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PROSPECTUS AUGUST 1, 1995
DREYFUS A BONDS PLUS, INC.
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DREYFUS A BONDS PLUS, INC. (THE "FUND") IS AN OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUTUAL FUND. ITS GOAL IS TO PROVIDE
YOU WITH THE MAXIMUM AMOUNT OF CURRENT INCOME TO THE EXTENT CONSISTENT WITH
THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
THE FUND INVESTS PRINCIPALLY IN DEBT OBLIGATIONS OF CORPORATIONS, THE
U.S. GOVERNMENT AND ITS AGENCIES AND INSTRUMENTALITIES, AND MAJOR U.S.
BANKING INSTITUTIONS.
AT LEAST 80% OF THE FUND'S PORTFOLIO IS INVESTED IN BONDS RATED AT
LEAST A BY MOODY'S INVESTORS SERVICE, INC. OR STANDARD & POOR'S CORPORATION.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED AUGUST 1, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
Page
Annual Fund Operating Expenses.................... 3
Condensed Financial Information................... 4
Description of the Fund........................... 5
Management of the Fund............................ 9
How to Buy Fund Shares............................ 10
Shareholder Services.............................. 13
How to Redeem Fund Shares......................... 16
Shareholder Services Plan......................... 19
Dividends, Distributions and Taxes................ 19
Performance Information........................... 20
General Information............................... 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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This Page Intentionally Left Blank
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C> <C> <C> <C> <C>
Management Fees........................................................................... .65%
Other Expenses ........................................................................... .34%
Total Fund Operating Expenses............................................................. .99%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $10 $32 $55 $121
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS REPRESENTATIVE
OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN
THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE
FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. You can purchase Fund shares without charge directly from the Fund's
distributor; you may be charged a nominal fee if you effect transactions in
Fund shares through a securities dealer, bank or other financial institution.
See "Management of the Fund" and "Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
---------------------------------------------------------------------------------------
PER SHARE DATA: 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ----- ---- ---- ---- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year $13.10 $15.32 $15.11 $13.78 $13.24 $13.45 $13.65 $14.35 $15.43 $14.38
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net..... 1.45 1.32 1.21 1.19 1.18 1.15 1.11 1.05 .98 .94
Net realized and unrealized gain (loss)
on investments...... 2.19 .02 (1.10) (.53) .21 .20 .70 1.29 (.46) (.56)
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS 3.64 1.34 .11 .66 1.39 1.35 1.81 2.34 .52 .38
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net........... (1.42) (1.30) (1.22) (1.20) (1.18) (1.15) (1.11) (1.05) (.99) (.94)
Dividends from net realized gain on
investments......... -- (.25) (.22) -- -- -- -- (.21) (.58) (.07)
------ ------ ------ ------ ------ ------- ------- ------ ------ ------
TOTAL DISTRIBUTIONS..... (1.42) (1.55) (1.44) (1.20) (1.18) (1.15) (1.11) (1.26) (1.57) (1.01)
------ ------ ------ ------ ------ ------ ------- ------ ------ ------
Net asset value, end of year... $15.32 $15.11 $13.78 $13.24 $13.45 $13.65 $14.35 $15.43 $14.38 $13.75
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 29.43% 9.34% 1.23% 5.03% 10.66% 10.60% 13.75% 17.09% 3.09% 3.01%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.......... .87% .84% .88% .94% .86% .85% .88% .93% .90% .99%
Ratio of net investment income
to average net assets..... 10.34% 8.72% 8.87% 8.90% 8.52% 8.59% 7.88% 7.07% 6.30% 6.89%
Portfolio Turnover Rate.... 61.21% 79.06% 49.03% 65.72% 39.77% 25.90% 66.82% 81.15% 93.67% 172.60%
Net Assets, end of year
(000's omitted)..... $222,890 $319,544 $254,333$ 262,367 $299,783 $339,935 $446,869 $574,431 $593,615 $539,140
</TABLE>
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Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
Page 4
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to provide you with the maximum amount of current
income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Fund invests principally in debt obligations of
corporations, the U.S. Government and its agencies and instrumentalities, and
major U.S. banking institutions. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved.
MANAGEMENT POLICIES
At least 80% of the value of the Fund's net assets will consist of
obligations of corporations which, at the time of purchase by the Fund, are
rated at least A by Moody's Investors Service, Inc. ("Moody's") or Standard &
Poor's Corporation ("S&P"), and of securities issued or guaranteed as to
principal and interest by the U.S. Government or its agencies or
instrumentalities. The Fund also may invest in mortgage-related securities,
Municipal Obligations and zero coupon securities. The Fund also may invest in
securities which, while not rated, are determined by The Dreyfus Corporation
to be of comparable quality to those rated securities in which the Fund may
invest; for purposes of the 80% requirement described in this paragraph, such
unrated securities shall be deemed to have the ratings so determined. In
addition, at least 65% of the value of the Fund's net assets (except when
maintaining a temporary defensive position) will be invested in bonds and
debentures.
Up to 20% of the Fund's net assets may consist of high grade
commercial paper of U.S. issuers, certificates of deposit, time deposits and
bankers' acceptances, and corporate bonds which are rated in any category
lower than A by both Moody's and S&P. When deemed necessary for temporary
defensive purposes or in connection with loans of portfolio securities, the
Fund's investment in high grade commercial paper, certificates of deposit,
time deposits and bankers' acceptances may exceed 20% of its net assets,
although the Fund currently does not intend to invest more than 5% of its
assets in any one of these types of instruments. Under no circumstances will
the Fund invest more than 20% of its net assets in corporate bonds which are
rated lower than A, but in no case lower than B, by both Moody's and S&P or
are unrated. In addition, the Fund will invest no more than 5% of its net
assets in bonds rated Ba or B by Moody's and BB or B by S&P. Obligations
rated Baa by Moody's or BBB by S&P are considered investment grade
obligations which lack outstanding investment characteristics and may have
speculative characteristics as well. See "Risk Factors_Fixed-Income
Securities" below, and "Appendix" in the Statement of Additional Information.
The Fund may invest up to 10% of its assets in securities of foreign issuers.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES - Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those issued
by the Federal National Mortgage Association, by discretionary authority of
the U.S. Government to purchase certain obligations of the agency or
instrumentality; and others, such as those issued by the Student Loan
Marketing Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of interest.
Principal and interest may fluctuate based on generally recognized reference
rates or
Page 5
the relationship of rates. While the U.S. Government provides financial
support to such U.S. Government sponsored agencies or instrumentalities, no
assurance can be given that it will always do so since it is not so obligated
by law. The Fund will invest in such securities only when it is satisfied that
the credit risk with respect to the issuer is minimal.
MORTGAGE-RELATED SECURITIES - The Fund may invest in mortgage-related
securities which are collateralized by pools of mortgage loans assembled for
sale to investors by various governmental agencies, such as Government
National Mortgage Association and government-related organizations such as
Federal National Mortgage Association and Federal Home Loan Mortgage
Corporation, as well as by private issuers such as commercial banks, savings
and loan institutions, mortgage banks and private mortgage insurance
companies, and similar foreign entities. Mortgage-related securities are a
form of derivative securities. The mortgage-related securities in which the
Fund may invest include those with fixed, floating and variable interest
rates and those with interest rates that change based on multiples of changes
in interest rates. Although certain mortgage-related securities are
guaranteed by a third party or otherwise similarly secured, the market value
of the security, which may fluctuate, is not so secured. If a
mortgage-related security is purchased at a premium, all or part of the
premium may be lost if there is a decline in the market value of the
security, whether resulting from changes in interest rates or prepayments in
the underlying mortgage collateral. As with other interest-bearing
securities, the prices of certain mortgage-backed securities are inversely
affected by changes in interest rates. However, although the value of a
mortgage-related security may decline when interest rates rise, the converse
is not necessarily true, since in periods of declining interest rates the
mortgages underlying the security are more likely to be prepaid. For this and
other reasons, a mortgage-related security's stated maturity may be shortened
by unscheduled prepayments on the underlying mortgage, and, therefore, it is
not possible to predict accurately the security's return to the Fund. The
Fund also may invest in collateralized mortgage obligations structured on
pools of mortgage pass-through certificates or mortgage loans. The issuers of
collateralized mortgage obligations typically do not have assets other than
those pledged to secure separately the obligations. Holders of these
obligations must rely principally on distributions on the underlying mortgage
related securities and other collateral securing the obligations for payments
of principal and interest on the obligations. If the collateral securing the
obligations is insufficient to make payments on the obligations, a holder
could sustain a loss. Collateralized mortgage obligations will be purchased
only if rated in one of the two highest rating categories by a nationally
recognized rating organization such as Moody's or S&P.
REPURCHASE AGREEMENTS - Repurchase agreements involve the acquisition by the
Fund of an underlying debt instrument, subject to an obligation of the seller
to repurchase, and the Fund to resell, the instrument at a fixed price
usually not more than one week after its purchase. Certain costs may be
incurred by the Fund in connection with the sale of the securities if the
seller does not repurchase them in accordance with the repurchase agreement.
In addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited.
ILLIQUID SECURITIES - The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject
Page 6
to a risk that should the Fund desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the value
of the Fund's net assets could be adversely affected.
INVESTMENT TECHNIQUES
BORROWING MONEY - As a fundamental policy, the Fund is permitted to borrow
to the extent permitted under the Investment Company Act of 1940, as amended.
However, the Fund currently intends to borrow money only for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value of
the Fund's total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount borrowed) at
the time the borrowing is made. While borrowings exceed 5% of the Fund's
total assets, the Fund will not make any additional investments.
LENDING PORTFOLIO SECURITIES - From time to time, the Fund may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
Such loans may not exceed 10% of the value of the Fund's total assets. In
connection with such loans, the Fund will receive collateral consisting of
cash, U.S. Government securities or irrevocable letters of credit which will
be maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. The Fund can increase its income
through the investment of such collateral. The Fund continues to be entitled
to payments in amounts equal to the interest or other distributions payable
on the loaned security and receives interest on the amount of the loan. Such
loans will be terminable at any time upon specified notice. The Fund might
experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
FORWARD COMMITMENTS - The Fund may purchase securities on a forward
commitment or when-issued basis, which means that the price is fixed at the
time of commitment, but delivery and payment ordinarily take place a number
of days after the commitment to purchase. The Fund will make commitments to
purchase such securities only with the intention of actually acquiring the
securities, but the Fund may sell these securities before the settlement date
if it is deemed advisable. The Fund will not accrue income in respect of a
forward commitment or when-issued security prior to its stated delivery date.
Securities purchased on a forward commitment or when-issued basis and
the securities held in the Fund's portfolio are subject to changes in value
(both generally changing in the same way, i.e., appreciating when interest
rates decline and depreciating when interest rates rise) based upon the
public's perception of the creditworthiness of the issuer and changes, real
or anticipated, in the level of interest rates. Securities purchased on a
forward commitment or when-issued basis may expose the Fund to risk because
they may experience such fluctuations prior to their actual delivery.
Purchasing securities on a forward commitment or when-issued basis can
involve the additional risk that the yield available in the market when the
delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the forward
commitment or when-issued securities will be established and maintained at
the Fund's custodian bank. Purchasing securities on a forward commitment or
when-issued basis when the Fund is fully or almost fully invested may result
in greater potential fluctuation in the value of the Fund's net assets and
its net asset value per share.
CERTAIN FUNDAMENTAL POLICIES
The Fund may (i) invest up to 25% of its total assets in the
securities of issuers in a particular industry or industries and up to 5% of
its total assets in the securities of one issuer, except that U.S. Government
and government agency securities may be purchased without limitation; and
(ii) borrow money to the
Page 7
extent permitted under the Investment Company Act of 1940, which currently
limits borrowing to no more then 331/3% of the value of the Fund's total
assets. This paragraph describes fundamental policies that cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940) of the Fund's outstanding voting shares. See "Investment
Objective and Management Policies_Investment Restrictions" in the Statement
of Additional Information.
RISK FACTORS
FIXED-INCOME SECURITIES - Even though interest-bearing securities are
investments which promise a stable stream of income, the prices of such
securities are inversely affected by changes in interest rates and,
therefore, are subject to the risk of market price fluctuations. The values
of fixed-income securities also may be affected by changes in the credit
rating or financial condition of the issuing entities. Once the rating of a
portfolio security has been changed, the Fund will consider all circumstances
deemed relevant in determining whether to continue to hold the security.
Certain securities purchased by the Fund, such as those rated Baa by Moody's
and BBB by S&P may be subject to such risk with respect to the issuing entity
and to greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. Obligations which are rated Baa are considered
medium grade obligations; they are neither highly protected nor poorly
secured, and are considered by Moody's to have speculative characteristics.
Bonds rated BBB by S&P are regarded as having adequate capacity to pay
interest and repay principal, and while such bonds ordinarily exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest
and repay principal for bonds in this category than in higher rated
categories. Up to 5% of the Fund's portfolio may consist of securities rated
B by Moody's or S&P which generally lack characteristics of a desirable
investment in that assurance of interest and principal payments or of
maintenance of other terms of the security over any long period of time may
be small. See "Investment Objective and Management Policies_Risk Factors_Lower
Rated Bonds" and "Appendix" in the Statement of Additional Information. The
Fund's net asset value generally will not be stable and should fluctuate
based upon changes in the value of the Fund's portfolio securities. Securities
in which the Fund invests may earn a higher level of current income than
certain shorter-term or higher quality securities which generally have greater
liquidity, less market risk and less fluctuation in market value.
INVESTING IN FOREIGN SECURITIES - Since up to 10% of the Fund's portfolio
may consist of securities of foreign issuers, the Fund may be subject to
investment risks as to these securities that are greater in some respects
than those incurred by a fund which invests only in securities of U.S.
domestic issuers. Such risks include future political and economic
developments, the possible imposition of foreign withholding taxes on
interest income payable on the securities, the possible establishment of
exchange controls, the possible seizure or nationalization of foreign
deposits, or the adoption of other foreign governmental restrictions which
might adversely affect the payment of principal and interest on such
securities.
OTHER INVESTMENT CONSIDERATIONS - The Fund's net asset value per share is
not fixed and should be expected to fluctuate. You should purchase Fund
shares only as a supplement to an overall investment program and only if you
are willing to undertake the risks involved.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, securities of the type in which the Fund invests at the same time
as the Fund, available investments or opportunities for sales will be
allocated equitably to each investment
Page 8
company. In some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained for or disposed of
by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of June 30, 1995, The Dreyfus Corporation managed or administered
approximately $76 billion in assets for more than 1.8 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's primary portfolio manager is Garitt
Kono. Mr. Kono has held that position since June 1994 and has been employed
at The Dreyfus Corporation since September 1992. Prior thereto, Mr. Kono was
Vice-President-Fixed Income at The First Boston Corporation. The Fund's other
portfolio manager is identified in the Fund's Statement of Additional
Information. The Dreyfus Corporation also provides research services for the
Fund as well as for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$200 billion in assets as of March 31, 1995, including approximately $72
billion in mutual fund assets. As of March 31, 1995, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $680 billion in assets, including
approximately $67 billion in mutual fund assets.
For the fiscal year ended March 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .65 of 1% of the
value of the Fund's average daily net assets. From time to time, The Dreyfus
Corporation may waive receipt of its fees and/or voluntarily assume certain
expenses of the Fund, which would have the effect of lowering the overall
expense ratio of the Fund and increasing yield to investors at the time such
amounts are waived or assumed, as the case may be. The Fund will not pay The
Dreyfus Corporation at a later time for any amounts it may waive, nor will
the Fund reimburse The Dreyfus Corporation for any amounts it may assume.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers or others in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor's ultimate parent company is Boston Institutional Group, Inc.
Page 9
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued
only upon your written request. No certificates are issued for fractional
shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the Fund's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their account, the minimum
initial investment is $50. The Fund reserves the right to offer Fund shares
without regard to minimum purchase requirements to employees participating in
certain qualified or non-qualified employee benefit plans or other programs
where contributions or account information can be transmitted in a manner and
form acceptable to the Fund. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time. Fund
shares also are offered without regard to the minimum initial investment
requirements through Dreyfus-Automatic Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the
Dreyfus Step Program described under "Shareholder Services." These services
enable you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will
not protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts, to
"The Dreyfus Trust Company, Custodian." Payments to open new accounts which
are mailed should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account Application.
For subsequent investments, your Fund account number should appear on the
check and an investment slip should be enclosed and sent to The Dreyfus
Family of Funds, P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus
retirement plan accounts, both initial and subsequent investments should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments should be
made by third party check. Purchase orders may be delivered in person only to
a Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."
Page 10
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA #8900051868/Dreyfus A Bonds
Plus, Inc., for purchase of Fund shares in your name. The wire must include
your Fund account number (for new accounts, your Taxpayer Identification
Number ("TIN") should be included instead), account registration and dealer
number, if applicable. If your initial purchase of Fund shares is by wire,
please call 1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund, as
no redemptions will be permitted until the Account Application is received.
You may obtain further information about remitting funds in this manner from
your bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in the Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent or other agent. Net asset value per share is determined as of
the close of trading on the floor of the New York Stock Exchange (currently
4:00 p.m., New York time), on each day the New York Stock Exchange is open
for business. Net asset value per share is computed by dividing the value of
the Fund's net assets (i.e., the value of its assets less liabilities) by the
total number of shares outstanding. Substantially all of the Fund's
investments are valued each business day at fair value as determined by one
or more independent pricing services approved by the Board of Directors. The
pricing service's procedures are reviewed under the general supervision of
the Board of Directors. The remaining assets are valued using available
market quotations or at fair value as determined in good faith by the Board
of Directors. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Fund's Statement of Additional Information.
If an order is received by the Transfer Agent by the close of trading
on the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time) on a business day, Fund shares will be purchased at the net asset value
per share determined as of such close of trading on that day. Otherwise, Fund
Page 11
shares will be purchased at the next determined net asset value except where
shares are purchased by dealers as provided below.
Orders for the purchase of Fund shares received by dealers by the
close of trading on the floor of the New York Stock Exchange on a business
day and transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the net
asset value per share determined as of the close of trading on the floor of
the New York Stock Exchange on that day. Otherwise, the orders will be based
on the next determined net asset value. It is the dealer's responsibility to
transmit orders so that they will be received by the Distributor or its
designee before the close of its business day. For certain institutions that
have entered into agreements with the Distributor, payment for the purchase
of Fund shares may be transmitted, and must be received by the Transfer
Agent, within three business days after the order is placed. If such payment
is not received within three business days after the order is placed, the
order may be canceled and the institution could be held liable for resulting
fees and/or losses.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service ("IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account Application
or have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House member
may be so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
FUND EXCHANGES - You may purchase, in exchange for shares of the Fund, shares
of certain other funds managed or administered by The Dreyfus Corporation, to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of Personal Retirement Plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all shareholders automatically, unless you check the
applicable "No" box on the Account Application indicating that you
specifically refuse this privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the account or by a separate signed Shareholder Services Form,
Page 12
also available by calling 1-800-645-6561. If you have established the
Telephone Exchange Privilege, you may telephone exchange instructions by
calling 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. See "How to Redeem Fund Shares - Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, Dreyfus TELETRANSFER Privilege, and the
dividend/capital gain distribution option (except for Dreyfus Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by a previous
exchange from shares of the fund purchased with a sales load, or (c) acquired
through reinvestment of dividends or distributions paid with respect to the
foregoing categories of shares. To qualify, at the time of your exchange you
must notify the Transfer Agent. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No fees
currently are charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days' written
notice, to charge shareholders a nominal fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
shareholders.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Certain funds in the Dreyfus Family of Funds offer multiple classes
of shares to the public. If any investor in a fund offering multiple classes
of shares exchanges shares of such fund subject to a contingent deferred
sales charge ("CDSC") for shares of the Fund, the Fund shares obtained in the
exchange will be held in a separate Exchange Account for the investor. Shares
held in an Exchange Account may be exchanged only for shares of select funds
in the Dreyfus Family of Funds. No CDSC will be imposed on such shares at the
time of exchange; however, an investor exchanging such shares should review
carefully the current prospectus of the fund from which such shares were
exchanged and into which such shares are being exchanged to determine the
CDSC applicable on redemption. Redemption proceeds on Exchange Account shares
will be paid only by Federal wire or by check. Exchange Account shares are
eligible for the Dreyfus Auto-Exchange Privilege, Dreyfus Dividend Options
and the Automatic Withdrawal Plan. Please call 1-800-645-6561 for further
information.
DREYFUS AUTO-EXCHANGE PRIVILEGE
Dreyfus Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of other funds in the Dreyfus Family of Funds of which
you are currently an investor. The amount you designate, which can be
expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth of
the month according to the schedule you have selected. Shares will be exchange
d at the then-current net asset value; however a sales load may be charged
with respect to exchanges into funds sold with a sales load. See "Shareholder
Services" in the Statement of
Page 13
Additional Information. The right to exercise this Privilege may be modified
or cancelled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by writing to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. The Fund may charge
a service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss. For more information concerning this Privilege
and the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization Form, please
call toll free 1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-Automatic Asset Builder permits you to purchase shares
(minimum of $100 and maximum of $150,000 per transaction) at regular
intervals selected by you. Fund shares are purchased by transferring funds
from the bank account designated by you. At your option, the bank account
designated by you will be debited in the specified amount, and Fund shares
will be purchased, once a month, on either the first or fifteenth day, or
twice a month, on both days. Only an account maintained at a domestic
financial institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-Automatic Asset Builder account you must
file an authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may cancel this
Privilege or change the amount of purchase at any time by mailing written noti
fication to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671, or, if for Dreyfus retirement plan accounts, to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427, and the notification will be effective three business days
following receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE
Dreyfus Government Direct Deposit Privilege enables you to purchase
shares (minimum of $100 and maximum of $50,000 per transaction) by having
Federal salary, Social Security, or certain veterans', military or other
payments from the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect. To enroll in
Dreyfus Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained by
calling 1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to terminate your
participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice to
you.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase shares (minimum
of $100 per transaction) automatically on a regular basis. Depending upon
your employer's direct deposit program, you may have part or all of your
paycheck transferred to your existing Dreyfus account electronically through
the Automated Clearing House system at each pay period. To establish a
Dreyfus Payroll Savings Plan account, you must file an authorization form
with your employer's payroll department. Your employer must complete the
reverse side of the form and return it to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form by calling 1-800-645-6561. You may change the amount of
purchase or cancel the authorization only by writ-
Page 14
ten notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the Transfer
Agent or any other person, to arrange for transactions under the Dreyfus
Payroll Savings Plan. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated
DREYFUS STEP PROGRAM
Dreyfus Step Program enables you to purchase Fund shares without
regard to the Fund's minimum initial investment requirements through
Dreyfus-Automatic Asset Builder, Dreyfus Government Direct Deposit Privilege
or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step Program account,
you must supply the necessary information on the Fund's Account Application
and file the required authorization form(s) with the Transfer Agent. For more
information concerning this Program, or to request the necessary
authorization form(s), please call toll free 1-800-782-6620. You may
terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-Automatic Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be,
or as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to purchase Fund
shares through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of another fund in the Dreyfus Family of Funds of which you are a
shareholder. Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with respect to
investments in shares of a fund sold with a sales load. If you are investing
in a fund that charges a sales load, you may qualify for share prices which
do not include the sales load or which reflect a reduced sales load. If you
are investing in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent deferred
sales charge, if any, applicable to the shares purchased. See "Shareholder
Services" in the Statement of Additional Information. Dreyfus Dividend ACH
permits you to transfer electronically dividends or dividends and capital
gain distributions, if any, from the Fund to a designated bank account. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a fee
for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 6527, Providence, Rhode Island 02940-6527. Enrollment in or
cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges
at any time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for these privileges.
AUTOMATIC WITHDRAWAL PLAN
The Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis if you have a $5,000 minimum account. An application for the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561. There is a service
charge of 50cents for each withdrawal check. The Automatic Withdrawal Plan
may be ended at any time by you, the Fund or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Page 15
RETIREMENT PLANS
The Fund offers a variety of prototype pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services are
also available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; and for
SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7) Plans, please call
1-800-322-7880.
HOW TO REDEEM FUND SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC
ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN
ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the number of shares held in your
account is 50 shares or less and remains so during the notice period.
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, the Wire Redemption Privilege, the Telephone
Redemption Privilege, the Check Redemption Privilege or the Dreyfus
TELETRANSFER Privilege. The Fund makes available to certain large institutions
the ability to issue redemption instructions through compatible computer
facilities.
Page 16
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be you, and
reasonably believed by the Transfer Agent to be genuine. The Fund will
require the Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to confirm that instructions are genuine
and, if it does not follow such procedures, the Fund or the Transfer Agent
may be liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION
Under the regular redemption procedure, you may redeem shares by
written request mailed to The Dreyfus Family of Funds, P.O. Box 9671,
Providence, Rhode Island 02940-9671. Redemption requests may be delivered in
person only to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED
TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location
of the nearest Dreyfus Financial Center, please call one of the telephone
numbers listed under "General Information." Redemption requests must be
signed by each shareholder, including each owner of a joint account, and each
signature must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form generally
will be accepted from domestic banks, brokers, dealers, credit unions,
national securities exchanges, registered securities associations, clearing
agencies and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
If you have any questions with respect to signature-guarantees, please call
one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE
You may request on the Account Application, Shareholders Services
Form or by later written request that the Fund provide Redemption Checks
drawn on the Fund's account. Redemption Checks may be made payable to the
order of any person in the amount of $500 or more. Potential fluctuation in
the net asset value of Fund shares should be considered in determining the
amount of the check. Redemption Checks should not be used to close your
account. Redemption Checks are free, but the Transfer Agent will impose a fee
for stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor a Redemption Check because of insufficient funds
or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. Shares for which certificates
Page 17
have been issued may not be redeemed by Redemption Check. Shares held under
Keogh Plans, IRAs or other retirement plans are not eligible for this
Privilege. This Privilege may be modified or terminated at any time by the
Fund or the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE
You may request by wire or telephone that redemption proceeds
(minimum $1,000) be wired to your account at a bank which is a member of the
Federal Reserve System, or a correspondent bank if your bank is not a member.
To establish the Wire Redemption Privilege, you must check the appropriate
box and supply the necessary information on the Fund's Account Application or
file a Shareholder Services Form with the Transfer Agent. You may direct that
redemption proceeds be paid by check (maximum $150,000 per day) made out to
the owners of record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of not more
than $250,000 wired within any 30-day period. You may telephone redemption
requests by calling 1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. The Fund reserves the right to refuse any redemption request,
including requests made shortly after a change of address, and may limit the
amount involved or the number of such requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
transmitting redemption requests by wire. Shares held under Keogh Plans, IRAs
or other retirement plans, and shares for which certificates have been issued,
are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE
You may redeem Fund shares (maximum $150,000 per day) by telephone if
you have checked the appropriate box on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
redemption proceeds will be paid by check and mailed to your address. You may
telephone redemption instructions by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any request made by telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of
telephone redemption requests. This Privilege may be modified or terminated
at any time by the Transfer Agent or the Fund. Shares held under Keogh Plans,
IRAs or other retirement plans, and shares for which certificates have been
issued, are not eligible
for this Privilege.
DREYFUS TELETRANSFER PRIVILEGE
You may redeem Fund shares (minimum $500 per day) by telephone if you
have checked the appropriate box and supplied the necessary information on
the Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The proceeds will be transferred between your Fund
account and the bank account designated in one of these documents. Only such
an account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. Redemption proceeds
will be on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your address.
Holders of jointly registered Fund or bank accounts may redeem through the
Dreyfus TELETRANSFER Privilege for transfer to their bank account not more
than $250,000 within any 30-day period. The Fund reserves the right to refuse
any request made by telephone, including requests made shortly after a change
of address, and may limit the amount involved or the number of such requests.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
Page 18
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. Shares held under Keogh
Plans, IRAs or other retirement plans, and shares issued in certificate form,
are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays monthly dividends from net investment income
and makes distributions from net realized securities gains, if any, once a
year, but it may make distributions on a more frequent basis to comply with
the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose whether
to receive dividends or distributions in cash or to reinvest in additional
Fund shares at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional
shares. No dividend paid by the Fund will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of the Fund will be taxable to U.S.
shareholders as long-term capital gains for Federal income tax purposes,
regardless of how long shareholders have held their Fund shares and whether
such distributions are received in cash or reinvested in additional shares.
The Code provides that the net capital gain of an individual generally will
not be subject to Federal income tax at a rate in excess of 28%. Dividends
and distributions may be subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gain realized from the sale of or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions and redemption proceeds may be
subject to backup withholding, as described below, unless the foreign
investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year.
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Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends, distributions
from net realized securities gains and the proceeds of any redemption,
regardless of the extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended March 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify, if such qualification
is in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains, if any.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, average annual total return and/or total
return.
Current yield refers to the Fund's annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a second six-month
period which, when added to the result for the first six months, provides an
"annualized" yield for an entire one-year period.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased with an
initial payment of $1,000 and that the investment was redeemed at the end of
a stated period of time, after giving effect to the reinvestment of dividends
and distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total return
for one, five and ten year periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Page 20
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Consumer
Price Index, Lipper Analytical Services, Inc., Moody's Bond Survey Bond
Index, Lehman Brothers Corporate Bond Index, Salomon Brothers High Grade
Index, Morningstar, Inc., IBC Bond Fund Report and other industry
publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on February 23, 1976.
The Fund is authorized to issue 100 million shares of Common Stock, par value
$.01 per share. Each share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year the
election of Directors or the appointment of auditors. However, pursuant to
the Fund's By-Laws, the holders of at least 10% of the shares outstanding and
entitled to vote may require the Fund to hold a special meeting of
shareholders for purposes of removing a Director from office and the holders
of at least 25% of such shares may require the Fund to hold a special meeting
of shareholders for any other purpose. Fund shareholders may remove a
Director by the affirmative vote of a majority of the Fund's outstanding
voting shares. In addition, the Board of Directors will call a meeting of
shareholders for the purpose of electing Directors if, at any time, less than
a majority of the Directors then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call
1-718-895-1206; outside the U.S. and Canada, call 1-516-794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
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DREYFUS
A Bonds
Plus, Inc.
(LION LOGO)
Prospectus
Copy Rights1995, Dreyfus Service Corporation 084p18080195
