<PAGE>
[EATON VANCE LOGO APPEARS HERE]
[PHOTO OF WALL WITH THE WORD
"EDUCATION" ON IT APPEARS HERE]
EATON VANCE
MUNICIPAL BOND
FUND, L.P.
[PHOTO OF HIGHWAY APPEARS HERE]
Eaton Vance
Global Management-Global Distribution
[PHOTO OF BRIDGE APPEARS HERE]
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
INVESTMENT UPDATE
[PHOTO OF THOMAS FETTER, PORTFOLIO
MANAGER APPEARS HERE]
Thomas Fetter,
Portfolio Manager
Investment Environment
- --------------------------------------------------------------------------------
The Economy
. The U.S. economy posted solid growth in the first half of the year. Gross
domestic product advanced a robust 4.9% in the first quarter, while
unemployment fell to a 24-year low of 4.8%. Despite the strong economic
climate, inflation remained in the 2-to-3% range.
. While inflation seemed generally in check, the Federal Reserve maintained a
vigilant policy. In March, the Fed raised its Federal funds target rate -
a key short-term rate barometer - to 5.5%.
. The municipal market modestly outperformed the Treasury market in the first
half of 1997. While Treasuries struggled to compete with stocks, lower supply
gave a boost to municipals.
The Fund
- --------------------------------------------------------------------------------
Management Discussion
. Our largest sector weighting was in escrowed bonds. Escrowed bonds have been
pre-refunded by their issuers to take advantage of lower interest rates.
Because they are backed by Treasury bond payments, they are of the very
highest quality.
. With yield spreads still narrow, we sought value in non-rated bonds. Assisted
living and life care facilities, in particular, offered attractive investment
opportunities.
. Finally, we've reduced the Portfolio's holdings in bonds with relatively low
yields in favor of higher-yielding issues. That has significantly improved
the "book yield" of the Portfolio and will enable the Fund to maintain its
attractive dividend stream.
- --------------------------------------------------------------------------------
Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------
Performance for the Past Six Months
. The Fund's total return was 4.9% for the six months ended June 30, 1997,/1/
the result of a rise in net asset value per share from $10.07 on December 31,
1996 to $10.25 on June 30, 1997, and the reinvestment of $0.30 in dividends.
The Fund was ranked #1 of 226 General Municipal Debt funds for the year ended
June 30, according to Lipper Analytical Services, a mutual fund ranking
service./2/
. Based on the most recent dividend and the net asset value of $10.25 per share
on June 30, the Fund had a distribution rate of 5.85%. To equal that, an
investor paying a 36% tax rate would need to receive 9.14% in a taxable
investment.
. The Fund's risk-adjusted performance earned it a Four-Star overall Rating
among municipal bond funds covered by Morningstar, Inc. - a nationally
recognized monitor of fund performance - for the period ended June 30./3/
Your Investment at Work
- --------------------------------------------------------------------------------
[MEDICAL SYMBOL APPEARS HERE]
New Jersey Economic Development
Authority - Keswick Pines Project
. These non-rated bonds provided funding for the construction of a continuing
care retirement community in Whiting, New Jersey.
. Keswick Pines provides a wide range of living options to meet the physical,
social and spiritual needs of its residents.
. With an attractive 8.75% coupon, these bonds provide excellent income for the
Portfolio.
- --------------------------------------------------------------------------------
/1/This return does not include the Fund's 3.75% maximum sales charge.
/2/Source: Lipper Analytical Services. Lipper rankings are based on total return
and do not take sales charges into consideration. It is not possible to
invest directly in the Lipper average of General Municipal Debt funds.
/3/Morningstar ratings reflect historical risk-adjusted performance though
6/30/97 and are subject to change. Past performance is no guarantee of future
results. Funds are assigned ratings from 1 star (lowest) to 5 stars
(highest). Ratings are calculated from the funds' 3-,5-, and 10-year returns
(with fee adjustment) in excess of 90-day Treasury bill returns. The top 10%
of the funds in a category receive 5 stars, the next 22.5%, 4 stars, and the
following 35%, 3 stars. For the 3-year period, the Fund was rated 5 stars
(1315 funds); for the 5-year period, 4 stars (640 funds); and for the 10-year
period, 4 stars (297 funds).
/4/Returns are calculated by determining the percentage change in net asset
value with all distributions reinvested. SEC average annual returns reflect
maximum 3.75% sales charge.
/5/Because the Fund is actively managed, sector weightings and Portfolio
overview are subject to change. Past performance is no guarantee of future
results. The value of an investment in the Fund will fluctuate so that
shares, when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
Fund Information
as of June 30, 1997
Performance/4/
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average Annual Total Returns (at net asset value)
- --------------------------------------------------------------------------------
<S> <C>
One Year 11.2%
Five Years 7.2
Ten years 8.6
<CAPTION>
SEC Average Annual Total Returns (including maximum sales charge)
- --------------------------------------------------------------------------------
<S> <C>
One Year 7.1%
Five Years 6.4
Ten years 8.2
</TABLE>
5 Largest Sectors/5/
- --------------------------------------------------------------------------------
By total investments
<TABLE>
<S> <C>
Escrowed/Prerefunded 15.4%
Transportation 13.7%
Nursing Homes 8.5%
Industrial Development Bonds 8.4%
Lease Revenue 7.7%
</TABLE>
Portfolio Overview/5/
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Number of Issues 63
Average Maturity 23.6 Yrs.
Effective Maturity 13.4 Yrs.
Average Rating A
Average Call 9.3 Yrs.
Average Dollar Price $93.96
</TABLE>
2
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
<TABLE>
<CAPTION>
Tax-Exempt Investments -- 100.0%
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assisted Living -- 3.7%
- -------------------------------------------------------------------------
NR NR $1,000 Bell County, TX, Health
Facilities, (Care
Institute, Inc.), $1,097,720
9.00%, 11/1/24
NR NR 1,000 St. Paul, MN, Housing
and Redevelopment (Care
Institute, Inc.), 1,095,140
Highland Park, 8.75%,
11/1/24
NR NR 1,000 Village of North
Syracuse, NY, Housing
Authority (AJM Senior
Housing, Inc., Janus 1,012,430
Park), 8.00%, 6/1/24
- -------------------------------------------------------------------------
$3,205,290
- -------------------------------------------------------------------------
Electric Utilities -- 3.1%
- -------------------------------------------------------------------------
Aa AA $1,000 Colorado Springs
Utility System, 6.75%, $1,094,600
11/15/21
Baa2 BBB+ 1,500 Massachusetts Municipal
Wholesale Electric Co., 1,608,330
6.75%, 7/1/11
- -------------------------------------------------------------------------
$2,702,930
- -------------------------------------------------------------------------
Escrowed / Prerefunded -- 15.4%
- -------------------------------------------------------------------------
Aaa NR $2,500 Boston City Hospital,
FHA Insured, 7.625%, $2,783,850
2/15/21
NR AAA 8,000 Colorado Health
Facilities Authority,
(Liberty Heights), FSA 1,583,760
Insured, 0%, 7/15/24
Aaa NR 19,000 Dawson Ridge
Metropolitan District
Number 1, Douglas 4,238,520
County, CO, 0%, 10/1/22
Aaa NR 685 Massachusetts IFA,
(Cape Cod Hospital), 772,769
8.40%, 11/15/08
Aaa NR 5,000 Mississippi Housing
Finance Corp., Single 1,820,000
Family (AMT), 0%, 6/1/15
Aaa BBB 665 North Carolina Eastern
Municipal Power, 6.50%, 758,167
1/1/18
Aaa NR 6,000 Savannah, GA, Economic
Development Authority,
0%, 12/1/21 1,399,740
- -------------------------------------------------------------------------
$13,356,806
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Hospitals -- 7.7%
- -------------------------------------------------------------------------
Aa3 AA- $1,500 Greenville, SC,
Hospital System, 5.25%, $1,431,585
5/1/23
A2 A 500 Illinois Health and
Education Facilities,
(Victory Memorial), 542,595
7.875%, 12/1/18
NR BBB 2,000 Louisiana PFA, General
Health Systems Project, 2,109,620
6.80%, 11/1/16
Aaa AAA 225 New York State Medical
Care, 7.875%, 8/15/20 252,457
Baa1 BBB+ 600 New York State,
Medical Care Facility
Finance Agency Mental
Health Services, 665,748
7.875%, 8/15/20(1)
Baa BBB 1,550 New York State, Medical
Care Facility,
(Brookdale Medical 1,666,250
Center), 6.85%,
2/15/17(1)
- -------------------------------------------------------------------------
$6,668,255
- -------------------------------------------------------------------------
Housing -- 6.5%
- -------------------------------------------------------------------------
NR AA $ 485 Arkansas Development
Finance Authority,
SFMR, 8.00%, 8/15/11(1) $ 521,341
Aa2 NR 750 Colorado Housing and
Finance Authority,
Single Family Access 835,447
Program, 7.90%, 12/1/24
NR NR 1,000 Florence, KY, Housing
Facilities, 7.625%, 1,001,000
5/1/27
NR NR 1,290 Lake Creek Affordable
Housing Corp., Eagle
County, CO, 8.00%, 1,346,153
12/1/23
Aa2 AA 220 North Carolina Single
Family Mortgage
Revenue, 8.125%, 9/1/19 227,273
NR A 1,650 Travis County, TX HFC
Multifamily (Travis
Station Apartments), 1,716,033
6.75%, 4/1/19(1)
- -------------------------------------------------------------------------
$5,647,247
- -------------------------------------------------------------------------
Industrial Development Revenue / Pollution Control
Revenue -- 8.4%
- -------------------------------------------------------------------------
NR NR $ 850 Florence County, SC,
(Stone Container
Company), 7.375%, 2/1/07 $ 874,633
NR NR 1,000 Maricopa County, AZ,
IDA, 8.625%, 1/1/27 1,006,650
</TABLE>
See notes to financial statements
3
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Industrial Development Revenue / Pollution Control
Revenue (continued)
- ---------------------------------------------------------------------
NR NR $1,750 New Jersey Economic
Development Authority
(Holt Hauling and
Warehouse), 7.75%,
3/1/27 $1,788,990
NR BBB- 2,450 Port Camas-Washougan,
WA, James River, 6.70%,
4/1/23 2,527,690
NR NR 1,000 Santa Fe, NM, IDA,
8.50%, 9/1/16 1,082,220
- ---------------------------------------------------------------------
$7,280,183
- ---------------------------------------------------------------------
Insured-Education -- 2.1%
- ---------------------------------------------------------------------
Aaa AAA $2,000 University of
California - Multiple
Projects (AMBAC),
4.875%, 9/1/19 $1,801,780
- ---------------------------------------------------------------------
$1,801,780
- ---------------------------------------------------------------------
Insured-Electric Utilities -- 1.0%
- ---------------------------------------------------------------------
Aaa AAA $ 800 Puerto Rico Electric
Power Authority (FSA),
Variable, 7/1/03(2) $ 887,000
- ---------------------------------------------------------------------
$ 887,000
- ---------------------------------------------------------------------
Insured-Hospitals -- 6.6%
- ---------------------------------------------------------------------
Aaa AAA $1,000 Fredericksburg, VA,
Industrial Development
Authority (FGIC)
"INFLOS", Variable,
8/15/23(2) $1,197,500
Aaa AAA 1,000 Illinois Health
Facilities Authority,
(Rush-Presbyterian -
St. Lukes Medical
Center) (MBIA),
"INFLOS", Variable,
10/1/24(2) 1,155,000
Aaa AAA 1,000 King County, WA, Public
Hospital District No. 1
(AMBAC), 6.00%, 9/1/20 1,006,910
Aaa AAA 1,000 Rhode Island Health and
Educational Facility,
(Rhode Island Hospital)
(FGIC),"INFLOS",
Variable, 8/15/21(3)(2) 1,216,250
Aaa AAA 1,000 Salt Lake City, UT,
(IHC Hospitals Inc.),
"INFLOS" (AMBAC),
Variable, 5/15/20(3)(2) 1,166,250
- ---------------------------------------------------------------------
$5,741,910
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Insured-Housing -- 2.5%
Aaa AAA $1,000 SCA MFMR Receipts,
Burnsville, MN (FSA),
7.10%, 1/1/30 $1,084,280
Aaa AAA 1,000 SCA MFMR Receipts,
Springfield, MO (FSA),
7.10%, 1/1/30 1,084,280
- ---------------------------------------------------------------------
$2,168,560
- ---------------------------------------------------------------------
Insured-Special Tax Revenue -- 1.5%
- ---------------------------------------------------------------------
Aaa AAA $1,500 Culver City, CA,
Redevelopment Finance
Authority (AMBAC),
4.60%, 11/1/20 $1,294,470
- ---------------------------------------------------------------------
$1,294,470
- ---------------------------------------------------------------------
Insured-Transportation -- 1.3%
- ---------------------------------------------------------------------
Aaa AAA $1,000 Triborough Bridge and
Tunnel Authority of New
York, RITES (AMBAC),
Variable, 1/1/12(2) $1,120,000
- ---------------------------------------------------------------------
$1,120,000
- ---------------------------------------------------------------------
Lease Revenue/
Certificates of Participation -- 4.6%
- ---------------------------------------------------------------------
A A $3,000 California Public Works
Board, (California
State University),
5.50%, 12/1/18 $2,895,600
NR NR 1,000 Hardeman County, TN,
(Correctional
Facilities Corp.),
7.75%, 8/1/17 1,072,230
- ---------------------------------------------------------------------
$3,967,830
- ---------------------------------------------------------------------
Life Care -- 4.6%
- ---------------------------------------------------------------------
NR NR $1,060 Loudoun County, VA,
Industrial Development
Authority (Falcons
Landing), 8.75%, 11/1/24 $1,129,048
NR NR 655 New Hampshire Higher
Educational and Health
Facilities (Riverwoods
at Exeter), 9.00%,
3/1/23 715,522
NR NR 1,000 New Jersey Economic
Development Authority,
Keswick Pines Project,
8.75%, 1/1/24 1,065,260
NR NR 1,000 Vermont Industrial
Development Authority
(Wake Robin Corp.),
8.75%, 4/1/23(3) 1,085,220
- ---------------------------------------------------------------------
$3,995,050
- ---------------------------------------------------------------------
</TABLE>
See notes to financial statements
4
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
<TABLE>
<CAPTION>
Ratings (Unaudited) Principal
- ------------------- Amount
Standard (000
Moody's & Poor's omitted) Security Value
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Miscellaneous -- 4.8%
- -------------------------------------------------------------------------
NR BB- $1,000 New Hampshire State
Business Finance $ 1,059,400
Authority, 7.75%, 1/1/22
NR NR 1,500 New Jersey Sports and
Exposition Authority,
Monmouth Park Project, 1,664,595
8.00%, 1/1/25
Aaa AAA 1,500 Tampa, FL, Sports
Authority, 5.25%, 1,451,130
1/1/17(4)
- -------------------------------------------------------------------------
$ 4,175,125
- -------------------------------------------------------------------------
Nursing Homes -- 8.5%
- -------------------------------------------------------------------------
NR NR $1,455 Bell County, TX,
(Riverside Healthcare,
Inc. - Normandy $ 1,621,088
Terrace), 9.00%, 4/1/23
NR NR 475 Covington-Allegheny
County, VA, IDA,
(Beverly Enterprises), 518,500
9.375%, 9/1/01
NR NR 975 Greene County, OH,
First Mortgage,
(Fairview Extended 1,099,127
Care), 10.125%, 1/1/11
NR NR 1,100 Massachusetts IFA
Health Care Facility ,
(Institute of 1,128,600
Massachusetts Project),
8.05%, 11/1/25
NR NR 1,265 Montgomery County, PA,
IDA (Advancement of
Geriatric Health Care 1,346,213
Institute), 8.375%,
7/1/23
NR NR 390 Okaloosa County, FL,
Beverly Enterprises, 405,386
10.75%, 10/1/03
NR NR 680 Tarrant County Health
Facilities, TX, 10.25%, 718,740
9/1/19
NR NR 485 Wisconsin Health
Facility Authority, 486,116
Villa Clement, 8.75%,
6/1/12
- -------------------------------------------------------------------------
$ 7,323,770
- -------------------------------------------------------------------------
Special Tax Revenue -- 4.0%
- -------------------------------------------------------------------------
Baa1 A $3,525 Puerto Rico Highway and
Transportation
Authority, 5.50%, 7/1/36 $ 3,439,343
- -------------------------------------------------------------------------
$ 3,439,343
- -------------------------------------------------------------------------
Transportation -- 13.7%
- -------------------------------------------------------------------------
Aaa NR $2,807 Indiana Transportation
Finance Authority, $ 3,081,103
6.25%, 11/1/16
A2 NR 758 Indiana Transportation
Finance Authority, 790,708
6.25%, 11/1/16
A1 A+ 5,500 Massachusetts State
Turnpike Authority, 5,137,385
5.00%, 1/1/20
NR NR 10,000 San Joaquin Hills, CA,
Toll Roads, 0%, 1/1/25 1,885,100
NR NR 2,500 San Joaquin Hills, CA,
Transportation Corridor 934,900
Agency, 0%, 1/1/14
- -------------------------------------------------------------------------
$11,829,196
- -------------------------------------------------------------------------
Total Tax-Exempt Investments -- 100%
(identified cost $78,224,283) $86,604,745
- -------------------------------------------------------------------------
</TABLE>
At June 30,1997, the concentration of the Fund's investments
in the various states, determined as a percentage of total
investments, is as follows:
<TABLE>
<S> <C>
Massachusetts 14%
Colorado 11%
California 10%
Others, representing less 65%
than 10% individually
</TABLE>
The Fund 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,
1997, 15.0% of the securities in the portfolio of investments are backed by bond
insurance of various financial institutions and financial guaranty insurance
agencies. The aggregate percentage by financial institution range from 2.8% to
7.4% of total investments.
(1) Security has been segregated to cover when-issued securities.
(2) Security has been issued as an inverse floater bond. Interest rate is shown
as of June 30, 1997.
(3) Security has been segregated to cover margin requirements on open financial
futures contracts.
(4) When-issued security.
See notes to financial statements
5
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
As of June 30, 1997
<TABLE>
<CAPTION>
Assets
- -------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $78,224,283) $86,604,745
Cash 2,431,268
Receivable for investments sold 20,132
Receivable for shares of partnership interest sold 8,535
Interest receivable 1,543,487
Receivable for variation margin on open financial
futures contracts (Note 1D) 53,876
- -------------------------------------------------------------------------
Total assets $90,662,043
- -------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------
Payable for when-issued security (Note 1I) $ 1,468,391
Payable for shares of partnership interest purchased 38,239
Payable to affiliate for Director General Partners'
fees (Note 4) 1,694
Accrued expenses 14,175
- -------------------------------------------------------------------------
Total liabilities $ 1,522,499
- -------------------------------------------------------------------------
Net Assets for 8,696,433 shares of partnership interest
outstanding $89,139,544
- -------------------------------------------------------------------------
Net Assets Applicable to Shares of Partnership
Interest Owned by:
- -------------------------------------------------------------------------
Limited Partners (8,555,959 shares) $87,699,669
General Partners --
Director partners (2,642 shares) 27,080
Adviser partners (137,832 shares) 1,412,795
- -------------------------------------------------------------------------
Net Assets (8,696,433 shares) $89,139,544
- -------------------------------------------------------------------------
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 $72,706,301
Accumulated net realized gain on investments (computed
on the basis of identified cost) 8,217,583
Net unrealized appreciation of investments (computed on
the basis of identified cost) 8,325,462
Accumulated distributions in excess of net
investment income (109,802)
- -------------------------------------------------------------------------
Total $89,139,544
- -------------------------------------------------------------------------
Net Asset Value and Redemption
Price Per Share of Partnership Interest
- -------------------------------------------------------------------------
($89,139,544/8,696,433 shares of $ 10.25
partnership interest outstanding)
- -------------------------------------------------------------------------
Computation of Offering Price
- -------------------------------------------------------------------------
Offering price per share (100/96.25 of $10.25) $ 10.65
- -------------------------------------------------------------------------
On sales of $50,000 or more, the offering price is reduced.
<CAPTION>
Statement of Operations
For the Six Months Ended
June 30, 1997
Investment Income (Note 1B)
- -------------------------------------------------------------------------
<S> <C>
Interest income $ 2,934,844
- -------------------------------------------------------------------------
Total investment income $ 2,934,844
- -------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------
Investment management fee earned by Adviser General
Partner (Note 4) $ 217,940
Compensation of Director General Partners not members
of the Adviser General Partner's organization (Note 4) 3,485
Legal and accounting services 41,079
Printing and postage 23,331
Custodian fee (Note 1F) 22,464
Transfer and dividend disbursing agent fees 15,528
Registration fees 14,029
Miscellaneous 18,837
- -------------------------------------------------------------------------
Total expenses $ 356,693
- -------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1F) $ 15,556
- -------------------------------------------------------------------------
Total expense reductions $ 15,556
- -------------------------------------------------------------------------
Net expenses $ 341,137
- -------------------------------------------------------------------------
Net investment income $ 2,593,707
- -------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- -------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ 760,050
Financial futures contracts (323,989)
- -------------------------------------------------------------------------
Net realized gain on investment transactions $ 436,061
- -------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 1,171,951
Financial futures contracts (55,000)
- -------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments $ 1,116,951
- -------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 1,553,012
- -------------------------------------------------------------------------
Net increase in net assets from operations $ 4,146,719
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
6
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) June 30, 1997 Year Ended
in Net Assets (Unaudited) December 31, 1996
- -------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income $ 2,593,707 $ 5,575,857
Net realized gain (loss) on
investment transactions 436,061 (91,627)
Net change in unrealized
appreciation (depreciation)
of investments 1,116,951 (1,303,829)
- -------------------------------------------------------------------------
Net increase in net assets
from operations $ 4,146,719 $ 4,180,401
- -------------------------------------------------------------------------
Distributions to partners --
From net investment income $ (2,593,707) $ (5,457,518)
In excess of net investment
income (31,649) (78,153)
- -------------------------------------------------------------------------
Total distributions to partners $ (2,625,356) $ (5,535,671)
- -------------------------------------------------------------------------
Transactions in shares of
partnership interest (Note2) --
Proceeds from sales of shares $ 4,509,866 $ 3,090,691
Net asset value of shares
issued to shareholders
in payment of distributions
declared 1,378,695 2,960,279
Cost of shares redeemed (6,454,039) (12,922,047)
- -------------------------------------------------------------------------
Net decrease in net assets from
transactions in shares of
partnership interest (Note 2) $ (565,478) $ (6,871,077)
- -------------------------------------------------------------------------
Net increase (decrease) in net
assets $ 955,885 $ (8,226,347)
- -------------------------------------------------------------------------
Net Assets
- -------------------------------------------------------------------------
At beginning of period $ 88,183,659 $ 96,410,006
- -------------------------------------------------------------------------
At end of period $ 89,139,544 $ 88,183,659
- -------------------------------------------------------------------------
Accumulated
distributions in excess of
net investment income
included in net assets
- -------------------------------------------------------------------------
At end of period $ (109,802) $ (78,153)
- -------------------------------------------------------------------------
</TABLE>
See notes to financial statements
7
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Financial Highlights
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value - beginning of period $10.070 $10.210 $ 9.260 $10.630 $ 9.950 $ 9.750
- ----------------------------------------------------------------------------------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 0.296 $0.605 $ 0.604 $ 0.611 $ 0.614 $ 0.639
Net realized and unrealized gain (loss) on investments 0.184 (0.143) 0.962 (1.369) 0.692 0.195
- ----------------------------------------------------------------------------------------------------------------------------------
Total income (loss) from operations $ 0.480 $0.462 $ 1.566 $(0.758) $ 1.306 $ 0.834
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions
- ----------------------------------------------------------------------------------------------------------------------------------
From net investment income $(0.296) $(0.594) $(0.604) $(0.611) $ (0.619) $ (0.634)
In excess of net investment income (0.004) (0.008) (0.012) (0.001) (0.007) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions $(0.300) $(0.602) $(0.616) $(0.612) $ (0.626) $ (0.634)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $10.250 $10.070 $10.210 $ 9.260 $ 10.630 $ 9.950
- ----------------------------------------------------------------------------------------------------------------------------------
Total Return/(1)/ 4.89% 4.78% 17.40% (7.27)% 13.52% 8.91%
- ----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $89,140 $88,184 $96,410 $90,802 $114,425 $103,208
Ratio of net expenses to average daily net assets /(2)/ 0.83%+ 0.78% 0.76% 0.80% 0.72% 0.74%
Ratio of net expenses to average daily net assets after
custodian fee reduction 0.79%+ 0.74% -- -- -- --
Ratio of net investment income to average daily 5.97%+ 6.12% 6.16% 6.26% 5.91% 6.50%
net assets
Portfolio Turnover 13% 30% 58% 58% 86% 60%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
/(1)/ Total 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 return is not
computed on an annualized basis.
/(2)/ The expense ratios for the year ended December 31, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund to increase
its expense ratio by the effect of any expense offset arrangements with
its service providers. The expense ratios for the periods ended on or
before December 31, 1994 have not been adjusted to reflect this change.
See notes to financial statements
8
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
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. Futures contracts and
options on financial futures contracts listed on commodity exchanges are
valued at closing settlement prices. Over-the-counter options on financial
futures are normally valued at the mean between the latest 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 ex-date.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of 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. All significant credit balances used to
reduce the Fund's custodian fees are reported as a reduction of expenses in
the Statement of Operations.
G Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those amounts.
H Put Options on Financial Futures Contracts -- Upon the purchase of a put
option on a financial futures contract by the Fund, the premium paid is
recorded as an investment, the value of which is marked-to-market daily. When
a purchased option expires, the Fund will realize a loss in the amount of the
cost of the option. When the Fund enters into a closing sale transaction, the
Fund will
9
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
realize a gain or loss depending on whether the sales proceeds from the
closing sale transaction are greater or less than the cost of the option.
When the Fund exercises a put option, settlement is made in cash. The risk
associated with purchasing options is limited to the premium originally paid.
I When-issued and Delayed Delivery
Transactions -- The Fund may engage in when-issued or delayed delivery
transactions. The Fund records when-issued securities on trade date and
maintains security positions such that sufficient liquid assets will be
available to make payment for the securities purchased. Securities purchased
on a when-issued or delayed delivery basis are marked-to-market daily and
begin accruing interest on settlement date.
J Interim Financial Information -- The interim financial statements relating
to June 30, 1997 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 only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Shares of Partnership Interest
----------------------------------------------------------------------------
Transactions in shares of partnership interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1997
(Unaudited)
-------------------------------------------------------------------------
General Partners Limited Partners
<S> <C> <C>
Sales -- 451,332
Issued to partners electing
to receive payment of
distributions in shares 4,152 134,069
Redemptions -- (647,620)
-------------------------------------------------------------------------
Net increase (decrease) 4,152 (62,219)
-------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1996
-------------------------------------------------------------------------
General Partners Limited Partners
<S> <C> <C>
Sales -- 310,886
Issued to partners electing
to receive payment of
distributions in shares 8,002 290,439
Redemptions -- (1,301,059)
-------------------------------------------------------------------------
Net increase (decrease) 8,002 (699,734)
-------------------------------------------------------------------------
</TABLE>
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 and put
option transactions, aggregated $11,179,379 and $15,627,702, respectively.
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, 1997, the fee was equivalent to 0.50% (annualized) of the
Fund's average net assets for such period and amounted to $217,940. 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 $36 as its portion of the sales charge on sales of partnership
interest in the Fund. 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
10
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
percentage of their annual fees in accordance with the terms of the Trustees
Deferred Compensation Plan. For the six months ended June 30, 1997, no
significant amounts have been deferred.
5 Line of Credit
-----------------------------------------------------------------------------
The Fund participates with other portfolios and funds managed by EVM and
affiliates in a committed $120 million unsecured line of credit with a group
of banks. 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 participating portfolio or fund based on its
borrowings at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate, a Eurodollar rate, or a federal funds
rate. In addition, a fee computed at an annual rate of 0.15% on the daily
unused portion of the line of credit is allocated among the participating
funds and portfolios at the end of each quarter. The Fund did not have any
significant borrowing or allocated fees during the six months ended June 30,
1997.
6 Federal Income Tax Basis of Investments
-----------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at June 30, 1997, as computed on a federal income tax basis, were as
follows:
<TABLE>
<S> <C>
Aggregate cost $ 78,328,476
---------------------------------------------------
Gross unrealized appreciation $ 8,284,999
Gross unrealized depreciation 8,730
---------------------------------------------------
Net unrealized appreciation $ 8,276,269
---------------------------------------------------
</TABLE>
7 Distributions
-----------------------------------------------------------------------------
On July 1, 1997, the Director General Partner declared a distribution of
$0.050 per share payable July 15, 1997, to partners of record on July 1,
1997.
8 Financial Instruments
-----------------------------------------------------------------------------
The Fund regularly trades in financial instruments with off-balance sheet
risk in the normal course of its investing activities to assist in managing
exposure to various market risks. These financial instruments include futures
contracts and may involve, to a varying degree, elements of risk in excess of
the amounts recognized for financial statement purposes. The notional or
contractual amounts of these instruments represent the investment the Fund
has in particular classes of financial instruments and does not necessarily
represent the amounts potentially subject to risk. The measurement of the
risks associated with these instruments is meaningful only when all related
and offsetting transactions are considered. A summary of obligations under
these financial instruments at June 30, 1997 is as follows:
<TABLE>
<CAPTION>
Futures Net Unrealized
Contracts Appreciation
Expiration Date Contracts Position (Depreciation)
-----------------------------------------------------------------------
<S> <C> <C> <C>
9/97 53 U.S. Treasury Bonds Short $ (55,000)
-----------------------------------------------------------------------
</TABLE>
11
<PAGE>
Eaton Vance Municipal Bond Fund, L.P. as of June 30, 1997
INVESTMENT MANAGEMENT
Eaton Vance Municipal Bond Fund, L.P.
Director General Partners
Landon T. Clay
Chairman, Eaton Vance
Management
Donald R. Dwight
President, Dwight
Partners, Inc.
Chairman, Newspapers of
New England, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor
of Investment Banking,
Harvard University
Graduate School of
Business Administration
Norton H. Reamer
President and Director,
United Asset Management
Corporation
John L. Thorndike
Formerly Director, Fiduciary
Company Incorporated
Jack L. Treynor
Investment Adviser and
Consultant
Officers
Landon T. Clay
Chairman, Eaton Vance Management
John L. Thorndike
Formerly Director, Fiduciary
Company Incorporated
Thomas J. Fetter
President and Portfolio Manager
James L. O'Conner
Treasurer
Alan R. Dynner
Secretary
12
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
Investment Advisor
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
Custodian
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
Transfer Agent
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
Independent Auditors
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
Eaton Vance
Municipal Bond Fund L.P.
24 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges and
expenses. Please read the prospectus carefully before you invest or send money.
- --------------------------------------------------------------------------------
T-MBSRC-8/97
