Dreyfus
A Bonds Plus, Inc.
SEMIANNUAL REPORT September 30, 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 Statement of Investments
12 Statement of Financial Futures
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus
A Bonds Plus, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus A Bonds Plus, Inc.,
covering the six-month period from April 1, 2000 through September 30, 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.
Bond prices have been mixed over the past six months. Despite some volatility,
prices of U.S. Treasury securities generally ended the period near where they
began and corporate bond prices ended the period at modestly lower levels than
where they began. More recently, most sectors of the U.S. bond market have been
affected by slowing economic growth. Additionally, the moderating effects of the
Federal Reserve Board's (the "Fed") interest-rate hikes during the first half of
2000 helped the Fed to achieve its goal of slowing the U.S. economy. Other
factors such as higher energy prices and a weak euro also served to slow
economic growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above their long-term averages,
establishing unrealistic expectations for some investors. We believe that as the
risks of the stock market have become more apparent, the relative stability and
income potential of municipal bonds can make them an attractive investment as
part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620.
Thank you for investing in Dreyfus A Bonds Plus, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 16, 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 six-month period ended September 30, 2000, Dreyfus A Bonds Plus, Inc.
produced a 3.45% total return and income dividends of $0.4200 per share.(1) This
compares to a 4.81% total return for the fund's benchmark, the Lehman Brothers
Aggregate Bond Index, for the same period.(2)
The fund's relative performance is due to its overweight held in higher quality
corporate bonds in comparison with its benchmark. Higher quality corporate bonds
outperformed lower quality corporate bonds during the second half of the
reporting period. However, since all corporate bonds lagged in performance
compared to U.S. Treasury and mortgage-backed securities, the fund trailed its
benchmark.
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.
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
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
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?
When the reporting period began on April 1, 2000, the U.S. economy continued to
grow strongly, raising concerns that long-dormant inflationary pressures might
reemerge. In response, the Federal Reserve Board (the "Fed") raised short-term
interest rates once during the reporting period. However, signs soon emerged
that the Fed's previous rate hikes were having the desired effect of slowing the
economy, suggesting that the Fed's restrictive monetary policies could be near
an end.
In this environment, the differences in yields between short-term securities and
long-term bonds has widened considerably. In addition, the possibility of slower
economic growth created concerns among investors that lower rated bond issuers
might have difficulty meeting their financial obligations. As a result, many
risk-averse investors flocked to the highest quality corporate names, as well as
to U.S. Treasury and agency securities.
We largely anticipated these changes by improving the fund's overall credit
quality. The fund ended the reporting period with an average credit rating of
double-A-plus, well above its minimum single-A rating requirement. We achieved
this credit-quality improvement by reducing our exposure to corporate bonds,
especially those issued by economically sensitive industries, including
financial services and industrial companies. We also avoided corporate bonds
that we considered overvalued, including those issued by U.S. telecommunications
companies. Instead, we emphasized high quality inflation-indexed corporate
bonds, U.S. Treasury securities and mortgage-backed securities because of the
combination of attractive yields and sound credit quality they offered
What is the fund's current strategy?
Although we have continued to maintain the fund's high average credit quality,
we have begun to rebuild our holdings of bonds from financial services
companies. The economy has slowed recently, suggesting that the Fed, in our
opinion, is probably finished with the current cycle of interest-rate hikes. We
believe that financial services companies such as banks may be in a good
position to improve profitability if interest rates moderate from current levels
for this reason. We have focused on certain European names because banks in that
region are less vulnerable than U.S. banks to non-performing loans and a
potential credit crunch among technology companies. We have also found
attractive opportunities among bonds issued by power-generation utilities that
we believe will be the beneficiaries of deregulation.
However, we have continued to avoid bonds of industrial issuers, such as paper,
chemicals, automobile and food businesses. In our view, these companies'
earnings may be hurt over the near term by higher oil prices, higher labor costs
and a declining euro, which makes U.S. goods more expensive for European
consumers. We also expect to reduce our holdings of inflation-indexed U.S.
Treasury securities if the economic slowdown continues or intensifies.
October 16, 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 INC. -- REFLECTS 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
STATEMENT OF INVESTMENTS
<TABLE>
STATEMENT OF INVESTMENTS
September 30, 2000 (Unaudited)
Principal
BONDS AND NOTES--110.6% Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AIRCRAFT & AEROSPACE--1.1%
Pegasus Aviation Lease Securitization,
Asset-Backed Ctfs.,
Ser. 2000-1, Cl. A1, 7.246%, 2015 4,866,676 (b,c) 4,863,634
AIRLINES--2.0%
US Airways Pass-Through Trust,
Pass-Through Ctfs.,
Ser. 2000-2G, Cl. G, 8.02%, 2019 8,790,000 8,885,679
ASSET-BACKED NOTES--2.1%
Bosque Asset,
7.66%, 2002 1,553,383 (b) 1,506,781
Inner Harbor CBO,
Ser. 1999-1, Cl. B2, 13.667%, 2012 3,210,000 (b) 3,185,925
Nomura Depositor Trust, ST1,
Ser. 1998-ST1, Cl. A3, 7.201%, 2003 5,000,000 (b,c) 4,955,469
9,648,175
AUTOMOTIVE--.8%
American Axle & Manufacturing,
Sr. Sub. Notes, 9.75%, 2009 3,616,000 3,525,600
BANKING--6.1%
Bank One Capital III,
Trust Originated Preferred Securities, 8.75%, 2030 8,140,000 8,234,180
Barclays Bank,
Bonds, 8.55%, 2049 7,766,000 (b,c) 7,817,970
Capital One Bank,
Sr. Notes, 8.25%, 2005 6,523,000 6,626,037
Regional Diversified Funding,
Sr. Notes, 9.25%, 2030 5,000,000 (b) 4,906,005
27,584,192
CABLE TELEVISION--1.8%
Adelphia Communications,
Sr. Notes, 10.875%, 2010 3,067,000 3,020,995
CSC Holdings, Ser. B,
Deb., 8.125%, 2009 5,000,000 4,974,370
7,995,365
COMMERCIAL MORTGAGE PASS-THROUGH CTFS.--3.7%
COMM,
Ser. 2000-FL2A, Cl. E, 7.609%, 2003 6,100,000 (b,c) 6,096,188
GMAC Commercial Mortgage Securities,
Ser. 2000-C2, Cl. A1, 7.273%, 2009 3,721,524 3,721,524
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL MORTGAGE PASS-THROUGH CTFS. (CONTINUED)
Morgan Stanley Dean Witter Capital I,
Ser. 2000-1345, Cl. B, 7.468%, 2010 3,000,000 (b) 3,041,250
Resolution Trust,
Ser. 1994-C2, Cl. D, 8%, 2025 3,713,935 3,697,390
16,556,352
CONSUMER--3.2%
Corning,
Deb., 6.85%, 2029 5,000,000 4,488,485
Grand Metropolitan Investment,
Discount Notes, 0%, 2004 5,000,000 3,981,680
Sleepmaster, Ser. B,
Sr. Sub. Notes, 11%, 2009 1,148,000 1,033,200
Unicredito Italia Capital Trust,
Trust Preferred Securities, 9.2%, 2049 5,029,000 (b,c) 5,048,060
14,551,425
FINANCE--1.3%
Bear Stearns,
Notes, 7.625%, 2009 5,709,000 5,675,168
FOREIGN/GOVERNMENTAL--.4%
Republic of Argentina,
Bonds, 10.25%, 2030 2,450,000 2,000,425
INDUSTRIAL--1.4%
NRG Energy,
Sr. Notes, 8.25%, 2010 6,105,000 6,124,841
Neenah,
Ser. B, Sr. Sub. Notes, 11.125%, 2007 300,000 234,000
6,358,841
INSURANCE--2.0%
MONY Group,
Sr. Notes, 8.35%, 2010 9,096,000 9,230,785
MEDIA/ENTERTAINMENT--1.5%
Clear Channel Communications,
Conv. Sub. Deb., 2.625%, 2003 6,126,000 6,723,285
OIL AND GAS--2.8%
Valero Energy,
Notes, 8.75%, 2030 7,359,000 7,732,425
Yosemite Securities Trust I,
Deb., 8.25%, 2004 5,000,000 (b) 5,073,885
12,806,310
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST--.5%
Crescent Real Estate Equities,
Notes, 7%, 2002 2,500,000 2,351,173
RESIDENTIAL MORTGAGE PASS-THROUGH CTFS.--3.3%
Chase Mortgage Finance, REMIC:
Ser. 1998-S5, Cl. B3, 6.5%, 2013 574,086 (b) 493,966
Ser. 1998-S5, Cl. B4, 6.5%, 2013 478,405 (b) 368,691
GE Capital Mortgage Services,
REMIC, Ser. 1998-16, Cl. B3, 6.5%, 2013 1,027,015 (b) 826,105
Norwest Asset Securities:
Ser. 1997-15, Cl. B1, 6.75%, 2012 962,216 925,705
Ser. 1997-16, Cl. B1, 6.75%, 2027 2,132,401 1,967,481
Ser. 1997-16, Cl. B2, 6.75%, 2027 678,843 650,607
Ser. 1998-11, Cl. B2, 6.5%, 2013 1,614,710 1,528,420
Ser. 1998-13, Cl. B1, 6.25%, 2028 2,924,452 2,778,627
Ser. 1998-13, Cl. B2, 6.25%, 2028 2,802,721 2,480,380
Ser. 1998-13, Cl. B6, 6.25%, 2028 366,516 (b) 104,457
Residential Funding Mortgage Securities I:
Ser. 1998-S9, Cl. 1-B1, 6.5%, 2013 741,698 (b) 642,044
Ser. 1998-S22, Cl. B1, 6.5%, 2013 468,876 377,152
Ser. 1998-S22, Cl. B3, 6.5%, 2013 351,746 (b) 103,838
Ser. 1998-S22, Cl. M2, 6.5%, 2013 586,323 553,290
Ser. 1998-S22, Cl. M3, 6.5%, 2013 1,172,189 1,076,374
14,877,137
RETAIL--1.6%
Dresdner Funding Trust I,
Bonds, 8.151%, 2031 6,105,000 (b) 5,474,549
Saks:
Gtd. Sr. Notes, 7.375%, 2019 2,388,000 1,241,760
Gtd. Sr. Notes, 7.5%, 2010 1,248,000 705,120
7,421,429
TELECOMMUNICATIONS--5.1%
Cable & Wireless Optus Finance Property,
Gtd. Notes, 8%, 2010 9,722,000 (b) 10,051,576
Marconi,
Bonds, 8.375%, 2030 9,394,000 9,357,608
TCI Communication Financial,
Capital Securities, 9.65%, 2027 2,000,000 2,148,054
Winstar Communications,
Sr. Notes, 12.75%, 2010 EUR 2,000,000 (b) 1,340,944
22,898,182
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENTS--14.4%
U. S. Treasury Bonds:
6.125%, 8/15/2029 11,459,000 11,706,056
12%, 8/15/2013 2,404,000 3,276,940
U. S. Treasury Inflation Protection Securities,
3.625%, 7/15/2002 24,436,000 (d) 26,306,606
U. S. Treasury Notes:
5.875%, 11/15/2005 17,938,000 17,949,122
6.75%, 5/15/2005 5,809,000 6,019,576
65,258,300
U. S. GOVERNMENT AGENCIES--15.3%
Federal Home Loan Mortgage Association,
Notes, 6.625%, 8/15/2002 17,500,000 17,548,265
Federal National Mortgage Association,
6.75%, 8/15/2002 38,704,000 38,894,579
Tennessee Valley Authority,
Valley Indexed Principal Securities,
3.375%, 1/15/2007 12,500,000 (d) 12,741,107
69,183,951
U. S. GOVERNMENT AGENCIES/MORTGAGE-BACKED--34.2%
Federal Home Loan Mortgage Corp.:
7.5% 10,000,000 (e) 9,993,700
REMIC, Mutliclass Mortgage Participation Ctfs.
(Interest Only Obligation):
Ser. 1978, Cl. PH, 7%, 1/15/2024 3,424,503 (f) 441,975
Ser. 1995, Cl. PY, 7%, 10/15/2027 10,124,292 (f) 3,621,718
Federal National Mortgage Association:
7.5% 21,900,000 (e) 21,886,203
6.88%, 2/1/2028 4,189,777 4,068,455
REMIC Trust, Gtd. Pass Through Ctfs.
(Interest Only Obligation),
Ser. 1996-64, Cl. PM, 7%, 1/18/2012 5,494,050 (f) 1,093,659
Government National Mortgage Association I:
6.7%, 7/15/2001 14,044,019 13,754,291
7%, 6/15/2008 68,456 68,948
9.5%, 11/15/2017 3,336,693 3,513,938
Construction Loan,
6.7%, 5/15/2039 1,321,780 1,294,512
Project Loan:
6.475%, 9/1/2033 7,686,859 7,231,653
6.54%, 7/15/2033 4,384,565 4,190,983
6.55%, 6/15/2033 1,820,920 1,742,054
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
BONDS AND NOTES (CONTINUED) Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U. S. GOVERNMENT AGENCIES/MORTGAGE-BACKED (CONTINUED)
Government National Mortgage Association I (continued):
Project Loan (continued):
6.625%, 6/1/2033-9/15/2033 6,120,335 5,883,523
6.75%, 10/15/2033 2,201,572 2,130,075
6.86%, 3/15/2038 12,527,978 12,459,967
7%, 8/15/2039 11,298,556 11,050,807
Government National Mortgage Association II:
7.5% 25,000,000 (e) 24,976,500
8% 25,000,000 (e) 25,328,000
154,730,961
UTILITIES--1.8%
Calpine,
Sr. Notes, 8.625%, 2010 8,120,000 8,130,329
YANKEE--4.2%
HSBC Capital Funding, Ser. 2,
Preferred Securities, 10.176%, 2049 7,970,000 (b,c) 8,835,303
Pemex Finance,
Notes, Ser. 2000-1, Cl. A2, 7.8%, 2013 10,000,000 (b) 10,340,750
19,176,053
TOTAL BONDS AND NOTES
(cost $503,598,771) 500,432,751
------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--1.0% Shares Value ($)
------------------------------------------------------------------------------------------------------------------------------------
BROADCASTING--.4%
Paxson Communications,
Cum., $1,325 150 1,470,000
TELECOMMUNICATIONS--.6%
Global Crossing,
Cum., Conv., $17.50 14,182 2,815,127
TOTAL PREFERRED STOCKS
(cost $4,306,648) 4,285,127
Principal
SHORT-TERM INVESTMENTS--10.0% Amount (a) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--9.5%
Halliburton,
6.68%, 10/2/2000 15,105,000 15,102,197
San Paolo IMI U. S. Financial,
6.69%, 10/2/2000 17,000,000 16,996,841
UBS Finance,
6.68%, 10/2/2000 10,985,000 10,982,962
43,082,000
U. S. TREASURY BILLS--.5%
6.04%, 11/2/2000 2,170,000 (g) 2,159,085
TOTAL SHORT-TERM INVESTMENTS
(cost $45,240,348) 45,241,085
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $553,145,767) 121.6% 549,958,963
LIABILITIES, LESS CASH AND RECEIVABLES (21.6%) (97,612,239)
NET ASSETS 100.0% 452,346,724
(A) PRINCIPAL AMOUNT WILL BE 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 SEPTEMBER 30,
2000, THESE SECURITIES AMOUNTED TO $85,077,390 OR 18.8% OF NET ASSETS.
(C) VARIABLE RATE SECURITY--INTEREST RATE SUBJECT TO PERIODIC CHANGE.
(D) PRINCIPAL AMOUNT FOR ACCRUAL PURPOSES IS PERIODICALLY ADJUSTED BASED ON
CHANGES TO THE CONSUMER PRICE INDEX.
(E) PURCHASED ON A FORWARD COMMITMENT BASIS.
(F) NOTIONAL FACE AMOUNT SHOWN.
(G) HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERAL FOR OPEN
FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF FINANCIAL FUTURES
September 30, 2000 (Unaudited)
<TABLE>
Unrealized
Market Value Appreciation
Covered (Depreciation)
Contracts by Contracts ($) Expiration at 9/30/00 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FINANCIAL FUTURES (SHORT)
U. S. Treasury 5 Year Notes 205 20,612,109 December 2000 (28,828)
U. S. Treasury 10 Year Notes 60 6,013,125 December 2000 10,312
U. S. Treasury 20 Year Bonds 60 5,919,375 December 2000 5,625
(12,891)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 553,145,767 549,958,963
Cash 592,890
Cash denominated in foreign currencies 4,852,828 4,763,201
Receivable for investment securities sold 67,344,005
Interest receivable 5,344,853
Paydown receivables 23,755
Receivable for shares of Common Stock subscribed 12,423
628,040,090
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 250,590
Payable for investment securities purchased 174,331,860
Payable for shares of Common Stock redeemed 779,928
Payable for futures variation margin--Note 4(a) 131,500
Accrued expenses 199,488
175,693,366
--------------------------------------------------------------------------------
NET ASSETS ($) 452,346,724
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 476,078,689
Accumulated undistributed investment income--net 4,317,959
Accumulated net realized gain (loss) on investments
and foreign currency transactions (24,756,168)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions
[including ($12,891) net unrealized (depreciation) on financial
futures] (3,293,756)
--------------------------------------------------------------------------------
NET ASSETS ($) 452,346,724
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(100 million shares of $.001 par value Common Stock authorized) 33,032,363
NET ASSET VALUE, offering and redemption price per share ($) 13.69
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended September 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 15,417,161
EXPENSES:
Management fee--Note 3(a) 1,450,721
Shareholder servicing costs--Note 3(b) 482,297
Custodian fees--Note 3(b) 35,961
Professional fees 29,338
Prospectus and shareholders' reports 19,911
Directors' fees and expenses--Note 3(c) 19,185
Registration fees 14,461
Miscellaneous 1,455
TOTAL EXPENSES 2,053,329
INVESTMENT INCOME--NET 13,363,832
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments, foreign currency
transactions and options transactions 4,107,994
Net realized gain (loss) on financial futures (920,086)
NET REALIZED GAIN (LOSS) 3,187,908
Net unrealized appreciation (depreciation) on investments
(including $348,984 net unrealized appreciation on financial
futures) (1,410,976)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 1,776,932
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 15,140,764
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
Septembert 30, 2000 Year Ended
(Unaudited) March 31, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 13,363,832 30,746,921
Net realized gain (loss) on investments 3,187,908 (13,155,994)
Net unrealized appreciation (depreciation)
on investments (1,410,976) (868,507)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 15,140,764 16,722,420
--------------------------------------------------------------------------------
NET EQUALIZATION CREDITS (DEBITS)--NOTE 1(F) ($) 40,724 (901,460)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (13,791,972) (31,048,735)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 62,771,906 111,669,920
Dividends reinvested 12,101,245 27,426,561
Cost of shares redeemed (77,211,427) (247,072,000)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (2,338,276) (107,975,519)
TOTAL INCREASE (DECREASE) IN NET ASSETS (948,760) (123,203,294)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 453,295,484 576,498,778
END OF PERIOD 452,346,724 453,295,484
Undistributed investment income--net 4,317,959 4,705,375
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 4,676,439 8,284,790
Shares issued for dividends reinvested 900,904 2,034,453
Shares redeemed (5,746,451) (18,331,864)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (169,108) (8,012,621)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
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.
<TABLE>
Six Months Ended
September 30, 2000 Year Ended March 31,
----------------------------------------------------------------
(Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 13.65 13.99 14.75 14.13 14.47 13.75
Investment Operations:
Investment income--net .41 .85 .83 .89 .88 .92
Net realized and unrealized
gain (loss) on investments .05 (.34) (.54) .79 (.34) .73
Total from Investment Operations .46 .51 .29 1.68 .54 1.65
Distributions:
Dividends from investment
income--net (.42) (.85) (.84) (.89) (.88) (.93)
Dividends from net realized
gain on investments -- -- (.21) (.17) -- --
Total Distributions (.42) (.85) (1.05) (1.06) (.88) (.93)
Net asset value, end of period 13.69 13.65 13.99 14.75 14.13 14.47
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 6.88(a) 3.85 2.05 12.20 3.88 12.12
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .92(a) 1.00 .96 .95 .96 .93
Ratio of net investment income
to average net assets 5.99(a) 6.20 5.78 6.07 6.12 6.32
Portfolio Turnover Rate 349.99(b) 557.83 255.27 374.30 415.69 165.50
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 452,347 453,295 576,499 648,372 571,580 598,551
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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. Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, 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, 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 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 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 September 29, 2000, the Board of Directors declared a cash dividend of $.070
per share from undistributed investment income-net, payable on October 2, 2000
(ex-dividend date) , to shareholders of record as of the close of business on
September 29, 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 carryover 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 Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 September 30, 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 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. During the period ended September 30, 2000,
their was no expense reimbursement pursuant to the Agreement.
(b) Under the Shareholder Services Plan, the fund reimburses the Distributor 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 September 30, 2000, the fund was charged $239,234
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 September 30, 2000, the fund was charged $157,635 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended September 30, 2000, the fund was
charged $35,961 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Each Board member who is not
an "affiliated person" as defined in the Act receives an annual fee of $40,000
and an attendance fee of $6,000 for each in person meeting and $500 for
telephone meetings. These fees are allocated among the funds in the Fund Group.
The chairman of the Board receives an additional 25% of such compensation.
Subject to the fund's Emeritus Program Guidelines, Emeritus Board Members, if
any, receive 50% of the fund's annual retainer fee and per meeting fee paid at
the time the Board member achieves emeritus status.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, financial futures and
options transactions during the period ended September 30, 2000, amounted to
$1,661,199,605 and $1,572,441,347, respectively.
The following summarizes the fund' s call/put options written for the period
ended September 30, 2000:
<TABLE>
Options Terminated
-----------------------------------------
Number of Premiums Net Realized
Options Written: Contracts Received ($) Cost ($) (Loss) ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts outstanding
March 31, 2000 500 410,156
Contracts written 700 388,282
Contracts terminated:
Closed 675 507,227 792,383 (285,156)
Exercised 350 194,141 194,141
Expired 175 97,070 237,695 (140,625)
Total Contracts Terminated 1,200 798,438 1,224,219 (425,781)
Contracts outstanding
September 30, 2000 -- --
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 September 30, 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.
(b) At September 30, 2000, accumulated net unrealized depreciation on
investments and financial futures was $3,199,695, consisting of $3,129,956 gross
unrealized appreciation and $6,329,651 gross unrealized depreciation.
At September 30, 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).
NOTE 5 - Subsequent Event:
On October 20, 2000, pursuant to an Agreement and Plan of Reorganization,
previously approved by the fund's Board of Directors, all or substantially all
of the Dreyfus Strategic Governments Income, Inc. assets and liabilities were
transferred to the fund in a tax free exchange of Common Stock of the fund at
net asset value 14,640,617 shares valued at $9.72 per share, representing net
assets of $142,322,688 (including $179,392 net unrealized depreciation on
investments) were exchanged by Dreyfus Strategic Governments Income, Inc. for
the respective number of shares of the fund.
The Fund
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 084SA009
