<PAGE>
To Shareholders
Eaton Vance Municipal Bond Fund L.P. had a total return of 9.4 percent during
the six months ended June 30, 1995, based on a rise in net asset value per share
from $9.26 on December 31, 1994 to $9.81 on June 30, 1995, and the reinvestment
of $0.307 in monthly income dividends. Based on the most recent dividend paid,
and the Fund's net asset value per share of $9.81 on June 30, 1995, the Fund's
annualized distribution rate was 6.3 percent. To equal that rate, a couple in
the 36 percent Federal tax bracket would have to receive 9.84 percent from a
taxable investment.
The Federal Reserve's aggressive efforts to fight inflation in 1994 extended
into February of this year, with a final increase in the Federal funds rate, a
key short-term interest rate barometer. With an inflation rate of only 2.7
percent for all of 1994, and few current signs of inflation to date this year,
the pressure on interest rates has mitigated. Heartened by the welcome news on
inflation and the promise of lower interest rates, investors showed a renewed
enthusiasm for bonds in the first half of 1995. 30-year Treasury bond yields*
fell from 7.9 percent at the beginning of the year to the 6.3 level on June 30.
Finally, satisfied that inflation posed no immediate threat to the economy, the
Fed elected to lower short-term rates at its July open market meeting.
While municipal bonds participated in the market rally, the tax-exempt sector
trailed the Treasury market. The primary reason for municipals' underperformance
was the concern of investors over a wide range of tax reform proposals currently
being debated in Congress. Among those proposals are several calling for a flat
tax, which would eliminate or greatly alter the current graduated income tax
schedule and reduce differences in marginal tax brackets. Investors have
expressed concerns that such changes in the tax code may remove the historical
tax advantage of municipals over taxable bonds.
The public works funded by the municipal market - such as bridges, roads, water
works, utilities, and schools - are of vital importance to state and local
issuers. While the final outcome of the tax legislation is far from decided, we
are confident that the municipal market will continue to fill a primary role of
providing capital for those public works and that municipal bond investors
should continue to reap the benefits of participating in the funding of these
worthy projects.
------------------ Sincerely,
[Photo of
/s/ Landon T. Clay
Landon T. Clay] Landon T. Clay
Chairman
------------------ August 21, 1995
*Principal and interest payments of U.S. Treasury securities are guaranteed
by the U.S. government.
----------------------------------------------------
[Map PORTFOLIO OVERVIEW
of
USA] Percentage of total investments
as of June 30, 1995
Number of issues.......................... 76
Average quality........................... A+
Investment grade.......................... 81.6%
Effective maturity (years)................ 14.9
Largest sectors:
Escrowed.............................. 20.3%
Insured hospital...................... 13.2*
Housing............................... 6.5
Lease revenue/
Certificates of Participation...... 6.5
Nursing homes......................... 5.8
*Private insurance does not remove the market risks
associated with this investment.
----------------------------------------------------
<PAGE>
Management Discussion
An interview with Thomas J.Fetter, Vice President and Portfolio Manager of
the Eaton Vance Municipal Bond Fund L.P.
Q. Tom, so far in 1995, the municipal market has made a strong recovery from
last year's debacle. What are your thoughts on the market?
A. Following 1994, when the bond market suffered its worst performance on
record, this year has provided a welcome change. Clearly, the Federal
Reserve has done a very good job of keeping inflation in check, and that is
the primary concern of bond investors. With inflation posing little threat
and the economy apparently moderating, interest rates have trended lower.
That, of course, has created an excellent environment for the bond market.
Q. The Fund was up 9.4 percent in the first six months of the year. What
accounted for the strong performance?
A. The most successful strategy we have employed over the past year is to
remain fully invested and retain a relatively long average maturity. As bad
as last year's market turmoil was, we believed that the market would snap
back at some point. We took the position that, rather than reacting to the
exaggerated decline, we would benefit significantly more in the long run by
maintaining a long maturity. That proved to be the correct course of
action. In addition to maintaining a relatively long average maturity, we
have tried to exploit those sectors of the market that we felt provided
extra value.
Q. Where have you concentrated the Fund's investments?
A. The Fund's two largest investment weightings have been in escrowed bonds
and insured hospital bonds. Escrowed bonds have provided a chance to add to
the quality of the Fund, while an ample supply of insured hospital bonds
has created some very attractive yield opportunities in that sector. Of
course, private insurance does not remove the market risk associated with
insured bonds.
---------------------------
[Photo of Thomas J. Fetter]
---------------------------
Q. What are escrowed bonds?
A. Escrowed bonds are those that have been pre-refunded by the issuers to take
advantage of a lower rate environment. As I've mentioned in previous
reports, with the sharp decline in interest rates in 1992 and 1993,
refundings hit the market in large supply. The large number of refundings
created supply pressures on the market and unusually attractive yields in
certain maturity ranges.
Q. There's increasing talk about the possibility of enacting a flat tax. Do
you think we'll see a flat tax any time soon?
A. Clearly, there are many obstacles standing in the way of the passage of a
comprehensive tax reform package. For example, the inherent regressivity of
flat tax proposals will provoke much opposition, as will proposals that
eliminate such tax breaks as the mortgage interest deduction. Such
proposals also could seriously depress entire sectors of the economy. It's
likely that any major tax code changes will come only after a significant
period of political debate. There are many consequences to consider,
including the impact on differing tiers of taxpayers, on state and local
governments, and on the nation's economy as a whole. Therefore, quick
passage of such a concept is not likely.
Q. What would be the likely impact of a flat tax on the municipal market?
A. If reform were to pass, municipal bond yields would be based on a spread
over Treasury bonds, as corporate bonds and some taxable municipals are
now.However, it is likely that reforms along these lines could reduce
interest rates across the board, lessening the impact on municipal bonds.
Q. What should municipal investors do about these current concerns ?
A. I believe that it's important that investors invest with a long-term
outlook in mind. One classic mistake that investors make is to react to
interest rate cycles, market peaks, or the occasional political flap.
Municipal yields now offer 90 percent of Treasury yields, a historical
high. Naturally, the ongoing tax debate creates uncertainty, and of course,
past trends do not guarantee the future performance of municipal bonds. But
municipals continue in the meantime to provide very high levels of tax-free
income. Historically, the bond market has been very kind to those who have
remained invested through market highs and lows. Bonds have historically
offered a premium over inflation, and that has helped investors preserve
their purchasing power while also helping them build wealth.
-------------------------------------------------------
MUNICIPALS: SOLID INVESTMENT RETURNS
YIELDS MORE THAN 90% OF TREASURY YIELDS*
30-YR. AA GENERAL OBLIGATION BONDS 6.28%
TAXABLE EQUIVALENT YIELD OF INVESTMENT
FOR COUPLE IN 36% TAX BRACKET 9.81%
30-YEAR TREASURY BONDS 6.62%
Source: Bloomberg, L.P.
Principal and interest payments of Treasury securities
are guaranteed by the U.S. government. Index yield
is not representative of the Fund's yield. Statistics
as of June 30, 1995.
*Past performance is no guarantee of future results.
-------------------------------------------------------
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 1995
(UNAUDITED)
------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS - 100.0%
------------------------------------------------------------------------------
RATINGS (UNAUDITED)
-------------------
PRINCIPAL
STANDARD AMOUNT
MOODY'S & POOR'S (000 OMITTED) SECURITY VALUE
------------------------------------------------------------------------------
EDUCATION - 4.7%
Baa1 BBB+ $ 5,000 New York State Dorm
Authority, State
University, 5.25%,
5/15/15 $ 4,440,450
------------
ESCROWED - 20.3%
Aaa AAA $ 1,000 Austin, Texas Combined
Utility System, 11.125%,
11/15/09 $ 1,254,920
Aaa NR 2,500 Boston City Hospital, FHA
Insured, 7.625%, 2/15/21 2,880,250
Aaa AAA 8,000 Colorado HFA, Liberty
Heights, FSA Insured,
0%, 7/15/24 1,070,800
Aa AAA 1,110 Colorado Springs Utility
System, 6.75%, 11/15/21 1,246,985
Aaa AAA 500 Maine State Health &
Education, Cove Edge,
10.00%, 8/1/20 630,125
Aaa BBB 715 Massachusetts Health &
Education, St. John's
Hospital, 8.375%,
12/1/20 852,816
Aaa NR 750 Massachusetts IFA, Cape
Cod Hospital, 8.40%,
11/15/08 894,488
NR NR 500 Massachussetts IFA,
Brookhaven Community
Project, 10.25%, 1/1/18 582,275
Aaa NR 6,200 Mesa County, Colorado, 0%,
12/1/11 2,277,322
A NR 600 Mississippi Hospital
Authority, Methodist
Hospital, 9.375%, 5/1/12 694,542
Aaa NR 5,000 Mississippi Housing
Finance Corp, SFMR, 0%,
6/1/15 1,483,200
Aaa NR 1,000 New York State UDC,
Correctional Facilities,
6.50%, 1/1/21 1,091,190
Aaa A- 665 North Carolina Eastern
Municipal Power, 6.50%,
1/1/18 723,055
NR AAA 2,400 Phoenix, Arizona Civic
Improvement Corp.,
6.125%, 7/1/23 2,641,727
Aaa NR 6,000 Savannah, Georgia Economic
Development Authority,
0%, 12/1/21 963,060
------------
$ 19,286,755
------------
HEALTH CARE - 5.0%
NR NR $ 1,000 Bell County, Texas Health
Facilities, Care
Institution Inc.,
9.00%, 11/1/24 $ 1,053,940
NR NR 600 Covington - Allegheny
County, Virginia, IFA,
Beverly Enterprises Inc.
Project, 9.375%, 9/1/01 677,178
Baa1 BBB+ 830 New York Medical Care,
Mental Health Services,
7.875%, 8/15/20 928,471
Baa BBB 1,550 New York Medical Care,
Brookdale Medical
Center, 6.85%, 2/15/17 1,572,150
NR NR 500 Wisconsin Health Facility
Authority, Villa
Clement, 8.75%, 6/1/12 504,750
------------
$ 4,736,489
------------
HOSPITALS - 2.6%
A A $ 500 Illinois Health &
Education Facilities,
Victory Memorial,
7.875%, 12/1/18 $ 538,635
NR A- 1,500 Union County Pennsylvania
Hospital Authority,
Evangelical Community
Hospital, 5.875%, 7/1/11 1,384,320
NR NR 480 Vermont Education & Health
Building Authority
Northwestern Medical
Facility, 9.75%, 9/1/18 524,414
------------
$ 2,447,369
------------
HOUSING - 6.5%
NR AA $ 665 Arkansas Development
Finance Authority, SFMR,
8.00%, 8/15/11 $ 717,535
Aa NR 1,000 Colorado Housing Finance
Authority, 7.90%,
12/1/24 1,098,840
NR NR 1,300 Lake Creek Affordable
Housing Corporation,
Eagle County, Colorado,
8.00%, 12/1/23 1,313,377
<PAGE>
------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (Continued)
------------------------------------------------------------------------------
RATINGS (UNAUDITED)
------------
PRINCIPAL
STANDARD AMOUNT
MOODY'S & POOR'S (000 OMITTED) SECURITY VALUE
------------------------------------------------------------------------------
HOUSING (Continued)
Aa A+ 340 North Carolina Single
Family Mortgage Revenue,
8.125%, 9/1/19 353,437
NR NR 1,000 North Syracuse NY Housing
Authority, Janus Park
Project,
8.00%, 6/1/24 977,870
NR A 1,650 Travis County Texas
Housing Finance Corp.,
Travis Station
Apartments Project,
6.75%, 4/1/19 1,683,858
------------
$ 6,144,917
------------
INDUSTRIAL DEVELOPMENT &
POLLUTION CONTROL REVENUE - 1.1%
NR BBB+ $ 1,000 Port Camas-Washougan,
Washington, James River
Project, 6.70%, 4/1/23 $ 1,009,820
------------
INSURED - EDUCATION - 1.7%
Aaa AAA $ 2,000 University of California -
Multiple Projects
(AMBAC), 4.875%, 9/1/19 $ 1,672,420
------------
INSURED - HOSPITAL - 13.2%
Aaa AAA $ 2,750 Colorado Health
Facilities, Sisters of
Charity Health Care
(MBIA), 5.25%, 5/15/14 $ 2,521,668
Aaa AAA 3,250 Franklin County, Ohio,
Riverside United
Methodist (AMBAC),
5.75%, 5/15/12 3,164,265
Aaa AAA 1,000 Franklin County, Ohio,
Riverside United
Methodist (AMBAC),
5.75%, 5/15/20 949,300
Aaa AAA 1,000 Fredericksburg, Virginia
Industrial Development
Authority (FGIC),
"INFLOS", Variable,
8/15/23 (1) 1,069,210
Aaa AAA 1,000 Illinois Health Facilities
Authority Rush-
Presbyterian - St. Lukes
Medical Center (MBIA),
"INFLOS", Variable,
10/1/24 (1) 1,088,930
Aaa AAA 1,000 King County, Washington,
Public Hospital District
No. 1 (AMBAC), 6.00%,
9/1/20 1,007,820
Aaa AAA 500 Massachusetts Health &
Education Authority,
Newton-Wellesley
Hospital (BIGI), 8.00%,
7/1/18 550,045
Aaa AAA 1,000 Rhode Island Health &
Educational Facility,
Rhode Island Hospital
(FGIC),"INFLOS",
Variable, 8/15/21 (1) 1,094,300
Aaa AAA 1,000 Salt Lake City, Utah IHC
Hospitals Inc., "INFLOS"
(AMBAC),
Variable, 5/15/20 (1) 1,085,670
------------
$ 12,531,208
------------
INSURED - HOUSING - 5.2%
Aaa AAA $ 2,500 California Housing Finance
Authority SFMR (MBIA),
5.70%, 2/1/25 $ 2,318,675
Aaa AAA 195 Jefferson County Colorado
SFMR (MBIA), 8.875%,
10/1/13 211,204
Aaa AAA 340 Mississippi Home Corp.
SFMR (FGIC), 9.25%,
3/1/12 369,220
Aaa AAA 1,000 SCA MFMR Springfield,
Missouri (FSA), 7.10%,
1/1/30 1,030,060
Aaa AAA 1,000 SCA MFMR Burnsville,
Minnesota (FSA), 7.10%,
1/1/30 1,030,060
------------
$ 4,959,219
------------
INSURED - TAX REVENUES - 1.3%
Aaa AAA $ 1,500 Culver City California
Redevelopment Finance
Authority (AMBAC), 4.6%, $ 1,198,500
11/1/20 ------------
INSURED - TRANSPORTATION - 4.1%
Aaa AAA $ 3,000 Denver, Colorado City &
County Airport (MBIA),
5.60%, 11/15/20 $ 2,807,400
Aaa AAA 1,000 Triborough Bridge and
Tunnel Authority of New
York, "RITES" (AMBAC),
Variable, 1/1/12 (1) 1,052,420
------------
$ 3,859,820
------------
INSURED - UTILITIES - 0.9%
Aaa AAA $ 800 Puerto Rico Electric Power
Authority STRIPES (FSA),
Variable, 7/1/03 (1) $ 860,767
------------
INSURED - WATER & SEWER - 2.1%
Aaa AAA $ 1,000 New Jersey Economic
Development Authority,
Hackensack Water Co.
Project (MBIA), 5.80%,
3/1/24 $ 975,370
Aaa AAA 1,155 Passaic Valley, New Jersey
Water Commission (FGIC),
5.00%, 12/15/22 1,001,847
------------
$ 1,977,217
------------
LEASE REVENUE/CERTIFICATES
OF PARTICIPATION - 6.5%
A A- $ 3,000 California Public Works
Board, California State
University Projects
5.50%, 12/1/18 $ 2,691,180
A A 3,565 Indiana Transportation
Authority Airport
Facilities, 6.25%,
11/1/16 3,506,891
------------
$ 6,198,071
------------
LIFE CARE - 4.3%
NR NR $ 1,060 Loudon County Virginia
IDA, Falcons Landing
Project, 8.75%, 11/1/24 $ 1,077,342
NR NR 200 New Hampshire Higher
Education, River Woods
at Exeter,
8.00%, 3/1/00 204,726
NR NR 655 New Hampshire Higher
Education, River Woods
at Exeter,
9.00%, 3/1/23 711,271
NR NR 1,000 New Jersey EDA, Keswick
Pines Project, 8.75%,
1/1/24 1,004,280
NR NR 1,000 Vermont IDA, Wake Robin
Corp. Project, 1993-A,
8.75%, 4/1/23 1,066,960
------------
$ 4,064,579
------------
MISCELLANEOUS - 2.7%
NR NR $ 1,500 New Jersey Sports
Authority, Monmouth Park
Project, 8.00%, 1/1/25 $ 1,630,305
NR NR 1,000 Retama Special Facilities,
Retama Race Track,
Texas, 8.75%, 12/15/18 975,650
------------
$ 2,605,955
------------
NURSING HOMES - 5.8%
NR NR $ 1,480 Bell County, Texas Health
Facilities, Normandy
Terrace Project,
9.00%, l4/1/23 $ 1,574,972
NR NR 630 Dauphin County
Pennsylvania IDA,
Susquehanna Center,
10.00%, 6/1/21 409,500
<PAGE>
------------------------------------------------------------------------------
TAX-EXEMPT INVESTMENTS (Continued)
------------------------------------------------------------------------------
RATINGS (UNAUDITED)
------------
PRINCIPAL
STANDARD AMOUNT
MOODY'S & POOR'S (000 OMITTED) SECURITY VALUE
------------------------------------------------------------------------------
NURSING HOMES (Continued)
NR NR 1,265 Montgomery, Pennsylvania,
IDA, Geriatric Health
Care Institute,
8.375%, 7/1/23 1,266,314
NR NR 440 Okaloosa County Florida,
Beverly Enterprises,
10.75%, 10/1/03 483,094
NR NR 1,000 St. Paul Minnesota Housing
Authority, Highland Park
Project,
8.75%, 11/1/24 1,004,640
NR NR 680 Tarrant County Texas
Health Facilities
Development Corp.,
10.25%, 9/1/19 738,936
------------
$ 5,477,456
------------
SOLID WASTE - 0.8%
Aa3 A+ $ 750 Delaware County
Pennsylvania Industrial $ 789,975
Revenue, 8.10%, 12/1/13 ------------
TRANSPORTATION - 5.8%
A1 A $ 1,000 Dallas Fort Worth
International Airport,
Texas, 9.125%, 11/1/15 $ 1,039,570
Baa BB 1,000 Denver Colorado City &
County Airport, 7.50%,
11/15/12 1,069,170
A1 A 2,100 Port Authority of New York
& New Jersey, 5.75%,
6/15/30 2,008,734
NR NR 5,000 San Joaquin Hills,
California
Transportation Agency,
0%, 1/1/14 1,394,000
------------
$ 5,511,474
------------
UTILITIES - 5.4%
Ba3 NR $ 250 Beaver County,
Pennsylvania, Pollution
Control, Toledo Edison,
10.75%, 11/15/15 $ 258,270
Aa AA 1,000 Colorado Springs Utility
System, 6.75%, 11/15/21 1,054,000
A BBB+ 1,500 Massachusetts Municipal
Wholesale Electric Co.,
6.75%, 7/1/11 1,559,310
Aa AA 10,250 Washington Public Power
Supply System, Project
#3, 0%, 7/1/18 2,238,395
------------
$ 5,109,975
------------
TOTAL INVESTMENTS
(identified cost,
$89,500,213) $ 94,882,436
============
(1) The above designated securities have been issued as inverse floater bonds.
At June 30, 1995, the concentration of the Fund's investments in the various
states, determined as a percentage of total investments, is as follows:
Colorado 15%
New York 13%
Other, representing less than 10% individually 72%
The Portfolio invests primarily in debt securities issued by municipalities. The
ability of the issuers of the debt securities to meet their obligations may be
affected by economic developments in a specific industry or municipality. In
order to reduce the risk associated with such economic developments, at June 30,
1995, 28.5% of the securities in the portfolio of investments are backed by bond
insurance of various financial institutions and financial guaranty assurance
agencies. The aggregate percentage by financial institution ranged from 3.3% to
10.7% of total investments.
See notes to financial statements.
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
------------------------------------------------------------------------------
June 30, 1995 (Unaudited)
------------------------------------------------------------------------------
ASSETS:
Investments, at value (Note 1A) (identified cost,
$89,500,213) $94,882,436
Cash 243
Receivable for investments sold 183,823
Receivable for shares of partnership interest sold 142
Interest receivable 1,441,278
-----------
Total assets $96,507,922
LIABILITIES:
Demand note payable (Note 5) $ 936,000
Payable for shares of partnership interest
redeemed 171,188
Payable to affiliates --
Director General Partners' fees 1,542
Custodian fees 921
Accrued expenses 23,013
----------
Total liabilities 1,132,664
-----------
NET ASSETS for 9,724,534 shares of partnership
interest outstanding $95,375,258
===========
NET ASSETS APPLICABLE TO SHARES OF PARTNERSHIP
INTEREST OWNED BY:
Limited Partners (9,600,166 shares) $94,155,495
General Partners --
Director partners (2,339 shares) $ 22,940
Adviser partner (122,029 shares) 1,196,823 1,219,763
---------- -----------
NET ASSETS (9,724,534 shares) $95,375,258
===========
SOURCES OF NET ASSETS:
Proceeds from sales of shares of partnership
interest (including shares issued to partners
electing to receive payment of distributions in
shares), less cost of shares of partnership
interest redeemed $82,893,380
Accumulated net realized gain on investment and
financial futures transactions (computed on the
basis of identified cost) 7,129,032
Unrealized appreciation of investments (computed
on the basis of identified cost) 5,382,223
Accumulated distributions in excess of net
investment income (29,377)
-----------
Total $95,375,258
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF PARTNERSHIP INTEREST
$ 9.81
======
COMPUTATION OF OFFERING PRICE:
Offering price per share (100/95.25 of $9.81). $10.30
======
On sales of $100,000 or more the offering price is reduced.
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
------------------------------------------------------------------------------
For the six months ended June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $ 3,338,988
Expenses --
Investment management fee earned by Adviser
General Partner (Note 4) $ 242,153
Compensation of Director General Partners
not members of the Adviser General
Partner's organization 2,702
Custodian fee (Note 4) 10,708
Legal and accounting services 42,647
Registration fees 20,017
Transfer and dividend disbursing agent fees 17,931
Printing and postage 16,084
Interest expense (Note 5) 9,581
Miscellaneous 9,943
-----------
Total expenses 371,766
-----------
Net investment income $ 2,967,222
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investment transactions
computed on the basis of identified cost $(1,612,694)
Net realized loss on financial futures contracts (1,381,398)
-----------
Net realized loss on investment and
financial futures transactions $(2,994,092)
Increase in unrealized appreciation of investments 8,385,565
-----------
Net realized and unrealized gain on investments $ 5,391,473
-----------
Net increase in net assets resulting from operations $ 8,358,695
===========
See notes to financial statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
-------------------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
----------- -----------------
INCREASE (DECREASE) IN NET ASSETS:
From operations --
Net investment income $ 2,967,222 $ 6,408,404
Net realized loss on investments (2,994,092) (1,891,871)
Change in unrealized appreciation
(depreciation) of investments 8,385,565 (12,681,127)
----------- -------------
Increase (decrease) in net assets
from operations $ 8,358,695 $ (8,164,594)
----------- -------------
Distributions to partners --
From net investment income $(2,967,222) $ (6,408,404)
In excess of net investment income (29,377) (6,943)
----------- -------------
Total distributions $(2,996,599) $ (6,415,347)
----------- -------------
Net decrease from transactions in shares
of partnership interest (Note 2) $ (789,288) $ (9,042,301)
----------- -------------
Net increase (decrease) in net assets $ 4,572,808 $ (23,622,242)
NET ASSETS:
At beginning of period 90,802,450 114,424,692
----------- -------------
At end of period $95,375,258 $ 90,802,450
=========== =============
See notes to financial statements
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1995 --------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period $ 9.260 $10.630 $ 9.950 $ 9.750 $ 9.200 $ 9.250
------- ------- ------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS:
Net investment income $ 0.304 $ 0.611 $ 0.614 $ 0.639 $ 0.638 $ 0.627
Net realized and
unrealized gain (loss)
on investments 0.553 (1.369) 0.692 0.195 0.552 (0.017)
------- ------- ------- ------- ------- -------
Total income (loss) from
operations $ 0.857 (0.758) $ 1.306 $ 0.834 $ 1.190 $ 0.610
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income $(0.304) $(0.611) $(0.619) $(0.634) $(0.638) $(0.627)
In excess of net
investment income (0.003) (0.001) (0.007) -- (0.002) (0.033)
------- ------- ------- ------- ------- -------
Total distributions $(0.307) $(0.612) $(0.626) $(0.634) $(0.640) $(0.660)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, end of period $ 9.810 $ 9.260 $10.630 $ 9.950 $ 9.750 $ 9.200
======= ======= ======= ======= ======= =======
TOTAL RETURN <F1> 9.36% (7.27)% 13.52% 8.91% 13.49% 6.97%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) $95,375 $90,802 $114,425 $103,208 $92,771 $80,907
Ratio of expenses to average
daily net assets 0.79%<F2> 0.80% 0.72% 0.74% 0.76% 0.85%
Ratio of net investment
income to average daily
net assets 6.30%<F2> 6.26% 5.91% 6.50% 6.75% 6.94%
PORTFOLIO TURNOVER 26% 58% 86% 60% 105% 187%
<FN>
<F1> Total investment return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset
value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net
asset value on the payable date. Total investment return is not computed on an annualized basis.
<F2> Annualized.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES The Fund is a limited partnership formed
under the laws of the State of California, and is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. Under the Partnership Agreement, all partnership
interests, whether of a limited partner or a general partner, are represented by
shares of the same class. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. INVESTMENT VALUATIONS -- Municipal bonds are normally valued on the basis of
valuations furnished by a pricing service. Taxable obligations, if any, for
which price quotations are readily available are normally valued at the mean
between the latest available bid and asked prices. Investments, if any for which
there are no such valuations are valued at fair value using methods determined
in good faith by or at the direction of the Director General Partners.
Short-term obligations, maturing in sixty days or less, are valued at amortized
cost, which approximates value.
B. INCOME -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of premium or discount on long-term
debt securities when required for federal income tax purposes.
C. INCOME TAXES -- Interest income received by the Fund on investments in
municipal bonds, which is excludable from gross income under the Internal
Revenue Code, will retain its status as income exempt from federal income tax
when allocated to the Fund's partners. The portion of such interest, if any,
earned on private activity bonds issued after August 7, 1986, may be considered
a tax preference item for shareholders. No provision is made by the Fund for
federal or state taxes on any taxable income of the partnership because each
partner is individually responsible for the payment of any taxes on his share of
such taxable income.
D. FINANCIAL FUTURES CONTRACTS -- Upon the entering of a financial futures
contract, the Fund is required to deposit ("initial margin") either in cash or
securities an amount equal to a certain percentage of the purchase price
indicated in the financial futures contract. Subsequent payments are made or
received by the Fund ("margin maintenance") each day, dependent on the daily
fluctuations in the value of the underlying security, and are recorded for book
purposes as unrealized gains or losses by the Fund. The Fund's investment in
financial futures contracts is designed only to hedge against anticipated future
changes in interest rates. Should interest rates move unexpectedly, the Fund may
not achieve the anticipated benefits of the financial futures contracts and may
realize a loss.
E. OTHER -- Investment transactions are accounted for on a trade date basis.
Distributions to partners and shares of partnership interest issued in payment
thereof are recorded on the record date.
F. INTERIM FINANCIAL INFORMATION -- The interim financial statements relating to
June 30, 1995 and for the six month period then ended have not been audited by
independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting of normal recurring adjustments,
necessary for the fair presentation of the financial statements.
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(2) SHARES OF PARTNERSHIP INTEREST
Transactions in shares of partnership interest were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1995
(UNAUDITED) YEAR ENDED DECEMBER 31, 1994
--------------------------------------- -----------------------------------------
GENERAL LIMITED GENERAL LIMITED
PARTNERS PARTNERS AMOUNT PARTNERS PARTNERS AMOUNT
----------- ------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Sales -- 414,498 $ 4,068,114 -- 782,602 $ 7,819,982
Issued to partners electing to receive
payment of distributions in shares 3,891 165,961 1,636,324 7,301 344,710 3,436,339
Redemptions -- (666,730) (6,493,726) -- (2,090,028) (20,298,622)
----- ------- ----------- ----- ---------- ------------
Net increase (decrease) 3,891 (86,271) $ (789,288) 7,301 (962,716) $ (9,042,301)
===== ======= =========== ===== ========== ============
</TABLE>
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(3) PURCHASES AND SALES OF INVESTMENTS
The Fund invests primarily in debt securities. The ability of the issuers of
the debt securities held by the Fund to meet their obligations may be affected
by economic developments in a specific industry or municipality. Purchases and
sales of investments, other than short-term obligations, aggregated $24,386,347
and $26,273,435, respectively.
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(4) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment management fee, computed at the monthly rate of 0.025% (0.300%
per annum) of average daily net assets and 3.00% of gross income (excluding net
realized gains on sales of securities) up to $500 million and at reduced rates
as daily net assets exceed that level, was earned by Eaton Vance Management
(EVM), the Adviser General Partner, as compensation for management and
investment advisory services rendered to the Fund. For the six months ended June
30, 1995, the fee was equivalent to 0.51% (annualized) of the Fund's average net
assets for such period and amounted to $242,153. Except as to Director General
Partners who are not members of EVM's organization, officers and Director
General Partners receive remuneration for their services to the Fund out of such
investment management fee. Eaton Vance Distributors, Inc., a subsidiary of EVM
and the Fund's principal underwriter, received approximately $5,200 as its
portion of the sales charge on sales of partnership interest in the Fund. The
custodian fee was paid to Investors Bank & Trust Company (IBT), a subsidiary of
EVM, for its services as custodian to the Fund. Pursuant to the custodian
agreement, IBT receives a fee reduced by credits which are determined based on
the average daily cash balances the Fund maintains with IBT. Certain of the
Director General Partners of the Fund are directors/trustees and/or officers of
the above organizations. Director General Partners of the Fund that are not
affiliated with the Investment Advisor may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of the Trustees
Deferred Compensation Plan. For the six months ended June 30, 1995, no
significant amounts have been deferred.
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(5) LINE OF CREDIT
The Fund participates with other funds managed by EVM in a $120 million
unsecured line of credit with a bank. The line of credit consists of a $20
million committed facility and a $100 million discretionary facility. Borrowings
will be made by the Fund solely to facilitate the handling of unusual and/or
unanticipated short-term cash requirements. Interest is charged to each fund,
based on its borrowings, at an amount above either the bank's adjusted
certificate of deposit rate, a variable adjusted certificate of deposit rate, or
a federal funds effective rate. In addition, a fee computed at an annual rate of
1/4 of 1% on the $20 million committed facility and on the daily unused portion
of the $100 million discretionary facility is allocated among the participating
funds at the end of each quarter. At June 30, 1995 the Fund had an outstanding
balance pursuant to the line of credit in the amount of $936,000.
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(6) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1995, as computed on a federal income tax basis, were as
follows:
Aggregate cost $89,500,213
===========
Gross unrealized appreciation $ 6,347,355
Gross unrealized depreciation 965,132
-----------
Net unrealized appreciation $ 5,382,223
===========
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(7) DISTRIBUTIONS
On June 19, 1995, the Director General Partners of the Fund declared a
distribution of $0.0515 per share payable July 17, 1995, to partners of record
on July 3, 1995. On July 18, 1995, the Director General Partners declared a
distribution of $0.0515 per share payable August 15, 1995, to partners of record
on August 1, 1995.
<PAGE>
<TABLE>
INVESTMENT MANAGEMENT
<S> <C> <C>
EATON VANCE DIRECTOR GENERAL PARTNERS OFFICERS
MUNICIPAL
BOND FUND L.P. LANDON T. CLAY LANDON T. CLAY
24 Federal Street Chairman, Eaton Vance Management Chairman
Boston, MA 02110
DONALD R. DWIGHT JOHN L. THORNDIKE
President, Dwight Partners, Inc. Alternate Chairman
Chairman, Newspapers of
New England, Inc. THOMAS J. FETTER
President and Portfolio Manager
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment JAMES B. HAWKES
Banking, Harvard University Graduate Vice President
School of Business Administration
ROBERT B. MACINTOSH
NORTON H. REAMER Vice President
President and Director, United Asset
Management Corporation JAMES L. O'CONNOR
Treasurer
JOHN L. THORNDIKE
Director, Fiduciary Company Incorporated THOMAS OTIS
Secretary
JACK L. TREYNOR
Investment Adviser and Consultant
</TABLE>
<PAGE>
INVESTMENT ADVISER EATON VANCE [LOGO]
Eaton Vance Management
24 Federal Street MUNICIPAL BOND
Boston, MA 02110
FUND L.P.
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(800) 225-6265
CUSTODIAN [Photo]
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
SEMI-ANNUAL
This report must be preceded or accompanied SHAREHOLDER REPORT
by a current prospectus which contains more
complete information on the Fund, including JUNE 30, 1995
its distribution plan, sales charges and
expenses. Please read the prospectus
carefully before you invest or send money.
EATON VANCE
MUNICIPAL BOND FUND L.P.
24 FEDERAL STREET
BOSTON, MA 02110 T-MBSRC
