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PROSPECTUS SEPTEMBER 1, 1995
AS REVISED, AUGUST 1, 1996
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
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DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC. (THE "FUND") IS AN
OPEN-END, DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MUNICIPAL
BOND FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH THE MAXIMUM
AMOUNT OF CURRENT INCOME EXEMPT FROM FEDERAL INCOME TAX AS IS CONSISTENT WITH
THE PRESERVATION OF CAPITAL. THE DOLLAR-WEIGHTED AVERAGE MATURITY OF THE
FUND'S PORTFOLIO RANGES BETWEEN THREE AND TEN YEARS.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED SEPTEMBER 1, 1995,
WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF
CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST
TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION AND IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND
EXCHANGE COMMISSION MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS
THE STATEMENT OF ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE,
AND OTHER INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE WILL FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES...................... 3
CONDENSED FINANCIAL INFORMATION..................... 3
DESCRIPTION OF THE FUND............................. 4
MANAGEMENT OF THE FUND.............................. 7
HOW TO BUY SHARES................................... 8
SHAREHOLDER SERVICES................................ 10
HOW TO REDEEM SHARES................................ 13
SHAREHOLDER SERVICES PLAN........................... 15
DIVIDENDS, DISTRIBUTIONS AND TAXES.................. 15
PERFORMANCE INFORMATION............................. 17
GENERAL INFORMATION................................. 18
APPENDIX............................................ 19
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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<TABLE>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C> <C> <C> <C> <C>
Management Fees .......................................................................... .59%
Other Expenses............................................................................ .14%
Total Fund Operating Expenses ............................................................ .73%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses
on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period: $7 $23 $41 $91
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund, the payment of which will reduce
investors' annual return. The expenses noted above, without reduction
pursuant to a settlement of litigation, would be: Management Fees_.60% and
Total Fund Operating Expenses_.74%. You can purchase Fund shares without
charge directly from the Fund's distributor; you may be charged a nominal fee
if you effect transactions in Fund shares through a securities dealer, bank
or other financial institution. See "Management of the Fund" and "Shareholder
Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
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 year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
FISCAL YEAR ENDED MAY 31,
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1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.... $12.93 $13.47 $13.46 $13.36 $13.48 $13.39 $13.67 $13.96 $14.31 $13.84
------ ------ ------ ------ ------ ------ ------ ------ ----- ------
INVESTMENT OPERATIONS:
Investment income-net........ 1.03 .99 .97 .97 .94 .92 .89 .81 .76 .75
Net realized and unrealized gain (loss)
on investments.................. .54 (.01) (.10) .12 (.09) .28 .36 .66 (.31) .24
------ ------ ------ ------ ------ ------ ------ ------ ----- ------
TOTAL FROM INVESTMENT OPERATIONS... 1.57 .98 .87 1.09 .85 1.20 1.25 1.47 .45 .99
------ ------ ------ ------ ------ ------ ------ ------ ----- ------
DISTRIBUTIONS:
Dividends from investment income-net... (1.03) (.99) (.97) (.97) (.94) (.92) (.88) (.81) (.76) (.75)
Dividends from net realized
gain on investment....... -- -- -- -- -- -- (.08) (.31) (.16) (.06)
------ ------ ------ ------ ------ ------ ------ ------ ----- ------
TOTAL DISTRIBUTIONS.......... (1.03) (.99) (.97) (.97) (.94) (.92) (.96) (1.12) (.92) (.81)
------ ------ ------ ------ ------ ------ ------ ------ ----- ------
Net asset value, end of year. $13.47 $13.46 $13.36 $13.48 $13.39 $13.67 $13.96 $14.31 $13.84 $14.02
====== ======= ====== ====== ====== ======= ======= ====== ====== ======
TOTALINVESTMENTRETURN 12.47% 7.32% 6.72% 8.48% 6.53% 9.30% 9.45% 10.88% 3.13% 7.54%
RATIOS / SUPPLEMENTALDATA:
Ratio of expenses to
average net assets..... .75% .71% .73% .71% .71% .69% .70% .71% .70% .73%
Ratio of net investment income to average
net assets................... 8.51% 7.78% 7.94% 7.98% 7.72% 7.53% 7.17% 5.68% 5.22% 5.52%
Portfolio Turnover Rate...... 34.15% 50.12% 48.98% 33.58% 39.93% 31.07% 48.03% 60.14% 36.27% 42.18%
Net Assets, end of year
(000's omitted)....$919,839 $1,090,196 $1,015,084 $1,056,046 $1,113,691 $1,236,870 $1,443,687 $1,703,674 $1,724,126 $1,569,511
</TABLE>
Page 3
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with the maximum
amount of current income exempt from Federal income tax as is consistent with
the preservation of capital. To accomplish its investment objective, the Fund
invests primarily in Municipal Obligations (described below) rated A or
better by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Group, a division of The McGraw-Hill Companies, Inc. ("S&P"), or
Fitch Investors Service, L.P. ("Fitch"). The dollar-weighted average maturity
of the Fund's portfolio ranges between three and ten years. The Fund's
investment objective cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be achieved.
MUNICIPAL OBLIGATIONS
Municipal Obligations are debt obligations issued by states,
territories and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or
multistate agencies or authorities, the interest from which, in the opinion
of bond counsel to the issuer, is exempt from Federal income tax. Municipal
Obligations generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are classified
as general obligation bonds, revenue bonds and notes. General obligation
bonds are secured by the issuer's pledge of its faith, credit and taxing
power for the payment of principal and interest. Revenue bonds are payable
from the revenue derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise or other specific
revenue source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that generally do not
carry the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal Obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities. Municipal Obligations
bear fixed, floating or variable rates of interest, which are determined in
some instances by formulas under which the Municipal Obligation's interest
rate will change directly or inversely to changes in interest rates or an
index, or multiples thereof, in many cases subject to a maximum and minimum.
Certain Municipal Obligations are subject to redemption at a date earlier
than their stated maturity pursuant to call options, which may be separated
from the related Municipal Obligation and purchased and sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least
80% of the value of its net assets (except when maintaining a temporary
defensive position) in Municipal Obligations. At least 65% of the value of
the Fund's net assets (except when maintaining a temporary defensive
position) will be invested in bonds, debentures and other debt instruments.
At least 80% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than A
by Moody's, S&P or Fitch. The Fund may invest up to 20%
Page 4
of the value of its net assets in Municipal Obligations which, in the case of
bonds, are rated lower than A by Moody's, S&P and Fitch and as low as the
lowest rating assigned by Moody's, S&P or Fitch, but it currently is the
intention of the Fund that this portion of the Fund's portfolio be invested
primarily in Municipal Obligations which, in the case of bonds, are rated no
lower than Baa by Moody's or BBB by S&P or Fitch. The Fund may invest in
short-term Municipal Obligations which are rated in the two highest rating
categories by Moody's, S&P or Fitch. See "Appendix" in the Statement of
Additional Information. Municipal Obligations rated BBB by S&P or Fitch or Baa
by Moody's are considered investment grade obligations; those rated BBB by
S&Pand Fitch are regarded as having an adequate capacity to pay principal and
interest, while those rated Baa by Moody's are considered medium grade
obligations which lack outstanding investment characteristics and have
speculative characteristics. Investments rated Ba or lower by Moody's and BB
or lower by S&P and Fitch ordinarily provide higher yields but involve
greater risk because of their speculative characteristics. The Fund may
invest in Municipal Obligations rated C by Moody's or D by S&P or Fitch, which
is the lowest rating assigned by such rating organizations, and indicates
that the Municipal Obligation is in default and interest and/or repayment of
principal is in arrears. See "Investment Considerations and Risks_Lower Rated
Bonds" below for a further discussion of certain risks. The Fund also may
invest in securities which, while not rated, are determined by The Dreyfus
Corporation to be of comparable quality to the rated securities in which the
Fund may invest; for purposes of the 80% requirement described in this
paragraph, such unrated securities shall be deemed to have the rating so
determined. The Fund also may invest in Taxable Investments of the quality
described under "Appendix--Certain Portfolio Securities--Taxable
Investments."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the nongovernmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective.
The annual portfolio turnover rate for the Fund is not expected to
exceed 100%. The Fund may engage in various investment techniques, such as
options and futures transactions and lending portfolio securities. Use of
certain of these techniques may give rise to taxable income. For a discussion
of the investment techniques and their related risks, see "Investment
Considerations and Risks," "Appendix -- Investment Techniques" and
"Dividends, Distributions and Taxes" below and "Investment Objective and
Management Policies -- Management Policies" in the Statement of Additional
Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- Even though interest-bearing securities are investments which
promise a stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore, are subject
to the risk of market price fluctuations. Certain securities that may be
purchased by the Fund, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to
be highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and possibly loss of principal. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities. Once the rating
of a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining
Page 5
whether to continue to hold the security. The Fund's net asset value generally
will not be stable and should fluctuate based upon changes in the value of the
Fund's portfolio securities. Securities in which the Fund invests may earn a
higher level of current income than certain shorter-term or higher quality
securities which generally have greater liquidity, less market risk and less
fluctuation in market value.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than 25% of
the value of its total assets in Municipal Obligations which are related in
such a way that an economic, business or political development or change
affecting one such security also would affect the other securities; for
example, securities the interest upon which is paid from revenues of similar
types of projects, or securities whose issuers are located in the same state.
As a result, the Fund may be subject to greater risk as compared to a fund
that does not follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for
interest on Municipal Obligations may be introduced in the future. If any
such proposal were enacted that would reduce the availability of Municipal
Obligations for investment by the Fund so as to adversely affect Fund
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of
Municipal Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
ZERO COUPON SECURITIES -- Federal income tax law requires the holder of a
zero coupon security or of certain pay-in-kind bonds to accrue income with
respect to these securities prior to the receipt of cash payments. To
maintain its qualification as a regulated investment company and avoid
liability for Federal income taxes, the Fund may be required to distribute
such income accrued with respect to these securities and may have to dispose
of portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
LOWER RATED BONDS _ The Fund may invest up to 20% of the value of its net
assets in higher yielding (and, therefore, higher risk) debt securities such
as those rated Ba by Moody's or BB by S&P or Fitch or as low as the lowest
rating assigned by Moody's, S&P or Fitch (commonly known as junk bonds). They
generally are not meant for short-term investing and may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. The retail secondary market for these bonds may be less liquid
than that of higher rated bonds; adverse market conditions could make it
difficult at times for the Fund to sell certain securities or could result in
lower prices than those used in calculating the Fund's net asset value. See
"Appendix _ Certain Portfolio Securities _ Ratings."
USE OF DERIVATIVES -- The Fund may invest in derivatives ("Derivatives").
These are financial instruments which derive their performance, at least in
part, from the performance of an underlying
Page 6
asset, index or interest rate. The Derivatives the Fund may use include
options and futures. While Derivatives can be used effectively in furtherance
of the Fund's investment objective, under certain market conditions, they can
increase the volatility of the Fund's net asset value, can decrease the
liquidity of the Fund's portfolio and make more difficult the accurate pricing
of the Fund's portfolio. See "Appendix -- Investment Techniques -- Use of
Derivatives" below, and "Investment Objective and Management Policies --
Management Policies -- Derivatives"in the Statement of Additional Information.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of June 28, 1996, The Dreyfus Corporation managed
or administered approximately $79 billion in assets for more than 1.7 million
investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Maryland law.
The Fund's primary portfolio manager is Monica S. Wieboldt. She has held that
position since September 1987, and has been employed by The Dreyfus
Corporation since November 1983. The Fund's other portfolio managers are
identified in the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and for other funds
advised by The Dreyfus Corporation through a professional staff of portfolio
managers and securities analysts.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$237 billion in assets as of March 31, 1996, including approximately $83
billion in mutual fund assets. As of March 31, 1996, Mellon, through various
subsidiaries, provided non-investment services, such as custodial or
administration services, for more than $886 billion in assets, including
approximately $61 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .60 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
May 31, 1995, the Fund paid The Dreyfus Corporation a monthly management fee
at the effective annual rate of .59 of 1% of the value of the Fund's average
daily net assets pursuant to a settlement of litigation. From time to time,
The Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of lowering
the overall expense ratio of the Fund and increasing yield to investors. The
Fund will not pay
Page 7
The Dreyfus Corporation at a later time for any amounts it may waive, nor will
the Fund reimburse The Dreyfus Corporation for any amounts it may assume.
Pursuant to such settlement of litigation effective October 14, 1988,
The Dreyfus Corporation agreed, among other things, to make payments to the
Fund to reduce its management fee for a period of ten years from the
effective date of the settlement, in an amount ranging from $90,000 per year,
if the Fund's average daily net assets are in excess of $1 billion, to $1
million per year if the Fund's average daily net assets are in excess of $10
billion.
In allocating brokerage transactions for the Fund, The Dreyfus
Corporation seeks to obtain the best execution of orders at the most
favorable net price. Subject to this determination, The Dreyfus Corporation
may consider, among other things, the receipt of research services and/or the
sale of shares of the Fund or other funds managed, advised or administered by
The Dreyfus Corporation as factors in the selection of broker-dealers to
execute portfolio transactions for the Fund. See "Portfolio Transactions" in
the Statement of Additional Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits, but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or other financial institutions in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold without a sales charge. You may be charged a
nominal fee if you effect transactions in Fund shares through a securities
dealer, bank or other financial institution. Stock certificates are issued
only upon your written request. No certificates are issued for fractional
shares. It is not recommended that the Fund be used as a vehicle for Keogh,
IRA or other qualified plans. The Fund reserves the right to reject any
purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a securities dealer, bank or other financial institution which has
made an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a fund
advised by The Dreyfus Corporation, including members of the Fund's Board, or
the spouse or minor child of any of the foregoing, the minimum initial
investment is $1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to have a
portion of their pay directly deposited into their Fund account, the minimum
initial investment is $50. The Fund reserves the right to vary further the
initial and subsequent investment minimum requirements at any time. Fund
shares also are offered without regard to the minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark,
Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan
pursuant to the Dreyfus Step Program described under "Shareholder Services."
These services enable you to make regularly scheduled investments and may
provide you with a conve-
Page 8
nient way to invest for long-term financial goals. You should be aware,
however, that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor
subsequent investments should be made by third party check. Purchase orders
may be delivered in person only to a Dreyfus Financial Center. THESE ORDERS
WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY.
For the location of the nearest Dreyfus Financial Center, please call one of
the telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA#8900052392/Dreyfus
Intermediate Municipal Bond Fund, Inc., for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing your wire
payment to obtain your Fund account number. Please include your Fund account
number on the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S.
banks. A charge will be imposed if any check used for investment in your
account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through compatible
computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value per share, options and futures
contracts will be valued 15 minutes after the close of trading on the floor
of the New York Stock Exchange. Net asset value per share is computed by
dividing the value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The Fund's
investments are valued by an independent pricing service approved by the
Fund's Board and are valued at fair value as determined by the pricing
service. The pricing service's procedures are reviewed under the general
supervision of the Fund's Board. For further information regarding the
methods employed in valuing the Fund's investments, see "Determination of Net
Asset Value" in the Statement of Additional Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information con-
Page 9
cerning this requirement. Failure to furnish a certified TIN to the Fund
could subject you to a $50 penalty imposed by the Internal Revenue Service
(the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The proceeds will
be transferred between the bank account designated in one of these documents
and your Fund account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be so designated.
The Fund may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, please call
1-800-645-6561 to determine if it is available and whether any conditions are
imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund into
which the exchange is being made. The ability to issue exchange instructions
by telephone is given to all Fund shareholders automatically, unless you
check the applicable "No" box on the Account Application, indicating that you
specifically refuse this Privilege. The Telephone Exchange Privilege may be
established for an existing account by written request, signed by all
shareholders on the Account, or by a separate signed Shareholder Services
Form, available by calling 1-800-645-6561, or, by oral request from any of
the authorized signatories on the account, also by calling 1-800-645-6561. If
you have established the Telephone Exchange Privilege, you may telephone
exchange instructions by calling 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares_Procedures." Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone Exchange
Privilege, Check Redemption Privilege, Wire Redemption Privilege, Telephone
Redemption Privilege, Dreyfus TELETRANSFER Privilege, and the
dividend/capital gain distribution option (except for Dreyfus Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund you are
exchanging were: (a) purchased with a sales load, (b) acquired by a previous
exchange from shares purchased with a sales load, or (c) acquired through
reinvestment of dividends or distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange you must notify
the Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
Page 10
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated by the
Securities and Exchange Commission. The Fund reserves the right to reject any
exchange request in whole or in part. The availability of Fund Exchanges may
be modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables you
to invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of the Fund, in shares of other funds in the Dreyfus
Family of Funds of which you are a shareholder. The amount you designate,
which can be expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. You may modify or cancel your exercise of this Privilege at
any time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. The Fund may charge a service
fee for the use of this Privilege. No such fee currently is contemplated. For
more information concerning this Privilege and the funds in the Dreyfus
Family of Funds eligible to participate in this Privilege, or to obtain a
Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-Automatic Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, and the
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
Page 11
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a
Dreyfus Step Program account, you must supply the necessary information on
the Fund's Account Application and file the required authorization form(s)
with the Transfer Agent. For more information concerning this Program, or to
request the necessary authorization form(s), please call 1-800-782-6620. You
may terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value, however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced sales
load. If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends and
capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P. O. Box 9671, Providence, Rhode Island 02940-9671. Enrollment in or
cancellation of these privileges is effective three business days following
receipt. These privileges are available only for existing accounts and may
not be used to open new accounts. Minimum subsequent investments do not apply
for Dreyfus Dividend Sweep. The Fund may modify or terminate these privileges
at any time or charge a service fee. No such fee currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Page 12
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks or other financial institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares. Any certificates
representing Fund shares being redeemed must be submitted with the redemption
request. The value of the shares redeemed may be more or less than their
original cost, depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK
CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS
DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE
CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE
OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD
OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE,AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES
You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or, if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, the Check Redemption
Privilege, the Wire Redemption Privilege, the Telephone Redemption Privilege,
or the Dreyfus TELETRANSFER Privilege. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities.The Fund reserves the right to refuse any
request made by wire or telephone, including requests made shortly after a
change of address, and may limit the amount involved or the number of such
requests. The Fund may modify or terminate any redemption Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated. Shares for which certificates have been issued are
not eligible for the Check Redemption, Wire Redemption, Telephone Redemption
or Dreyfus TELETRANSFER Privilege.
You may redeem Fund shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it),
Page 13
you authorize the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be you and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges Medallion
Program. If you have any questions with respect to signature-guarantees,
please call one of the telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Potential fluctuation in the net asset
value of the Fund shares should be considered in determining the amount of
the check. Redemption Checks should not be used to close your account.
Redemption Checks are free, but the Transfer Agent will impose a fee for
stopping payment of a Redemption Check upon your request or if the Transfer
Agent cannot honor the Redemption Check due to insufficient funds or other
valid reason. You should date your Redemption Checks with the current date
when you write them. Please do not postdate your Redemption Checks. If you
do, the Transfer Agent will honor, upon presentment, even if presented before
the date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good order.
This Privilege will be terminated immediately, without notice, with respect
to any account which is, or becomes, subject to backup withholding on
redemptions (see "Dividends, Distributions and Taxes"). Any Redemption Check
written on an account which has become subject to backup withholding on
redemptions will not be honored by the Transfer Agent.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day)made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders
Page 14
of jointly registered Fund or bank accounts may have redemption proceeds of
not more than $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-645-6561 or, if you are calling from
overseas, call 516-794-5452. The Statement of Additional Information sets
forth instructions for transmitting redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
DREYFUS TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-6561
or, if you are calling from overseas, call
516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan, pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of the Fund's average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. Fund shares begin
earning income dividends on the day following the date of purchase. The
Fund's earnings for Saturdays, Sundays and holidays are declared as dividends
on the next business day. Dividends usually are paid on the last business day
of each month and are automatically reinvested in additional Fund shares at
net asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends be paid to you along with
the proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund may
make distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional Fund shares at net asset value. All
expenses are accrued daily and deducted before declaration of dividends to
investors.
Page 15
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends from net investment income paid by the Fund
will not be subject to Federal income tax. Dividends derived from Taxable
Investments, together with distributions from any net realized short-term
securities gains and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by the Fund are
subject to Federal income tax as ordinary income, whether or not reinvested
in additional Fund shares. No dividend paid by the Fund will qualify for the
dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund
generally are taxable as long-term capital gains for Federal income tax
purposes if you are a citizen or resident of the United States. Dividends and
distributions attributable to income or gain derived from securities
transactions and from the use of certain of the investment techniques
described under "Appendix--Investment Techniques" will be subject to Federal
income tax. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Under the Code, interest on indebtedness incurred or continued to
purchase or carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible. Dividends and distributions may be subject to
state and local taxes.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private activity
bonds, the interest from which may be (i) a preference item for purposes of
the alternative minimum tax, (ii) a component of the "adjusted current
earnings" preference item for purposes of the corporate alternative minimum
tax as well as a component in computing the corporate environmental tax or
(iii) a factor in determining the extent to which a shareholder's Social
Security benefits are taxable. If the Fund purchases such securities, the
portion of the Fund's dividends related thereto will not necessarily be tax
exempt to an investor who is subject to the alternative minimum tax and/or
tax on Social Security benefits and may cause an investor to be subject to
such taxes.
Taxable dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Fund to a foreign investor as well as the proceeds of any redemptions
from a foreign investor's account, regardless of the extent to which gain or
loss may be realized, generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividend as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Page 16
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended May 31, 1995 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify if such qualification is in
the best interests of its shareholders. Such qualification relieves the Fund
of any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, tax equivalent yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a second six-month
period which, when added to the result of the first six months, provides an
"annualized" yield for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased with an
initial payment of $1,000 and that the investment was redeemed at the end of
a stated period of time, after giving effect to the reinvestment of dividends
and distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total return
for one, five and ten year periods.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include
Page 17
the value of a hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from CDA
Investment Technologies, Inc., Lipper Analytical Services, Inc., Moody's Bond
Survey Bond Index, Lehman Brothers Municipal Bond Index, Morningstar, Inc.
and other industry publications. The Fund's yield generally should be higher
than money market funds (the Fund, however, does not seek to maintain a
stabilized price per share and may not be able to return an investor's
principal), and its price per share should fluctuate less than long-term bond
funds (which generally have somewhat higher yields).
GENERAL INFORMATION
The Fund was incorporated under Maryland law on April 21, 1983, and
commenced operations on August 11, 1983. On September 11, 1990, the Fund
changed its name from Dreyfus Intermediate Tax Exempt Bond Fund, Inc. to
Dreyfus Intermediate Municipal Bond Fund, Inc. The Fund is authorized to
issue 300 million shares of Common Stock, par value $.01 per share. Each
share has one vote.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, pursuant to the Fund's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for purposes of
removing a Board member from office and the holders of at least 25% of such
shares may require the Fund to hold a special meeting of shareholders for any
other purpose. Fund shareholders may remove a Board member by the affirmative
vote of a majority of the Fund's outstanding voting shares. In addition, the
Fund's Board will call a meeting of shareholders for the purpose of electing
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S. and
Canada, call 516-794-5452.
Page 18
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund is permitted to borrow to the extent permitted
under the 1940 Act, which permits an investment company to borrow in an
amount up to 33-1/3% of the value of its total assets. The Fund currently
intends to borrow money only for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the Fund's total assets, the Fund will
not make any additional investments.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations and
Risks -- Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investment Objective and Management
Policies -- Management Policies -- Derivatives" in the Statement of
Additional Information.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its Derivatives
were poorly correlated with its other investments, or if the Fund were unable
to liquidate its position because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
Although the Fund will not be a commodity pool, Derivatives subject
the Fund to the rules of the Commodity Futures Trading Commission which limit
the extent to which the Fund can invest in certain Derivatives. The Fund may
invest in futures contracts and options with respect thereto for hedging
purposes without limit. However, the Fund may not invest in such contracts
and options for other purposes if the sum of the amount of initial margin
deposits and premiums paid for unexpired options with respect to such
contracts, other than for bona fide hedging purposes, exceed 5% of the
liquidation value of the Fund's assets, after taking into account unrealized
profits and unrealized losses on such contracts and options; provided,
however, that in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may write
(i.e., sell) covered call and put option contracts to the extent of 20% of
the value of its net assets at the time such option contracts are written.
When required by the Securities and Exchange Commission, the Fund will set
aside permissible liquid assets in a segregated account to cover its
obligations relating to its purchase of Derivatives. To maintain this
required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate a
Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest or other distributions
payable on the loaned securities which affords the Fund an opportunity to
earn interest on the amount of the loan and on the loaned securities'
collateral. Loans of portfolio securities may not exceed 33-1/3% of the value
of the Fund's total assets, and the Fund will receive collateral consisting
of cash, U.S. Government securities or irrevocable letters of credit which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Such loans are terminable by
the Fund at any time upon specified notice. The Fund might experience risk of
loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
Page 19
FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations and other
securities on a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date of the
commitment to purchase. The payment obligation and the interest rate
receivable on a forward commitment or when-issued security are fixed when the
Fund enters into the commitment, but the Fund does not make payment until it
receives delivery from the counterparty. The Fund will commit to purchase
such securities only with the intention of actually acquiring the securities,
but the Fund may sell these securities before the settlement date if it is
deemed advisable. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality liquid debt
securities at least equal at all times to the amount of the commitments will
be established and maintained at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and variable
rate demand notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit the holder to
demand payment of principal at any time or at specified intervals. Variable
rate demand notes include master demand notes which are obligations that
permit the Fund to invest fluctuating amounts, at varying rates of interest,
pursuant to direct arrangements between the Fund, as lender, and the
borrower. These obligations permit daily changes in the amount borrowed.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest. If the participation
interest is unrated, it will be backed by an irrevocable letter of credit or
guarantee of a bank that the Fund's Board has determined meets the prescribed
quality standards for banks set forth below, or the payment obligation
otherwise will be collateralized by U.S. Government securities. For certain
participation interests, the Fund will have the right to demand payment, on
not more than seven days' notice, for all or any part of the Fund's
participation interest in the Municipal Obligation, plus accrued interest. As
to these instruments, the Fund intends to exercise its right to demand
payment only upon a default under the terms of the Municipal Obligation, as
needed to provide liquidity to meet redemptions, or to maintain or improve
the quality of its investment portfolio.
TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a
fixed rate substantially higher than prevailing short-term tax exempt rates,
that has been coupled with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing
or similar agent at or near the commencement of such period, that would cause
the securities, coupled with the tender option, to trade at par on the date
of such determination. Thus, after payment of this fee, the security
Page 20
holder effectively holds a demand obligation that bears interest at the
prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf of
the Fund, will consider on an ongoing basis the creditworthiness of the issuer
of the underlying Municipal Obligation, of any custodian and of the third
party provider of the tender option. In certain instances and for certain
tender option bonds, the option may be terminable in the event of a default in
payment of principal or interest on the underlying Municipal Obligation and
for other reasons.
CUSTODIAL RECEIPTS -- The Fund may purchase custodial receipts representing
the right to receive certain future principal and interest payments on
Municipal Obligations which underlie the custodial receipts. A number of
different arrangements are possible. In a typical custodial receipt
arrangement, an issuer or a third party owner of Municipal Obligations
deposits such obligations with a custodian in exchange for two classes of
custodial receipts. The two classes have different characteristics, but, in
each case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest rate
is adjusted, and ownership changes, based on an auction mechanism. This
class's interest rate generally is expected to be below the coupon rate of
the underlying Municipal Obligations and generally is at a level comparable
to that of a Municipal Obligation of similar quality and having a maturity
equal to the period between interest rate adjustments. The second class bears
interest at a rate that exceeds the interest rate typically borne by a
security of comparable quality and maturity; this rate also is adjusted, but
in this case inversely to changes in the rate of interest of the first class.
If the interest rate on the first class exceeds the coupon rate of the
underlying Municipal Obligations, its interest rate will exceed the rate paid
on the second class. In no event will the aggregate interest paid with
respect to the two classes exceed the interest paid by the underlying
Municipal Obligations. The value of the second class and similar securities
should be expected to fluctuate more than the value of a Municipal Obligation
of comparable quality and maturity and their purchase by the Fund should
increase the volatility of its net asset value and, thus, its price per
share. These custodial receipts are sold in private placements. The Fund also
may purchase directly from issuers, and not in a private placement, Municipal
Obligations having characteristics similar to custodial receipts. These
securities may be issued as part of a multi-class offering and the interest
rate on certain classes may be subject to a cap or floor.
STAND-BY COMMITMENTS -- The Fund may acquire "stand-by commitments" with
respect to Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to repurchase, at the
Fund's option, specified securities at a specified price and, in this
respect, stand-by commitments are comparable to put options. The exercise of
a stand-by commitment, therefore, is subject to the ability of the seller to
make payment on demand. The Fund will acquire stand-by commitments solely to
facilitate its portfolio liquidity and does not intend to exercise its rights
thereunder for trading purposes. The Fund may pay for stand-by commitments if
such action is deemed necessary, thus increasing to a degree the cost of the
underlying Municipal Obligation and similarly decreasing such security's
yield to investors. Gains realized in connection with stand-by commitments
will be taxable. The Fund also may acquire call options on specific Municipal
Obligations. The Fund generally would purchase these call options to protect
the Fund from the issuer of the related Municipal Obligation redeeming, or
other holder of the call option from calling away, the Municipal Obligation
before maturity. The sale by the Fund of a call option that it owns on a
specific Municipal Obligation could result in the receipt of taxable income
by the Fund.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon securities which
are debt securities issued or sold at a discount from their face value which
do not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). The amount of
the discount varies depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of the security and
perceived credit quality of the issuer. Zero coupon securities
Page 21
also may take the form of debt securities that have been stripped of their
unmatured interest coupons, the coupons themselves and receipts or
certificates representing interest in such stripped debt obligations and
coupons. The market prices of zero coupon securities generally are more
volatile than the market prices of securities that pay interest periodically
and are likely to respond to a greater degree to changes in interest rates
than non-zero coupon securities having similar maturities and credit
qualities.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price that the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
TAXABLE INVESTMENTS -- From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may invest
in taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within the
two highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated not
lower than P-1 by Moody's, A-1 by S&P or F-1 by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic banks,
with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase agreements
in respect of any of the foregoing. Dividends paid by the Fund that are
attributable to income earned by the Fund from Taxable Investments will be
taxable to investors. See "Dividends, Distributions and Taxes." Except for
temporary defensive purposes, at no time will more than 20% of the value of
the Fund's net assets be invested in Taxable Investments. Under normal market
conditions, the Fund anticipates that not more than 5% of the value of its
total assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of Additional
Information, to which reference hereby is made.
RATINGS -- Bonds rated Ba by Moody's are judged to have speculative elements;
their future cannot be considered as well assured and often the protection of
interest and principal payments may be very moderate. Bonds rated BB by S&P
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Bonds
rated BB by Fitch are considered speculative and the payment of principal and
interest may be affected at any time by adverse economic changes. Bonds rated
C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in default
and the payment of interest and/or repayment of principal is in arrears.
Bonds rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD represents
the highest potential for recovery of such bonds; and D represents the lowest
potential for recovery. Such bonds, though high yielding, are characterized
by great risk. See "Appendix" in the Statement of Additional Information for
a general description of Moody's, S&P and Fitch ratings of Municipal
Obligations.
The ratings of Moody's, S&P and Fitch represent their opinions as to
the quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
bonds. Although these ratings may be an initial criteri-
Page 22
on for selection of portfolio investments, The Dreyfus Corporation also will
evaluate these securities and the ability of the issuers of such securities
to pay interest and principal. The Fund's ability to achieve its investment
objective may be more dependent on The Dreyfus Corporation's credit analysis
than might be the case for a fund that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MAY
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 23
DREYFUS
INTERMEDIATE
MUNICIPAL
BOND FUND, INC.
PROSPECTUS
Registration Mark
Copy Rights 1996, Dreyfus Service Corporation
947p070096
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
SEPTEMBER 1, 1995
AS REVISED, AUGUST 1, 1996
This Statement of Additional Information which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Intermediate Municipal Bond Fund, Inc. (the "Fund"), dated
September 1, 1995, as it may be revised from time to time. To obtain a
copy of the Fund's Prospectus, please write to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or call one of the
following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . B-11
Management Agreement. . . . . . . . . . . . . . . . . . . . B-15
Purchase of Shares. . . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services Plan . . . . . . . . . . . . . . . . . B-18
Redemption of Shares. . . . . . . . . . . . . . . . . . . . B-18
Shareholder Services. . . . . . . . . . . . . . . . . . . . B-21
Determination of Net Asset Value. . . . . . . . . . . . . . B-23
Dividends, Distributions and Taxes. . . . . . . . . . . . . B-24
Portfolio Transactions. . . . . . . . . . . . . . . . . . . B-24
Performance Information . . . . . . . . . . . . . . . . . . B-25
Information About the Fund. . . . . . . . . . . . . . . . . B-26
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors . . . . . . . . . . . B-27
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . B-28
Financial Statements. . . . . . . . . . . . . . . . . . . . B-36
Report of Independent Auditors. . . . . . . . . . . . . . . B-55
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the sections in the Fund's Prospectus entitled
"Description of the Fund" and "Appendix."
Portfolio Securities
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings for the fiscal year ended May 31,
1995, computed on a monthly basis, was as follows:
Fitch Investors Moody's Investors Standard & Poor's
Service, L.P. Service, Inc. Ratings Group Percent of
("Fitch") or ("Moody's") or ("S&P") Value
AAA Aaa AAA 35.5%
AA Aa AA 23.5
A A A 23.4
BBB Baa BBB 14.5
BB Ba BB 1.3
F-1 VMIG 1/MIG 1, P-1 SP-1, A-1 1.8(1)
____
100.0%
======
___________________
(1) Includes tax exempt notes rated in one of the two highest rating
categories by Moody's, S&P or Fitch. These securities, together with
Municipal Obligations rated Baa or better by Moody's or BBB or better by
S&P or Fitch, are taken into account at the time of a purchase for purposes
of determining that the Fund's portfolio meets the 80% minimum quality
standard discussed in the Fund's Prospectus.
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities, air or water
pollution control facilities and certain local facilities for water supply,
gas, electricity, or sewage or solid waste disposal; the interest paid on
such obligations may be exempt from Federal income tax, although current
tax laws place substantial limitations on the size of such issues. Such
obligations are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the opinion of bond
counsel to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time, or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending rate,
such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act of
1940, as amended (the "1940 Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the non-governmental
user, then such non-governmental user would be deemed to be the sole
issuer. If, however, in either case, the creating government or some other
entity guarantees a security, such a guaranty would be considered a
separate security and will be treated as an issue of such government or
other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the
event of foreclosure might prove difficult. The staff of the Securities
and Exchange Commission currently considers certain lease obligations to be
illiquid. Determination as to the liquidity of such securities is made in
accordance with guidelines established by the Fund's Board. Pursuant to
such guidelines, the Board has directed the Manager to monitor carefully
the Fund's investment in such securities with particular regard to (1) the
frequency of trades and quotes for the lease obligation; (2) the number of
dealers willing to purchase or sell the lease obligation and the number of
the potential buyers; (3) the willingness of dealers to undertake to make a
market in the lease obligation; (4) the nature of the marketplace trades
including the time needed to dispose of the lease obligation, the method of
soliciting offers and the mechanics of transfer; and (5) such other factors
concerning the trading market for the lease obligation as the Manager may
deem relevant. In addition, in evaluating the liquidity and credit quality
of a lease obligation that is unrated, the Fund's Board has directed the
Manager to consider (a) whether the lease can be cancelled; (b) what
assurance there is that the assets represented by the lease can be sold;
(c) the strength of the lessee's general credit (e.g., its debt,
administrative, economic, and financial characteristics); (d) the
likelihood that the municipality will discontinue appropriating funding for
the leased property because the property is no longer deemed essential to
the operations of the municipality (e.g., the potential for an "event of
nonappropriation"); (e) the legal recourse in the event of failure to
appropriate; and (f) such other factors concerning credit quality as the
Manager may deem relevant. The Fund will not invest more than 15% of the
value of its net assets in illiquid securities. See "Investment
Restriction No. 13" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based on
the tender option bond agreement, the Fund expects to be able to value the
tender option bond at par; however, the value of the instrument will be
monitored to assure that it is valued at fair value.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent that
the ratings given by Moody's, S&P or Fitch for Municipal Obligations may
change as a result of changes in such organizations or their rating
systems, the Fund will attempt to use comparable ratings as standards for
its investments in accordance with the investment policies contained in the
Prospectus and this Statement of Additional Information. The ratings of
Moody's, S&P and Fitch represent their opinions as to the quality of the
Municipal Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and are not
absolute standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments, the Manager also will
evaluate these securities and the creditworthiness of the issuers of such
securities.
Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased
by the Fund pursuant to Rule 144A under the Securities Act of 1933, as
amended, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board. Because it is not
possible to predict with assurance how the market for restricted securities
pursuant to Rule 144A will develop, the Fund's Board has directed the
Manager to monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in its portfolio
during such period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government
agencies and instrumentalities are supported by the full faith and credit
of the U.S. Treasury; others by the right of the issuer to borrow from the
U.S. Treasury; others by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others
only by the credit of the agency or instrumentality. These securities bear
fixed, floating or variable rates of interest. Interest may fluctuate
based on generally recognized reference rates or the relationship of rates.
While the U.S. Government provides financial support to such U.S.
Government sponsored agencies or instrumentalities, no assurance can be
given that it will always do so, since it is not so obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally
are limited to London branches of domestic banks that have total assets in
excess of $1 billion. Time deposits which may be held by the Fund will not
benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the full
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. The Fund's
custodian or sub-custodian will have custody of, and will hold in a
segregated account, securities acquired by the Fund under a repurchase
agreement. Repurchase agreements are considered by the Staff of the
Securities and Exchange Commission to be loans by the Fund. In an attempt
to reduce the risk of incurring a loss on a repurchase agreement, the Fund
will enter into repurchase agreements only with domestic banks with total
assets in excess of $1 billion or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. Repurchase agreements could
involve risks in the event of a default or insolvency of the other party to
the agreement, including possible delays or restrictions upon the Fund's
ability to dispose of the underlying securities.
Management Policies
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest
than "traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit the Fund to increase or
decrease the level of risk, or change the character of the risk, to which
its portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated
with Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of
counterparties to over-the-counter Derivatives in the same manner as it
would review the credit quality of a security to be purchased by the Fund.
Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only
investor with sufficient understanding of the Derivative to be interested
in bidding for it.
Futures Transactions--In General. The Fund may enter into futures
contracts in U.S. domestic markets, such as the Chicago Board of Trade.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the
Fund intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid
market will exist for any particular contract at any particular time. Many
futures exchanges and boards of trade limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the
daily limit has been reached in a particular contract, no trades may be
made that day at a price beyond that limit or trading may be suspended for
specified periods during the trading day. Futures contract prices could
move to the limit for several consecutive trading days with little or no
trading, thereby preventing prompt liquidation of futures positions and
potentially subjecting the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if the Fund uses futures to hedge against the possibility of a decline in
the market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit
of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. The Fund may have
to sell such securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities
and Exchange Commission, the Fund may be required to segregate cash or high
quality money market instruments in connection with its commodities
transactions in an amount generally equal to the value of the underlying
commodity. The segregation of such assets will have the effect of limiting
the Fund's ability otherwise to invest those assets.
Specific Futures Transactions. The Fund may purchase and sell interest
rate futures contracts. An interest rate future obligates the Fund to
purchase or sell an amount of a specific debt security at a future date at
a specific price.
Options--In General. The Fund may purchase and write (i.e., sell) call or
put options with respect to specific securities and interest rate futures
contracts. A call option gives the purchaser of the option the right to
buy, and obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option period, or
at a specific date. Conversely, a put option gives the purchaser of the
option the right to sell, and obligates the writer to buy, the underlying
security or securities at the exercise price at any time during the option
period, or at a specific date.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may
cease to exist for a variety of reasons. In the past, for example, higher
than anticipated trading activity or order flow, or other unforeseen
events, at times have rendered certain of the clearing facilities
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts
or suspensions in one or more options. There can be no assurance that
similar events, or events that may otherwise interfere with the timely
execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options.
Successful use by the Fund of options will be subject to the Manager's
ability to predict correctly movements in interest rates. To the extent
the Manager's predictions are incorrect, the Fund may incur losses.
Successful use of options by the Fund will be subject to the Manager's
ability to correctly predict movements in interest rates. To the extent
the Manager's predictions are incorrect, the Fund may incur losses.
Future Developments. The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by
the Fund or which are not currently available but which may be developed,
to the extent such opportunities are both consistent with the Fund's
investment objective and legally permissible for the Fund. Before entering
into such transactions or making any such investment, appropriate
disclosure will be provided in the Fund's Prospectus or this Statement of
Additional Information.
Lending Portfolio Securities. In connection with its securities
lending transactions, the Fund may return to the borrower or a third party
which is unaffiliated with the Fund, and which is acting as a "placing
broker," a part of the interest earned from the investment of collateral
received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must
be able to terminate the loan at any time; (4) the Fund must receive
reasonable interest on the loan, as well as any dividends, interest or
other distributions payable on the loaned securities, and any increase in
market value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan.
Forward Commitments. Municipal Obligations and other securities
purchased on a forward commitment or when-issued basis are subject to
changes in value (generally changing in the same way, i.e., appreciating
when interest rates decline and depreciating when interest rates rise)
based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates.
Securities purchased on a when-issued basis may expose the Fund to risks
because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a when-issued basis when the Fund is
fully or almost fully invested may result in greater potential fluctuation
in the value of the Fund's net assets and its net asset value per share.
Investment Considerations and Risks
Lower Rated Bonds. The Fund is permitted to invest in securities
rated Ba by Moody's and BB by S&P and Fitch and as low as the lowest rating
assigned by Moody's, S&P or Fitch. Such bonds, though higher yielding, are
characterized by risk. See "Description of the Fund--Investment
Considerations and Risks--Lower Rated Bonds" in the Prospectus for a
discussion of certain risks and "Appendix" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These bonds generally are
considered by S&P, Moody's and Fitch to be, on balance, predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation and generally will involve more
credit risk than securities in the higher rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally
is not as liquid as the secondary market for higher rated securities. The
lack of a liquid secondary market may have an adverse impact on market
price and yield and the Fund's ability to dispose of particular issues when
necessary to meet the Fund's liquidity needs or in response to a specific
economic event such as a deterioration in the creditworthiness of the
issuer. The lack of a liquid secondary market for certain securities also
may make it more difficult for the Fund to obtain accurate market
quotations for purposes of valuing the Fund's portfolio and calculating its
net asset value. Adverse publicity and investor perceptions, whether or
not based on fundamental analysis, may decrease the values and liquidity of
these securities. In such cases, judgment may play a greater role in
valuation because less reliable objective data may be available.
These bonds may be particularly susceptible to economic downturns. It
is likely that any economic recession could disrupt severely the market for
such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn
could adversely affect the ability of the issuers of such securities to
repay principal and pay interest thereon and increase the incidence of
default for such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with the Distributor or any other persons concerning the
acquisition of such securities, and the Manager will review carefully the
credit and other characteristics pertinent to such new issues.
The credit risk factors pertaining to lower rated securities also
apply to lower rated zero coupon bonds, in which the Fund may invest up to
5% of its total assets. Zero coupon bonds carry an additional risk in
that, unlike bonds which pay interest throughout the period to maturity,
the Fund will realize no cash until the cash payment date unless a portion
of such securities are sold and, if the issuer defaults, the Fund may
obtain no return at all on its investment. See "Dividends, Distributions
and Taxes."
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 9 as fundamental policies, which cannot be changed
without approval by the holders of a majority (as defined in the 1940 Act)
of the Fund's outstanding voting shares. Investment restrictions numbered
10 through 14 are not fundamental policies and may be changed by a vote of
a majority of the Fund's Board at any time. The Fund may not:
1. Invest more than 5% of its assets in the obligations of any single
issuer, except up to 25% of the value of the Fund's total assets may be
invested, and securities issued or guaranteed by the U.S. Government, or
its agencies or instrumentalities may be purchased, without regard to any
such limitations.
2. Hold more than 10% of the voting securities of any single issuer.
This Investment Restriction applies only with respect to 75% of the Fund's
total assets.
3. Invest more than 25% of its assets in the securities of issuers in
any single industry; provided that there shall be no limitation on the
purchase of Municipal Obligations and, for temporary defense purposes,
securities issued by banks and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
4. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). While borrowings exceed 5% of the Fund's total
assets, the Fund will not make any additional investments. For purposes of
this Investment Restriction, the entry into options, forward contracts,
futures contracts, including those relating to indices, and options on
future contracts or indices shall not constitute borrowing.
5. Purchase or sell real estate, commodities or commodity contracts,
or oil and gas interests, but this shall not prevent the Fund from
investing in Municipal Obligations secured by real estate or interests
therein, or prevent the Fund from purchasing and selling options, forward
contracts, futures contracts, including those relating to indices, and
options on futures contracts or indices.
6. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available, and except to the extent the Fund
may be deemed an underwriter under the Securities Act of 1933, as amended,
by virtue of disposing of portfolio securities.
7. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements; however, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange
Commission and the Fund's Board.
8. Issue any senior security (as such term is defined in
Section 18(f) of the 1940 Act), except to the extent that the activities
permitted in Investment Restrictions numbered 4, 5 and 12 may be deemed to
give rise to a senior security.
9. Sell securities short or purchase securities on margin, but the
Fund may make margin deposits in connection with transactions in options,
forward contracts, futures contracts, including those relating to indices,
and options on futures contracts or indices.
10. Purchase securities other than Municipal Obligations and Taxable
Investments and those arising out of transactions in futures and options or
as otherwise provided in the Fund's Prospectus.
11. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
12. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with respect to
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
13. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include participation interests (including
municipal lease/purchase agreements) that are not subject to the demand
feature described in the Fund's Prospectus, and floating and variable rate
demand obligations as to which the Fund cannot exercise the demand feature
described in the Fund's Prospectus on less than seven days' notice and as
to which there is no secondary market), if, in the aggregate, more than 15%
of its net assets would be so invested.
14. Invest in companies for the purpose of exercising control.
For purposes of Investment Restriction No. 3, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as
to their principal business occupations during at least the last five
years, are shown below. Each Board member who is deemed to be an
"interested person" of the Fund, as defined in the 1940 Act, is indicated
by an asterisk.
Board Members of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. He is
Chairman of the Board of Noel Group, Inc., a venture capital company;
and a director of the Muscular Dystrophy Association, HealthPlan
Services Corporation, Belding Heminway Company, Inc., a manufacturer
and marketer of industrial threads, specialty yarns and home
furnishings and fabrics, Curtis Industries, Inc., a national
distributor of security products, chemicals, and automotive and other
hardware, and Staffing Resources, Inc. For more than five years prior
to January 1995, he was President, a director and, until August 1994,
Chief Operating Officer of the Manager and Executive Vice President
and a director of Dreyfus Service Corporation, a wholly-owned
subsidiary of the Manager and, until August 24, 1994, the Fund's
distributor. From August 1994 to December 31, 1994, he was a director
of Mellon Bank Corporation. He is 52 years old and his address is 200
Park Avenue, New York, New York 10166.
*DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 to August 1995, Mr. Burke
was a Consultant to the Manager, and from October 1990 to August 1994,
he was Vice President and Chief Administrative Officer of the Manager.
From 1977 to 1990, Mr. Burke was involved in the management of
national television news, as Vice President and Executive Vice
President of ABC News, and subsequently as President of CBS News. He
is 60 years old and his address is Box 654, Eastham, Massachusetts
02642.
SAMUEL CHASE, Board Member. Since 1982, President of Samuel Chase &
Company, Ltd., an economic consulting firm. He is 64 years old and
his address is 10380 Springhill Road, Belgrade, Montana 59714.
GORDON J. DAVIS, Board Member. Since October 1994, a senior partner with
the law firm of LeBoeuf, Lamb, Greene & MacRae. From 1983 to
September 1994, Mr. Davis was a senior partner with the law firm of
Lord Day & Lord, Barrett Smith. From 1978 to 1983, he was
Commissioner of Parks and Recreation for the City of New York. He is
also a director of Consolidated Edison, a utility company, and Phoenix
Home Life Insurance Company and a member of various other corporate
and not-for-profit boards. He is 54 years old and his address is 241
Central Park West, New York, New York 10023.
JONI EVANS, Board Member. Senior Vice President of the William Morris
Agency since September 1993. From September 1987 to May 1993,
Executive Vice President of Random House Inc. and, from January 1991
to May 1993, President and Publisher of Turtle Bay Books; from January
1987 to December 1990, Publisher of Random House-Adult Trade Division;
from September 1985 to September 1987, President of Simon and
Schuster-Trade Division. She is 54 years old and her address is 1325
Avenue of the Americas, New York, New York 10019.
ARNOLD S. HIATT, Board Member. Chairman of The Stride Rite Foundation.
From 1969 to June 1992, Chairman of the Board, President or Chief
Executive Officer of The Stride Rite Corporation, a multi-divisional
footwear manufacturing and retailing company. Mr. Hiatt is also a
director of The Cabot Corporation. He is 69 years old and his address
is 400 Atlantic Avenue, Boston, Massachusetts 02110.
DAVID J. MAHONEY, Board Member. President of David Mahoney Ventures since
1983. From 1968 to 1983, he was Chairman and Chief Executive Officer
of Norton Simon Inc., a producer of consumer products and services.
Mr. Mahoney is also a director of Bionaire, Inc. and Intracoastal
Health Systems, Inc. He is 73 years old and his address is 745 Fifth
Avenue, Suite 700, New York, New York 10151.
BURTON N. WALLACK, Board Member. President and co-owner of Wallack
Management Company, a real estate management company managing real
estate in the New York City area. He is 45 years old and his address
is 18 East 64th Street, New York, New York 10021.
For so long as the Fund's plan described in the section "Shareholder
Services Plan" remains in effect, the Board members of the Fund who are not
"interested persons" of the Fund, as defined in the 1940 Act, will be
selected and nominated by the Board members who are not "interested
persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid by the Fund to each Board member for the fiscal year
ended May 31, 1995, and by all other funds in the Dreyfus Family of Funds
for which such person is a Board member (the number of which is set forth
in parenthesis next to each Board member's total compensation) for the year
ended December 31, 1995, were as follows:
Total Compensation
Aggregate From Fund and
Name of Board Compensation From Fund Complex
Member Fund* Paid to Board Member
Joseph S. DiMartino $8,125** $448,618 (94)
David W. Burke $5,736 $253,654 (51)
Samuel Chase $7,000 $ 54,520 (13)
Gordon J. Davis $1,264 $ 76,575 (24)
Joni Evans $7,000 $ 46,750 (13)
Arnold S. Hiatt $7,000 $ 50,500 (13)
David J. Mahoney $6,000 $ 47,250 (13)
Burton N. Wallack $7,000 $ 54,250 (13)
_____________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $459 for all Board members as a group.
** Estimated amount for the fiscal year ended May 31, 1996.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. Prior to December 1991, she served
as Vice President and Controller, and later as Senior Vice President,
of The Boston Company Advisors, Inc. She is 38 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
associate at Ropes & Gray. He is 32 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data
Investor Services Group. From 1989 to 1994, he was Vice President,
Assistant Treasurer and Tax Director - Mutual Funds of The Boston
Company. He is 40 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she
was an Assistant Vice President and Client Manager for The Boston
Company. She is 32 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston
Company. He is 27 years old.
ELIZABETH A. BACHMAN, Vice President and Assistant Secretary. Assistant
Vice President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 26 years
old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor
and an officer of other investment companies advised or administered
by the Manager. From July 1988 to August 1994, he was employed by The
Boston Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1%
of the Fund's outstanding on July 31, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is approved
by a majority of the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders on August 2, 1994, and was last
approved by the Fund's Board, including a majority of the Board members who
are not "interested persons" of any party to the Agreement, at a meeting
held on April 26, 1995. The Agreement is terminable without penalty, on
not more than 60 days' notice, by the Fund's Board or by vote of the
holders of a majority of the Fund's outstanding voting shares, or, upon not
less than 90 days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Christopher M. Condron, President, Chief
Operating Officer and a director; Stephen E. Canter, Vice Chairman, Chief
Investment Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Philip L. Toia, Vice Chairman--Operations and
Administration and a director; William T. Sandalls, Jr., Senior Vice
President and Chief Financial Officer; Elie M. Genadry, Vice President--
Institutional Sales; William F. Glavin, Jr., Vice President--Corporate
Development; Mark N. Jacobs, Vice President, General Counsel and Secretary;
Patrice M. Kozlowski, Vice President--Corporate Communications; Mary Beth
Leibig, Vice President--Human Resources; Jeffrey N. Nachman, Vice
President--Mutual Fund Accounting; Andrew S. Wasser, Vice President--
Information Systems; Elvira Oslapas, Assistant Secretary; and Mandell L.
Berman, Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene and Julian
Smerling, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions and provides
the Fund with portfolio managers who are authorized by the Fund's Board to
execute purchases and sales of securities. The Fund's portfolio managers
are A. Paul Disdier, Karen M. Hand, Stephen C. Kris, Richard J. Moynihan,
Jill C. Shaffro, L. Lawrence Troutman, Samuel J. Weinstock and Monica S.
Wieboldt. The Manager also maintains a research department with a
professional staff of portfolio managers and securities analysts who
provide research services for the Fund as well as for other funds advised
by the Manager. All purchases and sales are reported for Directors' review
at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: organizational costs, taxes, interest,
loan commitment fees and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining corporate existence,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
corporate meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, and any extraordinary expenses.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .60 of 1% of the
value of the Fund's average daily net assets. The management fees paid to
the Manager for the fiscal years ended May 31, 1993, 1994 and 1995 amounted
to $9,494,396, $10,736,104 and $9,375,485, respectively, which fees were
reduced by $90,000 in each fiscal year pursuant to the terms of the
settlement of litigation which commenced October 15, 1988 and will continue
for 10 years from that date.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage fees, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the average value of the Fund's net assets
for the fiscal year, the Fund may deduct from the payment to be made to the
Manager under the Agreement, or the Manager will bear, such excess expense.
Such deduction or payment, if any, will be estimated daily, and reconciled
and effected or paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
The Distributor. The Distributor serves as the Fund's distributor on
a best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in the Dreyfus
Family of Funds and for certain other investment companies. In some
states, certain financial institutions effecting transactions in Fund
shares may be required to register as dealers pursuant to state law.
Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers which may charge a nominal
transaction fee for such services. Some dealers will place Fund shares in
an account with their firm. Dealers also may require that the customer not
take physical delivery of stock certificates; the customer not request
redemption checks to be issued in the customer's name; fractional shares
not be purchased; monthly income distributions be taken in cash; or other
conditions.
There is no sales or service charge by the Fund or the Distributor
although investment dealers, banks and other institutions may make
reasonable charges to investors for their services. The services provided
and the applicable fees are established by each dealer or other institution
acting independently of the Fund. The Fund has been given to understand
that these fees may be charged for customer services including, but not
limited to: same day investment of client funds; same day access to client
funds; advice to customers about the status of their accounts, yield
currently being paid, or income earned to date; providing periodic account
statements showing security and money market positions; other services
available from the dealer, bank or other institution; and assistance with
inquiries related to their investments. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts could
constitute a substantial portion of distributions. Small, inactive
long-term accounts involving monthly service charges may not be in the best
interest of investors. Investors should be aware that they may purchase
Fund shares directly from the Distributor without imposition of any
maintenance or service charges, other than those already described herein.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 p.m., New York
time, on any business day that Dreyfus Transfer, Inc., the Fund's transfer
agent (the "Transfer Agent"), and the New York Stock Exchange are open for
business will be credited to the shareholder's Fund account on the next
bank business day following such purchase order. Purchase orders made
after 4:00 p.m., New York time, on any business day the Transfer Agent and
the New York Stock Exchange are open for business, or orders made on
Saturday, Sunday or any Fund holiday (e.g., when the New York Stock
Exchange is not open for business), will be credited to the shareholder's
Fund account on the second bank business day following such purchase order.
To qualify to use the Dreyfus TeleTransfer Privilege, the initial payment
for purchase of Fund shares must be drawn on, and redemption proceeds paid
to, the same bank and account as are designated on the Account Application
or Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request
must be in writing and signature-guaranteed. See "Redemption of Shares--
Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation for certain
allocated expenses of providing personal services and/or maintaining
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board members for their review. In addition, the Plan provides that
material amendments of the Plan must be approved by the Board and by the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the
operation of the Plan, by vote cast in person at a meeting called for the
purpose of considering such amendments. The Plan is subject to annual
approval by such vote of the Board members cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was so approved on
April 26, 1995. The Plan is terminable at any time by vote of a majority
of the Board members who are not "interested persons" and have no direct or
indirect financial interest in the operation of the Plan.
For the fiscal year ended May 31, 1995, $709,547 was chargeable to the
Fund under the Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application, Shareholder Services Form or by later written request that the
Fund provide Redemption Checks ("Checks") drawn on the investor's Fund
account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application or
later written request must be manually signed by the registered owner(s).
Checks may be made payable to the order of any person in an amount of $500
or more. When a Check is presented to the Transfer Agent for payment, the
Transfer Agent, as the investor's agent, will cause the Fund to redeem a
sufficient number of full or fractional shares in the investor's account to
cover the amount of the Check. Dividends are earned until the Check
clears. After clearance, a copy of the Check will be returned to the
investor. Investors generally will be subject to the same rules and
regulations that apply to checking accounts, although the election of this
Privilege creates only a shareholder-transfer agent relationship with the
Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer Agent
of the redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder
Services Form. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees ordinarily
are imposed by such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and also should inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the proper approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Fund's Board reserves the right to make payments in whole or in
part in securities (which may include non-marketable securities) or other
assets of the Fund in case of an emergency or any time a cash distribution
would impair the liquidity of the Fund to the detriment of the existing
shareholders. In such event, the securities would be valued in the same
manner as the Fund's portfolio is valued. If the recipient sold such
securities, brokerage charges might be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund normally utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To request an exchange, an investor must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. The ability to
issue exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "No" box on the
Account Application, indicating that the investor specifically refuses this
privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible
for telephone exchange.
To establish a personal retirement plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
personal retirement plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if his account falls below the
amount designated under this Privilege. In this case, an investor's
account will fall to zero unless additional investments are made in excess
of the designated amount prior to the next Auto-Exchange transaction.
Shares held under IRA and other retirement plans are eligible for this
Privilege. Exchanges of IRA shares may be made between IRA accounts and
from regular accounts to IRA accounts, but not from IRA accounts to regular
accounts. With respect to all other retirement accounts, exchanges may be
made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Dreyfus Auto-Exchange Privilege may be modified or terminated at any
time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates
have been issued may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred
salescharge ("CDSC") and the applicable CDSC, if any, will be
imposed upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Fund's Board. When, in the judgment of the Service, quoted
bid prices for investments are readily available and are representative of
the bid side of the market, these investments 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 bonds of comparable
quality, coupon, maturity and type; indications as to values from dealers;
and general market conditions. The Service may employ electronic data
processing techniques and/or a matrix system to determine valuations. The
Service's procedures are reviewed by the Fund's officers under the general
supervision of the Fund's Board. Expenses and fees, including the
management fee (reduced by the expense limitation, if any), are accrued
daily and are taken into account for the purpose of determining the net
asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Management believes that the Fund has qualified as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended
(the "Code"), for the fiscal year ended May 31, 1995 and the Fund intends
to continue to so qualify, if such qualification is in the best interests
of its shareholders. To qualify as a regulated investment company, the
Fund must distribute at least 90% of its net income (consisting of net
investment income from tax exempt obligations and net short-term capital
gains) to its shareholders, must derive less than 30% of its annual gross
income from gain on the sale of securities held for less than three months,
and must meet certain asset diversification and other requirements.
Accordingly, the Fund may be restricted in the selling of securities held
for less than three months. The term "regulated investment company" does
not imply the supervision of management or investment practices or policies
by any government agency.
The Code provides that if a shareholder has not held his Fund shares
for more than six months (or such shorter period as the Internal Revenue
Service may prescribe by regulation) and has received an exempt-interest
dividend with respect to such shares, any loss incurred on the sale of such
shares will be disallowed to the extent of the exempt-interest dividend
received. In addition, any dividend or distribution paid shortly after an
investor's purchase may have the effect of reducing the net asset value of
his shares below the cost of his investment. Such a distribution would be
a return on investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gains
realized from the sale or other disposition of certain market discount
bonds will be treated as ordinary income under Section 1276 of the Code.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could, under special tax rules, affect the amount, timing and
character of distributions to shareholders. For example, the Fund could be
required to take into account annually a portion of the discount (or deemed
discount) at which such securities were issued and to distribute such
portion in order to maintain its qualification as a regulated investment
company. In such case, the Fund may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
PORTFOLIO TRANSACTIONS
Portfolio securities are purchased from and sold to parties acting as
either principal or agent. Newly-issued securities ordinarily are
purchased directly from the issuer or from an underwriter; other purchases
and sales usually are placed with those dealers from which it appears that
the best price or execution will be obtained. Usually no brokerage
commissions, as such, are paid by the Fund for such purchases and sales,
although the price paid usually includes an undisclosed compensation to the
dealer acting as agent. The prices paid to underwriters of newly-issued
securities usually include a concession paid by the issuer to the
underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the expenses of its
research department. The amount of transactions during the fiscal year
ended May 31, 1995 in newly issued debt instruments in fixed price public
offerings directed to an underwriter or underwriters in consideration of,
among other things, research services provided, was $9,921,801.55.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Performance
Information."
The Fund's current yield for the 30-day period ended May 31, 1995 was
4.94%. Current yield is computed pursuant to a formula which operates as
follows: the amount of the Fund's expenses accrued for the 30-day period
(net of reimbursements) is subtracted from the amount of the dividends and
interest earned (computed in accordance with regulatory requirements) by
the Fund during the period. That result is then divided by the product of:
(a) the average daily number of shares outstanding during the period that
were entitled to receive distributions and dividends, and (b) the net asset
value per share on the last day of the period less any undistributed earned
income per share reasonably expected to be declared as a dividend shortly
thereafter. The quotient is then added to 1, and that sum is raised to the
6th power, after which 1 is subtracted. The current yield is then arrived
at by multiplying the result by 2.
Based upon a 1995 Federal personal income tax rate of 39.60%, the
Fund's tax equivalent yield for the 30-day period ended May 31, 1995 was
8.18%. Tax equivalent yield is computed by dividing that portion of the
current yield (calculated as described above) which is tax exempt by 1
minus a stated tax rate and adding the quotient to that portion, if any, of
the yield of the Fund that is not tax exempt.
The tax equivalent yield quoted above represents the application of
the highest Federal marginal personal tax rate presently in effect. The
tax equivalent figure, however, does not include the potential effect of
any state or local (including, but not limited to, county, district or
city) taxes, including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rate or yield. Each
investor should consult its tax adviser, consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
The Fund's average annual total return for the 1, 5 and 10 year
periods ended May 31, 1995 was 7.54%, 8.03% and 8.16%, respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result.
The Fund's total return for the period August 11, 1983 (commencement
of operations) through May 31, 1995 was 162.83%. Total return is
calculated by subtracting the amount of the Fund's net asset value per
share at the beginning of a stated period from the net asset value per
share at the end of the period (after giving effect to the reinvestment of
dividends and distributions during the period), and dividing the result by
the net asset value per share at the beginning of the period.
From time to time, the Fund may use hypothetical tax equivalent yields
or charts in its advertising. These hypothetical yields or charts will be
used for illustrative purposes only and are not indicative of the Fund's
past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, and actual or proposed tax legislation. From time to time,
advertising materials for the Fund also may refer to statistical or other
information concerning trends relating to investment companies, as compiled
by industry associations such as the Investment Company Institute. From
time to time, advertising materials for the Fund also may refer to
Morningstar ratings and related analyses supporting such ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the
Fund, the Transfer Agent arranges for the maintenance of shareholder
account records for the Fund, the handling of certain communications
between shareholders and the Fund and the payment of dividends and
distributions payable by the Fund. For these services, the Transfer Agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the Fund during the month, and is reimbursed for
certain out-of-pocket expenses. The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's custodian. Neither the
Transfer Agent nor The Bank of New York has any part in determining the
investment policies of the Fund or which portfolio securities are to be
purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as independent auditors of the
Fund.
APPENDIX
Description of certain S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
A
Principal and interest payments on bonds in this category are regarded
as safe. This rating describes the third strongest capacity for payment of
debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local
economic base, in debt burden, in the balance between revenues and
expenditures, or in quality of management. Under certain adverse
circumstances, any one such weakness might impair the ability of the issuer
to meet debt obligations at some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management performance
appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several
of the above factors could contribute to a lesser capacity for payment of
debt service. The difference between A and BBB rating is that the latter
shows more than one fundamental weakness, or one very substantial
fundamental weakness, whereas the former shows only one deficiency among
the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the pledged
revenues could show substantial variations with the revenue flow possibly
being subject to erosion over time. Basic security provisions are no more
than adequate. Management performance could be stronger.
BB, B, CCC, CC
Debt rated BB, B, CCC or CC is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payment.
B
Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default,
and is dependent upon favorable business, financial and economic conditions
to meet timely payments of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have the capacity to
pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C typically is applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus or
minus sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) sign designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for timely payment.
Issues in this category are delineated with the numbers 1, 2 and 3 to
indicate the relative degree of safety. Paper rated A-1 indicates that the
degree of safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus (+) sign designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may
be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end
of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term risk.
Factors affecting the liquidity of the borrower and short-term cyclical
elements are critical in short-term ratings, while other factors of major
importance in bond risk, long-term secular trends for example, may be less
important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as V-MIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the V-MIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or V-MIG 1 through MIG 4 or V-MIG 4. As the name implies, when
Moody's assigns a MIG or V-MIG rating, all categories define an investment
grade situation.
MIG 1/V-MIG 1
This description denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/V-MIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Rating
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation and well established access to a range of financial markets and
assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but
may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and
repay principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The
likelihood that the ratings of these bonds will fall below investment grade
is higher than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to
pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be
identified which could assist the obligor in satisfying its debt service
requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if
not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of
interest and/or principal payments. Such bonds are extremely speculative
and should be valued on the basis of their ultimate recovery value in
liquidation or reorganization of the obligor. DDD represents the highest
potential for recovery on these bonds and D represents lowest potential for
recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the AAA Category covering 12-36
months or the DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations in
a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect as
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-98.4% AMOUNT VALUE
---------------- ----------------
<S> <C> <C>
ALASKA-1.1%
Alaska Industrial Development and Export Authority, Revolving Fund:
7.80%, 4/1/2004......................................................... $ 6,360,000 $ 7,044,845
6.375%, 4/1/2008........................................................ 3,000,000 3,164,250
Anchorage, HR, Refunding (Sisters of Providence Project) 6.50%, 10/1/1999... 2,000,000 2,113,820
Kasaan, LR 7.75%, 8/15/2005 (LOC; Sumitomo Trust and Banking) (a)........... 3,510,000 3,951,102
ARIZONA-2.0%
Greenlee County Industrial Development Authority, PCR, Refunding
(Phelps Dodge Corp. Project) 5.45%, 6/1/2009............................ 15,000,000 14,627,400
Maricopa County Industrial Development Authority, Hospital Facility Revenue
(Samaritan Health Services) 7.15%, 12/1/2004 (Insured; MBIA)............ 9,835,000 11,459,152
Mesa Industrial Development Authority, Industrial Revenue
(TRW Vehicle Safety Systems, Inc. Project) 7.25%, 10/15/2004............ 5,000,000 5,199,100
ARKANSAS-.6%
Arkansas Student Loan Authority, Revenue:
6.05%, 6/1/2002......................................................... 4,700,000 4,903,886
6.05%, 12/1/2002........................................................ 4,455,000 4,659,574
CALIFORNIA-9.3%
California Department of Veteran Affairs, Home Purchase Revenue 7.80%, 8/1/2001 5,000,000 5,365,300
California Higher Education Loan Authority, Student Loan Revenue, Refunding:
6.40%, 12/1/2003........................................................ 6,000,000 6,387,840
6.50%, 6/1/2005......................................................... 5,500,000 5,831,870
California Public Works Board, LR:
(Community College Projects):
5.875%, 10/1/2008..................................................... 4,500,000 4,575,915
5.90%, 10/1/2009...................................................... 5,215,000 5,274,660
(University of California Projects):
5%, 6/1/2005.......................................................... 6,230,000 5,997,434
5%, 6/1/2006.......................................................... 5,730,000 5,464,013
Refunding 5.25%, 6/1/2006............................................. 6,000,000 5,926,080
Los Angeles Department of Airports, Airport Revenue, Refunding:
5.375%, 5/15/2007 (Insured; FGIC)....................................... 12,235,000 12,336,673
5.50%, 5/15/2009 (Insured; FGIC)........................................ 5,620,000 5,624,665
5.50%, 5/15/2010 (Insured; FGIC)........................................ 5,000,000 4,949,650
Los Angeles Department of Water and Power, Electric Plant Revenue, Refunding
5.125%, 11/15/2007...................................................... 7,000,000 6,864,130
Los Angeles Harbor Department, Revenue 6.40%, 8/1/2012...................... 5,420,000 5,636,421
Northern California Power Agency, Geothermal Project Number 3, Revenue,
Refunding
5.50%, 7/1/2005......................................................... 13,000,000 13,109,460
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
CALIFORNIA (CONTINUED)
Orange County Local Transportation Authority, Sales Tax Revenue
4.64%, 2/15/2006 (Insured; FGIC) (b).................................... $ 13,200,000 $ 11,350,812
Riverside County Asset Leasing Corp., Leasehold Revenue
(Riverside County Hospital Project) 6%, 6/1/2003........................ 3,000,000 3,111,720
Sacramento Municipal Utility District, Electric Revenue
5.40%, 11/15/2006 (Insured; FSA)........................................ 10,000,000 10,039,200
Sacramento Schools Insurance Authority, Revenue
(Workers Compensation Program) 5.75%, 6/1/2003.......................... 15,795,000 16,368,043
Solano County, COP, Refunding (Justice Facility and Public Buildings Project)
5.875%, 10/1/2005....................................................... 10,000,000 9,994,500
COLORADO-1.5%
Denver City and County, Airport Revenue:
7.50%, 11/15/2002....................................................... 6,080,000 6,557,523
8.75%, 11/15/2005....................................................... 14,485,000 16,470,749
CONNECTICUT-2.2%
Connecticut:
5.25%, 3/15/2007........................................................ 12,555,000 12,625,810
5.50%, 3/15/2007........................................................ 7,905,000 8,096,617
5.50%, 3/15/2008........................................................ 4,000,000 4,066,240
Connecticut Housing Finance Authority, Housing Mortgage Finance Program:
7.30%, 11/15/2003....................................................... 5,705,000 6,093,738
5.95%, 5/15/2011........................................................ 3,215,000 3,311,997
DELAWARE-.8%
Delaware River and Bay Authority, Delaware Authority Revenue 3.75%, 1/1/2004 13,565,000 12,939,925
FLORIDA-2.4%
Dade County, Aviation Revenue 5.90%, 10/1/2005 (Insured; AMBAC) (c)......... 10,830,000 11,358,504
Florida School Boards Association, LR (Orange County School Board Project)
6.25%, 7/1/2005 (Insured; AMBAC)........................................ 3,250,000 3,356,632
Greater Orlando Aviation Authority, Airport Facilities Revenue 6.40%, 10/1/2004 8,940,000 9,680,500
Indian Trace Community Development District, Water and Sewer Revenue
8.50%, 4/1/1997......................................................... 995,000 1,061,108
Palm Beach County, Solid Waste IDR (Okeelanta Power L.P. Project)
6.50%, 2/15/2009........................................................ 3,600,000 3,649,392
Sarasota County School Board Financing Corp., LR, Refunding:
5%, 7/1/2007 (Insured; MBIA)............................................ 4,015,000 3,950,479
5%, 7/1/2008 (Insured; MBIA)............................................ 4,200,000 4,089,708
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
GEORGIA-1.0%
Burke County Development Authority, PCR, Refunding (Oglethorpe Power Corp.):
5%, 1/1/2007 (c)........................................................ $ 8,395,000 $ 8,122,246
5.05%, 1/1/2008......................................................... 7,695,000 7,423,674
HAWAII-2.4%
Hawaii, Airports Systems Revenue 7.50%, 7/1/2005 (Insured; FGIC)............ 3,000,000 3,391,050
Hawaii County, Refunding and Improvement 5.30%, 5/1/2005 (Insured; FGIC).... 2,000,000 2,051,080
Honolulu City and County 5.40%, 9/27/2007................................... 30,600,000 30,926,808
ILLINOIS-6.0%
Chicago O'Hare International Airport, Special Facility Revenue
(International Terminal) 7.50%, 1/1/2005................................ 2,800,000 3,084,480
Chicago School Finance Authority 5%, 6/1/2009 (Insured; MBIA) (c)........... 9,000,000 8,459,910
Hoffman Estates, Tax Increment Revenue
7.50%, 11/15/2003 (LOC; Union Bank of Switzerland) (a).................. 5,145,000 5,506,848
Illinois:
5.60%, 6/1/2001......................................................... 3,325,000 3,453,478
5.60%, 8/1/2007......................................................... 11,925,000 12,111,984
Illinois Development Finance Authority, Community Rehabilitation
(Providers Facility Acquisition) 8.25%, 9/1/2000........................ 6,160,000 6,584,116
Illinois Health Facilities Authority, Revenue:
(Catholic Health Co. Addolorata Project) 7.625%, 7/1/1999............... 1,390,000 1,542,650
(Central Dupage Health Wyndemere Retirement Community)
6.125%, 11/1/2007 (Insured; MBIA)..................................... 4,400,000 4,593,160
(Ingalls Memorial Hospital Project) 7%, 1/1/2005 (Insured; MBIA)
(Prerefunded 1/1/2000)(d)............................................. 6,000,000 6,694,020
(Refunding - Evangelical Hospitals) 6.75%, 4/15/2007.................... 3,090,000 3,243,017
(Refunding - Westlake Community Hospital):
7.625%, 1/1/1999...................................................... 2,850,000 3,075,264
7.75%, 1/1/2004....................................................... 5,450,000 5,789,371
(Southern Illinois Hospital Services) 6.50%, 3/1/2007 (Insured; MBIA)... 4,000,000 4,307,440
(Swedish American Hospital)
7.30%, 4/1/2007 (Insured; AMBAC) (Prerefunded 4/1/2000) (d)........... 4,000,000 4,532,720
Illinois Student Assistance Commission, Student Loan Revenue:
6.30%, 3/1/2004......................................................... 2,600,000 2,761,200
6.40%, 3/1/2005......................................................... 6,300,000 6,745,410
Joliet, Gas Supply Revenue (Peoples Gas Light and Coke) 8%, 6/1/1999........ 5,000,000 5,609,800
Normal, EDR, Refunding (Dayton - Hudson Corp. Project)
6.75%, 11/1/2001........................................................ 3,400,000 3,640,210
INDIANA-6.5%
Boonville Junior High School Building Corp., First Mortgage Revenue,
Refunding
6.80%, 7/1/2005......................................................... 3,100,000 3,394,965
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
INDIANA (CONTINUED)
(CONTINUED)
Brownsburg School Building Corp., First Mortgage:
5.80%, 8/1/2008 (Insured; CGIC) (e)..................................... $ 2,650,000 $ 2,712,964
5.90%, 8/1/2009 (Insured; CGIC) (e)..................................... 2,895,000 2,962,164
Indiana Bond Bank (Special Hospital Program Hendricks) 6.90%, 4/1/2006...... 3,000,000 3,247,260
Indiana Health Facility Financing Authority, HR (Lafayette Home Hospital
Project)
5.75%, 8/1/2008......................................................... 3,000,000 3,004,110
Indiana Municipal Power Agency, Power Supply Systems Revenue, Refunding:
5.70%, 1/1/2006 (Insured; MBIA)......................................... 8,400,000 8,696,604
5.80%, 1/1/2008 (Insured; MBIA)......................................... 14,000,000 14,428,400
Indiana Transportation Finance Authority, Airport Facilities LR (United Air
Lines)
6.50%, 11/1/2007........................................................ 5,250,000 5,579,962
Indianapolis Local Public Improvement Bond Bank:
6.20%, 2/1/2003......................................................... 2,100,000 2,210,859
6.30%, 2/1/2004......................................................... 2,800,000 2,962,400
6.40%, 12/1/2005........................................................ 3,000,000 3,188,490
Knox County Hospital Association, LR 5.65%, 7/1/2008 (Insured; MBIA)........ 4,150,000 4,192,579
Logansport School Building Corp., First Mortgage
7.30%, 1/15/2007 (Prerefunded 1/15/2000) (d)............................ 4,750,000 5,353,060
Merrillville Multiple School Building Corp., First Mortgage, Refunding:
6.125%, 7/1/2001 (Insured; MBIA)........................................ 3,400,000 3,623,992
6.25%, 7/1/2002 (Insured; MBIA)......................................... 3,000,000 3,230,460
Noblesville High School Building Corp. (First Mortgage) 5.65%, 2/15/2008.... 4,060,000 4,065,846
North Montgomery Elementary School Building Corp., Refunding 6.50%, 7/1/2006 5,665,000 6,189,182
Purdue University, University Revenue (Purdue University Dormitory System)
6.90%, 7/1/2006 (Insured; AMBAC) (Prerefunded 7/1/2001) (d)............. 4,075,000 4,622,028
Robbins, RRR (Robbins Resource Recovery Partners) 8.75%, 10/15/2005......... 15,000,000 16,108,800
IOWA-1.7%
Ames, HR (Mary Greeley Medical Center Project) 6.25%, 8/15/2006 (Insured; AMBAC) 4,320,000 4,612,248
Council Bluffs, IDR, Refunding (Cargill, Inc. Project) 7%, 3/1/2007......... 4,400,000 4,818,000
Iowa Student Loan Liquidity Corp., Student Loan Revenue:
6.65%, 3/1/2003 (Insured; AMBAC)........................................ 4,900,000 5,235,209
7%, 12/1/2003 (Insured; AMBAC) (c)...................................... 10,000,000 10,982,100
KENTUCKY-1.8%
Kentucky Higher Education Student Loan Corp., Insured Student Loan Revenue,
Refunding 5.10%, 12/1/2003.............................................. 4,030,000 3,997,115
Kentucky Property and Buildings Commission, Revenue, Refunding (Project
Number 55)
6%, 9/1/2008............................................................ 12,770,000 13,487,163
Mount Sterling, LR (Kentucky League Cities Funding) 5.625%, 3/1/2003........ 10,000,000 10,155,800
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31,1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
LOUISIANA-2.9%
(CONTINUED)
Louisiana Correctional Facilities Corp., LR:
5.40%, 12/15/2001....................................................... $ 14,000,000 $ 14,434,560
5.55%, 12/15/2002....................................................... 14,000,000 14,460,600
5.60%, 12/15/2003....................................................... 5,600,000 5,787,824
Louisiana Public Facilities Authority, Revenue:
(Louisiana Association of Independent Colleges and Universities)
6.50%, 12/1/2002...................................................... 2,155,000 2,265,789
(Tulane University of Louisiana) 7.81%, 11/15/2012 (b).................. 8,065,000 8,526,318
MAINE-1.3%
Jay, PCR, Refunding (International Paper Co. Project) 4.65%, 9/1/2002....... 5,700,000 5,622,024
Maine Educational Loan Marketing Corp., Student Loan Revenue:
5.85%, 11/1/2002........................................................ 7,000,000 7,254,870
Refunding:
5.65%, 5/1/1999....................................................... 1,900,000 1,929,165
6.90%, 11/1/2003...................................................... 5,000,000 5,303,800
MASSACHUSETTS-6.5%
Boston Industrial Development Financing Authority, Sewage Facility Revenue
(Harbor Electric Energy Project) 7.10%, 5/15/2002....................... 5,505,000 5,710,997
Massachusetts Commonwealth:
Consolidated Loan 5.30%, 7/1/2006....................................... 30,600,000 30,649,266
Refunding:
6.40%, 8/1/2003....................................................... 3,175,000 3,463,099
5.20%, 8/1/2008 (Insured; FGIC)....................................... 5,000,000 4,962,000
5.30%, 7/1/2006....................................................... 7,295,000 7,306,745
Massachusetts Housing Finance Agency, Housing Revenue:
Refunding:
6.30%, 7/1/2007 (Insured; AMBAC)...................................... 3,190,000 3,350,808
6.35%, 7/1/2008 (Insured; AMBAC)...................................... 3,425,000 3,591,489
6.40%, 7/1/2009 (Insured; AMBAC)...................................... 3,740,000 3,912,003
Single Family 6.10%, 12/1/2010.......................................... 9,695,000 9,893,457
Massachusetts Water Resources Authority 5.10%, 12/1/2004.................... 10,000,000 9,999,900
New England Education Loan Marketing Corp., Student Loan Revenue, Refunding:
5.05%, 12/1/2002........................................................ 2,500,000 2,467,800
5.625%, 7/1/2004........................................................ 5,000,000 5,040,350
5.70%, 7/1/2005......................................................... 10,000,000 10,083,300
MICHIGAN-3.9%
Kent Hospital Finance Authority, Hospital Facility Revenue, Refunding
(Blodgett Memorial Medical Center) 7%, 7/1/2001......................... 2,500,000 2,663,550
Michigan Building Authority, Revenue 6.50%, 10/1/2005....................... 8,440,000 9,161,114
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
MICHIGAN (CONTINUED)
Michigan Higher Education Student Loan Authority, Revenue, Refunding:
5.70%, 9/1/2003......................................................... $ 2,000,000$ 2,042,660
5.80%, 9/1/2004......................................................... 3,900,000 3,994,887
Michigan Hospital Finance Authority, Revenue, Refunding:
(Genesys Health System) 8.10%, 10/1/2013................................ 10,000,000 10,802,600
(McLaren Obligated Group):
5.10%, 10/15/2005..................................................... 3,655,000 3,457,411
7%, 9/15/2007 (Prerefunded 9/15/2000) (d)............................. 3,670,000 4,142,256
7.375%, 9/15/2008 (Prerefunded 9/15/2001) (c,d)....................... 6,925,000 8,050,936
Michigan Housing Development Authority, Rental Housing Revenue 6.10%, 4/1/2002 4,500,000 4,662,000
Michigan Strategic Fund, SWDR (Genesee Power Station Project) 7.125%, 1/1/2006 7,500,000 7,807,500
Wayne State University, University Revenues, Refunding
5.40%, 11/15/2006 (Insured; AMBAC)...................................... 3,105,000 3,188,152
MISSISSIPPI-.3%
Adams County, PCR (International Paper Co. Project) 5.625%, 11/15/2006...... 5,150,000 5,242,133
MISSOURI-1.8%
Phelps City Industrial Development Authority, Industrial Revenue, Refunding
(Excel Corp. Project) 7%, 12/1/2000..................................... 4,500,000 4,858,650
Saint Louis, Airport Improvement Revenue, Refunding
(Lambert - Saint Louis International Airport) 6%, 7/1/2005 (Insured; FGIC) 9,675,000 10,136,401
Saint Louis Municipal Finance Corp., Leasehold Revenue, Refunding:
5.375%, 7/15/2003 (LOC; Sanwa Bank) (a)................................. 5,075,000 5,139,605
5.50%, 7/15/2004 (LOC; Sanwa Bank) (a).................................. 6,835,000 6,942,241
NEBRASKA-.2%
Albion, IDR, Refunding (Cargill, Inc. Project) 7%, 12/1/2000................ 2,600,000 2,807,220
NEVADA-.8%
Clark County, Passenger Facility Charge Revenue
(Las Vegas McCarran International Airport) 5.95%, 7/1/2005 (Insured; AMBAC) 6,365,000 6,725,323
Washoe County Airport Authority, Airport Systems Improvement Revenue
5.60%, 7/1/2002 (Insured; MBIA)......................................... 5,000,000 5,170,800
NEW HAMPSHIRE-.4%
New Hampshire Higher Educational and Health Facilities Authority, Revenue, Refunding
(Catholic Medical Center) 8%, 7/1/2004.................................. 5,215,000 5,757,099
NEW JERSEY-2.0%
Mercer County Improvement Authority, Solid Waste Revenue, Refunding
(Resources Recovery Project) 6.50%, 4/1/2007 (Insured; FGIC)............ 7,620,000 8,244,383
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31,1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
NEW JERSEY (CONTINUED)
New Jersey Economic Development Authority, Waste Paper Recycling Revenue
(Marcal Paper Mills, Inc. Project):
5.75%, 2/1/2004....................................................... $ 2,815,000 $ 2,750,987
8.50%, 2/1/2010....................................................... 2,930,000 3,348,902
New Jersey Health Care Facilities Financing Authority, Revenue
(Kimball Medical Center) 8%, 7/1/1998................................... 5,810,000 6,324,069
New Jersey Sports and Exposition Authority (Sports Complex) 9%, 12/1/1995... 4,265,000 4,375,080
Orange Township 6.60%, 2/1/2007............................................. 5,600,000 6,186,096
NEW MEXICO-1.5%
New Mexico Educational Assistance Foundation, Student Loan Revenue:
6.60%, 3/1/2005......................................................... 10,980,000 11,950,083
6.70%, 3/1/2006......................................................... 9,910,000 10,606,673
NEW YORK-3.3%
Metropolitan Transportation Authority, Service Contract, Refunding,
Commuter Facilities Revenue 6.70%, 7/1/2003............................. 2,835,000 3,144,922
New York City:
7.30%, 2/1/2001......................................................... 5,000,000 5,469,000
7.50%, 2/1/2001......................................................... 3,000,000 3,308,820
7.50%, 8/15/2002........................................................ 2,000,000 2,150,100
8.25%, 11/1/2002........................................................ 2,345,000 2,573,403
New York City Industrial Development Agency:
IDR 7.625%, 11/1/2009 (LOC; Algemene Bank Nederland) (a)................ 2,120,000 2,166,640
Special Facility Revenue (Terminal One Group Association Project) 5.90%, 1/1/2006 4,680,000 4,749,592
New York State Dormitory Authority, Revenue (Consolidated City University
System)
5.70%, 7/1/2005......................................................... 13,000,000 13,097,240
New York State Energy Research and Development Authority, Service Contract
Revenue, Refunding (Western New York Nuclear Service Center) 5.20%, 4/1/2002 5,085,000 5,204,904
New York State Mortgage Agency, Homeowner Mortgage Revenue
5.75%, 10/1/2010........................................................ 3,000,000 2,996,700
Triborough Bridge and Tunnel Authority, General Purpose Revenue, Refunding
6.75%, 1/1/2009......................................................... 5,100,000 5,756,370
NORTH CAROLINA-1.3%
North Carolina Eastern Municipal Power Agency, Refunding:
Electric Revenue, Number 1 Catawba, 6%, 1/1/2004........................ 5,000,000 5,221,050
Power Systems Revenue 6%, 1/1/2006...................................... 11,955,000 11,991,343
Northampton County Industrial Facilities and Pollution Control Financing
Authority,
SWDR 8.05%, 11/1/2004................................................... 3,000,000 3,267,300
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
OHIO-1.6%
Cincinnati Student Loan Funding Corp., Student Loan Revenue:
5.85%, 8/1/2004......................................................... $ 5,500,000 $ 5,653,890
Refunding:
5.70%, 7/1/1999....................................................... 6,000,000 6,062,640
7.20%, 8/1/2003....................................................... 4,700,000 4,927,433
Franklin County, HR, Refunding (Holy Cross Health Systems):
5%, 6/1/2003............................................................ 2,650,000 2,591,938
5.10%, 6/1/2004......................................................... 2,790,000 2,725,132
5.20%, 6/1/2005......................................................... 2,930,000 2,860,852
OKLAHOMA-1.0%
Tulsa Airports Improvement Trust, General Revenue, Refunding
(Tulsa International Airport) 6.125%, 6/1/1999.......................... 5,620,000 5,915,219
Tulsa County Industrial Authority, Health Care Revenue, Refunding
(Saint Francis Hospital) 5.15%, 12/15/2018.............................. 10,000,000 9,837,200
PENNSYLVANIA-7.6%
Dauphin County General Authority, Revenue 5%, 6/1/2026 (Insured; AMBAC)..... 4,750,000 4,690,340
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.65%, 11/1/2004........................................................ 5,000,000 5,080,150
9.375%, 11/1/2006....................................................... 7,070,000 7,396,775
Montgomery County Higher Education and Health Authority, Revenue
(Northwestern Corp.) 8.375%, 6/1/2004................................... 3,050,000 3,203,415
Pennsylvania Convention Center Authority, Revenue, Refunding
6.25%, 9/1/2004......................................................... 4,550,000 4,698,375
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating):
6.40%, 1/1/2009....................................................... 10,500,000 10,433,430
Refunding 6.75%, 1/1/2007............................................. 7,000,000 7,049,700
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue
7.50%, 4/1/2005 (Insured; MBIA)......................................... 10,000,000 10,996,000
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(City of Philadelphia Funding Program) 5.45%, 6/15/2008 (Insured; FGIC). 9,000,000 9,034,560
Philadelphia, Water and Wastewater Revenue, Refunding
5.50%, 6/15/2006 (Insured; MBIA)........................................ 12,750,000 13,078,567
Philadelphia Hospitals and Higher Education Facilities Authority, Revenue:
(Community Mental Health/Retardation) 8.875%, 6/15/2009................. 13,530,000 14,547,321
(Northwestern Corp.) 8.375%, 6/1/2004................................... 2,150,000 2,302,456
Philadelphia Municipal Authority, LR, Refunding 6%, 7/15/2003............... 1,500,000 1,535,400
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
PENNSYLVANIA (CONTINUED)
Schuylkill County Industrial Development Authority, RRR, Refunding
(Schuylkill Energy Resource, Inc.) 6.50%, 1/1/2010...................... $ 10,995,000$ 10,861,851
Scranton-Lackawanna Health and Welfare Authority, Hospital Facilities Revenue
(Mercy Health Systems):
6.90%, 1/1/2003 (Insured; MBIA)....................................... 3,075,000 3,384,499
6.90%, 1/1/2004 (Insured; MBIA)....................................... 4,330,000 4,775,211
7.25%, 6/15/2005 (Insured; MBIA) (Prerefunded 6/15/2000) (d).......... 4,020,000 4,548,389
RHODE ISLAND-1.0%
Rhode Island Convention Center Authority, Revenue, Refunding
4.90%, 5/15/2004 (Insured; MBIA) (Prerefunded 10/15/2001) (d)........... 6,000,000 5,901,720
Rhode Island Housing and Mortgage Finance Corp.:
(Homeownership Opportunity) 7.30%, 10/1/2008............................ 5,000,000 5,351,200
(Refunding-Rental Housing Program):
5.65%, 10/1/2007...................................................... 2,175,000 2,144,463
5.65%, 10/1/2008...................................................... 1,350,000 1,326,334
SOUTH CAROLINA-1.0%
Charleston County, Hospital Facilities Improvement Revenue, Refunding
(Medical Society Health Project) 5.50%, 10/1/2005 (Insured; MBIA) (c)... 7,945,000 8,139,414
Piedmont Municipal Power Agency, Electric Revenue, Refunding
6.25%, 1/1/2004 (Insured; FGIC)......................................... 4,050,000 4,359,703
York County, PCR (Bowater, Inc. Project) 7.625%, 3/1/2006................... 2,900,000 3,249,421
SOUTH DAKOTA-.4%
South Dakota Student Loan Finance Corp., Student Loan Revenue, Refunding
6.45%, 8/1/2006......................................................... 6,705,000 6,940,547
TENNESSEE-1.7%
Gatlinburg, COP (Gatlinburg Convention Center):
8.75%, 12/1/1997........................................................ 545,000 597,500
9%, 12/1/2002 (Prerefunded 12/1/1997) (d)............................... 3,535,000 4,023,820
Shelby County, Refunding:
5.25%, 4/1/2006......................................................... 4,410,000 4,471,519
5.375%, 4/1/2007........................................................ 5,140,000 5,221,880
5.40%, 4/1/2008......................................................... 5,480,000 5,533,266
Sullivan County Health Educational and Housing Facilities,
Board Revenue (Holston Valley Health Care Project)
7.125%, 2/15/2005 (Insured; MBIA) (Prerefunded 2/15/2000) (d)........... 5,585,000 6,272,793
TEXAS-8.3%
Bell County Health Facilities Development Corp., Revenue
(Scott and White Memorial Hospital) 7.40%, 9/1/1999..................... 2,985,000 3,205,144
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
TEXAS (CONTINUED)
Brazos Higher Education Authority, Student Loan Revenue, Refunding:
5.40%, 6/1/2001 (c)..................................................... $ 8,250,000$ 8,338,275
5.50%, 6/1/2002......................................................... 5,000,000 5,095,850
5.60%, 6/1/2003......................................................... 4,500,000 4,595,895
Central Texas Higher Education Authority, Student Loan Revenue, Refunding
5.10%, 12/1/2003 (c).................................................... 7,000,000 6,900,460
Ennis IDC, Revenue, Refunding (Cargill, Inc. Project)
6.15%, 11/1/2003........................................................ 2,450,000 2,572,818
Gulf Coast Waste Disposal Authority, SWDR, Refunding
(Quaker Oats Co. Project) 5.70%, 5/1/2006............................... 7,210,000 7,374,316
Harris County Hospital District, Mortgage Revenue, Refunding 7.50%, 2/15/2003 (c) 7,000,000 8,025,010
Harris County Toll Road, Sub Lien Revenue, Refunding, Capital Appreciation,
Zero Coupon, 8/1/2008................................................... 8,005,000 3,872,819
Houston, Hotel Occupancy Tax Revenue:
7%, 7/1/2003 (Insured; FGIC)............................................ 4,400,000 4,910,136
7%, 7/1/2004 (Insured; FGIC)............................................ 1,525,000 1,693,314
North Central Health Facility Development Corp., Revenue 7.74%, 5/15/2008 (b) 13,000,000 13,961,220
North Texas Higher Education Authority, Student Loan Revenue:
7%, Series B, 4/1/2002 (Insured; AMBAC)................................. 4,250,000 4,608,700
7%, Series E, 4/1/2002 (Insured; AMBAC)................................. 4,250,000 4,608,700
Rio Grande Valley Health Facilities Development Corp., HR, Refunding
(Valley Baptist Medical Center) 6.25%, 8/1/2006 (c)..................... 5,100,000 5,466,843
South Texas Higher Education Authority, Student Loan Revenue, Refunding
5.30%, 12/1/2003........................................................ 5,350,000 5,172,433
Tarrant County Health Facilities Development Corp., Health Systems Revenue
(Harris Methodist Health Systems) 6%, 9/1/2010.......................... 7,725,000 7,927,627
Texas, Veterans Housing Assistance Fund:
6.40%, 6/1/2006......................................................... 2,240,000 2,329,690
6.50%, 6/1/2007......................................................... 3,130,000 3,258,643
6.60%, 6/1/2008......................................................... 3,675,000 3,828,358
6.70%, 6/1/2009......................................................... 4,055,000 4,226,729
Texas Department of Housing and Community Affairs, Multi-Family Revenue, Refunding
(Dallas Association) 6.25%, 12/1/1995 (LOC; Phoenix Mutual Life Insurance Co.) (a) 5,000,000 5,056,650
Texas State College, Student Loan 5.70%, 8/1/2008........................... 5,345,000 5,418,601
Texas Water Resources Financing Authority, Revenue:
7.25%, 8/15/1997........................................................ 1,990,000 2,116,823
7.30%, 8/15/1998........................................................ 2,525,000 2,750,912
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
UTAH-2.3%
Carbon County, SWDR:
(Refunding - Sunnyside Cogeneration Project) 9%, 7/1/2006............... $ 9,750,000 $ 10,417,095
(Sunnyside Cogeneration Association) 7.50%, 7/1/2007.................... 5,500,000 5,635,630
Salt Lake County Municipal Building Authority, LR
5.90%, 10/1/2006 (Insured; MBIA)........................................ 4,260,000 4,460,987
Utah Board of Regents, Student Loan Revenue:
6.25%, 11/1/2003 (Insured; AMBAC)....................................... 3,000,000 3,147,720
7.05%, 11/1/2003 (Insured; AMBAC)....................................... 5,000,000 5,477,400
6.35%, 11/1/2004 (Insured; AMBAC)....................................... 3,000,000 3,212,610
6.45%, 11/1/2005 (Insured; AMBAC)....................................... 3,000,000 3,235,440
VERMONT-.2%
Vermont Student Assistance Corp., Education Loan Revenue (Finance Program)
6.25%, 12/15/2003 (Insured; FSA)........................................ 3,500,000 3,725,890
VIRGINIA-1.1%
Fairfax County Economic Development Authority, Educational Facilities Revenue
(George Mason University Educational Foundation):
6.50%, 11/15/2002..................................................... 2,000,000 2,091,060
6.95%, 11/15/2002..................................................... 5,360,000 5,698,645
Virginia Housing Development Authority, Commonwealth Mortgage:
6.05%, 1/1/2004......................................................... 4,400,000 4,560,512
6.15%, 1/1/2005......................................................... 4,400,000 4,550,920
WASHINGTON-4.8%
Chelan County Public Utility District Number 1, Consolidated Revenue
(Chelan Hydroelectric):
7.55%, 7/1/2062....................................................... 6,515,000 7,109,624
5.70%, 7/1/2068....................................................... 5,650,000 5,696,330
5.70%, 7/1/2068....................................................... 1,960,000 1,968,840
Clark County Public Utility District Number 1, Electric Revenue, Refunding:
6.10%, 1/1/2002 (Insured; FGIC)......................................... 2,015,000 2,154,236
6.30%, 1/1/2004 (Insured; FGIC)......................................... 3,160,000 3,396,147
Port Seattle, Revenue 6.50%, 11/1/2005...................................... 3,000,000 3,260,880
Washington Health Care Facilities Authority, Revenue:
(Childrens Hospital and Medical Center) 6.125%, 10/1/2007 (Insured; FGIC) 4,000,000 4,174,280
(Refunding - Yakima Valley Memorial Hospital) 7.875%, 1/1/2003.......... 3,300,000 3,607,890
Washington Housing Finance Commission, SFMR
6.85%, 7/1/2011 (Insured: FNMA, GNMA)................................... 4,445,000 4,712,500
Washington Public Power Supply Systems, Revenue, Refunding:
(Nuclear Project Number 1):
7.70%, 7/1/2002....................................................... 16,745,000 19,348,178
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- ----------------
WASHINGTON (CONTINUED)
Washington Public Power Supply Systems, Revenue, Refunding (continued):
(Nuclear Project Number 1) (continued):
7.25%, 7/1/2003....................................................... $ 2,400,000 $ 2,639,232
6.60%, 7/1/2004....................................................... 2,500,000 2,683,050
(Nuclear Project Number 2) 7.50%, 7/1/2003.............................. 5,775,000 6,470,945
(Nuclear Project Number 3) 7.375%, 7/1/2004............................. 5,500,000 6,138,880
WISCONSIN-1.9%
Carlton, PCR, Refunding (Wisconsin Public Service Corp.) 6.125%, 10/1/2005.. 5,000,000 5,446,450
Milwaukee County 5.30%, 12/1/2005........................................... 3,000,000 3,032,340
Wisconsin Health and Educational Facilities Authority, Revenue, Refunding:
(Luther Hospital Project) 6.125%, 11/15/2006............................ 3,500,000 3,699,115
(Wheaton Franciscan Services, Inc.):
6%, 8/15/2006 (Insured; MBIA)......................................... 3,555,000 3,762,896
6%, 8/15/2007 (Insured; MBIA)......................................... 3,780,000 3,980,453
6.50%, 8/15/2007 (Insured; MBIA)...................................... 3,000,000 3,209,910
Wisconsin Housing and Economic Development Authority, Housing Revenue
5.30%, 11/1/2006........................................................ 7,075,000 6,833,742
----------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $1,444,252,740)................. $1,517,584,608
================
SHORT-TERM MUNICIPAL INVESTMENTS-1.6%
CALIFORNIA-1.3%
California, RAN 6.50%, 4/25/1996............................................ $ 20,000,000 $ 20,347,800
WASHINGTON-.3%
Washington Public Power Supply Systems
(Nuclear Project Number 3) 5.40% (b).................................... 4,500,000 4,500,000
----------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $24,782,576)................... $ 24,847,800
===============
TOTAL INVESTMENTS-100.0%
(cost $1,469,035,316)................................................... $1,542,432,408
===============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
CGIC Capital Guaranty Insurance Corporation LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
EDR Economic Developement Revenue Insurance Corporation
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RAN Revenue Anticipation Notes
FSA Financial Security Assurance RRR Resources Recovery Revenue
GNMA Government National Mortgage Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDC Industrial Development Corporation VRDN Variable Rate Demand Notes
IDR Industrial Development Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <C> <C>
AAA Aaa AAA 36.3%
AA Aa AA 24.0
A A A 22.2
BBB Baa BBB 7.2
BB Ba BB .4
F2 MIG2, VMIG2 & P2 SP2, A2 1.3
Not Rated(g) Not Rated(g) Not Rated(g) 8.6
-------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Secured by letters of credit.
(b) Inverse floater security - the interest rate is subject to change
periodically.
(c) Wholly held by the custodian in a segregated account as collateral
for delayed delivery securities.
(d) 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.
(e) Purchased on a delayed delivery basis.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poors, have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $1,469,035,316)-see statement...................................
$1,542,432,408
Interest receivable..................................................... 28,917,225
Receivable for investment securities sold............................... 5,925,500
Receivable for subscriptions to Common Stock............................ 105,765
Prepaid expenses........................................................ 37,625
--------------
1,577,418,523
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 860,101
Due to Custodian........................................................ 1,266,321
Payable for investment securities purchased............................. 5,576,549
Payable for Common Stock redeemed....................................... 32,729
Accrued expenses........................................................ 172,250 7,907,950
------------ --------------
NET ASSETS..................................................................
$1,569,510,573
==============
REPRESENTED BY:
Paid-in capital.........................................................
$1,497,868,575
Accumulated net realized (loss) on investments.......................... (1,755,094)
Accumulated net unrealized appreciation on investments-Note 3........... 73,397,092
--------------
NET ASSETS at value, applicable to 111,965,447 shares outstanding
(300 million shares of $.01 par value Common Stock authorized)..........
$1,569,510,573
==============
NET ASSET VALUE, offering and redemption price per share
($1,569,510,573 / 111,965,447 shares)................................... $14.02
======
See notes to financial statements.
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1995
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 98,526,547
EXPENSES:
Management fee-Note 2(a).............................................. $ 9,375,485
Shareholder servicing costs-Note 2(b)................................. 1,702,231
Custodian fees........................................................ 111,364
Professional fees..................................................... 77,060
Registration fees..................................................... 69,143
Directors' fees and expenses-Note 2(c)................................ 42,659
Prospectus and shareholders' reports.................................. 41,941
Miscellaneous......................................................... 101,126
-------------
TOTAL EXPENSES.................................................. 11,521,009
-------------
INVESTMENT INCOME-NET........................................... 87,005,538
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (1,725,706)
Net unrealized appreciation on investments.............................. 22,832,163
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 21,106,457
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $108,111,995
=============
See notes to financial statements.
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31,
--------------------------------------
1994 1995
------------------ -----------------
OPERATIONS:
Investment income-net............................................... $ 94,163,302 $ 87,005,538
Net realized gain (loss) on investments............................. 16,989,268 (1,725,706)
Net unrealized appreciation (depreciation) on investments for the year (57,274,612) 22,832,163
----------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 53,877,958 108,111,995
----------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net............................................... (94,921,816) (87,005,538)
Net realized gain on investments.................................... (20,390,870) (7,204,563)
----------------- -----------------
TOTAL DIVIDENDS................................................... (115,312,686) (94,210,101)
----------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold....................................... 1,103,022,230 744,924,662
Dividends reinvested................................................ 88,406,570 69,793,688
Cost of shares redeemed............................................. (1,109,542,268) (983,235,669)
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS. 81,886,532 (168,517,319)
----------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS....................... 20,451,804 (154,615,425)
NET ASSETS:
Beginning of year................................................... 1,703,674,194 1,724,125,998
----------------- -----------------
End of year......................................................... $ 1,724,125,998 $ 1,569,510,573
================= =================
SHARES SHARES
----------------- -----------------
CAPITAL SHARE TRANSACTIONS:
Shares sold......................................................... 76,481,952 55,011,010
Shares issued for dividends reinvested.............................. 6,129,404 5,153,303
Shares redeemed..................................................... (77,120,425) (72,735,921)
----------------- -----------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING..................... 5,490,931 (12,571,608)
================= =================
See notes to financial statements.
</TABLE>
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
Condensed Financial Information:
Reference is made to Page 3 of the Prospectus dated September 1, 1995,
as revised August 1, 1996.
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Dreyfus
Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., the parent company of which is Boston Institutional Group,
Inc.
(A) PORTFOLIO VALUATION: The Fund's investments 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.
(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.
NOTE 2-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 .60 of 1% of the average
daily value of the Fund's net assets and is
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
payable monthly. However, pursuant to the court approved settlement of
previously disclosed litigation, commencing October 15, 1988 the Manager has
agreed to make payments to the Fund for 10 years, ranging from $0 to $1
million per year depending upon average daily net assets of the Fund. The
management fee for the year ended May 31, 1995 was reduced by $90,000
pursuant to the settlement of litigation.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over the Fund for any full fiscal year. The
most stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such expenses
(exclusive of certain expenses as described above) exceed 2 1/2% of the first
$30 million, 2% of the next $70 million and 1 1/2% of the excess over $100
million of the average value of the Fund's net assets in accordance with
California "blue sky" regulations. There was no expense reimbursement for the
year ended May 31, 1995.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation an amount not to exceed an annual rate of .25 of
1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. During the year ended May
31, 1995, the Fund was charged an aggregate of $709,547 pursuant to the
Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and directors of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each director who is not an "affiliated person"
receives 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.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $1,483,335,979 and $1,701,898,537, respectively, for the year
ended May 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At May 31, 1995, accumulated net unrealized appreciation on investments
was $73,397,092, consisting of $76,887,006 gross unrealized appreciation and
$3,489,914 gross unrealized depreciation.
At May 31, 1995, 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).
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Intermediate Municipal Bond Fund, Inc., including the statement of
investments, as of May 31, 1995, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
years indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of May 31, 1995 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Intermediate Municipal Bond Fund, Inc. at May 31, 1995,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
June 29, 1995
