Edgar Filing: Western Asset Income Fund

Form N-Q for the September 30, 2007 Reporting Period

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-02351

Western Asset Income Fund

(Exact Name of Registrant as Specified In Its Charter)


Address of Principal Executive Offices:		385 East Colorado Boulevard Pasadena, CA 91101

Name and address of agent for service:		Charles A. Ruys de Perez
		385 East Colorado Boulevard Pasadena, CA 91101

Registrant’s telephone number, including area code: (410) 539-0000

Date of fiscal year end: December 31, 2007

Date of reporting period: September 30, 2007

Item 1 – Schedule of Investments

Portfolio of Investments

Western Asset Income Fund

September 30, 2007 (Unaudited)

(Amounts in Thousands)


	Rate		Maturity Date	Par		Value
Long-Term Securities — 98.2%
Corporate Bonds and Notes — 72.0%
Aerospace and Defense — 0.2%
L-3 Communications Corp.	7.625	%	6/15/12	$	275	$	281

Airlines — 0.5%
Continental Airlines Inc.	6.545	%	2/2/19		170		171
Continental Airlines Inc.	7.256	%	3/15/20		201		208
Delta Air Lines Inc.	7.111	%	9/18/11		400		406

							785

Automobiles — 6.6%
DaimlerChrysler NA Holding Corp.	7.300	%	1/15/12		245		261
Ford Motor Co.	7.450	%	7/16/31		8,050		6,319	^A
General Motors Corp.	8.250	%	7/15/23		3,450		3,019	^A

							9,599

Beverages — 0.2%
PepsiAmericas Inc.	5.750	%	7/31/12		290		297

Building Products — 0.5%
American Standard Inc.	8.250	%	6/1/09		500		526
Nortek Inc.	8.500	%	9/1/14		225		195

							721

Capital Markets — 5.0%
BankAmerica Capital III	5.930	%	1/15/27		215		194	^B
Goldman Sachs Capital II	5.793	%	12/29/49		610		577	^C
Lehman Brothers Holdings Capital Trust VII	5.857	%	11/29/49		1,360		1,296	^C
Lehman Brothers Holdings Inc.	6.500	%	7/19/17		110		112
Merrill Lynch and Co. Inc.	6.050	%	8/15/12		400		410
Merrill Lynch and Co. Inc.	5.700	%	5/2/17		1,000		972
Merrill Lynch and Co. Inc.	6.400	%	8/28/17		300		310
Merrill Lynch and Co. Inc.	6.110	%	1/29/37		320		301
Morgan Stanley	5.050	%	1/21/11		1,780		1,759
Morgan Stanley	4.750	%	4/1/14		60		56
Morgan Stanley	6.250	%	8/28/17		100		102
The Bear Stearns Cos. Inc.	5.550	%	1/22/17		720		680	^A
The Goldman Sachs Group Inc.	6.345	%	2/15/34		555		517

							7,286

Chemicals — 0.6%
The Dow Chemical Co.	7.375	%	11/1/29		800		875

Commercial Banks — 2.7%
Comerica Capital Trust II	6.576	%	2/20/37		360		325	^C
Rabobank Capital Funding Trust II	5.260	%	12/31/49		115		109	^C,D
Rabobank Capital Funding Trust III	5.254	%	12/31/16		1,145		1,054	^C,D
RBS Capital Trust III	5.512	%	9/29/49		1,460		1,366	^C
SunTrust Capital VIII	6.100	%	12/15/36		560		508	^C
Wachovia Capital Trust III	5.800	%	3/15/42		200		198	^C


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Commercial Banks — Continued
Wells Fargo Capital X	5.950	%	12/15/36	$	450	$	413	^C

							3,973

Commercial Services and Supplies — 0.3%
Waste Management Inc.	7.375	%	5/15/29		415		445

Communications Equipment — N.M.
Motorola Inc.	7.625	%	11/15/10		56		59	^A

Consumer Finance — 3.0%
American Express Co.	6.800	%	9/1/66		1,120		1,148	^C
Capital One Financial Corp.	6.750	%	9/15/17		230		235
GMAC LLC	8.000	%	11/1/31		1,610		1,580	^A
Nelnet Inc.	7.400	%	9/29/36		460		451	^C
SLM Corp.	5.000	%	10/1/13		30		26
SLM Corp.	5.375	%	5/15/14		780		681
SLM Corp.	5.050	%	11/14/14		130		110
SLM Corp.	5.625	%	8/1/33		180		139	^A

							4,370

Containers and Packaging — 0.1%
Graphic Packaging International Corp.	9.500	%	8/15/13		200		206

Diversified Financial Services — 8.5%
AGFC Capital Trust I	6.000	%	1/15/67		300		281	^C,D
AIG SunAmerica Global Financing VI	6.300	%	5/10/11		1,880		1,939	^D
Bank of America Corp.	7.800	%	9/15/16		250		280
Beaver Valley II Funding	9.000	%	6/1/17		294		326
Capital One Bank	6.500	%	6/13/13		330		334
Capital One Capital IV	6.745	%	2/17/37		390		348	^A,C
Capmark Financial Group Inc.	5.875	%	5/10/12		350		319	^C,D
Chase Capital II	5.856	%	2/1/27		725		654	^B
Citigroup Inc.	6.125	%	8/25/36		550		544
Deutsche Bank Capital Funding Trust	5.628	%	1/19/49		670		623	^C,D
Glen Meadow Pass-Through Certificates	6.505	%	2/12/67		310		298	^C,D
HSBC Finance Capital Trust IX	5.911	%	11/30/35		1,350		1,281	^C
HSBC Finance Corp.	5.700	%	6/1/11		1,730		1,744
ILFC E-Capital Trust II	6.250	%	12/21/65		790		762	^C,D
Mizuho Preferred Capital Co. LLC	8.790	%	12/29/49		110		112	^C,D
UBS Preferred Funding Trust V	6.243	%	5/12/49		1,120		1,103	^A,C
ZFS Finance USA Trust II	6.450	%	12/15/65		1,440		1,391	^C,D

							12,339

Diversified Telecommunication Services — 4.1%
AT&T Corp.	8.000	%	11/15/31		440		535
Embarq Corp.	7.082	%	6/1/16		330		342
Qwest Capital Funding Inc.	7.250	%	2/15/11		1,150		1,156	^A
Qwest Communications International Inc.	7.500	%	2/15/14		850		861
Qwest Corp.	6.875	%	9/15/33		1,000		935
Verizon Global Funding Corp.	5.850	%	9/15/35		570		545
Verizon New York Inc.	6.875	%	4/1/12		1,540		1,622

							5,996


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Electric Utilities — 4.9%
Exelon Corp.	6.750	%	5/1/11	$	550	$	572
FirstEnergy Corp.	6.450	%	11/15/11		60		62
FirstEnergy Corp.	7.375	%	11/15/31		395		432
Pacific Gas and Electric Co.	6.050	%	3/1/34		800		786
PNPP II Funding Corp.	9.120	%	5/30/16		2,282		2,595	^A
Sithe/Independence Funding Corp.	9.000	%	12/30/13		1,500		1,606
Tampa Electric Co.	6.375	%	8/15/12		145		150
TXU Energy Co.	6.125	%	3/15/08		500		503
TXU Energy Co.	7.000	%	3/15/13		370		406

							7,112

Food and Staples Retailing — 0.5%
CVS Corp.	5.750	%	8/15/11		290		294
Wal-Mart Stores Inc.	6.500	%	8/15/37		380		394

							688

Food Products — 0.2%
Tyson Foods Inc.	6.600	%	4/1/16		340		350	^E

Gas Utilities — 0.1%
Southern Natural Gas Co.	5.900	%	4/1/17		170		165	^D

Health Care Equipment and Supplies — 0.6%
Baxter International Inc.	5.900	%	9/1/16		520		524
Hospira Inc.	6.050	%	3/30/17		290		286

							810

Health Care Providers and Services — 4.3%
Aetna Inc.	5.750	%	6/15/11		540		549
Cardinal Health Inc.	6.050	%	10/15/16		410		404	^D
Coventry Health Care Inc.	5.950	%	3/15/17		440		425
HCA Inc.	7.875	%	2/1/11		250		246
HCA Inc.	6.300	%	10/1/12		180		162
HCA Inc.	6.250	%	2/15/13		930		823
HCA Inc.	5.750	%	3/15/14		65		54
HCA Inc.	9.125	%	11/15/14		400		422	^D
HCA Inc.	9.250	%	11/15/16		500		531	^D
Humana Inc.	6.450	%	6/1/16		220		223
Tenet Healthcare Corp.	6.375	%	12/1/11		1,465		1,282	^A
Universal Health Services Inc.	7.125	%	6/30/16		520		533
WellPoint Inc.	5.875	%	6/15/17		540		536

							6,190

Hotels, Restaurants and Leisure — 0.2%
Caesars Entertainment Inc.	8.125	%	5/15/11		250		255

Household Durables — 0.5%
DR Horton Inc.	5.250	%	2/15/15		410		343
Pulte Homes Inc.	6.250	%	2/15/13		145		129
The Black and Decker Corp.	5.750	%	11/15/16		290		284

							756


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Independent Power Producers and Energy Traders — 1.7%
Dynegy Holdings Inc.	6.875	%	4/1/11	$	1,300	$	1,277	^A
Dynegy Holdings Inc.	8.750	%	2/15/12		735		759	^A
The AES Corp.	9.500	%	6/1/09		39		41
TXU Corp.	6.500	%	11/15/24		520		417

							2,494

Insurance — 3.4%
Ace Ina Holdings Inc.	5.700	%	2/15/17		240		237
Allstate Corp.	6.500	%	5/15/37		480		463	^A,C
American International Group Inc.	5.450	%	5/18/17		180		175
American International Group Inc.	6.250	%	3/15/37		80		75	^C
ASIF Global Financing XIX	4.900	%	1/17/13		30		29	^D
Everest Reinsurance Holdings Inc.	6.600	%	5/15/37		260		241	^C
Liberty Mutual Group	5.750	%	3/15/14		270		264	^D
Liberty Mutual Group	7.800	%	3/15/37		300		292	^D
MetLife Inc.	6.400	%	12/15/36		1,160		1,103	^C
Prudential Financial Inc.	5.700	%	12/14/36		340		313
The Chubb Corp.	6.375	%	3/29/67		320		318	^C
The Travelers Cos. Inc.	6.250	%	3/15/37		620		600	^C
The Travelers Cos. Inc.	6.250	%	6/15/37		280		270
Willis North America Inc.	5.125	%	7/15/10		280		277
Willis North America Inc.	5.625	%	7/15/15		230		219	^A

							4,876

IT Services — 0.7%
Electronic Data Systems Corp.	7.125	%	10/15/09		600		611
Electronic Data Systems Corp.	7.450	%	10/15/29		420		425

							1,036

Leisure Equipment and Products — 0.2%
Hasbro Inc.	6.300	%	9/15/17		320		319	^E

Media — 3.4%
AMFM Inc.	8.000	%	11/1/08		210		213
Clear Channel Communications Inc.	5.500	%	9/15/14		365		287
Comcast Cable Holdings LLC	9.800	%	2/1/12		375		434
Comcast Corp.	7.050	%	3/15/33		160		169
Comcast Corp.	6.450	%	3/15/37		380		375
Cox Communications Inc.	4.625	%	1/15/10		510		504
Liberty Media LLC	8.500	%	7/15/29		130		131
Liberty Media LLC	8.250	%	2/1/30		65		64	^A
News America Inc.	6.550	%	3/15/33		545		537
TCI Communications Inc.	8.750	%	8/1/15		160		185
Time Warner Entertainment Co. LP	8.375	%	7/15/33		530		622
Time Warner Inc.	9.125	%	1/15/13		240		275
Time Warner Inc.	7.700	%	5/1/32		595		653
Viacom Inc.	5.625	%	8/15/12		520		518

							4,967

Metals and Mining — 1.3%
Freeport-McMoRan Copper & Gold Inc.	8.375	%	4/1/17		1,730		1,890


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Multi-Utilities — 1.1%
Centerpoint Energy Inc.	6.850	%	6/1/15	$	1,150	$	1,200
DTE Energy Co.	6.375	%	4/15/33		330		331	^A

							1,531

Multiline Retail — 0.7%
Federated Retail Holdings Inc.	5.350	%	3/15/12		110		108
Macy’s Retail Holdings Inc.	5.875	%	1/15/13		330		328
May Department Stores Co.	5.750	%	7/15/14		400		387
May Department Stores Co.	6.650	%	7/15/24		180		169

							992

Oil, Gas and Consumable Fuels — 8.8%
Apache Corp.	6.000	%	1/15/37		230		221
DCP Midstream LLC	6.750	%	9/15/37		420		417	^D
Devon Financing Corp. ULC	7.875	%	9/30/31		350		413
Duke Capital LLC	6.250	%	2/15/13		1,200		1,226
El Paso Corp.	7.800	%	8/1/31		2,000		2,031
EOG Resources Inc.	5.875	%	9/15/17		540		540
Hess Corp.	7.875	%	10/1/29		1,450		1,667
Kerr-McGee Corp.	6.950	%	7/1/24		300		311
Kerr-McGee Corp.	7.875	%	9/15/31		1,225		1,416
Kinder Morgan Energy Partners LP	7.125	%	3/15/12		530		559
Occidental Petroleum Corp.	6.750	%	1/15/12		500		529
Peabody Energy Corp.	6.875	%	3/15/13		285		288
Pemex Project Funding Master Trust	6.625	%	6/15/35		1,150		1,185	^A
The Williams Cos. Inc.	7.500	%	1/15/31		102		106
The Williams Cos. Inc.	8.750	%	3/15/32		1,250		1,439
XTO Energy Inc.	6.100	%	4/1/36		440		426

							12,774

Paper and Forest Products — 0.6%
Georgia-Pacific Corp.	9.500	%	12/1/11		325		343
Georgia-Pacific Corp.	7.375	%	12/1/25		250		232	^A
Weyerhaeuser Co.	6.750	%	3/15/12		235		244

							819

Pharmaceuticals — 0.6%
Wyeth	6.950	%	3/15/11		680		713	^E
Wyeth	5.950	%	4/1/37		170		164

							877

Real Estate Investment Trusts — 0.5%
Health Care REIT Inc.	5.875	%	5/15/15		130		124	^A
iStar Financial Inc.	5.950	%	10/15/13		590		554

							678

Real Estate Management and Development — 0.2%
Forest City Enterprises Inc.	7.625	%	6/1/15		225		212
Socgen Real Estate Co. LLC	7.640	%	12/29/49		80		80	^C,D

							292


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Corporate Bonds and Notes — Continued
Thrifts and Mortgage Finance — 2.9%
BB&T Capital Trust II	6.750	%	6/7/36	$	640	$	656
Countrywide Financial Corp.	5.800	%	6/7/12		950		891
Countrywide Home Loans Inc.	4.250	%	12/19/07		250		247	^A
Residential Capital LLC	8.190	%	4/17/09		1,420		994	^B,D
Residential Capital LLC	6.000	%	2/22/11		1,350		1,100
Residential Capital LLC	7.500	%	6/1/12		420		340	^E

							4,228

Tobacco — 1.1%
Altria Group Inc.	7.000	%	11/4/13		185		201
Reynolds American Inc.	7.250	%	6/1/12		1,360		1,442

							1,643

Wireless Telecommunication Services — 1.2%
New Cingular Wireless Services Inc.	8.750	%	3/1/31		475		601
Nextel Communications Inc.	5.950	%	3/15/14		88		84
Nextel Communications Inc.	7.375	%	8/1/15		285		290
Sprint Capital Corp.	6.900	%	5/1/19		330		331
Sprint Capital Corp.	8.750	%	3/15/32		340		390

							1,696

Total Corporate Bonds and Notes (Cost — $ 103,385)							104,670

Mortgage-Backed Securities — 0.8%
Variable Rate Securities^F — 0.8%
Thornburg Mortgage Securities Trust 2007-4 2A1	6.240	%	9/25/37		586		588
Thornburg Mortgage Securities Trust 2007-4 3A1	6.228	%	9/25/37		537		532

Total Mortgage-Backed Securities (Cost — $ 1,113)							1,120

U.S. Government and Agency Obligations — 0.5%
Fixed Rate Securities — 0.5%
United States Treasury Notes	4.500	%	4/30/12		700		709	^A

Total U.S. Government and Agency Obligations (Cost — $693)							709

U.S. Government Agency Mortgage-Backed Securities — N.M.
Fixed Rate Securities — N.M.
Freddie Mac	10.250	%	5/1/09		5		5

Total U.S. Government Agency Mortgage-Backed Securities (Cost — $ 5)							5

Yankee Bonds^G — 24.9%
Aerospace and Defense — 0.3%
Systems 2001 Asset Trust	6.664	%	9/15/13		402		424	^D

Capital Markets — 0.2%
Deutsche Bank AG	6.000	%	9/1/17		330		334

Commercial Banks — 9.8%
AES El Salvador Trust	6.750	%	2/1/16		750		737	^D
ATF Capital BV	9.250	%	2/21/14		810		825	^D
Banco Mercantil del Norte SA	6.135	%	10/13/16		750		746	^C,D
Barclays Bank PLC	7.434	%	9/29/49		560		595	^C,D


	Rate		Maturity Date	Par		Value
Long-Term Securities — Continued
Yankee Bonds — Continued
Commercial Banks — Continued
Glitnir Banki Hf	6.330	%	7/28/11	$	400	$	407	^D
Glitnir Banki Hf	6.693	%	6/15/16		680		695	^C,D
Glitnir Banki Hf	7.451	%	12/14/49		210		207	^A,C,D
HBOS Capital Funding LP	6.071	%	6/30/49		560		539	^C,D
HSBK Europe BV	7.250	%	5/3/17		490		442	^D
ICICI Bank Ltd.	6.375	%	4/30/22		100		94	^C,D
ICICI Bank Ltd.	6.375	%	4/30/22		200		187	^C,D
Kaupthing Bank Hf	6.050	%	4/12/11		540		536	^B,D
Kaupthing Bank Hf	5.750	%	10/4/11		480		474	^D
Kaupthing Bank Hf	7.125	%	5/19/16		1,250		1,262	^D
Mizuho Financial Group	5.790	%	4/15/14		1,100		1,091	^D
Resona Preferred Global Securities	7.191	%	12/29/49		1,035		1,039	^C,D
Royal Bank of Scotland Group PLC	7.640	%	3/17/49		100		100	^C
RSHB Capital SA	7.175	%	5/16/13		1,340		1,365	^D
RSHB Capital SA	6.299	%	5/15/17		380		358	^D
Shinsei Finance Cayman Ltd.	6.418	%	1/29/49		1,210		1,122	^C,D
Sumitomo Mitsui Banking Corp.	5.625	%	12/31/49		270		251	^C,D
TuranAlem Finance BV	8.250	%	1/22/37		740		625	^D
VTB Capital SA for Vneshtorgbank	5.956	%	8/1/08		560		554	^B,D

							14,251

Consumer Finance — 0.8%
Aiful Corp.	6.000	%	12/12/11		1,095		1,076	^D

Diversified Financial Services — 1.3%
Lukoil International Finance BV	6.356	%	6/7/17		310		295	^D
Petroplus Finance Ltd.	7.000	%	5/1/17		600		570	^D
SMFG Preferred Capital	6.078	%	1/29/49		380		351	^C,D
TNK-BP Finance SA	7.500	%	7/18/16		360		358	^D
UFJ Finance Aruba AEC	6.750	%	7/15/13		355		367

							1,941

Diversified Telecommunication Services — 2.5%
British Telecommunications PLC	9.125	%	12/15/30		330		437	^E
Deutsche Telekom International Finance BV	5.750	%	3/23/16		160		158	^A,E
Deutsche Telekom International Finance BV	8.250	%	6/15/30		500		612	^E
France Telecom SA	8.500	%	3/1/31		560		720
Koninklijke (Royal) KPN NV	8.375	%	10/1/30		240		277
Telecom Italia Capital	7.200	%	7/18/36		760		804
Telefonica Emisiones S.A.U.	7.045	%	6/20/36		600		639

							3,647

Electric Utilities — 0.6%
Enersis SA	7.375	%	1/15/14		317		336
Enersis SA/Cayman Island	7.400	%	12/1/16		452		487

							823

Food and Staples Retailing — 0.2%
Delhaize Group	6.500	%	6/15/17		290		292	^D

Foreign Governments — 2.7%
Federative Republic of Brazil	7.125	%	1/20/37		81		90	^A
Federative Republic of Brazil	11.000	%	8/17/40		177		237	^A


	Rate		Maturity Date	Par			Value
Long-Term Securities — Continued
Yankee Bonds — Continued
Foreign Governments — Continued
Quebec Province	7.970	%	7/22/36	$	650		$	886
Republic of Colombia	7.375	%	9/18/37		100			110
Republic of Panama	7.125	%	1/29/26		88			95	^A
Republic of Panama	9.375	%	4/1/29		14			19
Republic of Panama	6.700	%	1/26/36		181			186	^A
Russian Federation	7.500	%	3/31/30		271			305	^D
United Mexican States	6.750	%	9/27/34		1,825			1,985	^A

								3,913

Gas Utilities — 0.2%
Intergas Finance BV	6.375	%	5/14/17		270			261	^D

Industrial Conglomerates — 1.0%
Tyco International Group SA	6.375	%	10/15/11		1,450			1,484

Insurance — 0.6%
Axa	8.600	%	12/15/30		550			655
XL Capital Ltd.	5.250	%	9/15/14		250			239

								894

Media — 0.2%
Rogers Cable Inc.	6.250	%	6/15/13		250			253

Metals and Mining — 0.8%
Vale Overseas Ltd.	6.875	%	11/21/36		1,148			1,183

Oil, Gas and Consumable Fuels — 3.5%
Anadarko Finance Co.	7.500	%	5/1/31		130			142
Gazprom	9.625	%	3/1/13		50			58	^A,D
Gazprom	9.625	%	3/1/13		20			23	^D
Gazprom	6.212	%	11/22/16		450			446	^D
Gazprom	6.510	%	3/7/22		400			396	^D
Petrobras International Finance Co.	6.125	%	10/6/16		825			831
Petrozuata Finance Inc.	8.220	%	4/1/17		3,205			3,197	^D

								5,093

Wireless Telecommunication Services — 0.2%
Rogers Wireless Inc.	6.375	%	3/1/14		300			303

Total Yankee Bonds (Cost — $ 35,590)								36,172

Total Long-Term Securities (Cost — $ 140,786)								142,676

Investment of Collateral From Securities Lending — 13.0%
State Street Navigator Securities Lending Prime Portfolio
					18,924	(shs)		18,924

Total Investment of Collateral From Securities Lending (Cost— $ 18,924)								18,924

Total Investments — 111.2% (Cost — $ 159,710)^H								161,600
Obligation to Return Collateral For Securities Loaned — (13.0)%								(18,924	)
Other Assets Less Liabilities — 1.8%								2,581

Net Assets — 100.0%							$	145,257

N.M. Not Meaningful.

A	All or a portion of this security is on loan.

Indexed Security—The rates of interest earned on these securities are tied to the London Interbank Offered Rate (“LIBOR”), the Euro Interbank Offered Rate (“EURIBOR”) Index, the Consumer Price Index (“CPI”), the one-year Treasury Bill Rate or the ten-year Japanese Government Bond Rate. The coupon rates are the rates as of September 30, 2007.

C	Stepped Coupon Security—A security with a predetermined schedule of interest or dividend rate changes at which time it begins to accrue interest or pay dividends according to the predetermined schedule.

D	Rule 144a Security—A security purchased pursuant to Rule 144a under the Securities Act of 1933 which may not be resold subject to that rule except to qualified institutional buyers. These securities, which the Fund’s investment adviser has determined to be liquid, represent 22.50% of net assets.

E	Credit Linked Security—The rates of interest earned on these securities are tied to the credit rating assigned by Standard & Poor’s Rating Service and/or Moody’s Investors Services.

F	The coupon rates shown on variable rate securities are the rates at September 30, 2007. These rates vary with the weighted average coupon of the underlying loans.

G	Yankee Bond—A dollar-denominated bond issued in the U.S. by foreign entities.

H	Aggregate cost for federal income tax purposes is substantially the same as book cost. At September 30, 2007, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:


Gross unrealized appreciation	$	4,878
Gross unrealized depreciation		(2,988	)

Net unrealized appreciation	$	1,890

Security Valuation

The Fund’s securities are valued on the basis of readily available market quotations or, lacking such quotations, at fair value as determined under policies approved by and under the general oversight of the Board of Directors. In determining fair value, all relevant qualitative and quantitative factors available are considered. These factors are subject to change over time and are reviewed periodically. The Fund may use fair value pricing instead of market quotations to value one or more securities if the Fund believes that, because of special circumstances, doing so would more accurately reflect the prices the Fund expects to realize on the current sale of those securities. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from quoted or published values or from the values that would have been used had a ready market for the investments existed, and the differences could be material.

Securities Lending

The Fund may lend its securities to approved brokers to earn additional income, and will receive cash and U.S. government securities as collateral against the loans. Cash collateral received is invested in a money market pooled account by the Fund’s lending agent. Collateral is maintained over the life of the loan in an amount not less than 100% of the value of the loaned securities.

At September 30, 2007, the market value of the securities on loan to broker-dealers was $18,530 for which the fund received collateral of $18,924 in cash. Such collateral is in the possession of the Fund’s custodian. The cash invested in the State Street Navigator Securities Lending Prime Portfolio is included in the Fund’s portfolio of investments. As wish other extensions of credit, the Fund may bear the risk of delay in recovery or even loss of rights to the collateral should the borrower of the securities fail financially.

Other information regarding the Fund is available in the Fund’s most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov).

Item 2 – Controls and Procedures

(a)

Western Asset Income Fund (the “Registrant”) principal executive and principal financial officers have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant’s disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-Q is recorded, processed, summarized and reported within the required time periods in the Securities and Exchange Commission’s rules and forms and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-Q is accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)

There were no changes in the Registrant’s internal control over financial reporting during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 3 – Exhibits

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – filed as an exhibit hereto.

SIGNATURES

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


Western Asset Income Fund

By:		/s/ R. Jay Gerken
R. Jay Gerken
President
Western Asset Income Fund
Date: November 27, 2007

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/ R. Jay Gerken
R. Jay Gerken
President
Western Asset Income Fund
Date: November 27, 2007

By:		/s/ Marie K. Karpinski
Marie K. Karpinski
Principal Financial and Accounting Officer
Western Asset Income Fund
Date: November 20, 2007