Western Asset Variable Rate Strategic Fund Inc. (the “Fund”) announced today that the Fund’s Board of Directors (the “Board”) has set a record date of September 18, 2020 for determining those stockholders of the Fund entitled to notice of and to vote at the special meeting of stockholders, or at any adjournment or postponement thereof, to be held on or about November 13, 2020.
The Board has approved a plan of liquidation and dissolution (the “Plan”) of the Fund, subject to stockholder approval of the Plan in accordance with Maryland law. The Board believes that liquidation and dissolution of the Fund is in the best interests of the Fund because the Fund did not receive the requisite vote required by the Investment Company Act of 1940 (the “1940 Act”) to approve new management and subadvisory agreements at the special meeting of stockholders of the Fund held on July 6, 2020.
These new agreements were proposed in connection with the combination of Legg Mason, Inc., the parent company of the Fund’s investment manager and subadvisers, and Franklin Resources, Inc., a global investment management organization operating as Franklin Templeton (the “Transaction”). The closing of the Transaction on July 31, 2020 resulted in the automatic termination of the Fund’s prior management and subadvisory agreements. The Fund’s manager and subadvisers are currently managing the Fund under interim agreements, in reliance on Rule 15a-4 under the 1940 Act, which will automatically terminate following the conclusion of their term on December 28, 2020. Absent relief from the U.S. Securities and Exchange Commission (the “SEC”) or its staff, the Fund’s investment manager and subadvisers will not be permitted to manage the Fund after December 28, 2020, even if stockholders do not approve the Plan.
The Plan will become effective only upon (a) its adoption and approval by the holders of a majority of the votes entitled to be cast by the outstanding shares of capital stock of the Fund and (b) the satisfactory resolution in the sole discretion of the Board of any and all claims pending against the Fund and/or the Board. To ensure an orderly liquidation of its assets, the Fund may deviate from its investment objective and strategies effective with this announcement.
In connection with the proposal to approve the Plan, the Fund intends to file a definitive proxy statement with the SEC. Stockholders are advised to read the Fund’s proxy statement related to the Plan when it becomes available because it will contain important information. When filed with the SEC, the proxy statement and other documents filed by the Fund will become available for free on the SEC website, www.sec.gov. Copies of the proxy statement will also be mailed to each stockholder of record as of the record date for the special stockholder meeting.
About the Fund
The Fund is a non-diversified, closed-end management investment company that is managed by Legg Mason Partners Fund Advisor, LLC (“LMPFA”), a wholly-owned subsidiary of Franklin Resources, Inc., and is sub-advised by Western Asset Management Company, LLC, Western Asset Management Company Limited and Western Asset Management Company Pte. Ltd., affiliates of LMPFA.
This press release may contain statements regarding plans and expectations for the future that constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the Fund’s current plans and expectations, and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Additional information concerning such risks and uncertainties are contained in the Fund’s filings with the SEC.
For more information about the Fund, please call Investor Relations: 1-888-777-0102, or consult the Fund’s web site at www.lmcef.com. The information contained on the Fund’s web site is not part of this press release. Hard copies of the Fund’s complete audited financial statements are available free of charge upon request.
Category: Fund Announcement
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