Western Asset Global High Income Fund

EHI

Market cap $193M

EHI offers a high 12.7% yield and global diversification, but distribution coverage is declining and overdistribution risks NAV erosion. The fund has shifted to a higher allocation of junk-rated debt, which could suggest management's view of stable credit and limited rate cuts. I'd like to see a wider discount on this fund before considering it to be a good time to add.

EHI offers a high distribution rate of 12.33% on NAV, with monthly payouts and a current market price discount of 3.08%. The fund's 3- and 6-month total returns outperform HYG, despite HYG's historical 5-year outperformance. EHI maintains a BB credit rating and uses 29.24% leverage, resulting in higher expenses but attractive income potential.

EHI offers a high 13.2% yield and global diversification, but its performance is heavily dependent on future interest rate cuts. The fund's price and NAV have declined significantly, with recent returns only modestly positive when distributions are included. EHI's high leverage and substantial exposure to below-investment-grade debt increase risk, especially if defaults rise in a high-rate environment.

NEW YORK--(BUSINESS WIRE)--Category: Financials.

Western Asset Global High Income Fund offers a high 12.80% yield, higher than both domestic and international fixed-income indices and its peers. The EHI closed-end fund's high yield may signal market doubts about its distribution sustainability, necessitating a review of its financial health and distribution coverage. The fund's portfolio is heavily weighted towards junk bonds, which have outperformed investment-grade bonds recently but may face valuation challenges.

NEW YORK--(BUSINESS WIRE)--Category: Fund Announcement.

NEW YORK--(BUSINESS WIRE)--Category: Fund Announcement.

Western Asset Global High Income Fund (EHI) offers a diversified, leveraged global fixed-income portfolio with exposure to both investment-grade and below-investment-grade holdings. The recent rights offering has pushed EHI to a discount, making it attractive relative to short-term averages but not looking like a great bargain relative to the long term. It delivers a high distribution rate, but there is a lack of coverage, though there is some optimism that coverage can improve going forward based on a lower rate environment.

Western Asset Global High Income Fund offers high income potential with a global focus, providing international diversification in portfolios. The fund boasts an 11.77% yield, which is higher than most of its peers. Leverage ratio of 34.53% raises concerns, but the fund is currently covering its distribution and trades at a discount on NAV.

NEW YORK--(BUSINESS WIRE)--Effective June 3, 2024, the named portfolio management team responsible for the day-to-day oversight of the Fund is as follows: Michael Buchanan Ryan Brist Ian Edmonds Walter Kilcullen Christopher Kilpatrick Also as of June 3, 2024, Chia-Liang (CL) Lian is no longer a portfolio manager of the Fund. Data and commentary provided in this press release are for informational purposes only. Franklin Resources and its affiliates do not engage in selling shares of the Fund. F.