Dreyfus
A Bonds Plus, Inc.
ANNUAL REPORT March 31, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
13 Statement of Financial Futures
13 Statement of Options Written
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
17 Financial Highlights
18 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
A Bonds Plus, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus A Bonds Plus, Inc.,
covering the 12-month period from April 1, 1999 through March 31, 2000. Inside,
you' ll find valuable information about how the fund was managed during the
reporting period, including a discussion with Gerald E. Thunelius, portfolio
manager and a member of the Dreyfus Taxable Fixed Income Team that manages the
fund.
Tighter monetary policy represented the most significant influence on the bond
market over the past year. This was primarily a result of efforts by the Federal
Reserve Board to forestall a potential re-emergence of inflationary pressures.
The Federal Reserve raised short-term interest rates five times during the
reporting period, for a total increase of 125 basis points.
Higher interest rates generally led to an erosion of bond prices, especially
during 1999. During the first quarter of 2000, however, some bonds began to
rally, led higher by long-term U.S. Treasury securities, which rose because of
reduced supply amid robust demand from domestic and foreign investors.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus A Bonds Plus, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
April 12, 2000
DISCUSSION OF FUND PERFORMANCE
Gerald E. Thunelius, Portfolio Manager Dreyfus Taxable Fixed Income Team
How did Dreyfus A Bonds Plus, Inc. perform relative to its benchmark?
For the 12-month period ended March 31, 2000, Dreyfus A Bonds Plus, Inc.,
produced a 3.85% total return.(1) This compares to a 1.87% total return for the
fund' s new benchmark, the Lehman Brothers Aggregate Bond Index, for the same
period. (2) Further discussion about this benchmark change follows in the
line-graph comparison contained in this annual report.
We attribute the fund' s positive relative performance to our sector rotation
strategy, which emphasized corporate bonds, the best-performing sector of the
investment-grade bond market over the past year. We avoided bonds from financial
services companies such as banks and brokerage firms, which performed relatively
poorly. At the same time, we emphasized bonds issued by telecommunications firms
and economically sensitive companies, such as chemical manufacturers, which
performed well.
What is the fund's investment approach?
The fund seeks to maximize current income as is consistent with preservation of
capital and maintenance of liquidity. The fund invests at least 80% of its
assets in fixed-income securities that, when purchased, are rated single-A or
better or, if unrated, deemed to be of comparable quality by Dreyfus. While the
fund may invest in a broad array of fixed-income securities, the portfolio has
recently concentrated primarily on corporate securities, and we currently expect
to maintain that focus for the near term. Of course, portfolio composition is
subject to change at any time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
When selecting securities for the fund, we first examine U.S. and global
economic conditions and other market factors in an effort to determine what we
believe is the likely direction of long- and short-term interest rates. Using a
research-driven investment process, we then attempt to identify potentially
profitable sectors before they are widely perceived by the market. Finally, we
look for underpriced or mispriced securities within those sectors that, in our
opinion, appear likely to perform well over time.
What other factors influenced the fund's performance?
The fund' s performance was influenced by a difficult investment environment
during much of the past year. When the reporting period began on April 1, 1999,
investors had become concerned that strong economic growth in the U.S. and
overseas might rekindle long-dormant inflationary pressures. In an attempt to
forestall a reacceleration of inflation, the Federal Reserve Board raised
short-term interest rates five times during the 12-month reporting period, for a
total increase of 125 basis points since last summer, causing most bond prices
to fall.
Most sectors of the bond market were also affected by supply-and-demand
influences. During the second half of the reporting period, these influences
helped longer term U.S. Treasury securities outperform higher yielding
securities of comparable maturity, including corporate bonds and U.S. government
agency securities. That' s because the federal government announced that it
intended to begin buying back longer term, higher yielding bonds, effectively
reducing the supply of U.S. Treasury bonds amid robust demand from domestic and
foreign investors.
In addition, heightened volatility in the stock market during the first quarter
of 2000 boosted demand for high quality bonds, such as U.S. Treasury securities,
and reduced demand for lower rated bonds. This "flight to quality" adversely
affected prices of corporate securities, and caused the yield differences
between high quality and lower rated bonds to widen considerably.
What is the fund's current strategy?
We have continued to follow our long-term strategy of investing in those sectors
of the investment-grade bond market that we believe offer high current income
potential. To that end, we have continued to focus primarily on corporate bonds.
However, we recently reduced our exposure to the corporate sector from about 70%
of the portfolio at the start of the reporting period to about 52% as of March
31, 2000. We redeployed those assets primarily to mortgage-backed pass-through
securities that are issued by U.S. government agencies such as Government
National Mortgage Association (" Ginnie Mae" ) and Federal National Mortgage
Association (" Fannie Mae"). With yields about 1.20% higher than U.S. Treasury
securities, government agency bonds have recently offered attractive values.
We also allocated about 10% of the fund's assets to inflation-indexed U.S.
Treasury securities, known as TIPS. Because these securities' principal adjust
with the rate of inflation, they tend to perform particularly well in strong
economic environments such as the one that prevailed during the reporting
period. Although we tended to avoid "regular" U.S. Treasury securities during
most of the period because of low yields, we increased our holdings modestly
during the first quarter of 2000. We also focused on U.S. Treasury bonds in the
20-year maturity range.
April 12, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- REFLECTS THE REINVESTMENT OF
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE LEHMAN BROTHERS
AGGREGATE BOND INDEX IS A WIDELY ACCEPTED, UNMANAGED TOTAL RETURN INDEX OF
CORPORATE, U.S. GOVERNMENT AND U.S. GOVERNMENT-AGENCY DEBT INSTRUMENTS,
MORTGAGE-BACKED SECURITIES AND ASSET-BACKED SECURITIES WITH AN AVERAGE MATURITY
OF 1-10 YEARS.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus A Bonds Plus,
Inc. with the Merrill Lynch Domestic Master Index and the Lehman Brothers
Aggregate Bond Index
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 3/31/00
<TABLE>
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FUND 3.85% 6.73% 8.04%
(+) SOURCE: BLOOMBERG, L.P.
(+)(+) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
</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 3/31/90 TO A $10,000 INVESTMENT MADE IN THE LEHMAN BROTHERS AGGREGATE BOND
INDEX AND IN THE MERRILL LYNCH DOMESTIC MASTER INDEX ON THAT DATE. ALL
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THIS IS THE FIRST YEAR IN WHICH COMPARATIVE PERFORMANCE IS BEING SHOWN FOR THE
LEHMAN BROTHERS AGGREGATE BOND INDEX. THIS INDEX HAS BEEN SELECTED AS THE
PRIMARY INDEX FOR COMPARING THE FUND'S PERFORMANCE BECAUSE STATISTICAL
INFORMATION ON THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS PROVIDED MORE
FREQUENTLY THAN THAT ON THE MERRILL LYNCH DOMESTIC MASTER INDEX, WHICH WAS USED
AS THE FUND'S BENCHMARK INDEX LAST YEAR. PERFORMANCE FOR THE MERRILL LYNCH
DOMESTIC MASTER INDEX WILL NOT BE PROVIDED WITH THE NEXT ANNUAL REPORT, BUT IS
PROVIDED HEREWITH PURSUANT TO APPLICABLE REGULATIONS.
THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT ALL APPLICABLE
FEES AND EXPENSES. THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS A WIDELY
ACCEPTED, UNMANAGED TOTAL RETURN INDEX OF CORPORATE, GOVERNMENT AND
GOVERNMENT-AGENCY DEBT INSTRUMENTS, MORTGAGE-BACKED SECURITIES AND ASSET-BACKED
SECURITIES WITH AN AVERAGE MATURITY OF 1-10 YEARS. THE MERRILL LYNCH DOMESTIC
MASTER INDEX IS AN UNMANAGED PERFORMANCE BENCHMARK COMPOSED OF U.S. TREASURY AND
AGENCY, AND MORTGAGE AND INVESTMENT-GRADE CORPORATE SECURITIES WITH MATURITIES
GREATER THAN OR EQUAL TO ONE YEAR.
NEITHER OF THE FOREGOING INDICES TAKE INTO ACCOUNT CHARGES, FEES AND OTHER
EXPENSES. FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING EXPENSE
REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION
OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
<TABLE>
STATEMENT OF INVESTMENTS
March 31, 2000
Principal
BONDS AND NOTES--91.6% Amount (a) Value ($)
--------------------------------------------------------------------------------
AEROSPACE & DEFENSE--2.0%
Lockheed Martin,
<S> <C> <C>
Notes, 8.2%, 2009 9,000,000 9,004,923
AIRLINES--4.8%
Air 2 US, Ser. A,
Enhanced Equipment Notes, 8.027%, 2019 9,000,000 (b) 9,011,115
Continental Airlines,
Pass-Through Ctfs.,
Ser. 1997-4A, 6.9%, 2018 13,321,607 12,663,054
21,674,169
ASSET-BACKED NOTES--2.3%
Bosque Asset,
7.66%, 2002 2,123,411 (b) 2,102,176
Inner Harbor CBO,
Ser. 1999-1, Cl. B2, 13.667%, 2012 3,210,000 (b) 3,137,775
Pegasus Aviation Lease Securitization,
Ser. 2000-1, Cl. A1, 6.7213%, 2015 5,000,000 (b,c) 5,000,000
10,239,951
AUTOMOTIVE--2.1%
Daimler-Chrysler, Ser. B,
Deb., 7.45%, 2097 5,000,000 4,735,320
Lear,
Sr. Notes, 7.96%, 2005 5,000,000 4,642,515
9,377,835
BANKING--5.6%
Fleet Boston,
Sub. Notes, 7.375%, 2009 4,840,000 4,726,841
KBC Bank Funding Trust IV,
Floating Rate Gtd. Trust Preferred Securities,
8.22%, 2049 EUR 5,000,000 (c) 4,894,002
National Westminster Bank, Ser. B,
Floating Rate Notes, 6.5625%, 2049 3,000,000 (c) 2,454,942
Regional Diversified Funding,
Sr. Notes, 9.25%, 2030 5,000,000 (b) 5,025,335
Royal Bank of Scotland Group, Ser. 1,
Bonds, 9.118%, 2049 7,926,000 8,174,274
25,275,394
BROADCASTING & MEDIA--1.2%
Grupo Televisa,
Deb., 0/13.25%, 2008 5,650,000 (d) 5,579,375
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
--------------------------------------------------------------------------------
CHEMICALS--2.5%
Air Products & Chemicals, Ser. E,
Medium-Term Notes, 7.8%, 2026 3,637,000 3,438,347
ICI Wilmington
(Gtd. by Imperial Chemical Industries),
Notes, 7.05%, 2007 8,105,000 7,859,297
11,297,644
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--2.9%
Nomura Depositor Trust ST 1,
Ser. 1998-ST1, Cl. A3, 6.584%, 2003 5,000,000 (b,c) 4,914,844
Resolution Trust,
Ser. 1994-C2, Cl. D, 8%, 2025 8,217,917 8,199,057
13,113,901
COMPUTERS--1.0%
IBM,
Deb., 7.125%, 2096 5,000,000 4,615,430
CONSUMER--1.8%
Corning,
Deb., 6.85%, 2029 5,000,000 4,509,120
Grand Metropolitan Investment,
Discount Notes, 0%, 2004 5,000,000 3,809,120
8,318,240
FINANCE--3.5%
DLJ,
Medium-Term Notes, .4%, 2000 8,000,000 (b) 8,192,600
Lehman Brothers Holdings,
Notes, 7.875%, 2009 7,750,000 7,730,385
15,922,985
FOREIGN/GOVERNMENTAL--.9%
Federative Republic of Brazil,
Bonds, 12.25%, 2030 3,500,000 3,382,750
Republic of Philippines,
Notes, 9.875%, 2010 800,000 771,000
4,153,750
INDUSTRIAL--1.8%
Alliant Energy Resources,
Notes, 7.375%, 2009 5,000,000 (b) 4,932,640
Rockwell International,
Deb., 5.2%, 2098 5,000,000 3,196,960
8,129,600
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
--------------------------------------------------------------------------------
INSURANCE--1.5%
Everest Reinsurance Holdings,
Sr. Notes, 8.75%, 2010 6,750,000 6,789,744
MUNICIPAL OBLIGATIONS--6.1%
Chicago, ILL, Board of Education
(Chicago School Reform), Ser. A,
General Obligation, 5.25%, 2022 5,000,000 4,610,850
City of Atlanta, GA, Water and Wastewater Revenue, Ser. A,
5%, 2038 5,000,000 4,307,900
Jefferson County, ALA,
Sewer Revenue, Capital Improvement,
5%, 2033 5,500,000 4,767,125
Massachusetts State Water Pollution Abatement Trust, Ser. A,
System Revenue, 5.75%, 2029 5,000,000 4,961,000
Massachusetts Turnpike Authority, Ser. A,
Metropolitan Highway System Revenue, 5%, 2039 5,000,000 4,300,200
Oklahoma State Health System,
System Revenue, 5.75%, 2029 5,000,000 4,858,200
27,805,275
OIL & GAS EXPLORATION--1.0%
Petroleos Mexicanos, Ser. P,
Sr. Notes, 9.5%, 2006 4,250,000 (e) 4,388,125
REAL ESTATE INVESTMENT TRUST--.5%
Crescent Real Estate Equities,
Notes, 7%, 2002 2,500,000 2,286,985
RESIDENTIAL MORTGAGE PASS-THROUGH CFTS.--3.2%
Chase Mortgage Finance, REMIC:
Ser. 1998-S5, Cl. B3, 6.5%, 2013 588,566 (b) 463,312
Ser. 1998-S5, Cl. B4, 6.5%, 2013 490,471 (b) 328,156
GE Capital Mortgage Services,
REMIC, Ser. 1998-16, Cl. B3, 6.5%, 2013 1,052,683 (b) 828,330
Norwest Asset Securities:
Ser. 1997-15, Cl. B1, 6.75%, 2012 989,832 933,377
Ser. 1997-16, Cl. B1, 6.75%, 2027 2,145,504 1,994,160
Ser. 1997-16, Cl. B2, 6.75%, 2027 683,015 605,772
Ser. 1998-11, Cl. B2, 6.5%, 2013 1,657,241 1,552,321
Ser. 1998-13, Cl. B1, 6.25%, 2028 2,942,724 2,649,474
Ser. 1998-13, Cl. B2, 6.25%, 2028 2,820,233 2,598,788
Ser. 1998-13, Cl. B6, 6.25%, 2028 368,806 (b) 108,798
Residential Funding Mortgage Securities I:
Ser. 1998-S9, Cl. 1-B1, 6.5%, 2013 761,267 (b) 611,023
Ser. 1998-S22, Cl. B1, 6.5%, 2013 480,661 378,295
Ser. 1998-S22, Cl. B3, 6.5%, 2013 360,588 (b) 90,598
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
--------------------------------------------------------------------------------
RESIDENTIAL MORTGAGE PASS-THROUGH CFTS. (CONTINUED)
Residential Funding Mortgage Securities I: (continued)
Ser. 1998-S22, Cl. M2, 6.5%, 2013 601,061 532,293
Ser. 1998-S22, Cl. M3, 6.5%, 2013 1,201,652 1,015,817
14,690,514
RESTAURANTS--1.9%
Tricon Global Restaurants,
Sr. Notes, 7.45%, 2005 8,900,000 8,417,887
TECHNOLOGY--1.6%
Clear Channel Communications,
Conv. Sub. Deb., 2.625%, 2003 3,323,000 4,095,597
Metromedia Fiber Network,
Sr. Notes, 10%, 2009 3,500,000 3,355,625
7,451,222
TELECOMMUNICATION--2.2%
TCI Communication Financial,
Capital Securities, 9.65%, 2027 7,000,000 7,956,746
Winstar Communications,
Sr. Notes, 12.75%, 2010 EUR 2,000,000 (b) 1,901,047
9,857,793
TELECOMMUNICATION/CARRIERS--1.0%
Qwest Communications International, Ser. B,
Sr. Discount Notes, 0/8.29%, 2008 5,690,000 (d) 4,409,545
U.S. GOVERNMENT AGENCY--2.7%
Tennessee Valley Authority,
Valley Indexed Principal Securities,
3.375%, 1/15/2007 12,500,000 (f) 12,393,469
U.S. GOVERNMENT--7.3%
U.S. Treasury Bonds:
6.125%, 8/15/2029 3,960,000 4,033,102
6.25%, 5/15/2030 5,000,000 5,295,950
U.S. Treasury Inflation Protection Securities:
3.625%, 1/15/2008 11,750,000 (f) 11,956,150
3.875%, 4/15/2029 9,125,000 (f) 9,290,149
U.S. Treasury Notes,
6.5%, 5/15/2005 2,500,000 2,519,175
33,094,526
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY/MORTGAGE-BACKED--25.0%
Federal Home Loan Mortgage:
7.5%, 4/15/2029 20,000,000 (g) 19,687,400
REMIC, Multiclass Mortgage Participation Ctfs.,
(Interest Only Obligation):
Ser. 1978, Cl. PH, 7%, 1/15/2024 4,074,538 (h) 552,609
Ser. 1995, Cl. PY, 7%, 10/15/2027 10,124,292 (h) 3,967,013
Federal National Mortgage Association:
6.88%, 2/1/2028 4,212,788 4,044,792
REMIC Trust, Gtd. Pass-Through Ctfs.
(Interest Only Obligation),
Ser. 1996-64, Cl. PM, 7%, 1/18/2012 5,941,837 (h) 1,242,215
Government National Mortgage Association I:
7%, 6/15/2008 77,231 76,531
8.5%, 4/15/2030 20,000,000 (g) 20,500,000
9.5%, 11/15/2017 3,722,407 3,949,213
Construction Loan;
6.7%, 5/15/2039 1,792,208 (g) 1,723,871
Project Loan:
6.475%, 9/1/2033 7,717,790 6,637,299
6.54%, 7/15/2033 4,401,955 4,228,606
6.55%, 6/15/2033 1,828,109 1,732,133
6.625%, 6/1/2033--9/15/2033 6,155,180 5,945,753
6.7%, 7/15/2001 13,883,038 13,353,678
6.75%, 10/15/2033 2,209,826 2,116,594
6.86%, 3/15/2038 12,527,978 12,535,745
7%, 8/15/2039 11,324,167 10,994,974
113,288,426
WIRELESS COMMUNICATIONS--1.8%
Centaur Funding, Ser. C,
Discount Notes, 0%, 2020 45,000,000 (b) 8,226,585
YANKEE--3.4%
Bayer HypoVereinsbank,
Bonds, 8.741%, 2031 5,525,000 (b) 5,472,336
Pemex Finance,
Notes, Ser. 2000-1, Cl. A2, 7.8%, 2013 10,000,000 (b) 10,070,000
15,542,336
TOTAL BONDS AND NOTES
(cost $420,646,479) 415,345,629
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
PREFERRED STOCKS--2.5% Shares Value ($)
--------------------------------------------------------------------------------
WIRELESS COMMUNICATIONS;
Winstar Communications, Ser. C,
Cum., $142.50
(cost $7,258,874) 7,600 11,324,000
---------------------------------------------------------------------------------------------------------------------------------
Principal
SHORT-TERM INVESTMENTS--9.2% Amount ($) Value ($)
---------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--8.6%
Dow Chemical,
6.3%, 4/3/2000 10,000,000 9,996,500
Textron,
6.23%, 4/3/2000 3,090,000 3,088,931
UBS Finance,
6.28%, 4/3/2000 11,655,000 11,650,934
Xerox Credit,
6.35%, 4/3/2000 14,005,000 14,000,059
38,736,424
U.S. TREASURY BILLS--.6%
5.35%, 4/20/2000 2,700,000 (i) 2,692,413
TOTAL SHORT-TERM INVESTMENTS 41,428,837
(cost $41,428,796)
---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $469,334,149) 103.3% 468,098,466
LIABILITIES, LESS CASH AND RECEIVABLES (3.3%) (14,802,982)
NET ASSETS 100.0% 453,295,484
(A) PRINCIPAL AMOUNT STATED IS IN U.S. DOLLARS UNLESS OTHERWISE NOTED.
EUR--EUROS
(B) 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, 2000,
THESE SECURITIES AMOUNTED TO $70,416,670 OR 15.5% OF NET ASSETS.
(C) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(D) ZERO COUPON UNTIL A SPECIFIED DATE AT WHICH TIME THE STATED COUPON RATE
BECOMES EFFECTIVE UNTIL MATURITY.
(E) REFLECTS DATE SECURITY CAN BE REDEEMED AT HOLDER'S OPTION; THE STATED
MATURITY IS 9/15/2027.
(F) PRINCIPAL AMOUNT FOR ACCRUAL PURPOSES IS PERIODICALLY ADJUSTED BASED ON
CHANGES TO THE CONSUMER PRICE INDEX.
(G) PURCHASED ON A FORWARD COMMITMENT BASIS.
(H) NOTIONAL FACE AMOUNT SHOWN.
(I) HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
STATEMENT OF FINANCIAL FUTURES
March 31, 2000
Unrealized
Market Value Appreciation
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 3/31/00 ($)
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL FUTURES (LONG)
<S> <C> <C> <C> <C>
U.S. Government Agency
10 Year Notes 200 18,387,500 June 2000 65,156
U.S. Treasury 30 Year Bonds 393 38,391,188 June 2000 515,375
FINANCIAL FUTURES (SHORT)
U.S. Treasury 5 Year Notes 562 55,357,000 June 2000 (337,203)
U.S. Treasury 10 Year Notes 681 66,791,203 June 2000 (605,203)
(361,875)
STATEMENT OF OPTIONS WRITTEN
March 31, 2000
ISSUER Contracts Value ($)
--------------------------------------------------------------------------------
Call Options
U.S. Treasury Bonds, 6.25%, 5/15/2030,
May 2000 @$107.1015625
(Premiums received $410,156) 500 655,000
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
<S> <C> <C>
Investments 469,334,149 468,098,466
Cash 3,680,107
Cash denominated in foreign currencies 1,944,000 1,910,600
Receivable for investment securities sold 21,435,715
Interest receivable 5,036,807
Receivable for options sold 710,938
Paydown receivables 55,926
Receivable for shares of Common Stock subscribed 14,866
500,943,425
---------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 309,652
Payable for investment securities purchased 44,006,784
Payable for shares of Common Stock redeemed 2,417,623
Outstanding options written, at value (premiums
received $410,156)--see Statement of Options Written 655,000
Payable for futures variation margin--Note 4(a) 24,745
Accrued expenses 234,137
47,647,941
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 453,295,484
---------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 478,416,965
Accumulated undistributed investment income--net 4,705,375
Accumulated net realized gain (loss) on investments (27,944,076)
Accumulated net unrealized appreciation (depreciation)
on investments, options written and foreign currency transactions
[including ($361,875) net unrealized (depreciation)
on financial futures]--Note 4(b) (1,882,780)
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 453,295,484
---------------------------------------------------------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 33,201,471
NET ASSET VALUE, offering and redemption price per share ($) 13.65
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
Year Ended March 31, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
<S> <C>
Interest 35,041,424
Cash dividends 658,825
TOTAL INCOME 35,700,249
EXPENSES:
Management fee--Note 3(a) 3,225,750
Shareholder servicing costs--Note 3(b) 1,473,614
Custodian fees--Note 3(b) 68,172
Professional fees 52,170
Directors' fees and expenses--Note 3(c) 52,123
Prospectus and shareholders' reports 40,799
Registration fees 33,490
Miscellaneous 7,210
TOTAL EXPENSES 4,953,328
INVESTMENT INCOME--NET 30,746,921
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments, foreign currency transactions
and options transactions (19,035,673)
Net realized gain (loss) on forward currency exchange contracts 3,837
Net realized gain (loss) on financial futures 5,875,842
NET REALIZED GAIN (LOSS) (13,155,994)
Net unrealized appreciation (depreciation) on investments
[including ($650,320) net unrealized (depreciation) on financial futures] (868,507)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (14,024,501)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 16,722,420
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Year Ended March 31,
---------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
<S> <C> <C>
Investment income--net 30,746,921 35,287,779
Net realized gain (loss) on investments (13,155,994) (14,456,795)
Net unrealized appreciation (depreciation)
on investments (868,507) (8,867,246)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 16,722,420 11,963,738
---------------------------------------------------------------------------------------------------------------------------------
NET EQUALIZATION CREDITS (DEBITS)--NOTE 1(F) ($) (901,460) (551,071)
---------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (31,048,735) (35,493,065)
Net realized gain on investments -- (8,881,327)
TOTAL DIVIDENDS (31,048,735) (44,374,392)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 111,669,920 240,655,499
Dividends reinvested 27,426,561 39,428,193
Cost of shares redeemed (247,072,000) (318,995,045)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (107,975,519) (38,911,353)
TOTAL INCREASE (DECREASE) IN NET ASSETS (123,203,294) (71,873,078)
---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 576,498,778 648,371,856
END OF PERIOD 453,295,484 576,498,778
Undistributed investment income--net 4,705,375 5,908,649
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 8,284,790 16,733,399
Shares issued for dividends reinvested 2,034,453 2,761,789
Shares redeemed (18,331,864) (22,239,479)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (8,012,621) (2,744,291)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Year Ended March 31,
--------------------------------------------
2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 13.99 14.75 14.13 14.47 13.75
Investment Operations:
Investment income--net .85 .83 .89 .88 .92
Net realized and unrealized
gain (loss) on investments (.34) (.54) .79 (.34) .73
Total from Investment Operations .51 .29 1.68 .54 1.65
Distributions:
Dividends from investment income--net (.85) (.84) (.89) (.88) (.93)
Dividends from net realized
gain on investments -- (.21) (.17) -- --
Total Distributions (.85) (1.05) (1.06) (.88) (.93)
Net asset value, end of period 13.65 13.99 14.75 14.13 14.47
---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.85 2.05 12.20 3.88 12.12
---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.00 .96 .95 .96 .93
Ratio of net investment income
to average net assets 6.20 5.78 6.07 6.12 6.32
Portfolio Turnover Rate 557.83 255.27 374.30 415.69 165.50
---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 453,295 576,499 648,372 571,580 598,551
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
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, as amended (the "Act" ), as a diversified open-end
management investment company. The fund's investment objective is to maximize
current income to the extent consistent with the preservation of capital and the
maintenance of liquidity. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation. Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a
wholly-owned subsidiary of the Manager, became the distributor of the fund's
shares, which are sold to the public without a sales charge. Prior to March 22,
2000, Premier Mutual Fund Services, Inc. was the distributor.
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, other than U.S. Treasury Bills, options and financial futures) 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. Securities for which there are no such valuations are valued
at fair value as determined in good faith under the direction of the Board of
Directors. Short-term investments, excluding
U.S. Treasury Bills, are carried at amortized cost, which approximates value.
Financial futures and options are valued at the last sales price on the
securities exchange on which such securities are primarily traded or at the last
sales price on the national securities market on each business day. Investments
denominated in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(C) 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. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund receives net
earnings credits based on available cash balances left on deposit.
(D) 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, if any, are normally declared and paid annually,
but the fund may make distri The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
butions on a more frequent basis to comply with the distribution requirements of
the Internal Revenue Code of 1986, as amended (the "Code"). To the extent that
net realized capital gain, can be offset by capital loss carryovers, it is the
policy of the fund not to distribute such gain.
On March 31, 2000, the Board of Directors declared a cash dividend of $.071 per
share from undistributed investment income-net, payable on April 3, 2000
(ex-dividend date) , to shareholders of record as of the close of business on
March 31, 2000.
(E) 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 Code and
to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carrryover of approximately $21,185,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to March 31, 2000. This amount
is calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with generally accepted accounting principles.
If not applied, $3,436,000 of the carryover expires in fiscal 2007 and
$17,749,000 expires in fiscal 2008.
(F) 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.
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. During
the period ended March 31, 2000, the fund did not borrow under either line of
credit.
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 11_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. During the period ended March 31, 2000, their
was no expense reimbursement pursuant to the Agreement.
(B) Under the Shareholder Services Plan, the fund reimburses DSC 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, 2000, the fund was charged $710,776 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. During the period
ended March 31, 2000, the fund was charged $246,381 pursuant to the transfer
agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The fund compensates Mellon under a custody agreement for providing
custodial services for the fund. During the period ended March 31, 2000, the
fund was charged $68,172 pursuant to the custody agreement.
(C) Each Director who is not an "affiliated person" as defined in the Act is a
Board member of one or more funds comprising a certain group of funds ("Fund
Group" ) within the Dreyfus complex. Effective January 1, 2000, for their
participation as a director in a Fund Group, the Directors receive an annual fee
of $40,000 each, $6,000 for each meeting attended in person and $500 for each
telephonic meeting in which they participate. These fees are allocated among the
funds in the Fund Group. The Chairman of the Board receives an additional 25% of
such compensation. Prior to January 1, 2000, each director who was not an
" affiliated person" as defined in the Act received from the fund an annual fee
of $2,500 and an attendance fee of $500 per meeting. The Chairman of the Board
received an additional 25% of such compensation.
NOTE 4--Securities Transactions:
(A) The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, financial futures,
forward currency exchange contracts and options transactions during the period
ended March 31, 2000, amounted to $2,788,068,890 and $2,934,242,263,
respectively.
The following summarizes the fund' s call/put options written for the period
ended March 31, 2000:
<TABLE>
OPTIONS TERMINATED
-----------------------------------------
NUMBER OF PREMIUMS NET REALIZED
OPTIONS WRITTEN: CONTRACTS RECEIVED ($) COST($) GAIN ($)
---------------------------------------------------------------------------------------------------------------------------------
Contracts outstanding
<S> <C> <C>
March 31, 1999 -- --
Contracts written 500 410,156
Contracts terminated:
Closed -- -- -- --
Contracts outstanding
March 31, 2000 500 410,156
</TABLE>
The fund may purchase and write (sell) put and call options in order to gain
exposure to or to protect against changes in the market.
As a writer of call options, the fund receives a premium at the outset and then
bears the market risk of unfavorable changes in the price of the financial
instrument underlying the option. Generally, the fund would incur a gain, to the
extent of the premium, if the price of the underlying financial instrument
decreases between the date the option is written and the date on which the
option is terminated. Generally, the fund would realize a loss, if the price of
the financial instrument increases between those dates.
As a writer of put options, the fund receives a premium at the outset and then
bears the market risk of unfavorable changes in the price of the financial
instrument underlying the option. Generally, the fund would incur a gain, to the
extent of the premium, if the price of the underlying financial instrument
increases between the date the option is written and the date on which the
option is terminated. Generally, the fund would realize a loss, if the price of
the financial instrument decreases between those dates.
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contracts at the
close of each day's trading. Typically, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at March 31, 2000, are set
forth in the Statement of Financial Futures.
The fund may purchase or sell financial futures contracts and options on such
futures contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) At March 31, 2000, accumulated net unrealized depreciation on investments,
financial futures and options was $1,842,402, consisting of $8,676,058 gross
unrealized appreciation and $10,518,460 gross unrealized depreciation.
At March 31, 2000, 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).
REPORT OF 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 statements of investments, financial futures
and options written, as of March 31, 2000, 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 auditing standards generally accepted
in the United States. 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,
2000 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, 2000, 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 accounting principles generally accepted in the United
States.
New York, New York
May 10, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
For Federal tax purposes, the fund hereby designates .70% of the ordinary
dividends paid during the fiscal year ended March 31, 2000 as qualifying for the
corporate dividends received deduction. Shareholders will receive notification
in January 2001 of the percentage applicable to the preparation of their 2000
income tax returns.
NOTES
For More Information
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
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 084AR003
