DREYFUS A BONDS PLUS, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus A Bonds Plus,
Inc. for its fiscal year ended March 31, 1997. Your Fund produced a total
return including bond price changes and interest income of 3.88%.* Income
dividends of $.879 per share were declared to shareholders. This is
equivalent to a distribution rate per share of 6.22%.**
THE ECONOMY
With the economy in an almost ideal balance of strong growth, low
unemployment and stable prices, the Federal Open Market Committee (FOMC) of
the Federal Reserve Board (the "Fed") raised interest rates at the end of
March for the first time in over two years. Concerned that persistently
strong demand would increase the risk of a resurgence of inflation, the FOMC,
which is the policy-making arm of the Fed, voted to lift the Federal Funds
rate by a quarter of a percentage point to 5.5%. (The Federal Funds rate is
the rate that banks charge each other for overnight loans.) The move to raise
interest rates had been much discussed since early last year when the Fed
first became concerned about the inflationary potential of rising wage
demands resulting from the strong rate of growth in new jobs. Yet over that
time, there has been little evidence of inflation despite robust job growth
and an unemployment rate of less than 5.5%, a level that in the 1970s and
1980s contributed to an escalation in wages and prices. Instead, prices in
virtually all sectors of the economy have remained quiescent. The Consumer
Price Index has risen a modest 2.8% over the past 12 months, while increases
in producer prices have been equally modest and, of late, many prices have
actually fallen.
Not surprisingly, the consumer confidence index of the Conference Board,
a private research group, remains near all-time high territory. A closely
followed component measures consumer sentiment about the job market. The
percentage of people reporting that jobs are plentiful has recently reached
an eight-year high, while the portion reporting that jobs are hard to get was
the lowest ever recorded. That positive attitude regarding job security has
been cited by Federal Reserve Board Chairman Greenspan as a possible
harbinger of higher wage pressures, which could result in an acceleration in
the rate of inflation.
Looking at the economy more generally, factory production _ particularly
the durable goods sector _ has picked up lately after slumping late last
year. Also suggesting renewed vigor in the economy was the brisk pickup in
retail sales from their relatively sluggish pace during the last quarter of
1996. As a corollary to the surge in retail sales, late payments on credit
card debt have risen to the highest proportion of accounts since 1980, the
year the American Bankers Association first monitored credit card
delinquencies.
Effective monetary policy is formulated less on how conditions are today
than on how things may be in the future; hence the Fed's preemptive move to
tighten without significant direct evidence that inflation is already on the
rise is understandable. In recent testimony to Congress made before the Fed's
decision to raise the Federal Funds rate, Fed Chairman Alan Greenspan said
that the question "is not so much . . . where prices are or have been, but
rather what the state of the economy will be later this year and into 1998
when any actions we may or may not have taken would become effective." We
continue to remain alert to any economic developments that might indicate a
further tightening by the Fed.
THE MARKET AND THE PORTFOLIO
For the year ended March 31, 1997, the Fund's total return was 3.88% as
compared to a total return for the Merrill Lynch Corporate Master Index*** of
5.11% and to the Merrill Lynch Domestic Master Index of 4.87+ during the same
period. The Merrill Lynch Domestic Master Index is a broader index than the
Merrill Lynch Corporate Master Index. It is more representative of the
overall high-grade bond market and a more widely used benchmark. Over the
course of the fiscal year, the Fund's performance diverged from that of the
Merrill Lynch Corporate Master Index primarily because the Fund's portfolio
duration was greater than the Index. Security and sector selection were
positive influences on the Fund's performance, helping to mitigate somewhat
those duration differences.
Over the past year we have experienced several swings in
intermediate-term interest rates despite relatively stable short-term
interest rates. We began the Fund's fiscal year on March 31, 1996 with the
ten-year Treasury bond yielding 6.33%. This rate peaked at 7.06% in June,
fell to a low of 6.04% in November and subsequently rose again to 6.90%. We
adjusted the portfolio's overall duration several times during the course of
the year to take advantage of these rate movements that were based on the
fear of the Federal Reserve raising interest rates. Now that the Fed has
actually raised rates, we have positioned the Fund more defensively, with a
duration shorter than the Merrill Lynch Corporate Master Index. We have also
overweighted both short- and long-maturity bonds. This barbelled portfolio
structure will produce better total return performance if the yield curve
continues to flatten, with short rates rising more than long-term interest
rates.
We reduced the weighting in corporate bonds in the fourth quarter of
1996. We correctly anticipated that corporate spreads, having narrowed
consistently throughout the year, would widen due to the onslaught of bank
and insurance company issuance near year-end. This allowed us to increase our
exposure to the banking sector at wider spreads to Treasuries than might
otherwise have been available.
We have also made several changes in the mortgage-backed portion of the
portfolio. We reduced exposure to the agency mortgage-backed sector because
the spreads have narrowed to record lows. In their place we have purchased
commercial and residential mortgage-backed securities that have more stable
cash flows and should benefit from improving fundamentals in the real estate
markets.
The past year has been a very dynamic year for us, requiring flexibility
and resourcefulness. We remain focused on our primary objectives _to provide
you with the maximum amount of current income consistent with the
preservation of capital.
Included in this report are a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Kevin McClintock signature logo]
Kevin McClintock
Head of Taxable Fixed Income
April 17, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**Distribution rate per share is based upon dividends per share declared from
net investment income during the period, divided by the net asset value per
share at the end of the period.
*** SOURCE: MERRILL LYNCH, PIERCE, FENNER AND SMITH INC. _ The Merrill
Lynch Corporate Master Index is a performance benchmark for portfolios that
include fixed-rate, coupon bearing investment-grade corporate securities
rated BBB/Baa3 and above. The securities included in the Index have
maturities greater than or equal to one year.
+ SOURCE: MERRILL LYNCH, PIERCE, FENNER AND SMITH INC. _ The Merrill Lynch
Domestic Master Index is an unmanaged performance benchmark for portfolios
that include U.S. Government, mortgage and BBB or higher-rated corporate
securities with maturities greater than or equal to one year.
DREYFUS A BONDS PLUS, INC. MARCH 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS A BONDS PLUS,
INC. WITH
THE MERRILL LYNCH DOMESTIC MASTER INDEX AND THE MERRILL LYNCH CORPORATE
MASTER INDEX
[Exhibit A:
$23,500
Merrill Lynch Corporate
Master Index*
Dollars
$22,124
Merrill Lynch Domestic
Master Index*
$21,433
Dreyfus A Bonds Plus
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.]
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C>
One Year Ended Five Years Ended Ten Years Ended
March 31, 1997 March 31, 1997 March 31, 1997
________________ ________________ ________________
3.88% 7.69% 7.92%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus A Bonds Plus,
Inc. on 3/31/87 to a $10,000 investment made in the Merrill Lynch Domestic
Master Index on that date as well as to the Merrill Lynch Corporate Master
Index which are described below. All dividends and capital gain distributions
are reinvested.
The Fund's performance shown in the line graph takes into account all
applicable fees and expenses. Unlike the Fund, the Merrill Lynch Domestic
Master Index is an unmanaged performance benchmark for portfolios that
include U.S. Government, mortgage and BBB or higher-rated corporate
securities with maturities greater than or equal to one year; corporate and
Treasury securities in the Index must have par amounts outstanding greater
than or equal to $25 million and generic mortgage-backed securities, $200
million per coupon. The Merrill Lynch Corporate Master Index is an unmanaged
performance benchmark for portfolios that include fixed-rate, coupon bearing
investment-grade corporate securities rated BBB/Baa3 and above. The
securities included in this Index have maturities greater than or equal to
one year and must have par amounts outstanding greater than or equal to $25
million. The Indices do not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
DREYFUS A BONDS PLUS, INC.
STATEMENT OF INVESTMENTS MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Principal
Bonds and Notes_96.7% Amount Value
_______ _______
Asset-Backed_7.2% ContiMortgage Home Equity Loan Trust,
Pass-Through Ctfs.,
Ser. 1996-3, Cl. A7, 8.04%, 2027..... $ 8,000,000 $ 8,135,000
The Money Store Trust,
Asset Backed Ctfs., Ser. 1996-D:
Cl. A-7, 7.11%, 2025.................. 16,000,000 15,556,800
Cl. A-16, 7.11%, 2028................. 7,640,466 7,548,542
UCFC Acceptance,
Home Equity Loan Pass-Through Ctfs.,
Ser. 1997-A1, Cl. A-6, 7.435%, 2024.. 9,686,000 9,607,301
_______
40,847,643
_______
Automotive_1.3% Chrysler,
Deb., 7.45%, 2097.................... 8,000,000 (a) 7,418,080
_______
Banking_16.2% BNY Capital I,
Gtd. Capital Securities, Ser. B, 7.97%, 2026 11,000,000 10,646,361
BankBoston Capital Trust II,
Gtd. Capital Securities, 7 3/4%, 2026. 13,000,000 (a) 12,106,250
Barnett Capital II,
Gtd. Capital Securities, 7.95%, 2026. 6,000,000 (a) 5,737,500
First Union Institutional:
Capital I,
Gtd. Capital Securities, 8.04%, 2026 17,000,000 16,512,151
Capital II,
Gtd. Capital Securities, 7.85%, 2027 10,000,000 (a) 9,475,000
Fleet Capital Trust II,
Gtd. Capital Securities, 7.92%, 2026. 10,000,000 9,581,210
J.P. Morgan & Co.,
Floating Rate Medium-Term Notes,
Ser. A, 4%, 2012..................... 10,000,000 (b) 9,756,000
State Street Institutional Capital A,
Gtd. Capital Securities, Ser. A, 7.94%, 2026 20,000,000 (a) 19,034,000
_______
92,848,472
_______
Brokerage_.9% Salomon,
Sr. Consumer Price Index-Linked Bonds,
3.65%, 2002.......................... 5,000,000 (b) 4,879,770
_______
Chemicals_1.4% Eastman Chemical,
Deb., 7.60%, 2027.................... 8,000,000 7,720,568
_______
Commercial Mortgage_21.2% Asset Securitization,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1996-MD VI, Cl. A7, 7.147%, 2026 23,000,000 (c) 22,148,281
Commercial Mortgage Acceptance,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1996-C2, Cl. C, 7.139%, 2023.... 8,619,000 (a,c) 8,392,751
DREYFUS A BONDS PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1997
Principal
Bonds and Notes (continued) Amount Value
_______ _______
Commercial Mortgage (continued) DLJ Mortgage Acceptance,
Commercial Mortgage Pass-Through Ctfs.,
Ser. 1996-CF2:
Cl. A-2, 7.28%, 2021.................. $ 5,000,000 (a) $ 4,878,125
Cl. A-3, 7.38%, 2021.................. 3,000,000 (a) 2,926,875
Cl. B-1, 7.53%, 2021.................. 4,000,000 (a) 3,890,000
FDIC REMIC Trust,
Commercial Mortgage Pass-Through Ctfs.,
Ser.1996-C1:
Cl.1-B, 7 1/8%, 2026............................ 7,000,000 6,803,125
Cl.1-C, 7 1/4%, 2026 5,000,000 4,863,281
Cl.1-D, 7 1/4%, 2026............................ 10,000,000 9,595,313
GMAC Commercial Mortgage Securities,
Mortgage Pass-Through Ctfs., Ser. 1996-C1:
Cl. C, 7.43%, 2006.................... 5,000,000 4,929,687
Cl. D, 7.73%, 2006.................... 11,409,000 11,282,431
Cl. E, 7.86%, 2006.................... 3,105,000 2,951,691
Merrill Lynch Mortgage Investors,
Mortgage Pass-Through Ctfs.:
Ser. 1995-C3, Cl. C, 7.368%, 2025..... 4,980,000 (c) 4,880,400
Ser. 1996-C2, Cl. C, 6.96%, 2028...... 10,000,000 9,521,875
Resolution Trust,
Commercial Mortgage Pass-Through Ctfs.:
Ser. 1994-C2, Cl. D, 8%, 2025......... 10,165,417 10,222,597
Ser. 1995-C1, Cl. A2B, 6.55%, 2027.... 835,007 832,659
Ser. 1995-C2, Cl. C, 7%, 2027......... 6,626,365 6,375,806
Structured Asset Securities,
Mortgage Pass-Through Ctfs.,
Ser. 1996-C3, Cl. B, 7 1/8%, 2030..... 7,000,000 (a) 6,899,375
_______
121,394,272
_______
Consumer/Finance_1.4% MBNA Capital B,
Gtd. Floating Rate Capital Securities,
Ser. B, 6.363%, 2027................. 8,000,000 (c) 7,930,944
_______
Foreign_6.7% Bangkok Bank PLC,
Sub. Notes, 8 3/8%, 2027............. 11,000,000 (a) 10,562,937
United Mexican States,
Floating Rate Notes, 7 5/8%, 2001.... 18,000,000 (a,c) 18,225,000
Wharf International Finance Ltd.,
Gtd. Notes, Ser. A, 7 5/8%, 2007..... 10,000,000 (a) 9,665,900
_______
38,453,837
_______
DREYFUS A BONDS PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1997
Principal
Bonds and Notes (continued) Amount Value
_______ _______
Industrial_1.3% GATX Capital,
Medium-Term Notes, Ser. B, 9 1/2%, 2002 $ 5,000,000 $ 5,447,370
Parker-Hannifin,
Deb., 9 3/4%, 2021................... 2,000,000 2,185,730
_______
7,633,100
_______
Insurance_6.1% AFC Capital Trust I,
Gtd. Capital Securities, 8.207%, 2027.......... 15,000,000 (a) 14,975,670
American General Institutional Capital B,
Gtd. Capital Securities, Ser. B, 8 1/8%, 2046 10,000,000 (a) 9,687,500
NAC Re,
Notes, 8%, 1999...................... 5,000,000 5,106,700
Orion Capital,
Sr. Notes, 9 1/8%, 2002.............. 5,000,000 5,378,205
_______
35,148,075
_______
Oil and Gas_3.1% Halliburton,
Notes, 6 3/4%, 2007.................. 18,000,000 (d) 17,448,102
Maxus Energy,
Sinking Fund Deb., 11 1/4%, 2013..... 184,000 189,520
_______
17,637,622
_______
Real Estate_.9% United Dominion Realty Trust,
Notes, 7 1/4%, 2007.................. 5,000,000 4,876,545
_______
Residential Mortgage_1.1% Collateralized Mortgage Obligation Trust 9,
Cl. C (Collateralized by
GNMA Pass-Through Ctfs.),
7 3/4%, 2012......................... 336,480 339,354
DLJ Acceptance Trust 1,
Collateralized Mortgage Obligation,
Ser. 1989-1, Cl. 1-F (Collateralized by
GNMA Pass-Through Ctfs. and the
Collateral Proceeds Account), 11%, 2019 208,884 218,865
FHA Project Loan Ctfs., Ser. Pool No. 6
(Reilly Mortgage Group), 7.43%, 2022. 6,010,460 5,938,148
_______
6,496,367
_______
Utilities/Electric_.9% National Rural Utilities Cooperative Finance,
Collateral Trust Bonds, 7.30%, 2006.. 5,000,000 4,983,270
_______
Utilities/Telephone_4.9% BellSouth Capital Funding,
Deb., 6.04%, 2001.................... 12,000,000 (e) 11,688,840
Wisconsin Bell,
Deb., 6.35%, 2006.................... 17,000,000 (f) 16,140,106
_______
27,828,946
_______
DREYFUS A BONDS PLUS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MARCH 31, 1997
Principal
Bonds and Notes (continued) Amount Value
_______ _______
U.S. Government Agency/
Mortgage Backed_17.8% Government National Mortgage Association I:
7%, 6/15/2008......................... $ 162,448 $ 161,281
7 1/2%, 5/15/2027..................... 54,000,000 (g) 52,987,500
9 1/2%, 11/15/2017.................... 9,221,662 9,950,727
Project Loan,
7 1/2%, 12/15/2029.................. 4,679,678 4,577,287
Government National Mortgage Association REMIC Trust,
Gtd. REMIC Pass-Through Securities:
Ser. 1997-2, Cl. K, 7 1/2%, 1/20/2024... 11,259,000 10,840,053
Ser. 1997-4, Cl. G, 7 1/2%, 11/16/2024.. 11,500,000 11,001,015
Student Loan Marketing Association,
Consumer Price Index-Indexed Notes, 2.90%, 2000 12,500,000 (b) 12,368,875
_______
101,886,738
_______
U.S. Government_4.3% U.S. Treasury Notes,
6 1/4%, 3/31/1999........................ 25,000,000 24,803,750
_______
TOTAL BONDS AND NOTES
(cost $564,635,102).................. $552,787,999
=======
Short-Term Investments_6.6%
U.S. Government Agency; Federal Home Loan Banks,
6.45%, 4/1/1997
(cost $37,765,000)................... $ 37,765,000 $ 37,765,000
=======
TOTAL INVESTMENTS (cost $602,400,102)....................................... 103.3% $590,552,999
==== =======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (3.3%) $ (18,972,720)
==== =======
NET ASSETS.................................................................. 100.0% $571,580,279
==== =======
</TABLE>
Notes to Statement of Investments:
(a) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At March 31,
1997, these securities amounted to $143,874,963 or 25.2% of net assets.
(b) Variable rate security-base interest rate shown-adjustment
to interest rate linked to the Consumer Price Index.
(c) Variable rate security-interest rate subject to periodic change.
(d) Reflects date security can be redeemed at holders' option; the
stated maturity date is 2/1/2027.
(e) Reflects date security can be redeemed at holder's option; the
stated maturity date is 11/15/2026.
(f) Reflects date security can be redeemed at holders' option; the
stated maturity date is 12/1/2026.
(g) Purchased on a forward commitment basis.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DREYFUS A BONDS PLUS, INC.
STATEMENT OF ASSETS AND LIABILITIES MARCH 31, 1997
Cost Value
-------- --------
ASSETS: Investments in securities_See Statement of Investments $602,400,102 $590,552,999
Cash....................................... 1,906,292
Receivable for investment securities sold.. 52,913,904
Interest receivable........................ 5,868,712
Receivable for shares of Common Stock subscribed 208,205
Prepaid expenses and other assets.......... 53,930
--------
651,504,042
--------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 420,124
Payable for investment securities purchased 77,167,774
Payable for shares of Common Stock redeemed 2,208,646
Interest payable........................... 2,046
Accrued expenses........................... 125,173
--------
79,923,763
--------
NET ASSETS.................................................................. $571,580,279
========
REPRESENTED BY: Paid-in capital............................ $573,818,789
Accumulated undistributed investment income_net 6,127,083
Accumulated net realized gain (loss) on investments 3,481,510
Accumulated net unrealized appreciation (depreciation)
on investments_Note 4.................... (11,847,103)
--------
NET ASSETS.................................................................. $571,580,279
========
SHARES OUTSTANDING
(100 million shares of $.01 par value Common Stock authorized).............. 40,439,539
NET ASSET VALUE, offering and redemption price per share.................... $14.13
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS A BONDS PLUS, INC.
STATEMENT OF OPERATIONS YEAR ENDED MARCH 31, 1997
INVESTMENT INCOME
INCOME Interest Income............................ $ 42,280,458
EXPENSES: Management fee_Note 3(a)................... $ 3,885,766
Shareholder servicing costs_Note 3(b)...... 1,545,986
Custodian fees_Note 3(b)................... 61,454
Directors' fees and expenses_Note 3(c)..... 56,782
Professional fees.......................... 53,450
Registration fees.......................... 51,179
Prospectus and shareholders' reports....... 27,376
Interest_Note 2............................ 23,686
Miscellaneous.............................. 8,436
_______
Total Expenses....................... 5,714,115
_______
INVESTMENT INCOME_NET....................................................... 36,566,343
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4:
Net realized gain (loss) on investments.... $ 8,631,964
Net unrealized appreciation (depreciation) on investments (22,130,009)
_______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (13,498,045)
_______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 23,068,298
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS A BONDS PLUS, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
March 31, 1997 March 31, 1996
________ ________
OPERATIONS:
Investment income_net................................................... $ 36,566,343 $ 36,916,840
Net realized gain (loss) on investments................................. 8,631,964 18,686,437
Net unrealized appreciation (depreciation) on investments............... (22,130,009) 9,773,168
-------- --------
Net Increase (Decrease) in Net Assets Resulting from Operations....... 23,068,298 65,376,445
-------- --------
NET EQUALIZATION CREDITS (DEBITS)_Note 1(e)................................. (142,308) 164,551
-------- --------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net................................................... (36,573,464) (37,132,047)
-------- --------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 188,296,554 194,660,390
Dividends reinvested.................................................... 31,341,242 31,821,743
Cost of shares redeemed................................................. (232,961,296) (195,480,199)
-------- --------
Increase (Decrease) in Net Assets from Capital Stock Transactions..... (13,323,500) 31,001,934
-------- --------
Total Increase (Decrease) in Net Assets........................... (26,970,974) 59,410,883
NET ASSETS:
Beginning of Period..................................................... 598,551,253 539,140,370
-------- --------
End of Period........................................................... $ 571,580,279 $ 598,551,253
======== ========
Undistributed investment income_net......................................... $ 6,127,083 $ 6,276,512
-------- --------
Shares Shares
-------- --------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 13,245,473 13,495,937
Shares issued for dividends reinvested.................................. 2,202,148 2,215,494
Shares redeemed......................................................... (16,381,726) (13,549,784)
-------- --------
Net Increase (Decrease) in Shares Outstanding......................... (934,105) 2,161,647
======== ========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS A BONDS PLUS, INC.
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 period indicated. This
information has been derived from the Fund's financial statements.
Year Ended March 31,
______________________________________________________________
PER SHARE DATA: 1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Net asset value, beginning of period......... $14.47 $13.75 $14.38 $15.43 $14.35
---- ---- ---- ---- ----
Investment Operations:
Investment income_net........................ .88 .92 .94 .98 1.05
Net realized and unrealized gain (loss)
on investments............................. (.34) .73 (.56) (.46) 1.29
---- ---- ---- ---- ----
Total from Investment Operations............. .54 1.65 .38 .52 2.34
---- ---- ---- ---- ----
Distributions:
Dividends from investment income_net......... (.88) (.93) (.94) (.99) (1.05)
Dividends from net realized gain on investments -- -- (.07) (.58) (.21)
---- ---- ---- ---- ----
Total Distributions.......................... (.88) (.93) (1.01) (1.57) (1.26)
---- ---- ---- ---- ----
Net asset value, end of period............... $14.13 $14.47 $13.75 $14.38 $15.43
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 3.88% 12.12% 3.01% 3.09% 17.09%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .96% .93% .99% .90% .93%
Ratio of net investment income
to average net assets...................... 6.12% 6.32% 6.89% 6.30% 7.07%
Portfolio Turnover Rate...................... 415.69% 165.50% 172.60% 93.67% 81.15%
Net Assets, end of period (000's omitted).... $571,580 $ 598,551 $ 539,140 $ 593,615 $ 574,431
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS A BONDS PLUS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus A Bonds Plus, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to provide investors
with the maximum amount of current income to the extent consistent with the
preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). Premier Mutual Fund
Services, Inc. is the distributor of the Fund's shares, which are sold to the
public without a sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding short-term
investments and U.S. Government obligations) are valued each business day by
an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the
Service are valued at the mean between the quoted bid prices (as obtained by
the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. Investments in U.S. Government obligations are
valued at the mean between quoted bid and asked prices. Investments
denominated in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange. Short-term investments are carried at amortized
cost, which approximates value.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, including, where applicable, amortization of discount on investments,
is recognized on the accrual basis.
(c) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net are declared and paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
On March 31, 1997, the Board of Directors declared a cash dividend of
$.075 per share from undistributed investment income-net, payable on April 1,
1997 (ex-dividend date), to shareholders of record as of the close of
business on March 31, 1997.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
(e) Equalization: The Fund follows the accounting practice known as
"equalization" by which a portion of the amounts received on issuances and
the amounts paid on redemptions of Fund shares (equivalent, on a per share
basis, to the amount of distributable investment income-net on the date of
the transaction) is allocated to undistributed investment income-net so that
undistributed investment income-net per share is unaffected by Fund shares
issued or redeemed.
DREYFUS A BONDS PLUS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2_BANK LINE OF CREDIT:
The Fund may borrow up to $20 million for leveraging purposes under a
short-term unsecured line of credit and participates with other
Dreyfus-managed funds in a $100 million unsecured line of credit primarily to
be utilized for temporary or emergency purposes, including the financing of
redemptions. Interest is charged to the Fund at rates which are related to
the Federal Funds rate in effect at the time of borrowings. At March 31,
1997, the Fund had no outstanding borrowings under either line of credit.
The average daily amount of borrowings outstanding under both
arrangements during the period ended March 31, 1997 was approximately
$422,000, with a related weighted average annualized interest rate of 5.61%.
The maximum amount borrowed at any time during the period ended March 31,
1997 was $9,550,000.
NOTE 3_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .65 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, interest on borrowings, brokerage commissions and
extraordinary expenses, exceed 1 1/2% of the value of the Fund's average net
assets, the Fund may deduct from the payments to be made to the Manager, or
the Manager will bear, the amount of such excess expenses. There was no
expense reimbursement for the period ended March 31, 1997.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus
Service Corporation, a wholly-owned subsidiary of the Manager, 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.
During the period ended March 31, 1997, the Fund was charged an aggregate of
$1,007,283 pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $277,997 during the period ended March 31, 1997.
The Fund compensates Mellon under a custody agreement to provide
custodial services for the Fund. During the period ended March 31, 1997,
$55,807 was charged by Mellon pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4_SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period
ended March 31, 1997, amounted to $2,478,012,721 and $2,449,750,034,
respectively.
At March 31, 1997, accumulated net unrealized depreciation on investments
was $11,847,103, consisting of $1,711,347 gross unrealized appreciation and
$13,558,450 gross unrealized depreciation.
At March 31, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS A BONDS PLUS, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus A Bonds Plus, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus A Bonds Plus, Inc., including the statement of investments, as of
March 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements and financial highlights. Our procedures included
verification by examination of securities held by the custodian as of March
31, 1997 and confirmation of securities not held by the custodian by
correspondence with others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus A Bonds Plus, Inc. at March 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
[ERNST & YOUNG LLP signature logo]
New York, New York
May 6, 1997
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS A BONDS PLUS, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 084AR973
[Dreyfus logo]
Registration Mark
A Bonds Plus
Annual Report
March 31, 1997
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS A BONDS PLUS, INC. WITH THE MERRILL LYNCH
DOMESTIC MASTER INDEX AND THE MERRILL LYNCH
CORPORATE MASTER INDEX
EXHIBIT A:
MERRILL MERRILL
LYNCH LYNCH DREYFUS
PERIOD CORPORATE DOMESTIC A BONDS
MASTER INDEX * MASTER INDEX * PLUS
3/31/87 10,000 10,000 10,000
3/31/88 10,440 10,492 10,123
3/31/89 11,121 11,034 10,632
3/31/90 12,441 12,363 11,765
3/31/91 13,956 13,954 13,011
3/31/92 15,808 15,554 14,800
3/31/93 18,243 17,655 17,330
3/31/94 18,911 18,131 17,866
3/31/95 19,909 19,026 18,403
3/31/96 22,359 21,097 20,633
3/31/97 23,500 22,124 21,433
*Source: Merrill Lynch, Pierce, Fenner and Smith Inc.
