Semi-Annual Report October 31, 2022

WESTERN ASSET HIGH INCOME FUND II INC. (HIX)

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Fund objectives

The Fund seeks to maximize current income. As a secondary objective, the Fund seeks capital appreciation to the extent consistent with its objective of seeking to maximize current income.

Under normal market conditions, the Fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in high-yield debt securities. In addition, the Fund may invest up to 35% of its total assets in debt securities of issuers located in emerging market countries.

What's inside

Letter from the chairman

III

Performance review

V

Fund at a glance

1

Schedule of investments

2

Statement of assets and liabilities

19

Statement of operations

20

Statements of changes in net assets

21

Statement of cash flows

22

Financial highlights

24

Notes to financial statements

26

Board approval of management and subadvisory agreements

43

Dividend reinvestment plan

50

  1. Western Asset High Income Fund II Inc.

Letter from the chairman

Dear Shareholder,

We are pleased to provide the semi-annual report of Western Asset High Income Fund

  1. Inc. for the six-month reporting period ended October 31, 2022. Please read on for Fund performance information during the Fund's reporting period.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.franklintempleton.com. Here you can gain immediate access to market and investment information, including:

  • Fund prices and performance,
  • Market insights and commentaries from our portfolio managers, and
  • A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

Chairman, President and Chief Executive Officer

November 30, 2022

Western Asset High Income Fund II Inc.

III

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Performance review

For the six months ended October 31, 2022, Western Asset High Income Fund II Inc. returned -11.68% based on its net asset value ("NAV")i and -10.18% based on its New York Stock Exchange ("NYSE") market price per share. The Fund's unmanaged benchmarks, the Bloomberg U.S. Corporate High Yield - 2% Issuer Cap Indexii and the JPMorgan Emerging Markets Bond Index Globaliii, returned -4.71% and -9.26%, respectively, for the same period. The Lipper High Yield (Leveraged) Closed-End Funds Category Averageiv returned -8.70% over the same time frame. Please note that Lipper performance returns are based on each fund's NAV.

The Fund has a practice of seeking to maintain a relatively stable level of distributions to shareholders. This practice has no impact on the Fund's investment strategy and may reduce the Fund's NAV. The Fund's manager believes the practice helps maintain the Fund's competitiveness and may benefit the Fund's market price and premium/discount to the Fund's NAV.

During this six-month period, the Fund made distributions to shareholders totaling $0.29 per share. As of October 31, 2022, the Fund estimates that 87% of the distributions were sourced from net investment income and 13% constituted a return of capital.* The performance table shows the Fund's six-month total return based on its NAV and market price as of October 31, 2022. Past performance is no guarantee of future results.

Performance Snapshot as of October 31, 2022 (unaudited)

6-Month

Price Per Share

Total Return**

$4.89

(NAV)

-11.68%†

$4.56

(Market Price)

-10.18%‡

All figures represent past performance and are not a guarantee of future results. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

  • Total returns are based on changes in NAV or market price, respectively. Returns reflect the deduction of all Fund expenses, including management fees, operating expenses, and other Fund expenses. Returns do not reflect the deduction of brokerage commissions or taxes that investors may pay on distributions or the sale of shares.
  • Total return assumes the reinvestment of all distributions, including returns of capital, if any, at NAV.
  • Total return assumes the reinvestment of all distributions, including returns of capital, if any, in additional shares in accordance with the Fund's Dividend Reinvestment Plan.
  • These estimates are not for tax purposes. The Fund will issue a Form 1099 with final composition of the distributions for tax purposes after year-end. A return of capital is not taxable and results in a reduction in the tax basis of a shareholder's investment. For more information about a distribution's composition, please refer to the Fund's distribution press release or, if applicable, the Section 19 notice located in the press release section of our website, www.franklintempleton.com.

Western Asset High Income Fund II Inc.

V

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Western Asset High Income Fund II Inc. published this content on 31 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 December 2022 00:08:06 UTC.