Western Asset Managed Municipals Fund · NYSE:MMU
Western Asset Managed Municipals Fund — Western Asset — Investor Presentation (July 2026)
15 slides from Western Asset Managed Municipals Fund's investor presentation, Jul 15, 2026
Slide 1: 3Q26 Market Outlook: Quarterly CIO Webcast
3Q26 Market Outlook: Quarterly CIO Webcast July 15, 2026 Presented by: Michael Buchanan Catherine Matthews Chief Investment Officer Senior Client Portfolio Manager Western Asset Western Asset For Financial Professional and Institutional Use Only. Not for Public Use. Not FDIC Insured | No Bank Guaran
Slide 2: Global macro outlook
Global macro outlook Moderate global growth, heightened inflation concerns Growth Inflation • US growth supported by AI capex, resilient consumers, and pro- • To moderate gradually toward central bank objectives business policies • Energy price pressures have peaked, disinflation to feed gradually i
Slide 3: Inflation outlook
Inflation outlook Inflation reacceleration in 2026. To moderate towards central bank objectives in 2027 CPI / PCE / Dallas Fed Trimmed Mean (6mo SAAR) Year End Inflation Forecast As of May 31, 2026 June OECD – As of June 2026 10% 10% 3.7 9% 9% United States 2.1 8% 8% 7% 7% 2.8 Euro area 6% Headline
Slide 4: US labor market
US labor market Broadening job growth, moderating wage growth Civilian Unemployment Rate: 16 yr + (SA, %) Atlanta Fed Wage Tracker As of June 30, 2026 As of June 2026 5.0% 9.0% 8.0% 4.54% 4.5% 7.0% 4.19% 6.0% 4.0% Job Switcher (3mma) 5.0% 4.0% 3.5% Smoothed (3mma) 3.0% Median Wage Growth 2.0% 3.0% 2
Slide 5: Policy rates
Policy rates Expectations shift higher Policy Rates Implied Policy Rate at the End of 2026 As of July 13, 2026 As of July 13, 2026 6.0 5.0% Market Implied 5.5 4.5% 5.0 4.5 RBA 4.0% BoE 4.0 Fed 3.5% 3.5 3.0% 3.0 ECB 2.5 2.5% 2.0 BoJ 2.0% 1.5 1.0 1.5% 0.5 1.0% 0.0 0.5% -0.5 -1.0 0.0% 2018 2019 2020 20
Slide 6: EM rates
EM rates High real yields and strong USD create opportunities EM Real Yields USD Remains Historically Strong Despite 2025 Weakening As of May 31, 2026 As of June 2026 10 115 GBI-EM GD 110 8 Nominal Yield 105 6 Inflation (GBI-EM GD 100 weighted) 4 95 Percent 2 GBI-EM GD Real Yield 90 0 85 80 -2 75 -4
Slide 7: Spread sector valuations
Spread sector valuations Credit markets have remained resilient Credit Spreads Are Close to Tights in Most Sectors: 5-Year Range (High/Low/Current) As of July 7, 2026 69 US IG Credit 67 151 76 EUR IG Corp* 72 234 261 US HY Corps 248 585 258 EUR HY Corps* 256 668 476 US Leveraged Loans 401 604 126 AA
Slide 8: AI debt boom driven by surging hyperscaler spending
AI debt boom driven by surging hyperscaler spending Estimated Financing Breakdown for Total Capex – Estimated Cash Need or Hyperscaler Capex Drives Higher Issuance ($B) Source Through 2028 As of July 8, 2026 As of July 8, 2026 1,200 1,110 1,000 Cash Need $2.9T Global Capex on Data Centers (ex. Power
Slide 9: Impact of AI funding
Impact of AI funding Percent of US Credit Index: Technology + Amazon & META 5 Largest US Hyperscalers As of December 31, 2025 As of June 30, 2026 250 12% Capex Operating cash flow 11% 200 10% 150 9% USD (Billions) 100 8% 7% 50 6% 0 5% Free cash flow 4% -50 2016 2017 2018 2019 2020 2021 2022 2023 202
Slide 10: High-yield default rates not indicative of fundamental stress
High-yield default rates not indicative of fundamental stress US HY Default Rate (Issuer Weighted) Private Credit Trailing 12-Month Borrower Default Rate As of May 31, 2026 As of February 10, 2026 10.0% 5.0% 9.0% 8.0% 4.0% 7.0% 6.0% 3.0% 5.0% 4.0% 2.0% 3.0% 2.0% 1.0% 1.0% 0.0% 0.0% 2012 2015 2018 20
Slide 11: Near-term opportunity in B vs. BB rated issues
Near-term opportunity in B vs. BB rated issues B/BB High-Yield Ratio B/BB Loan Spread Ratio: Historically Elevated Levels are Shortlived As of July 2026 As of July 2026 2.1 2.1 2.0 2.0 1.9 1.9 1.8 1.8 1.7 1.7 1.6 1.6 1.5 1.5 1.4 1.4 1.3 1.3 1.2 1.2 2010 2012 2014 2016 2018 2020 2022 2024 2026 2010 2
Slide 12: CMBS valuations remain attractive
CMBS valuations remain attractive BBB CMBS Spreads vs REIT Equity As of June 26, 2026 900 3200 REIT Index (left) 800 2700 700 600 Basis Points Basis Points 2200 BBB CMBS Spread (right) 500 400 1700 300 1200 200 Jul 19 Jan 20 Jul 20 Jan 21 Jul 21 Jan 22 Jul 22 Jan 23 Jul 23 Jan 24 Jul 24 Jan 25 Jul 2
Slide 13: CLOs – Attractive features create solid demand
CLOs – Attractive features create solid demand Securitized Product Purchases by Insurance in Q1 2026 AAA-A CLOs Deliver Superior Capital Efficiency for Insurance Companies As of March 31, 2026 As of June 30, 2026 45 41.2 1000 40 800 35 30 600 25 18.9 18.7 20 17.2 16.7 400 15 10 200 5 0 0 AAA AA A BB
Slide 14: Key Takeaways
Key Takeaways Global Macro • Global inflation elevated but set to moderate • Central bank’s lean hawkishly • Longer-term inflation expectations remain well anchored • Growth supported by AI-capex, fiscal spending and resilient consumers • Path to long-term resolution in Middle East remains uncertain
Slide 15: Risk Disclosure
Risk Disclosure © Western Asset Management Company, LLC 2026. The information contained in these materials (“the materials”) is intended for the exclusive use of the designated recipient (“the recipient”). This information is proprietary and confidential and may contain commercially sensitive inform