Western Asset Variable Rate Strategic Fund Inc. (NYSE: GFY) Announces Board Approval of Plan Of Liquidation and Dissolution

Western Asset Variable Rate Strategic Fund Inc. (the "Fund") announced today that the Fund's Board of Directors (the "Board") has approved a plan of liquidation and dissolution of the Fund, subject to stockholder approval of such plan in accordance with Maryland law. Based on the recommendations of Legg Mason Partners Fund Advisor, LLC ("LMPFA"), the Fund's investment manager, and Western Asset Management Company, LLC ("Western Asset"), one of the Fund's sub-advisers, the Board believes that liquidation and dissolution of the Fund is in the best interests of the Fund.

As was announced in a separate press release, the Fund did not receive the requisite vote required by the Investment Company Act of 1940, as amended (the "1940 Act"), to approve its 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 pending combination of Legg Mason, Inc. ("Legg Mason"), 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 will result in the automatic termination of the Fund's current management and subadvisory agreements.

In order to allow LMPFA, Western Asset, Western Asset Management Company Limited ("Western Asset Limited") and Western Asset Management Company Pte. Ltd. ("Western Asset Singapore") to continue to manage the Fund, the Board has approved interim management and subadvisory agreements for the Fund in accordance with Rule 15a-4 under the 1940 Act that will take effect upon consummation of the Transaction and will continue for a duration of 150 days. In anticipation of the liquidation and the termination of the interim management and subadvisory agreements after 150 days, the Fund may deviate from its investment objective and strategies to ensure an orderly liquidation and dissolution.

The plan of liquidation and dissolution will be submitted to the Fund's stockholders at a special meeting called for that purpose. Information about the special meeting will be provided by future public announcements. In connection with the proposal to approve the plan of liquidation and dissolution, the Fund intends to file a definitive proxy statement with the Securities and Exchange Commission (the "SEC"). Stockholders are advised to read the Fund's proxy statement related to the plan of liquidation and dissolution 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 LMPFA, a wholly-owned subsidiary of Legg Mason, and is sub-advised by Western Asset, Western Asset Limited and Western Asset Singapore, 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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