The words "First Investors" in a box across the top of the page.
FIRST INVESTORS
SPECIAL BOND FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1999
First Investors Logo
The words "A MEMBER OF THE FIRST INVESTORS FINANCIAL NETWORK"
under the First Investors logo.
Bond Market Overview
FIRST INVESTORS SPECIAL BOND FUND, INC.
Dear Investor:
We are pleased to present this Bond Market Overview for the semi-annual
report for the First Investors Tax Exempt Funds for the six month period
ended June 30, 1999. The period under review was characterized by a
strong U.S. economy, rising interest rates and a climbing stock market.
The U.S. economy, now in its ninth year of expansion, continued its
remarkable performance. Economic growth in the first quarter of 1999 was
strong, with the Gross Domestic Product (GDP) growing by 4.3% on an
annualized basis. The momentum continued into the second quarter, with
growth of 2.3% on an annualized basis. Although the economy continued to
expand, inflation stayed under control. As of June 30, the rate of
inflation for the previous 12 months was 2% as measured by the Consumer
Price Index (CPI). The unemployment rate remained near its lowest level
in 30 years at 4.3%. Rising personal income, high consumer confidence,
wealth from stock market gains and home price appreciation combined to
power economic growth.
During the first half of 1999, interest rates moved sharply higher,
causing bond prices to decline. The 30-year U.S. Treasury rate rose from
5.10% on December 31 to 5.96% on June 30. The bellwether rate reached a
high of 6.16% in June. This rising interest rate environment was driven
by a number of factors, including the improvement of economies around
the globe. With foreign economies and markets recovering from last
year's financial markets crisis, the "flight to safety" which had
benefited U.S. Treasuries reversed, as investors returned to riskier
asset classes.
As well, the Federal Reserve became concerned that the continued
strength of the U.S. economy, particularly when combined with tight
labor markets, would lead to inflation. In an effort to preempt
inflation, the Fed raised the Federal Funds rate 25 basis points (.25%)
to 5% on June 30. This tightening of monetary policy was a partial
unwinding of last Fall's 75 basis point (.75%) decrease in the Federal
Funds rate. Although the Fed has currently adopted a neutral stance
toward interest rates, it remains alert to developments that may require
further rate increases.
Among bond sectors, the high yield bond market provided the highest
total returns over the past six months, as companies benefited from the
strong economy and healthy earnings. The mortgage-backed bond market was
the second best performing bond sector as higher rates substantially
reduced prepayment risk. Treasury securities and investment grade
corporate bonds had the lowest total returns among bond sectors, in
large part due to heavy issuance of U.S. agency and corporate debt.
Lastly, in June long-term municipal bond yields rose to their highest
level in over 18 months.
Going forward, we anticipate that the bond market will remain stable, at
best, for the next three to six months. The domestic economy remains
strong, although inflation is not yet apparent. The Fed should remain
vigilant in its mission to keep inflation under control. To this end,
one or two additional interest rate hikes over the next six months are
possible. The bond markets can potentially perform better in the next
six to nine months if the economy slows, inflation remains low and the
Fed is satisfied with the economic outlook.
Thank you for your continued confidence in First Investors. As always,
we appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
First Investors Management Company, Inc.
July 30, 1999
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS SPECIAL BOND FUND, INC.
June 30, 1999
- -------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS--90.6%
Aerospace/Defense--1.7%
$ 500M Moog, Inc., 10%, 2006 $ 518,750 $ 170
- -------------------------------------------------------------------------------------------------------
Apparel/Textiles--1.6%
500M Polymer Group, Inc., 9%, 2007 481,250 158
- -------------------------------------------------------------------------------------------------------
Automotive--5.5%
700M Cambridge Industries, Inc., 10 1/4%, 2007 570,500 187
500M Collins & Aikman Products Co., 11 1/2%, 2006 506,250 166
600M Exide Corp., 10%, 2005 604,500 198
- -------------------------------------------------------------------------------------------------------
1,681,250 551
- -------------------------------------------------------------------------------------------------------
Building Materials--1.6%
500M Falcon Building Products Corp., 9 1/2%, 2007 476,250 156
- -------------------------------------------------------------------------------------------------------
Chemicals--2.8%
800M Huntsman Polymers Corp., 11 3/4%, 2004 852,000 279
- -------------------------------------------------------------------------------------------------------
Consumer Products--3.8%
700M AKI Inc., 10 1/2%, 2008 679,000 222
455M Hines Horticulture, Inc., 11 3/4%, 2005 480,025 157
- -------------------------------------------------------------------------------------------------------
1,159,025 379
- -------------------------------------------------------------------------------------------------------
Containers/Packaging--3.0%
400M Tekni-Plex, Inc., 9 1/4%, 2008 392,000 128
500M U.S. Can Corp., 10 1/8%, 2006 525,000 172
- -------------------------------------------------------------------------------------------------------
917,000 300
- -------------------------------------------------------------------------------------------------------
Durable Goods Manufacturing--1.6%
500M Columbus McKinnon Corp., 8 1/2%, 2008 487,500 160
- -------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--1.6%
500M Canandaigua Brands, Inc., 8 1/2%, 2009 483,750 158
- -------------------------------------------------------------------------------------------------------
Energy--1.6%
500M Stone Energy Corp., 8 3/4%, 2007 491,875 161
- -------------------------------------------------------------------------------------------------------
Entertainment/Leisure--6.4%
460M Carmike Cinemas, Inc., 9 3/8%, 2009+ 451,375 148
500M Loews Cineplex Entertainment Corporation, 8 7/8%, 2008 483,125 158
600M Outboard Marine Corp., 10 3/4%, 2008 411,000 134
1,000M PX Escrow Corp., 0%-9 5/8%, 2006 612,500 200
- -------------------------------------------------------------------------------------------------------
1,958,000 640
- -------------------------------------------------------------------------------------------------------
Gaming/Lodging--2.7%
400M Hollywood Park, Inc., 9 1/4%, 2007 394,000 129
450M Isle of Capri Casinos, 8 3/4%, 2009+ 424,125 139
- -------------------------------------------------------------------------------------------------------
818,125 268
- -------------------------------------------------------------------------------------------------------
Healthcare--3.9%
300M Integrated Health Services, Inc., 9 1/2%, 2007 217,125 71
500M Leiner Health Products, Inc., 9 5/8%, 2007 482,500 158
500M Tenet Healthcare Corp., 8 5/8%, 2007 490,000 160
- -------------------------------------------------------------------------------------------------------
1,189,625 389
- -------------------------------------------------------------------------------------------------------
Household Products--1.6%
500M Chattem, Inc., 8 7/8%, 2008 482,500 158
- -------------------------------------------------------------------------------------------------------
Machinery/Diversified-1.3%
500M Numatics, Inc., 9 5/8%, 2008 407,500 133
- -------------------------------------------------------------------------------------------------------
Media (Cable TV/Broadcasting)--10.6%
500M Allbritton Communications Corp., 9 3/4%, 2007 508,750 166
350M American Telecasting Inc., 14 1/2%, 2004 369,250 121
300M Grupo Televisa SA, 11 7/8%, 2006 309,375 101
500M Mediacom LLC/Capital Corp., 8 1/2%, 2008 472,500 155
550M Rogers Communications, Inc., 9 1/8%, 2006 562,375 184
500M Sinclair Broadcasting Group, Inc., 9%, 2007 496,250 162
500M Star Choice Communications, Inc., 13%, 2005 522,500 171
- -------------------------------------------------------------------------------------------------------
3,241,000 1,060
- -------------------------------------------------------------------------------------------------------
Media (Other)--1.5%
500M Garden State Newspapers, Inc., 8 5/8%, 2011+ 473,750 155
- -------------------------------------------------------------------------------------------------------
Mining/Metals--6.3%
600M Commonwealth Aluminum Corp., 10 3/4%, 2006 597,750 196
800M CSN Iron, SA, 9 1/8%, 2007+ 612,000 200
700M Euramax International PLC, 11 1/4%, 2006 714,000 234
- -------------------------------------------------------------------------------------------------------
1,923,750 630
- -------------------------------------------------------------------------------------------------------
Miscellaneous-7.0%
500M Iron Mountain, Inc., 10 1/8%, 2006 525,000 172
600M Kindercare Learning Centers, Inc., 9 1/2%, 2009 576,000 188
600M Loomis Fargo & Co., 10%, 2004 594,000 194
400M Pierce Leahy Corp., 11 1/8%, 2006 436,000 143
- -------------------------------------------------------------------------------------------------------
2,131,000 697
- -------------------------------------------------------------------------------------------------------
Paper/Forest Products--5.0%
500M Container Corp., 11 1/4%, 2004 522,500 171
700M Fonda Group, Inc., 9 1/2%, 2007 612,500 200
400M Packaging Corporation of America, 9 5/8%, 2009+ 408,000 133
- -------------------------------------------------------------------------------------------------------
1,543,000 504
- -------------------------------------------------------------------------------------------------------
Real Estate/Construction--.8%
600M Cathay International Ltd., 13%, 2008+ 234,000 77
- -------------------------------------------------------------------------------------------------------
Telecommunications--16.9%
500M 21st Century Telecom Group, Inc., 0%-12 1/4%, 2008 216,250 71
700M Facilicom International, Inc., 10 1/2%, 2008 546,000 179
600M ICG Services, Inc., 0%-10%, 2008 367,500 120
800M McCaw International, Ltd., 0%-13%, 2007 496,000 162
700M McLeodUSA, Inc., 9 1/4%, 2007 690,375 226
750M Netia Holdings BV, 0%-11 1/4%, 2007 470,625 154
400M NEXTLINK Communications, Inc., 9%, 2008 377,500 123
800M Powertel, Inc., 0%-12%, 2006 644,000 211
700M Qwest Communications International, Inc., 0%-9.47%, 2007 540,750 177
800M RCN Corp., 0%-11%, 2008 498,000 163
500M Viatel, Inc., 0%-12 1/2%, 2008 321,250 105
- -------------------------------------------------------------------------------------------------------
5,168,250 1,691
- -------------------------------------------------------------------------------------------------------
Transportation--1.8%
600M Eletson Holdings, Inc., 9 1/4%, 2003 566,250 185
- -------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $29,923,518) 27,685,400 9,059
- -------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Amount
Principal Invested
Amount, For Each
Shares or $10,000 of
Warrants Security Value Net Assets
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCKS--1.7%
Media (Cable TV/Broadcasting)--.7%
1,300 *Echostar Communications Corp.,--Class "A" 199,469 65
- -------------------------------------------------------------------------------------------------------
Media (Other)--.6%
1,500 *Affiliated Newspaper Investments, Inc.--Class "B" 187,500 62
- -------------------------------------------------------------------------------------------------------
Telecommunications--.4%
2,037 *Viatel, Inc. 114,327 37
- -------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $276,388) 501,296 164
- -------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.6%
Durable Goods Manufacturing
230 Day International Group, Inc., 12 1/4% (cost $0) 190,325 62
- -------------------------------------------------------------------------------------------------------
WARRANTS--.1%
Media (Cable TV/Broadcasting)--.1%
11,580 *Star Choice Communications, Inc. (expiring 12/15/05)+ 30,397 10
- -------------------------------------------------------------------------------------------------------
Telecommunications--.0%
1,100 *McCaw International, Ltd. (expiring 4/15/07)+ 2,750
- -------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $0) 33,147 11
- -------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.5%
$ 1,000M United States Treasury Notes, 7%, 2006 (cost $1,087,969) 1,059,688 347
- -------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.9%
250M Eastman Kodak Co., 5.1%, 7/8/99 249,752 82
400M Eastman Kodak Co., 5.28%, 7/9/99 399,531 131
250M Ford Motor Credit Co., 5.23% 7/9/99 249,709 81
- -------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $32,186,867) 99.4% 30,368,848 9,937
Other Assets, Less Liabilities .6 192,954 63
- -------------------------------------------------------------------------------------------------------
Net Assets 100.0% $ 30,561,802 $ 10,000
- -------------------------------------------------------------------------------------------------------
+ See Note 5
* Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS SPECIAL BOND FUND, INC.
June 30, 1999
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities, at value (identified cost $32,186,867) (Note 1A) $ 30,368,848
Cash 320,441
Interest receivable 707,909
Other assets 4,373
------------
Total Assets 31,401,571
Liabilities
Dividend payable $ 786,121
Payable for shares redeemed 20,074
Accrued advisory fee 20,860
Accrued expenses 12,714
-----------
Total Liabilities 839,769
------------
Net Assets $ 30,561,802
============
Net Assets Consist of:
Capital paid in $ 35,440,695
Undistributed net investment income 581,789
Accumulated net realized loss on investment transactions (3,642,663)
Net unrealized depreciation in value of investments (1,818,019)
------------
Total $ 30,561,802
============
Net Asset Value, Offering Price and Redemption Price Per Share
($30,561,802 divided by 2,621,703 shares outstanding),
25,000,000 shares authorized, $1.00 par value (Note 2) $ 11.66
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS SPECIAL BOND FUND, INC.
Six Months Ended June 30, 1999
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Income:
Interest $ 1,560,746
Dividends 21,589
-------------
Total income $ 1,582,335
Expenses (Notes 1 and 4):
Advisory fee 118,187
Professional fees 5,584
Custodian fees 1,874
Other expenses 2,612
-------------
Total expenses 128,257
Less: Custodian fees paid indirectly (760)
-------------
Net expenses 127,497
-------------
Net investment income 1,454,838
Realized and Unrealized Gain (Loss) on Investments (Note 3):
Net realized loss on investments (79,388)
Net unrealized depreciation of investments (340,710)
-------------
Net loss on investments (420,098)
-------------
Net Increase in Net Assets Resulting from Operations $ 1,034,740
=============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS SPECIAL BOND FUND, INC.
- ---------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1999 December 31, 1998
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 1,454,838 $ 3,029,373
Net realized gain (loss) on investments (79,388) 857,581
Net unrealized depreciation of investments (340,710) (3,371,027)
------------- -------------
Net increase in net assets resulting from operations 1,034,740 515,927
------------- -------------
Dividends to Shareholders
Net investment income (1,578,444) (3,269,565)
------------- -------------
Capital Share Transactions (a)
Proceeds from shares sold 177,115 240,123
Reinvestment of dividends 792,323 3,269,565
Cost of shares redeemed (2,123,588) (4,577,922)
------------- -------------
Net decrease in net assets resulting from share transactions (1,154,150) (1,068,234)
------------- -------------
Net decrease in net assets (1,697,854) (3,821,872)
------------- -------------
Net Assets
Beginning of period 32,259,656 36,081,528
------------- -------------
End of period (including undistributed net investment income of
$581,789 and $705,395, respectively) $ 30,561,802 $ 32,259,656
============= =============
(a) Capital Shares Issued and Redeemed
Sold 14,899 18,737
Issued for dividends reinvested 66,636 265,057
Redeemed (179,351) (364,362)
------------- -------------
Net decrease in capital shares (97,816) (80,568)
============= =============
See notes to financial statements
</TABLE>
Notes to Financial Statements
FIRST INVESTORS SPECIAL BOND FUND, INC.
1. Significant Accounting Policies -- The Fund is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-end
management investment company. The investment objective of the Fund is to
seek high current income without undue risk to principal and secondarily to
seek growth of capital.
A. Security Valuation -- Except as provided below, a security listed or
traded on an exchange or the Nasdaq Stock Market is valued at its last sale
price on the exchange or market where the security is principally traded, and
lacking any sales, the security is valued at the mean between the closing bid
and asked prices. Securities traded in the over-the-counter market
(including securities listed on exchanges whose primary market is believed to
be over-the-counter) are valued at the mean between the last bid and asked
prices based upon quotes furnished by a market maker for such securities.
Securities may also be priced by a pricing service. The pricing service uses
quotations obtained from investment dealers or brokers and other available
information in determining value. Short-term debt securities that mature in
60 days or less are valued on the amortized cost method which approximates
market value. Securities for which market quotations are not readily
available are valued on a consistent basis at fair value as determined in
good faith by or under the supervision of the Fund's officers in a manner
specifically authorized by the Board of Directors.
B. Federal Income Taxes -- No provision has been made for federal income
taxes on net income or capital gains, since it is the policy of the Fund to
continue to comply with the special provisions of the Internal Revenue Code
applicable to regulated investment companies and to make sufficient
distributions of income and capital gains (in excess of any available capital
loss carryovers) to relieve it from all, or substantially all, such taxes.
At December 31, 1998, the Fund had capital loss carryovers of $3,563,275, of
which $3,021,871 expires in 1999, $287,903 in 2003 and $253,501 in 2004.
C. Distributions to Shareholders -- Dividends to shareholders from net
investment income are declared daily and paid quarterly. Distributions from
net realized capital gains, if any, are normally declared and paid annually.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to differing
treatments for capital loss carryforwards and post-October capital losses.
D. Use of Estimates -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expense during the reporting period. Actual results
could differ from those estimates.
E. Other -- Security transactions are accounted for on the date the
securities are purchased or sold. Cost is determined, and gains and losses
are based, on the identified cost basis for both financial statement and
federal income tax purposes. Dividend income is recorded on the ex-dividend
date. Interest income and estimated expenses are accrued daily. For the six
months ended June 30, 1999, the Fund's custodian has provided credits in the
amount of $760 against custodian charges based on the uninvested cash
balances of the Fund.
2. Capital Stock -- Shares of the Fund are sold only through the purchase of
annuity contracts issued by First Investors Life Variable Annuity Fund A.
3. Security Transactions -- For the six months ended June 30, 1999, purchases
and sales of investment securities, other than United States Government
obligations and short-term corporate notes, aggregated $5,800,119 and
$5,433,098, respectively.
At June 30, 1999, the cost of investments for federal income tax purposes was
$32,186,867. Accumulated net unrealized depreciation on investments was
$1,818,019, consisting of $682,409 gross unrealized appreciation and
$2,500,428 gross unrealized depreciation.
4. Advisory Fee and Other Transactions With Affiliates -- Certain officers
and directors of the Fund are officers and directors of its investment
adviser, First Investors Management Company, Inc. ("FIMCO") and its transfer
agent, Administrative Data Management Corp. Directors of the Fund who are
not "interested persons" of the Fund as defined in the 1940 Act are
remunerated by the Fund. For the six months ended June 30, 1999, total
directors fees accrued by the Fund amounted to $1,500.
The Investment Advisory Agreement provides as compensation to FIMCO an annual
fee, payable monthly, at the rate of .75% on the first $250 million of the
Fund's average daily net assets, declining by .03% on each $250 million
thereafter, down to .66% on average daily net assets over $750 million.
5. Rule 144A Securities -- Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and
may only be resold to qualified institutional investors. At June 30, 1999,
the Fund held eight 144A securities with an aggregate value of $2,636,397
representing 8.6% of the Fund's net assets. These securities are valued as
set forth in Note 1A.
6. Concentration of Credit Risk -- The Fund's investment in high yield
securities, whether rated or unrated, may be considered speculative and
subject to greater market fluctuations and risk of loss of income and
principal than lower yielding, higher rated, fixed income securities. The
risk of loss due to default by the issuer may be significantly greater for
the holders of high yielding securities, because such securities are
generally unsecured and are often subordinated to other creditors of the
issuer.
Independent Auditors' Report
To the Shareholders and Board of Directors of
First Investors Special Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of First
Investors Special Bond Fund, Inc., including the portfolio of investments, as
of June 30, 1999 and the related statement of operations for the six months
then ended, the statement of changes in net assets for the six months ended
June 30, 1999 and the year ended December 31, 1998, and financial highlights
for each of the periods indicated thereon. 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.
Our procedures included confirmation of securities owned as of June 30, 1999,
by correspondence with the custodian. 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
First Investors Special Bond Fund, Inc. as of June 30, 1999, and the results
of its operations, changes in its net assets and financial highlights for
the periods indicated thereon, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
July 30, 1999
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS SPECIAL BOND FUND, INC.
The following table sets forth the operating performance data for a share of capital stock outstanding,
total return, ratios to average net assets and other supplemental data for each period indicated.
---------------------------------------------------------
Year Ended December 31
1/1/99 ---------------------------------------------------------
to 6/30/99 1998 1997 1996 1995 1994
--------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data
- --------------
Net Asset Value, Beginning of Period $11.86 $12.89 $12.75 $12.23 $11.03 $12.18
--------- --------- -------- -------- -------- --------
Income from Investment Operations
Net investment income 0.56 1.12 1.11 1.17 1.20 1.09
Net realized and unrealized
gain (loss) on investments (0.16) (.95) .23 .37 1.02 (1.22)
--------- --------- -------- -------- -------- --------
Total from Investment Operations .40 .17 1.34 1.54 2.22 (.13)
--------- --------- -------- -------- -------- --------
Less Distributions from
Net Investment Income .60 1.20 1.20 1.02 1.02 1.02
--------- --------- -------- -------- -------- --------
Net Asset Value, End of Period $11.66 $11.86 $12.89 $12.75 $12.23 $11.03
========= ========= ======== ======== ======== ========
Total Return(%)+ 3.39 1.29 10.94 13.10 20.76 (1.00)
- ----------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(in thousands) $30,562 $32,260 $36,082 $36,948 $38,037 $36,725
Ratio to Average Net Assets:(%)
Expenses .81(a) .89 .86 .86 .88 .87
Net investment income 9.24(a) 8.93 8.60 9.31 10.17 9.38
Portfolio Turnover Rate(%) 18 65 53 29 45 54
+ The effect of fees and charges incurred at the separate account level are not reflected in these performance figures.
(a) Annualized
See notes for financial statements
</TABLE>
FIRST INVESTORS SPECIAL BOND FUND, INC.
Directors
- ---------------------------------------
James J. Coy (Emeritus)
Glenn O. Head
Kathryn S. Head
Larry R. Lavoie
Rex R. Reed
Herbert Rubinstein
Nancy S. Schaenen
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- ---------------------------------------
Glenn O. Head
President
George V. Ganter
Vice President
Concetta Durso
Vice President and Secretary
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
Gregory R. Kingston
Assistant Treasurer
Mark S. Spencer
Assistant Treasurer
Shareholder Information
- ---------------------------------------
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by
calling 800-423-4026. The Fund will ensure that separate reports are sent to
any shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders,
and, if given to prospective shareholders, must be accompanied or preceded by
the Fund's prospectus.
