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Simpson Thacher represented Western Asset Mortgage Defined Opportunity Fund Inc. (the “Fund”) in connection with its initial public offering of common stock. The offering raised approximately $218.5 million, assuming full exercise of the underwriters’ overallotment option. The Fund is a newly organized, non-diversified, limited-term, closed-end management investment company which trades on the New York Stock Exchange under the symbol “DMO”. The underwriting syndicate for the offering was led by BofA Merrill Lynch and Wells Fargo Securities.

The Fund’s primary investment objective is to provide current income. As a secondary objective, the Fund will seek capital appreciation. The Fund seeks to achieve its investment objectives by investing primarily in a diverse portfolio of mortgage-backed securities (“MBS”), consisting primarily of non-agency residential mortgage-backed securities and commercial mortgage-backed securities. The Fund intends to invest in MBS directly, and indirectly through a separate investment in a public-private investment fund formed in connection with the Legacy Securities Public-Private Investment Program established by the U.S. Department of the Treasury.

Legg Mason Partners Fund Advisor, LLC is the Fund’s investment manager. The Fund’s subadviser is Western Asset Management Company, a subsidiary of Legg Mason, Inc. and one of the world's premier fixed-income managers with $482 billion in assets under management as of December 31, 2009. Wilshire Associates Incorporated will serve as the Fund’s allocation subadviser.

The Simpson Thacher team for the transaction included: Sarah Cogan, Robert Griffith, and Medard Fischer (Capital Markets); and Jonathan Cantor and Rian Balfour (Tax). Paralegal Natalie Kone provided valuable assistance.