Company: EMD
Filing Date: 2025-02-27
Form Type: N-CSR
Source: 0001133228-25-001572
Chunk: 3

Company: WESTERN ASSET EMERGING MARKETS DEBT FUND INC.
Filing Date: 2025-02-27
Form: N-CSR
Chunk 3
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 with high inflation and low growth and continues to be negatively impacted by geopolitical events in the region. One example of an underweight that we increased in 2024 was Poland. Poland bonds traded well and we saw better relative value elsewhere. Lastly, in Latin America we maintained our overweight given better valuations and several opportunities in both corporates and sovereigns. From a ratings perspective, we added to BB and single B corporate and sovereign opportunities that offered additional income for shareholders, while reducing our longer-duration investment grade exposure. We ended the year overweight below investment-grade emerging markets, with an emphasis on BB and single B rated issuers. We ended the year underweight investment-grade rated issuers. From a sector/industry perspective, we continued to overweight energy, metals & mining, communication services and banking. In general, fundamental performance was stable in commodity-price-driven sectors such as energy and metals & mining. In the communication services sector, valuations improved and we generally like businesses with recurring cash flows. Globally, banks have, in general, de-risked post the great financial crisis and have posted positive fundamental performance. U.S. Treasury futures, which were used to manage the Fund’s duration and yield curve positioning, contributed to performance. Currency forwards, which were used to manage the Fund’s local currency exposures, also contributed to performance. The use of leverage was tactically managed during the reporting period. We ended the period with leverage at roughly 24% of the total assets of the Fund, versus roughly 29% at the beginning of the period. Overall, the use of leverage was positive for performance during the twelve months ended December 31, 2024. Performance review For the twelve months ended December 31, 2024, Western Asset Emerging Markets Debt Fund Inc. returned 10.43% based on its net asset value (NAV) iv and 16.10% based on its New York Stock Exchange (NYSE) market price per share. The Fund’s unmanaged

2 Western Asset Emerging Markets Debt Fund Inc. 2024 Annual Report

benchmark, the JPMorgan Emerging Markets Bond Index Global Diversified v , returned 6.54% for the same period. The Fund has adopted a managed distribution policy (the Managed Distribution Policy). Pursuant to this policy, the Fund intends to make regular monthly distributions to common shareholders at a fixed rate per common share, which rate may be adjusted from time to time by the Fund’s Board of Directors. This policy has no impact on the Fund’s investment strategy and may reduce