
Commonwealth Financing Authority, PA, Tobacco
Master Settlement Payment Revenue Bonds,
Series 2018
5.000%
6/1/32
250,000
258,843
  
Cumberland County, PA, Municipal Authority
Revenue:
Diakon Lutheran Social Ministries Project,
Unrefunded
5.000%
1/1/29
225,000
225,284
  
Diakon Lutheran Social Ministries Project,
Unrefunded
5.000%
1/1/30
775,000
775,826
  
Lancaster County, PA, Convention Center
Authority Revenue, Hotel Room Rental Tax:
Series B, Refunding, County GTD
4.750%
5/1/53
2,000,000
1,983,087
  
Series B, Refunding, County GTD
4.750%
5/1/57
2,500,000
2,478,022
  
Lancaster County, PA, Hospital Authority
Revenue, Penn State Health, Series 2021
5.000%
11/1/46
3,500,000
3,554,613
  
See Notes to Financial Statements.
24
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Pennsylvania — continued
Pennsylvania State Economic Development
Financing Authority Revenue:
Exempt Facilities Bonds, PPL Energy
Supply LLC Project, Series B, Refunding
5.250%
6/1/27
$1,000,000
$1,001,061
  (a)(b)
Exempt Facilities Bonds, PPL Energy
Supply LLC Project, Series C, Refunding
5.250%
6/1/27
2,200,000
2,202,319
  (a)(b)
Solid Waste Disposal Facility, Core Natural
Resources Inc. Project, Refunding
5.450%
3/27/35
850,000
923,863
  (a)(b)(c)(d)
Tax-Exempt Private Activity, The Penndot
Major Bridges Package One Project
5.750%
6/30/48
2,000,000
2,101,513
  (c)
Tax-Exempt Private Activity, The Penndot
Major Bridges Package One Project
5.250%
6/30/53
7,200,000
7,284,641
  (c)
Pennsylvania State Turnpike Commission Oil
Franchise Tax Revenue, Series B
5.000%
12/1/53
2,900,000
3,010,558
  
Pennsylvania State Turnpike Commission
Revenue:
Series A-2
5.000%
12/1/48
2,000,000
2,040,441
  
Series B
5.000%
12/1/45
2,000,000
2,085,771
  
Series B, Refunding
5.250%
12/1/47
1,500,000
1,590,086
  
Series C, Refunding
4.000%
12/1/51
2,000,000
1,810,743
  
Philadelphia, PA, Authority for IDR:
Charter School Revenue, A String Theory
Charter School Project, Refunding
5.000%
6/15/40
500,000
501,121
  (d)
City Service Agreement Revenue, Rebuild
Project
5.000%
5/1/38
500,000
515,544
  
Philadelphia, PA, IDA Revenue, City Service
Agreement, Rebuild Project
5.000%
5/1/35
250,000
258,178
  
Philadelphia, PA, SD, GO, Series A, State Aid
Withholding
5.000%
9/1/33
1,755,000
1,755,321
  
State Public School Building Authority, PA, Lease
Revenue:
Philadelphia SD Project, Series A, Refunding,
AG, State Aid Withholding
5.000%
6/1/31
800,000
808,712
  
Philadelphia SD Project, Series A, Refunding,
AG, State Aid Withholding
5.000%
6/1/33
2,280,000
2,302,900
  
Total Pennsylvania
39,958,137
Puerto Rico — 5.8%
Puerto Rico Commonwealth Aqueduct & Sewer
Authority Revenue:
Senior Lien, Series A, Refunding
5.000%
7/1/37
1,840,000
1,932,370
  (d)
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
25
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Puerto Rico — continued
Senior Lien, Series A, Refunding
5.000%
7/1/47
$4,700,000
$4,715,774
  (d)
Puerto Rico Commonwealth, GO:
CAB, Restructured, Series A-1
0.000%
7/1/33
78,612
57,373
  
Restructured, Series A-1
5.625%
7/1/27
67,418
68,492
  
Restructured, Series A-1
5.625%
7/1/29
66,323
69,723
  
Restructured, Series A-1
5.750%
7/1/31
64,420
69,775
  
Restructured, Series A-1
4.000%
7/1/33
61,087
61,230
  
Restructured, Series A-1
4.000%
7/1/35
1,209,908
1,206,993
  
Restructured, Series A-1
4.000%
7/1/37
4,065,000
4,018,365
  
Restructured, Series A-1
4.000%
7/1/41
629,073
599,564
  
Restructured, Series A-1
4.000%
7/1/46
66,635
59,100
  
Subseries CW
0.000%
11/1/43
234,690
162,230
  (b)
Puerto Rico Sales Tax Financing Corp., Sales Tax
Revenue:
CAB, Restructured, Series A-1
0.000%
7/1/27
887,000
857,533
  
CAB, Restructured, Series A-1
0.000%
7/1/46
7,830,000
2,858,077
  
Restructured, Series A-1
4.550%
7/1/40
300,000
300,664
  
Restructured, Series A-1
4.750%
7/1/53
1,230,000
1,184,943
  
Restructured, Series A-1
5.000%
7/1/58
3,870,000
3,824,311
  
Restructured, Series A-2
4.329%
7/1/40
8,290,000
8,266,491
  
Restructured, Series A-2A
4.550%
7/1/40
4,600,000
4,610,181
  
Total Puerto Rico
34,923,189
Rhode Island — 0.2%
Rhode Island State Health & Educational
Building Corp., Student Housing Revenue:
PRG - RI Properties LLC, Senior Series A, AG
5.000%
7/1/50
400,000
402,797
  
PRG - RI Properties LLC, Senior Series A, AG
5.000%
7/1/55
500,000
501,781
  
Total Rhode Island
904,578
South Carolina — 1.3%
Patriots Energy Group Financing Agency, SC, Gas
Supply Revenue, Subseries B-2, Refunding (SOFR
x 0.670 + 1.900%)
4.332%
3/1/31
1,250,000
1,296,198
  (a)(b)
South Carolina State Jobs - EDA Revenue:
Bon Secours Mercy Health Inc., Series A,
Refunding
4.000%
12/1/44
2,550,000
2,422,553
  
International Paper Company Project, Series
A, Refunding
3.950%
4/1/33
1,800,000
1,801,003
  (c)
South Carolina State Ports Authority Revenue:
Series 2018
5.000%
7/1/36
500,000
512,374
  (c)
See Notes to Financial Statements.
26
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
South Carolina — continued
Series 2018
5.000%
7/1/48
$1,750,000
$1,755,093
  (c)
Total South Carolina
7,787,221
South Dakota — 0.1%
South Dakota State HEFA Revenue, Regional
Health
5.000%
9/1/40
700,000
707,421
  
Tennessee — 1.6%
Clarksville, TN, Water, Sewer & Gas Revenue,
Series A
4.000%
2/1/51
3,250,000
3,000,504
  
Knox County, TN, Health, Educational & Housing
Facility Board Revenue, University Health
System Inc., Series A
5.000%
9/1/40
1,550,000
1,568,014
  
Metropolitan Government of Nashville &
Davidson County, TN, Health and Educational
Facilities Board Revenue:
Vanderbilt University Medical Center, Series
B, Refunding
5.000%
7/1/34
1,000,000
1,118,176
  
Vanderbilt University Medical Center, Series
B, Refunding
5.000%
7/1/37
1,250,000
1,400,347
  
Metropolitan Government of Nashville &
Davidson County, TN, Sports Authority Revenue,
Series A, AG
5.250%
7/1/53
2,250,000
2,363,646
  
Total Tennessee
9,450,687
Texas — 11.4%
Arlington, TX, Higher Education Finance Corp.,
Education Revenue:
Basis Texas Charter Schools Inc., Refunding
5.875%
6/15/65
1,250,000
1,265,777
  (d)
Uplift Education, Series A, Refunding, PSF -
GTD
5.000%
12/1/47
250,000
251,452
  
Arlington, TX, Special Tax Revenue, Senior Lien,
Series A, AG
5.000%
2/15/48
1,600,000
1,618,098
  
Austin, TX, Airport System Revenue:
Series B
5.000%
11/15/39
3,270,000
3,391,565
  (c)
Series B, Refunding
5.000%
11/15/42
3,650,000
3,929,759
  (c)
Central Texas Regional Mobility Authority
Revenue, Senior Lien, Series B
4.000%
1/1/51
4,320,000
3,864,930
  
Central Texas Turnpike System Revenue:
Series C, Refunding
5.000%
8/15/41
750,000
813,254
  
Series C, Refunding
5.000%
8/15/42
1,000,000
1,079,757
  
Elgin, TX, ISD, GO, Unlimited Tax School Building
Bonds, PSF - GTD
4.000%
8/1/49
3,100,000
2,858,803
  
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
27
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Texas — continued
Forney, TX, ISD, GO, Unlimited Tax School
Building Bonds, Series 2019, PSF - GTD
5.000%
2/15/49
$500,000
$502,205
  
Galveston, TX, Wharves & Terminal Revenue:
First Lien, Series A
5.000%
8/1/34
1,555,000
1,668,286
  (c)
First Lien, Series A
5.250%
8/1/35
1,250,000
1,354,689
  (c)
First Lien, Series A
5.250%
8/1/37
1,250,000
1,342,831
  (c)
Grand Parkway Transportation Corp., TX, System
Toll Revenue, Convertible CAB, Series A, B & C
5.500%
10/1/36
6,000,000
6,316,712
  
Harris County, TX, Cultural Education Facilities
Finance Corp., Hospital Revenue, Texas
Children’s Hospital, Series B, Refunding
5.000%
10/1/31
1,650,000
1,799,156
  (a)(b)
Harris County, TX, GO, Certificates of Obligation
4.000%
9/15/49
4,750,000
4,401,712
  
Hays, TX, ISD, GO, Unlimited Tax School Building
Bonds, PSF - GTD
4.000%
2/15/47
1,650,000
1,562,573
  
Houston, TX, GO, Series A
4.125%
3/1/51
1,200,000
1,103,566
  
Houston, TX, Airport System Revenue:
Special Facilities, United Airlines Inc.,
Terminal Improvement Project, Series B-1
4.000%
7/15/41
2,100,000
1,968,059
  (c)
Subordinated Lien, Series A, Refunding
4.000%
7/1/40
2,000,000
1,954,631
  (c)
Subordinated Lien, Series A, Refunding
4.000%
7/1/41
750,000
726,098
  (c)
Houston, TX, Combined Utility System Revenue,
First Lien, Series D, Refunding
5.000%
11/15/44
1,000,000
1,000,645
  
Longview, TX, ISD, GO, Unlimited Tax School
Building Bonds, PSF - GTD
4.000%
2/15/49
2,250,000
2,114,578
  
Love Field, TX, Airport Modernization Corp.,
General Airport Revenue:
Series 2017
5.000%
11/1/33
160,000
161,051
  (c)
Series 2017
5.000%
11/1/36
160,000
160,882
  (c)
Mission, TX, EDC, Solid Waste Disposal
Revenue, Graphic Packaging International, LLC
Project, Green Bonds
5.000%
6/1/30
800,000
825,581
  (a)(b)(c)
New Hope Cultural Education Facilities Finance
Corp., TX, Student Housing Revenue, Collegiate
Housing College Station, AG
5.000%
4/1/46
750,000
749,984
  
Newark, TX, Higher Education Finance Corp.,
Education Revenue, TLC Academy, Series A
4.000%
8/15/51
1,300,000
1,000,676
  
Tarrant County, TX, Cultural Education Facilities
Finance Corp., Hospital Revenue, Methodist
Hospitals of Dallas
4.000%
10/1/42
2,500,000
2,455,369
  
See Notes to Financial Statements.
28
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Texas — continued
Texas State Private Activity Bond Surface
Transportation Corp. Revenue, Senior Lien, NTE
Mobility Partners Segments 3 LLC, Refunding
5.500%
6/30/41
$1,650,000
$1,735,645
  (c)
Texas State Transportation Commission GO:
Highway Improvement, Series 2026,
Refunding
5.000%
4/1/42
3,000,000
3,352,751
  
Highway Improvement, Series 2026,
Refunding
5.000%
4/1/43
10,000,000
11,113,681
  
Total Texas
68,444,756
Utah — 1.4%
Salt Lake City, UT, Airport Revenue, Salt Lake
City International Airport, Series A
5.000%
7/1/43
5,250,000
5,338,257
  (c)
Utah State Charter School Finance Authority,
Charter School Revenue:
Syracuse Arts Academy Project, UT CSCE
5.000%
4/15/42
250,000
250,054
  
Syracuse Arts Academy Project, UT CSCE
5.000%
4/15/47
1,000,000
1,000,056
  
Utah State Infrastructure Agency,
Telecommunications Revenue:
Series 2019
4.000%
10/15/39
1,250,000
1,200,029
  
Series 2021
4.000%
10/15/36
100,000
97,412
  
Series 2021
4.000%
10/15/38
500,000
483,043
  
Total Utah
8,368,851
Virginia — 1.9%
Arlington County, VA, IDA, Hospital Revenue,
Virginia Hospital Center, Refunding
5.000%
7/1/35
700,000
743,125
  
Isle of Wight County, VA, EDA Revenue:
Riverside Health System, Series 2023, AG
4.750%
7/1/53
1,250,000
1,255,324
  
Riverside Health System, Series 2023, AG
5.250%
7/1/53
500,000
520,111
  
Virginia State Small Business Financing
Authority Revenue:
National Senior Campuses Inc., Series A,
Refunding
5.000%
1/1/32
500,000
524,252
  
National Senior Campuses Inc., Series A,
Refunding
5.000%
1/1/34
550,000
575,656
  
Senior Lien, 95 Express Lanes LLC Project,
Refunding
5.000%
7/1/35
3,000,000
3,168,559
  (c)
Senior Lien, 95 Express Lanes LLC Project,
Refunding
5.000%
1/1/37
1,000,000
1,048,227
  (c)
Senior Lien, 95 Express Lanes LLC Project,
Refunding
5.000%
1/1/38
1,250,000
1,307,771
  (c)
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
29
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
Virginia — continued
Senior Lien, I-495 High Occupancy Toll Lanes
Project, Refunding
5.000%
12/31/47
$2,500,000
$2,530,627
  (c)
Total Virginia
11,673,652
Washington — 1.5%
Port of Seattle, WA, Intermediate Lien Revenue:
Series 2019
4.000%
4/1/44
1,000,000
950,952
  (c)
Series 2022, Refunding
5.000%
8/1/41
3,250,000
3,432,097
  (c)
Series C
5.000%
5/1/42
1,500,000
1,512,490
  (c)
Washington State Health Care Facilities
Authority Revenue:
Seattle Cancer Care Alliance, Refunding
4.000%
12/1/40
500,000
491,963
  (d)
Seattle Cancer Care Alliance, Refunding
4.000%
12/1/45
1,200,000
1,109,355
  (d)
Seattle Cancer Care Alliance, Refunding
5.000%
9/1/50
1,500,000
1,523,843
  
Total Washington
9,020,700
West Virginia — 0.1%
West Virginia State EDA Revenue, Solid Waste
Disposal Facility, Commercial Metals Co. Project
4.625%
5/15/32
750,000
769,476
  (a)(b)(c)
Wisconsin — 1.9%
Public Finance Authority, WI, Airport Facilities
Revenue, Transportation Infrastructure
Properties LLC, Series B, Refunding
5.000%
7/1/42
4,000,000
4,001,073
  (c)
Public Finance Authority, WI, Revenue:
Cone Health, Series A
5.000%
10/1/52
2,000,000
2,022,757
  
The Carmelite System Inc. Obligated Group,
Refunding
5.000%
1/1/45
700,000
706,772
  
Public Finance Authority, WI, Student Housing
Revenue, University of Hawai’i Foundation
Project, Green Bonds, Series A-1
4.000%
7/1/51
1,800,000
1,344,971
  (d)
Village of Mount Pleasant, WI, Tax Increment
Revenue, Series A, Moral Obligations
5.000%
4/1/48
3,000,000
3,041,407
  
Total Wisconsin
11,116,980
 
Total Municipal Bonds (Cost — $842,688,440)
850,714,700
Municipal Bonds Deposited in Tender Option Bond Trusts(f) — 4.3%
New York — 4.3%
New York City, NY, Municipal Water Finance
Authority, Water & Sewer System Revenue,
Second General Resolution Fiscal 2023,
Subseries AA-1
5.250%
6/15/52
6,920,000
7,276,841
  
See Notes to Financial Statements.
30
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
(Percentages shown based on Fund net assets)
Security
 
Rate
Maturity
Date
Face
Amount
Value
 
New York — continued
New York State Dormitory Authority, State
Personal Income Tax Revenue, Series A,
Refunding
4.000%
3/15/45
$8,480,000
$8,174,317
  
New York State Urban Development Corp., State
Sales Tax Revenue, Series A
5.000%
3/15/49
10,200,000
10,580,379
  
 
Total Municipal Bonds Deposited in Tender Option Bond Trusts
(Cost — $25,972,328)
26,031,537
Total Investments before Short-Term Investments (Cost — $868,660,768)
876,746,237
 
Short-Term Investments — 1.3%
Municipal Bonds — 1.3%
Iowa — 0.1%
Iowa Finance Authority, Series E, SPA - TD Bank
N.A., GNMA / FNMA / FHLMC
1.570%
1/1/49
335,000
335,000
  (g)(h)
Maryland — 0.3%
Maryland State Health & Higher EFA Revenue,
The Johns Hopkins Health System, Series A,
Refunding, LOC - TD Bank N.A.
2.750%
6/1/48
1,800,000
1,800,000
  (g)(h)
New Jersey — 0.3%
New Jersey State Health Care Facilities
Financing Authority Revenue, Hospital Capital
Asset Financing Program, Series A, Refunding,
LOC - TD Bank N.A.
1.550%
7/1/35
1,700,000
1,700,000
  (g)(h)
New Mexico — 0.6%
New Mexico State Hospital Equipment Loan
Council, Hospital System Revenue, Presbyterian
Health Care Services, Series B, Refunding, SPA -
JPMorgan Chase & Co.
2.850%
8/1/34
3,800,000
3,800,000
  (g)(h)
Pennsylvania — 0.0%††
Pennsylvania State HFA, Single Family Mortgage
Revenue, Series B, SPA - TD Bank N.A.
1.600%
10/1/50
100,000
100,000
  (g)(h)
 
Total Short-Term Investments (Cost — $7,735,000)
7,735,000
Total Investments — 147.5% (Cost — $876,395,768)
884,481,237
Variable Rate Demand Preferred Stock, at Liquidation Value — (47.4)%
(284,075,000
)
TOB Floating Rate Notes — (2.3)%
(13,955,000
)
Other Assets in Excess of Other Liabilities — 2.2%
13,258,656
Total Net Assets Applicable to Common Shareholders — 100.0%
$599,709,893
 
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
31
Schedule of investments (cont’d)
May 31, 2026
 Western Asset Managed Municipals Fund Inc.
††
Represents less than 0.1%.
(a)
Maturity date shown represents the mandatory tender date.
(b)
Variable rate security. Interest rate disclosed is as of the most recent information available. Certain variable rate
securities are not based on a published reference rate and spread but are determined by the issuer or agent and
are based on current market conditions. These securities do not indicate a reference rate and spread in their
description above.
(c)
Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax
(“AMT”).
(d)
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.
(e)
Pre-Refunded bonds are generally escrowed with U.S. government obligations and/or U.S. government agency
securities.
(f)
Represents securities deposited into a special purpose entity, referred to as a Tender Option Bond (“TOB”) trust
(Note 1).
(g)
Variable rate demand obligations (“VRDOs”) have a demand feature under which the Fund can tender them back to
the issuer or liquidity provider on no more than 7 days notice. The interest rate generally resets on a daily or
weekly basis and is determined on the specific interest rate reset date by the remarketing agent, pursuant to a
formula specified in official documents for the VRDO, or set at the highest rate allowable as specified in official
documents for the VRDO. VRDOs are benchmarked to the Securities Industry and Financial Markets Association
(“SIFMA”) Municipal Swap Index. The SIFMA Municipal Swap Index is compiled from weekly interest rate resets
of tax-exempt VRDOs reported to the Municipal Securities Rulemaking Board’s Short-term Obligation Rate
Transparency System.
(h)
Maturity date shown is the final maturity date. The security may be sold back to the issuer before final maturity.
 
See Notes to Financial Statements.
32
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
 Western Asset Managed Municipals Fund Inc.
Abbreviation(s) used in this schedule:
AG
—
Assured Guaranty — Insured Bonds
BAM
— 
Build America Mutual — Insured Bonds
CAB
— 
Capital Appreciation Bonds
CSCE
— 
Charter School Credit Enhancement
DFA
— 
Development Finance Agency
EDA
— 
Economic Development Authority
EDC
— 
Economic Development Corporation
EFA
— 
Educational Facilities Authority
FHLMC
— 
Federal Home Loan Mortgage Corporation
FNMA
— 
Federal National Mortgage Association
GNMA
— 
Government National Mortgage Association
GO
— 
General Obligation
GTD
— 
Guaranteed
HDA
— 
Housing Development Authority
HEFA
— 
Health & Educational Facilities Authority
HFA
— 
Housing Finance Agency
IDA
— 
Industrial Development Authority
IDR
— 
Industrial Development Revenue
ISD
— 
Independent School District
LOC
— 
Letter of Credit
MFA
— 
Municipal Finance Authority
MTA
— 
Metropolitan Transportation Authority
PCFA
— 
Pollution Control Financing Authority
PEA
— 
Public Energy Authority
PSF
— 
Permanent School Fund
SD
— 
School District
SOFR
— 
Secured Overnight Financing Rate
SPA
— 
Standby Bond Purchase Agreement — Insured Bonds
TFA
— 
Transitional Finance Authority
USD
— 
Unified School District
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
33
Statement of assets and liabilities
May 31, 2026
 
Assets:
Investments, at value (Cost — $876,395,768)
$884,481,237
Interest receivable
12,480,549
Dividends receivable from affiliated investments
80
Prepaid expenses
90,330
Total Assets
897,052,196
Liabilities:
Variable Rate Demand Preferred Stock ($25,000 liquidation value per share; 11,363 shares
issued and outstanding) (net of deferred offering costs of $1,595,715) (Note 5)
282,479,285
TOB Floating Rate Notes (Note 1)
13,955,000
Investment management fee payable
410,879
Interest expense payable
132,199
Due to custodian
65,456
Accrued expenses
299,484
Total Liabilities
297,342,303
Total Net Assets Applicable to Common Shareholders
$599,709,893
Net Assets Applicable to Common Shareholders:
Common stock par value ($0.001 par value; 54,618,848 shares issued and outstanding;
500,000,000 common shares authorized) 
$54,619
Paid-in capital in excess of par value
626,866,729
Total distributable earnings (loss)
(27,211,455
)
Total Net Assets Applicable to Common Shareholders
$599,709,893
Common Shares Outstanding
54,618,848
Net Asset Value Per Common Share
$10.98
See Notes to Financial Statements.
34
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
Statement of operations
For the Year Ended May 31, 2026
 
Investment Income:
Interest
$38,605,770
Dividends from affiliated investments
2,046
Total Investment Income
38,607,816
Expenses:
Distributions to Variable Rate Demand Preferred Stockholders (Notes 1 and 5)
7,388,363
Investment management fee (Note 2)
4,848,998
Liquidity fees (Note 5)
2,200,118
Interest expense (Note 1)
423,840
Legal fees
394,672
Directors’ fees
184,978
Remarketing fees (Note 5)
144,011
Shareholder reports
105,844
Rating agency fees
87,555
Amortization of Variable Rate Demand Preferred Stock offering costs (Note 5)
84,972
Fund accounting fees
72,219
Transfer agent fees 
67,431
Audit and tax fees
53,272
Stock exchange listing fees
27,992
Insurance
6,003
Custody fees
5,133
Miscellaneous expenses 
41,689
Total Expenses
16,137,090
Less: Fee waivers and/or expense reimbursements (Note 2)
(63
)
Net Expenses
16,137,027
Net Investment Income
22,470,789
Realized and Unrealized Gain (Loss) on Investments (Notes 1 and 3):
Net Realized Loss From Unaffiliated Investment Transactions
(2,941,564
)
Change in Net Unrealized Appreciation (Depreciation) From Unaffiliated
Investments
32,392,069
Net Gain on Investments
29,450,505
Increase in Net Assets Applicable to Common Shareholders From Operations
$51,921,294
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
35
Statements of changes in net assets
 
For the Years Ended May 31,
2026
2025
Operations:
Net investment income
$22,470,789
$21,315,502
Net realized loss
(2,941,564
)
(668,886
)
Change in net unrealized appreciation (depreciation)
32,392,069
(23,405,196
)
Increase (Decrease) in Net Assets Applicable to Common
Shareholders From Operations
51,921,294
(2,758,580
)
Distributions to Common Shareholders From (Note 1):
Total distributable earnings
(19,340,764
)
(21,129,427
)
Return of capital
(16,379,963
)
(14,592,156
)
Decrease in Net Assets From Distributions to Common
Shareholders
(35,720,727
)
(35,721,583
)
Fund Share Transactions:
Cost of shares repurchased (0 and 35,441 shares repurchased,
respectively) (Note 8) 
—
(363,636
)
Decrease in Net Assets From Fund Share Transactions
—
(363,636
)
Increase (Decrease) in Net Assets Applicable to Common
Shareholders
16,200,567
(38,843,799
)
Net Assets Applicable to Common Shareholders:
Beginning of year
583,509,326
622,353,125
End of year
$599,709,893
$583,509,326
See Notes to Financial Statements.
36
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
Statement of cash flows
For the Year Ended May 31, 2026
 
Increase (Decrease) in Cash:
Cash Flows from Operating Activities:
Net increase in net assets applicable to common shareholders resulting from operations
$51,921,294
Adjustments to reconcile net increase in net assets resulting from operations to net cash
provided (used) by operating activities:
Purchases of portfolio securities
(68,052,025
)
Sales of portfolio securities
90,601,384
Net purchases, sales and maturities of short-term investments
6,088,516
Net amortization of premium (accretion of discount)
3,518,203
Decrease in interest receivable
305,657
Decrease in prepaid expenses
15,690
Increase in dividends receivable from affiliated investments
(77
)
Decrease in payable for securities purchased
(16,341,156
)
Amortization of preferred stock offering costs
84,972
Increase in investment management fee payable
3,258
Decrease in interest expense payable
(21,065
)
Increase in accrued expenses
91,696
Net realized loss on investments
2,941,564
Change in net unrealized appreciation (depreciation) of investments
(32,392,069
)
Net Cash Provided in Operating Activities*
38,765,842
Cash Flows from Financing Activities:
Distributions paid on common stock (net of distributions payable)
(38,697,454
)
Decrease in due to custodian
(68,388
)
Net Cash Used by Financing Activities
(38,765,842
)
Cash and restricted cash at beginning of year
—
Cash and restricted cash at end of year
—
 
*
Included in operating expenses is $444,905 paid for interest on borrowings and $7,388,363 paid for distributions to
Variable Rate Demand Preferred Stockholders.
The following table provides a reconciliation of cash and restricted cash reported within the Statement of Assets
and Liabilities that sums to the total of such amounts shown on the Statement of Cash Flows.  
 
May 31, 2026
Cash
—
Restricted cash
—
Total cash and restricted cash shown in the Statement of Cash Flows
—
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
37
Financial highlights
 
For a common share of capital stock outstanding throughout each year ended May 31:
 
20261
20251
20241
20231
20221
Net asset value, beginning of year
$10.68
$11.39
$11.52
$12.20
$14.19
Income (loss) from operations:
Net investment income
0.41
0.39
0.35
0.42
0.47
Net realized and unrealized gain (loss)
0.54
(0.45
)
0.03
(0.66
)
(1.97
)
Distributions paid to Auction Rate
Cumulative Preferred Stockholders from net
investment income
—
—
(0.00
)2
(0.02
)
(0.00
)2
Total income (loss) from operations
0.95
(0.06)
0.38
(0.26)
(1.50)
Less distributions to common shareholders
from:
Net investment income
(0.35
)
(0.38
)
(0.37
)
(0.40
)
(0.48
)
Net realized gains
—
—
—
—
(0.01
)
Return of capital
(0.30
)
(0.27
)
(0.14
)
(0.05
)
—
Total distributions to common
shareholders
(0.65
)
(0.65
)
(0.51
)
(0.45
)
(0.49
)
Anti-dilutive impact of repurchase plan
—
0.00
2,3
0.00
2,3
—
—
Net increase from repurchase of Auction
Rate Cumulative Preferred Shares
—
—
—
0.03
—
Net asset value, end of year
$10.98
$10.68
$11.39
$11.52
$12.20
Market price, end of year
$10.31
$9.91
$9.93
$9.84
$11.13
Total return, based on NAV4,5
9.15
%
(0.68
)%6
3.34
%7
(1.78
)%8
(10.86
)%
Total return, based on Market Price9
10.86
%
6.24
%
6.23
%
(7.61
)%
(14.06
)%
Net assets applicable to common
shareholders, end of year (millions)
$600
$584
$622
$500
$529
Ratios to average net assets:10
Gross expenses11
2.70
%
2.87
%6
3.25
%7
2.44
%
1.34
%
Net expenses11,12,13
2.70
2.84
6
3.20
7
2.44
1.34
Net investment income
3.76
3.41
6
3.07
7
3.59
3.43
Portfolio turnover rate
8
%
14
%
17
%
28
%
22
%
See Notes to Financial Statements.
38
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
For a common share of capital stock outstanding throughout each year ended May 31:
 
20261
20251
20241
20231
20221
Supplemental data:
Auction Rate Cumulative Preferred Stock at
Liquidation Value, End of Year (000s)
—
—
—
$1,300
$27,625
Variable Rate Demand Preferred Stock at
Liquidation Value, End of Year (000s)
$284,075
$284,075
$284,075
$217,575
$217,575
Asset Coverage Ratio for Auction Rate
Cumulative Preferred Stock and Variable Rate
Demand Preferred Stock14
311
%
305
%
319
%
328
%
316
%
Asset Coverage, per $25,000 Liquidation
Value per Share of Auction Rate Cumulative
Preferred Stock and Variable Rate Demand
Preferred Stock14
$77,777
$76,352
$79,770
$82,084
$78,956
 
1
Per share amounts have been calculated using the average shares method.
2
Amount represents less than $0.005 or greater than $(0.005) per share.
3
The repurchase plan was completed at an average repurchase price of $10.26 for 35,441 shares and $363,636 for
the year ended May 31, 2025, and $10.21 for 113,555 shares and $1,159,604 for the year ended May 31, 2024.
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.
5
The total return calculation assumes that distributions are reinvested at NAV. Past performance is no guarantee of
future results.
6
Ratios and total return for the year ended May 31, 2025, include certain non-recurring fees incurred by the Fund
during the period. Without these fees, the gross and net expense ratios and the net investment income ratio would
have been 2.87%, 2.84% and 3.41%, respectively, and total return based on NAV would have been (0.68)%.
7
Ratios and total return for the year ended May 31, 2024, include certain non-recurring fees incurred by the Fund
during the period. Without these fees, the gross and net expense ratios and the net investment income ratio would
have been 3.09%, 3.04% and 3.23%, respectively, and total return based on NAV would have been 3.43%.
8
The total return based on NAV reflects the impact of the repurchase by the Fund of a portion of its Auction Rate
Cumulative Preferred Shares at 95% of the per share liquidation preference. Absent this transaction, the total
return based on NAV would have been (2.04)%.
9
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.
10
Calculated on the basis of average net assets of common stock shareholders. Ratios do not reflect the effect of
dividend payments to auction rate cumulative preferred stockholders.
11
Includes expenses related to borrowings of 1.71%, 1.94%, 2.10%, 1.44% and 0.42% for the years ended May 31,
2026, 2025, 2024, 2023 and 2022, respectively.
12
The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management
fee payable in connection with any investment in an affiliated money market fund.
13
Reflects fee waivers and/or expense reimbursements.
14
Represents value of net assets plus the liquidation value of the auction rate cumulative preferred stock and
variable rate demand preferred stock, if any, at the end of the period divided by the liquidation value of the auction
rate cumulative preferred stock and variable rate demand preferred stock, if any, outstanding at the end of the
period.
See Notes to Financial Statements.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
39
Notes to financial statements
1. Organization and significant accounting policies
Western Asset Managed Municipals Fund Inc. (the “Fund”) was incorporated in Maryland and is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund’s investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital. When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal.
The Fund follows the accounting and reporting guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946, Financial Services – Investment Companies (“ASC 946”). The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”), including, but not limited to, ASC 946. 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 typically 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. Investments in open-end funds are valued at the closing net asset value per share of each fund on the day of valuation. If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Directors (the “Board”).  
Pursuant to policies adopted by the Board, the Fund’s manager has been designated as the valuation designee and is responsible for the oversight of the daily valuation process. The Fund’s manager is assisted by the Global Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Fund’s manager and the Board. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts
40
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
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, 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 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.
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 — unadjusted 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.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
41
Notes to financial statements (cont’d)
The following is a summary of the inputs used in valuing the Fund’s assets 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†:
Municipal Bonds
—
$850,714,700
—
$850,714,700
Municipal Bonds Deposited in
Tender Option Bond Trusts
—
26,031,537
—
26,031,537
Total Long-Term Investments
—
876,746,237
—
876,746,237
Short-Term Investments†
—
7,735,000
—
7,735,000
Total Investments
—
$884,481,237
—
$884,481,237
 
†
See Schedule of Investments for additional detailed categorizations.
(b) Tender option bonds. The Fund may enter into tender option bond (“TOB”) transactions and may invest in inverse floating rate instruments (“Inverse Floaters”) issued in TOB transactions. The Fund may participate either in structuring an Inverse Floater or purchasing an Inverse Floater in the secondary market. When structuring an Inverse Floater, the Fund deposits securities (typically municipal bonds or other municipal securities) (the “Underlying Bonds”) into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues floating rate notes (“Floaters”) to third parties and residual interest, Inverse Floaters, to the Fund. The Floaters issued by the TOB trust have interest rates which reset weekly and provide the holders of the Floaters the option to tender their notes back to the TOB trust for redemption at par at each reset date. The net proceeds of the sale of the Floaters, after expenses, are received by the Fund and may be invested in additional securities. The Inverse Floaters are inverse floating rate debt instruments, as the return on those bonds is inversely related to changes in a specified interest rate. Distributions on any Inverse Floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term interest rates rise and will increase when such interest rates fall. Floaters issued by a TOB trust may be senior to the Inverse Floaters held by the Fund. The value and market for Inverse Floaters can be volatile, and Inverse Floaters can have limited liquidity.
An investment in an Inverse Floater structured by the Fund is accounted for as a secured borrowing. The Underlying Bonds deposited into the TOB trust are included in the Fund’s Schedule of Investments and a liability for Floaters (TOB floating rate notes) issued by the TOB trust is recognized in the Fund’s Statement of Assets and Liabilities. The carrying amount of the TOB trust’s floating rate note obligations as reported on the Statement of Assets and Liabilities approximates its fair value. Interest income, including amortization, on the Underlying Bonds is recognized in the Fund’s Statements of Operations. Interest paid to holders of the Floaters, as well as other expenses related to administration, liquidity, remarketing and trustee services of the TOB trust, are recognized in Interest expense in the Fund’s Statement of Operations. For the year ended May 31, 2026, the average daily amount of floating rate notes outstanding was $13,955,000 and weighted average interest rate was 2.99%.
42
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
(c) Net asset value. The net asset value (“NAV”) of the Fund’s common stock is determined no less frequently than the close of business on the Fund’s last business day of each week (generally Friday) and on the last business day of the month. It is determined by dividing the value of the net assets available to common stock by the total number of shares of common stock outstanding. For the purpose of determining the NAV per share of the common stock, the value of the Fund’s net assets shall be deemed to equal the value of the Fund’s assets less the Fund’s liabilities including the aggregate liquidation value (i.e., $25,000 per outstanding share) of the Variable Rate Demand Preferred Stock (“VRDPS”), net of deferred offering costs.
(d) Cash flow information. The Fund invests in securities and distributes dividends from net investment income and net realized gains, which are paid in cash and may be reinvested at the discretion of shareholders. These activities are reported in the Statements of Changes in Net Assets and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows.
(e) Security transactions and investment income. Security transactions are accounted for on a trade date basis. Interest income (including interest income from payment-in-kind securities) is recorded on the accrual basis. Amortization of premiums and accretion of discounts on debt securities are recorded to interest income over the lives of the respective securities, except for premiums on certain callable debt securities, which are amortized to the earliest call date. 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.
(f) Distributions to shareholders. Distributions to common shareholders from net investment income of the Fund, if any, are declared quarterly and paid on a monthly basis. Distributions to common shareholders of net realized gains, if any, are taxable and are declared at least annually. The actual source of the Fund’s monthly distribution may be from net investment income, realized capital gains, return of capital or a combination of such amounts. The Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from federal and certain state income taxes, to retain such tax-exempt status when distributed to the common shareholders of the Fund. Distributions to common 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.
Distributions to holders of VRDPS are accrued on a daily basis and paid monthly as described in Note 5 and are treated as an operating expense as required by GAAP. For tax purposes, the payments made to the holders of the Fund’s VRDPS are treated as dividends or distributions.
(g) 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, as amended (the “Code”), 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.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
43
Notes to financial statements (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 May 31, 2026, 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 the prior three fiscal years are subject to examination by the Internal Revenue Service and state departments of revenue.
(h) 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. During the current year, the following reclassifications have been made:
 
 
Total Distributable
Earnings (Loss)
Paid-in
Capital
(a)
$84,972
$(84,972)
(a)
Reclassifications are due to bond discounts and premiums, defaulted securities and non-deductible expenses.
2. Investment management agreement and other transactions with affiliates
Franklin Templeton Fund Adviser, LLC (“FTFA”) is the Fund’s investment manager and Western Asset Management Company, LLC (“Western Asset”) is the Fund’s subadviser. FTFA and Western Asset are indirect, wholly-owned subsidiaries of Franklin Resources, Inc. (“Franklin Resources”).
FTFA provides administrative and certain oversight services to the Fund. The Fund pays FTFA an investment management fee, calculated daily and paid monthly, at an annual rate of 0.55% of the Fund’s average daily net assets. For the purposes of calculating the investment management fee, the aggregate liquidation value of the Preferred Stock is not deducted in determining the Fund’s average daily net assets.
FTFA delegates to Western Asset the day-to-day portfolio management of the Fund. For its services, FTFA pays Western Asset monthly 70% of the net management fee it receives from the Fund.
The manager has agreed to waive the Fund’s management fee to an extent sufficient to offset the net management fee payable in connection with any investment in an affiliated money market fund (the “affiliated money market fund waiver”).
During the year ended May 31, 2026, fees waived and/or expenses reimbursed amounted to $63, all of which was an affiliated money market fund waiver.
All officers and one Director of the Fund are employees of Franklin Resources or its affiliates and do not receive compensation from the Fund.
The Fund is permitted to purchase or sell short-term variable rate demand obligations from or to certain other affiliated funds or portfolios under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to provide assurance that any purchase or sale of securities by the Fund from or to another fund or portfolio that is, or could be considered, an affiliate by virtue of having a common investment manager or subadviser (or affiliated investment manager or subadviser), common Directors and/or common officers complies with Rule 17a-7 under the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. For the year ended
44
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
May 31, 2026, such purchase and sale transactions (excluding accrued interest) were $42,500,000 and $47,165,000, respectively. There was no realized gain or loss recognized as a result of these transactions.
3. Investments
During the year ended May 31, 2026, the aggregate cost of purchases and proceeds from sales of investments (excluding short-term investments) were as follows: 
 
Purchases
$68,052,025
Sales
90,601,384
At May 31, 2026, the aggregate cost of investments and the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were as follows:
 
 
Cost*
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Net
Unrealized
Appreciation
Securities
$860,181,486
$24,761,056
$(14,416,305)
$10,344,751
 
*
Cost of investments for federal income tax purposes includes the value of Inverse Floaters issued in TOB
transactions (Note 1).
4. Derivative instruments and hedging activities
During the year ended May 31, 2026, the Fund did not invest in derivative instruments.
5. Variable rate demand preferred stock
On March 4, 2015, the Fund completed a private offering of 8,703 shares of Series 1 VRDPS. Net proceeds from the offering were used by the Fund to repurchase outstanding shares of Series M, Series T, Series W, Series TH and Series F ARCPS that had been accepted for payment pursuant to the tender offer (see Note 6). Offering costs incurred by the Fund in connection with the Series 1 VRDPS issuance are being amortized to expense over the life of the VRDPS.
On October 16, 2023, the Fund issued and delivered for distribution to holders of shares of Western Asset Municipal Partners Fund Inc. Series 1 VRDPS newly-issued shares of the Fund’s Series 2 VRDPS. Offering costs incurred by the Fund in connection with the Series 2 VRDPS issuance are being amortized to expense over the life of the Series 2 VRDPS.
The table below summarizes the key terms of Series 1 and Series 2 of the VRDPS at May 31, 2026.
 
Series
Mandatory
Redemption Date
Shares
Liquidation
Preference
Per Share
Aggregate
Liquidation
Value
Series 1
3/4/2045
8,703
$25,000
$217,575,000
Series 2
3/11/2045
2,660
25,000
66,500,000
The VRDPS shares are not listed on any securities exchange or automated quotation system. For financial reporting purposes, the VRDPS shares are considered debt of the Fund;
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
45
Notes to financial statements (cont’d)
therefore, the liquidation value, which approximates fair value of the VRDPS shares, is recorded as a liability on the Statement of Assets and Liabilities.
Holders of VRDPS have the right to tender their VRDPS shares for remarketing at a price equal to the liquidation preference amount plus all accumulated but unpaid dividends and at a date which is no earlier than the seventh day following delivery of the notice to the tender and paying agent. The VRDPS shares include a liquidity feature that allows VRDPS holders to have their shares purchased by the liquidity provider with whom the Fund has contracted in the event of a failed remarketing where purchase orders are not sufficient in number to be matched with the sale orders. The Fund is required to redeem the VRDPS shares owned by the liquidity provider after six months of continuous, unsuccessful remarketing. The Fund pays a monthly remarketing fee at the annual rate of 0.05% of the liquidation value of each VRDPS share outstanding on the first calendar day of the preceding calendar month. These fees are shown as remarketing fees on the Statement of Operations.
Holders of VRDPS are entitled to receive monthly cumulative cash dividends, payable on the first business day of each calendar month, at a variable rate set weekly by the remarketing agent. The dividend rate is generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate will reset to the maximum rate. The maximum rate is determined, in part, based upon the long-term rating assigned to the VRDPS. In the event the Fund fails to make a scheduled dividend payment, all outstanding shares of the VRDPS are subject to mandatory tender.
Subject to certain conditions, the VRDPS shares may be redeemed, in whole or in part, at any time at the option of the Fund. The redemption price per share is equal to the liquidation value per share plus any accumulated but unpaid dividends. The Fund is required to redeem its VRDPS on the mandatory redemption dates, March 4, 2045 and March 11, 2045, for Series 1 and Series 2, respectively. In addition, the Fund is required to redeem certain of the VRDPS shares if the Fund fails to maintain certain asset coverage and rating agency guidelines.
The Fund is a party to a fee agreement with the liquidity provider that requires monthly payment of an annual liquidity fee. These fees are shown as liquidity fees on the Statement of Operations. The fee agreement between the Fund and the liquidity provider is scheduled to terminate on June 18, 2027. The Fund has the right, which is exercisable 120 to 90 days prior to the scheduled termination date, to request that the liquidity provider extend the term of the agreement for an additional period. The Fund may also terminate the agreement early. In the event the fee agreement is not renewed or is terminated in advance, and the Fund does not enter into a fee agreement with an alternate liquidity provider, the VRDPS will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. The Fund is required to redeem any VRDPS purchased by the liquidity provider six months after the purchase date.
The VRDPS ranks senior to the Fund’s outstanding common stock and on parity with any other preferred stock. The Fund may not declare dividends or make other distributions on shares of its common stock unless the Fund has declared and paid full cumulative dividends
46
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
on the VRDPS, due on or prior to the date of the common stock dividend or distribution, and meets the VRDPS asset coverage and rating agency requirements.
The holders of the VRDPS have one vote per share and vote together with the holders of common stock of the Fund as a single class except on matters affecting only the holders of VRDPS or the holders of common stock. Pursuant to the 1940 Act, holders of the VRDPS have the right to elect two Directors of the Fund, voting separately as a class.
The annualized dividend rate for the VRDPS shares for the year ended May 31, 2026 was 2.631%.
6.  Auction rate cumulative preferred stock
As described below, all of the Fund’s remaining outstanding ARCPS were redeemed by the Fund during the year ended May 31, 2024.
On January 22, 2015, the Fund announced that it had commenced an issuer tender offer for up to 100% of its outstanding ARCPS at a price equal to 90% of the liquidation preference of $25,000 per share (or $22,500 per share), plus any unpaid dividends accrued through February 27, 2015, the expiration date of the tender offer.
The Fund’s tender offers were conditioned upon the Fund closing on the private offering of VRDPS with an aggregate liquidation preference at least equal to the aggregate liquidation preference of ARCPS accepted for tender.
On March 4, 2015, the Fund announced the final results for its issuer tender offer and all shares that were validly tendered and not withdrawn during the offering period were accepted for payment. The Fund accepted for payment 1,871 Series M ARCPS, 1,717 Series T ARCPS, 1,710 Series W ARCPS, 1,466 Series Th ARCPS and 1,939 Series F ARCPS, which represented 93.55% of outstanding Series M ARCPS, 85.85% of outstanding Series T ARCPS, 85.50% of outstanding Series W ARCPS, 73.30% of outstanding Series Th ARCPS, and 96.95% of outstanding Series F ARCPS. In aggregate, the Fund accepted for payment 8,703 ARCPS, which represented 87.03% of the outstanding ARCPS. The ARCPS that were not tendered remained outstanding.
In September 2015, the Fund repurchased 14 Series W ARCPS in a private transaction at a price equal to 90% of the liquidation preference of $25,000 per share (or $22,500 per share), plus any unpaid dividends.
On November 27, 2018, the Fund repurchased 80 Series M and 80 Series Th ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends.
On January 23, 2019, the Fund repurchased 1 Series M ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends.
On November 20, 2019, the Fund repurchased 16 Series Th ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
47
Notes to financial statements (cont’d)
On November 17, 2020, the Fund repurchased 1 Series M ARCPS in a private transaction at a price equal to 85% of the liquidation preference of $25,000 per share (or $21,250 per share), plus any unpaid dividends.
On November 16, 2022, the Fund repurchased 2 Series M, 31 Series T, 17 Series W and 24 Series Th ARCPS in a private transaction at a price equal to 95% of the liquidation preference of $25,000 per share (or $23,750 per share), plus any unpaid dividends.
On March 1, 2023, the Fund repurchased 42 Series M, 234 Series T, 257 Series W, 397 Series Th and 49 Series F ARCPS in a private transaction at a price equal to 95% of the liquidation preference of $25,000 per share (or $23,750 per share), plus any unpaid dividends.
On October 5, 2023, the Fund redeemed 3 Series M ARCPS at the liquidation preference value of $25,000, plus any accrued but unpaid dividends.
On October 6, 2023, the Fund redeemed 18 Series T ARCPS at the liquidation preference value of $25,000, plus any accrued but unpaid dividends.
On October 10, 2023, the Fund redeemed 2 Series W ARCPS at the liquidation preference value of $25,000, plus any accrued but unpaid dividends.
On October 11, 2023, the Fund redeemed 17 Series Th ARCPS at the liquidation preference value of $25,000, plus any accrued but unpaid dividends.
On October 12, 2023, the Fund redeemed 12 Series F ARCPS at the liquidation preference value of $25,000, plus any accrued but unpaid dividends.
The difference between the liquidation preference of the ARCPS and the actual purchase price of the tendered ARCPS was recognized by the Fund in the Statement of Changes in Net Assets as an increase in net assets applicable to common shares resulting from the tender and repurchase of the ARCPS by the Fund.
The ARCPS’ dividends were cumulative at a rate determined at an auction and the dividend period was typically seven days. The dividend rate could not exceed a certain maximum rate, including in the event of a failed auction, unless the Board of the Fund authorized an increased maximum rate. To the extent capital gains and other taxable income were allocated to holders of ARCPS for tax purposes, the Fund would have likely had to pay higher dividends to holders of ARCPS to compensate them for the increased tax liability to them resulting from such allocation. Due to failed auctions experienced by the Fund’s ARCPS starting February 14, 2008, the Fund paid the applicable maximum rate, which was calculated using the higher of 110% of the taxable equivalent of the short-term municipal bond rate and 110% of the prevailing 30-days “AA” Financial Composite Commercial Paper Rate. The Fund may have paid higher maximum rates if the rating of the Fund’s ARCPS were to be lowered by the rating agencies.
The holders of the ARCPS had one vote per share and voted together with the holders of common stock of the Fund as a single class except on matters that affected only the holders of preferred stock or the holders of common stock. Pursuant to the 1940 Act, holders of the preferred stock had the right to elect two Directors of the Fund, voting separately as a class.
48
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
7. Distributions to common shareholders subsequent to May 31, 2026
The following distributions to common shareholders have been declared by the Board and are payable subsequent to the period end of this report:
 
Record Date
Payable Date
Amount
6/23/2026
6/30/2026
$0.0545
7/24/2026
7/31/2026
$0.0545
8/24/2026
8/31/2026
$0.0545
8. Stock repurchase program
On November 16, 2015, the Fund announced that 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 year ended May 31, 2026, the Fund did not repurchase any shares. During the year ended May 31, 2025, the Fund repurchased and retired 0.06% of its common shares outstanding under the repurchase plan. The weighted average discount per share on these repurchases was 11.80% for the year ended May 31, 2025. Shares repurchased and the corresponding dollar amount are included in the Statements of Changes in Net Assets. The anti-dilutive impact of these share repurchases is included in the Financial Highlights.
 
Since the commencement of the stock repurchase program through May 31, 2026, the Fund repurchased 148,996 shares or 0.27% of its common shares outstanding for a total amount of $1,523,240.
9. Transactions with affiliated company
As defined by the 1940 Act, an affiliated company is one in which the Fund owns 5% or more of the outstanding voting securities, or a company which is under common ownership or control with the Fund. The following company was considered an affiliated company for all or some portion of the year ended May 31, 2026. The following transactions were effected in such company for the year ended May 31, 2026.
 
 
Affiliate
Value at

May 31,
2025
Purchased
Sold
Cost
Shares
Proceeds
Shares
Western Asset
Premier
Institutional
Government
Reserves, Premium
Shares
—
$8,964,282
8,964,282
$8,964,282
8,964,282
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
49
Notes to financial statements (cont’d)

 
(cont’d)
Realized
Gain (Loss)
Dividend
Income
Net Increase
(Decrease) in
Unrealized
Appreciation
(Depreciation)
Affiliate
Value at
May 31,
2026
Western Asset Premier
Institutional
Government Reserves,
Premium Shares
—
$2,046
—
—
10. Income tax information and distributions to shareholders
The tax character of distributions paid during the fiscal years ended May 31, was as follows:
 
 
2026
2025
Distributions paid from:
Tax exempt income:
Common shareholders
$19,340,225
$21,128,022
Variable rate demand preferred stockholders
7,388,260
9,155,989
Total tax exempt distributions
$26,728,485
$30,284,011
Taxable income:
Common shareholders
$539
$1,405
Variable rate demand preferred stockholders
103
360
Total ordinary income distributions
$642
$1,765
Tax return of capital:
Common shareholders
$16,379,963
$14,592,156
Variable rate demand preferred stockholders
—
—
Total distributions paid
$43,109,090
$44,877,932
As of May 31, 2026, the components of distributable earnings (loss) on a tax basis were as follows:
 
Deferred capital losses*
$(37,556,207)
Unrealized appreciation (depreciation)(a)
10,344,752
Total distributable earnings (loss) — net
$(27,211,455)
 
*
These capital losses have been deferred in the current year as either short-term or long-term losses. The losses
will be deemed to occur on the first day of the next taxable year in the same character as they were originally
deferred and will be available to offset future taxable capital gains.
(a)
 The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable to wash
sales, bond discounts and premiums and defaulted securities.
11. Operating segments
The Fund operates as a single operating segment, which is an investment portfolio. A management group assigned to the Fund within the Fund’s investment manager serves as the Chief Operating Decision Maker (“CODM”) and is responsible for evaluating the Fund’s operating results and allocating resources in accordance with the Fund’s investment strategy. Internal reporting provided to the CODM aligns with the accounting policies and measurement principles used in the financial statements.
50
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
For information regarding segment assets, segment profit or loss, and significant expenses, refer to the Statement of Assets and Liabilities and the Statement of Operations, along with the related Notes to Financial Statements. The Fund’s Schedule of Investments provides details of the Fund’s investments that generate returns such as interest, dividends, and realized and unrealized gains or losses. Performance metrics, including portfolio turnover and expense ratios, are disclosed in the Financial Highlights.
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
51
Report of independent registered public accounting firm
To the Board of Directors and Shareholders of Western Asset Managed Municipals Fund Inc.
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Western Asset Managed Municipals Fund Inc. (the “Fund”) as of May 31, 2026, the related statements of operations and cash flows for the year ended May 31, 2026, the statement of changes in net assets for each of the two years in the period ended May 31, 2026, including the related notes, and the financial highlights for each of the five years in the period ended May 31, 2026 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of May 31, 2026, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended May 31, 2026 and the financial highlights for each of the five years in the period ended May 31, 2026 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management.  Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of May 31, 2026 by correspondence with the custodian and the administrative agent for the tender option bond trust. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Baltimore, Maryland
July 23, 2026
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
52
Western Asset Managed Municipals Fund Inc. 2026 Annual Report
Board approval of management and
subadvisory agreements (unaudited)
Background
The Investment Company Act of 1940, as amended (the “1940 Act”), requires that the Board of Directors (the “Board”) of Western Asset Managed Municipals Fund Inc. (the “Fund”), including a majority of its members who are not considered to be “interested persons” under the 1940 Act (the “Independent Directors”) voting separately, approve on an annual basis the continuation of the investment management agreement (the “Management Agreement”) between the Fund and the Fund’s manager, Franklin Templeton Fund Adviser, LLC (the “Manager”), and the sub-advisory agreement (the “Sub-Advisory Agreement”) between the Manager and Western Asset Management Company, LLC (the “Sub-Adviser”), an affiliate of the Manager, with respect to the Fund.
At an in-person meeting (the “Contract Renewal Meeting”) held on May 12-13, 2026, the Board, including the Independent Directors, considered and approved the continuation of each of the Management Agreement and the Sub-Advisory Agreement for an additional one-year period. To assist in its consideration of the renewal of each of the Management Agreement and the Sub-Advisory Agreement, the Board received and considered extensive information (together with the information provided at the Contract Renewal Meeting, the “Contract Renewal Information”) about the Manager and the Sub-Adviser, as well as the management and sub-advisory arrangements for the Fund and the other closed-end funds in the same complex under the Board’s purview (the “Franklin Templeton Closed-end Funds”), certain portions of which are discussed below.
A presentation made by the Manager and the Sub-Adviser to the Board at the Contract Renewal Meeting in connection with the Board’s evaluation of each of the Management Agreement and the Sub-Advisory Agreement encompassed the Fund and other Franklin Templeton Closed-end Funds. In addition to the Contract Renewal Information, the Board received performance and other information throughout the year related to the respective services rendered by the Manager and the Sub-Adviser to the Fund. The Board’s evaluation took into account the information received throughout the year and also reflected the knowledge and experience gained as members of the Boards of the Fund and other Franklin Templeton Closed-end Funds with respect to the services provided to the Fund by the Manager and the Sub-Adviser. The information received and considered by the Board (including its various committees) in conjunction with both the Contract Renewal Meeting and throughout the year was both written and oral. The contractual arrangements discussed below are the product of multiple years of review and negotiation and information received and considered by the Board during each of those years.
At an in-person meeting held on April 24, 2026, the Independent Directors, in preparation for the Contract Renewal Meeting, met in a private session with their independent legal counsel to review the Contract Renewal Information regarding the Franklin Templeton Closed-end Funds, including the Fund, received to date. No representatives of the Manager
Western Asset Managed Municipals Fund Inc.
53
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
or the Sub-Adviser participated in this meeting. Following the April 24, 2026 meeting, the Independent Directors submitted certain questions and requests for additional information to Fund management. The Independent Directors also met in private sessions with their independent legal counsel to consider the Contract Renewal Information and Fund management’s responses to the Independent Directors’ questions and requests for additional information in advance of and during the Contract Renewal Meeting. The discussion below reflects all of these reviews.
The Manager provides the Fund with investment advisory and administrative services pursuant to the Management Agreement and the Sub-Adviser provides the Fund with investment sub-advisory services pursuant to the Sub-Advisory Agreement. The discussion below covers both the advisory and administrative functions being rendered by the Manager, each such function being encompassed by the Management Agreement, and the investment sub-advisory functions being rendered by the Sub-Adviser pursuant to the Sub-Advisory Agreement.
Board Approval of Management Agreement and Sub-Advisory Agreement
The Independent Directors were advised by separate independent legal counsel throughout the process. Prior to voting, the Independent Directors received a memorandum discussing the legal standards for their consideration of the proposed continuation of the Management Agreement and the Sub-Advisory Agreement. The Independent Directors considered the Management Agreement and Sub-Advisory Agreement separately during the course of their review. In doing so, they noted the respective roles of the Manager and the Sub-Adviser in providing services to the Fund.
In approving the continuation of the Management Agreement and Sub-Advisory Agreement, the Board, including the Independent Directors, considered a variety of factors, including those factors discussed below. No single factor reviewed by the Board was identified by the Board as the principal factor in determining whether to approve the continuation of the Management Agreement and the Sub-Advisory Agreement. Each Director may have attributed different weight to the various factors in evaluating the Management Agreement and the Sub-Advisory Agreement.
After considering all relevant factors and information, the Board, exercising its reasonable business judgment, determined that the continuation of the Management Agreement and Sub-Advisory Agreement was in the best interests of the Fund’s stockholders and approved the continuation of each such agreement for an additional one-year period.
Nature, Extent and Quality of the Services under the Management Agreement and Sub-Advisory Agreement
The Board received and considered Contract Renewal Information regarding the nature, extent, and quality of services provided to the Fund by the Manager and the Sub-Adviser
54
Western Asset Managed Municipals Fund Inc.
under the Management Agreement and the Sub-Advisory Agreement, respectively, during the past year. The Board noted information received at regular meetings throughout the year related to the services provided by the Manager in its management of the Fund’s affairs and the Manager’s role in coordinating the activities of the Sub-Adviser and the Fund’s other service providers. The Board observed that the scope of services provided by the Manager and the Sub-Adviser, and of the undertakings required of the Manager and Sub-Adviser in connection with those services, including maintaining and monitoring their respective compliance programs as well as the Fund’s compliance programs had expanded over time as a result of regulatory, market and other developments. The Board also noted that on a regular basis it received and reviewed information from the Manager and the Sub-Adviser regarding the Fund’s compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the risks borne by the Manager, the Sub-Adviser and their respective affiliates on behalf of the Fund, including entrepreneurial, operational, reputational, litigation and regulatory risks, as well as the Manager’s and the Sub-Adviser’s risk management processes.
The Board reviewed the qualifications, backgrounds, and responsibilities of the Manager’s senior personnel and the Sub-Adviser’s portfolio management team primarily responsible for the day-to-day portfolio management of the Fund. The Board also considered, based on its knowledge of the Manager and its affiliates, the financial resources of Franklin Resources, Inc., the parent organization of the Manager and the Sub-Adviser. The Board recognized the importance of having a fund manager with significant resources.
The Board considered the division of responsibilities between the Manager and the Sub-Adviser under the Management Agreement and the Sub-Advisory Agreement, respectively, including the Manager’s coordination and oversight of the services provided to the Fund by the Sub-Adviser and other fund service providers. The Management Agreement permits the Manager to delegate certain of its responsibilities, including its investment advisory duties thereunder, provided that the Manager, in each case, will supervise the activities of the delegee.
In reaching its determinations regarding continuation of the Management Agreement and the Sub-Advisory Agreement, the Board took into account that Fund stockholders, in pursuing their investment goals and objectives, may have purchased their shares of the Fund based upon the reputation and the investment style, philosophy and strategy of the Manager and the Sub-Adviser, as well as the resources available to the Manager and the Sub-Adviser.
The Board concluded that, overall, the nature, extent, and quality of the management and other services provided (and expected to be provided) to the Fund, under the Management Agreement and the Sub-Advisory Agreement were satisfactory.
Western Asset Managed Municipals Fund Inc.
55
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
Fund Performance
The Board received and considered information regarding Fund performance, including information and analyses (the “Broadridge Performance Information”) for the Fund, as well as for a group of comparable funds (the “Performance Universe”) selected by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third-party provider of investment company data. The Board was provided with a description of the methodology Broadridge used to determine the similarity of the Fund with the funds included in the Performance Universe. It was noted that while the Board found the Broadridge Performance Information generally useful, they recognized its limitations, including that the data may vary depending on the end date selected, and that the results of the performance comparisons may vary depending on the selection of the peer group and its composition over time. The Board also noted that Board members had received and discussed with the Manager and the Sub-Adviser information throughout the year at periodic intervals comparing the Fund’s performance against its benchmark and against the Fund’s peers. In addition, the Board considered the Fund’s performance in view of overall financial market conditions.
The Broadridge Performance Information comparing the Fund’s performance to that of its Performance Universe, consisting of the Fund and all leveraged closed-end general and insured municipal debt funds classified by Broadridge, regardless of asset size, showed, among other data, that based on net asset value per share, the Fund’s performance was above the median for the 1-, 3-, 5- and 10-year periods ended December 31, 2025. The Board noted the explanations from the Manager and the Sub-Adviser regarding the Fund’s relative performance versus the Performance Universe for the various periods.
Based on the reviews and discussions of Fund performance and considering other relevant factors, including those noted above, the Board concluded, under the circumstances, that continuation of the Management Agreement and the Sub-Advisory Agreement for an additional one-year period would be consistent with the interests of the Fund and its stockholders.
Management and Sub-Advisory Fees and Expense Ratios
The Board reviewed and considered the contractual management fee (the “Contractual Management Fee”) and the actual management fee (the “Actual Management Fee”) payable by the Fund to the Manager under the Management Agreement and the sub-advisory fee (the “Sub-Advisory Fee”) payable by the Manager to the Sub-Adviser under the Sub-Advisory Agreement in view of the nature, extent and overall quality of the management, investment advisory and other services provided by the Manager and the Sub-Adviser, respectively. The Board noted that the Sub-Advisory Fee is paid by the Manager, not the Fund, and, accordingly, that the retention of the Sub-Adviser does not increase the fees or expenses otherwise incurred by the Fund’s stockholders.
56
Western Asset Managed Municipals Fund Inc.
In addition, the Board received and considered information and analyses prepared by Broadridge (the “Broadridge Expense Information”) comparing the Contractual Management Fee and the Actual Management Fee and the Fund’s actual total expenses with those of funds in an expense group (the “Expense Group”), as well as a broader group of funds, each selected and provided by Broadridge. The comparison was based upon the constituent funds’ latest fiscal years. It was noted that while the Board found the Broadridge Expense Information generally useful, they recognized its limitations, including that the data may vary depending on the selection of the peer group.
The Broadridge Expense Information showed that the Fund’s Contractual Management Fee was equal to the Expense Group median. The Broadridge Expense Information also showed that the Fund’s Actual Management Fee was below the Expense Group median based on common share assets and equal to the Expense Group median based on total managed assets, which includes common share assets and leveraged assets. The Broadridge Expense Information also showed that the Fund’s actual total expenses were below the Expense Group median based on both common share assets and total managed assets. The Board took into account management’s discussion of the Fund’s expenses.
The Board also reviewed Contract Renewal Information regarding fees charged by the Manager and/or the Sub-Adviser to other U.S. clients investing primarily in an asset class similar to that of the Fund, including, where applicable, institutional and separate accounts. The Manager reviewed with the Board the differences in services provided to these different types of accounts, noting that the Fund is provided with certain administrative services, office facilities, and Fund officers, and that the Fund is subject not only to heightened regulatory requirements relative to institutional clients but also to requirements for listing on the New York Stock Exchange, and that the Manager coordinates and oversees the provision of services to the Fund by other fund service providers. The Board considered the fee comparisons in view of the different services provided in managing these other types of clients and funds.
The Board considered the overall management fee, the fees of the Sub-Adviser and the amount of the management fee retained by the Manager after payment of the Sub-Advisory Fee in each case in view of the services rendered for those amounts. The Board also received an analysis of complex-wide management fees provided by the Manager, which, among other things, set out a framework of fees based on asset classes.
Taking all of the above into consideration, as well as the factors identified below, the Board determined that the management fee and the Sub-Advisory Fee were reasonable in view of the nature, extent and overall quality of the management, investment advisory and other services provided by the Manager and the Sub-Adviser to the Fund under the Management Agreement and the Sub-Advisory Agreement, respectively.
Western Asset Managed Municipals Fund Inc.
57
Board approval of management and
subadvisory agreements (unaudited) (cont’d)
Manager Profitability
The Board, as part of the Contract Renewal Information, received an analysis of the profitability to the Manager and its affiliates in providing services to the Fund for the Manager’s fiscal years ended September 30, 2025 and September 30, 2024. The Board also received profitability information with respect to the Franklin Templeton fund complex as a whole. In addition, the Board received Contract Renewal Information with respect to the Manager’s revenue and cost allocation methodologies used in preparing such profitability data. It was noted that the allocation methodologies had been reviewed by an outside consultant. In response to the Board’s request, the Manager provided and the Board reviewed information comparing the profitability of Franklin Resources, Inc. with that of publicly traded peer fund management companies. The profitability to the Sub-Adviser was not considered to be a material factor in the Board’s considerations since the Sub-Advisory Fee is paid by the Manager, not the Fund, although the Board noted the affiliation of the Manager with the Sub-Adviser. The profitability of the Manager and its affiliates was considered by the Board to be reasonable in view of the nature, extent and quality of services provided to the Fund.
Economies of Scale
The Board received and discussed Contract Renewal Information concerning whether the Manager realizes economies of scale if the Fund’s assets grow. The Board noted that because the Fund is a closed-end fund, it has limited ability to increase its assets. The Board determined that the management fee structure was appropriate under the circumstances. For similar reasons as stated above with respect to the Sub-Adviser’s profitability and the costs of the Sub-Adviser’s provision of services, the Board did not consider the potential for economies of scale in the Sub-Adviser’s management of the Fund to be a material factor in the Board’s consideration of the Sub-Advisory Agreement.
Other Benefits to the Manager and the Sub-Adviser
The Board considered other benefits received by the Manager, the Sub-Adviser and their affiliates as a result of their relationship with the Fund, including the opportunity to offer additional products and services to the Fund’s stockholders. In view of the costs of providing investment management and other services to the Fund and the ongoing commitment of the Manager and the Sub-Adviser to the Fund, the Board considered that the ancillary benefits received by the Manager and its affiliates, including the Sub-Adviser, were reasonable.
58
Western Asset Managed Municipals Fund Inc.
Additional information (unaudited)
Information about Directors and Officers
The business and affairs of Western Asset Managed Municipals Fund Inc. (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Directors. The business address of each Director is c/o Jane Trust, Franklin Templeton, One Madison Avenue, 17th Floor, New York, NY 10010.
Information pertaining to the Directors and officers of the Fund is set forth below. The Fund’s annual proxy statement includes additional information about Directors and is
available, without charge, upon request by calling the Fund at 1-888-777-0102.     
Independent Directors† 
Robert D. Agdern
Year of birth
1950
Position(s) held with Fund1
Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, and Compliance Liaison,
Class III
Term of office1 and year service began
Since 2015
Principal occupation(s) during the past five years
Member of the Advisory Committee of the Dispute Resolution
Research Center at the Kellogg Graduate School of Business,
Northwestern University (2002 to 2016); formerly, Deputy
General Counsel responsible for western hemisphere matters
for BP PLC (1999 to 2001); Associate General Counsel at Amoco
Corporation responsible for corporate, chemical, and refining
and marketing matters and special assignments (1993 to 1998)
(Amoco merged with British Petroleum in 1998 forming BP PLC)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
None
Carol L. Colman
Year of birth
1946
Position(s) held with Fund1
Director and Member of Nominating, Audit and Compensation
Committees, and Chair of Pricing and Valuation Committee,
Class I
Term of office1 and year service began
Since 2006
Principal occupation(s) during the past five years
President, Colman Consulting Company (consulting)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
None
Western Asset Managed Municipals Fund Inc.
59
Additional information (unaudited) (cont’d)
Information about Directors and Officers
Independent Directors† (cont’d) 
Anthony Grillo
Year of birth
1955
Position(s) held with Fund1
Director and Member of Nominating, Audit, Compensation and
Pricing and Valuation Committees, Class I
Term of office1 and year service began
Since 2024
Principal occupation(s) during the past five years
Retired; Founder, Managing Director and Partner of American
Securities Opportunity Funds (private equity and credit firm)
(2006 to 2018); formerly, Senior Managing Director of Evercore
Partners Inc. (investment banking) (2001 to 2004); Senior
Managing Director of Joseph Littlejohn & Levy, Inc. (private
equity firm) (1999 to 2001); Senior Managing Director of The
Blackstone Group L.P. (private equity and credit firm) (1991 to
1999)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
Director of Littelfuse, Inc. (electronics manufacturing) (since
1991); formerly, Director of Oaktree Acquisition Corp. II (2020
to 2022); Director of Oaktree Acquisition Corp. (2019 to 2021)
Eileen A. Kamerick
Year of birth
1958
Position(s) held with Fund1
Chair (since November 15, 2024) and Member of Nominating,
Compensation, Pricing and Valuation and Audit Committees,
Class II
Term of office1 and year service began
Since 2013
Principal occupation(s) during the past five years
Chief Executive Officer, The Governance Partners, LLC
(consulting firm) (since 2015); National Association of Corporate
Directors Board Leadership Fellow (since 2016, with Directorship
Certification since 2019) and NACD 2022 Directorship 100
honoree; Adjunct Professor, Georgetown University Law Center
(since 2021); Adjunct Professor, The University of Chicago Law
School (since 2018); Adjunct Professor, University of Iowa
College of Law (since 2007); formerly, Chief Financial Officer,
Press Ganey Associates (health care informatics company) (2012
to 2014); Managing Director and Chief Financial Officer,
Houlihan Lokey (international investment bank) and President,
Houlihan Lokey Foundation (2010 to 2012)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
Director, VALIC Company I (since October 2022); Director of ACV
Auctions Inc. (since 2021); Director of Associated Banc-Corp
(financial services company) (since 2007); formerly, Director of
Hochschild Mining plc (precious metals company) (2016
to 2023); formerly Trustee of AIG Funds and Anchor Series Trust
(2018 to 2021)
60
Western Asset Managed Municipals Fund Inc.
Independent Directors† (cont’d) 
Nisha Kumar
Year of birth
1970
Position(s) held with Fund1
Director and Member of Nominating, Compensation and Pricing
and Valuation Committees, and Chair of Audit Committee,
Class II
Term of office1 and year service began
Since 2019
Principal occupation(s) during the past five years
Formerly, Managing Director and the Chief Financial Officer and
Chief Compliance Officer of Greenbriar Equity Group, LP (2011
to 2021); formerly, Chief Financial Officer and Chief
Administrative Officer of Rent the Runway, Inc. (2011); Executive
Vice President and Chief Financial Officer of AOL LLC, a
subsidiary of Time Warner Inc. (2007 to 2009); Member of the
Council on Foreign Relations
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
Director of Stonepeak-Plus Infrastructure Fund LP (since 2025);
Director of Birkenstock Holding plc (since 2023); Director of The
India Fund, Inc. (since 2016); formerly, Director of Aberdeen
Income Credit Strategies Fund (2017 to 2018); and Director of
The Asia Tigers Fund, Inc. (2016 to 2018)
Peter Mason
Year of birth
1959
Position(s) held with Fund1
Director and Member of Audit, Nominating and Pricing and
Valuation Committees, and Chair of Compensation Committee,
Class III
Term of office1 and year service began
Since 2024
Principal occupation(s) during the past five years
Arbitrator and Mediator (self-employed) (since 2021); formerly,
Global General Counsel of UNICEF (intergovernmental
organization) (1998 to 2021)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
Chairman of University of Sydney USA Foundation (since 2020);
formerly, Director of the Radio Workshop US, Inc. (2023 to 2026)
Western Asset Managed Municipals Fund Inc.
61
Additional information (unaudited) (cont’d)
Information about Directors and Officers
Independent Directors† (cont’d) 
Hillary A. Sale
Year of birth
1961
Position(s) held with Fund1
Director and Member of Audit, Compensation and Pricing and
Valuation Committees, and Chair of Nominating Committee,
Class II
Term of office1 and year service began
Since 2024
Principal occupation(s) during the past five years
Agnes Williams Sesquicentennial Professor of Leadership and
Corporate Governance, Georgetown Law; and Professor of
Management, McDonough School of Business (since 2018);
formerly, Associate Dean for Strategy, Georgetown Law (2020
to 2023); National Association of Corporate Directors Board
Faculty Member (since 2021)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
22
Other board memberships held by Director during the past five
years
Director of CBOE U.S. Securities Exchanges, CBOE Futures
Exchange, and CBOE SEF, Director (since 2022); Advisory Board
Member of Foundation Press (academic book publisher)
(since 2019); formerly, a Member of the Board of Governors of
FINRA (2016 to 2022)
 
Interested Director and Officer 
Jane Trust, CFA3
Year of birth
1962
Position(s) held with Fund1
Director, President and Chief Executive Officer, Class III
Term of office1 and year service began
Since 2015
Principal occupation(s) during the past five years
Senior Vice President, Fund Board Management, Franklin
Templeton (since 2020); Officer and/or Trustee/Director of 115
funds associated with FTFA or its affiliates (since 2015); Trustee
of Putnam Family of Funds consisting of 105 portfolios; President
and Chief Executive Officer of FTFA (since 2015); formerly, Senior
Managing Director (2018 to 2020) and Managing Director (2016
to 2018) of Legg Mason & Co., LLC (“Legg Mason & Co.”); and
Senior Vice President of FTFA (2015)
Number of portfolios in fund complex2 overseen by Director
(including the Fund)
Trustee/Director of Franklin Templeton funds consisting of 115
portfolios; Trustee of Putnam Family of Funds consisting of 105
portfolios
Other board memberships held by Director during the past five
years
None
 
62
Western Asset Managed Municipals Fund Inc.
Additional Officers 
Fred Jensen
 
Franklin Templeton
One Madison Avenue, 17th Floor, New York, NY 10010
 
Year of birth
1963
Position(s) held with Fund1
Chief Compliance Officer
Term of office1 and year service began
Since 2020
Principal occupation(s) during the past five years
Director - Global Compliance of Franklin Templeton (since 2020);
Managing Director of Legg Mason & Co. (2006 to 2020); Director
of Compliance, Legg Mason Office of the Chief Compliance
Officer (2006 to 2020); formerly, Chief Compliance Officer of
Legg Mason Global Asset Allocation (prior to 2014); Chief
Compliance Officer of Legg Mason Private Portfolio Group (prior
to 2013); formerly, Chief Compliance Officer of The Reserve
Funds (investment adviser, funds and broker-dealer) (2004) and
Ambac Financial Group (investment adviser, funds and broker-
dealer) (2000 to 2003)
Marc A. De Oliveira
 
Franklin Templeton
100 First Stamford Place, 6th Floor, Stamford, CT 06902
 
Year of birth
1971
Position(s) held with Fund1
Secretary and Chief Legal Officer
Term of office1 and year service began
Since 2023
Principal occupation(s) during the past five years
Associate General Counsel of Franklin Templeton (since 2020);
Secretary and Chief Legal Officer (since 2020) and Assistant
Secretary of certain funds in the Franklin Templeton fund
complex (since 2006); formerly, Managing Director (2016
to 2020) and Associate General Counsel of Legg Mason & Co.
(2005 to 2020)
Thomas C. Mandia
 
Franklin Templeton
100 First Stamford Place, 6th Floor, Stamford, CT 06902
 
Year of birth
1962
Position(s) held with Fund1
Senior Vice President
Term of office1 and year service began
Since 2022
Principal occupation(s) during the past five years
Senior Associate General Counsel to Franklin Templeton
(since 2020); Senior Vice President (since 2020) and Assistant
Secretary of certain funds in the Franklin Templeton fund
complex (since 2006); Secretary of FTFA (since 2006); Secretary
of LMAS (since 2002) and LMFAM (formerly registered
investment advisers) (since 2013); formerly, Managing Director
and Deputy General Counsel of Legg Mason & Co. (2005
to 2020)
Western Asset Managed Municipals Fund Inc.
63
Additional information (unaudited) (cont’d)
Information about Directors and Officers
Additional Officers (cont’d) 
Christopher Berarducci
 
Franklin Templeton
One Madison Avenue, 17th Floor, New York, NY 10010
 
Year of birth
1974
Position(s) held with Fund1
Treasurer and Principal Financial Officer
Term of office1 and year service began
Since 2019
Principal occupation(s) during the past five years
Vice President, Fund Administration and Reporting, Franklin
Templeton (since 2020); Treasurer (since 2010) and Principal
Financial Officer (since 2019) of certain funds associated with
Legg Mason & Co. or its affiliates; formerly, Managing
Director (2020), Director (2015 to 2020), and Vice President (2011
to 2015) of Legg Mason & Co.
Jeanne M. Kelly
 
Franklin Templeton
One Madison Avenue, 17th Floor, New York, NY 10010
 
Year of birth
1951
Position(s) held with Fund1
Senior Vice President
Term of office1 and year service began
Since 2007
Principal occupation(s) during the past five years
U.S. Fund Board Team Manager, Franklin Templeton (since 2020);
Senior Vice President of certain funds associated with Legg
Mason & Co. or its affiliates (since 2007); Senior Vice President
of FTFA (since 2006); President and Chief Executive Officer of
LMAS and LMFAM (since 2015); formerly, Managing Director of
Legg Mason & Co. (2005 to 2020); and Senior Vice President of
LMFAM (2013 to 2015)
†Directors who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.
1The Fund’s Board of Directors is divided into three classes: Class I, Class II and Class III. The terms of office of the Class I, II and III Directors expire at the Annual Meetings of Stockholders in the year 2027, year 2028 and year 2026, respectively, or thereafter in each case when their respective successors are duly elected and qualified. The Fund’s executive officers are chosen each year, to hold office until their successors are duly elected and qualified.
2The term “fund complex” means two or more registered investment companies that:
 (a) hold themselves out to investors as related companies for purposes of investment and investor services; or
 (b) have a common investment adviser or have an investment adviser that is an affiliated person of the investment adviser of any of the other registered investment companies.
3Ms. Trust is an “interested person” of the Fund as defined in the 1940 Act because Ms. Trust is an officer of FTFA and certain of its affiliates.
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Annual chief executive officer and
principal financial officer certifications (unaudited)
The Fund’s Chief Executive Officer (“CEO”) has submitted to the NYSE the required annual certification and the Fund also has included the Certifications of the Fund’s CEO and Principal Financial Officer required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC for the period of this report.
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Other shareholder communications regarding accounting matters (unaudited)
The Fund’s Audit Committee has established guidelines and procedures regarding the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (collectively, “Accounting Matters”). Persons with complaints or concerns regarding Accounting Matters may submit their complaints to the Chief Compliance Officer (“CCO”). Persons who are uncomfortable submitting complaints to the CCO, including complaints involving the CCO, may submit complaints directly to the Fund’s Audit Committee Chair. Complaints may be submitted on an anonymous basis.
The CCO may be contacted at:
Franklin Resources, Inc.
Compliance Department
One Madison Avenue, 17th Floor
New York, NY 10010
Complaints may also be submitted by telephone at 1-800-742-5274. Complaints submitted through this number will be received by the CCO.
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Summary of information regarding the Fund (unaudited)
Investment Objective
The Fund’s investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with preservation of capital.
When pursuing its investment objective, the Fund seeks to maximize current income exempt from federal income tax as is consistent with preservation of principal.
Principal Investment Policies and Strategies
The Fund invests primarily in long-term investment grade municipal debt securities issued by state and local governments, political subdivisions, agencies and public authorities (municipal obligations). The Fund’s policy under normal market conditions is to invest at least 80% of its total assets in investment grade municipal obligations. This policy is fundamental. All other policies and percentage limitations of the Fund as described below may be modified by the Fund’s board of directors if, in the reasonable exercise of its business judgment, it determines that modification is necessary or appropriate to carry out the Fund’s investment objective.
The Fund defines municipal obligations to include bonds and notes such as:
• general obligation bonds issued for various public purposes and supported by the municipal issuer’s credit and taxing power;
• revenue bonds whose principal and interest is payable only from the revenues of a particular project or facility. Industrial revenue bonds depend on the credit standing of a private issuer and may be subject to the federal alternative minimum tax, or AMT; and
• notes that are short-term obligations of municipalities or agencies sold in anticipation of a bond sale, collection of taxes or receipt of other revenues.
Municipal obligations may have all types of interest rate payment and reset terms, including fixed rate, floating and variable rate, zero coupon, payment in kind and auction rate features.
Under normal market conditions, the Fund is obligated to invest at least 80% of its total assets in municipal securities rated, at the time of investment, no lower than BBB, SP-2 or A-1 by S&P or Baa, MIG3 or Prime-1 by Moody’s, or BBB or F1 by Fitch. The Fund may, under normal market conditions, invest up 20% of its total assets in municipal obligations that are, at the time of investment, rated below investment grade (“high-yield”) by a nationally recognized statistical rating organization (“NRSRO”) or, if unrated, of equivalent quality as determined by the investment manager. For credit ratings purposes, pre-refunded bonds are deemed to be unrated. Western Asset determines the credit quality of pre-refunded bonds based on the quality of the escrowed collateral and such other factors as Western Asset deems appropriate.
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Summary of information regarding the Fund (unaudited) (cont’d)
The Fund’s policy on the credit quality of its investments apply only at the time of the purchase of a security, and the Fund is not required to dispose of securities in the event that S&P or Moody’s or any other NRSRO downgrades its assessment of the credit characteristics of a particular issuer or in the event the manager reassesses its view with respect to the credit quality of the issuer thereof.
In addition, the Fund has the ability to invest in participation interests in municipal bonds, including industrial development bonds, private activity bonds and floating and variable rate securities. The Fund may also invest in non-appropriation municipal lease obligations.
The Fund may enter into TOB transactions and may invest in inverse floating rate instruments issued in TOB transactions. In a TOB transaction, the Fund transfers securities (typically municipal bonds or other municipal securities) into a special purpose entity, referred to as a TOB trust. The TOB trust generally issues floating rate notes to third parties and residual interest TOBs to the Fund. The net proceeds of the sale of the floating rate notes, after expenses, are received by the Fund and may be invested in additional securities. The residual interest TOBs are inverse floating rate debt instruments (“inverse floaters”), as the return on those bonds is inversely related to changes in a specified interest rate. Distributions on the inverse floaters paid to the Fund will be reduced or, in the extreme, eliminated as short-term interest rates rise and will increase when such interest rates fall. Floating rate notes issued by a TOB trust may be senior to the inverse floaters held by the Fund. The Fund may enter into TOB transactions on either a non-recourse or recourse basis. If the Fund invests in a TOB trust on a recourse basis, it will bear the risk of loss with respect to any liquidation of the TOB trust. The Fund will look through to the underlying securities held by a TOB trust for purposes of calculating compliance with the Fund’s 80% policy. TOB transactions create leverage to the extent the Fund invests the net proceeds of the floating rate notes in additional securities. The Fund currently intends to segregate or earmark liquid assets or otherwise cover its obligations with respect to its investments in TOB trusts.
The Fund uses leverage from the offering of preferred stock in an effort to increase the Fund’s income available for distribution to holders of its common stock. Under the 1940 Act, the Fund may use leverage through the issuance of preferred stock in an aggregate amount of liquidation preference attributable to the preferred stock of up to approximately 50% of the Fund’s total assets less all liabilities and indebtedness not represented by senior securities immediately after such issuance.
The Fund invests with the objective that dividends paid by the Fund may be excluded by shareholders from their gross incomes for federal income tax purposes. A portion of the Fund’s dividends may be taxable. The Fund may invest without limit in private activity bonds. Income from these bonds may be a special preference item for purposes of the AMT. The Fund may not be a suitable investment if you are subject to the AMT.
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The Fund is classified as a diversified fund under the 1940 Act. The Fund intends to conduct its operations, however, so as to qualify as a “regulated investment company” for purposes of the Code, which will relieve the Fund of any liability for federal income tax to the extent its earnings are distributed to shareholders. To qualify as a regulated investment company,the Fund will, among other things, limit its investments so that, at the close of each quarter of its taxable year (1) not more than 25% of the market value of the Fund’s total assets will be invested in the securities of a single issuer and (2) with respect to 50% of the market value of its total assets, not more than 5% of the market value of its total assets will be invested in the securities of a single issuer.
The Fund may not borrow money, except for temporary or emergency purposes, and then not in amounts that are greater than 15% of total assets (including the amount borrowed). The Fund also may not buy more securities if the Fund has borrowed money in amounts greater than 5% of net assets.
The Fund generally will not invest more than 25% of its total assets in any single industry. Governmental issuers of municipal obligations are not considered part of any “industry.” Municipal obligations backed only by the assets and revenues of non-governmental users may be deemed to be issued by the non-governmental users, and would be subject to the Fund’s 25% industry limitation. The Fund may invest more than 25% of its total assets in a broad segment of the municipal obligations market, if Western Asset determines that the yields available from obligations in a particular segment of the market justify the additional risks associated with a large investment in the segment. The Fund reserves the right to invest more than 25% of its assets in industrial development bonds or in issuers located in the same state. If the Fund was to invest more than 25% of its total assets in issuers located in the same state, it would be more susceptible to adverse economic, business or regulatory conditions in that state.
Municipal obligations are classified as general obligation bonds, revenue bonds and notes. General obligation bonds are secured by the issuer’s pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenue derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source, but not from the general taxing power. Notes are short-term obligations of issuing municipalities or agencies and are sold in anticipation of a bond sale, collection of taxes or receipt of other revenues. Municipal obligations bear fixed, floating and variable rates of interest, and variations exist in the security of municipal obligations, both within a particular classification and between classifications.
The yields on, and values of, municipal obligations are dependent on a variety of factors, including general economic and monetary conditions, money market factors, conditions in the municipal obligations markets, size of a particular offering, maturity of the obligation
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Summary of information regarding the Fund (unaudited) (cont’d)
and rating of the issue. Consequently, municipal obligations with the same maturity, coupon and rating may have different yields or values, whereas obligations of the same maturity and coupon with different ratings may have the same yield or value.
Opinions relating to the validity of municipal obligations and to the exemption of interest on them from federal income taxes are rendered by bond counsel to the respective issuers at the time of issuance. Neither the Fund nor Western Asset will review the procedures relating to the issuance of municipal obligations or the basis for opinions of counsel. Issuers of municipal obligations may be subject to the provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors. In addition, the obligations of those issuers may become subject to laws enacted in the future by Congress, state legislatures or referenda extending the time for payment of principal and/or interest, or imposing other constraints upon enforcement of the obligations or upon the ability of municipalities to levy taxes. The possibility also exists that, as a result of litigation or other conditions, the power or ability of any issuer to pay, when due, the principal of, and interest on its obligations may be materially affected.
Under normal conditions, the Fund may hold up to 20% of its total assets in cash or money market instruments, including taxable money market instruments (collectively, “taxable investments”). In addition, the Fund may take a temporary defensive posture and invest without limitation in short-term municipal obligations and taxable investments, upon a determination by the manager that market conditions warrant such a posture. To the extent the Fund holds taxable investments, the Fund may not be fully achieving its investment objective.
The Fund may invest in securities of other investment companies. To the extent it does, Fund shareholders will indirectly pay a portion of the operating costs of such companies, in addition to the expenses that the Fund bears directly in connection with its own operation. Investing in securities issued by other investment companies, including exchange-traded funds that invest primarily in municipal securities, involves risks similar to those of investing directly in the securities in which those investment companies invest.
Principal Risk Factors
There is no assurance that the Fund will meet its investment objectives. You may lose money on your investment in the Fund. The value of the Fund’s shares may go up or down, sometimes rapidly and unpredictably. Market conditions, financial conditions of issuers represented in the Fund’s portfolio, investment strategies, portfolio management, and other factors affect the volatility of the Fund’s shares. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. The following summarizes the principal risks of investing in the Fund.
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Investment and Market Risk. An investment in the Fund is subject to investment risk, including the possible loss of the entire amount that you invest. Your investment in the Common Stock represents an indirect investment in the fixed income securities and other investments owned by the Fund, most of which could be purchased directly. The value of the Fund’s portfolio securities may move up or down, sometimes rapidly and unpredictably. At any point in time, your Common Stock may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.
Interest Rate Risk. The Fund expects that under normal market circumstances at least 80% of its assets will consist of investment grade tax-exempt securities, the market value of which generally varies inversely with changes in prevailing interest rates. The market value of the Fund’s investments will change in response to changes in interest rates and other factors. During periods of declining interest rates, the values of fixed-income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. The magnitude of these fluctuations is generally greater for securities with longer maturities. The subadviser’s judgment about interest rate trends may prove to be incorrect.
Tax-Exempt Securities Risks. In general, the secondary market for tax-exempt securities is less liquid than that for taxable fixed-income securities. Consequently, the ability of the Fund to buy and sell tax-exempt securities may, at any particular time and with respect to any particular securities, be limited. The amount of information about the financial condition of an issuer of tax-exempt securities may not be as extensive as information about corporations whose securities are publicly traded. Obligations of issuers of tax-exempt securities may be subject to the provisions of bankruptcy, insolvency and the United States Bankruptcy Code and applicable state laws, which could limit the ability of the Fund to recover payments of principal or interest on such securities.
Certain tax-exempt securities which may be held by the Fund may permit the issuer at its option to “call,” or redeem, its securities. If an issuer were to redeem tax-exempt securities held by the Fund during a time of declining interest rates, the Fund may realize a capital loss on its investment if the security was purchased at a premium and may not be able to reinvest the proceeds in tax-exempt securities providing as high a level of investment return as the securities redeemed.
Municipal Securities Risk. Liquidity in the municipal securities market may vary from time to time. At times of decreased liquidity, the ability of the Fund to buy and sell municipal securities may, with respect to any particular securities, be limited. The amount of information about the financial condition of an issuer of municipal securities may not be as extensive as information about corporations whose securities are publicly traded, and the Fund’s performance may therefore be more dependent on the sub-adviser’s analytical abilities than if the Fund were to invest in stocks or taxable bonds. The secondary market
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Summary of information regarding the Fund (unaudited) (cont’d)
for municipal securities, particularly the below investment grade municipal securities in which the Fund may invest, also tends to be less developed or liquid than many other securities markets, which may adversely affect the Fund’s ability to sell its municipal securities at attractive prices.
Obligations of issuers of municipal securities may be subject to the provisions of bankruptcy, insolvency and the United States Bankruptcy Code and applicable state laws, which could limit the ability of the Fund to recover payments of principal or interest on such securities.
Certain municipal securities which may be held by the Fund may permit the issuer at its option to “call,” or redeem, its securities. If an issuer were to redeem municipal securities held by the Fund during a time of declining interest rates, the Fund may realize a capital loss on its investment if the security was purchased at a premium and may not be able to reinvest the proceeds in municipal securities providing as high a level of investment return as the securities redeemed.
Inverse Floating Rate Securities and TOBs Risk. Subject to certain limitations, the Fund may invest in inverse floating rate securities. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a “tender option bond trust”) formed by a third party sponsor for the purpose of holding municipal bonds purchased from the Fund or from another third party. An investment in an inverse floating rate security may involve greater risk than an investment in a fixed-rate bond. Because changes in the interest rate on the underlying security or index inversely affect the residual interest paid on the inverse floating rate security, the value of an inverse floating rate security is generally more volatile than that of a fixed-rate bond.
Inverse floating rate securities have interest rate adjustment formulas which generally reduce or, in the extreme, eliminate the interest paid to the Fund when short-term interest rates rise, and increase the interest paid to the Fund when short-term interest rates fall. Inverse floating rate securities have varying degrees of liquidity, and the market for these securities is relatively volatile. These securities tend to underperform the market for fixed-rate bonds in a rising interest rate environment, but tend to outperform the market for fixed-rate bonds when interest rates decline. Shifts in long-term interest rates may, however, alter this tendency.
During times of reduced market liquidity, such as at the present, the Fund may not be able to sell municipal securities readily at prices reflecting the values at which the securities are carried on the Fund’s books. Sales of large blocks of municipal securities by market participants, such as the Fund, that are seeking liquidity can further reduce municipal security prices in an illiquid market. The Fund may seek to make sales of large blocks of municipal securities as part of its investment strategy or it may be required to raise cash to
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re-collateralize, unwind or “collapse” tender option bond trusts that issued inverse floating rate securities to the Fund or to make payments to such trusts to enable them to pay for tenders of the short-term securities they have issued if the remarketing agents for those municipal securities are unable to sell the short-term securities in the marketplace to other buyers (typically tax-exempt money market funds). The Fund’s potential exposure to losses related to or on inverse floating rate securities may increase beyond the value of the Fund’s inverse floater investments as the Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates.
Although volatile, inverse floating rate securities typically offer the potential for yields exceeding the yields available on fixed-rate bonds with comparable credit quality, coupon, call provisions and maturity. These securities usually permit the investor to convert the floating rate to a fixed rate (normally adjusted downward), and this optional conversion feature may provide a partial hedge against rising rates if exercised at an opportune time.
Investment in inverse floating rate securities may amplify the effects of the Fund’s use of leverage. Any economic effect of leverage through the Fund’s purchase of inverse floating rate securities will create an opportunity for increased Common Stock net income and returns, but may also result in losses if the cost of leverage exceeds the return on the inverse floating rate securities purchased by the Fund.
TOB transactions expose the Fund to leverage and credit risk, and generally involve greater risk than investments in fixed rate municipal bonds, including the risk of loss of principal. The interest payments that the Fund would typically receive on inverse floaters acquired in such transactions vary inversely with short-term interest rates and will be reduced (and potentially eliminated) when short-term interest rates increase. Inverse floaters will generally underperform the market for fixed rate municipal securities when interest rates rise. The value and market for inverse floaters can be volatile, and inverse floaters can have limited liquidity. Investments in inverse floaters issued in TOB transactions are derivative instruments and, therefore, are also subject to the risks generally applicable to investments in derivatives.
Insurance Risk. The Fund may purchase municipal securities that are secured by insurance, bank credit agreements or escrow accounts. The credit quality of the companies that provide such credit enhancements will affect the value of those securities. Certain significant providers of insurance for municipal securities have recently incurred significant losses as a result of exposure to sub-prime mortgages and other lower credit quality investments that have experienced recent defaults or otherwise suffered extreme credit deterioration. As a result, such losses have reduced the insurers’ capital and called into question their continued ability to perform their obligations under such insurance if they are called upon to do so in the future. While an insured municipal security will typically be deemed to have the rating of its insurer, if the insurer of a municipal security suffers a
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Summary of information regarding the Fund (unaudited) (cont’d)
downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer, the rating of the underlying municipal security will be more relevant and the value of the municipal security would more closely, if not entirely, reflect such rating. In such a case, the value of insurance associated with a municipal security would decline, and the insurance may not add any value. The insurance feature of a municipal security does not guarantee the full payment of principal and interest through the life of an insured obligation, the market value of the insured obligation or the net asset value of the Common Stock represented by such insured obligation.
Leverage Risk. The value of your investment may be more volatile due to the Fund’s leveraged capital structure and use of instruments that have a leveraging effect on the Fund’s portfolio. The Fund may also have to sell assets at inopportune times to satisfy its obligations created by the use of leverage or derivatives. The use of leverage is considered to be a speculative investment practice and may result in the loss of a substantial amount, and possibly all, of the Fund’s assets.
Special Risks Related to Certain Municipal Securities. The Fund may invest in municipal leases and certificates of participation in such leases. Municipal leases and certificates of participation involve special risks not normally associated with general obligations or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt issuance limitations are deemed to be inapplicable because of the inclusion in many leases or contracts of “non-appropriation” clauses that relieve the governmental issuer of any obligation to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate governmental body on a yearly or other periodic basis. In addition, such leases or contracts may be subject to the temporary abatement of payments in the event the governmental issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover the Fund’s original investment. In the event of non-appropriation, the issuer would be in default and taking ownership of the assets may be a remedy available to the Fund, although the Fund does not anticipate that such a remedy would normally be pursued. To the extent that the Fund invests in unrated municipal leases or participates in such leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. Certificates of participation, which represent interests in unmanaged pools of municipal leases or installment contracts, involve the same risks as the underlying municipal leases. In addition, the Fund may be dependent upon the municipal authority
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issuing the certificates of participation to exercise remedies with respect to the underlying securities. Certificates of participation also entail a risk of default or bankruptcy, both of the issuer of the municipal lease and also the municipal agency issuing the certificate of participation.
Alternative Minimum Tax and Taxable Income Risk. The Fund will qualify to pay “exempt-interest dividends,” which are exempt from regular U.S. federal income tax, for any taxable year only if at least 50% of the value of its assets, as of the close of each quarter of the taxable year, consists of state or local obligations described in Section 103(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Assuming that the Fund qualifies to pay exempt-interest dividends, it is anticipated that certain of the Fund’s distributions will nevertheless constitute taxable income. Moreover, a portion of the Fund’s exempt-interest dividends may be subject to federal alternative minimum tax, and all or a portion of such dividends may be subject to state and local taxation.
A portion of the Fund’s distributions may be taxable to Common Stockholders. In particular, the Fund may use a variety of derivative instruments and may sell certain fixed-income securities short including, but not limited to, U.S. Treasuries, for investment and/or hedging purposes. To the extent that the Fund utilizes these strategies the Fund could generate taxable income and gains. Distributions of any capital gain or other taxable income (including gains and “market discount” realized by the Fund on the sale of municipal securities) will be taxable to Common Stockholders. The Fund may not be a suitable investment for investors subject to the federal alternative minimum tax or who would become subject to such tax by investing in the Fund. The suitability of an investment in Common Stock will depend upon a comparison of the after tax yield likely to be provided from the Fund with that from comparable tax-exempt investments not subject to the alternative minimum tax, and from comparable fully taxable investments, in light of each such investor’s tax position. Special considerations apply to corporate investors.
Certain provisions of the Code relating to the issuance of municipal obligations impose restrictions on the volume of municipal obligations qualifying for federal tax exemption. One effect of these provisions could be to increase the cost of the municipal securities available for purchase by the Fund and thus reduce available yield. Legislative proposals that may further restrict or eliminate the federal income tax exemption for interest on municipal obligations may be introduced in the future. The value of the Fund’s investments and its net asset value may be adversely affected by changes in tax rates and policies. Because interest income from municipal securities normally is not subject to regular federal income taxation, the attractiveness of municipal securities in relation to other investment alternatives is affected by changes in federal income tax rates or changes in the tax-exempt status of interest income from municipal securities. Any proposed or actual changes in such rates or exempt status, therefore, can significantly affect the demand for and supply,
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Summary of information regarding the Fund (unaudited) (cont’d)
liquidity and marketability of municipal securities. This could in turn affect the Fund’s net asset value and ability to acquire and dispose of municipal securities at desirable yield and price levels.
Below Investment Grade (High Yield or Junk Bond) Securities Risk. The Fund may invest up to 20% of its assets in municipal obligations of below investment grade quality. High yield debt securities are generally subject to greater credit risks than higher-grade debt securities, including the risk of default on the payment of interest or principal. High yield debt securities are considered speculative, typically have lower liquidity and are more difficult to value than higher grade bonds. High yield debt securities tend to be volatile and more susceptible to adverse events, credit downgrades and negative sentiments and may be difficult to sell at a desired price, or at all, during periods of uncertainty or market turmoil.
Credit Crisis Liquidity and Volatility Risk. The markets for credit instruments, including fixed income securities, have experienced periods of extreme illiquidity and volatility. General market uncertainty and consequent repricing risk have led to market imbalances of sellers and buyers, which in turn have also resulted in significant valuation uncertainties in a variety of debt securities, including certain fixed income securities. These conditions resulted, and in many cases continue to result in greater volatility, less liquidity, widening credit spreads and a lack of price transparency, with many debt securities remaining illiquid and of uncertain value. During times of reduced market liquidity, the Fund may not be able to sell securities readily at prices reflecting the values at which the securities are carried on the Fund’s books. Sales of large blocks of securities by market participants, such as the Fund, that are seeking liquidity can further reduce security prices in an illiquid market. These market conditions may make valuation of some of the Fund’s securities uncertain and/or result in sudden and significant valuation increases or decreases in its holdings. Illiquidity and volatility in the credit markets may directly and adversely affect the setting of dividend rates on the Common Stock.
Liquidity Risk. The Fund may invest, without limitation, in illiquid securities. Illiquid securities are securities that cannot be disposed of within seven days in the ordinary course of business at approximately the value at which the Fund has valued the securities. Liquidity risk exists when particular investments are difficult to sell. Securities may become illiquid after purchase by the Fund, particularly during periods of market turmoil. When the Fund holds illiquid investments, the portfolio may be harder to value, especially in changing markets, and if the Fund is forced to sell these investments in order to segregate assets or for other cash needs, the Fund may suffer a loss.
Government Intervention in Financial Markets Risk. U.S. federal and state governments and foreign governments, their regulatory agencies or self regulatory organizations may take additional actions that affect the regulation of the securities in which the Fund invests, or
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the issuers of such securities, in ways that are unforeseeable. Issuers of corporate fixed income securities might seek protection under the bankruptcy laws. Legislation or regulation may also change the way in which the Fund itself is regulated. Such legislation or regulation could limit or preclude the Fund’s ability to achieve its investment objectives. Western Asset will monitor developments and seek to manage the Fund’s portfolio in a manner consistent with achieving the Fund’s investment objectives, but there can be no assurance that it will be successful in doing so.
Derivatives Risk. The Fund may utilize a variety of derivative instruments for investment or risk management purposes, such as options, futures contracts, swap agreements and credit default swaps. Using derivatives can increase Fund losses and reduce opportunities for gains when market prices, interest rates, currencies, or the derivatives themselves behave in a way not anticipated by the Fund. Using derivatives also can have a leveraging effect and increase Fund volatility. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. Derivatives may not be available at the time or price desired, may be difficult to sell, unwind or value, and the counterparty may default on its obligations to the Fund. Derivatives are generally subject to the risks applicable to the assets, rates, indices or other indicators underlying the derivative. The value of a derivative may fluctuate more than the underlying assets, rates, indices or other indicators to which it relates. Use of derivatives may have different tax consequences for the Fund than an investment in the underlying security, and those differences may affect the amount, timing and character of income distributed to shareholders. The U.S. government and foreign governments are in the process of adopting and implementing regulations governing derivatives markets, including mandatory clearing of certain derivatives, margin and reporting requirements. The ultimate impact of the regulations remains unclear. Additional regulation of derivatives may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance or disrupt markets.
The Fund operates under Rule 18f-4 under the 1940 Act which, among other things, governs the use of derivative investments and certain financing transactions (e.g. reverse repurchase agreements) by registered investment companies. Among other things, Rule 18f-4 requires funds that invest in derivative instruments beyond a specified limited amount to apply a value at risk (VaR) based limit to their use of certain derivative instruments and financing transactions and to adopt and implement a derivatives risk management program. A fund that uses derivative instruments in a limited amount is not subject to the full requirements of Rule 18f-4. Compliance with Rule 18f-4 by the Fund could, among other things, make derivatives more costly, limit their availability or utility, or otherwise adversely affect their performance. Rule 18f-4 may limit the Fund’s ability to use derivatives as part of its investment strategy and may not work as intended to limit losses from derivatives.
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Summary of information regarding the Fund (unaudited) (cont’d)
Lending Securities. The risks in lending portfolio securities, as with other extensions of credit, consist of possible delays in recovery of the securities or possible loss of rights in the collateral should the borrower fail financially. Although voting rights, or rights to consent, with respect to the loaned securities pass to the borrower, the Fund retains the right to call the loans at any time on reasonable notice, and it will do so in order that the securities may be voted by the Fund if the holders of such securities are asked to vote upon or consent to matters materially affecting the investment. The Fund also may call such loans in order to sell the securities involved.
Counterparty Risk. The Fund may enter into transactions with counterparties that become unable or unwilling to fulfill their contractual obligations. There can be no assurance that any such counterparty will not default on its obligations to the Fund. In the event of a counterparty default, the Fund may be hindered or delayed in exercising rights against a counterparty and may experience significant losses. To the extent that the Fund enters into multiple transactions with a single or small set of counterparties, the Fund will be subject to increased counterparty risk.
Credit Risk. If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults or its credit is downgraded, or is perceived to be less creditworthy, or if the value of the assets underlying a security declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer and will be disproportionately affected by a default, downgrade or perceived decline in creditworthiness.
Prepayment Risk. Prepayments may cause losses on securities purchased at a premium. At times, some of the securities in which the Fund may invest may have higher than market interest rates and therefore may be purchased at a premium above their par value. Unscheduled prepayments, which are made at par, may cause the Fund to experience a loss equal to any unamortized premium. In addition, a reduction in prepayments may increase the effective maturities of these securities, subjecting them to a greater risk of decline in market value in response to rising interest rates than traditional debt securities, and, therefore, potentially increasing the volatility of the Fund.
Inflation/Deflation Risk. Inflation risk is the risk that the value of certain assets or income from the Fund’s investments will be worth less in the future as inflation decreases the value of money. As inflation increases, the real value of the Common Stock and distributions on the Common Stock can decline. In addition, during any periods of rising inflation, the dividend rates or borrowing costs associated with the Fund’s use of leverage would likely increase, which would tend to further reduce returns to stockholders. Deflation risk is the risk that prices throughout the economy decline over time—the opposite of inflation.
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Western Asset Managed Municipals Fund Inc.
Deflation may have an adverse effect on the creditworthiness of issuers and may make issuer defaults more likely, which may result in a decline in the value of the Fund’s portfolio.
Market Events Risk. The market values of securities or other assets will fluctuate, sometimes sharply and unpredictably, due to factors such as economic events, governmental actions or intervention, actions taken by the U.S. Federal Reserve or foreign central banks, market disruptions caused by trade disputes, labor strikes or other factors, political developments, armed conflicts, economic sanctions and countermeasures in response to sanctions, major cybersecurity events, the global and domestic effects of widespread or local health, weather or climate events, and other factors that may or may not be related to the issuer of the security or other asset. Economies and financial markets throughout the world are increasingly interconnected. Economic, financial or political events, trading and tariff arrangements, public health events, terrorism, wars, natural disasters and other circumstances in one country or region could have profound impacts on global economies or markets. As a result, whether or not the fund invests in securities of issuers located in or with significant exposure to the countries or markets directly affected, the value and liquidity of the fund’s investments may be negatively affected. Ongoing armed conflicts in Europe and the Middle East have caused and could continue to cause significant market disruptions and volatility. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. For example, following Russia’s invasion of Ukraine in 2022, Russian stocks lost all, or nearly all, of their market value. Further, recent escalations of conflict in the Middle East could lead to disruptions in local, regional, national and global markets and economies for an unknown period of time. The United States and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the United States has recently enacted and proposed to enact significant new tariffs and President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy, which could potentially lead to significant changes to current policies, treaties and tariffs. There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S. For example, the United States has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the United States and its trading partners, as well as companies directly or indirectly affected and financial markets generally. The United States government has prohibited U.S. persons
Western Asset Managed Municipals Fund Inc.
79
Summary of information regarding the Fund (unaudited) (cont’d)
from investing in Chinese companies designated as related to the Chinese military. These and possible future restrictions could limit the Fund’s opportunities for investment and require the sale of securities at a loss or make them illiquid. Moreover, the Chinese government is involved in a longstanding dispute with Taiwan that has included threats of invasion. If the political climate between the United States and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund’s assets may go down.
Raising the ceiling on U.S. government debt has become increasingly politicized. Any failure to increase the total amount that the U.S. government is authorized to borrow could lead to a default on U.S. government obligations, with unpredictable consequences for economies and markets in the U.S. and elsewhere. Recently, inflation and interest rates have increased and may rise further. These circumstances could adversely affect the value and liquidity of the fund’s investments, impair the fund’s ability to satisfy redemption requests, and negatively impact the fund’s performance.
Anti-Takeover Provisions Risk. The Fund’s Charter and Bylaws include provisions that are designed to limit the ability of other entities or persons to acquire control of the Fund for short-term objectives, including by converting the Fund to open-end status or changing the composition of the Board, that may be detrimental to the Fund’s ability to achieve its primary investment objective of seeking to maximize current income. The Bylaws provide that the Fund shall be subject to the provisions of the MCSAA (as defined below). There can be no assurance, however, that the provisions of the MCSAA will be sufficient to deter professional arbitrageurs that seek to cause the Fund to take actions that may not be consistent with its investment objective or aligned with the interests of long-term stockholders, such as liquidating debt investments prior to maturity, triggering taxable events for stockholders and decreasing the size of the Fund. See “Certain Provisions in the Charter and Bylaws” and “Certain Provisions in the Charter and Bylaws—Maryland Control Share Acquisition Act” (“MCSAA”). Such provisions may limit the ability of stockholders to sell their shares at a premium over prevailing market prices by discouraging an investor from seeking to obtain control of the Fund.
Portfolio Turnover Risk. Changes to the investments of the Fund may be made regardless of the length of time particular investments have been held. A high portfolio turnover rate may result in increased transaction costs for the Fund in the form of increased dealer spreads and other transactional costs, which may have an adverse impact on performance. The portfolio turnover rate of the Fund will vary from year to year, as well as within a year.
Management Risk. The Fund is subject to management risk because it is an actively managed investment portfolio. The subadviser and each individual portfolio manager will
80
Western Asset Managed Municipals Fund Inc.
apply investment techniques and risk analyses in making investment decisions for the Fund, but there can be no guarantee that these will produce the desired results.
Market Price Discount from Net Asset Value Risk. Shares of closed-end investment companies frequently trade at a discount from their net asset value. This risk is separate and distinct from the risk that the Fund’s net asset value could decrease as a result of its investment activities and may be a greater risk to investors expecting to sell their Common Stock in a relatively short period following completion of this offering. Whether investors will realize gains or losses upon the sale of the Common Stock will depend not upon the Fund’s net asset value but upon whether the market price of the Common Stock at the time of sale is above or below the investor’s purchase price for the Common Stock.
Because the market price of the Common Stock will be determined by factors such as relative supply of and demand for the Common Stock in the market, general market and economic conditions and other factors beyond the control of the Fund, the Fund cannot predict whether the Common Stock will trade at, above or below net asset value or at, above or below the initial public offering price. The Fund’s Common Stock is designed primarily for long term investors and you should not view the Fund as a vehicle for trading purposes.
Temporary Defensive Strategies Risk. When the manager believes a temporary defensive posture in the market is warranted (e.g., times when, in the manager’s opinion, temporary imbalances of supply and demand or other temporary dislocations in the municipal obligations market adversely affect the price at which municipal obligations are available), and in order to keep cash on hand fully invested, the Fund may temporarily invest to a substantial degree in high quality, short-term municipal obligations. If these high-quality, short-term municipal obligations are not available or, in the manager’s judgment, do not afford sufficient protection against adverse market conditions, the Fund may invest in the following taxable securities: obligations of the U.S. Government and its agencies or instrumentalities; other debt securities rated within the four highest categories by an NRSRO; commercial paper rated in the highest category by an NRSRO; certificates of deposit, time deposits and bankers’ acceptances; or repurchase agreements with respect to any of the foregoing investments or any other fixed-income securities that the manager considers consistent with such strategy. To the extent the Fund invests in taxable securities, the Fund will not at such times be able to achieve its investment objective of earning income that is exempt from regular federal income taxes.
Operational Risk. The valuation of the Fund’s investments may be negatively impacted because of the operational risks arising from factors such as processing errors and human errors, inadequate or failed internal or external processes, failures in systems and technology, changes in personnel, and errors caused by third party service providers or trading counterparties. It is not possible to identify all of the operational risks that may
Western Asset Managed Municipals Fund Inc.
81
Summary of information regarding the Fund (unaudited) (cont’d)
affect the Fund or to develop processes and controls that completely eliminate or mitigate the occurrence of such failures. The Fund and its shareholders could be negatively impacted as a result.
Valuation Risk. The sales price the Fund could receive for any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair value methodology. These differences may increase significantly and affect Fund investments more broadly during periods of market volatility. The Fund’s ability to value its investments may be impacted by technological issues and/or errors by pricing services or other third party service providers. The valuation of the Fund’s investments involves subjective judgment.
Tax Risks. To qualify for the favorable U.S. federal income tax treatment generally accorded to regulated investment companies, among other things, the Fund must derive in each taxable year at least 90% of its gross income from certain prescribed sources and satisfy certain distribution and asset diversification requirements. If for any taxable year the Fund does not qualify as a regulated investment company, all of its taxable income (including its net capital gain) would be subject to tax at regular corporate rates without any deduction for distributions to stockholders, and such distributions would be taxable as ordinary dividends to the extent of the Fund’s current or accumulated earnings and profits.
Cybersecurity Risk. Like other funds and business enterprises, the Fund, the Manager, Western Asset, the relevant listing exchange and their service providers are subject to the risk of cybersecurity incidents occurring from time to time. Cybersecurity incidents, whether intentionally caused by third parties or otherwise, may allow an unauthorized party to gain access to fund assets, fund or customer data (including private stockholder information) or proprietary information, cause the Fund, the Manager, Western Asset, the relevant listing exchange and/or their service providers (including, but not limited to, fund accountants, custodians, sub-custodians, transfer agents and financial intermediaries) to suffer data breaches, data corruption or loss of operational functionality, or prevent fund investors from purchasing, redeeming or exchanging shares, receiving distributions or receiving timely information regarding the fund or their investment in the fund. The Fund, Western Asset, and the subadvisers have limited ability to prevent or mitigate cybersecurity incidents affecting third party service providers, and such third party service providers may have limited indemnification obligations to the Fund or the Manager. Cybersecurity incidents may result in financial losses to the Fund and its stockholders, and substantial costs may be incurred in order to prevent any future cybersecurity incidents. Issuers of securities in which the fund invests are also subject to cybersecurity risks, and the value of these securities could decline if the issuers experience cybersecurity incidents.
82
Western Asset Managed Municipals Fund Inc.
New ways to carry out cyber attacks continue to develop. There is a chance that some risks have not been identified or prepared for, or that an attack may not be detected, which puts limitations on the fund’s ability to plan for or respond to a cyber attack.
More Information
For a complete list of the Fund’s fundamental investment restrictions and more detailed descriptions of the Fund’s investment policies, strategies and risks, see the Fund’s registration statement on Form N-14 that was declared effective by the SEC on May 25, 2023. The Fund’s fundamental investment restrictions may not be changed without the approval of the holders of a majority of the outstanding voting securities, as defined in the 1940 Act.
Western Asset Managed Municipals Fund Inc.
83
Dividend reinvestment plan (unaudited)
Unless you elect to receive distributions in cash (i.e., opt-out), all dividends, including any capital gain dividends and return of capital distributions, on your Common Stock will be automatically reinvested by Computershare Trust Company, N.A., as agent for the stock- holders (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 Trust Company, N.A., 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 (plus $0.03 per share commission) on the payment date (or, if the payment date is not a NYSE trading day, the immediately preceding trading day) is equal to or exceeds the net asset value per share of the Common Stock at the close of trading on the NYSE on the payment date, the Fund will issue new Common Stock at a price equal to the greater of (a) the net asset value per share at the close of trading on the NYSE on the payment date or (b) 95% of the market price per share of the Common Stock on the payment date.
(2) If the net asset value per share of the Common Stock exceeds the market price of the Common Stock (plus $0.03 per share commission) at the close of trading on the NYSE on the payment 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 payment date and terminating no later than the earlier of (a) 30 days after the dividend or distribution payment date, or (b) the payment 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 (plus $0.03 per share commission) rises so that it equals or exceeds the net asset value per share of the Common Stock at the close of trading on the NYSE on the payment 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) the net asset value per share at the close of trading on the NYSE on the day prior to the issuance of shares for reinvestment 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 P.O. Box 43006, Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151. Such withdrawal will be effective immediately if notice is received by the Plan Agent not less than ten business days prior to any dividend or distribution record date; otherwise such
84
Western Asset Managed Municipals Fund Inc.
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.
Plan participants who sell their shares will be charged a service charge (currently $5.00 per transaction) and the Plan Agent is authorized to deduct brokerage charges actually incurred from the proceeds (currently $0.05 per share commission). 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. The Plan may be terminated, amended or supplemented 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 or amendment is to be effective. Upon any termination, you will be sent cash for any fractional share of Common Stock in your account. 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. Additional information about the Plan and your account may be obtained from the Plan Agent at P.O. Box 43006, Providence, RI 02940-3078 or by calling the Plan Agent at 1-888-888-0151.
Western Asset Managed Municipals Fund Inc.
85
Important tax information (unaudited)
By mid-February, tax information related to a shareholder’s proportionate share of distributions paid during the preceding calendar year will be received, if applicable. Please also refer to www.franklintempleton.com for per share tax information related to any distributions paid during the preceding calendar year. Shareholders are advised to consult with their tax advisors for further information on the treatment of these amounts on their tax returns.
The following tax information for the Fund is required to be furnished to shareholders with respect to income earned and distributions paid during its fiscal year.
The Fund hereby reports the following amounts, or if subsequently determined to be different, the maximum allowable amounts, for the fiscal year ended May 31, 2026:
 
 
Pursuant to:
Amount Reported
Exempt-Interest Dividends Distributed
§852(b)(5)(A)
$26,728,485
Interest Earned from Federal Obligations
Note (1)
$924
Note (1) - The law varies in each state as to whether and what percentage of dividend income attributable to Federal obligations is exempt from state income tax. Shareholders are advised to consult with their tax advisors to determine if any portion of the dividends received is exempt from state income taxes.
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Western Asset Managed Municipals Fund Inc.
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Western Asset
Managed Municipals Fund Inc.
Directors
Robert D. Agdern
Carol L. Colman
Anthony Grillo
Eileen A. Kamerick
Chair
Nisha Kumar
Peter Mason
Hillary A. Sale
Jane Trust
Officers
Jane Trust
President and Chief Executive
Officer
Christopher Berarducci
Treasurer and Principal Financial
Officer
Fred Jensen
Chief Compliance Officer
Marc A. De Oliveira
Secretary and Chief Legal Officer
Thomas C. Mandia
Senior Vice President
Jeanne M. Kelly
Senior Vice President
Western Asset Managed Municipals Fund Inc.
One Madison Avenue
17th Floor
New York, NY 10010
Investment manager
Franklin Templeton Fund Adviser, LLC
Subadviser
Western Asset Management Company, LLC
Custodian
The Bank of New York Mellon
Transfer agent
Computershare Inc.
P.O. Box 43006
Providence, RI 02940-3078
Independent registered 
public accounting firm
PricewaterhouseCoopers LLP
Baltimore, MD
Legal counsel
Simpson Thacher & Bartlett LLP
900 G Street NW
Washington, DC 20001
New York Stock
Exchange Symbol
MMU
Western Asset Managed Municipals Fund Inc.
Western Asset Managed Municipals Fund Inc.
One Madison Avenue
17th Floor
New York, NY 10010
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 as an exhibit to its reports on Form N-PORT. The Fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov. To obtain information on Form N-PORT, shareholders can call the Fund at 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.franklintempleton.com and (3) on the SEC’s website at www.sec.gov.
Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Fund may be found on Franklin Templeton’s website, which can be accessed at www.franklintempleton.com. Any reference to Franklin Templeton’s website in this report is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate Franklin Templeton’s website in this report.
This report is transmitted to the shareholders of Western Asset Managed Municipals Fund 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.
P.O. Box 43006
Providence, RI 02940-3078
90064-A 7/26 

(b) Not applicable 

 

ITEM 2. CODE OF ETHICS.

 

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

 

(c) N/A

 

(d) N/A

 

(f) Pursuant to Item 19(a) (1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

 

The Board of Directors of the Registrant has determined that Eileen A. Kamerick and Nisha Kumar, possesses the technical attributes identified in Item 3 to Form N-CSR to qualify as an “audit committee financial experts,” and has designated Eileen A. Kamerick and Nisha Kumar, as the Audit Committee’s financial experts. Eileen A. Kamerick and Nisha Kumar are an “independent” Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.

 

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 

ITEM 4.PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

(a) Audit Fees. The aggregate fees billed in the last two fiscal years ending May 31, 2025 and May 31, 2026 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $48,883 in May 31, 2025 and $49,372 in May 31, 2026.

 

(b) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in May 31, 2025 and $0 in May 31, 2026.

 

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $9,750 in May 31, 2025 and $9,750 in May 31, 2026. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

 

 

There were no fees billed for tax services by the Auditors to the Registrant’s investment manager and any entity controlling, controlled by, or under common control with the investment manager that provides ongoing services to the Registrant (“Service Affiliates”) during the Reporting Periods that required pre-approval by the Audit Committee.

 

d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor to the Registrant, other than the services reported in paragraphs (a) through (c) of this item, were $0 in May 31, 2025 and $0 in May 31, 2026.

 

There were no other non-audit services rendered by the Auditor to the Service Affiliates requiring pre-approval by the Audit Committee in the Reporting Periods.

 

(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.

 

(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by the Registrant’s investment manager or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) if the engagement relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.

 

The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

 

Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and the Covered Service Providers constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.

 

(2) None of the services described in paragraphs (b) through (d) of this Item were performed in reliance on paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

(f) Not applicable.

 

 

 

(g) Non-audit fees billed by the Auditor for services rendered to the Registrant and the Service Affiliates during the reporting period were $334,889 in May 31, 2025 and $344,935 in May 31, 2026.

 

(h) Yes. The Registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Auditor’s independence. All services provided by the Auditor to the Registrant or to the Service Affiliates, which were required to be pre-approved, were pre-approved as required.

 

(i) Not applicable.

 

(j) Not applicable.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

a)Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)58(A) of the Exchange Act. The Audit Committee consists of the following Board members:

 

Robert D. Agdern

Carol L. Colman

Anthony Grillo

Eileen A. Kamerick

Nisha Kumar

Peter Mason

Hillary A. Sale.

 

b) Not applicable

 

ITEM 6. SCHEDULE OF INVESTMENTS.

 

(a)Please see schedule of investments contained in the Financial Statements and Financial Highlights included under Item 1 of this Form N-CSR.

 

(b)Not applicable.

 

ITEM 7.FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

ITEM 9.PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

 

ITEM 10.REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

ITEM 11.STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.

 

The information is disclosed as part of the Financial Statements included in Item 1 of this Form N-CSR, as applicable.

 

ITEM 12.DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Western Asset Management Company, LLC

Proxy Voting Policies and Procedures

 

NOTE

The policy below relating to proxy voting and corporate actions is a global policy for Western Asset Management Company, LLC (“Western Asset” or the “Firm”) and all Western Asset affiliates, including Western Asset Management Company Limited (“Western Asset Limited”), and Western Asset Management Company Pte. Ltd. (“Western Asset Singapore”), as applicable. As compliance with the policy is monitored by Western Asset, the policy has been adopted from the US Compliance Manual and all defined terms are those defined in the US Compliance Manual rather than the compliance manual of any other Western Asset affiliate.

 

BACKGROUND

An investment adviser is required to adopt and implement policies and procedures that we believe are reasonably designed to ensure that proxies are voted in the best interest of clients, in accordance with fiduciary duties and Rule 206(4)-6 under the Investment Advisers Act of 1940 (“Advisers Act”). The authority to vote the proxies of our clients is established through investment management agreements or comparable documents. In addition to SEC requirements governing advisers, long-standing fiduciary standards and responsibilities have been established for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the investment manager.

 

POLICY

As a fixed income only manager, the occasion to vote proxies is very rare, for instance, when fixed income securities are converted into equity by their terms or in connection with a bankruptcy or corporate workout. However, the Firm has adopted and implemented policies and procedures that we believe are reasonably designed to ensure that proxies are voted in the best interest of clients, in accordance with our fiduciary duties and Rule 206(4)-6 under the Advisers Act. In addition to SEC requirements governing advisers, our proxy voting policies reflect the long-standing fiduciary standards and responsibilities for ERISA accounts. Unless a manager of ERISA assets has been expressly precluded from voting proxies, the Department of Labor has determined that the responsibility for these votes lies with the investment manager.

 

While the guidelines included in the procedures are intended to provide a benchmark for voting standards, each vote is ultimately cast on a case-by-case basis, taking into consideration the Firm’s contractual obligations to our clients and all other relevant facts and circumstances at the time of the vote (such that these guidelines may be overridden to the extent the Firm deems appropriate).

 

In exercising its voting authority, Western Asset will not consult or enter into agreements with officers, directors or employees of Franklin Resources (Franklin Resources includes Franklin Resources, Inc. and organizations operating as Franklin Resources) or any of its affiliates (other than Western Asset affiliated companies) regarding the voting of any securities owned by its clients.

 

 

 

PROCEDURES

 

Responsibility and Oversight

 

The Legal & Compliance Group is responsible for administering and overseeing the proxy voting process. The gathering of proxies is coordinated through the Corporate Actions team of the Investment Operations Group (“Corporate Actions”). Research analysts and portfolio managers are responsible for determining appropriate voting positions on each proxy utilizing any applicable guidelines contained in these procedures.

Client Authority

 

The Investment Management Agreement for each client is reviewed at account start-up for proxy voting instructions. If an agreement is silent on proxy voting, but contains an overall delegation of discretionary authority or if the account represents assets of an ERISA plan, Western Asset will assume responsibility for proxy voting. The Portfolio Compliance Group maintains a matrix of proxy voting authority.

Proxy Gathering

 

Registered owners of record, client custodians, client banks and trustees (“Proxy Recipients”) that receive proxy materials on behalf of clients should forward them to Corporate Actions. Proxy Recipients for new clients (or, if Western Asset becomes aware that the applicable Proxy Recipient for an existing client has changed, the Proxy Recipient for the existing client) are notified at start-up of appropriate routing to Corporate Actions of proxy materials received and reminded of their responsibility to forward all proxy materials on a timely basis. If Western Asset personnel other than Corporate Actions receive proxy materials, they should promptly forward the materials to Corporate Actions.

Proxy Voting

 

Once proxy materials are received by Corporate Actions, they are forwarded to the Portfolio Compliance Group for coordination and the following actions:

 

Proxies are reviewed to determine accounts impacted.

Impacted accounts are checked to confirm Western Asset voting authority.

Where appropriate, the Regulatory Affairs Group reviews the issues presented to determine any material conflicts of interest. (See Conflicts of Interest section of these procedures for further information on determining material conflicts of interest.)

 

If a material conflict of interest exists, (i) to the extent reasonably practicable and permitted by applicable law, the client is promptly notified, the conflict is disclosed and Western Asset obtains the client’s proxy voting instructions, and (ii) to the extent that it is not reasonably practicable or permitted by applicable law to notify the client and obtain such instructions (e.g., the client is a mutual fund or other commingled vehicle or is an ERISA plan client), Western Asset seeks voting instructions from an independent third party.

 

The Portfolio Compliance Group provides proxy material to the appropriate research analyst or portfolio manager to obtain their recommended vote. Research analysts and portfolio managers determine votes on a case-by-case basis taking into account the voting guidelines contained in these procedures. For avoidance of doubt, depending on the best interest of each individual client, Western Asset may vote the same proxy differently for different clients. The analyst’s or portfolio manager’s basis for their decision is documented and maintained by the Portfolio Compliance Group.

 

Portfolio Compliance Group votes the proxy pursuant to the instructions received in (d) or (e) and returns the voted proxy as indicated in the proxy materials.

 

 

Timing

 

Western Asset’s Legal and Compliance Department personnel act in such a manner to ensure that, absent special circumstances, the proxy gathering and proxy voting steps noted above can be completed before the applicable deadline for returning proxy votes.

Recordkeeping

 

Western Asset maintains records of proxies voted pursuant to Rule 204-2 of the Advisers Act and ERISA DOL Bulletin 94-2. These records include:

 

•A copy of Western Asset’s proxy voting policies and procedures.
•Copies of proxy statements received with respect to securities in client accounts.
•A copy of any document created by Western Asset that was material to making a decision how to vote proxies.
•Each written client request for proxy voting records and Western Asset’s written response to both verbal and written client requests.

 

A proxy log including:

 

1.Issuer name;
2.Exchange ticker symbol of the issuer’s shares to be voted;
3.Committee on Uniform Securities Identification Procedures (“CUSIP”) number for the shares to be voted;
4.A brief identification of the matter voted on;
5.Whether the matter was proposed by the issuer or by a shareholder of the issuer;
6.Whether a vote was cast on the matter;
7.A record of how the vote was cast;
8.Whether the vote was cast for or against the recommendation of the issuer’s management team;
9.Funds are required to categorize their votes so that investors can focus on the topics they find important. Categories include, for example, votes related to director elections, extraordinary transactions, say-on-pay, shareholder rights and defenses, and the environment or climate, among others; and
10.Funds are required to disclose the number of shares voted or instructed to be cast, as well as the number of shares loaned but not recalled and, therefore, not voted by the fund.

Records are maintained in an easily accessible place for a period of not less than five (5) years with the first two (2) years in Western Asset’s offices.

 

Disclosure

 

Western Asset’s proxy policies and procedures are described in the Firm’s Form ADV Part 2A. Clients are provided with a copy of these policies and procedures upon request. In addition, clients may receive reports on how their proxies have been voted, upon request.

Conflicts of Interest

 

All proxies that potentially present conflicts of interest are reviewed by the Regulatory Affairs Group for a materiality assessment. Issues to be reviewed include, but are not limited to:

 

1.Whether Western Asset (or, to the extent required to be considered by applicable law, its affiliates) manages assets for the company or an employee group of the company or otherwise has an interest in the company;
2.Whether Western Asset or an officer or director of Western Asset or the applicable portfolio manager or analyst responsible for recommending the proxy vote (together, “Voting Persons”) is a close relative of or has a personal or business relationship with an executive, director or person who is a candidate for director of the company or is a participant in a proxy contest; and
3.Whether there is any other business or personal relationship where a Voting Person has a personal interest in the outcome of the matter before shareholders.
 

 

Voting Guidelines

 

Western Asset’s substantive voting decisions are based on the particular facts and circumstances of each proxy vote and are evaluated by the designated research analyst or portfolio manager. The examples outlined below are meant as guidelines to aid in the decision making process.

 

Situations can arise in which more than one Western Asset client invests in instruments of the same issuer or in which a single client may invest in instruments of the same issuer but in multiple accounts or strategies. Multiple clients or the same client in multiple accounts or strategies may have different investment objectives, investment styles, or investment professionals involved in making decisions. While there may be differences, votes are always cast in the best interests of the client and the investment objectives agreed with Western Asset. As a result, there may be circumstances where Western Asset casts different votes on behalf of different clients or on behalf of the same client with multiple accounts or strategies.

 

Guidelines are grouped according to the types of proposals generally presented to shareholders. Part I deals with proposals which have been approved and are recommended by a company’s board of directors; Part II deals with proposals submitted by shareholders for inclusion in proxy statements; Part III addresses issues relating to voting shares of investment companies; and Part IV addresses unique considerations pertaining to foreign issuers.

 

I.Board Approved Proposals

 

The vast majority of matters presented to shareholders for a vote involve proposals made by a company itself that have been approved and recommended by its board of directors. In view of the enhanced corporate governance practices currently being implemented in public companies, Western Asset generally votes in support of decisions reached by independent boards of directors. More specific guidelines related to certain board-approved proposals are as follows:

 

1.Matters relating to the Board of Directors

 

Western Asset votes proxies for the election of the company’s nominees for directors and for board-approved proposals on other matters relating to the board of directors with the following exceptions:

 

a.Votes are withheld for the entire board of directors if the board does not have a majority of independent directors or the board does not have nominating, audit and compensation committees composed solely of independent directors.
b.Votes are withheld for any nominee for director who is considered an independent director by the company and who has received compensation from the company other than for service as a director.
c.Votes are withheld for any nominee for director who attends less than 75% of board and committee meetings without valid reasons for absences.
d.Votes are cast on a case-by-case basis in contested elections of directors.
 

 

2.Matters relating to Executive Compensation

 

Western Asset generally favors compensation programs that relate executive compensation to a company’s long-term performance. Votes are cast on a case-by-case basis on board-approved proposals relating to executive compensation, except as follows:

 

a.Except where the firm is otherwise withholding votes for the entire board of directors, Western Asset votes for stock option plans that will result in a minimal annual dilution.
b.Western Asset votes against stock option plans or proposals that permit replacing or repricing of underwater options.
c.Western Asset votes against stock option plans that permit issuance of options with an exercise price below the stock’s current market price.
d.Except where the firm is otherwise withholding votes for the entire board of directors, Western Asset votes for employee stock purchase plans that limit the discount for shares purchased under the plan to no more than 15% of their market value, have an offering period of 27 months or less and result in dilution of 10% or less.

 

3.Matters relating to Capitalization

 

The Management of a company’s capital structure involves a number of important issues, including cash flows, financing needs and market conditions that are unique to the circumstances of each company. As a result, Western Asset votes on a case-by-case basis on board-approved proposals involving changes to a company’s capitalization except where Western Asset is otherwise withholding votes for the entire board of directors.

 

a.Western Asset votes for proposals relating to the authorization of additional common stock.
b.Western Asset votes for proposals to effect stock splits (excluding reverse stock splits).
c.Western Asset votes for proposals authorizing share repurchase programs.

 

4.Matters relating to Acquisitions, Mergers, Reorganizations and Other Transactions

 

Western Asset votes these issues on a case-by-case basis on board-approved transactions.

 

5.Matters relating to Anti-Takeover Measures

 

Western Asset votes against board-approved proposals to adopt anti-takeover measures except as follows:

 

a.Western Asset votes on a case-by-case basis on proposals to ratify or approve shareholder rights plans.
b.Western Asset votes on a case-by-case basis on proposals to adopt fair price provisions.

 

6.Other Business Matters

 

Western Asset votes for board-approved proposals approving such routine business matters such as changing the company’s name, ratifying the appointment of auditors and procedural matters relating to the shareholder meeting.

a.Western Asset votes on a case-by-case basis on proposals to amend a company’s charter or bylaws.
b.Western Asset votes against authorization to transact other unidentified, substantive business at the meeting.

 

7.Reporting of Financially Material Information

 

Western Asset generally believes issuers should disclose information that is material to their business.

What qualifies as “material” can vary, so votes are cast on a case-by-case basis but consistent with the overarching principle.

 

II.Shareholder Proposals

 

SEC regulations permit shareholders to submit proposals for inclusion in a company’s proxy statement. These proposals generally seek to change some aspect of a company’s corporate governance structure or to change some aspect of its business operations. Western Asset votes in accordance with the recommendation of the company’s board of directors on all shareholder proposals, except as follows:

 

1.Western Asset votes for shareholder proposals to require shareholder approval of shareholder rights plans.
 

 

2.Western Asset votes for shareholder proposals that are consistent with Western Asset’s proxy voting guidelines for board-approved proposals.
3.Western Asset votes on a case-by-case basis on other shareholder proposals where the firm is otherwise withholding votes for the entire board of directors.

 

Environmental or social issues that are the subject of a proxy vote will be considered on a case-by-case basis. Constructive proposals that seek to advance the health of the issuer and the prospect for risk-adjusted returns to Western Assets clients are viewed more favorably than proposals that advance a single issue or limit the ability of management to meet its operating objectives.

 

III.Voting Shares of Investment Companies

 

Western Asset may utilize shares of open or closed-end investment companies to implement its investment strategies. Shareholder votes for investment companies that fall within the categories listed in Parts I and II above are voted in accordance with those guidelines.

 

1.Western Asset votes on a case-by-case basis on proposals relating to changes in the investment objectives of an investment company taking into account the original intent of the fund and the role the fund plays in the clients’ portfolios.
2.Western Asset votes on a case-by-case basis all proposals that would result in increases in expenses (e.g., proposals to adopt 12b-1 plans, alter investment advisory arrangements or approve fund mergers) taking into account comparable expenses for similar funds and the services to be provided.

 

IV.Voting Shares of Foreign Issuers

 

In the event Western Asset is required to vote on securities held in non-U.S. issuers – i.e. issuers that are incorporated under the laws of a foreign jurisdiction and that are not listed on a U.S. securities exchange or the NASDAQ stock market, the following guidelines are used, which are premised on the existence of a sound corporate governance and disclosure framework. These guidelines, however, may not be appropriate under some circumstances for foreign issuers and therefore apply only where applicable.

 

1.Western Asset votes for shareholder proposals calling for a majority of the directors to be independent of management.
2.Western Asset votes for shareholder proposals seeking to increase the independence of board nominating, audit and compensation committees.
3.Western Asset votes for shareholder proposals that implement corporate governance standards similar to those established under U.S. federal law and the listing requirements of U.S. stock exchanges, and that do not otherwise violate the laws of the jurisdiction under which the company is incorporated.
4.Western Asset votes on a case-by-case basis on proposals relating to (1) the issuance of common stock in excess of 20% of a company’s outstanding common stock where shareholders do not have preemptive rights, or (2) the issuance of common stock in excess of 100% of a company’s outstanding common stock where shareholders have preemptive rights.

 

V.Environmental, Social and Governance (“ESG”) Matters

 

Western Asset incorporates ESG considerations, among other relevant risks, as part of the overall process where appropriate. The Firm seeks to identify and consider material risks to the investment thesis, including material risks presented by ESG factors. While Western Asset is primarily a fixed income manager, opportunities to vote proxies are considered on the investment merits of the instruments and strategies involved.

 

As a general proposition, Western Asset votes to encourage disclosure of information material to their business. This principle extends to ESG matters. What qualifies as “material” can vary, so votes are cast on a case-by-case basis but consistent with the overarching principle. Western Asset recognizes that objective standards and criteria may not be available or universally agreed and that there may be different views and subjective analysis regarding factors and their significance.

 

 

Targeted environmental or social issues that are the subject of a proxy vote will be considered on a case-by-case basis. Constructive proposals that seek to advance the health of the issuer and the prospect for risk-adjusted returns to Western Assets clients are viewed more favorably than proposals that advance a single issue or limit the ability of management to meet its operating objectives.

 

Retirement Accounts

 

For accounts subject to ERISA, as well as other retirement accounts, Western Asset is presumed to have the responsibility to vote proxies for the client. The Department of Labor has issued a bulletin that states that investment managers have the responsibility to vote proxies on behalf of Retirement Accounts unless the authority to vote proxies has been specifically reserved to another named fiduciary. Furthermore, unless Western Asset is expressly precluded from voting the proxies, the Department of Labor has determined that the responsibility remains with the investment manager.

 

In order to comply with the Department of Labor’s position, Western Asset will be presumed to have the obligation to vote proxies for its retirement accounts unless Western Asset has obtained a specific written instruction indicating that: (a) the right to vote proxies has been reserved to a named fiduciary of the client, and (b) Western Asset is precluded from voting proxies on behalf of the client. If Western Asset does not receive such an instruction, Western Asset will be responsible for voting proxies in the best interests of the retirement account client and in accordance with any proxy voting guidelines provided by the client.

 

 

ITEM 13.PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

(a)(1): As of the date of filing this report:

 

NAME AND

ADDRESS

LENGTH OF

TIME SERVED

PRINCIPAL OCCUPATION(S) DURING

PAST 5 YEARS

Michael C. Buchanan

 

Western Asset

385 East Colorado Blvd.

Pasadena, CA

91101

 Since 2024 Responsible for the day-to-day management with other members of the Fund’s portfolio management team; Chief Investment Officer of Western Asset since September 2024; employed by Western Asset Management as an investment professional for at least the past five years; Managing Director and head of U.S. Credit Products from 2003-2005 at Credit Suisse Asset Management   

Robert Amodeo


Western Asset
385 East Colorado Blvd. Pasadena, CA 91101

 Since 2007 Responsible for the day-to-day management with other members of the Fund’s portfolio management team; portfolio manager at Western Asset since 2005; prior to that time, Mr. Amodeo was a Managing Director and portfolio manager with Salomon Brothers Asset Management Inc from 1992 to 2005.

David Fare

 

Western Asset
385 East Colorado Blvd. Pasadena, CA 91101

 Since 2004 Responsible for the day-to-day management with other members of the Fund’s portfolio management team; portfolio manager at Western Asset since 2005; prior to that time, Mr. Fare was with Citigroup Asset Management or one of its affiliates since 1989.

John Mooney


Western Asset
385 East Colorado Blvd. Pasadena, CA 91101

 Since 2023 Responsible for the day-to-day management with other members of the Fund’s portfolio management team; portfolio manager at Western Asset since 2005; prior to that time, Mr. Mooney was with Citigroup Asset Management, AIG/SunAmerica, and First Investors Management Company.

Ryan K. Brist


Western Asset
385 East Colorado Blvd. Pasadena, CA 91101

 Since 2024 Responsible for the day-to-day management with other members of the Fund’s portfolio management team; Head of U.S. Investment Grade Credit of Western Asset since 2009; Chief Investment Officer and Portfolio Manager at Logan Circle Partners, L.P. from 2007-2009; Co-Chief Investment Officer and Senior Portfolio Manager at Delaware Investment Advisors from 2000-2007
 

 

(a)(2): DATA TO BE PROVIDED BY FINANCIAL CONTROL

 

The following tables set forth certain additional information with respect to the fund’s investment professionals for the fund. Unless noted otherwise, all information is provided as of May 31, 2026.

 

Other Accounts Managed by Investment Professionals

 

The table below identifies the number of accounts (other than the fund) for which the fund’s investment professionals have day-to-day management responsibilities and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts where fees are based on performance is also indicated.

 

 

Name of PM Type of Account Number of  Accounts Managed Total Assets Managed Number of Accounts Managed for which Advisory Fee is Performance-Based Assets Managed for which Advisory Fee is Performance-Based
Michael C. Buchanan ‡ Other Registered Investment Companies 62  $83.06 billion None None   
Other Pooled Vehicles 185 $45.61 billion    13 $2.44 billion   
Other Accounts 259  $79.69 billion 11 $6.31 billion  
Robert Amodeo‡ Other Registered Investment Companies 17  $6.85 billion None None   
Other Pooled Vehicles 2 $5.63 billion    None None   
Other Accounts 27 $6.74 billion    None None   
David Fare‡     Other Registered Investment Companies 16  $6.75 billion None None   
Other Pooled Vehicles 2 $5.63 billion    None None   
Other Accounts 14  $3.73 billion None None   
John Mooney ‡ Other Registered Investment Companies 17  $6.85 billion None None   
Other Pooled Vehicles 2 $5.63 billion    None None   
Other Accounts 27 $6.74 billion    None None   
Ryan K. Brist ‡ Other Registered Investment Companies 25  $8.69 billion None None   
Other Pooled Vehicles 16 $13.46 billion    None None   
Other Accounts 87 $32.24 million    4 $1.57 billion   

 

 ‡ The numbers above reflect the overall number of portfolios managed by employees of Western Asset Management Company (“Western Asset”). They are involved in the management of all the Firm’s portfolios, but they are not solely responsible for particular portfolios. Western Asset’s investment discipline emphasizes a team approach that combines the efforts of groups of specialists working in different market sectors. They are responsible for overseeing implementation of Western Asset’s overall investment ideas and coordinating the work of the various sector teams. This structure ensures that client portfolios benefit from a consensus that draws on the expertise of all team members.

 

 

(a)(3): Portfolio Manager Compensation (As of May 31, 2026):

 

Investment Professional Compensation

 

Conflicts of Interest

 

The Subadviser has adopted compliance policies and procedures to address a wide range of potential conflicts of interest that could directly impact client portfolios. For example, potential conflicts of interest may arise in connection with the management of multiple portfolios (including portfolios managed in a personal capacity). These could include potential conflicts of interest related to the knowledge and timing of a portfolio’s trades, investment opportunities and broker selection. Portfolio managers are privy to the size, timing, and possible market impact of a portfolio’s trades.

 

It is possible that an investment opportunity may be suitable for both a portfolio and other accounts managed by a portfolio manager, but may not be available in sufficient quantities for both the portfolio and the other accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by a portfolio and another account. A conflict may arise where the portfolio manager may have an incentive to treat an account preferentially as compared to a portfolio because the account pays a performance-based fee or the portfolio manager, the Subadviser or an affiliate has an interest in the account. The Subadviser has adopted procedures for allocation of portfolio transactions and investment opportunities across multiple client accounts on a fair and equitable basis over time. Eligible accounts that can participate in a trade generally share the same price on a pro-rata allocation basis, taking into account differences based on factors such as cash availability, investment restrictions and guidelines, and portfolio composition versus strategy.

 

With respect to securities transactions, the Subadviser determines which broker or dealer to use to execute each order, consistent with their duty to seek best execution of the transaction. However, with respect to certain other accounts (such as pooled investment vehicles that are not registered investment companies and other accounts managed for organizations and individuals), the Subadviser may be limited by the client with respect to the selection of brokers or dealers or may be instructed to direct trades through a particular broker or dealer. In these cases, trades for a portfolio in a particular security may be placed separately from, rather than aggregated with, such other accounts. Having separate transactions with respect to a security may temporarily affect the market price of the security or the execution of the transaction, or both, to the possible detriment of a portfolio or the other account(s) involved. Additionally, the management of multiple portfolios and/or other accounts may result in a portfolio manager devoting unequal time and attention to the management of each portfolio and/or other account. The Subadviser’s team approach to portfolio management and block trading approach seeks to limit this potential risk.

 

The Subadviser also maintains a gift and entertainment policy to address the potential for a business contact to give gifts or host entertainment events that may influence the business judgment of an employee. Employees are permitted to retain gifts of only a nominal value and are required to make reimbursement for entertainment events above a certain value. All gifts (except those of a de minimis value) and entertainment events that are given or sponsored by a business contact are required to be reported in a gift and entertainment log which is reviewed on a regular basis for possible issues.

 

 

Employees of the Subadviser have access to transactions and holdings information regarding client accounts and the Subadviser’s overall trading activities. This information represents a potential conflict of interest because employees may take advantage of this information as they trade in their personal accounts. Accordingly, the Subadviser maintains a Code of Ethics that is compliant with Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act to address personal trading. In addition, the Code of Ethics seeks to establish broader principles of good conduct and fiduciary responsibility in all aspects of the Subadviser’s business. The Code of Ethics is administered by the Legal and Compliance Department and monitored through the Subadviser’s compliance monitoring program.

 

The Subadviser may also face other potential conflicts of interest with respect to managing client assets, and the description above is not a complete description of every conflict of interest that could be deemed to exist. The Subadviser also maintains a compliance monitoring program and engages independent auditors to conduct a SOC1/ISAE 3402 audit on an annual basis. These steps help to ensure that potential conflicts of interest have been addressed.

 

Investment Professional Compensation

 

With respect to the compensation of the Fund’s investment professionals, the Subadviser’s compensation system assigns each employee a total compensation range, which is derived from annual market surveys that benchmark each role with its job function and peer universe. This method is designed to reward employees with total compensation reflective of the external market value of their skills, experience and ability to produce desired results. Standard compensation includes competitive base salaries, generous employee benefits and a retirement plan.

 

In addition, the Subadviser’s employees are eligible for bonuses. These are structured to closely align the interests of employees with those of the Subadviser, and are determined by the professional’s job function and pre-tax performance as measured by a formal review process. All bonuses are completely discretionary. The principal factor considered is an investment professional’s investment performance versus appropriate peer groups and benchmarks (e.g., a securities index and with respect to the Fund, the benchmark set forth in the Fund’s Prospectus to which the Fund’s average annual total returns are compared or, if none, the benchmark set forth in the Fund’s annual report). Performance is reviewed on a 1, 3 and 5 year basis for compensation—with 3 and 5 years having a larger emphasis. The Subadviser may also measure an investment professional’s pre-tax investment performance against other benchmarks, as it determines appropriate. Because investment professionals are generally responsible for multiple accounts (including the Fund) with similar investment strategies, they are generally compensated on the performance of the aggregate group of similar accounts, rather than a specific account. Other factors that may be considered when making bonus decisions include client service, business development, length of service to the Subadviser, management or supervisory responsibilities, contributions to developing business strategy and overall contributions to the Subadviser’s business.

 

Finally, in order to attract and retain top talent, all investment professionals are eligible for additional incentives in recognition of outstanding performance. These are determined based upon the factors described above and include long-term incentives that vest over a set period of time past the award date.

 

 

Investment Professional Securities Ownership

 

The table below identifies the dollar range of securities beneficially owned by the named investment professional as of May 31, 2026.

 

Investment Professional(s)   Dollar Range of
Portfolio Securities Beneficially Owned
Michael C. Buchanan   A
David Fare   A
Robert Amodeo   B
John Mooney   A

Ryan K. Brist

   A

 

Dollar Range ownership is as follows:
A: none
B: $1 - $10,000
C: 10,001 - $50,000
D: $50,001 - $100,000
E: $100,001 - $500,000
F: $500,001 - $1 million
G: over $1 million

 

ITEM 14.PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

 

    (a)    (b)    (c)  

 

(d)

Period    Total Number of
Shares Purchased		    Average
Price Paid
per Share		    Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs		    Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
June 1 through June 30    28,232   $10.20    28,232    5,334,997
July 1 through July 31    7,209   $10.43    7,209    5,327,788
August 1 through August 31    0    0    0    5,327,788
September 1 through September 30    0    0    0    5,327,788
October 1 through October 31*    0    0    0    5,327,788
November 1 through November 30    0    0    0    5,327,788
December 1 through December 31    0    0    0    5,327,788
January 1 through January 31    0    0    0    5,327,788
February 1 through February 28    0    0    0    5,327,788
March 1 through March 31    0    0    0    5,327,788
April 1 through April 30    0    0    0    5,327,788
May 1 through May 31    0    0    0    5,327,788
Total    35,441   $10.25    35,441    5,327,788

 

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 continue 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.

 

 

 

ITEM 15.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that would require disclosure herein.

  

ITEM 16.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 period covered by this report that have materially affected or are likely to materially affect the Registrant’s internal control over financial reporting.

 

ITEM 17.DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

ITEM 18.RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

 

(a)Not applicable.

 

(b)Not applicable.

 

ITEM 19.EXHIBITS.

 

(a) (1) Code of Ethics attached hereto.

Exhibit 99.CODE ETH

 

(a) (3) 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 Managed Municipals Fund Inc.

 

By: /s/ Jane Trust  
  Jane Trust  
  Chief Executive Officer  
     
Date: July 29, 2026  

 

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 29, 2026  

 

By: /s/ Christopher Berarducci  
  Christopher Berarducci  
  Principal Financial Officer  
     
Date: July 29, 2026  
 

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ATTACHMENTS / EXHIBITS

ATTACHMENTS / EXHIBITS

CODE OF ETHICS

CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATIONS PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

XBRL SCHEMA FILE

XBRL LABEL FILE

XBRL PRESENTATION FILE

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