WIA and WIW Announce Year-End Review: Period Ended December 31, 2006.

PASADENA, Calif. & LISLE, Ill. -- Annual Review: Period Ended December 31, 2006

Today, Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund (NYSE: WIA) and Western Asset/Claymore U.S. Treasury Inflation Protected Securities Fund 2 (NYSE: WIW) made available their annual review for the period ended December 31, 2006.

Can you provide a recap of 2006 economic activity and how WIA and WIW were affected?

After a strong first quarter of the year in which real GDP grew at 5.6% and it felt to us like the Fed would never stop increasing rates, economic activity began slowing. The cumulative effects of higher short-term rates and an over-extended housing market began dragging down growth so that by the third quarter real GDP growth was down to only 2.0%. In August, after raising the Fed Funds target rate to 5.25% in June, the Federal Reserve (Fed) stopped raising rates, saying that their forecast called for a slowing economy and for a decline in inflation. Although Chairman Bernanke was not afforded much credibility at the time, in hindsight the Fed's decision looks to us to be remarkably prescient.

Indeed, inflation in the U.S., as measured by the Consumer Price Index for All Urban Consumers (CPI-U), fell from 3.4% at the end of December 2005 to just 2.0% as of November 2006. While CPI-U rose during the first half of 2006, largely on increases in rent and energy prices, it dropped precipitously during the second half of the year when energy prices collapsed. For the year, oil prices as measured by near-month futures prices, went from being up over 25% in July when crude reached $77/barrel, to being almost unchanged by the end of the year. Core CPI (which excludes the effects of food and energy) actually rose slightly during 2006, from 2.2% to 2.6%, but we believe that this was largely discounted by the market. Meanwhile, core Personal Consumption Expenditures (PCE), which we believe is the Fed's favorite inflation measure and also excludes the effects of food and energy, increased only slightly from 2.1% in December 2005 to 2.2% as of November 2006.

The bottom line was that 2006 was a very difficult year for U.S. Treasury Inflation Protected Securities (U.S. TIPS), as real rates moved higher and CPI-U accretion fell dramatically. The 10-year U.S TIPS real yield rose from approximately 2.06% at the end of 2005 to approximately 2.41% at the end of 2006, and with the reduced inflation accretion as well, generated a total return of just 0.61% for the year. As a result, for the year, both Funds' net asset values declined, though WIW's decline was less pronounced due to its allocation to emerging markets.

What is your outlook for the Funds' primary investments -- U.S. TIPS, emerging market debt (WIW) and corporate bonds (WIA)? What is your outlook for inflation and short-term interest rates?

As we enter 2007, we believe that the consensus forecast is for real GDP to slow to around 2.0%. We believe the outlook for employment, housing, and consumer spending is still uncertain and that the risks are skewed towards weaker, rather than stronger, growth. Despite core inflation remaining above the Fed's defined "comfort zone" of 1.5%-2.0%, we do not believe that there will be any more Fed tightening in 2007, as they have already stated that they believe that inflation will remain "well contained." We think that this means that if the economy weakens, the Fed could cut rates by 25 to 50 basis points relatively easily. This outlook puts us pretty firmly in the "soft landing" camp where the economy slows down, but only gradually, and there is no recession. Our outlook means that real rates would remain stable or move slightly lower, mostly at the front end of the yield curve, if the Fed did in fact lower rates.

On the inflation front, we do not see much increase in core inflation, as most components are growing around their trends. The wild card remains energy prices, which could move either way, but we believe a move in energy prices would likely only be for a short period of time - a spike up or down rather than a new trend. After 2006, U.S. TIPS remain reasonably priced relative to nominal Treasuries, with both real and breakeven inflation rates on 10-year U.S. TIPS around 2.3%. Comparing the breakeven inflation rate of 2.3% to the 10-year average of CPI-U of approximately 2.5%, we believe that valuations on U.S. TIPS are fair. U.S. TIPS continue to offer diversification benefits and they continue to offer a hedge against weaker than expected growth or the possibility that inflation fails to decline as much or as fast as the market expects.

With respect to other areas that we have been following and that we think could affect the economy in 2007:

The housing market and its impact on the U.S. consumer:

Housing, as measured by starts, sales, or median home prices slowed dramatically in 2006, yet did not seem to us to spillover into the rest of the economy. Consumer spending, although slowing, has not fallen as much as some market participants had forecasted, perhaps partially offset by the fall in retail gasoline prices. While a slowdown in homebuilding activity has had an effect on real GDP, we have not seen a large decline in jobs caused by declining homebuilding, home sales, or refinancing activity. The question for 2007 is whether we have actually seen the bottom or whether the secondary effects have yet to hit the economy.

The U.S. current account deficit and the U.S. dollar:

Lots of press was generated in November when the dollar again fell below 1.30 Euro, but so far, not much has resulted from this event.

Energy prices:

Energy prices have been extremely volatile over the past year and will likely continue that way. While that hurt U.S. TIPS significantly in the second half of 2006, we believe that much of the decline and negative inflation accretion has been priced into the market by now. Unless oil starts heading near $50/barrel, we do not believe there will be a large decline in U.S. TIPS prices.

With respect to emerging market debt, the global environment for emerging market debt remains supportive. We expect growth to be moderate and inflation to be low. We believe that the risk scenario in emerging markets is for growth to be much weaker than expected. Global liquidity and risk appetite have declined from historically high levels. We believe that emerging market macro fundamentals and technicals remain very strong, as evidenced by positive rating actions. However, we feel that yield spreads at current historically tight levels do not leave much room for further spread tightening. Therefore, we are maintaining a reduced exposure to emerging market debt. On the other hand, we do not expect a move towards significantly wider spreads due to continued strong flows into the asset class.

With respect to corporate bonds, our outlook remains cautious. In our view, the potential reward for owning corporate bonds is generally insufficient given the risks. We acknowledge that credit fundamentals remain strong by most standards; however, we believe that pricing leaves little room for error for corporate bonds as well. Consensus expectations for economic, interest rate and equity performance suggest a continued benign environment for credit, and market prices reflect the best outcome of these benign expectations. In our view the market has not discounted the systemic risk associated with an economic slowdown or event risk. As noted previously, the consensus forecast for growth in 2007, as measured by real GDP, is that it will slow to a range around 2%, and we believe with a greater possibility of weaker, rather than stronger, activity. In addition, although credit fundamentals remain strong and well above average, we believe that stock buybacks, acquisitions and leveraged buyouts have taken their toll on corporate liquidity.

It is possible that the volatility of yield spreads between U.S. Treasuries and corporate bonds will remain muted and corporate spreads will continue to tighten. Stable interest rates, solid corporate earnings, above average credit fundamentals and ongoing investor demand for corporate product certainly support current valuations. However, it is hard to forecast that all of these factors will remain supportive indefinitely. Our bias is to overweight the spread sectors and we will continue to seek value in select sectors and securities.

Explain the similarities and differences between the Consumer Price Index for All Urban Consumers (CPI-U) and the Producer Price Index (PPI)?

The Consumer Price Index (CPI), calculated by the Bureau of Labor Statistics (BLS), is a measure of the average change in prices over time of a basket of goods and services purchased by consumers. This includes the prices of food, clothing, shelter, fuels, transportation fares, charges for doctors' and dentists' services, drugs, and other goods and services that people buy for day-to-day living. CPI-U covers the prices paid by approximately 87 percent of the total population and includes, in addition to wage earners and clerical workers, households, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The Producer Price Index (PPI), also calculated by the BLS, measures the average change over time in the prices received by domestic producers of goods and services. The PPI thus measures inflation from the relatively narrow perspective of producers, whereas the CPI measures inflation from the perspective of the consumer, a much larger segment of the population.

The principal value of U.S. TIPS is adjusted daily to reflect the effects of inflation as measured by the CPI-U. Historically, consumer price inflation has tended to exceed producer price inflation. Sellers' and buyers' prices can differ due to government subsidies, sales and excise taxes, and distribution costs.

How have the NAVs and share prices of WIA and WIW performed?

Net Asset Value

[TABLE OMITTED]

a Annualized

U Cumulative

Inception date of WIA is 9/25/2003; inception date of WIW is 2/24/2004

Since Inception returns assume a purchase of common shares at the initial offering price of $15.00 per share for share price returns or initial net asset value (NAV) of $14.33 per share for NAV returns. Returns for periods of less than one year are not annualized. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for share price returns or NAV for NAV returns. Until the DRIP price is available from the Plan Agent, dividends are assumed to be paid in cash for total return purposes.

What factors may affect the Funds' dividend rates?

Both WIA and WIW invest at least 80% of their total managed assets in U.S. TIPS. There are some important differences between investing directly in U.S. TIPS and investing in U.S. TIPS through an actively-managed closed-end fund, such as WIA or WIW. Among these differences are the ways in which investors receive distributions from their investments. Whereas individual U.S. TIPS pay a semi-annual coupon based on a principal value that adjusts for inflation (using CPI-U), WIA and WIW pay monthly dividends based on the income derived from the underlying investments in U.S. TIPS and other fixed-income securities.

Historically, CPI-U figures (which are utilized for U.S. TIPS' principal value accretion) have fluctuated from month to month. As a result of this seasonality of inflation, the Funds' monthly distributions may be greater or less than the amount of income generated by each Fund's underlying portfolio of investments. Although such shortfalls and excesses may occur, the Funds seek to avoid returning capital to shareholders during the course of a taxable year. In an effort to provide current income and a relatively stable monthly distribution, the Funds attempt to set their dividend rates based on current and projected net investment income at a level that is believed to be sustainable over a period of time.

Each Fund intends to continue to qualify as a regulated investment company for U.S. federal income tax purposes and to meet all other requirements necessary to be relieved of federal taxes on income and gains distributed in a timely manner to shareholders. Each Fund will distribute substantially all its net investment income and net realized capital gains to its shareholders on a current basis. Accordingly, each Fund will be able to retain for use in the following year very little, if any, of its net investment income and net realized capital gains in excess of its regular monthly distributions for the current year. This means that the Funds may begin each calendar year without a significant "cushion" of undistributed income and gains.

What factors caused a modification of the Funds' leverage structure? How will this modification affect the Funds?

Last quarter, each Fund completed the redemption of its Auction Market Preferred Shares (AMPS), thus removing this form of leverage from the Funds' portfolios. Each Fund may utilize other forms of leverage, including reverse repurchase agreements and dollar roll transactions. A Fund generally will not utilize leverage if it anticipates that it would result in a lower return to holders of the Fund's common shares over time. The use of financial leverage creates an opportunity for increased income for common shareholders, but, at the same time, creates the possibility for greater loss (including the likelihood of greater volatility of dividends on the common shares and of the net asset value and market price of the common shares), and there can be no assurance that a Fund's use of leverage will be successful.

The Funds made these proactive changes to the leverage structure because they currently anticipate that this change in strategy will lead to better long-term shareholder value. Given Western Asset Management Company's current outlook for inflation, as measured by the CPI-U, as well as the current yield-curve environment, the Funds currently anticipate that they will be able to deliver better long-term performance with a more flexible approach to leverage utilization. The flexible approach enables the Funds to utilize leverage when market conditions warrant, but also allows the Funds to remove leverage when shareholder value-enhancing opportunities via the use of leverage are non-existent.

What effect does the seasonality of inflation have on the Funds' income?

U.S. inflation generally exhibits a normal seasonal pattern of being high in the first half of the year and lower in the second half. By maintaining a stable dividend, the Funds attempt to mitigate the effects of the seasonality of inflation. As we get past the January U.S. TIPS auctions, we will look forward to the spring months because we believe they will provide good inflation accretion for U.S. TIPS holders.

U.S. TIPS may provide a hedge against inflation. What are some of the hedging strategies the Funds have pursued to address risks not directly associated with inflation?

We continue to implement hedging strategies in the Funds' portfolios, primarily through the use of short futures and long put options. We have also been opportunistic sellers of calls. We believe a combination of these strategies has helped us maintain a hedge over time without losing option premium to time decay when the market and real yields are largely range bound. These strategies had a positive impact in the fourth quarter of 0.14% and 0.11% on the total return of WIA and WIW, respectively.

Since the Funds de-levered in November, they are not exposed to as much interest rate risk as they were prior to redeeming the AMPS, and therefore we are reducing our hedging strategies at the present time.

Recall that one of our goals is to maintain a relatively stable NAV - so in bull markets, our hedging strategies may cause us to underperform published indices on a total return basis. In bear markets, the hedging strategies are designed to help protect the NAV against a significant decline in value. However, there can be no assurance such hedging strategies, if implemented, will be successful.

Please visit www.westernclaymore.com for the Funds' press release announcing the redemption of AMPS and the declaration of dividends for November and December.

What are the key reasons you believe investors should hold WIA and WIW in their portfolio?

The key reasons investors should hold WIA and WIW in their portfolio are as follows:

* Current income potential

* Opportunity for long-term inflation protection: The U.S. TIPS in which WIA and WIW primarily invest continue to be one of the few yield-bearing securities that are directly linked to inflation. (The positive effects of inflation on the U.S. TIPS may not necessarily be reflected in the share prices of the Funds.)

* Diversification within investors' fixed-income portfolios.

* A portion of the Funds' dividends directly attributable to U.S. TIPS principal adjustments is exempt from state and local income tax in certain states.

* An investment in WIA or WIW as compared to a direct investment in individual U.S. TIPS may help avoid the "phantom income"(a) concern.

We continue to believe that:

* U.S. TIPS, such as those held by the Funds, can be an excellent diversifier for a fixed-income portfolio.

* U.S. TIPS should outperform comparable maturity U.S. Treasuries over the long-term.

(a) Phantom income" is generally any income that is reportable as taxable income but that does not generate cash flow for the investor. In the case of a direct investment in U.S. TIPS, phantom income exists because the investor receives the coupon income in cash but is taxed on both the coupon income and the accretion of principal (resulting from inflation).

Western Asset Management Company

December 31, 2006

Risks and Other Considerations of the Funds

This document may contain forward-looking statements representing Western Asset Management Company's beliefs concerning future operations, strategies, financial results or other developments. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Because these-forward looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond Western Asset Management Company's control or are subject to change, actual results could be materially different. Other risks are detailed from time to time in the Funds' period reports filed with the Securities and Exchange Commission.

This document is not an offer to sell securities of the Funds and it is not soliciting an offer to buy securities of the Funds.

There can be no assurance that a Fund will achieve its investment objectives. The net asset value of each Fund will fluctuate with the value of the underlying securities. It is important to note that closed-end funds trade on their market value, not net asset value, and closed-end funds often trade at a discount to their net asset value. Past performance is not an indication of future performance.

There can be no guarantee that the Funds' hedging strategies will be employed under all market conditions or will be successful. Additionally, the cost paid for the hedging strategies may result in a reduction of the net asset value of a Fund and, as a result, could make the Fund worse off than if such hedging strategies had not been used.

Certain risks are associated with the leveraging of a Fund's common shares. Both the net asset value and the market value of the common shares may be subject to higher volatility and a decline in value. A Fund's leveraging strategy may not be successful.

An investment in a Fund is subject to certain risks and other considerations. Such risks and considerations include, but are not limited to: Investment Risk, Market Discount Risk, Interest Rate Risk, U.S. TIPS Risk, Credit Risk, Lower Grade and Unrated Securities Risk, Leverage Risk, Issuer Risk, Country Risk, (WIW only) Emerging Markets Risk, Prepayment Risk, Reinvestment Risk, Derivatives Risk, Inflation/Deflation Risk, Mortgage-Related Securities Risk, Management Risk, Turnover Risk, Anti-Takeover Provisions, Smaller Company Risk, and Market Disruption and Geopolitical Risk. Investors should consider the risks, expenses and fees of the Funds prior to investing.

Investment by WIW in securities of issuers based in developing or "emerging market" countries entails all of the risks of investing in securities of non-U.S. issuers, but to a heightened degree. Emerging market countries typically have economic and political systems that are less fully developed, and can be expected to be less stable than those of more developed countries. Because WIW may invest up to 20% of its total managed assets in securities or instruments of emerging market issuers, investors should be able to tolerate sudden and sometimes substantial fluctuations in the value of their investments in WIW.

A Fund's common shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.