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Previous: IMPERIAL BANCORP, SC 13D/A, 1996-05-03 |
Next: INTER REGIONAL FINANCIAL GROUP INC, S-8, 1996-05-03 |
The Tax-Exempt Bond Fund of America
Semi-annual report
for the six months ended February 29, 1996
[The American Funds Group(R)]
The Tax-Exempt Bond Fund of America(R) seeks a high level of federally tax-free
current income, consistent with preservation of capital, through a diversified
portfolio of municipal bonds.
The fund invests primarily in state, city and public authority bonds that are
issued to provide funding for projects such as airport modernization, pollution
control, hospital expansion, electric power and highway improvements.
INVESTMENT HIGHLIGHTS THROUGH 2/29/96
6-month total return +5.2%
(income plus capital changes,
with dividends reinvested)
12-month total return +11.4%
(income plus capital changes,
with dividends reinvested)
Tax-free distribution rate
for February 5.0%
(reflecting maximum sales charge)
Taxable equivalent
distribution rate 8.3%
(for February, assuming
a 39.6% federal tax rate)
For current yield information, please call toll-free: 800/421-0180.
Fund results in this report were computed without a sales charge unless
otherwise indicated. Here are returns, with all distributions reinvested,
through March 31, 1996 (the most recent calendar quarter), assuming payment of
the 4.75% maximum sales charge at the beginning of the stated periods.
<TABLE>
<CAPTION>
<S> <C> <C>
Total Average Annual
Return Compound Return
10 Years +94.43% +6.87%
Five Years +39.60% +6.90%
One Year +3.43% -
</TABLE>
Sales charges are lower for accounts of $25,000 or more. The fund's 30-day
yield as of March 31, 1996, calculated in accordance with the Securities and
Exchange Commission formula, was 4.59%. The fund's distribution rate as of that
date was 5.04%. The SEC yield reflects income the fund expects to earn based on
its current portfolio of securities, while the distribution rate is based
solely on the fund's past dividends. Accordingly, the fund's SEC yield and
distribution rate may differ.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS. SHARE PRICE AND RETURN WILL
VARY, SO YOU MAY LOSE MONEY BY INVESTING IN THE FUND. THE SHORTER THE TIME
PERIOD OF YOUR INVESTMENT, THE GREATER THE POSSIBILITY OF LOSS. FUND SHARES ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED OR GUARANTEED BY, THE U.S.
GOVERNMENT, ANY FINANCIAL INSTITUTION, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON. Income may be subject to
state or local income taxes. Certain other income, as well as capital gain
distributions, may be taxable.
Fellow Shareholders:
The Tax-Exempt Bond Fund of America earned solid returns in the six months
ended February 29, 1996. Aided by falling interest rates and rising bond prices
for much of the period, the value of your holdings in the fund rose 5.2%
assuming you reinvested your dividends, as most shareholders do. During the
same period, the unmanaged Lehman Brothers Municipal Bond Index had a total
return of 4.9%.
Investors who took their dividends in cash earned an income return of 2.7%
(5.4% annualized) and also saw a 2.5% increase in the value of their holdings.
Shareholders received regular dividends totaling 32 cents a share and a capital
gain distribution of 8.5 cents during the six months.
The fund began its fiscal year on September 1, 1995, in the midst of one of the
best years in bond market history. Economic growth was slow and inflation
subdued. Interest rates, after a slight rise in midsummer, had resumed their
downward trend. Additionally, talks continued among the nation's political
leaders about reducing government spending. This boosted investors' confidence.
By the end of 1995, we believed a more conservative approach was appropriate
and moved the fund's portfolio to a less aggressive stance by shortening the
fund's average maturity. At almost the same time, a sense of uncertainty began
to spread in the market. Impasses between President Clinton and congressional
leaders over how to balance the budget led to two government shutdowns. Then
the East Coast was hit hard by a paralyzing blizzard. The government shutdowns
and the fierce storm interrupted the flow of important government statistics,
including figures used to judge the economy's strength. Without knowing the
pace of economic expansion, it was difficult for investors to estimate the
future course of inflation and interest rates.
When the flow of economic statistics resumed, the interruptions caused by the
shutdowns and the blizzard made the figures difficult to interpret. More recent
indicators have pointed to an economic rebound, but it is unclear how
long-lived or robust the recovery will be.
Sentiment in the market about the future course of interest rates is mixed. We
believe interest rates may stay in a narrow range if inflation remains in
check.
This is also a presidential election year, a situation that always introduces
elements of uncertainty. Congress has not adopted a final budget for fiscal
1996 and questions remain whether political considerations will propel the
Clinton administration and Republican leaders to reach a balanced budget
agreement before the November election.
The outlook for other issues that could affect tax-free funds, such as a flat
tax, is still uncertain. In its most radical form, a flat tax would erode the
advantage of tax-free bonds because all interest and dividends would be
untaxed. Although the flat tax is garnering much attention, such a fundamental
shift in tax policy would face many obstacles, and we do not foresee action on
this front in the near future. We will continue to watch developments closely.
Since its inception in October 1979, The Tax-Exempt Bond Fund of America has
seen many political developments, changes to the tax code, and economic cycles.
Through it all, the fund has relied on extensive research and a philosophy of
investing for the long term to produce solid returns. Over its lifetime, your
fund has earned an average annual return of 8.8% with all distributions
reinvested. Most of this, of course, was free from taxes. We will do everything
we can to continue to provide you with a rewarding investment experience.
We look forward to reporting to you again in six months.
Cordially,
Paul G. Haaga, Jr.
Chairman of the Board
Abner D. Goldstine
President
April 19, 1996
Why Tax-Free Investing Is Worthwhile
The table below is based on the current federal tax rates. To use this table,
find your estimated taxable income to determine your federal tax rate. Then
look at the right-hand column to see what you would have had to earn from a
taxable investment to equal the fund's 5.0% tax-exempt distribution rate in
February.
Because of tax increases in recent years, many high-income investors are
finding that their returns on taxable fixed-income issues have to be even
higher to match those currently offered by tax-exempt municipals. For instance,
a couple with a taxable income of $150,000 faces a federal tax rate of 36.0%.
In this bracket, the fund's current 5.0% distribution rate would be equivalent
to a return on a taxable fixed-income investment of 7.8%. Investors in the
highest bracket (39.6%) would need a taxable distribution rate of 8.3% to equal
the fund's tax-exempt distribution rate.
FEDERAL INCOME TAX RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Your Taxable Income Current Federal The fund's 5.0%
Tax Rate /1/ tax-exempt distribution
rate in February/2/is
equivalent to a taxable
distribution rate of:
Single Joint
$0 - 24,000 $0 - 40,100 15.0% 5.9%
24,001 - 58,150 40,101 - 96,900 28.0 6.9
58,151 - 121,300 96,901 - 147, 31.0 7.2
700
121,301 - 147,701 - 36.0 7.8
263,750 263,750
Over 263,750 Over 263,750 39.6 8.3
</TABLE>
/1/The federal rates are marginal rates. They do not include an adjustment for
the loss of personal exemptions and the phase-out of itemized deductions that
are applicable to certain taxable income levels.
/2/The fund's distribution rate in the table is based on offering price and
therefore reflects the effects of the maximum sales charge on the initial
investment. It is not a projection of future results. Such results will reflect
interest rate levels, changes in the value of portfolio securities, the effects
of portfolio transactions, fund expenses and applicable sales charges.
<PAGE>
THE TAX-EXEMPT BOND FUND OF AMERICA
Investment Portfolio, February 29, 1996
Unaudited
<TABLE>
<CAPTION>
<S> <C> <C>
Geographic Breakdown
New York -- 11.81%
California -- 11.47%
Washington -- 7.09%
Illinois -- 6.78%
Michigan -- 6.42%
Pennsylvania -- 5.50%
Other States -- 46.57%
Cash & Short-Term Securities -- 4.36%
Aaa/AAA -- 30%
Aa/AA -- 19%
A/A -- 17%
Baa/BBB -- 27%
Below investment grade -- 7%
Principal Market
Amount Value
(000) (000)
TAX-EXEMPT SECURITIES MATURING IN MORE THAN
ONE YEAR - 95.64%
ALABAMA - 0.43%
Daughters of Charity, National Health System,
5.25% 2015 $4,000 $3,855
The Industrial Development Board of the City of
Mobile, Solid Waste Revenue Refunding Bonds (Mobile
Energy Services Company, L.L.C. Projects), Series
1995, 6.95% 2020 2,500 2,657
ALASKA - 3.42%
Housing Finance Corporation:
Insured Mortgage Program Refunding Bonds, 1990
First Series, 7.80% 2030 5,900 6,266
Collateralized Bonds (Veterans Mortgage
Program), Series 1992A-1, 6.75% 2032 4,600 4,746
Municipality of Anchorage:
1995 General Obligation Refunding General Purpose
Bonds, Series B, FGIC Insured, 6.00% 2012 2,895 3,132
Municipal light & Power, Senior Lien Refunding Electric
Revenue Bonds, MBIA Insured, Series 1996:
6.50% 2013 1,235 1,413
6.50% 2014 5,000 5,710
City of Valdez, Marine Terminal Revenue Refunding
Bonds (BP Pipelines (Alaska) Inc. Project),
Series 1993 B:
5.50% 2028 17,000 16,185
5.65% 2028 14,600 14,152
ARIZONA - 0.21%
State Transportation Board, Subordinated Highway
Revenue Bonds, Series 1992B, 6.50% 2008
(Prerefunded 2002) 1,850 2,090
Salt River Project Agricultural Improvement and
Power District, Electric System Revenue Bonds,
Refunding Series A, 7.875% 2028 (Prerefunded 1998) 1,000 1,092
CALIFORNIA - 11.47%
General Obligation Bonds, 6.75% 2002 5,000 5,624
Various Purpose General Obligation Bonds,
6.75% 2006 1,000 1,150
Housing Finance Agency Home Mortgage Revenue, Series A,
MBIA Insured:
5.20% 2005* 2,000 2,011
5.30% 2006* 3,105 3,111
Health Facilities Financing Authority:
Downey Community Hospital, Series 1993:
5.00% 2001 1,000 1,011
5.75% 2015 4,990 4,835
Kaiser Permanente Medical Care Program, Semiannual
Tender Revenue Bonds, 1985 Tender Bonds:
5.55% 2025 5,000 4,821
5.60% 2033 7,000 6,730
Public Works Board, Lease Revenue Bonds:
(California Community Colleges), 1994 Series B
(Various Community College Projects):
6.75% 2005 2,505 2,831
7.00% 2007 1,315 1,487
Department of Corrections California State
Prison-Lassen County (Susanville), 1993 Series D,
5.20% 2007 3,760 3,747
Statewide Communities Development Authority:
Children's Hospital of Los Angeles, MBIA Insured,
6.00% 2008 3,415 3,753
St. Joseph Health System Obligated Group,
Certificates of Participation:
5.50% 2014 4,000 3,916
5.50% 2023 3,700 3,556
Castaic Lake Water Agency Financing Corporation,
Refunding Revenue Certificates of Participation
(Water System Improvement Projects), Series 1994A,
MBIA Insured:
7.50% 2003 2,000 2,369
7.25% 2010 1,245 1,507
7.00% 2011 2,400 2,836
Central Valley Financing Authority, Cogeneration
Project Revenue Bonds (Carson Ice-Gen Project),
Series 1993, 6.10% 2013 1,000 1,004
Culver City Redevelopment Financing Authority, 1993
Tax Allocation Refunding Revenue Bonds, AMBAC
Insured, 5.00% 2023 3,635 3,337
Foothill/Eastern Transportation Corridor Agency
Toll Road Revenue Bonds, Series 1995A (Fixed
Rate), Senior Lien Current Interest Bonds,
5.00% 2035 2,000 1,660
Long Beach Aquarium of the Pacific, Revenue Bonds
(Aquarium of the Pacific Project), 1995 Series A:
6.10% 2010 4,000 3,994
6.125% 2015 6,965 6,856
6.125% 2023 2,000 1,948
City of Los Angeles:
State Building Authority Lease Revenue Refunding Bonds,
Department of General Services Lease), 1993 Series A:
5.375% 2006 3,000 3,077
5.50% 2007 7,295 7,472
Convention and Exhibition Center Authority,
Certificates of Participation:
7.375% 2018 (Prerefunded 1999) 1,000 1,123
7.00% 2020 (Prerefunded 1999) 2,750 3,055
Department of Water and Power, Electric Revenue
Bonds, 7.10% 2031 (Subject to Crossover
Prerefunding 2001) 3,000 3,412
Regional Airports Improvement Corporation,
Facilities Lease Refunding Revenue Bonds,
Issue of 1992, United Air Lines, Inc. (Los
Angeles International Airport), 6.875% 2012 2,000 2,095
Wastewater System Revenue Bonds, Refunding Series 1993 D,
FGIC Insured, 5.20% 2021 2,500 2,350
County of Los Angeles, Certificates of
Participation (Marina Del Rey), Series A:
6.25% 2003 5,500 5,610
6.50% 2008 4,750 4,871
The Metropolitan Water District of Southern
California, Waterworks General Obligation Refunding
Bonds, 1993 Series A1, 5.50% 2010 3,000 3,072
Northern California Power Agency, Geothermal
Project #3, Special Revenue Bonds, 1993 Refunding
Series A, 5.60% 2006 3,000 3,154
Orange County Local Transportation Authority,
(Orange County, California), Measure M Sales Tax
Revenue Bonds (Limited Tax Bonds):
Second Senior Bonds, Series 1992, FGIC Insured,
5.90% 2006 1,200 1,295
First Senior Bonds, MBIA Insured, 6.00% 2009 2,000 2,157
County of Orange (Aliso Viejo), Special Tax Bonds
of Community Facilities District No. 88-1,
Series A of 1992:
7.15% 2006 (Prerefunded 2002) 2,000 2,349
7.35% 2018 (Prerefunded 2002) 10,000 11,856
South Orange County, Public Financing Authority
Special Tax Revenue Bonds, 1994 Series B (Junior
Lien Bonds):
6.65% 2003 1,000 1,015
6.75% 2004 2,385 2,418
Pleasanton Joint Powers Financing Authority
Reassessment Revenue Bonds, 1993 Series A:
5.40% 1999 2,075 2,125
5.70% 2001 500 512
Riverside County Transportation Commission, Sales
Tax Revenue Bonds (Limited Tax Bonds), 1991
Series A, 6.50% 2009 (Prerefunded 2001) 3,600 4,035
Sacramento City Financing Authority, 1991 Revenue
Bonds, 6.80% 2020 (Prerefunded 2001) 5,000 5,737
Sacramento Cogeneration Authority, Cogeneration
Project Revenue Bonds, (Procter & Gamble Project),
1995 Series, 6.375% 2010 1,000 1,040
Sacramento, California Power Authority, Cogeneration
Project Revenue Bonds, 1995 Series:
6.00% 2002 2,000 2,085
6.00% 2003 2,200 2,290
Public Facilities Financing Authority of The City of
San Diego, Sewer Revenue Bonds, Series 1993, AMBAC
Insured, 5.00% 2013 1,105 1,043
San Francisco Bay Area Rapid Transit District,
Sales Tax Revenue Refunding Bonds, Series 1990,
AMBAC Insured, 6.75% 2009 3,250 3,560
Redevelopment Agency of the City and County of
San Francisco Refunding Lease Revenue Bonds,
Series 1991 (George R. Moscone Convention
Center), 5.50% 2018 6,000 5,672
San Joaquin Hills Transportation Corridor Agency
(Orange County), Senior Lien Toll Road Revenue
Bonds, 0% 2000 4,525 3,727
The Regents of the University of California
(Various University of California Projects),1993:
Series A, 5.50% 2021 2,000 1,917
Series B, 5.375% 2009 2,000 2,018
The Regents of the University of California Revenue
Bonds, Series A, MBIA Insured, 6.90% 2015
(Prerefunded 1997) 2,750 2,940
COLORADO - 3.61%
Housing And Finance Authority, Multi-Family Housing Insured
Mortgage Revenue Bonds, 1982 Series A, 9.00% 2025 1,780 1,787
Student Obligation Bond Authority, Student Loan Revenue
Bonds, 1994 Series L, 6.00% 2001 1,065 1,135
Arapahoe County, Capital Improvement Trust Fund
Highway Revenue Bonds (E-470 Project):
6.90% 2015 5,750 6,336
6.95% 2020 20,500 22,585
City and County of Denver, Airport System Revenue
Bonds, Series 1992A, 7.25% 2025 19,800 22,687
DISTRICT OF COLUMBIA - 2.84%
General Obligation Bonds:
Series 1990 A, AMBAC Insured, 7.25% 2005
(Prerefunded 2000) 2,500 2,842
Series 1993 A, 5.75% 2003 3,000 2,979
Series 1992 B, MBIA Insured:
6.125% 2003 1,750 1,910
6.30% 2010 2,900 3,080
AMBAC Insured, 5.20% 2004 1,500 1,548
Series 1993 A, AMBAC Insured, 5.875% 2005 7,000 7,513
Series B-2, FSA Insured, 5.50% 2007 8,725 8,990
Series B-1, AMBAC Insured, 5.50% 2009 8,500 8,668
Hospital Revenue Refunding Bonds
(Medlantic Healthcare Group, Inc. Issue):
Series 1992 A, 7.00% 2005 2,000 2,107
Series 1993 A, MBIA Insured, 5.25% 2012 2,000 1,917
Redevelopment Land Agency, Sports Arena Special Tax Revenue
Bonds, Series 1996, 5.625% 2010 1,350 1,311
FLORIDA - 0.85%
Broward County, Resource Recovery Revenue Bonds,
Series 1984:
North Project, 7.95% 2008 4,670 5,241
South Project, 7.95% 2008 1,200 1,347
The Crossing at Fleming Island Community Development
District (Clay County), Special Assessment Bonds,
Series 1995, 8.25% 2016 1,125 1,197
Mid-Bay Bridge Authority Revenue Refunding Bonds,
Series 1993A, 8.50% 2022 (Subject to crossover refunding) 4,000 4,607
Series 1993D, 6.125% 2022 500 495
GEORGIA - 1.42%
General Obligation Bonds, 1995 D, 6.75% 2011 5,410 6,355
City of Atlanta, Airport Facilities Revenue
Refunding Bonds, Series 1994A, AMBAC Insured,
6.50% 2009 1,000 1,146
City of Atlanta, Special Purpose Facilities
Revenue Refunding Bonds (Delta Air Lines, Inc.
Project), Series 1989 A, 7.50% 2019 4,500 4,784
Fulco Hospital Authority Revenue Anticipation
Certificates (St. Joseph's Hospital of Atlanta,
Inc.), Series 1994, 4.80% 2001 2,305 2,331
Fulco Hospital Authority Revenue Anticipation
Certificates (Georgia Baptist Health Care System
Project), Series 1992:
A 6.40% 2007 1,000 1,029
A 6.375% 2022 1,595 1,574
B 6.375% 2022 910 898
Development Authority of Fulton County, Special
Facilities Revenue Bonds (Delta Air Lines, Inc.
Project), Series 1992, 6.95% 2012 3,115 3,300
HAWAII - 0.07%
State General Obligation Refunding Bonds of 1993,
Series C, 5.125% 2009 1,000 1,003
ILLINOIS - 6.78%
Civic Center Bonds (Special State Obligation Bonds),
Series 1991, AMBAC Insured, 6.25% 2020 3,000 3,283
Build Illinois Bonds (Sales Tax Revenue Bonds),
Series O, 6.00% 2002 1,000 1,088
Health Facilities Authority, Fairview,
Revenue Refunding Bonds, Series 1995A, 7.40% 2023 1,000 979
Health Facilities Authority:
Revenue Refunding Bonds, (The Carle Foundation), FGIC
Insured, Series 1989 A, 6.00% 2015 1,500 1,535
Revenue Bonds, Series 1992 (Edward Hospital
Association Project), 7.00% 2022 1,000 1,060
Refunding Bonds, Series 1993 A (Edward Hospital
Project), 6.00% 2019 1,435 1,416
Revenue and Revenue Refunding Bonds
(Evangelical Hospitals Corporation), Series C,
6.25% 2022 4,000 4,006
Revenue Bonds, Series 1994 A (Northwestern Memorial
Hospital), 6.00% 2024 2,000 2,019
Revenue Bonds, Series 1993 (OSF Healthcare System),
5.75% 2007 5,760 5,774
City of Alton, Health Facilities Revenue Bonds
(Barnes-Jewish, Inc./Christian Health Services,
Alton Memorial Hospital), Series 1993 B,
MBIA Insured, 5.50% 2021 5,000 4,831
City of Chicago:
General Obligation Bonds, Project and Refunding,
Series 1995 A-1, AMBAC Insured, 5.125% 2025 2,445 2,281
Chicago-O'Hare International Airport:
General Airport Second Lien Revenue Refunding Bonds,
1993 Series C, MBIA Insured, 5.00% 2018 10,000 9,195
Special Facilities Revenue Bonds for United
Airlines:
1984 Series C, 8.20% 2018 1,230 1,350
1988 Series B, 8.85% 2018 1,940 2,233
Special Facilities Revenue Refunding Bonds
(Delta Airlines, Inc. Terminal), 6.45% 2018 4,435 4,530
Special Facilities Revenue Refunding Bonds,
Series 1994 (American Airlines, Inc. Project),
8.20% 2024 2,750 3,229
Metropolitan Pier and Exposition Authority,
McCormick Place Expansion Project Bonds,
Current Interest Bonds, Series 1992 A,
6.50% 2027 4,000 4,174
Metropolitan Water Reclamation District of Greater
Chicago, Series B:
Capital Improvement Bonds, 5.25% 2004 5,000 5,237
Refunding Bonds, 5.30% 2005 5,325 5,579
Skyway Toll Bridge Refunding Revenue Bonds,
Series 1994:
6.50% 2010 15,250 15,792
6.75% 2014 6,500 6,786
Water Revenue Bonds, Refunding
Series 1993, FGIC Insured, 6.50% 2011 4,345 4,888
Educational Facilities Authority Revenue
Bonds, Wesleyan University, Series 1993,
5.625% 2018 1,490 1,442
Hoffman Estates Park District, Cook County,
General Obligation Refunding Bonds, FGIC Insured,
Series 1996, 6.00% 2005* 2,360 2,568
Regional Transportation Authority, Cook, DuPage,
Kane, Lake, McHenry and Will Counties,
General Obligation Bonds:
Series 1994D, FGIC Insured, 7.75% 2019 4,500 5,837
Series 1990A, AMBAC Insured, 7.20% 2020 1,000 1,229
INDIANA - 2.78%
Educational Facilities Authority, Educational
Facilities Revenue Bonds (University Evansville
Project), Series 1996, 5.25% 2005 1,000 968
Housing Finance Authority, Single Family Mortgage
Refunding Revenue Bonds, 1992 Series A, 6.75% 2010 1,660 1,745
State Office Building Commission, Correctional
Facilities Program Revenue Bonds, Series 1995B,
AMBAC Insured, 6.25% 2012 8,490 9,408
Transportation Finance Authority, Airport
Facilities Lease Revenue Bonds, Series A:
6.50% 2007 7,000 7,534
6.75% 2011 2,400 2,569
City of East Chicago, Pollution Control Refunding
Revenue Bonds (Inland Steel Company Project No. 11),
Series 1994, 7.125% 2007 3,000 3,147
Hospital Authority of the City of Fort Wayne,
Revenue Bonds (Parkview Memorial Hospital, Inc.
Project), Series 1992:
6.375% 2013 6,000 6,173
6.40% 2022 8,000 8,200
Indianapolis Local Public Improvement Bond Bank,
Series 1992 D Bonds, 6.60% 2007 1,960 2,190
KENTUCKY - 0.28%
Higher Education Student Loan Corp., Insured
Student Loan Revenue Bonds, 1994 Series B,
6.20% 1999 1,140 1,205
Turnpike Authority, Resource Recovery Road Revenue
Refunding Bonds, 1981 Series A, 13.125% 2009
(Prerefunded 1997) 390 438
Kenton County Airport Board, Special Facilities
Revenue Bonds (Delta Air Lines, Inc. Project):
7.80% 2015 1,000 1,079
1992 Series B, 7.25% 2022 1,350 1,455
LOUISIANA - 4.15%
Offshore Terminal Authority, Deepwater Port
Refunding Revenue Bonds (LOOP INC. Project):
First Stage Series B:
5.40% 1998 3,150 3,244
6.25% 2004 9,000 9,843
First Stage Series E, 7.45% 2004 1,000 1,109
Lake Charles Harbor and Terminal District, Port
Facilities Revenue Refunding Bonds (Trunkline
LNG Company Project), Series 1992, 7.75% 2022 28,000 31,731
Orleans Levee District, Levee Improvement Fixed Rate
Refunding Bonds, Series 1987 A, 8.25% 2014 10,420 10,583
Parish of St. Charles, Adjustable/Fixed Rate
Pollution Control Revenue Bonds (Louisiana
Power & Light Company Project),
Series 1984, 8.25% 2014 5,490 6,129
MAINE - 0.25%
State Housing Authority, Mortgage Purchase
Bonds,1994 Series C-1, 5.90% 2015 3,635 3,707
MARYLAND - 1.77%
Community Development Administration, Department
of Housing and Community Development, Single
Family Program Bonds:
1994 First Series, 5.80% 2009 3,000 3,098
1990 First Series, 7.60% 2017 5,920 6,208
Health and Higher Educational Facilities Authority:
Revenue Bonds, Howard County General Hospital
Issue, Series 1993:
5.50% 2013 2,300 2,148
5.50% 2021 6,225 5,635
Project and Refunding Revenue Bonds, Peninsula
Regional Medical Center Issue, Series 1993,
5.25% 2012 1,000 955
Calvert County, Maryland Economic Development
Revenue Bonds (Asbury-Solomons Island Facility),
Series 1995, 8.625% 2024 2,500 2,709
John Hopkins Hospital Issue, Revenue Refunding
Bonds, Series 1993, 5.00% 2023 1,000 925
Prince George's County, Hospital Revenue Bonds:
5.30% 2024 3,305 3,048
Dimensions Health Corporation Issue, Series
1992, 7.25% 2017 (Prerefunded 2002) 750 881
University of Maryland System, Auxiliary Facility and
Tuition Revenue Bonds, 1992 Series A, 6.30% 2009 1,000 1,081
MASSACHUSETTS - 2.39%
General Obligation Bonds Consolidated Loan of
1989, Series D, MBIA Insured, 7.00% 2009
(Prerefunded 1999) 1,000 1,116
Health and Educational Facilities Authority,
Revenue Bonds, Brigham and Women's Hospital Issue,
Series D, 6.75% 2024 7,000 7,386
Massachusetts Bay Transportation Authority, General
Transportation System Bonds, 1994 Series A
Refunding Bonds, 7.00% 2007 10,110 11,829
City of Boston, Revenue Refunding Bonds,
Boston City Hospital (FHA-Insured Mortgate),
7.625% 2021 980 1,121
Water Resources Authority:
General Revenue Bonds, 1990 Series A, 7.50% 2009
(Prerefunded 2000) 9,500 10,850
General Revenue Refunding Bonds, 1993 Series B,
5.25% 2009 2,500 2,513
The New England Loan Marketing Corp.,
Student Loan Refunding Bonds, 1993 Series G,
5.20% 2002 1,200 1,221
MICHIGAN - 6.42%
Job Development Authority, Pollution
Control Revenue Bonds (Chrysler Corporation
Project), Series 1984, 5.70% 1999 7,000 7,245
State Housing Development Authority, Rental Housing
Revenue Bonds, 1994 Series A:
6.20% 2003 600 627
AMBAC Insured, 6.40% 2005 1,850 1,981
State Hospital Finance Authority, Hospital Revenue
Refunding Bonds:
(McLaren Obligated Group), Series 1993A, 5.375% 2013 2,985 2,860
Genesys Health System Obligated Group, Series 1995A:
7.10% 2002 1,955 2,098
7.20% 2003 1,000 1,080
8.00% 2005 8,880 9,923
8.10% 2013 5,000 5,533
8.125% 2021 4,500 4,987
7.50% 2027 2,925 3,083
Sinai Hospital of Greater Detroit, Series 1995:
6.625% 2016 5,500 5,578
6.70% 2026 1,930 1,953
Daughters of Charity, National Health System, 5.50% 2005 1,750 1,840
City of Detroit, General Obligation Revenue Bonds
(Unlimited Tax):
Series 1995-A 5.60% 2001 4,250 4,297
Series 1995-B:
6.25% 2001 6,585 6,890
6.75% 2003 2,000 2,149
7.00% 2004 2,500 2,728
6.25% 2005 3,625 3,767
6.25% 2008 1,730 1,774
6.25% 2009 1,195 1,218
6.25% 2010 1,250 1,270
City of Royal Oak Hospital Financing Authority,
Hospital Revenue Refunding Bonds (William Beaumont
Hospital), Series 1993 G, 5.25% 2019 8,000 7,480
Charter County of Wayne, Special Airport Facilities
Revenue Refunding Bonds, (Northwest Airlines, Inc.,
Facilities), Series 1995, 6.75% 2015 16,155 16,499
MINNESOTA - 0.61%
Housing Finance Agency, Housing Development
Bonds, 1991 Series A Bonds, 6.85% 2007 1,035 1,108
Housing and Redevelopment Authority of the City
of Saint Paul, Hospital Facility Revenue
Bonds (Healtheast Project), Series 1987-B:
9.75% 2017 (Subject to Crossover Prerefunding 1997) 2,735 3,045
9.75% 2017 (Subject to Crossover Prerefunding 1997) 4,525 5,038
MISSISSIPPI - 1.94%
Claiborne County Adjustable/Fixed Rate Pollution
Control Revenue Bonds (Middle South Energy, Inc.
Project):
Series A, 9.50% 2013 1,550 1,760
Series B, 8.25% 2014 4,750 5,219
Series C, 9.875% 2014 19,535 22,350
NEVADA - 0.10%
City of Henderson, Local Improvement
District No. T-10 (Seven Hills) Limited Obligation
Improvement Bonds, 7.50% 2015 1,500 1,488
NEW HAMPSHIRE - 0.25%
Business Finance Authority, Pollution Control
Refunding Revenue Bonds (The United Illuminating
Company Project), Series A 1993, 5.875% 2033 2,985 2,821
Higher Educational and Health
Facilities Authority Revenue Bonds, Dartmouth
College Issue, Series 1993, 5.375% 2023 1,000 953
NEW JERSEY - 0.86%
Economic Development Authority, First
Mortgage Revenue Fixed Rate Bonds (Fellowship
Village Project), Series 1995A, 9.25% 2025 7,000 7,590
Housing and Mortgage Finance Agency,
Section 8 Bonds, 1991 Series A:
6.80% 2005 2,570 2,775
6.85% 2006 2,500 2,693
NEW MEXICO - 0.24%
Mortgage Finance Authority, Single Family Mortgage
Purchase Refunding Senior Bonds, 1992 Series
A-1, 6.85% 2010 3,455 3,623
NEW YORK - 11.81%
Dormitory Authority:
State University Educational Facilities Revenue
Refunding Bonds:
Series 1990 B, 7.50% 2011 1,720 2,052
Series 1990 A, 7.50% 2013 3,500 4,222
Series 1990 B, 7.00% 2016 1,000 1,089
City University System, Consolidated Second
General Resolution Revenue Bonds:
Series 1990 F, FGIC Insured, 7.50% 2020
(Prerefunded 2000) 7,100 8,175
Series G, 5.00% 2002 2,000 2,014
Environmental Facilities Corporation, State Water
Pollution Control Revolving Fund Revenue Bonds
(New York City Municipal Water Finance Authority
Project):
Series 1994 A, 5.75% 2009 8,380 8,980
Series 1991 E, 6.875% 2010 1,500 1,659
Series 1990 A, 7.50% 2012 500 559
Local Government Assistance Corporation:
Series 1991 A Bonds, 7.00% 2016 (Prerefunded 2001) 7,000 8,010
Series 1991 B Bonds, 7.50% 2020 (Prerefunded 2001) 6,925 8,081
Series 1991 C Bonds, 0% 2005 5,000 3,203
Series 1991 D Bonds, 7.00% 2011 2,000 2,252
Series 1991 D Bonds, 7.00% 2018 (Prerefunded 2002) 8,650 10,033
Series 1991 D Bonds, 6.75% 2021 (Prerefunded 2002) 1,350 1,548
Series 1992 C Bonds, 5.50% 2022 1,000 957
State Medical Care Facilities Finance Agency,
Mental Health Services Facilities Improvement
Revenue Bonds:
1991 Series A, 7.50% 2021 (Prerefunded 2001) 3,645 4,241
1993 Series F, Refunding, 4.60% 1999 1,000 999
1994 Series A, 5.10% 2003 1,720 1,708
Series D, 5.25% 2023 1,000 909
Metropolitan Transit Authority, Transit Facilities
Service Contract Bonds, Series O and P,
5.375% 2002 4,000 4,115
Urban Development Corporation, Correctional
Capital Facilities Revenue Bonds:
Series 1993 A, Refunding Series, 5.30% 2005 2,800 2,775
Series 2, 6.50% 2021 (Prerefunded 2001) 3,700 4,072
Series 6A, 6.00% 2003 3,750 3,923
Battery Park City Authority, Revenue Refunding
Bonds, Series 1993 A:
5.25% 2017 7,500 7,007
4.75% 2019 18,000 15,571
City of New York, General Obligation Bonds:
Fiscal 1995 Series F:
6.375% 2006 3,000 3,142
6.60% 2010 2,000 2,116
6.625% 2025 1,500 1,579
Fiscal 1992 Series H, 6.875% 2002 1,900 2,043
Fiscal 1993 Series A, 6.25% 2003 4,200 4,392
Fiscal 1991 Series B, 8.25% 2006 1,500 1,828
Fiscal 1995 Series E, MBIA Insured, 6.20% 2008 3,000 3,355
Fiscal 1996 Series D, 5.40% 2003 3,300 3,281
Fiscal 1996 Series E, 6.50%:
2004 8,000 8,457
2006 3,000 3,039
Fiscal 1996 Series G, 5.90% 2005 3,000 3,155
Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
Fiscal 1989 Series B, FGIC Insured,
7.625% 2017 (Prerefunded 1998) 3,000 3,299
Fiscal 1991 Series C, 7.75% 2020 (Prerefunded 2001) 5,000 5,900
Fiscal 1994 Series B, 4.875% 2002 3,000 3,061
Fiscal 1994 Series B, 5.50% 2019 2,000 1,935
Transit Authority, Transit
Facilities Revenue Bonds (Livingston Plaza
Project), Series 1990, FSA Insured, 7.50% 2020
(Prerefunded 2000) 4,000 4,553
Triborough Bridge and Tunnel Authority, General
Purpose and Revenue Bonds:
Series K, 8.25% 2017 (Prerefunded 1997) 1,000 1,061
Series S, 7.00% 2021 (Prerefunded 2001) 11,400 12,934
Series Y, 6.00% 2012 1,000 1,080
NORTH CAROLINA - 1.69%
Eastern Municipal Power Agency, Power System Revenue
Bonds:
Refunding Series 1993 C, 5.50% 2007 5,250 5,279
1993 B, 6.00% 2006 3,000 3,157
1993 B, 7.00% 2008 10,045 11,324
1993 B, 7.25% 2007 5,000 5,747
OHIO - 0.12%
County of Franklin, Hospital Facilities Revenue
Refunding and Improvement Bonds (Doctors Hospital
Project), 5.60% 2006 1,750 1,852
OKLAHOMA - 0.95%
Grand River Dam Authority, Revenue Bonds, Refunding
Series 1995, AMBAC Insured, 6.25% 2011 2,500 2,801
Industries Authority, Health System Revenue
Bonds, Baptist Medicine Center of Oklahoma,
Series 1995 C, AMBAC Insured, 6.375% 2009 2,500 2,735
State Industrial Authority, Health System
Revenue Refunding Bonds, (Obligated Group consisting
of INTEGRIS Baptist Medical Center, Inc., INTEGRIS
South Oklahoma City Hospital Corp. and INTEGRIS
Rural Health, Inc.), AMBAC Insured, Series 1995D:
6.00% 2009 1,250 1,350
6.00% 2010 1,300 1,394
Trustees of the Tulsa Municipal Airport Trust Revenue
Bonds, (AMR Corp.), Series 1995, 6.25% 2020 6,000 6,000
PENNSYLVANIA - 5.50%
Convention Center Authority Refunding
Revenue Bonds, 1994 Series A, 6.25% 2004 10,000 10,504
Higher Educational Facilities Authority, Revenue
Bonds (Thomas Jefferson University), 1992
Series A, 6.625% 2009 1,250 1,374
Housing Finance Authority, Single Family Mortgage
Revenue Bonds:
Series 1990-29A, 7.375% 2016 3,575 3,836
Series 1992-33, 6.85% 2009 1,000 1,073
Industrial Development Authority,
Economic Development Revenue Bonds, Series 1994,
AMBAC Insured, 7.00% 2007 1,750 2,093
Hospitals and Higher Education Facilities
Authority of Philadelphia:
Hospital Revenue Bonds (The Children's Hospital of
Philadelphia Project):
Series A of 1992, 6.50% 2009 (Prerefunded 2002) 4,500 5,075
Series A of 1992, 6.50% 2021 (Prerefunded 2002) 3,000 3,384
Series A of 1993, 5.00% 2021 13,155 11,769
Frankford Hospital, Series A:
6.00% 2014 1,805 1,807
6.00% 2023 4,000 3,939
Hospital Authority of Philadelphia Hospital
Revenue Bonds (Temple University Hospital):
Series of 1993 A, 6.50% 2008 12,500 13,530
Series of 1983, 6.625% 2023 15,385 15,997
City of Pottsville Hospital Authority, Hospital
Revenue Bonds (The Pottsville Hospital and Warne
Clinic), Series of 1994, 7.25% 2024 8,500 8,673
RHODE ISLAND - 2.92%
Convention Center Authority Refunding Revenue
Bonds, MBIA Insured:
1993 Series B, 5.00% 2008 2,790 2,809
1993 Series A, 5.00% 2010 3,190 3,163
1993 Series B, 5.25% 2015 5,660 5,451
1993 Series B, 5.00% 2020 5,000 4,546
Depositors Economic Protection Corporation, Special
Obligation Bonds:
1993 Series A, MBIA Insured:
5.75% 2012 4,850 5,112
6.25% 2016 4,500 4,914
1992 Series A, FSA Insured, 6.625% 2019
(Prerefunded 2002) 1,000 1,142
1993 Series A, 5.75% 2021 6,895 6,826
1993 Series A, 6.375% 2022 7,000 7,525
Housing and Mortgage Finance Corporation,
Homeownership Opportunity Bonds, Series 3-A,
7.80% 2010 2,500 2,665
SOUTH DAKOTA - 0.20%
Housing Development Authority,
Homeownership Mortgage Bonds, 1995 Series A and B,
6.00% 2023 2,945 2,990
TENNESSEE - 2.32%
Health and Educational Facilities Board of the
Metropolitan Government of Nashville and Davidson
County, 9.25% 2024 6,600 7,040
Memphis-Shelby County Airport Authority, Special
Facilities Revenue Bonds, Refunding Series 1992
(Federal Express Corporation), 6.75% 2012 26,375 28,017
TEXAS - 4.33%
National Research Laboratory Commission General
Obligation Bonds, Series 1990 (Superconducting
Super Collider Project), 7.125% 2020
(Prerefunded 2000) 14,450 16,301
Dallas-Fort Worth International Airport
Facility Improvement Corp.:
American Airlines, Inc., Revenue Bonds, Series 1992,
6.00% 2014 13,625 13,376
Delta Air Lines, Inc., Revenue Refunding Bonds,
Series 1993, 6.25% 2013 2,400 2,416
Fort Worth Independent School District (Tarrant
County), Unlimited Tax Refunding Bonds,
Series 1993, 4.90% 2002 2,875 2,959
Harris County Health Facilities Development
Corporation, SCH Health Care System Revenue Bonds
(Sisters of Charity of the Incarnate Word,
Houston), Series 1991A, 7.10% 2021 8,000 8,769
Harris County Toll Road, Unlimited Tax and
Subordinate Lien Revenue Bonds, Series 1984,
10.375% 2014 (Prerefunded 1998) 1,000 1,122
Health Facilities Revenue Refunding Bonds, (Sisters
of Mercy Health System, St. Louis, Inc.),
Series 1993, AMBAC Insured, 5.20% 2005 3,350 3,441
North Central Texas Health Facilities Development
Corporation, Hospital Revenue Bonds
(Presbyterian Healthcare System Project),
Series 1993, 5.90% 2021 3,000 3,018
Northside Independent School District (Bexar,
Medina, and Bandera Counties), Unlimited
Tax School Building Bonds, Series 1991, 6.375% 2008
(Prerefunded 2001) 3,500 3,829
Tomball Hospital Authority, Hospital Revenue
Refunding Bonds, Series 1993, Tomball Regional
Hospital, 6.125% 2023 7,250 6,882
Village at Western Oaks Municipal Utility District,
City of Austin, Contract Revenue Refunding
Bonds, Series 1991, FGIC Insured, 6.50% 2009 3,000 3,279
UTAH - 2.35%
Housing Finance Agency, Single Family Mortgage
Bonds, 1995 Issue E (Federally Insured or
Guaranteed Mortgage Loans), 5.50% 2024 2,000 2,023
Intermountain Power Agency:
Special Obligation Refunding Bonds,
5th Crossover Series:
FGIC Insured, 7.00% 2015 7,000 7,391
7.20% 2019 1,000 1,055
Power Supply Revenue, Refunding Bonds,
1996 Series B, MBIA Insured:
6.25% 2006* 4,000 4,442
6.50% 2009* 2,000 2,233
1996 Series D, 5.00% 2021 5,875 5,365
Salt Lake City, Hospital Revenue Bonds, Series
1992 (IHC Hospitals, Inc.):
5.50% 2021 8,100 7,828
6.25% 2023 5,000 5,171
VERMONT - 0.08%
Housing Finance Agency, Single Family
Housing Bonds, Series 4, 5.75% 2012 1,250 1,265
VIRGINIA - 1.43%
Industrial Development Authority of Fairfax
County, Hospital Revenue Refunding Bonds (Inova
Health System Hospitals Project), Series 1993A:
4.80% 2005 1,850 1,859
5.00% 2010 3,450 3,304
5.00% 2011 1,300 1,230
5.00% 2023 2,200 1,982
Industrial Development Authority of the County of
Hanover, Hospital Revenue Bonds, (Memorial Regional
Medical Center Project at Hanover Medical Park),
Series 1995, MBIA Insured:
6.00% 2009 1,550 1,679
6.50% 2009 1,000 1,131
6.375% 2018 3,000 3,351
Industrial Development Authority of the City of
Norfolk, Hospital Revenue Bonds (Sentara
Hospitals-Norfolk Project), Series 1991,
6.50% 2013 2,500 2,696
Commonwealth Transportation Board, Commonwealth of
Virginia Transportation Contract Revenue Bonds,
Series 1988 (Route 28 Project), 7.80% 2016
(Prerefunded 1998) 3,500 3,839
Upper Occoquan Sewage Authority, Regional
Sewerage System Revenue Bonds, Series of 1995 A,
MBIA Insured, 5.15% 2020 500 480
WASHINGTON - 7.09%
General Obligation, Series B, 5.50% 2010 2,000 2,067
Public Power Supply System:
Nuclear Project No. 1 Refunding Revenue Bonds:
Series 1989 A, 7.50% 2015 (Prerefunded 1999) 1,820 2,048
Series 1989 A, 6.00% 2017 7,700 7,714
Nuclear Project No. 2 Refunding Revenue Bonds:
Series 1990 A, 7.375% 2012 (Prerefunded 2000) 17,335 19,830
Series 1990 C, 7.30% 2000 1,800 2,001
Series 1992 A, 5.90% 2004 3,850 4,111
Series 1993 A, 5.10% 2000 4,600 4,720
Series 1994 A, 6.00% 2007 20,000 21,285
Series 1994 A, 5.25% 2008 5,000 4,933
Nuclear Project No. 3 Refunding Revenue Bonds:
BIG Insured, 7.25% 2016 (Prerefunded 1999) 5,000 5,587
Series 1989 B, 7.25% 2015 (Prerefunded 2000) 5,450 6,143
Series 1989 B, FGIC Insured, 7.00% 2005 14,400 15,879
Series 1989 B, 5.375% 2015 5,000 4,675
Series 1989 B, 7.125% 2016 5,250 6,112
WISCONSIN - 1.19%
Health and Educational Facilities Authority,
Revenue Bonds:
Children's Hospital Project, Series 1993, FGIC Insured,
5.50% 2006 2,000 2,112
SSM Health Care Projects, Series 1995A,
MBIA Insured, 5.75% 2012 1,500 1,527
Housing and Economic Development Authority, Housing
Revenue Bonds, 6.40% 2003 3,480 3,649
Pollution Control and Industrial Development Revenue
Bonds (General Motors Corporation Projects), City
of Janesville, Series 1984, 5.55% 2009 3,000 2,972
City of Superior, Limited Obligation
Refunding Revenue Bonds (Midwest Energy Resources
Company Project), Series E-1991 (Collateralized),
FGIC Insured, 6.90% 2021 6,000 7,203
Public Power Incorporated System,
Power Supply System Revenue Bonds, Series
1990 A, AMBAC Insured, 7.40% 2020
(Prerefunded 2000) 500 572
WYOMING - 0.11%
Community Development Authority, Single Family
Mortgage Bonds, 1989 Series A, 7.90% 2017 635 677
Student Loan Corp., Student Loan Revenue
Refunding Bonds, Series 1991, 6.25% 1999 950 1,005
GUAM - 0.41%
General Obligation Bonds:
1995 Series A, 5.625% 2002 3,000 3,086
1995 Series A, 5.70% 2003 3,000 3,088
-----------
1,443,990
-----------
TAX-EXEMPT SECURITIES MATURING IN
ONE YEAR OR LESS - 4.41%
County of Alameda, California, 1995-96 Tax and
Revenue Anticipation Notes, 4.75% 1996 10,800 10,856
State of California, 1994 Revenue Anticipation
Warrants, Series C, FGIC Insured, 5.75% 1996 16,800 16,854
The Turnpike Authority of Kentucky, Resource
Recovery Road Revenue Refunding Bonds, 1981
Series A, 13.125% 2009 (Prerefunded 1996) 5 5
County of Los Angeles, California, 1995-96 Tax and
Revenue Anticipation Notes, Series A, 4.50% 1996 2,295 2,303
State of Michigan, Full Faith and Credit General
Obligation Notes, 4.00% 1996 5,600 5,627
State of Montana, Tax and Revenue Anticipation
Notes, Series 1995, 4.50% 1996 1,400 1,405
Commonwealth of Pennsylvania, Tax Anticipation
Notes, First Series of 1995-1996, 4.50% 1996 6,300 6,322
City of Richmond, Virginia, General Obligation
Revenue Anticipation Notes, Series 1996A, 4.00% 1996 5,300 5,310
State of Texas, Tax and Revenue Anticipation
Notes, Series 1995 A, 4.75% 1996 9,310 9,377
State of Wisconsin Operating Notes of 1995, 4.50%
1996 8,485 8,511
-----------
66,570
-----------
TOTAL TAX-EXEMPT SECURITIES (cost: $1,418,492,000) 1,510,560
Excess of payables over cash and receivables 680
-----------
NET ASSETS $1,509,880
===========
*Represents a when-issued security.
</TABLE>
See Notes to Financial Statements
<PAGE>
The Tax-Exempt Bond Fund of America
Financial Statements
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
at February 29, 1996 (dollars in thousands) (Unaudited)
Assets:
Tax-exempt securities (cost: $1,418,492) $1,510,560
Cash 5
Receivables for--
Sales of investments $ 3,450
Sales of fund's shares 1,805
Accrued interest 23,638 28,893
---------- -----------
1,539,458
Liabilities:
Payables for--
Purchases of investments 23,835
Repurchases of fund's shares 2,199
Dividends payable 2,661
Management services 448
Accrued expenses 435 29,578
---------- -----------
Net Assets at February 29, 1996--
Equivalent to $12.15 per share on
124,294,011 shares of $1 par value
capital stock outstanding (authorized
capital stock--200,000,000 shares) $1,509,880
===========
STATEMENT OF OPERATIONS
For the six months ended February 29, 1996 (Unaudited)
(dollars in thousands)
Investment Income:
Income:
Interest on tax-exempt securities $ 44,368
Expenses:
Management services fee $ 2,712
Distribution expenses 1,779
Transfer agent fee 254
Reports to shareholders 21
Registration statement and prospectus 19
Postage, stationery and supplies 5
Directors' fees 7
Auditing and legal fees 36
Custodian fee 30 4,863
---------- -----------
Net investment income 39,505
-----------
Realized Gain and Unrealized
Appreciation on Investments:
Net realized gain 10,563
Net unrealized appreciation on investments:
Beginning of period 66,846
End of period 92,063
----------
Net increase in unrealized appreciation
on investments 25,217
-----------
Net realized gain and increase in
unrealized appreciation on investments 35,780
-----------
Net Increase in Net Assets Resulting
from Operations $75,285
===========
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
(dollars in thousands)
Six Months Year
Ended Ended
February 29, August 31,
1996* 1995
----------- -----------
Operations:
Net investment income $ 39,505 $ 79,709
Net realized gain on investments 10,563 8,891
Net increase in unrealized appreciation
on investments 25,217 22,271
----------- -----------
Net increase in net assets
resulting from operations 75,285 110,871
----------- -----------
Dividends and Distributions Paid to
Shareholders:
Dividends from net investment income (39,476) (79,742)
Distributions from net realized gain on
investments (10,310) -
----------- -----------
Total dividends and distributions (49,786) (79,742)
----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
13,233,132 and 24,743,163
shares, respectively 160,476 285,197
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
2,676,264 and 4,184,414 shares,
respectively 32,494 48,311
Cost of shares repurchased:
10,913,687 and 28,504,965
shares, respectively (132,569) (325,755)
----------- -----------
Net increase in net assets
resulting from capital share
transactions 60,401 7,753
----------- -----------
Total Increase in Net Assets 85,900 38,882
Net Assets:
Beginning of period 1,423,980 1,385,098
----------- -----------
End of period $1,509,880 $1,423,980
=========== ===========
</TABLE>
*Unaudited
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. The Tax-Exempt Bond Fund of America, Inc. (the "fund") is registered under
the Investment Company Act of 1940 as an open-end, diversified management
investment company. The fund seeks a high level of federally tax-free current
income, consistent with preservation of capital, through a diversified
portfolio of municipal bonds. The following paragraphs summarize the
significant accounting policies consistently followed by the fund in the
preparation of its financial statements:
Tax-exempt securities with original or remaining maturities in excess of 60
days are valued at prices obtained from a national municipal bond pricing
service. The pricing service takes into account various factors such as
quality, yield and maturity of tax-exempt securities comparable to those held
by the fund, as well as actual bid and asked prices on a particular day. Other
securities with original or remaining maturities in excess of 60 days,
including securities for which pricing service values are not available, are
valued at the mean of their quoted bid and asked prices. However, in
circumstances where the investment adviser deems it appropriate to do so,
securities will be valued at the mean of their representative quoted bid and
asked prices, or, if such prices are not available, at the mean of such prices
for securities of comparable maturity, quality and type. All securities with 60
days or less to maturity are valued at amortized cost, which approximates
market value. Securities for which market quotations are not readily available
are valued at fair value as determined in good faith by the Valuation Committee
of the Board of Directors.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. In the event
the fund purchases securities on a delayed delivery or "when-issued" basis, it
will segregate with its custodian liquid assets in an amount sufficient to meet
its payment obligations in these transactions. Realized gains and losses from
securities transactions are reported on an identified cost basis. Interest
income is reported on the accrual basis. Premiums and original issue discounts
on securities purchased are amortized over the life of the respective
securities. Amortization of market discounts on securities is recognized upon
disposition, subject to applicable tax requirements. Dividends to shareholders
are declared daily after the determination of the fund's net investment income
and paid to shareholders monthly.
Pursuant to the custodian agreement, the fund receives credits against its
custodian fee for imputed interest on certain balances with the custodian bank.
The custodian fee of $30,000 includes $12,000 that was paid by these credits
rather than in cash.
2. It is the fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required.
As of February 29, 1996, net unrealized appreciation on investments for
book and federal income tax purposes aggregated $92,068,000, of which
$93,980,000 related to appreciated securities and $1,912,000 related to
depreciated securities. There was no difference between book and tax realized
gains on securities transactions for the six months ended February 29, 1996.
The cost of portfolio securities for book and federal income tax purposes was
$1,418,492,000 at February 29, 1996.
3. The fee of $2,712,000,000 for management services was paid pursuant to an
agreement with Capital Research and Management Company (CRMC), with which
certain officers and Directors of the fund are affiliated. The Investment
Advisory and Service Agreement provides for monthly fees, accrued daily, based
on an annual rate of 0.30% of the first $60 million of average net assets;
0.21% of such assets in excess of $60 million but not exceeding $1 billion;
0.18% of such assets in excess of $1 billion but not exceeding $3 billion; and
0.16% of such assets in excess of $3 billion; plus 3.00% on the first
$3,333,333 of the fund's monthly gross investment income, 2.50% of such income
in excess of $3,333,333 but not exceeding $8,333,333; and 2.25% of such income
in excess of $8,333,333.
Pursuant to a Plan of Distribution, the fund may expend up to 0.25% of its
average net assets annually for any activities primarily intended to result in
sales of fund shares, provided the categories of expenses for which
reimbursement is made are approved by the fund's Board of Directors. Fund
expenses under the Plan include payments to dealers to compensate them for
their selling and servicing efforts. During the six months ended February 29,
1996, distribution expenses under the Plan were $1,779,000. As of February 29,
1996, accrued and unpaid distribution expenses were $693,000.
American Funds Service Company (AFS), the transfer agent for the fund, was
paid a fee of $254,000. American Funds Distributors, Inc. (AFD), the principal
underwriter of the fund's shares, received $404,000 (after allowances to
dealers) as its portion of the sales charges paid by purchasers of the fund's
shares. Such sales charges are not an expense of the fund and, hence, are not
reflected in the accompanying statement of operations.
Directors of the fund who are unaffiliated with CRMC may elect to defer part
or all of the fees earned for services as members of the Board. Amounts
deferred are not funded and are general unsecured liabilities of the fund. As
of February 29, 1996, aggregate amounts deferred and earnings thereon were
$30,000.
CRMC is owned by The Capital Group Companies, Inc. AFS and AFD are both
wholly owned subsidiaries of CRMC. Certain Directors and officers of the fund
are or may be considered to be affiliated with CRMC, AFS, and AFD. No such
persons received any remuneration directly from the fund.
4. As of February 29, 1996, accumulated undistributed net realized gain on
investments was $7,692,000 and additional paid-in capital was $1,285,834,000.
The fund made purchases and sales of investment securities of $257,745,000
and $213,219,000, respectively, during the six months ended February 29, 1996.
<PAGE>
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Year Ended August 31
Six Months
Ended
February 29,
1996/1/ 1995 1994 1993 1992 1991
Net Asset Value, Beginning
of Period $11.94 $11.65 $12.43 $11.78 $11.30 $10.78
------- ------- ------- ------- ------- -------
Income from Investment
Operations:
Net investment income .32 .68 .67 .68 .70 .71
Net realized and
unrealized gain
(loss) on investments .30 .29 (.69) .73 .48 .52
------- ------- ------- ------- ------- -------
Total income from
investment operations .62 .97 (.02) 1.41 1.18 1.23
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from net
investment income (.32) (.68) (.68) (.68) (.70) (.71)
Distributions from net
realized gains (.09) - (.08) (.08) - -
------- ------- ------- ------- ------- -------
Total distributions (.41) (.68) (.76) (.76) (.70) (.71)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $12.15 $11.94 $11.65 $12.43 $11.78 $11.30
======= ======= ======= ======= ======= =======
Total Return/2/ 5.23%/3/ 8.70% (.14)% 12.42% 10.80% 11.70%
Ratios/Supplemental Data:
Net assets, end of period
(in millions) $1,510 $1,424 $1,385 $1,327 $921 $712
Ratio of expenses to average
net assets .33%/3/ .66% .69% .71% .71% .72%
Ratio of net income to
average net assets 2.67%/3/ 5.87% 5.53% 5.62% 6.04% 6.33%
Portfolio turnover rate 15.07%/3/ 49.28% 22.40% 15.55% 17.22% 24.73%
</TABLE>
/1/Unaudited
/2/Calculated without
deducting a sales charge. The
maximum sales charge is 4.75%
of the fund's offering price.
/3/Based on operations for the
period shown and, accordingly,
not representative of a full
year's operations.
<PAGE>
The Tax-Exempt Bond Fund of America
Board of Directors
H. Frederick Christie
Rolling Hills Estates, California
Private Investor; Former President and Chief Executive Officer, The Mission
Group; Former President, Southern California Edison Company
Diane C. Creel
Long Beach, California
Chairwoman, Chief Executive Officer and President, The Earth Technology
Corporation
(environmental engineering)
Martin Fenton, Jr.
San Diego, California
Chairman of the Board,
Senior Resource Group, Inc.
(senior living centers management)
Leonard R. Fuller
Marina del Rey, California
President, Fuller & Company, Inc.
(financial management consulting)
Abner D. Goldstine
Los Angeles, California
President of the Fund
Senior Vice President and Director,
Capital Research and Management Company
Paul G. Haaga, Jr.
Los Angeles, California
Chairman of the Board of the fund
Senior Vice President And Director,
Capital Research And Management Company
Herbert Hoover III
Pasadena, California
Private investor
Richard G. Newman
Los Angeles, California
Chairman of the Board,
President and Chief Executive Officer,
AECOM Technology Corporation
(architectural engineering)
Peter C. Valli
Long Beach, California
Chairman of the Board,
BW/IP International, Inc.
(industrial manufacturing)
OTHER OFFICERS
Neil L. Langberg
Los Angeles, California
SENIOR VICE PRESIDENT OF THE FUND
Vice President - Investment Management Group,
Capital Research and Management Company
Michael J. Downer
Los Angeles, California
VICE PRESIDENT OF THE FUND
Senior Vice President -
Fund Business Management Group,
Capital Research and Management Company
Mary C. Hall
Brea, California
VICE PRESIDENT OF THE FUND
Senior Vice President -
Fund Business Management Group,
Capital Research And Management Company
Mark R. MacDonald
Los Angeles, California
VICE PRESIDENT OF THE FUND
Vice President - Investment Management Group,
Capital Research and Management Company
Julie F. Williams
Los Angeles, California
SECRETARY OF THE FUND
Vice President -
Fund Business Management Group,
Capital Research And Management Company
Anthony W. Hynes, Jr.
Brea, California
TREASURER OF THE FUND
Vice President -
Fund Business Management Group,
Capital Research And Management Company
Kimberly S. Verdick
Los Angeles, California
ASSISTANT SECRETARY OF THE FUND
Assistant Vice President -
Fund Business Management Group,
Capital Research And Management Company
OFFICES OF THE FUND
AND OF THE INVESTMENT
ADVISER, CAPITAL RESEARCH
AND MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92621-5804
TRANSFER AGENT FOR SHAREHOLDER ACCOUNTS
American Funds Service Company
P.O. Box 2205
Brea, California 92622-2205
P.O. Box 659522
San Antonio, Texas 78265-9522
P.O. Box 6007
Indianapolis, Indiana 46206-6007
P.O. Box 2280
Norfolk, Virginia 23501-2280
CUSTODIAN OF ASSETS
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081-0001
COUNSEL
Morrison & Foerster LLP
345 California Street
San Francisco, California 94104-2675
PRINCIPAL UNDERWRITER
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, California 90071-1462
FOR INFORMATION ABOUT YOUR ACCOUNT OR ANY OF THE FUND'S SERVICES, PLEASE
CONTACT YOUR SECURITIES DEALER OR FINANCIAL PLANNER, OR CALL THE FUND'S
TRANSFER AGENT, TOLL-FREE, AT 800/421-0180.
This report is for the information of shareholders of The Tax-Exempt Bond Fund
of America, but it may also be used as sales literature when preceded or
accompanied by the current prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the fund. If used as
sales material after June 30, 1996, this report must be accompanied by an
American Funds Group Statistical Update for the most recently completed
calendar quarter.
Litho in USA BDA/ALI/2912
Lit. No. TEBF-013-0496
[The American Funds Group(R)]
Printed on recycled paper
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