GENERAL MUNICIPAL BOND FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the General Municipal
Bond Fund, Inc. for its six-month reporting period ended August 31, 1997.
Your Fund produced a total return, including bond price changes and interest
income, of 3.53%* and an annualized tax-free distribution rate per share of
5.25%.** (Some income may be subject to the Federal Alternative Minimum Tax
for certain shareholders.)
ECONOMIC REVIEW
The performance of the economy over the reporting period has been
remarkable. Economic growth during this time has been robust and virtually
inflation-free. The revised Gross Domestic Product (GDP) data for the second
quarter revealed that the economy grew at a much stronger rate than
originally reported (3.6% versus 2.2%). A significant portion of this
unexpectedly strong growth came from a large buildup in inventories which
rose at the fastest pace since 1984. Such a rapid increase in inventories
could trigger a subsequent slowdown in the economy if companies cut production
in order to work off the unsold backlog. Yet, it is possible that the momentum
in the economy, combined with more vigorous consumer spending, could absorb
these inventories without any diminution in production.
Increasingly secure income and plentiful jobs have given workers a
growing sense that their jobs are safe which, in turn, has spurred measures
of consumer confidence to rise to all-time high levels. This confidence has
sparked a recovery in retail sales, which, after a second quarter slow-down,
have since revived. This resurgence in retail sales coincided with a boost in
overall consumer spending, a combination that could fuel additional economic
expansion in the third quarter. This could cause the Federal Reserve Board to
again raise interest rates, despite the lack of any evidence of inflationary
excess, since the Federal Reserve is concerned that continued strong growth
may raise the risk of inflation.
So far, even with a tightening labor market (the unemployment rate near
the end of the reporting period was 4.8%, a 23-year low), wage pressures have
been subdued, as has inflation. Inflation has fallen to its lowest level
since the early 1960s, with the Consumer Price Index running at annual rates
of about 2%. A broader measure of inflation, the Gross Domestic Product
Deflator, was even lower, rising at an annual pace of 1.5%. Farther up the
economic pipeline, producer prices fell for the seventh straight month in
July, the first time this has occurred in over 40 years. The Producer Price
Index is essentially unchanged from a year ago.
This inflationless prosperity has stayed the Fed from enacting further
increases in interest rates. The dramatic reduction in the budget deficit
(the result of a sharp growth in tax receipts from booming corporate profits
and rising individual incomes) has also made the Fed more willing to allow
economic events to play themselves out. The Federal Open Market Committee
(FOMC), the policy-making arm of the Federal Reserve, has raised interest
rates just once in more than two years. The last increase in short-term
interest rates came on March 25, 1997 when the FOMC increased the Federal
Funds rate by a modest one-quarter of a percentage point to 5.50%. (The
Federal Funds rate is the rate of interest that banks charge one another for
overnight loans.) Since March, the FOMC has voted three times to leave
interest rates unchanged.
There has been much talk that huge capital investments by businesses
combined with new technology have given the economy far greater capacity for
expansion than standard economic theories allow. This could be so. Yet, the
Fed is not an entity given to economic experimentation. The economy is in its
seventh year of expansion, labor markets are tightening, and thus wage
pressures could begin to build. We are mindful that the role of the Federal
Reserve is to anticipate the future consequences of current monetary policy.
Even with the lack of specific inflationary evidence, another modest,
cautionary increase in rates could occur, particularly if the economy
continues to grow faster than expected.
MARKET ENVIRONMENT
The returns generated from fixed income securities have paled in
comparison to the performance of stocks so far this year. Certainly, the
tax-exempt sector has lagged equities to a large degree. Looking forward, the
strong run-up in stock prices in recent months and the future uncertainties
for corporate earnings and the economy would favor, at the very least, some
slowing in the rise of the stock market. In fact, many investment strategists
are now shifting assets from stocks into bonds, weighing the risk/reward of
holding equities versus bonds in the months ahead. In addition, a lower
capital gains tax rate might encourage investors to take their stock market
gains. So municipal bonds may look better in the months ahead. Even today,
there are already indications that some of this asset allocation shift is
occurring. Year-end tax planning could cause this activity to accelerate.
Of course, long-term municipal bond performance is going to be influenced
more by economic and inflation data. The economy is apparently enjoying the
best of both worlds - solid growth with little inflation. It is unlikely that
this environment can continue indefinitely. While the fixed income markets
are not currently expecting a rate hike, we would argue that the Fed will not
hesitate to act should any price or wage pressures emerge.
With summer now coming to an end, we look for the supply of new municipal
bonds to increase. The lack of issuance over the past several weeks has lent
an additional level of support to the market. Traditionally, the fourth
quarter of the year is very active with new bond sales. It appears that this
pattern will hold true for 1997. We anticipate that this period will present
us with some attractive investment opportunities.
THE PORTFOLIO
Despite the fact that the bond markets staged an impressive rally this
past spring, we have elected to maintain our more defensive posture with the
portfolio. The recent upward revision to the second quarter's GDP estimate
reinforces our belief that the bond rally was attributable more to technical
and other outside factors than to an economic slowdown. As we stated in our
last letter to shareholders, we still believe that after such a long period
of uninterrupted expansion with no inflationary pressures, it is prudent to
heed the warning signals. We continue to maintain a slightly shorter than
neutral duration for the Fund. Our emphasis when adding new security holdings
is to add higher yielding bonds. Income should continue to account for a
meaningful percentage of performance in the months ahead.
Exercising a measure of conservatism in the near term risks losing some
price appreciation in the event that interest rates decline; however, should
rates remain at current levels or move higher, we have acted to minimize any
adverse impact. We trust that this approach meets with your investment
objectives.
A Statement of Investments and other financial data are contained in this
report for your review. We appreciate your investment in this Fund.
Very truly yours,
[RICHARD J. MOYNIHAN SIGNATURE LOGO]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
September 10, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid
from net investment income during the period (annualized), divided by the net
asset value per share at the end of the period, adjusted for any capital gain
distributions.
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments-93.2% Amount Value
------- -------
<S> <C> <C>
Alabama-2.4%
Alabama Industrial Development Authority, SWDR (Pine City Fiber Co.)
6.45%, 12/1/2023.......................................................... $ 12,000,000 $ 12,416,780
Courtland Industrial Development Board, SWDR
(Champion International Corp. Project) 6.375%, 3/1/2029................... 4,000,000 4,170,440
California-2.1%
California Pollution Control Financing Authority, PCR, Refunding
(San Diego Gas and Electric Co.) 5.90%, 6/1/2014 (Insured; MBIA).......... 9,715,000 10,542,524
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
Refunding 6%, 7/1/2026 (Insured; MBIA).................................... 3,900,000 4,089,579
Colorado-8.2%
Colorado Housing Finance Authority, Single Family Program 7.55%, 8/1/2023... 2,905,000 3,063,845
Denver City and County:
Airport System Revenue:
7.25%, 11/15/2007 (Insured; MBIA)....................................... 6,250,000 7,012,312
7.25%, 11/15/2012....................................................... 5,100,000 5,619,894
8.25%, 11/15/2012....................................................... 4,505,000 5,082,496
7.75%, 11/15/2021....................................................... 6,760,000 7,564,372
7.25%, 11/15/2023....................................................... 5,185,000 5,799,111
8%, 11/15/2025.......................................................... 5,250,000 5,864,040
Special Facilities Airport Revenue (United Airlines Project) 6.875%, 10/1/20 3211,235,000 12,004,822
Lakewood, MFHR, Mortgage 6.70%, 10/1/2036 (Insured; FHA).................... 5,000,000 5,308,350
District of Columbia-1.1%
District of Columbia, HR, Refunding (National Rehabilitation
Hospital-Medlantic)
7.10%, 11/1/2011 (Insured; MBIA) (Prerefunded 11/1/1999) (a).............. 7,000,000 7,549,920
Connecticut-1.6%
Connecticut Housing Finance Authority, Refunding (Housing Mortgage Finance
Program):
6%, 11/15/2027............................................................ 6,000,000 6,102,240
6% (Series G) 11/15/2027.................................................. 5,250,000 5,339,460
Florida-5.9%
Collier County School Board, COP 5%, 2/15/2016 (Insured; FSA)............... 7,550,000 7,225,199
Orange County, Tourist Development Tax Revenue, Refunding
5%, 10/1/2017 (Insured; MBIA)............................................. 11,000,000 10,516,000
Palm Beach County, Solid Waste IDR (Osceola Power Ltd. Partnership)
6.95%, 1/1/2022 (b)....................................................... 3,000,000 1,744,260
Pinellas County Housing Facilities Authority, SFMR (Multi-County Program)
6.70%, 2/1/2028 (Insured; FHA)............................................ 5,920,000 6,271,411
Polk County Industrial Development Authority, IDR 7.525%, 1/1/2015.......... 13,840,000 14,981,246
Georgia-3.4%
Fulton County School District, Refunding 6.375%, 5/1/2016................... 5,900,000 6,694,730
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Georgia (continued)
State of Georgia:
6.30%, 11/1/2009.......................................................... $ 4,780,000 $ 5,434,812
6.25%, 4/1/2011........................................................... 4,750,000 5,360,375
Macon-Bibb County Industrial Authority, Industrial Revenue (Weyerhaeuser Co.
Project)
9%, 10/1/2007............................................................. 1,000,000 1,327,480
Monroe County Development Authority, PCR, Refunding
(Oglethorpe Power Corp., Scherer Project) 6.75%, 1/1/2010................. 4,000,000 4,580,720
Idaho-.5%
Idaho Housing Agency, Housing Revenue (Blue Meadows Project)
7.20%, 7/1/2033 (Insured; FHA)............................................ 3,500,000 3,667,125
Illinois-7.0%
Chicago, Gas Supply Revenue (People's Gas Light and Coke Co. Project)
8.10%, 5/1/2020........................................................... 3,000,000 3,297,660
Chicago-O'Hare International Airport, Special Facility Revenue
(United Airlines Inc. Project):
8.40%, 5/1/2018......................................................... 2,750,000 2,969,587
8.50%, 5/1/2018......................................................... 2,500,000 2,746,650
8.85%, 5/1/2018......................................................... 6,200,000 7,032,412
Illinois Development Finance Authority, Health Hospital and Nursing Home
Revenue:
8.75%, 3/1/2010........................................................... 916,000 978,783
8.75%, 3/1/2010 (Prerefunded 3/1/1999) (a)................................ 1,144,000 1,240,943
Illinois Health Facilities Authority, Health Hospital and Nursing Home
Revenue:
(Beverly Farm Foundation) 9.125%, 12/15/2015 (Prerefunded 12/15/2000) (a). 2,000,000 2,338,700
(Residential Centers Inc.) 8.50%, 8/15/2016............................... 5,715,000 6,063,215
Robbins, RRR (Robbins Resource Recovery Partners) 8.375%, 10/15/2016........ 12,750,000 13,372,200
Village of Romeoville 8.375%, 1/1/2010...................................... 7,495,000 8,389,603
Indiana-3.8%
Fishers, Economic Development Revenue, First Mortgage (United Student Funds
Inc.)
8.375%, 9/1/2014.......................................................... 2,000,000 2,087,580
Indianapolis Airport Authority, Special Facility Revenue:
(Federal Express Corp. Project) 7.10%, 1/15/2017.......................... 4,900,000 5,465,411
(United Airlines Project) 6.50%, 11/15/2031............................... 17,750,000 18,765,478
Iowa-.6%
Iowa Finance Authority, Single Family Mortgage 6.10%, 1/1/2028.............. 4,000,000 4,101,680
Kentucky-4.4%
Kenton County Airport Board, Airport Revenue
(Special Facilities-Delta Airlines Project):
7.50%, 2/1/2012......................................................... 11,550,000 12,734,684
7.125%, 2/1/2021........................................................ 4,630,000 5,037,209
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Kentucky (continued)
City of Mount Sterling, Revenue (Kentucky League of Cities Funding Trust Lease
Program) 6.10%, 3/1/2018.................................................. $ 5,500,000 $ 5,839,735
Pendleton County, Multi-County Lease Revenue (Kentucky Association of
Counties
Leasing Trust Program) 6.40%, 3/1/2019.................................... 6,000,000 6,595,740
Louisiana-1.6%
Louisiana Public Facilities Authority, HR (Louisiana Association of
Independent
Colleges and Universities Facilities Loan Program) 7%, 12/1/2017.......... 6,195,000 6,694,813
Parish of Saint James, SWDR (Freeport-McMoRan Partnership Project)
7.70%, 10/1/2022.......................................................... 4,140,000 4,466,894
Maine-1.1%
Maine Finance Authority, SWDR (Boise Cascade Corp. Project) 7.90%, 6/1/2015. 6,900,000 7,466,145
Maryland-1.7%
Maryland Community Development Administration, Department of Housing and
Community Development (Single Family Program) 6.55%, 4/1/2026............. 9,970,000 10,475,978
Montgomery County Housing Opportunities Commission, MFMR 7.375%, 7/1/2032... 1,405,000 1,458,938
Massachusetts-1.3%
Massachusetts Health and Educational Facilities Authority, Revenue
(New England Deaconess Hospital Issue) 7.20%, 4/1/2022.................... 5,070,000 5,501,204
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt
Project)
10%, 3/1/2026............................................................. 3,000,000 3,352,500
Michigan-5.2%
Michigan Hospital Finance Authority, HR, Refunding (Genesys Health System):
8.10%, 10/1/2013.......................................................... 2,000,000 2,342,120
8.125%, 10/1/2021......................................................... 4,910,000 5,717,597
7.50%, 10/1/2027.......................................................... 8,000,000 8,922,240
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021........................................................... 7,000,000 7,407,400
Romulus Economic Development Corp., Economic Development Revenue, Refunding
(HIR Limited Partnership Project)
7%, 11/1/2015 (Surety Bond; ITT Lyndon Property Co. Inc.)................. 5,000,000 5,463,500
Wayne Charter County, Special Airport Facilities Revenue, Refunding
(Northwest Airlines Inc.) 6.75%, 12/1/2015................................ 5,625,000 6,097,556
Mississippi-.8%
Clairborne County, PCR, Refunding (System Energy Resources Inc.)
7.30%, 5/1/2025........................................................... 5,000,000 5,287,350
New Hampshire-1.9%
New Hampshire Higher Educational and Health Facilities Authority, Revenue
(Crotched Mountain Rehabilitation Center) 7.75%, 1/1/2020 (Prerefunded 1/1/2000) 2,200,000 2,411,728
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
New Hampshire (continued)
New Hampshire Housing Finance Authority, Single Family Residential Mortgage:
7.75%, 7/1/2023........................................................... $ 6,205,000 $ 6,630,911
7.70%, 7/1/2029........................................................... 3,990,000 4,201,390
New Jersey-1.3%
Camden County Improvement Authority, Health, Hospital and Nursing Home
Revenue
(Health Care Redevelopment Project-Cooper Health) 6%, 2/15/2027........... 9,000,000 9,082,170
New Mexico-1.0%
Farmington, PCR, Refunding (Public Service Company of San Juan Project)
6.375%, 4/1/2022.......................................................... 6,925,000 7,220,351
New York-8.2%
Metropolitan Transportation Authority, Commuter Facilities Revenue, Refunding
5%, 7/1/2017 (Insured; AMBAC)............................................. 8,755,000 8,331,170
City of New York, Refunding 6.50%, 3/15/2006................................ 6,000,000 6,588,840
New York State Dormitory Authority, Revenue:
(Mount Sinai School of Medicine) 5.15%, 7/1/2024 (Insured; MBIA).......... 4,000,000 3,891,960
(State University Educational Facilities) 7.50%, 5/15/2013................ 2,500,000 3,069,100
New York State Local Government Assistance Corp., Sales Tax Revenue,
Refunding 5.25%, 4/1/2016 (Insured; AMBAC)................................ 6,410,000 6,405,898
New York State Urban Development Corp., Lease Revenue, Refunding
(Correctional Capital Facilities) 5.25%, 1/1/2014 (Insured; FSA).......... 6,925,000 6,973,683
Port Authority of New York and New Jersey, Port, Airport and Marina Revenue
(JFK International Air Terminal) 6.25%, 12/1/2011 (Insured; MBIA)......... 10,000,000 11,164,800
Triborough Bridge and Tunnel Authority, Revenues, General Purpose, Refunding
5.50%, 1/1/2017 (Insured; MBIA)........................................... 10,000,000 10,300,600
North Carolina-3.3%
North Carolina Eastern Municipal Power Agency, Power System Revenue,
Refunding:
7%, 1/1/2008.............................................................. 5,000,000 5,660,950
6.125%, 1/1/2009.......................................................... 5,000,000 5,295,250
5.875% 1/1/2014........................................................... 11,610,000 11,805,977
North Dakota-1.2%
North Dakota Housing Finance Agency, SFMR:
7.30%, 7/1/2024........................................................... 3,875,000 4,088,551
7.75%, 7/1/2024 (Insured; MBIA)........................................... 4,200,000 4,477,326
Ohio-1.6%
Cleveland, Parking Facilities Improvement Revenue
8.10%, 9/15/2022 (Prerefunded 9/15/2002).................................. 2,300,000 2,705,720
Ohio State Water Development Authority, Pollution Control Facilities Revenue,
Refunding (Cleveland Electric) 6.10%, 8/1/2020............................ 8,500,000 8,553,125
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Oklahoma-4.4%
McGee Creek Authority, Water Revenue 6%, 1/1/2013 (Insured; MBIA)........... $ 6,025,000 $ 6,600,026
Trustees of the Tulsa Municipal Airport Trust, Revenue
(American Airlines Inc. Project):
7.375%, 12/1/2020 (Guaranteed; AMR Corp.)............................... 9,850,000 10,654,253
7.60%, 12/1/2030........................................................ 12,000,000 13,149,480
Pennsylvania-1.0%
Lehigh County General Purpose Authority, Revenue (Wiley House)
9.50%, 11/1/2016.......................................................... 3,500,000 3,829,875
Montgomery County Higher Education and Health Authority, Revenue
(Northwestern Corp.) 8.50%, 6/1/2016...................................... 3,000,000 3,229,770
Rhode Island-1.1%
Rhode Island Housing and Mortgage Finance Corp.:
(Homeownership E-1) 7.55%, 10/1/2022...................................... 4,305,000 4,568,122
(Rental Housing Program) 7.95%, 10/1/2020................................. 3,195,000 3,360,245
South Carolina-1.9%
Georgetown County, HR, Refunding (Georgetown County Memorial Hospital)
7.25%, 11/1/2017 (Insured; AMBAC)......................................... 4,000,000 4,307,000
Piedmont Municipal Power Agency, Electric Revenue, Refunding
6.55%, 1/1/2016........................................................... 9,100,000 9,130,303
Texas-7.4%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project) 7%, 12/1/2011 (Guaranteed; AMR Corp.).... 10,000,000 11,487,000
Bell County Health Facilities Development Corp., Revenue
(Southern Healthcare-Southview) 10.50%, 3/1/2020 (Prerefunded 3/1/2020) (a) 2,855,000 3,315,768
Dallas-Fort Worth International Airport Facility Improvement Corp., Revenue
(Delta Airlines Inc.):
7.625%, 11/1/2021....................................................... 2,200,000 2,430,890
7.125%, 11/1/2026....................................................... 5,000,000 5,341,850
Dickens County, Lease Obligation (Jail and Detention Facility Project)
8.875%, 4/1/2005.......................................................... 3,950,000 4,093,504
Gulf Coast Waste Disposal Authority, SWDR (Champion International Corp.
Project)
7.25%, 4/1/2017........................................................... 4,735,000 5,146,566
Houston, Airport System Revenue (Continental Airlines Project):
6.125% (Series B) 7/15/2027............................................... 1,000,000 1,016,580
6.125% (Series C) 6.125%, 7/15/2027....................................... 5,000,000 5,082,900
Montgomery County Health Facilities Development Corp., Hospital Mortgage
Revenue
(Woodlands Medical Center Project) 8.85%, 8/15/2014....................... 6,520,000 7,102,171
Texas Public Finance Authority, Building Revenue 5%, 8/1/2017 (Insured; AMBAC) 6,440,000 6,150,393
Utah-.8%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration Project) 9.25%, 7/1/2018 (b) 8,000,000 5,210,800
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1997 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
------- -------
Washington-4.7%
Chelan County Public Utility District Number 001, Consolidated Revenue
(Chelan Hydroelectric) 7.50%, 7/1/2011.................................... $ 5,655,000 $ 6,649,545
State of Washington 5%, 7/1/2017............................................ 14,000,000 13,257,020
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project Number 3) 7.125%, 7/1/2016 (Insured; MBIA)............... 10,425,000 12,575,469
Wyoming-.7%
Wyoming Community Development Authority, Housing Revenue 5%, 6/1/2027....... 5,000,000 5,163,750
-------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $611,432,884)....................................................... $646,757,828
========
Short-Term Municipal Investments-6.8%
Florida-1.4%
Martin County, PCR, Refunding, VRDN (Florida Power and Light Co. Project)
3.40% (c)................................................................. $ 9,600,000 $ 9,600,000
Massachusetts-2.7%
State of Massachusetts, Refunding, VRDN
3.40% (LOC; National Westminster Bank) (c,d).............................. 18,450,000 18,450,000
Mississippi-.4%
Perry County, PCR, Refunding (Leaf River Forest Project) VRDN
3.50% (LOC; Wachovia Bank) (c,d).......................................... 2,800,000 2,800,000
New York-1.4%
New York City, VRDN 3.50% (Insured; MBIA and SBPA; National Westminster Bank) (c) 2,300,000 2,300,000
New York City Housing Development Corp., Special Obligation Revenue , VRDN
(East 96th Street Project) 3.45% (LOC; Bank of Tokyo Mitsubishi) (c,d).... 7,400,000 7,400,000
North Carolina-.5%
Person County Industrial Facilities and Pollution Control Financing
Authority,
Solid Waste Disposal Revenue, VRDN (Carolina Power and Light)
3.95% (LOC; Fuji Bank Ltd.) (c,d)......................................... 3,700,000 3,700,000
Virginia-.4%
Peninsula Ports Authority, Industrial Revenue, Refunding, VRDN
(Shell Oil Co. Project) 3.50% (Guaranteed; Shell Oil Co.) (c)............. 3,000,000 3,000,000
-------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $47,250,000)........................................................ $ 47,250,000
=======
TOTAL INVESTMENTS-100.0%
(cost $658,682,884)....................................................... $694,007,828
=======
</TABLE>
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation MFMR Multi-Family Mortgage Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FSA Financial Security Assurance RRR Resources Recovery Revenue
HR Hospital Revenue SFMR Single-Family Mortgage Revenue
IDR Industrial Development Revenue SBPA Standby Bond Purchase Agreement
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
MBIA Municipal Bond Investors Assurance VRDN Variable Rate Demand Notes
Insurance Corporation
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
- ---- ---- --------- ----------
AAA Aaa AAA 22.4%
AA Aa AA 13.5
A A A 5.8
BBB Baa BBB 35.8
BB Ba BB 3.2
F1 Mig1 SP1 6.4
Not Rated (f) Not Rated (f) Not Rated (f) 12.9
----
100.0%
====
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Non-income accruing security.
(c) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(d) Secured by letters of credit.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
(g) At August 31, 1997, the Fund had $190,085,445 (27.0% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from transportation projects.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1997 (UNAUDITED)
Cost Value
-------- --------
<S> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $658,682,884 $694,007,828
Interest receivable........................ 11,035,193
Receivable for investment securities sold.. 2,159,208
Receivable for shares of Common Stock subscribed 100
Prepaid expenses........................... 39,962
--------
707,242,291
--------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 416,759
Due to Distributor......................... 39,895
Cash overdraft due to Custodian............ 1,618,926
Payable for shares of Common Stock redeemed 43,000
Accrued expenses........................... 91,445
--------
2,210,025
--------
NET ASSETS.................................................................. $705,032,266
========
REPRESENTED BY: Paid-in capital............................ $671,247,814
Accumulated undistributed investment income-net 203,097
Accumulated net realized gain (loss) on investments (1,743,589)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4(b) 35,324,944
--------
NET ASSETS.................................................................. $705,032,266
========
SHARES OUTSTANDING
(150 million shares of $.01 par value Common Stock authorized).............. 48,095,595
NET ASSET VALUE, offering and redemption price per share-Note 3(d).......... $14.66
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS SIX MONTHS ENDED AUGUST 31, 1997 (UNAUDITED)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $22,341,455
EXPENSES: Management fee-Note 3(a)................... $ 1,994,770
Shareholder servicing costs-Note 3(b)...... 997,206
Registration fees.......................... 56,392
Custodian fees............................. 34,011
Professional fees.......................... 32,760
Directors' fees and expenses-Note 3(c)..... 27,414
Prospectus and shareholders' reports-Note 3(b) 11,624
Loan commitment fees-Note 2................ 7,536
Miscellaneous.............................. 2,732
-------
Total Expenses....................... 3,164,445
-------
INVESTMENT INCOME-NET....................................................... 19,177,010
-------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 875,401
Net realized gain (loss) on financial futures (432,462)
-------
Net Realized Gain (Loss)............... 442,939
Net unrealized appreciation (depreciation) on investments 6,885,257
-------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 7,328,196
-------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $26,505,206
=======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
August 31, 1997 Year Ended
(Unaudited) February 28, 1997
--------- ----------
<S> <C> <C>
OPERATIONS:
Investment income-net.................................................. $ 19,177,010 $ 42,819,625
Net realized gain (loss) on investments................................ 442,939 (738,739)
Net unrealized appreciation (depreciation) on investments.............. 6,885,257 (7,523,574)
--------- ----------
Net Increase (Decrease) in Net Assets Resulting from Operations...... 26,505,206 34,557,312
--------- ----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net.................................................. (18,973,913) (42,819,625)
Net realized gain on investments....................................... (111,506) (14,473,553)
--------- ----------
Total Dividends...................................................... (19,085,419) (57,293,178)
--------- ----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 1,287,145,389 2,667,841,855
Dividends reinvested................................................... 12,775,648 40,371,255
Cost of shares redeemed................................................ (1,292,401,588) (2,862,540,890)
--------- ----------
Increase (Decrease) in Net Assets from Capital Stock Transactions.... 7,519,449 (154,327,780)
--------- ----------
Total Increase (Decrease) in Net Assets............................ 14,939,236 (177,063,646)
NET ASSETS:
Beginning of Period.................................................... 690,093,030 867,156,676
--------- ----------
End of Period.......................................................... $ 705,032,266 $ 690,093,030
========= ==========
Undistributed investment income-net...................................... $ 203,097 -----
--------- ----------
Shares Shares
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 89,082,763 183,985,040
Shares issued for dividends reinvested................................. 877,838 2,780,020
Shares redeemed........................................................ (89,343,521) (197,113,727)
--------- ---------
Net Increase (Decrease) in Shares Outstanding........................ 617,080 (10,348,667)
========= =========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Six Months Ended
August 31, 1997 Fiscal Year Ended February,
--------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $14.53 $15.00 $14.45 $15.46 $15.74 $14.60
------ ---- ---- ---- ---- ----
Investment Operations:
Investment income-net................. .39 .78 .82 .86 .90 .97
Net realized and unrealized gain (loss)
on investments...................... .12 (.21) .57 (.89) (.04) 1.29
------ ---- ---- ---- ---- ----
Total from Investment Operations...... .51 .57 1.39 (.03) .86 2.26
------ ---- ---- ---- ---- ----
Distributions:
Dividends from investment income-net.. (.38) (.78) (.82) (.86) (.91) (.97)
Dividends from net realized gain on investments .00(1) (.26) (.02) (.12) (.23) (.15)
Dividends in excess of net realized gain
on investments...................... - - - .00(1) - -
------ ---- ---- ---- ---- ----
Total Distributions................... (.38) (1.04) (.84) (.98) (1.14) (1.12)
------ ---- ---- ---- ---- ----
Net asset value, end of period........ $14.66 $14.53 $15.00 $14.45 $15.46 $15.74
====== ==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN................... 7.00%(2) 4.04% 9.79% .07% 5.50% 16.13%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .87%(2) .88% .88% .87% .82% .41%
Ratio of net investment income
to average net assets............... 5.29%(2) 5.40% 5.50% 5.99% 5.71% 6.46%
Decrease reflected in above expense ratios
due to undertakings by the Manager.. - - - - .03% .35%
Portfolio Turnover Rate............... 42.39%(3) 115.62% 114.78% 67.87% 59.19% 64.98%
Net Assets, end of period (000's Omitted) $705,032 $690,093 $867,157 $934,277 $1,240,815 $1,238,291
(1) Amount represents less than $.01 per share.
(2) Annualized.
(3) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
GENERAL MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
General Municipal Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to maximize current
income exempt from Federal income tax to the extent consistent with the
preservation of capital. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares, which are sold to the public without a
sales load.
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 options and
financial futures on municipal and U.S. treasury securities) 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities 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 not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $1,964,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 28, 1997. The
carryover does not include net realized securities losses from November 1,
1996 through February 28, 1997 which are treated, for Federal income tax
purposes, as arising in fiscal 1998. If not applied, the carryover expires in
fiscal 2005.
GENERAL MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. For the period ended August
31, 1997, the Fund did not borrow under the Facility.
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 .55 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, brokerage, interest on borrowings, commitment fees and
extraordinary expenses, exceed 1-1\2% of the value of the Fund's average daily
net assets, the Fund may deduct from payments to be made to the Manager, or
the Manager will bear such excess expense. There was no expense reimbursement
for the period ended August 31, 1997.
(b) Under a Service Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund (a) reimburses the Distributor for payments to
certain Service Agents (a securities dealer, financial institution or other
industry professional) for distributing the Fund's shares and servicing
shareholder accounts ("Servicing") and (b) pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and marketing
relating to the Fund and for Servicing, at an aggregate annual rate of .20 of
1% of the value of the Fund's average daily net assets. Both the Distributor
and Dreyfus may pay one or more Service Agents a fee in respect of the Fund's
shares owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
Both the Distributor and Dreyfus determine the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such payments are made.
The fees payable under the Plan are payable without regard to actual expenses
incurred. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the value of the Fund's average daily net assets for any full fiscal year.
During the period ended August 31, 1997, $730,660 was charged to the Fund
pursuant to the Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. Such
compensation amounted to $157,313 during the period ended August 31, 1997.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) Effective May 12, 1997, a .10% redemption fee is charged on certain
redemptions of Fund shares (including redemptions through use of the Fund
Exchanges service) where the shares being redeemed were issued subsequent to
a specified effective date and the redemption or exchange occurs less than
fifteen days following the date of issuance. During the period ended August
31, 1997, the redemption fees amounted to $170,688.
NOTE 4-SECURITIES TRANSACTIONS:
(a) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended August 31, 1997,
amounted to $279,420,332 and $313,529,274, respectively.
GENERAL MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 contract 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. At
August 31, 1997, there were no financial futures contracts outstanding.
(b) At August 31, 1997, accumulated net unrealized appreciation on
investments was $35,324,944, consisting of $40,139,343 gross unrealized
appreciation and $4,814,399 gross unrealized depreciation.
At August 31, 1997, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
Registration Mark
[Dreyfus Lion 'd' logo]
GENERAL MUNICIPAL
BOND FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 106SA978
Registration Mark
[Dreyfus Logo}
General Municipal
Bond Fund, Inc.
Semi-Annual
Report
August 31, 1997
