File No. 2-56878
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 34 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 34 [X]
(Check appropriate box or boxes.)
DREYFUS MUNICIPAL BOND FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on December 29, 1994 pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for
a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended August 31, 1994 was filed on October 24, 1994.
DREYFUS MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 3
4 General Description of Registrant 4
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 21
7 Purchase of Securities Being Offered 12
8 Redemption or Repurchase 16
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-23
13 Investment Objectives and Policies B-2
14 Management of the Fund B-9
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-12
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-20
18 Capital Stock and Other Securities B-23
19 Purchase, Redemption and Pricing B-14, B-15,
of Securities Being Offered B-20
20 Tax Status *
21 Underwriters B-14
22 Calculations of Performance Data B-22
23 Financial Statements B-34
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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PROSPECTUS DECEMBER 29, 1994
DREYFUS MUNICIPAL BOND FUND, INC.
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DREYFUS MUNICIPAL BOND FUND, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A NO-LOAD MUNICIPAL BOND
FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL OF CURRENT INCOME EXEMPT
FROM FEDERAL INCOME TAX AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL.
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.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION), DATED
DECEMBER 29, 1994, 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. FOR A FREE COPY,
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 666.
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.
TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES....................... 3
CONDENSED FINANCIAL INFORMATION...................... 3
DESCRIPTION OF THE FUND.............................. 4
MANAGEMENT OF THE FUND............................... 11
HOW TO BUY FUND SHARES............................... 12
SHAREHOLDER SERVICES................................. 14
HOW TO REDEEM FUND SHARES............................ 16
SHAREHOLDER SERVICES PLAN............................ 19
DIVIDENDS, DISTRIBUTIONS AND TAXES................... 19
PERFORMANCE INFORMATION.............................. 21
GENERAL INFORMATION.................................. 21
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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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[This Page Intentionally Left Blank]
Page 2
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
<S> <C>
Management Fees (after expense reimbursement) ............................................... .59%
Other Expenses............................................................................... .09%
Total Fund Operating Expenses (after expense reimbursement).................................. .68%
</TABLE>
<TABLE>
<CAPTION>
Example: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
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 $22 $38 $85
</TABLE>
- ---------------------------------------------------------------------------
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%.
- ----------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. The expenses noted above, without reimbursements, would be: Management
Fees - .60% and Total Fund Operating Expenses - .69%; and the amount of
expenses that an investor would pay, assuming redemption after one, three,
five and ten years, would be $7, $22, $38 and $86, respectively. 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>
<CAPTION>
Year Ended August 31,
----------------------------------------------------------------------------
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PERSHAREDATA:
Net asset value, beginning of year...... $10.84 $11.60 $12.87 $12.22 $12.03 $12.47 $12.24 $12.68 $13.17 $13.68
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Investment Operations:
Investment income-net .................. 1.02 .99 .93 .91 .91 .90 .87 .84 .79 .75
Net realized and unrealized
gain (loss) on investments ............. .76 1.27 (.64) (.19) .44 (.23) .44 .49 .79 (.96)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total from Investment
Operations.............................. 1.78 2.26 .29 .72 1.35 .67 1.31 1.33 1.58 (.21)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Distributions:
Dividends from investment
income-net.............................. (1.02) (.99) (.94) (.91) (.91) (.90) (.87) (.84) (.79) (.75)
Dividends from net realized
gain on investments .................... -- -- -- -- -- -- -- -- (.28) (.33)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total Distributions .................... (1.02) (.99) (.94) (.91) (.91) (.90) (.87) (.84) (1.07) (1.08)
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net asset value, end of year............ $11.60 $12.87 $12.22 $12.03 $12.47 $12.24 $12.68 $13.17 $13.68 $12.39
===== ===== ===== ====== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN .................. 17.15% 20.22% 2.30% 6.27% 11.60% 5.51% 11.11% 10.82% 12.62% (1.63%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets ..................... .69% .69% .68% .71% .68% .67% .67% .68% .69% .68%
Ratio of net investment income
to average net assets .................. 9.11% 8.16% 7.34% 7.68% 7.41% 7.23% 7.05% 6.49% 5.96% 5.80%
Portfolio Turnover Rate ................ 27.67% 53.03% 67.23% 50.63% 36.38% 28.06% 35.53% 67.86% 45.37% 36.25%
Net Assets, end of year
(000's Omitted)... $2,724,383 $3,647,778 $3,528,585 $3,245,184 $3,485,053 $3,594,296 $4,081,440 $4,272,679 $4,724,389 $4,008,477
</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 goal is to provide you with as high a level
of current income exempt from Federal income taxes as is consistent with the
preservation of capital. To accomplish this goal, the Fund invests primarily
in Municipal Obligations (described below) rated A or better by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's Corporation ("S&P") or
Fitch Investors Service, Inc. ("Fitch"). 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) 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 is, in the
opinion of bond counsel to the issuer, 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 Obligations 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 and debentures.
At least 75% 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 25% 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 such rating organizations. 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&P
and 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 out-
Page 4
standing 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 such rating organizations' lowest rating and indicates that the Municipal
Obligation is in default and interest and/or repayment of principal is in
arrears. See "Risk Factors-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 those rated securities in which the Fund may invest; for purposes of the
75% requirement described in this paragraph, such unrated securities shall be
deemed to have the ratings so determined. The Fund also may invest in Taxable
Investments of the quality described below.
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.
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 non-governmental 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. See "Risks Factors _ Other Investment Considerations" below.
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, which may change daily without penalty, pursuant
to direct arrangements between the Fund, as lender, and the borrower. The
interest rates on these obligations fluctuate from time to time. Frequently,
such obligations are secured by letters of credit or other credit support
arrangements provided by banks. Use of letters of credit or other credit
support arrangements will not adversely affect the tax exempt status of these
obligations. 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.
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. The Dreyfus Corporation, on behalf
of the Fund, will consider on an ongoing basis the creditworthiness of the
issuers of the floating and variable rate demand obligations in the Fund's
portfolio. The Fund will not invest more than 15% of the value of its net
assets in floating or variable rate demand obligations as to which it cannot
exercise the demand feature on not more than seven days' notice if there is
no secondary market available for these obligations, and in other illiquid
securities.
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
Page 5
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 Board of Directors 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. The Fund will not invest more than 15% of the value of its net
assets in participation interests that do not have this demand feature if
there is no secondary market available, and in other illiquid securities.
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
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.
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. However, if a substantial
market of qualified institutional buyers develops pursuant to Rule 144A under
the Securities Act of 1933, as amended, for certain of these securities held
by the Fund, the Fund intends to treat such securities as liquid securities
in accordance with procedures approved by the Fund's Board of Directors.
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 of
Directors has directed The Dreyfus Corporation to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
avail-
Page 6
ability 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 the Fund's portfolio during such period.
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 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. 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.
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 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 issuers of the
underlying Municipal Obligations, 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 Obligations and
for other reasons. The Fund will not invest more than 15% of the value of its
net assets in securities that are illiquid, which would include tender option
bonds as to which it cannot exercise the tender feature on not more than
seven days' notice if there is no secondary market available for these
obligations.
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 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
interest-bearing securities and are likely to respond to a greater degree to
changes in interest rates than interest-bearing securities having similar
maturities and credit qualities. The Fund may invest up to 5% of its net
assets in zero coupon bonds which are rated below investment grade. See "Risk
Factors-Lower Rated Bonds" and "Other Investment Considerations" below, and
"Investment Objective and Management
Page 7
Policies-Risk Factors- Lower Rated Bonds" and "Dividends, Distributions and
Taxes" in the Statement of Additional Information.
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 three
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-l
by Moody's, A-l by S&P or F-l 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 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.
From time to time, the Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to borrow
securities to complete certain transactions. Such loans may not exceed 331/3%
of the value of the Fund's total assets. In connection with such loans, 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. The Fund can increase its income through the investment of such
collateral. The Fund continues to be entitled to payments in amounts equal to
the interest or other distributions payable on the loaned security and
receives interest on the amount of the loan. Such loans will be terminable 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.
As a fundamental policy, the Fund is permitted to borrow to the
extent permitted under the Investment Company Act of 1940. However, 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 the Fund's 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.
CERTAIN FUNDAMENTAL POLICIES - The Fund may (i) borrow money to the extent
permitted under the Investment Company Act of 1940, as amended; (ii) invest
up to 5% of its assets in the obligations of any single issuer, except that
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 limitation;
and (iii) invest up to 25% of its total assets in any particular industry or
industries, provided that there is no such limitation on the purchase of
Municipal Obligations and obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without the approval by the
holders of a majority (as defined in the Investment Company Act of 1940) of
the Fund's outstanding voting shares. See "Investment Objective and
Management Policies-Investment Restrictions" in the Statement of Additional
Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES - The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii) invest up to 15% of the value of its net
assets in repurchase agreements providing for settlement in more than seven
days after notice and in illiquid securities (which securities could include
participation interests (including
Page 8
municipal lease/purchase agreements) that
are not subject to the demand feature described above, and floating and
variable rate demand obligations as to which the Fund cannot exercise the
related demand feature described above if there is no secondary market). See
"Investment Objective and ManagementPolicies _ Investment Restrictions" in
the Statement of Additional Information.
RISK FACTORS - LOWER RATED BONDS - You should carefully consider the relative
risks of investing in the higher yielding (and, therefore, higher risk) debt
securities in which the Fund may invest up to 25% of the value of its net
assets. These are bonds 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. 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. 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.
Therefore, although these ratings may be an initial criterion 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. Once the rating of
a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold the
security.
The market price and yield of bonds rated Ba or lower by Moody's and
BB or lower by S&P and Fitch are more volatile than those of higher rated
bonds. Factors adversely affecting the market price and yield of these
securities will adversely affect the Fund's net asset value. In addition, 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.
The Fund may invest up to 5% of the value of its net assets in zero
coupon securities and pay-in-kind bonds (bonds which pay interest through the
issuance of additional bonds) rated Ba or lower by Moody's and BB or lower by
S&P and Fitch. These securities may be subject to greater fluctuations in
value due to changes in interest rates than interest-bearing securities and
thus may be considered more speculative than comparably rated
interest-bearing securities. See "Other Investment Considerations" below, and
"Investment Objective and Management Policies-Risk Factors-Lower Rated Bonds"
and "Dividends, Distributions and Taxes" in the Statement of Additional
Information.
Page 9
OTHER INVESTMENT CONSIDERATIONS - 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. 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 will invest 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.
New issues of Municipal Obligations usually are offered on a
when-issued basis, which means that delivery and payment for such Municipal
Obligations ordinarily take place within 45 days after the date of the
commitment to purchase. The payment obligation and the interest rate that
will be received on the Municipal Obligations are fixed at the time the Fund
enters into the commitment. The Fund will make commitments to purchase such
Municipal Obligations 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, although any gain realized on such sale would be
taxable. The Fund will not accrue income in respect of a when-issued security
prior to its stated delivery date. No additional when-issued commitments will
be made if more than 20% of the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in value (both
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. Municipal Obligations purchased
on a when-issued basis may expose the Fund to risk because they may experience
such fluctuations prior to their actual delivery. Purchasing Municipal
Obligations 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. 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 when-issued commitments will be established and maintained
at the Fund's custodian bank. Purchasing Municipal Obligations 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.
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.
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.
Page 10
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.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, Municipal Obligations or Taxable Investments at the same time 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
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 September 30, 1994, The Dreyfus Corporation managed or administered
approximately $69 billion in assets for more than 1.9 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 overall authority of the Fund's Board of Directors in
accordance with Maryland law. The Fund's portfolio manager is Richard J.
Moynihan. He has held that position since the inception of the Fund and has
been employed by The Dreyfus Corporation since 1973. The Fund's other
portfolio managers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus Corporation also
provides research services for the Fund as well as 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, Mellon managed more than $130 billion in assets as of July
31, 1994, including approximately $6 billion in mutual fund assets. As of
June 30, 1994, various subsidiaries of Mellon provided non-investment
services, such as custodial or administration services, for approximately
$747 billion in assets, including approximately $97 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. 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
Page 11
of the Fund and increasing yield to investors at the
time such amounts are waived or assumed, as the case may be. The Fund will
not pay 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. For the fiscal year ended August 31, 1994, 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.
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 between $1 billion and $2 billion,
to $1 million per year, if the Fund's average daily net assets are in excess
of $10 billion. No payments are required if the Fund's average daily net
assets are less than $1 billion.
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 or others in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of Institutional Administration
Services, Inc., a provider of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
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, 110 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY FUND SHARES
GENERAL - You can purchase Fund shares without a sales charge directly from
the Distributor; 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.
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.
Page 12
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 #8900051825/Dreyfus
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."
The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Fund shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds one million dollars. All
present holdings of shares of funds in The Dreyfus Family of Funds by such
employee benefit plans or programs will be aggregated to determine the fee
payable with respect to each such purchase of Fund shares. The Distributor
reserves the right to cease paying these fees at any time. The Distributor
will pay such fees from its own funds, other than amounts received from the
Fund, including past profits or any other source available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after the Transfer Agent receives an order in proper
form. 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. 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 each business day by
an independent pricing service approved by the Board of Directors 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 Board
of Directors. For further information regarding the methods employed in
valuing Fund investments, see "Determination of Net Asset Value" in the
Fund's 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 Fund's Account Application for further information concerning 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").
Page 13
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's 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 Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to 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 Privilege, please call 1-800-645-6561 to determine if it is available
and whether any conditions are imposed on its use.
To use this Privilege, you must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-221-4060 or, if you are calling from overseas,
call 1-401-455-3306. See "How to Redeem Fund Shares-Procedures." 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. Telephone
exchanges may be made only if the appropriate "YES" box has been checked on
the Account Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. 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: 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 from
which 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 an 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 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 Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
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 14
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 currently an investor. 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 day 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 writing 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. 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. 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.
DREYFUS-AUTOMATIC ASSET BUILDER - 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 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 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
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 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
Page 15
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 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. See "Shareholder Services" in the Statement of Additional Information.
Dreyfus Dividend ACH permits you to transfer electronically on the payment
date 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 and the funds in the
Dreyfus Family of Funds eligible to participate in 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. To
select a new fund after cancellation, you must submit a new Dividends Options
Form. 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. There is a service charge of 50cents for each withdrawal
check. 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.
HOW TO REDEEM FUND 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 directly through
the Distributor. Securities dealers, banks and other financial institutions
may charge 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 BUILDER 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
Page 16
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 has a balance of 50
shares or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption procedure
through 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.
You may redeem or exchange Fund shares by telephone if you have
checked the appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select a telephone
redemption or exchange privilege, 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
your 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 request on the Account Application,
Shareholder Services Form or by later written request that the fund provide
Redemption Checks drawn on the Fund's
Page 17
account. Redemption Checks may be made payable to the order of any person in
the amount of $500 or more. Potential fluctuations in the net asset value of
the Fund's 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 because of 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. Shares for which
certificates have been issued may not be redeemed by Redemption Check. This
Privilege may be modified or terminated at any time by the Fund or the Transfer
Agent upon notice to shareholders.
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. To establish the Wire Redemption Privilege, you must
check the appropriate box and supply the necessary information on the Fund's
Account Application or file a Shareholder Services Form with the Transfer
Agent. You 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 of jointly registered Fund or bank accounts may have redemption
proceeds of only up to $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves the right to
refuse any redemption request, including requests made shortly after a change
of address, and may limit the amount involved or the number of such requests.
This Privilege may be modified or terminated at any time by the Transfer
Agent or the Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares for which
certificates have been issued are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE _ You may redeem Fund shares (maximum
$150,000 per day) by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services Form with the
Transfer Agent. The redemption proceeds will be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306. The
Fund reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege may
be modified or terminated at any time by the Transfer Agent or the Fund.
Shares for which certificates have been issued are not eligible for this
Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem Fund shares (minimum $500 per
day) by telephone if you have checked the appropriate box and supplied the
necessary information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in one
of these documents. Only such an account maintained in a domestic financial
institution which is an Automated Clearing House member may be so 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 only up to $250,000 within any 30-day period. The Fund
reserves the right to refuse any request made by 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
Page 18
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 redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call
1-401-455-3306. Shares issued in certificate form are not eligible for this
Privilege.
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 dividends on the day following the date of purchase. Dividends
usually are paid on the last business day of each month and are reinvested in
additional Fund shares at net asset value or, at your option, paid in cash.
The Fund's earnings for Saturdays, Sundays and holidays are declared as
dividends on the next business day. 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. 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 Investment Company Act of 1940. 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.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends 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, are taxable as ordinary income whether or not
reinvested. 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. 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.
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
Page 19
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 by 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 derives
dividends 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.
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 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 dividends or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines that 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 August 31, 1994 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interest of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. In
addition, 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.
Page 20
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 for 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 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
Technologies, Inc., Lipper Analytical Services, Inc., Moody's Bond Survey
Bond Index, Lehman Brothers Municipal Bond Index, Morningstar, Inc. and other
industry publications.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on July 12, 1976, and
commenced operations on October 4, 1976. On January 22, 1993 the Fund's name
was changed from Dreyfus Tax Exempt Bond Fund, Inc. to Dreyfus Municipal Bond
Fund, Inc. The Fund is authorized to issue 600 million shares of Common
Stock, par value $.01 per share. Each share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
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 Directors 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 Director from office and
Page 21
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 Director by the affirmative vote of a majority of the Fund's
outstanding voting shares. In addition, the Board of Directors will call a
meeting of shareholders for the purpose of electing Directors if, at any time,
less than a majority of the Directors then holding office have been elected by
shareholders.
The Transfer Agent maintains a record of your ownership and will send
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; on Long Island, call
794-5452.
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 MUST
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.
MUNICIPAL
BOND FUND, INC.
Prospectus
Registration Mark
Copy Rights Premier Mutual Fund Services, Inc., 1994
Distributor 054p18122994
__________________________________________________________________________
DREYFUS MUNICIPAL BOND FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
DECEMBER 29, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Municipal Bond Fund, Inc. (the "Fund"), dated December 29,
1994, 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 the following numbers:
Outside New York State--Call Toll Free 1-800-645-6561
In New York City--Call 1-718-895-1206
On Long Island--Call 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-9
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . B-12
Shareholder Services Plan . . . . . . . . . . . . . . . . . . . . . . . . B-14
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . . B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . B-15
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . . B-20
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . B-20
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . . B-21
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . B-22
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . . B-23
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . . . . B-23
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-25
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . B-34
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . B-57
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations (including notes) by ratings for the fiscal year ended August
31, 1994, computed on a monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Investors Moody's Standard &
Services, Inc. Investors Service, Poor's Corporation Percentage
("Fitch") and/or Inc. ("Moody's") and/or ("S&P") of Value
<S> <C> <C> <C>
AAA Aaa AAA 25.7%
AA Aa AA 26.0
A A A 21.5
BBB Baa BBB 20.2
BB Ba BB .6
F-1 P-1 A-1 .2
F-1(1) MIG 1(1) SP-1(1) 1.9
Not Rated Not Rated Not Rated 3.9 (2)
100.0%
</TABLE>
___________________________________
(1) Included in these categories are tax exempt notes rated within the
two highest grades by Fitch, Moody's or S&P. Therefore, these
securities, together with Municipal Obligations rated A or better by
Fitch, Moody's or S&P, are taken into account at the time of a
purchase to ensure that the Fund's portfolio meets the 75% minimum
quality standard discussed in the Fund's Prospectus.
(2) Included in the Not Rated category are securities comprising 3.9% of
the Fund's market value which, while not rated, have been determined
by the Manager to be of comparable quality to securities in the
following rating categories: Aaa/AAA (.4%), Aa/AA (.1%), A/A (.8%),
Baa/BBB (2.5%) and Ba/BB (.1%).
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 "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 other 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
lease obligations that are illiquid and in other illiquid securities.
Accordingly, not more than 15% of the value of the Fund's net assets will
be invested in lease obligations that are illiquid and in other illiquid
securities.
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.
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. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks,
by the right of the issuer to borrow from the U.S. Treasury; others, such
as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized 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. The Fund will invest
in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
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 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 one billion dollars.
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 face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. 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 one billion dollars 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. The Manager will monitor on
an ongoing basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. From time to time, 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 from 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 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. These conditions may be subject to future
modification.
Risk Factors--Lower Rated Bonds. The Fund is permitted to invest in
securities rated below Baa by Moody's and below BBB by S&P and Fitch.
Such bonds, though high yielding, are characterized by risk. See in the
Prospectus "Description of the Fund--Risk Factors--Lower Rated Bonds" for
a discussion of certain risks and "Appendix" in the Statement of
Additional Information 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 the 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. In this evaluation, the Manager will take
into consideration, among other things, the issuer's financial resources,
its sensitivity to economic conditions and trends, the quality of the
issuer's management and regulatory matters. It also is possible that a
rating agency might not timely change the rating on a particular issue to
reflect subsequent events. As stated above, once the rating of a bond in
the Fund's portfolio has been changed, the Manager will consider all
circumstances deemed relevant in determining whether the Fund should
continue to hold the bond.
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. These bonds are considered by S&P, Moody's and Fitch on
balance, as 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
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 an 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 of 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.
Lower rated zero coupon securities and pay-in-kind bonds, in which
the Fund may invest up to 5% of the value its net assets, involve special
considerations. The credit risk factors pertaining to lower rated
securities also apply to lower rated zero coupon bonds and pay-in-kind
bonds. Such zero coupon, pay-in-kind or delayed interest 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 8 as fundamental policies. Fundamental
policies cannot be changed without approval by the holders of a majority
(as defined in the Act) of the Fund's outstanding voting shares.
Investment restrictions numbered 9 through 14 are not fundamental policies
and may be changed by vote of a majority of the Directors at any time.
The Fund may not:
1. Invest more than 5% of its assets in the obligations of any
single issuer, except that 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, its agencies or instrumentalities may be purchased, without
regard to any such limitation.
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 total 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 defensive
purposes, obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
4. Borrow money, except to the extent permitted under the Act. For
purposes of this investment restriction, the entry into options, forward
contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes 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 interest
therein, or prevent the Fund from purchasing and selling options, forward
contracts, futures contracts, including those relating to indexes, and
options on futures contracts or indexes.
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 of Directors.
8. Issue any senior security (as such term is defined in Section
18(f) of the 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.
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 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
indexes, and options on futures contracts or indexes.
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 an
investment, a later increase in percentage resulting from a change in
values or assets will not constitute a violation of that 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
Directors 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 Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors of the Fund
*DAVID W. BURKE, Director. Consultant to the Manager since August, 1994.
From October 1990 to August, 1994, 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. His address is 200 Park Avenue, New York,
New York 10166.
HODDING CARTER, III, Director. President of MainStreet, a television
production company. Since 1991, a syndicated columnist for United
Media-NEA. From 1985 to 1986, he was editor and chief correspondent
of "Capitol Journal," a weekly Public Broadcasting System ("PBS")
series on Congress. From 1981 to 1984, he was anchorman and chief
correspondent for PBS's "Inside Story," a regularly scheduled
half-hour critique of press performance. From 1977 to July 1980, Mr.
Carter served as Assistant Secretary of State for Public Affairs and
as Department of State spokesman. His address is MainStreet, 918
Sixteenth Street, N.W., Washington, D.C. 20006.
EHUD HOUMINER, Director. Since July 1991, Professor and Executive-in-
Residence at the Columbia Business School, Columbia University and,
since February 1992, a Consultant to Bear, Stearns & Co. Inc.,
investment bankers. He was President and Chief Executive Officer of
Philip Morris USA, manufacturers of consumer products, from December
1988 until September 1990. He also is a Director of Avnet Inc. His
address is c/o Columbia Business School, Columbia University, Uris
Hall, Room 526, New York, New York 10027.
RICHARD C. LEONE, Director. President of The Twentieth Century Fund, a
tax exempt research foundation engaged in economic, political and
social policy studies. Since April 1990, Chairman, and since April
1988, a Commissioner of The Port Authority of New York and New
Jersey. A member in 1985, and from January 1986 to January 1989,
Managing Director of Dillon, Read & Co. Inc. and from May 1982 to
December 1984, President of Atlantic Inc., a wholly-owned subsidiary
of Amerada Hess Corporation. Mr. Leone is also a director of
Resource Mortgage Capital, Inc. His address is 41 East 70th Street,
New York, New York 10021.
HANS C. MAUTNER, Director. Chairman, Trustee and Chief Executive Officer
of Corporate Property Investors, a real estate investment company.
Since January 1986, a Director of Julius Baer Investment Management,
Inc., a wholly-owned subsidiary of Julius Baer Securities, Inc. His
address is 305 East 47th Street, New York, New York 10017.
JOHN E. ZUCCOTTI, Director. President and Chief Executive Officer of
Olympia & York Companies (U.S.A.), and of member of its Board of
Directors since the inception of a Board on July 27, 1993. From 1986
to 1990, he was partner in the law firm of Brown & Wood and from 1978
to 1986 a partner in the law firm of Tufo & Zuccotti. First Deputy
Mayor of the City of New York from December 1975 to June 1977, and
Chairman of the City Planning Commission for the City of New York
from 1973 to 1975. Mr. Zuccotti is also a director of Empire Blue
Cross & Blue Shield, Catellus Development Corporation, a real estate
development corporation, and Starrett Housing Corporation, a
construction, development and management of real estate properties
corporation. His address is 237 Park Avenue, New York, New York
10017.
Each of the Fund's "non-interested" Directors is also a director of
Dreyfus Capital Value Fund (A Premier Fund), Dreyfus Insured Municipal
Bond Fund, Inc., Dreyfus Municipal Money Market Fund, Inc., Dreyfus New
Leaders Fund, Inc., Dreyfus Strategic Municipals, Inc. and Dreyfus
Strategic Municipal Bond Fund, Inc. and a trustee of Dreyfus California
Tax Exempt Money Market Fund. Mr. Houminer is also a director of Dreyfus
Focus Funds, Inc.
For so long as the Shareholder Services Plan of the Fund, described
in the section captioned "Shareholder Services Plan" remains in effect,
the Board members of the Fund who are not "interested persons" (as defined
in the Act) will be selected and nominated by the Board members who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not "interested persons"
(as defined in the Act) of the Fund, which totaled $35,972 during fiscal
1994 for all such Directors as a group.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer 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., a wholly-owned subsidiary of The Boston Company,
Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc.
JOHN E. PELLETIER, 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, and prior to August 1990, he was employed as an
Associate at Sidley & Austin.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was Manager of the High Performance Fabric Division
of Springs Industries Inc.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System.
JOSEPH S. TOWER,III, 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.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the Distributor,
and an officer of other investment companies advised or administered
by the Manager. From 1984 to July 1994, he was Assistant Vice
President in the Mutual Fund Accounting Department of the Manager.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was
a Senior Legal Product Manager for the Boston Company Advisors, Inc.,
and from January 1990 to January 1992, he was mutual fund accountant
for The Boston Company Advisors, Inc. Prior thereto, he was employed
as a licensed realtor at Furcinito Real Estate, Inc.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
The address of each of the Fund's officers is 200 Park Avenue, New
York, New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's Common Stock outstanding on October 24, 1994.
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") with the Fund dated August 24, 1994, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Directors who are not "interested
persons" (as defined in the 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 4, 1994. The
Agreement was last approved by the Fund's Board of Directors, including a
majority of the Directors who are not "interested persons" of any party to
the Agreement, at a meeting held on October 24, 1994. The Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board of
Directors or by vote of the holders of a majority of the Fund's
outstanding voting shares or, on not less than 90 days' notice, by the
Manager. The Agreement will terminate automatically in the event of its
assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; Julian M.
Smerling, Vice Chairman of the Board; Joseph S. DiMartino, President and a
director; W. Keith Smith, Chief Operating Officer and a director; Paul H.
Snyder, Vice President and Chief Financial Officer; Daniel C. Maclean,
Vice President and General Counsel; Barbara E. Casey, Vice President--
Retirement Services; Robert F. Dubuss, Vice President; Henry D. Gottmann,
Vice President--Retail; Elie M. Genadry, Vice President--Wholesale; Mark
N. Jacobs, Vice President--Fund Legal and Compliance; Jeffrey N. Nachman,
Vice President--Mutual Fund Accounting; Diane Coffey, Vice President--
Corporate Communications; Jay DeMartine, Vice President--Marketing; Kirk
V. Stumpp, Vice President--New Product Development; Lawrence S. Kash, Vice
Chairman--Distribution; Philip L. Toia, Vice Chairman--Operations and
Administration; Katherine C. Wickham, Vice President--Human Resources;
Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V. Cahouet,
Alvin E. Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B.
Truman, 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 of Directors. The Manager is responsible for investment
decisions and provides the Fund with Portfolio Managers who are authorized
by the Board of Directors 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 the 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: taxes, interest, brokerage fees and
commissions, if any, fees of Directors 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. 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. This amount is
reduced, pursuant to the terms of a Stipulation of Settlement of
Litigation, which became effective on October 15, 1988, by annual amounts
ranging from $90,000 per year to $1 million per year, depending on the
size of the Fund's average daily net assets, for a period of 10 years from
the effective date. The management fees paid for the fiscal years ended
August 31, 1992, 1993 and 1994 amounted to $24,676,154, $26,589,276 and
$25,447,556, respectively. The management fees for the fiscal years ended
August 31, 1992, 1993 and 1994 were reduced by $350,000 in each year
pursuant to the Stipulation of Settlement of Litigation. All fees and
expenses are accrued daily and deducted before the declaration of
dividends to investors.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, 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 value of the Fund's average 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,
reconciled and effected or paid, as the case may be, on a monthly basis.
During the fiscal year ended August 31, 1994, no expense reimbursements
were made pursuant to such limitation.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
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, a
wholly-owned subsidiary of the Manager, 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
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the 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 Directors cast in person at a meeting called
for the purpose of voting on the Plan. The Plan is terminable at any time
by vote of a majority of the Directors who are not "interested persons"
and have no direct or indirect financial interest in the operation of the
Plan.
For the fiscal year ended August 31, 1994, $1,066,264 was chargeable
to the Fund under the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
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.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time,
on any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), and the New
York Stock Exchange are open. Such purchases will be credited to the
shareholder's Fund account on the next bank business day. 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 Fund
Shares--Dreyfus TeleTransfer Privilege."
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 the
Fund's shares in an account with their firm. Dealers also may require
that the customer invest more than the $1,000 minimum investment; the
customer not take physical delivery of share certificates; the customer
not request redemption checks to be issued in the customer's name;
fractional shares not be purchased; or other conditions. There are no
sales or service charges by the Fund or the Distributor although
investment dealers, banks and other financial institutions may make
reasonable charges to investors for their services. The services provided
and fees therefor are established by each 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; provision of periodic account statements showing
security and money market positions; other services available from the
dealer, bank or other financial 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 shares of the
Fund directly from the Fund without the imposition of any maintenance or
service charges, other than those already described herein. In some
states, banks or other institutions effecting transactions in Fund shares
may be required to register as dealers pursuant to state law.
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.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's 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 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 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 a 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 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 should also 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 also 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 Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any stock certificate 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 prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in
whole or in part in securities or other assets 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 would 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 ordinarily 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."
Exchange Privilege. 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 any 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 any funds purchased with a sales load, shares of any
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 use this Privilege, a shareholder must give exchange instructions
to the Transfer Agent in writing, by wire or by telephone. Telephone
exchanges may be made only if the appropriate "YES" box has been checked
on the Account Application or a separate signed Shareholder Services Form
is on file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on telephonic, telegraphic or written
exchange 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 exchanges.
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 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 "Exchange
Privilege." 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 to be exchanged 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.
The Exchange Privilege and 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 from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege and 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. An Automatic Withdrawal Plan may be esta-
blished by completing the appropriate application available from the
Distributor. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which stock certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on their payment date the 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 sales
charge ("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
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Board of Directors. 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 Board of Directors. 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.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily 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. The amount of transactions during the last fiscal year 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 totalled $44,813,068.
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 overall expenses
of its research department.
The Fund anticipates that its annual portfolio turnover rate
generally will not exceed 100%, but the turnover rate will not be a
limiting factor when the Fund deems it desirable to sell or purchase
securities. Therefore, depending upon market conditions, the Fund's
annual portfolio turnover rate may exceed 100% in particular years.
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."
The Internal Revenue Code of 1986, as amended (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.
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 August 31, 1994
was 5.72%. 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 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 1994 Federal income tax rate of 39.6%, the Fund's tax
equivalent yield for the 30-day period ended August 31, 1994 was 9.47%.
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 noted above represents the application of
the highest Federal marginal personal income tax rate in effect during
1994. 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, and 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 one, five and ten year
periods ended August 31, 1994 was -1.63%, 7.55% and 9.41%, 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 from October 4, 1976
(commencement of operations) to August 31, 1994 was 231.12%. 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.
Advertising materials for the Fund also may refer to or discuss then-
current or past economic conditions, developments and/or events, including
those relating to actual or proposed tax legislation, and 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 analysis supporting the rating.
From time to time, the Fund may advertise that it was established in
1976 as the first incorporated tax exempt fund, and may discuss historical
events and circumstances surrounding its formation. As of June 30, 1994,
there were approximately $354.8 billion of net assets invested in tax
exempt funds throughout the investment company industry.***
__________________________________
*** Source: Lipper Analytical Services, Inc.
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.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. 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 of Common Stock 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 auditors of the Fund.
APPENDIX
Description of 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 of 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, C
Debt rated BB, B, CCC, CC and C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and C 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 debt rating.
C
The rating C is typically 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.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus designation to show relative standing
within the major ratings categories.
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 (+)
designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
Commercial Paper Ratings
The designation A-1 by S&P 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. Capacity for timely payment on
issues with an A-2 designation is strong. However, the relative degree of
safety is not as high as for issues designated A-1.
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 present 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 municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). Such ratings recognize the
differences 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 VMIG 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 VMIG 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 VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation 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/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
MIG 3/VMIG 3
This designation denotes favorable quality. All security elements
are accounted for but there is lacking the undeniable strength of the
preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.
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 wide range of financial
markets and assured sources of alternative 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 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
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 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 the 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 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.
Fitch short-term ratings are as follows:
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 an
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.
Demand Bond or Notes Ratings
Certain demand securities empower the holder at his option to require
the issuer, usually through a remarketing agent, to repurchase the
security upon notice at par with accrued interest. This is also referred
to as a put option. The ratings of the demand provision may be changed or
withdrawn at any time if, in Fitch's judgment, changing circumstances
warrant such action.
Fitch demand provision ratings carry the same symbols and related
definitions as its short-term ratings.
<TABLE>
<CAPTION>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--96.0% AMOUNT VALUE
---------------- ---------------
<S> <C> <C>
ALABAMA--1.0%
Alabama Housing Finance Authority, Single Family Mortgage Revenue
6.80%, 4/1/2025......................................................... $ 5,000,000 $ 5,007,500
Camden Industrial Development Board, Pollution Control Facilities Revenue, Refunding
(Macmillian Bloedel Project) 7.75%, 5/1/2009............................ 8,000,000 8,564,080
Columbia Industrial Development Board, PCR (Alabama Power Farley Plant Project)
9.25%, 12/1/2015........................................................ 3,800,000 4,096,666
Industrial Development Board of the Town of Courtland, SWDR
(Champion International Corp. Project) 7%, 11/1/2022.................... 8,100,000 8,221,095
West Jefferson Industrial Development Board, PCR, Refunding
(Alabama Power Co.- Miller Plant) 6.05%, 5/1/2023 (Insured; MBIA)....... 15,000,000 14,620,050
ALASKA--.8%
Valdez, Marine Terminal Revenue, Refunding (BP Pipeline Inc. Project)
5.85%, 8/1/2025......................................................... 37,000,000 33,357,720
CALIFORNIA--6.9%
Airport Commission City and County of San Francisco,
(San Francisco International Airport) 6.50%, 5/1/2015................... 10,100,000 10,322,604
California:
5.50%, 3/1/2010......................................................... 13,330,000 12,573,656
7.814%, 4/1/2023 (a,b).................................................. 20,000,000 17,275,000
California Higher Education Loan Authority, Inc.,
Student Loan Revenue, Refunding 6.50%, 6/1/2005......................... 19,250,000 19,432,682
California Pollution Control Financing Authority, Revenue,
Solid Waste Disposal (North County Recycling Center)
6.75%, 7/1/2011 (LOC; Union Bank of Switzerland) (c).................... 10,000,000 10,280,700
Los Angeles Department of Water and Power, Electric Plant Revenue:
6.125%, 1/15/2033 ...................................................... 28,000,000 26,596,080
6.125%, 1/15/2033 ...................................................... 22,600,000 21,466,836
8.685%, 1/15/2033 (a,b)................................................. 85,000 76,394
Orange County Local Transportation Authority, Sales Tax Revenue:
6.13%, 2/15/2009(a)..................................................... 5,400,000 4,334,580
6.18%, 2/15/2010(a)..................................................... 10,000,000 7,986,200
6.23%, 2/15/2011(a)..................................................... 10,000,000 7,952,000
Pleasanton Joint Powers Financing Authority, Reassessment Revenue 6.15%, 9/2/2012 3,445,000 3,312,505
Sacramento Municipal Utility District, Electric Revenue Refunding
6.97%, 11/15/2015 (Insured; MBIA) (a)................................... 16,500,000 14,272,500
San Diego, IDR (San Diego Gas and Electric Co.) 5.90%, 9/1/2018............. 10,000,000 9,508,300
San Diego County, COP, Refunding (Interim Justice Facilities Project) 6.50%, 8/1/2007 10,110,000 10,475,578
San Marcos Public Facilities Authority, Revenue, Refunding, Public Improvement
(Civic Center) 6.20%, 8/1/2022.......................................... 7,245,000 6,689,453
Southern California Public Power Authority, Power Project Revenue, Refunding
5.50%, 7/1/2012......................................................... 20,000,000 18,540,600
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
CALIFORNIA (CONTINUED)
State Public Works Board of the State of California, LR:
(Community College Projects) 6%, 10/1/2014.............................. $ 11,000,000 $ 10,589,810
(Department of Corrections - California State Prison-Madera County)
5.50%, 6/1/2015....................................................... 19,000,000 16,968,900
(Various University of California Projects) 6.375%, 10/1/2014........... 3,000,000 2,999,790
University of California, Revenue (Multi-Purpose Project)
6.75%, 9/1/2023 (Insured; AMBAC)........................................ 37,000,000 40,826,910
COLORADO--2.9%
Colorado Health Facilities Authority, Retirement Facilities Revenue
(Liberty Heights):
Zero Coupon, 7/15/2022................................................ 37,500,000 5,292,375
Zero Coupon, 7/15/2024................................................ 91,150,000 11,017,300
Dawson Ridge Metropolitan District No. 1, Refunding:
Zero Coupon, 10/1/2017.................................................. 15,000,000 3,030,300
Zero Coupon, 10/1/2022.................................................. 47,535,000 6,791,325
City and County of Denver, Airport Revenue:
4.25%, 9/1/1995......................................................... 10,000,000 9,994,800
8.25%, 11/15/2012....................................................... 10,000,000 10,289,800
6.75%, 11/15/2013....................................................... 8,765,000 8,027,425
8%, 11/15/2017.......................................................... 8,175,000 8,130,855
7.25%, 11/15/2023....................................................... 6,650,000 6,340,974
8.50%, 11/15/2023....................................................... 30,500,000 31,839,560
7.50%, 11/15/2025....................................................... 15,000,000 14,731,500
CONNECTICUT--.6%
Connecticut Health and Educational Facilities Authority, Revenue
(Yale University) 8.482%, 6/10/2030 (a)................................. 5,000,000 4,637,500
Connecticut Housing Finance Authority (Housing Mortgage Finance Program):
6.70%, 11/15/2012....................................................... 4,000,000 4,112,520
6.20%, 5/15/2014........................................................ 3,000,000 2,941,200
Eastern Connecticut Resource Recovery Authority:
(American Fuel Co. Project) 6.45%, 11/15/2022........................... 7,325,000 7,379,425
Solid Waste Revenue (Wheelabrator Lisbon Project) 5.50%, 1/1/2014....... 4,425,000 3,808,907
DELAWARE--.2%
Delaware Economic Development Authority, Water Development Revenue
(Wilmington Suburban Water Corp. Project) 6.80%, 12/1/2023.............. 8,000,000 8,106,800
DISTRICT OF COLUMBIA--2.1%
District of Columbia:
GO 6%, 6/1/2009......................................................... 10,955,000 10,886,422
Revenue 9.515%, 4/1/2022 (a)............................................ 4,000,000 4,000,000
Metropolitan Washington Airports Authority, Airport System Revenue:
6.625%, 10/1/2012 (Insured; MBIA)....................................... 40,400,000 41,853,996
6.625%, 10/1/2019 (Insured; MBIA)....................................... 24,800,000 25,300,216
FLORIDA--6.9%
Brevard County, Industrial Development Revenue (NUI Corp. Project)
6.40%, 10/1/2024........................................................ 9,000,000 9,120,240
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
FLORIDA (CONTINUED)
Charlotte County, HR
(Bon Secours Health System - Saint Joseph's Hospital Project) 8.25%, 8/15/2018 $ 7,000,000 $ 8,001,000
Dade County, Aviation Facilities Revenue:
6.125%, 10/1/2020 (Insured; MBIA)....................................... 20,000,000 19,679,000
6.60%, 10/1/2022 (Insured; MBIA)........................................ 10,000,000 10,326,100
Escambia County, PCR (Champion International Corp. Project)
6.90%, 8/1/2022......................................................... 9,000,000 9,030,600
Florida (Jacksonville Transportation Authority) 9.20%, 1/1/2015............. 2,000,000 2,757,540
Florida State Board of Education, Public Education Capital Outlay:
5.75%, 6/1/2019......................................................... 10,000,000 9,493,700
5.875%, 6/1/2023 ....................................................... 40,000,000 38,260,800
Florida Community Services Corp. Walton County Water and Sewer Revenue
(South Walton County Regional Utility):
6.95%, 3/1/2012....................................................... 3,000,000 3,204,870
7%, 3/1/2018.......................................................... 3,500,000 3,768,310
Florida Housing Finance Agency, SFMR Zero Coupon, 1/1/2016.................. 43,205,000 3,974,428
Florida Municipal Power Agency, Revenue (All Requirements
Power Supply Project) 5.10% 10/1/2025................................... 11,710,000 9,844,831
Hospital Board of Directors of Lee County, HR, Refunding
(Lee Memorial Hospital Project) 9.219%, 4/1/2020 (Insured; MBIA) (a).... 17,500,000 17,828,125
Jacksonville, Capital Improvement Revenue (Gator Bowl Project)
6%, 10/1/2025 (Insured; AMBAC).......................................... 10,000,000 9,847,000
Nassau County, PCR, Refunding (ITT Rayonier Project) 7.65%, 6/1/2006........ 5,935,000 6,253,472
Orange County Health Facilities Authority,
Pooled Hospital Loan Revenue, Refunding:
7.875%, Series A, 12/1/2025 (Insured; FGIC)........................... 26,915,000 28,529,900
7.875%, Series B, 12/1/2025 (Insured; BIGI)........................... 16,555,000 17,548,300
Palm Beach County, Solid Waste Industrial Development Revenue:
(Okeelanta Power Limited Partnership Project) 6.70%, 2/15/2015.......... 5,000,000 4,840,050
(Osceola Power Limited Partnership) 6.95%, 1/1/2022..................... 17,300,000 17,260,383
Tampa, Water and Sewer System Revenue:
6.25%, 10/1/2012 (Insured; FGIC) ....................................... 20,000,000 20,433,600
6.60%, 10/1/2014 (Insured; FGIC)........................................ 20,000,000 21,931,800
Volusia County, Airport System Revenue (Daytona Beach Regional Airport):
7%, 10/1/2021 (Insured; MBIA)........................................... 810,000 907,378
7%, 10/1/2021 (Insured; MBIA)........................................... 2,390,000 2,570,110
GEORGIA--.7%
Atlanta Urban Residential Finance Authority, Single Family Mortgage Revenue
Zero Coupon, 10/1/2016.................................................. 33,000,000 7,084,440
Fulco Hospital Authority, Revenue Anticipation Certificates
(Saint Joseph's Hospital of Atlanta, Inc.) 5.50%, 10/1/2014............. 9,200,000 8,166,288
Georgia Housing and Finance Authority, Revenue, Homeownership Mortgage
Zero Coupon, 12/1/2031.................................................. 135,825,000 9,397,732
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
GEORGIA (CONTINUED)
Henry County and Henry County Water and Sewerage Authority,
Water and Sewerage Revenue, Refunding and Improvement 5.125%, 2/1/2013.. $ 5,000,000 $ 4,480,100
IDAHO--.3%
Idaho Housing Agency, Multi-Family Housing Refunding
6.70%, 7/1/2024......................................................... 10,050,000 10,109,898
ILLINOIS--6.1%
Bryant, PCR, Refunding (Central Illinois Light Co. Project)
5.90%, 8/1/2023......................................................... 11,000,000 10,197,330
Chicago O'Hare International Airport, Special Facilities Revenue:
(Lufthansa German Airlines Project)
7.125%, 5/1/2018 (LOC; Bayerische Vereinsbank) (c).................... 4,650,000 4,858,459
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 19,535,000 20,712,374
8.40%, 5/1/2018....................................................... 20,440,000 21,664,152
8.50%, 5/1/2018....................................................... 6,500,000 6,905,925
8.85%, 5/1/2018....................................................... 15,665,000 17,161,007
Illinois, GO 5.75%, 4/1/2013................................................ 4,000,000 3,841,080
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facilities) 8.75%, 3/1/2010......... 19,955,000 21,209,371
Pollution Control, Refunding (Public Service Co.) 5.70%, 8/15/2026...... 8,650,000 7,873,403
Retirement Housing (Regency Park):
Zero Coupon, 4/15/2020................................................ 55,000,000 8,979,300
Zero Coupon, 7/15/2023................................................ 118,400,000 15,148,096
Illinois Educational Facilities Authority, Revenue, Refunding
(Illinois Institute of Technology):
6.60%, 12/1/2009...................................................... 3,365,000 3,300,560
6.875%, 12/1/2015..................................................... 7,250,000 7,301,040
Illinois Health Facilities Authority, Revenue:
(Beverly Farm Foundation) 9.125%, 12/15/2015............................ 3,730,000 4,065,439
Refunding:
(Brokaw-Mennonite Association-Bromenn Healthcare)
6.25%, 8/15/2018 (Insured; FGIC).................................. 10,000,000 9,913,700
(Evangelical Hospitals) 6.50%, 4/15/2009.............................. 5,000,000 5,088,900
(Franciscan Sisters Health Care) 6%, 9/1/2009 (Insured; MBIA)......... 6,115,000 6,151,507
(Masonic Medical Center) 5.50%, 10/1/2019............................. 1,140,000 959,116
(Mercy Hospital and Medical Center) 7%, 1/1/2015...................... 7,500,000 7,742,400
(Southern Illinois Hospital Services) 5.85%, 3/1/2014 (Insured; MBIA)... 7,275,000 6,933,875
(Trinity Medical Center) 7%, 7/1/2012................................... 7,150,000 7,224,503
Illinois Housing Development Authority:
Homeowner Mortgage Revenue:
6.45%, 8/1/2017....................................................... 6,500,000 6,537,115
6.70%, 8/1/2025....................................................... 5,000,000 5,028,100
Multi-Family Program 6.75%, 9/1/2021.................................... 8,750,000 8,874,688
Residential Mortgage Revenue 10.179%, 2/1/2018 (a)...................... 7,915,000 7,915,000
Section 8 Elderly Housing Revenue (Morningside North Development)
6.85%, 1/1/2021....................................................... 11,220,000 11,412,872
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
ILLINOIS (CONTINUED)
Peru, Electric System Revenue 5.75%, 5/1/2025 (Insured; FGIC)............... $ 6,750,000 $ 6,239,362
INDIANA--6.7%
Allen County, COP:
8.125%, 11/1/2017....................................................... 5,000,000 5,533,650
Refunding 6.50%, 11/1/2008.............................................. 5,000,000 5,176,750
Columbus Multi-School Building Corp., First Mortgage Refunding
6.625%, 7/1/2011 (Insured; AMBAC)....................................... 3,750,000 3,973,200
Danville Community Elementary School Building Corp., First Mortgage
6.90%, 1/15/2010........................................................ 4,400,000 4,806,340
Fort Wayne Hospital Authority, HR (Lutheran Hospital) 8%, 2/15/2003......... 7,000,000 7,717,920
Hamilton County Public Building Corp., First Mortgage Refunding
6.25%, 1/20/2012........................................................ 7,200,000 7,305,336
Hammond Multi-School Building Corp., First Mortgage:
6%, 1/15/2013........................................................... 1,760,000 1,762,464
7.10%, 1/15/2015........................................................ 5,585,000 6,316,076
6%, 1/15/2018........................................................... 1,250,000 1,231,700
Indiana Health Facility Financing Authority, HR
Refunding (Welborn Memorial Baptist Hospital) 5.60%, 7/1/2018........... 6,445,000 5,640,728
Indiana Housing Finance Authority, SFMR, Refunding 6.80%, 1/1/2017.......... 9,855,000 10,080,482
Indiana Office Building Commission, Correctional Facilities Program Revenue
6.375%, 7/1/2016........................................................ 25,000,000 25,231,250
Indiana Transportation Finance Authority, Airport Facility LR
6.50%, 11/1/2007........................................................ 12,500,000 12,835,125
Indianapolis Local Public Improvement Bond Bank:
8.50%, 2/1/2018......................................................... 73,000,000 82,878,360
6.75%, 2/1/2020......................................................... 16,775,000 16,954,660
IPS School Building Corp., First Mortgage 6.10%, 1/15/2020.................. 11,000,000 10,820,480
Jefferson County Hospital Authority, Hospital Facility Revenue, Refunding
(Kings Daughter's Hospital) 8.50%, 8/15/2013............................ 3,000,000 3,252,870
Lake Central Multi-District School Building Corp., First Mortgage Refunding:
5.375%, 7/1/2012........................................................ 4,360,000 4,025,370
6.50%, 1/15/2014 (Insured; MBIA)........................................ 3,100,000 3,153,878
Lebanon High School Building Corp., First Mortgage Refunding
5.75%, 7/1/2005......................................................... 2,000,000 2,078,880
Logansport Multi - Purpose School Building Corp., First Mortgage Refunding
6%, 1/1/2009............................................................ 7,645,000 7,884,518
Monroe County Community School Corp., School Building Corp.,
First Mortgage Refunding 6.60%, 7/1/2009................................ 3,080,000 3,162,513
Noblesville High School Building Corp., First Mortgage 5.75%, 2/15/2015..... 20,060,000 19,117,381
Valparaiso Multi-Schools Building Corp., First Mortgage Refunding:
6.625%, 7/1/2002 (Insured; AMBAC)....................................... 10,700,000 11,842,118
6.625%, 7/1/2012 (Insured; AMBAC)....................................... 1,300,000 1,357,590
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
IOWA--.6%
City of Chillicothe, PCR, Refunding
(Midwest Power Systems Inc.) 5.95%, 5/1/2023............................ $ 5,000,000 $ 4,644,000
Council Bluffs, PCR, Refunding
(Midwest Power System Inc.) 5.95%, 5/1/2023............................. 13,130,000 12,195,144
Iowa Finance Authority:
Hospital Facility Revenue, Refunding (Jennie Edmundson Memorial Hospital)
7.65%, 11/1/2016...................................................... 4,850,000 4,988,079
Single Family Mortgage Refunding 6.35%, 7/1/2009 (Insured; AMBAC)....... 3,545,000 3,579,351
KANSAS--1.8%
Burlington, PCR, Refunding (Kansas Gas and Electric Co. Project)
7%, 6/1/2031 (Insured; MBIA)............................................ 10,000,000 10,739,000
Kansas Department of Transportation, Highway Revenue 6.50%, 3/1/2012........ 7,840,000 8,594,914
Wichita, HR 6.464%, 10/1/2022 (Insured; MBIA) .............................. 51,300,000 51,768,882
KENTUCKY--1.9%
Jefferson County Health Facilities, Revenue
(Jewish Hospital Health Care Services Inc.) 6.55%, 5/1/2022 (Insured; AMBAC) 10,000,000 10,228,600
Kenton County Airport Board, Airport Revenue
(Greater Cincinnati International Airport):
8.25%, 3/1/1998....................................................... 2,395,000 2,697,225
8.25%, 3/1/2015....................................................... 10,945,000 12,269,673
Commonwealth of Kentucky State Property and Building Commission, Refunding
(Project No. 54) 5.90%, 9/1/2007........................................ 5,000,000 5,048,850
Mount Sterling, LR (Kentucky League Cities Funding):
6.15%, 3/1/2013......................................................... 3,000,000 2,932,020
6.10%, 3/1/2018......................................................... 6,955,000 6,654,405
Pendleton County, Multi-County Lease Revenue
(Kentucky Associates Counties Leasing Trust Program) 6.50%, 3/1/2019.... 28,000,000 27,603,520
Trimble County, PCR (Louisville Gas and Electric Co. Project):
7.625%, 11/1/2000....................................................... 1,445,000 1,668,657
7.625%, 11/1/2020....................................................... 7,555,000 8,214,703
LOUISIANA--3.2%
Beauregard Parish, Revenue, Refunding (Boise Cascade Corp. Project)
7.75%, 6/1/2021......................................................... 3,420,000 3,613,093
Industrial Development Board of the Parish of Calcasieu, Inc.,
Environmental Revenue (Citgo Petroleum Corp. Project) 6%, 7/1/2023...... 30,000,000 26,538,900
Louisiana Public Facilities Authority, Revenue:
Hospital Refunding (Woman's Hospital Foundation Project) 7.83%, 10/1/2014 (a) 11,500,000 9,380,665
(Tulane University of Louisiana) 6.625%, 11/15/2021..................... 20,000,000 20,572,200
Parish of Saint Charles, PCR (Louisiana Power and Lighting Co. Project)
8.25%, 6/1/2014......................................................... 8,500,000 9,360,200
Parish of West Feliciana, PCR:
(Gulf States Utilities Project):
10.625%, 5/1/2014..................................................... 6,000,000 6,314,880
9%, 5/1/2015.......................................................... 13,500,000 15,461,820
(Gulf States Utilities-I) 7.70%, 12/1/2014.............................. 33,000,000 35,867,370
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
MAINE--1.6%
Jay, SWDR (International Paper Co. Project) 6%, 12/1/2017................... $ 6,250,000 $ 5,737,312
Maine Financial Authority, Solid Waste Revenue:
Disposal (Boise Cascade Corp. Project) 7.90%, 6/1/2015.................. 11,300,000 11,819,235
Recycling Facilities (Great Northern Paper, Inc. Project-Bowater Inc. Obligor)
7.75%, 10/1/2022...................................................... 8,165,000 8,776,803
Maine Health and Higher Education Facilities Authority, Revenue, Refunding
5.70%, 7/1/2013 (Insured; FSA).......................................... 5,000,000 4,723,950
Maine Housing Authority, Mortgage Purchase:
5.55%, 11/15/2014....................................................... 11,865,000 10,605,768
6.875%, 11/15/2023...................................................... 14,000,000 13,954,220
Skowhegan, SWDR (S.D. Warren Co. Project) 8.40%, 10/1/2015.................. 7,700,000 8,699,229
MARYLAND--2.1%
Community Development Administration,
Department of Housing and Community Development State of Maryland,
Single Family Program Bonds:
6.80%, 4/1/2024....................................................... 34,000,000 34,498,780
6.75%, 4/1/2026....................................................... 20,000,000 20,094,000
Maryland Health and Higher Educational Facilities Authority,
Revenue (Maryland General Hospital Issue):
6.125%, 7/1/2019 (Insured; MBIA)...................................... 2,315,000 2,304,513
6.20%, 7/1/2024 (Insured; MBIA)....................................... 4,000,000 4,009,520
Mayor and City Council of Baltimore, Revenue, Refunding (Water Projects)
5.65%, 7/1/2020 (Insured; MBIA) ........................................ 12,000,000 11,227,440
Prince Georges County, PCR, Refunding (Potomac Electric Project)
6.375%, 1/15/2023....................................................... 10,225,000 10,281,749
MASSACHUSETTS--3.0%
Massachusetts Bay Transportation Authority, General Transportation System
5.875%, 3/1/2019........................................................ 5,000,000 4,760,400
Massachusetts Health and Educational Facilities Authority, Revenue
(Brigham and Womens Hospital) 6.75%, 7/1/2024........................... 15,000,000 15,358,350
Massachusetts Housing Finance Agency, Single Family Housing:
Insured Rental Housing 6.65%, 7/1/2019 (Insured; AMBAC)................. 7,275,000 7,357,280
Revenue 7.125%, 6/1/2025................................................ 30,975,000 31,546,799
Massachusetts Industrial Finance Agency, Revenue:
Museum (Norman Rockwell Stockbridge) 8.125%, 7/1/2011................... 3,255,000 3,479,953
(Provider Lease Program) 8.75%, 7/15/2009............................... 3,000,000 3,222,780
Tunnel (Massachusetts Turnpike) 9%, 10/1/2020........................... 14,620,000 15,616,645
Massachusetts Municipal Wholesale Electric Co., Power Supply System Revenue
6.92%, 7/1/2018 (a)..................................................... 18,500,000 14,800,000
The New England Education Loan Marketing Corp., Student Loan Refunding
5.70%, 7/1/2005......................................................... 23,000,000 22,543,450
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
MICHIGAN--2.8%
Detroit, Revenue, Refunding:
Sewer Disposal 7.821%, 7/1/2023 (Insured; FGIC) (a)..................... $ 17,500,000 $ 15,050,000
Water Supply System:
9.171%, 7/1/2002 (Insured; FGIC) (a).................................. 10,800,000 12,595,500
9.171%, 7/1/2022 (Insured; FGIC) (a).................................. 4,200,000 4,268,250
The Economic Development Corp. of the County of Gratiot,
Limited Obligation Economic Development Revenue
(Danly Die Set Project) 7.625%, 4/1/2007................................ 3,200,000 3,293,312
Michigan Hospital Finance Authority, Revenue:
(Metropolitan Hospital) 8.125%, 7/1/2018................................ 5,000,000 5,816,500
(Sisters of Mercy) 9.224%, 2/15/2022 (Insured;FSA) (a).................. 18,100,000 17,851,125
Michigan Strategic Fund, Limited Obligation, Revenue:
Refunding (Detroit Edison Co.) 6.95%, 9/1/2021 (Insured; FGIC).......... 10,000,000 10,603,900
(WMX Technologies Inc. Project) 6%, 12/1/2013........................... 10,000,000 9,666,900
Pontiac Hospital Finance Authority, HR, Refunding
(North Oakland Medical Center Obligated Group) 6%, 8/1/2013............. 10,495,000 9,449,698
Western Townships Utilities Authority, Sewer Disposal System
(Limited Tax G.O.):
8.125%, 1/1/2009...................................................... 8,765,000 9,837,135
8.20%, 1/1/2018....................................................... 9,250,000 10,413,558
8.30%, 1/1/2019....................................................... 1,000,000 1,129,630
MINNESOTA--1.2%
Minneapolis, HR, Refunding (Lifespan Inc. Issue)
9.125%, 12/1/2014....................................................... 4,000,000 4,609,120
Minnesota Housing Finance Agency, Single Family Mortgage:
6.90%, 7/1/2022......................................................... 7,265,000 7,482,877
6.85%, 1/1/2024......................................................... 26,985,000 27,327,709
Rochester Health Care Facilities, Revenue 8.618%, 11/15/2015 (a)............ 9,000,000 8,707,500
MISSOURI--.2%
Saint Louis, Airport Revenue, Refunding and Improvement
(Lambert-Saint Louis International Airport Project)
6.125%, 7/1/2015 (Insured; FGIC)........................................ 8,000,000 7,999,120
MONTANA--.5%
Montana Health Facilities Authority, HR 7.287%, 2/25/2025 (a)............... 13,850,000 10,335,563
Montana Higher Education Student Assistance Corp., Student Loan Revenue
5.95%, 12/1/2012........................................................ 7,500,000 7,193,250
NEVADA--.9%
Clark County, IDR (Nevada Power Co. Project) 6.70%, 6/1/2022 (Insured; FGIC) 25,895,000 26,656,572
Washoe County, Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA)........................................ 10,000,000 10,283,800
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
NEW HAMPSHIRE--4.4%
Business Finance Authority of the State of New Hampshire,
State Guaranteed Airport Revenue (Manchester Airport Project):
6.50%, 1/1/2019....................................................... $ 9,350,000 $ 9,512,316
6.375%, 1/1/2022...................................................... 8,650,000 8,706,398
New Hampshire Higher Educational and Health Facilities Authority, Revenue, Refunding:
(Franklin Pierce College Issue) 6%, 10/1/2013........................... 4,655,000 4,358,290
(Wentworth - Douglas Hospital):
8.375%, 1/1/2006...................................................... 2,300,000 2,539,246
8.50%, 1/1/2015....................................................... 7,700,000 8,522,052
New Hampshire Housing Finance Authority:
Single Family Mortgage 6.05%, 7/1/2025.................................. 34,295,000 32,772,988
Single Family Residential Mortgage:
6.85%, 7/1/2016....................................................... 7,315,000 7,349,307
5.60%, 7/1/2017....................................................... 6,000,000 5,374,500
7.10%, 1/1/2023....................................................... 27,000,000 27,925,830
7.75%, 7/1/2023....................................................... 18,880,000 19,484,915
6.85%, 1/1/2025....................................................... 10,985,000 11,123,960
6.95%, 1/1/2026....................................................... 6,500,000 6,603,935
New Hampshire Industrial Development Authority, Revenue:
(Pollution Control Public Service Co. Project) 7.65%, 5/1/2021.......... 18,300,000 19,297,716
(Refunding-Pollution Control - Central Maine) 7.375%, 5/1/2014.......... 10,000,000 10,424,700
NEW JERSEY--4.4%
Howell Township Municipal Utilities Authority, Revenue 8.60%, 1/1/2014...... 4,000,000 4,603,280
Jersey City:
6.65%, 2/15/2013........................................................ 2,900,000 2,942,485
6.65%, 2/15/2014........................................................ 3,030,000 3,067,996
6.65%, 2/15/2015........................................................ 3,200,000 3,237,856
6.65%, 2/15/2016........................................................ 3,200,000 3,233,376
6.65%, 2/15/2017........................................................ 3,200,000 3,231,104
New Jersey Economic Development Authority, PCR
(Public Service Electric and Gas Co. Project)
6.40%, 5/1/2032 (Insured; MBIA)......................................... 27,040,000 27,091,917
New Jersey Health Care Facilities Financing Authority, Revenue:
(Atlantic City Medical Center) 8.375%, 8/1/2020 (Insured; FHA).......... 8,510,000 9,616,811
(Bayonne Hospital) 9.125%, 7/1/2012..................................... 2,350,000 2,607,631
(Elizabeth General Medical Center) 7.375%, 7/1/2015..................... 21,500,000 22,419,125
(Kimball Medical Center) 8%, 7/1/2013................................... 16,550,000 17,682,020
(Newton Memorial Hospital) 7.50%, 7/1/2019.............................. 5,000,000 5,283,500
(Warren Hospital) 9.375%, 7/1/2013...................................... 10,125,000 10,754,066
New Jersey Housing and Mortgage Finance Agency, Revenue 8.594%, 11/1/2007 (a,b) 15,000,000 15,412,500
New Jersey Sports and Exposition Authority 6.50%, 3/1/2019.................. 20,000,000 20,730,800
New Jersey Wastewater Treatment Trust, Insured Loan Revenue 9%, 9/1/2007.... 6,000,000 6,836,640
Passaic County Utilities Authority, Solid Waste System Revenue 7%, 11/15/2007 10,960,000 11,037,378
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
NEW JERSEY (CONTINUED)
Pollution Control Financing Authority of Salem County, PCR, Refunding
(Public Service Electric and Gas Co. Project)
6.25%, 6/1/2031 (Insured; MBIA)......................................... $ 6,500,000 $ 6,515,275
NEW MEXICO--.9%
Albuquerque, HR, Refunding (Presbyterian Health Care Services)
6.375%, 8/1/2007 (Insured; MBIA)........................................ 4,500,000 4,753,575
Chaves County, HR (Eastern New Mexico Medical Center Project) 7.25%, 12/1/2010 6,380,000 6,365,135
New Mexico Educational Assistance Foundation, Student Loan Revenue 7.45%, 3/1/2010 12,045,000 12,145,094
New Mexico Mortgage Financing Authority,
Tax-Exempt Agency Mortgage - Backed Securities:
6.50%, 7/1/2025....................................................... 3,000,000 2,939,490
6.75%, 7/1/2025....................................................... 2,250,000 2,261,183
6.80%, 1/1/2026....................................................... 5,500,000 5,489,495
NEW YORK--7.3%
New York City:
8%, 6/1/1995............................................................ 6,925,000 7,152,556
8%, 6/1/1995............................................................ 3,075,000 3,165,836
8%, 6/1/1996............................................................ 3,685,000 3,898,030
7.50%, 2/1/2003......................................................... 29,000,000 32,265,980
7.50%, 2/1/2005......................................................... 8,000,000 8,784,400
8.40%, 11/15/2005....................................................... 5,000,000 5,813,550
8.25%, 6/1/2006......................................................... 2,750,000 3,257,650
6%, 8/1/2006............................................................ 15,000,000 15,000,900
7.75%, 8/15/2006........................................................ 20,000,000 22,440,400
7.50%, 2/1/2007......................................................... 5,000,000 5,455,900
New York City Industrial Development Agency, Special Facilities Revenue
(1994 American Airlines, Inc., Project) 6.90%, 8/1/2024................. 5,000,000 5,017,000
New York State Dormitory Authority, Revenue:
City University:
7.50%, 7/1/2010....................................................... 10,000,000 11,354,700
Refunding:
8.125%, Series C, 7/1/2008........................................ 9,725,000 10,963,382
8.125%, Series D, 7/1/2008........................................ 28,755,000 32,028,182
Judicial Facility Lease (Suffolk County Issue) 9.50%, 4/15/2014......... 8,000,000 9,372,640
New York State Energy, Research and Development Authority, Revenue,
Electric Facilities (Con Edison Co. Project):
7.75%, 1/1/2024....................................................... 8,925,000 9,577,596
7.50%, 1/1/2026....................................................... 25,000,000 26,893,000
New York State Housing Finance Agency, Revenue, Refunding
(Health Facilities-New York City) 8%, 11/1/2008......................... 22,000,000 24,973,080
New York State Medical Care Facilities Finance Agency, Revenue
Mental Health Services Facilities Improvement 7.875%, 8/15/2020......... 12,125,000 13,333,984
New York State Power Authority, Revenue and General Purpose:
Refunding 6.50%, 1/1/2019............................................... 27,000,000 27,602,910
6.25%, 1/1/2023......................................................... 10,165,000 10,199,459
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
NORTH CAROLINA--.9%
Martin County Industrial Facilities and Pollution Control Financing
Authority,
Revenue (Solid Waste-Weyerhaeuser Co.) 5.65%, 12/1/2023................. $ 5,000,000 $ 4,464,100
North Carolina Eastern Municipal Power Agency, Power System Revenue
5.75%, 12/1/2016........................................................ 4,000,000 3,636,080
North Carolina Medical Care Community, HR:
(Alamance Health Services Inc. Project):
5.50%, 8/15/2013 (Insured; FSA)....................................... 5,000,000 4,670,750
Refunding 6.375%, 8/15/2012 (Insured; FSA)............................ 3,000,000 3,101,460
(Duke University Hospital Project) 7%, 6/1/2021......................... 2,000,000 2,244,180
Pitt County, Revenue (Pitt County Memorial Hospital) 6.90%, 12/1/2021....... 12,000,000 12,678,120
Winston Salem, COP 6.90%, 6/1/2011.......................................... 5,245,000 5,866,795
NORTH DAKOTA--.3%
North Dakota Housing Finance Agency:
(Housing Mortgage Finance Program) 6.75%, 7/1/2025...................... 6,760,000 6,797,450
SFMR:
8.375%, 7/1/2021...................................................... 2,605,000 2,728,321
6.80%, 7/1/2023....................................................... 3,290,000 3,353,234
OHIO--.6%
Cuyahoga County, HR (Meridia Health System) 7%, 8/15/2023................... 7,000,000 7,287,420
Hamilton County, Hospital Facilities Revenue, Refunding
(Bethesda Hospital) 6.25%, 1/1/2012..................................... 3,115,000 3,126,401
Ohio Air Quality Development Authority, PCR (Cincinnati Gas and Electric)
10.125%, 12/1/2015...................................................... 5,500,000 6,006,220
Ohio State University, General Receipts:
5.70%, 12/1/2005........................................................ 2,350,000 2,384,381
5.70%, 12/1/2006........................................................ 1,820,000 1,829,628
Refunding 5.70%, 12/1/2005.............................................. 2,380,000 2,414,819
OKLAHOMA--1.3%
Claremore Industrial and Redevelopment Authority, Economic Development Revenue
(Yuba Project) 8.375%, 7/1/2011......................................... 7,500,000 8,035,125
Oklahoma Turnpike Authority, Turnpike Revenue 6.125%, 1/1/2020.............. 9,500,000 9,516,340
Southern Oklahoma Memorial Hospital Authority, HR 6.60%, 12/1/2012.......... 5,725,000 5,796,448
Tulsa Municipal Airport Trust, Revenue:
(AMR Corp.) 7.60%, 12/1/2030............................................ 14,390,000 14,446,697
(American Airlines) 7.375%, 12/1/2020................................... 15,000,000 14,937,750
OREGON--.2%
Portland, Sewer System Revenue 6.25%, 6/1/2015.............................. 8,750,000 8,806,788
PENNSYLVANIA--1.0%
Pennsylvania Convention Center Authority, Refunding, Revenue
6.70%, 9/1/2014......................................................... 12,000,000 11,831,160
Philadelphia Hospitals and Higher Educational Facilities Authority, HR
(Philadelphia MR Project) 8.625%, 8/1/2011.............................. 3,000,000 3,292,560
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
PENNSYLVANIA (CONTINUED)
Quakertown General Authority, Revenue (Community Mental Health/Retardation):
8.75%, 11/1/2000........................................................ $ 2,010,000 $ 2,249,210
8.875%, 11/1/2010....................................................... 6,420,000 7,161,767
Ridley Park Hospital Authority, Revenue (Taylor Hospital) 8.625%, 12/1/2020. 10,000,000 12,076,900
Schuykill County Industrial Development Authority, RRR,
Refunding (Schuykill Energy Resource Inc.) 6.50%, 1/1/2010.............. 5,000,000 4,742,650
RHODE ISLAND--1.2%
Rhode Island Depositors Economic Protection Corp., Special Obligation
6.95%, 8/1/2022......................................................... 10,500,000 11,849,565
Rhode Island Health and Educational Building Corp., Revenue:
(Johnson and Wales University) 8.375%, 4/1/2020......................... 11,000,000 12,985,060
(Landmark Medical Center) 5.60%, 10/1/2012.............................. 5,000,000 4,469,150
(Providence College) Zero Coupon, 11/1/2012 (Insured; BIGI)............. 2,500,000 777,975
Rhode Island Housing and Mortgage Finance Corp.
(Homeownership Opportunity) 6.50%, 4/1/2027............................. 9,835,000 9,781,498
Rhode Island Port Authority and Economic Development Corp.,
Airport Revenue:
5.25%, 7/1/2015 (Insured: FSA)........................................ 6,000,000 5,248,920
6.625%, 7/1/2024 (Insured: FSA)....................................... 3,400,000 3,448,314
SOUTH CAROLINA--.3%
Richland County, Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 7.125%, 9/1/2021............................. 6,250,000 6,622,125
Spartanburg County, Hospital Facilities Improvement Revenue, Refunding
(Mary Black Memorial Project) 8.25%, 10/1/2008.......................... 5,000,000 5,732,900
SOUTH DAKOTA--.2%
South Dakota Housing Development Authority, Homeownership Mortgage:
5.70%, 5/1/2013......................................................... 3,000,000 2,788,200
6.65%, 5/1/2014......................................................... 3,350,000 3,395,694
TENNESSEE--1.0%
Health, Educational and Housing Facilities Board of the County of Shelby
Multi-Family Housing Revenue (Windsor Apartments Project) 6.75%, 10/1/2017 5,000,000 5,091,050
McMinn County Industrial Development Board, PCR (Calhoun Newsprint Co.
Project)
7.625%, 3/1/2016........................................................ 15,000,000 15,811,650
Metropolitan Government Nashville and Davidson County, Water and Sewer Revenue
8.662%, 1/1/2022 (Insured; AMBAC) (a)................................... 7,500,000 7,321,875
Tennessee Housing Development Agency, Mortgage Financing Program
6.90%, 7/1/2025......................................................... 10,250,000 10,447,928
TEXAS--6.5%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project):
7%, 12/1/2011......................................................... 17,330,000 17,048,561
7.50%, 12/1/2029...................................................... 25,905,000 25,831,689
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
TEXAS (CONTINUED)
Amarillo Health Facilities Corp., HR
(High Plains Baptist Hospital Project) 9.718%, 1/3/2022 (Insured; FSA) (a) $ 7,250,000 $ 7,494,687
Angelina and Neches River Authority, SWDR (Champion International Corp. Project)
7.375%, 5/1/2015........................................................ 5,570,000 5,851,118
Brazos County Health Facility Development Corp.,
Franciscan Services Corp. Revenue, Refunding
(Saint Joseph's Hospital and Health Center) 8.875%, 1/1/2015............ 14,875,000 17,013,728
Brazos River Authority, PCR (Texas Utilities Electric Co. Project):
7.875%, 3/1/2021........................................................ 8,400,000 9,153,984
6.10%, 4/1/2028 (Insured; FSA).......................................... 25,000,000 24,371,500
Denison Hospital Authority, HR, Refunding (Texoma Medical Center Project)
8%, 9/1/2016............................................................ 8,790,000 9,296,304
Gulf Coast Waste Disposal Authority, Revenue:
(Champion International Corp.):
7.375%, 10/1/2025..................................................... 12,000,000 12,635,040
6.875%, 12/1/2028..................................................... 11,500,000 11,538,525
Solid Waste Disposal (Occidental Petroleum Corp. Project) 7%, 11/1/2020. 7,725,000 7,897,113
Harris County Health Facilities Development Corp., HR:
(Hermann Trust) 9%, 10/1/2017........................................... 5,000,000 5,712,300
(Saint Luke's Episcopal Hospital Project) 6.75%, 2/15/2021.............. 5,000,000 5,188,600
Harris County Hospital District, Mortgage Revenue, Refunding
7.40%, 2/15/2010 (Insured; AMBAC)....................................... 5,000,000 5,720,400
Houston, Water and Sewer System Revenue, Junior Lien
6.375%, 12/1/2022 (Insured; MBIA)....................................... 8,375,000 8,471,229
Houston Hotel Occupancy Tax, Revenue 7%, 7/1/2009 (Insured; FGIC)........... 12,225,000 13,048,720
North Central Health Facility Development Corp., Revenue, Refunding
(Children's Medical Center of Dallas Project) 5.75%, 8/15/2013 (Insured; MBIA) 8,500,000 8,094,805
Richardson Hospital Authority, HR, Refunding and Improvement
(Richardson Medical Center Project) 6.50%, 12/1/2012.................... 13,195,000 12,696,097
Rio Grande Valley Health Facilities Development Corp., HR, Refunding
(Valley Baptist Medical Center Project) 6.40%, 8/1/2016 ................ 11,200,000 11,305,504
Sabine River Authority, PCR (Collateralized-Texas Utilities Electric Project)
8.25%, 10/1/2020........................................................ 4,000,000 4,372,800
Texas General Service Commission, Lease Purchase Agreement
7.50%, 3/1/2012......................................................... 7,055,000 7,208,376
Texas Higher Education Coordinating Board,
College Student Loan Revenue (Senior Lien):
7.45%, 10/1/2006...................................................... 4,400,000 4,494,028
Zero Coupon, 10/1/2025................................................ 3,010,000 1,752,422
7.70%, 10/1/2025...................................................... 2,965,000 3,030,615
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation Project):
8.625%, 11/1/2000..................................................... 2,460,000 2,673,503
8.75%, 11/1/2010...................................................... 4,745,000 5,543,251
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
TEXAS (CONTINUED)
Texas Water Resources Finance Authority, Revenue 7.625%, 8/15/2008.......... $ 4,990,000 $ 5,410,607
Tomball Hospital Authority, HR, Refunding (Tomball Regional Hospital)
6.125%, 7/1/2023........................................................ 4,000,000 3,520,040
UTAH--2.5%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018..... 20,000,000 21,519,800
Intermountain Power Agency, Power Supply Revenue, Refunding 5.55%, 7/1/2011 44,000,000 41,253,080
Salt Lake County, HR (Intermountain Health Care Hospital):
7.875%, 8/1/2020........................................................ 5,000,000 5,319,250
Refunding 6.25%, 2/15/2023.............................................. 18,625,000 18,284,163
Utah Housing Finance Agency, Single Family Mortgage
6.40%, 1/1/2027......................................................... 6,880,000 6,795,858
Utah Municipal Finance Cooperative, Local Government Revenue
(Pooled Capital-Salt Lake):
Zero Coupon, 3/1/2012(Insured: FSA)................................... 7,385,000 2,462,528
Zero Coupon, 3/1/2013(Insured: FSA)................................... 3,690,000 1,150,431
Zero Coupon, 3/1/2014(Insured: FSA)................................... 3,190,000 928,545
Zero Coupon, 3/1/2015(Insured: FSA)................................... 3,540,000 965,287
VERMONT--.3%
Vermont Housing Finance Agency, Single Family Housing 6.875%, 5/1/2025...... 10,500,000 10,510,395
VIRGINIA--1.4%
Giles County Industrial Development Authority,
Solid Waste Disposal Facility Revenue (Hoechst Celanese Corp. Project)
6.625%, 12/1/2022....................................................... 8,715,000 8,820,364
Henrico County Industrial Development Authority, Revenue
(Maryview Hospital Project) 7.50%, 9/1/2011............................. 5,650,000 6,449,757
Virginia Housing Development Authority, Commonwealth Mortgage:
6.20%, 7/1/2011......................................................... 12,160,000 12,218,490
6.20%, 7/1/2021......................................................... 15,000,000 14,302,650
6.70%, 1/1/2022......................................................... 6,950,000 7,030,551
6.85%, 1/1/2027......................................................... 8,000,000 8,103,360
WASHINGTON--5.3%
Lake Washington School District No. 414, Kings County, Unlimited Tax GO
6.125%, 12/1/2006....................................................... 5,035,000 5,234,487
Pilchuck Development Public Corp., Revenue, Special Facilities Airport
(Tramco Inc. Project) 6%, 8/1/2023...................................... 10,000,000 8,801,000
Public Utility District No. 1 of Chelan County,
Chelan Hydro Consolidated System Revenue:
6.95%, 6/1/2018....................................................... 8,700,000 9,627,333
6.55%, 7/1/2023....................................................... 10,000,000 9,858,500
Public Utility District No. 1 of Douglas County,
Wells Hydroelectric Revenue:
6.15%, 9/1/2013....................................................... 2,000,000 1,949,760
6.20%, 9/1/2018....................................................... 3,000,000 2,919,750
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
WASHINGTON (CONTINUED)
Puyallup School District No. 3, Pierce County:
6.65%, 12/1/2007........................................................ $ 2,000,000 $ 2,109,980
6.70%, 12/1/2008........................................................ 4,515,000 4,741,698
Snohomish County School District No. 2, Everett, Refunding
6.20%, 12/1/2012 (Insured; MBIA)........................................ 5,000,000 5,035,600
Snohomish County School District No. 6, Mukilteo:
6.50%, 12/1/2011........................................................ 7,700,000 8,050,042
5.70%, 12/1/2012 (Insured; FGIC)........................................ 5,140,000 4,936,816
Tacoma, Electric System Revenue 6.513%, 1/1/2015 (Insured; AMBAC) (a)....... 14,000,000 14,252,560
Washington:
10%, 10/1/2002 (Insured; MBIA).......................................... 3,000,000 3,328,830
5.70%, 10/1/2015........................................................ 50,200,000 47,661,386
6.40%, 6/1/2017......................................................... 43,600,000 44,974,272
Washington Health Care Facilities Authority, Revenue (Harrison Memorial
Hospital, Bremerton) 5.30%, 8/15/2014 (Insured; AMBAC).................. 5,000,000 4,420,800
Washington Public Power, Supply System Revenue, Refunding (Nuclear Project
No. 3)
5.375%, 7/1/2015........................................................ 35,710,000 31,303,743
WISCONSIN--.3%
Janesville, IDR (Simmons Manufacturing Co., Inc. Project)
7%, 10/15/2017.......................................................... 3,000,000 3,125,490
Wisconsin Health and Educational Facilities Authority, Revenue
(Lutheran Hospital - La Crosse Inc.) 5.75%, 2/15/2015 (Insured; FSA).... 3,000,000 2,792,070
Wisconsin Housing and Economic Development Authority,
Home Ownership Revenue 6.45%, 3/1/2017.................................. 5,000,000 4,988,200
Wisconsin Municipal Mutual Insurance Co., Revenue
8.50%, 12/1/2007 (LOC; Fuji Bank) (c)................................... 2,500,000 2,590,100
WYOMING--.2%
Uinta County Hospital Facility, Revenue, Refunding
(IHC Hospitals Inc.) 7.25%, 2/15/2019................................... 7,350,000 7,796,439
U.S. RELATED--.5%
Commonwealth of Puerto Rico, 5.85%, 7/1/2010................................ 5,725,000 5,709,428
Puerto Rico Highway and Transportation Authority, Highway Revenue
7.285%, 7/1/2008 (a).................................................... 7,000,000 6,282,500
Puerto Rico Public Buildings Authority,
Guaranteed Public Education and Health Facilities, Refunding
6.60%, 7/1/2004......................................................... 8,190,000 8,811,048
----------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $ 3,748,175,466).................................................. $3,811,666,608
===============
</TABLE>
<TABLE>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS--4.0% AMOUNT VALUE
---------------- --------------
<S> <C> <C>
ARIZONA--.1%
Maricopa Industrial Development Authority, Hospital Facility Revenue, VRDN
(Samaritan Health Service Hospital) 3.15% (d)........................... $ 3,500,000 $ 3,500,000
Pima County Industial Development Authority, Industrial Revenue, VRDN (Tuscon Electric)
3.25% (LOC; Bank America National Trust and Saving Association) (c,d)... 1,800,000 1,800,000
CALIFORNIA--.1%
California Pollution Control Financing Authority, IDR, VRDN
3.55% (LOC; Sumitomo Trust and Banking Co. Ltd.) (c,d).................. 4,000,000 4,000,000
COLORADO--.0%
Colorado Student Obligation Bond Authority, Student Loan Revenue, VRDN
3.25% (LOC; Student Loan Marketing Association and Sumitomo Bank Ltd.) (c,d) 200,000 200,000
DISTRICT OF COLUMBIA--.2%
District of Columbia, Refunding, VRDN 3.10% (LOC; Sanwa Bank) (c,d)......... 6,700,000 6,700,000
FLORIDA--.4%
Florida Board of Education, Capital Outlay 3.09% (a,b)...................... 12,000,000 12,000,000
Florida Local Government Finance Authority, Revenue, VRDN (Government Union
Loan)
3.20% (LOC; First Union National Bank of Florida) (c,d)................. 200,000 200,000
Pinellas County Health Facilities Authority, Revenue, Refunding, VRDN
(Pooled Hospital Loan Program) 3.25% (LOC; Chemical Bank) (c,d)......... 3,200,000 3,200,000
GEORGIA--.0%
Marietta Housing Authority, Multi-Family Revenue, VRDN (Franklin Walk
Apartments Project) 3.275% (LOC; Bankers Trust) (c,d)................... 225,000 225,000
ILLINOIS--.0%
Illinois Development Finance Authority, IDR, VRDN (Toyomenka Inc. Project)
4.15% (LOC; Tokai Bank Ltd.) (c,d)...................................... 1,200,000 1,200,000
MARYLAND--.1%
Maryland Health and Higher Education Facilities Authority, Revenue, VRDN
(Pooled Loan Program) 3.25% (d)......................................... 1,900,000 1,900,000
Prince Georges' County Housing Authority, Mortgage Revenue, VRDN (Laurel -
Oxford)
3.275% (LOC; Bankers Trust) (c,d)....................................... 1,000,000 1,000,000
MICHIGAN--.0%
Midland County Economic Development Corp., Economic Development Ltd.
Obligation Revenue, VRDN (Dow Chemical Co. Project) 3.50% (d)........... 2,000,000 2,000,000
MINNESOTA--.0%
Cloquet, PCR, VRDN (Potlatch Corp. Project) 3.15% (LOC; Credit Suisse) (c,d) 2,000,000 2,000,000
NEW MEXICO--.1%
New Mexico Mortgage Finance Authority, Mortgage Backed Securities 3.25%,
11/15/1994 ................................................................ 2,250,000 2,249,618
NEW YORK--.9%
New York City, 3.50% (a).................................................... 7,500,000 7,500,000
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
NEW YORK (CONTINUED)
New York City Health and Hospital Corp., Revenue:
3.05% (Insured; AMBAC) (a).............................................. $ 3,900,000 $ 3,900,000
3% (Insured; AMBAC) (a)................................................. 2,000,000 2,000,000
New York State Housing Finance Agency, Revenue, VRDN
(Normandie Court I Project) 2.95% (LOC; Societe Generale) (c,d)......... 3,500,000 3,500,000
New York State Job Development Authority, State Guaranteed Special Purpose,
VRDN 3.15% (LOC; Sumitomo Bank) (c,d)................................... 5,300,000 5,300,000
Port Authority of New York and New Jersey, Special Obligation Revenue, VRDN
3.30% (d)............................................................... 12,200,000 12,200,000
OHIO--.1%
Cincinnati Student Loan Funding Corp., Student Loan Revenue, VRDN:
3.10% (LOC; Fuji Bank) (c,d)............................................ 2,140,000 2,140,000
3.25% (LOC; National Westminster Bank) (c,d)............................ 1,500,000 1,500,000
Scioto County Marine Terminal Facilities, Revenue, Refunding, VRDN
(Norfolk Southern Corp. Project) 3.05% (d).............................. 1,300,000 1,300,000
PENNSYLVANIA--.1%
Allegheny County Higher Education Building Authority, Revenue,
VRDN (University of Pittsburgh) 2.70% (LOC; Fuji Bank) (c,d)............ 300,000 300,000
Pennsylvania Economic Development Financing Authority,
Economic Development Revenue, VRDN:
(6424 West Ridge Road Project) 3.40% (LOC; PNC Bank) (c,d)............ 750,000 750,000
(Creative Pultrusions Inc. Project) 3.40% (LOC; PNC Bank) (c,d)....... 450,000 450,000
Pennsylvania Energy Development Authority, Energy Development Revenue, VRDN
(Ebensburg Project) 3.25% (LOC; Swiss Bank Corp.) (c,d)................. 300,000 300,000
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue, VRDN
3.20% (LOC; Union Bank of Switzerland) (c,d)............................ 1,500,000 1,500,000
Warren County Hospital Authority, Revenue, VRDN (Warren General Hospital
Project)
3.30% (LOC; PNC Bank) (c,d)............................................. 1,000,000 1,000,000
TEXAS--.4%
Gulf Coast Waste Disposal Authority, Solid Waste Disposal Revenue, Refunding,
VRDN
(Amoco Oil Co. Project) 3.25% (d)....................................... 9,000,000 9,000,000
Texas Department of Housing and Community Affairs, Home Mortgage Revenue,
Refunding 3.08% (a)..................................................... 6,850,000 6,850,000
Trinity River Industrial Development Authority, IDR, VRDN (Toys R Us /Nytex
Project)
3.275% (LOC; Bankers Trust) (c,d)....................................... 1,000,000 1,000,000
VIRGINIA--.4%
Peninsula Ports Authority, Revenue, Refunding, VRDN (Port Facility - Shell
Oil Co. Project)
3.10% (d)............................................................... 16,300,000 16,300,000
WASHINGTON--.8%
Washington Public Power, Supply System Revenue (Nuclear Project No. 2), VRDN
3.65% (d)............................................................... 30,800,000 30,800,000
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
WYOMING--.2%
Uinta County, PCR, VRDN (Chevron USA Inc. Project) 3.05% (LOC; Chevron Corp.) (c,d) $ 7,200,000 $ 7,200,000
U.S. RELATED--.1%
Puerto Rico Electric Power Authority, Power Revenue, (Insured: FSA) 3% (a).. 3,700,000 3,700,000
----------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $ 160,665,000).................................................... $ 160,664,618
===============
TOTAL INVESTMENTS --100.0%
(cost $ 3,908,840,466).................................................. $3,972,331,226
===============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BIGI Bond Investors Guaranty Insurance LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Insurance Association
FGIC Financial Guaranty Insurance Corporation PCR Pollution Control Revenue
FHA Federal Housing Administration RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GO General Obligation SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
IDR Industrial Development Revenue
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 26.6%
AA Aa AA 30.4
A A A 17.5
BBB Baa BBB 18.7
BB Ba BB .6
F1 MIG1/P1 SP1/A1 1.9
Not Rated Not Rated Not Rated 4.3
--------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse Floater Security - the interest rate is subject to change
periodically.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At August 31,
1994, these securities amounted to $44,763,894 or 1.1% of net assets.
(c) Secured by letters of credit.
(d) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
See notes to financial statements.
<TABLE>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $3,908,840,466)--see statement.................................. $3,972,331,226
Receivable for investment securities sold............................... 63,779,543
Interest receivable..................................................... 61,730,026
Receivable for Common Stock subscribed.................................. 25,500
Prepaid expenses........................................................ 154,252
----------------
4,098,020,547
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 2,022,383
Payable for investment securities purchased............................. 86,880,468
Payable for Common Stock redeemed....................................... 220,856
Accrued expenses and other liabilities.................................. 419,731 89,543,438
--------------- --------------
NET ASSETS ................................................................ $4,008,477,109
==============
REPRESENTED BY:
Paid-in capital......................................................... $3,922,365,714
Accumulated undistributed net realized gain on investments.............. 22,620,635
Accumulated net unrealized appreciation on investments_Note 3........... 63,490,760
---------------
NET ASSETS at value applicable to 323,557,950 shares outstanding
(600 million shares of $.01 par value Common Stock authorized).......... $4,008,477,109
==============
NET ASSET VALUE, offering and redemption price per share
($4,008,477,109 / 323,557,950 shares)................................... $12.39
=======
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS YEAR ENDED AUGUST 31, 1994
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 278,669,931
EXPENSES:
Management fee--Note 2(a)............................................. $ 25,447,556
Shareholder servicing costs_Note 2(b)................................. 3,087,411
Custodian fees........................................................ 255,872
Professional fees..................................................... 156,003
Prospectus and shareholders' reports.................................. 146,124
Registration fees..................................................... 41,980
Directors' fees and expenses_Note 2(c)................................ 35,972
Miscellaneous......................................................... 166,877
--------------
TOTAL EXPENSES.................................................. 29,337,795
---------------
INVESTMENT INCOME--NET.......................................... 249,332,136
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments--Note 3................................ $ 40,066,377
Net unrealized (depreciation) on investments............................ (349,064,340)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (308,997,963)
----------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (59,665,827)
==============
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED AUGUST 31,
-------------------------------------
1993 1994
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 264,131,758 $ 249,332,136
Net realized gain on investments..................................... 116,426,973 40,066,377
Net unrealized appreciation (depreciation) on investments for the year 161,942,467 (349,064,340)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... 542,501,198 (59,665,827)
----------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net............................................... (264,131,758) (249,332,136)
Net realized gain on investments..................................... (94,413,898) (110,423,674)
----------------- -----------------
TOTAL DIVIDENDS.................................................... (358,545,656) (359,755,810)
----------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................ 4,490,003,891 3,541,071,359
Dividends reinvested................................................. 239,231,863 239,678,805
Cost of shares redeemed.............................................. (4,461,481,108) (4,077,240,448)
----------------- -----------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.. 267,754,646 (296,490,284)
----------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 451,710,188 (715,911,921)
NET ASSETS:
Beginning of year.................................................... 4,272,678,842 4,724,389,030
----------------- -----------------
End of year.......................................................... $ 4,724,389,030 $ 4,008,477,109
================ ================
SHARES SHARES
----------------- ----------------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................................................... 340,555,104 271,726,312
Shares issued for dividends reinvested............................... 18,295,176 18,369,588
Shares redeemed...................................................... (337,948,221) (311,906,108)
----------------- ----------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING...................... 20,902,059 (21,810,208)
================ ================
See notes to financial statements.
</TABLE>
DREYFUS MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Fund's Prospectus dated December 29,
1994.
See notes to financial statements.
DREYFUS 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. The
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. ("Premier") was
engaged as the Fund's distributor. Premier, located at One Exchange Place,
Boston, Massachusetts 02109, is a wholly-owned subsidiary of Institutional
Administration Services, Inc., a provider of mutual fund administration
services, 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 judgement 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 6/10ths of 1% of the
average daily value of the Fund's net assets and is 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,
DREYFUS MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ranging from $0 to $1 million per year depending upon average daily net
assets of the Fund. The management fee for the year ended August 31, 1994 was
reduced by $350,000 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 1 1/2% of the average value
of the Fund's net assets for any full fiscal year. No expense reimbursement
was required for the year ended August 31, 1994.
(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 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 August 31, 1994,
the Fund was charged an aggregate of $1,066,264 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.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $4,712,476,315 and $5,153,920,024, respectively, for the year
ended August 31, 1994, and consisted entirely of long-term and short-term
municipal investments.
At August 31, 1994, accumulated net unrealized appreciation on
investments was $63,490,760, consisting of $142,820,881 gross unrealized
appreciation and $79,330,121 gross unrealized depreciation.
At August 31, 1994, 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 MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Municipal Bond Fund, Inc., including the statement of investments, as
of August 31, 1994, 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 August 31, 1994 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 Municipal Bond Fund, Inc. at August 31, 1994, 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 LLP Signature Logo)
September 30, 1994
DREYFUS MUNICIPAL BOND FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Highlights - for each of the ten years in
the period ended August 31, 1994.
Included in Part B of the Registration Statement:
Statement of Investments-- August 31, 1994
Statement of Assets and Liabilities-- August 31, 1994
Statement of Operations--year ended August 31, 1994
Statement of Changes in Net Assets--for each of the
years ended August 31, 1993 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors, dated
September 30, 1994
Schedules No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) The Registrant's Articles of Incorporation and Articles of
Amendment are incorporated by reference to Exhibit (1(a) of the
Registration Statement on Form S-5, filed on July 21, 1976, and
Exhibit (1)(a)(i) of Pre-Effective Amendment No. 1 to Form S-5,
filed on September 20, 1976.
(b) Registrant's Articles of Amendment, are incorporated by reference
to Exhibit (1)(b) of Post-Effective Amendment No. 23 to the
Registration Statement on Form N-1A, filed on December 19, 1986.
(c) The Registrant's Articles of Amended are incorporated by reference
to Exhibit (1)(c) of Post-Effective Amendment No. 33 filed on
October 29, 1993.
(2) The Registrant's By-Laws, as amended August 3, 1989, are
incorporated by reference to Exhibit 2 of Post-Effective Amendment
No. 29 to the Registration Statement on From N-1A, filed on
December 29, 1989.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibits (1)(c) and 2 of Pre-
Effective Amendment No. 1 to the Registration Statement on Form
S-5, filed on September 20, 1976.
(5) Management Agreement.
(6)(a) Distribution Agreement.
(8)(a) Amended and Restated Custody Agreement dated August 18, 1989 is
incorporated by reference to Exhibit 8(a) of Post-Effective
Amendment No. 29 to the Registration Statement on Form N-1A,
filed on December 29, 1989.
(8)(b) Sub-Custodian Agreements.
(9) Shareholder Services Plan.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (3) of Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-5, filed on September 20, 1976.
(11) Consent of Independent Auditors.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit 16 of Post-Effective Amendment No. 33 filed
on October 29, 1993.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney.
(b) Certificate of Corporate Secretary is incorporated by
reference to Post-Effective Amendment No. 29 to the
Registration Statement on Form N-1A, filed on December
29, 1989.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of October 24, 1994
______________ ______________________________
Common Stock
(Par value $.01) 74,547
Item 27. Indemnification
_______ _______________
The statement as to the general effect of any contract,
arrangements or statute under which a director, officer, underwriter
or affiliated person of the Registrant is indemnified, is
incorporated by reference to Item 4 of Post-Effective Amendment No.
19 to the Registration Statement on Form N-1A, filed on December 29,
1982.
Reference is also made to the Management Agreement referenced as
Exhibit (5) and to the Distribution Agreement referenced as Exhibit
6.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser, manager and distributor for sponsored
investment companies registered under the Investment Company Act
of 1940 and as an investment adviser to institutional and
individual accounts. Dreyfus also serves as sub-
investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned
subsidiary of Dreyfus, serves primarily as a registered broker-
dealer of shares of investment companies sponsored by Dreyfus and
of other investment companies for which Dreyfus acts as
investment adviser, sub-investment adviser or administrator.
Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension plans,
institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
DAVID B. TRUMAN Former Trustee:
(cont'd) College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board:
Chairman of the Board and Dreyfus Acquisition Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit Corporation*;
Dreyfus Land Development Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
Avnet, Inc.**;
Dreyfus America Fund++++
The Dreyfus Fund International
Limited+++++
World Balanced Fund+++
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
The Dreyfus Trust Company++;
Seven Six Seven Agency, Inc.*;
Trustee:
Corporate Property Investors
New York, New York;
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, and The Dreyfus Trust Company++;
Director Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
JOSEPH S. DiMARTINO Director:
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
Trustee:
Bucknell University
Lewisburg, Pennsylvania 17837;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
W. KEITH SMITH Chairman and Chief Executive Officer:
Chief Operating Officer The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
PAUL H. SNYDER Director:
Vice President and Chief Pennsylvania Economy League
Financial Officer Philadelphia, Pennsylvania;
Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Director and Vice President:
Financial Executives Institute,
Philadelphia Chapter
Philadelphia, Pennsylvania;
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman, Distribution Executive Officer:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
LAWRENCE S. KASH Executive Vice President
(cont'd) Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
JAY R. DIMARTINE Chairman of the Board and President:
Vice President, Marketing The Woodbury Society
16 Woodbury Lane
Ogunquit, ME 03907;
Former Managing Director:
Bankers Trust Company
280 Park Avenue
New York, NY 10017;
BARBARA E. CASEY President:
Vice President, Dreyfus Retirement Services;
Retirement Services Executive Vice President:
Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President,
Corporate Communications
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ELIE M. GENADRY President:
Vice President, Institutional Services Division of
Dreyfus
Wholesale Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of
Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President, Fund
Administration
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice Chairman, Operations Dreyfus Thrift & Commerce****;
and Administration Director:
The Dreyfus Security Savings Bank
F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President, Department of Parks and Recreation of the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Secretary:
Vice President, Fund The Dreyfus Consumer Credit Corporation*;
Legal and Compliance Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80
Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Cash Management Plus
45) Dreyfus Municipal Money Market Fund, Inc.
46) Dreyfus New Jersey Intermediate Municipal Bond Fund
47) Dreyfus New Jersey Municipal Bond Fund, Inc.
48) Dreyfus New Jersey Municipal Money Market Fund, Inc.
49) Dreyfus New Leaders Fund, Inc.
50) Dreyfus New York Insured Tax Exempt Bond Fund
51) Dreyfus New York Municipal Cash Management
52) Dreyfus New York Tax Exempt Bond Fund, Inc.
53) Dreyfus New York Tax Exempt Intermediate Bond Fund
54) Dreyfus New York Tax Exempt Money Market Fund
55) Dreyfus Ohio Municipal Money Market Fund, Inc.
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Short-Intermediate Government Fund
63) Dreyfus Short-Intermediate Municipal Bond Fund
64) Dreyfus Short-Term Income Fund, Inc.
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Strategic Growth, L.P.
67) Dreyfus Strategic Income
68) Dreyfus Strategic Investing
69) Dreyfus Tax Exempt Cash Management
70) Dreyfus Treasury Cash Management
71) Dreyfus Treasury Prime Cash Management
72) Dreyfus Variable Investment Fund
73) Dreyfus-Wilshire Target Funds, Inc.
74) Dreyfus Worldwide Dollar Money Market Fund, Inc.
75) First Prairie Cash Management
76) First Prairie Diversified Asset Fund
77) First Prairie Money Market Fund
78) First Prairie Municipal Money Market Fund
79) First Prairie Tax Exempt Bond Fund, Inc.
80) First Prairie U.S. Government Income Fund
81) First Prairie U.S. Treasury Securities Cash Management
82) General California Municipal Bond Fund, Inc.
83) General California Municipal Money Market Fund
84) General Government Securities Money Market Fund, Inc.
85) General Money Market Fund, Inc.
86) General Municipal Bond Fund, Inc.
87) General Municipal Money Market Fund, Inc.
88) General New York Municipal Bond Fund, Inc.
89) General New York Municipal Money Market Fund
90) Pacific American Fund
91) Peoples Index Fund, Inc.
92) Peoples S&P MidCap Index Fund, Inc.
93) Premier Insured Municipal Bond Fund
94) Premier California Municipal Bond Fund
95) Premier GNMA Fund
96) Premier Growth Fund, Inc.
97) Premier Municipal Bond Fund
98) Premier New York Municipal Bond Fund
99) Premier State Municipal Bond Fund
(b)
Name and principal Positions and offices with Positions and
business address the Distributor offices with
Registrant
__________________ ___________________________ _____________
Marie E. Connolly Director, President and Chief President and
Operating Officer Treasurer
Joseph F. Tower, III Senior Vice President and Chief Assistant
Financial Officer Treasurer
John E. Pelletier Senior Vice President and Vice
General Counsel President
and Secretary
Frederick C. Dey Senior Vice President Vice
President and
Assistant
Treasurer
Eric B. Fischman Vice President and Associate Vice
General Counsel President
and Assistant
Secretary
Jean M. O'Leary Assistant Secretary None
Ruth D. Leibert Assistant Vice President Assistant
Secretary
Paul D. Furcinito Assistant Vice President Assistant
Secretary
John W. Gomez Director None
William J. Nutt Director None
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a director or directors when requested in writing
to do so by the holders of at least 10% of the Registrant's outstanding
shares of common stock and in connection with such meeting to comply with
the provisions of Section 16(c) of the Investment Company Act of 1940
relating to shareholder communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon request and
without charge.
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, and State
of New York on the 28th day of October, 1994.
DREYFUS MUNICIPAL BOND FUND, INC.
BY: /s/Marie E. Connolly*
----------------------------
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
date indicated.
Signatures Title Date
__________________________ ______________________________ __________
/s/Marie E. Connolly* President (Principal Executive 10/28/94
____________________________ Officer)
Marie E. Connolly
/s/Joseph F. Tower, III* Treasurer (Principal Financial 10/28/94
____________________________ and Accounting Officer)
Joseph F. Tower, III
/s/David W. Burke* Director 10/28/94
_____________________________
David W. Burke
/s/Hodding Carter, III* Director 10/28/94
_____________________________
Hodding Carter, III
/s/Ehud Houminer* Director 10/28/94
_____________________________
Ehud Houminer
/s/Richard C. Leone* Director 10/28/94
_____________________________
Richard C. Leone
/s/Hans C. Mautner* Director 10/28/94
_____________________________
Hans C. Mautner
/s/John E. Zuccotti* Director 10/28/94
_____________________________
John E. Zuccotti
*BY: __________________________
Eric B. Fischman,
Attorney-in-Fact
INDEX OF EXHIBITS
(5) Management Agreement
(6) Distribution Agreement
(8)(b) Form of Sub-Custodian Agreements
(9) Shareholder Services Plan
(11) Consent of Ernst & Young, Independent Auditors
Power of Attorney
MANAGEMENT AGREEMENT
DREYFUS MUNICIPAL BOND FUND, INC.
August 24, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments of the type and in
accordance with the limitations specified in its charter
documents and in its Prospectus and Statement of Additional
Information as from time to time in effect, copies of which have
been or will be submitted to you, and in such manner and to such
extent as from time to time may be approved by the Fund's Board.
The Fund desires to employ you to act as its investment adviser.
In this connection it is understood that from time to
time you will employ or associate with yourself such person or
persons as you may believe to be particularly fitted to assist
you in the performance of this Agreement. Such person or
persons may be officers or employees who are employed by both
you and the Fund. The compensation of such person or persons
shall be paid by you and no obligation may be incurred on the
Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's
Board, you will provide investment management of the Fund's
portfolio in accordance with the Fund's investment objectives
and policies as stated in its Prospectus and Statement of
Additional Information as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise the Fund's investments and conduct a
continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of the Fund's assets. You
will furnish to the Fund such statistical information, with
respect to the investments which the Fund may hold or
contemplate purchasing, as the Fund may reasonably request. The
Fund wishes to be informed of important developments materially
affecting its portfolio and shall expect you, on your own
initiative, to furnish to the Fund from time to time such
information as you may believe appropriate for this purpose.
In addition, you will supply office facilities (which
may be in your own offices), data processing services, clerical,
accounting and bookkeeping services, internal auditing and legal
services, internal executive and administrative services, and
stationery and office supplies; carry such fidelity and other
insurance (except insurance not obtained under a blanket policy
covering one or more other investment companies managed by you)
as may be deemed appropriate and desirable; prepare reports to
the Fund's stockholders, tax returns, reports to and filings
with the Securities and Exchange Commission and state Blue Sky
authorities; calculate the net asset value of the Fund's shares;
and generally assist in all aspects of the Fund's operations.
You shall have the right, at your expense, to engage other
entities to assist you in performing some or all of the
obligations set forth in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You agree to be liable for
the acts or omissions of each such entity to the same extent as
if you had acted or failed to act under the circumstances.
Notwithstanding the above statements, the expenses to
be borne by the Fund include, without limitation, the following:
taxes, interest, brokerage fees and commissions, if any, fees of
Board members who are not your officers, directors or employees
or holders of 5% or more of your outstanding voting securities,
Securities and Exchange Commission fees and state Blue Sky
qualification fees, advisory fees, charges of registrars and
custodians, transfer and dividend disbursing agents' fees,
outside auditing and legal expenses, costs of maintaining the
Fund's existence, all costs of insurance obtained other than
under a blanket policy covering one or more other investment
companies managed by you, all costs incurred in supplying prices
(including the costs of valuations furnished by pricing
services), costs attributable to investor services (including
telephone and personnel expenses), costs of printing
prospectuses for regulatory purposes and for distribution to
existing stockholders, and costs of stockholders' reports and
meetings. The Fund also will pay the salaries of such of its
principal executive officers as are not also full-time salaried
officers or employees of yours.
You shall exercise your best judgment in rendering the
services to be provided to the Fund hereunder and the Fund
agrees as an inducement to your undertaking the same that you
shall not be liable hereunder for any error of judgment or
mistake of law or for any loss suffered by the Fund, provided
that nothing herein shall be deemed to protect or purport to
protect you against any liability to the Fund or to its security
holders to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your
reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to this
Agreement, the Fund will pay you on the first business day of
each month a fee (subject to adjustment as provided in the next
paragraph) at the annual rate of .60 of 1% of the value of the
Fund's average daily net assets. Net asset value shall be
computed on such days and at such time or times as described in
the Fund's then-current Prospectus and Statement of Additional
Information. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be pro-
rated according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement.
For the period of ten years from October 15, 1988,
your fee in connection with this Agreement will be reduced by
the following annual payments based upon the Fund's average
daily net assets:
Annual
Size of Fund Payment
Less than $1 billion. . . . . . . . . . . nothing
$1-$2 billion . . . . . . . . . . . . . $ 90,000
$2-$3.5 billion . . . . . . . . . . . . . $ 200,000
$3.5-$5 billion . . . . . . . . . . . . . $ 350,000
$5-$7.5 billion . . . . . . . . . . . . . $ 550,000
$7.5-$10 billion. . . . . . . . . . . . . $ 775,000
Greater than $10 billion. . . . . . . . . $1,000,000
These payments shall be made on the first business day
of each month, based upon the average value of the Fund's net
assets during the preceding month.
For the purpose of determining fees payable to you,
the value of the Fund's net assets shall be computed in the
manner specified in the Fund's charter documents for the
computation of the value of the Fund's net assets.
If in any fiscal year the aggregate expenses of the
Fund (including fees pursuant to this Agreement, but excluding
interest, taxes, brokerage and, with the prior written consent
of the necessary state securities commissions, extraordinary
expenses) exceed l l/2% of the average value of the Fund's net
assets for the fiscal year, the Fund may deduct from the fees to
be paid hereunder, or you will bear, such excess expense.
Your obligation pursuant hereto will be limited to the amount of
your fees hereunder. 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 Fund understands that you now act, and that from
time to time hereafter you may act, as investment adviser to one
or more other investment companies and fiduciary or other
managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities of
the same issuer is suitable for the investment objectives of two
or more companies or accounts managed by you which have
available funds for investment, the available securities will be
allocated in a manner believed by you to be equitable to each
company or account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by the
Fund or the size of the position obtainable for or disposed of
by the Fund.
In addition, it is understood that the persons
employed by you to assist in the performance of your duties
hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict
your right or the right of any of your affiliates to engage in
and devote time and attention to other businesses or to render
services of whatever kind or nature.
You shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates,
except for a loss resulting from willful misfeasance, bad faith
or gross negligence on your part in the performance of your
duties or from reckless disregard by you of your obligations and
duties under this Agreement. Any person, even though also your
officer, director, partner, employee or agent, who may be or
become an officer, Board member, employee or agent of the Fund,
shall be deemed, when rendering services to the Fund or acting
on any business of the Fund, to be rendering such services to or
acting solely for the Fund and not as your officer, director,
partner, employee or agent or one under your control or
direction even though paid by you.
This Agreement shall continue until November 30, 1994,
and thereafter shall continue automatically for successive
annual periods ending on November 30th of each year, provided
such continuance is specifically approved at least annually by
(i) the Fund's Board or (ii) vote of a majority (as defined in
the Investment Company Act of 1940) of the Fund's outstanding
voting securities, provided that in either event its continuance
also is approved by a majority of the Fund's Board members who
are not "interested persons" (as defined in said Act) of any
party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agree-
ment is terminable without penalty, on 60 days' notice, by the
Fund's Board or by vote of holders of a majority of the Fund's
shares or, upon not less than 90 days' notice, by you. This
Agreement also will terminate automatically in the event of its
assignment (as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may serve as directors,
trustees, partners, officers and employees of other
corporations, business trusts, partnerships or other entities
(including other investment companies) and that such other
entities may include the name "Dreyfus" as part of their name,
and that your corporation or its affiliates may enter into
investment advisory or other agreements with such other
entities. If you cease to act as the Fund's investment adviser,
the Fund agrees that, at your request, the Fund will take all
necessary action to change the name of the Fund to a name not
including "Dreyfus" in any form or combination of words.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
DREYFUS MUNICIPAL BOND FUND, INC.
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
DISTRIBUTION AGREEMENT
DREYFUS MUNICIPAL BOND FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
August 24, 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agree-
ments hereinafter contained, the above-named investment company
(the "Fund") has agreed that you shall be, for the period of
this agreement, the distributor of (a) shares of each Series of
the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes
of this agreement the term "Shares" shall mean the authorized
shares of the relevant Series, if any, and otherwise shall mean
the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities Act
of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the
Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you will
enter into sales or servicing agreements with securities
dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished
by the Fund hereunder, and all expenses in connection with the
preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided however, that nothing
contained herein shall be deemed to require the Fund to pay any
of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents
and to furnish any and all information and otherwise to take all
actions which may be reasonably necessary in the discretion of
the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement, all
other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for
use in connection with the sale of Shares, such information with
respect to the Fund or any relevant Series and the Shares as you
may reasonably request, all of which shall be signed by one or
more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information,
when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual audited reports of the Fund's
books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings
statements prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully prepared
in conformity with the requirements of said Acts and rules and
regulations of the Securities and Exchange Commission there-
under. As used in this agreement the terms "registration state-
ment" and "prospectus" shall mean any registration statement and
prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Fund may but
shall not be obligated to propose from time to time such amend-
ment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of
future developments, may, in the opinion of the Fund's counsel,
be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this agreement
or decline to make offers of the Fund's securities until such
amendments are made. The Fund shall not file any amendment to
any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in
the form furnished to you from time to time, in connection with
the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person
who controls you within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which you, your officers and directors, or any such con-
trolling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in either any registration statement or any prospectus or
necessary to make the statements in either thereof not
misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund,
its several officers and Board members, and any person who con-
trols the Fund within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting
from such claims or demands, shall arise out of or be based upon
any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration
statement or in the corresponding statements made in the pro-
spectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the
Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within ten days after the summons or
other first legal process shall have been served. You shall
have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or
omission on your part, and in any other event the Fund, its
officers or Board members, or such controlling person shall each
have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which
you may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and to
the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no orders
for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any necessary amend-
ments thereto shall be suspended under any of the provisions of
the Securities Act of 1933, as amended, or if and so long as a
current prospectus as required by Section 10 of said Act, as
amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing contained in this
paragraph 1.11 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase any
Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement
or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or pro-
spectus then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectus then in effect or
which requires the making of a change in such registra-
tion statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to
any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you
shall be offered for sale at a price per share (the "offering
price") approximately equal to (a) their net asset value
(determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you
shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
DREYFUS MUNICIPAL BOND FUND, INC.
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
EXHIBIT A
Reapproval Date Reapproval Day
November 30, 1995 November 30th
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "custodian") for the
investment company identified below (the "Fund") hereby appoints
on the following terms and conditions Bankers Trust Company as
subcustodian (the "Subcustodian") for it and the Subcustodian
hereby accepts such appointment on the following terms and con-
ditions as of the date set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represents to the other and to the Fund that it is
qualified to act as a custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to maintain a
separate account and to hold segregated at all times from
the Subcustodian's securities and from all other customers'
securities held by the Subcustodian, all the Fund's
securities and evidence of rights thereto ("Fund
Securities") deposited, from time to time by the Custodian
with the Subcustodian. The Subcustodian will accept, hold or
dispose of and take other actions with respect to Fund
Securities in accordance with the Instructions of the
Custodian given in the manner set forth in Section 4 and
will take certain other actions as specified in Section 3.
The Subcustodian hereby waives any claim against or lien on
any Fund Securities. The Subcustodian may take steps to
register and continue to hold Fund Securities in the name of
the Subcustodian's nominee and shall take such other steps
as the Subcustodian believes necessary or appropriate to
carry out efficiently the terms of this Agreement. To the
extent that ownership of Fund Securities may be recorded by
a book entry system maintained by any transfer agent or
registrar for such Fund Securities or by Depository Trust
Company, the Subcustodian may hold Fund Securities as a book
entry reflecting the ownership of such Fund Securities by
its nominee and need not possess certificates or any other
evidence of ownership of Fund Securities.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) at the request of the
Custodian, or on its behalf, execute any necessary
declarations or certificates of ownership (provided by the
Custodian or on its behalf) under any tax law now or here-
after in effect, (v) forward to the Custodian, or notify it
by telephone of, confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it as registered holder (and the Custodian
agrees to forward same to the Fund), and (vi) promptly
report to the Custodian any missed payment or other default
upon any Fund Securities known to it as Subcustodian
hereunder (the Subcustodian shall be deemed to have
knowledge of any payment default on any Fund Securities in
respect of which it acts as paying agent). All cash
distributions from the Subcustodian to the Custodian will be
in same day funds, on the same day that same day funds are
received by the Subcustodian unless such distribution
required instructions from the Custodian which were not
timely received. Promptly after the Subcustodian is
furnished with any report of its independent public
accountants on an examination of its internal accounting
controls and procedures for safeguarding securities held in
its custody as subcustodian under this Agreement or under
similar agreements, the Subcustodian will furnish a copy
thereof to the Custodian.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer"), shall be authorized to instruct the Subcustodian
as to the acceptance, holding, presentation, disposition or
any other action with respect to Fund Securities from time
to time by telephone, or in writing signed by such
Authorized Officer and delivered by tested telex, tested
computer printout or such other reasonable method as the
Custodian and Subcustodian shall agree is designed to
prevent unauthorized officer's instructions; provided,
however, the Subcustodian is authorized to accept and act
upon orders from the Custodian, whether given orally, by
telephone or otherwise, which the Subcustodian reasonably
believes to be given by an authorized person. The
Subcustodian will promptly transmit to the Custodian all
receipts and transaction confirmations in respect of Fund
Securities as to which the Subcustodian has received any
instructions. The Authorized Officers shall be as set forth
on Exhibit A attached hereto and, as amended from time to
time, made a part hereof.
5. LIABILITIES. (i) The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provision of this Agreement if
done without willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement. Except as otherwise set forth
herein, the Subcustodian shall have no responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities (except at the instructions
of the Custodian), nor for informing the Custodian with
respect thereto, whether or not the Subcustodian has, or is
deemed to have, knowledge of the aforesaid. The Subcustodian
is under no duty to supervise or to provide investment
counseling or advice to the Custodian or to the Fund
relative to the purchase, sale, retention or other
disposition of any Fund Securities held hereunder. The
Subcustodian shall for the benefit of the Custodian and the
Fund use the same care with respect to receiving,
safekeeping, handling and delivery of Fund Securities as it
uses in respect of its own securities.
(ii) The Subcustodian will indemnify, defend and save
harmless the Custodian and the Fund from and against all
loss, liability, claims and demands incurred by the
Custodian or the Fund arising out of or in connection with
the Subcustodian's willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement.
(iii) The Custodian agrees to be responsible for and
indemnify the Subcustodian and any nominee in whose name the
Fund Securities are registered, from and against all loss,
liability, claims and demands incurred by the Subcustodian
and the nominee in connection with the performance of any
activity pursuant to this Agreement, done in good faith and
without negligence, including any expenses, taxes or other
charges which the Subcustodian is required to pay in
connection therewith.
6. Each party may terminate this Agreement at any time
by not less than ten (10) business days' prior written
notice. In the event that such notice is given, the
Subcustodian shall make delivery of the Fund Securities held
in the Subcustodian account to the Custodian or to any third
party within the Borough of Manhattan, specified by the
Custodian in writing within ten (10) days of receipt of the
termination notice, at the Custodian's expense.
7. All communications required or permitted to be given
under this Agreement, unless otherwise agreed by the
parties, shall be addressed a follows:
(i) to the Subcustodian:
Bankers Trust Company
1 Bankers Trust Plaza
14th Floor
New York, NY 10015
Attention: Barara Walter
RMO Safekeeping Unit
(ii) to the Custodian:
The Bank of New York
110 Washington Street
New York, New York 10286
8. MISCELLANEOUS: this Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended by
the parties hereto in writing.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: April 13, 1992
THE BANK OF NEW YORK
Custodian
By: ______________________________________
Title: ____________________________________
As Custodian For
DREYFUS CALIFORNIA INTERMEDIATE
MUNICIPAL BOND FUND
BANKERS TRUST COMPANY
As Subcustodian
By: ___________________________________
Title: ___________________________________
EXHIBIT A
TO SUBCUSTODIAN AGREEMENT
DATED: APRIL 13, 1992
The Authorized Officers pursuant to Section 4 of the
Agreement shall be:
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
Dated: April 13, 1992
THE BANK OF NEW YORK
As Custodian
By: ___________________________
Title: ________________________
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "Custodian") for the
investment company identified in Schedule A attached
(collectively, the "Funds") hereby appoints on the following
terms and conditions Chemical Bank as subcustodian (the
"Subcustodian") for it and the Subcustodian hereby accepts such
appointment on the following terms and conditions as of the date
set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represent to the other and to each Fund that it is
qualified to act as custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to hold in a
separate account, segregated at all times from all other
accounts maintained by the Subcustodian, all securities and
evidence of rights thereto of each of the Funds
(collectively, "Fund Securities") deposited, from time to
time by the Custodian with the Subcustodian. The
Subcustodian will accept, hold or dispose of and take such
other reasonable actions with respect to Fund Securities, in
addition to those specified in Section 3, in accordance with
the instructions of the Custodian relating to Fund
Securities given in the manner set forth in Section 4
("Instructions"). The Subcustodian hereby waives any claim
against, or lien on, any Fund Securities for any claim
hereunder. Registered Fund Securities may be held in the
name of the Subcustodian or nominee. To the extent that
ownership of Fund Securities may be recorded by a book entry
system maintained by any transfer agent or registrar for
such Fund Securities (including, but not limited to, any
such system operated by the Subcustodian) or by Depositary
Trust Company, the Subcustodian may hold Fund Securities as
a book entry reflecting the ownership of such Fund
Securities by it or its nominee and need not possess
certificates or any other evidence of ownership.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereupon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) forward to the
Custodian all confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it (and the Custodian agrees to forward same to
the Fund), (v) report to the Custodian any missed payment or
other default upon any Fund Securities known to it as
Subcustodian hereunder, (the Subcustodian shall be deemed to
have knowledge of any payment default on any Fund Securities
in respect of which it acts as paying agent); all cash
distributions from the Subcustodian to the Custodian will be
on same day funds, or the same day that same day funds are
received by the Subcustodians unless such distribution
required instructions from the Custodian which were not
timely received, and (vi) at the request of the Custodian,
or on its behalf, execute any necessary declarations or
certificates of ownership (provided by the Custodian or on
its behalf) under any tax law nor or hereafter in effect.
The Subcustodian will furnish to the Custodian, upon the
Custodian's request, any report of the Subcustodian's
independent public accountants on an examination of its
internal accounting controls and procedures for safeguarding
securities held in its custody for the account of others.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give Instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer") shall be authorized to instruct the Subcustodian
as to the acceptance, holding, voting, presentation,
disposition or any other action with respect to Fund
Securities from time to time in writing signed by such
Authorized Officer and delivered by hand, mail, telecopier,
tested telex, tested computer printout or such other
reasonable method as the Custodian and Subcustodian shall
agree is designed to prevent unauthorized officer's
instructions. The Subcustodian is also authorized to accept
an act upon Instructions regardless of the manner in which
given (whether orally, by telephone or otherwise) if the
Subcustodian reasonably believes such Instructions are given
by an Authorized Officer. The Subcustodian will promptly
transmit to the Custodian all receipts, confirmations or
other transactional evidence received by it in respect of
Fund Securities as to which the Subcustodian has received
any Instructions. Instructions and other communications to
the Subcustodian shall be given to Chemical Bank, 55 Water
Street, Room 504, New York, New York, Attention: Debt
Securities Administration, Phone: (212)820-5616 Telex:
(212)269-8510 (or to such other address as the Custodian
or the Fund or Funds giving such notice, shall specify by
notice to the Subcustodian.
5. THE SUBCUSTODIAN. The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provisions of this Agreement if
done without willful malfeasance, bad faith, negligence or
reckless disregard of its obligations and duties under this
Agreement.
The Subcustodian shall not have any responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities, except upon Instructions
from the Custodian, nor for informing the Custodian with
respect thereto, unless the Subcustodian has knowledge or is
deemed to have knowledge of the aforesaid. The Subcustodian
shall be deemed to have knowledge in circumstances where it
is acting as tender agent or paying agent for the Fund
Securities. The Subcustodian shall not be under a duty to
supervise or to provide advice (other than notice) to the
Custodian or any of the Funds relative to any purchase,
sale, retention or other disposition of any Fund Securities
held hereunder. The Subcustodian shall for the benefit of
the Custodian and the Funds be required to exercise the same
care with respect to the receiving, safekeeping, handling
and delivery of Fund Securities than it customarily
exercises in respect of its own securities.
The Subcustodian will indemnify, defend and save
harmless the Custodian and the Funds from any loss or
liability incurred by the Custodian arising out of or in
connection with the Subcustodian's willful malfeasance, bad
faith, negligence or reckless disregard of its obligations
and duties under this Agreement; PROVIDED, HOWEVER, that the
Subcustodian shall in no event be liable for any special,
indirect or consequential damages.
The Custodian agrees to be responsible for, and will
indemnify, defend and save harmless the Subcustodian (or any
nominee in whose name any Fund Securities are registered)
for, any loss or liability incurred by the Subcustodian (or
such nominee) arising out of or in connection with any
action taken by the Subcustodian (or such nominee) in
accordance with any Instructions or any other action taken
by the Subcustodian (or such nominee) in good faith and
without negligence pursuant to this Agreement, including any
expenses, taxes or other charges which the Subcustodian (or
such nominee) is required to incur or pay in connection
therewith.
6. RESIGNATION. The Subcustodian may resign as such
at any time upon not less than five business days' prior
written notice to the Custodian. In the event of such
resignation or any other termination of this Agreement, the
Subcustodian shall deliver all Fund Securities then held by
it to the Custodian, or as otherwise directed by the
Custodian pursuant to Instructions received by the
Subcustodian, at the Custodian's expense; PROVIDED, HOWEVER,
that the Subcustodian shall not be required to effect any
such delivery outside the Borough of Manhattan.
7. MISCELLANEOUS. This Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended
only by written agreement executed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: ______________________________
By: ______________________________
[Address]
Telephone:
Telex:
As Custodian for the Funds Listed
in Schedule A attached
CHEMICAL BANK
By: ______________________________
DREYFUS MUNICIPAL BOND FUND, INC.
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan (the "Plan") under which the Fund would reimburse
Dreyfus Service Corporation ("DSC") for certain allocated
expenses of providing personal services and/or maintaining
shareholder accounts to (a) shareholders of each series of the
Fund or class of Fund shares set forth on Exhibit A hereto, as
such Exhibit may be revised from time to time, or (b) if no
series or classes are set forth on such Exhibit, shareholders of
the Fund. The Plan is not to be adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act"),
and the fee under the Plan is intended to be a "service fee" as
defined in Article III, Section 26 (a "Service Fee"), of the NASD
Rules of Fair Practice (the "NASD Rules").
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use Fund assets for such purposes.
In voting to approve the implementation of such a plan,
the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall reimburse DSC an amount not to
exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for its allocated expenses of providing
personal services to shareholders and/or maintaining shareholder
accounts; provided that, at no time, shall the amount paid to DSC
under this Plan, together with amounts otherwise paid by the
Fund, or each series or class identified on Exhibit A, as a
Service Fee under the NASD Rules, exceed the maximum amount then
payable under the NASD Rules as a Service Fee. The amount of
such reimbursement shall be based on an expense allocation
methodology prepared by DSC annually and approved by the Fund's
Board or on any other basis from time to time deemed reasonable
by the Fund's Board.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets of the Fund or the
net assets attributable to each series or class of Fund shares
identified on Exhibit A, shall be computed in the manner
specified in the Fund's charter documents for the computation of
the value of the Fund's net assets.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a majority
of the Board members who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements
entered into in connection with this Plan, pursuant to a vote
cast in person at a meeting called for the purpose of voting on
the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board,
provided that any material amendments of the terms of this Plan
shall become effective only upon approval as provided in
paragraph 4 hereof.
7. This Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have
no direct or indirect financial interest in the operation of this
Plan or in any agreements entered into in connection with this
Plan.
Dated: October 24, 1994 EXHIBIT A
Name of Series or Class
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian, Transfer and Dividend Disbursing
Agent, Counsel and Independent Auditors" and to the use of our report
dated September 30, 1994, in this Registration Statement (Form N-1A
33-50350) of Dreyfus Municipal Bond Fund, Inc.
ERNST & YOUNG LLP
New York, New York
October 27, 1994
POWER OF ATTORNEY
The undersigned, being members of the Board of the Dreyfus Municipal
Bond Fund, Inc., hereby constitutes and appoints Frederick C. Dey, Eric B.
Fischman, Ruth D. Leibert and John Pelletier as the attorney-in-fact for
the proper officers of the Fund, with full power of substitution and
resubstitution; to sign any and all amendments to the Registration
Statement (including Post-Effective Amendments and amendments thereto);
and that the appointment of each of such persons as such attorney-in-fact
hereby is authorized and approved; and that such attorneys-in-fact, and
each of them, shall have full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
with such Registration Statement and any and all amendments and
supplements thereto, as fully to all intents and purposes as the officer,
for whom he is acting as attorney-in fact, might or could do in person.
IN WITNESS WHEREOF, the undersigned have executed this Consent as of
August 26, 1994.
/s/ David W. Burke /s/ Richard C. Leone
- ------------------ ------------------
David W. Burke Richard C. Leone
/s/ Hodding Carter /s/ Hans C. Mautner
- ------------------ ------------------
Hodding Carter, III Hans C. Mautner
/s/ Ehud Houminer /s/ John E. Zuccotti
- ------------------ ------------------
Ehud Houminer John E. Zuccotti
POWER OF ATTORNEY
The undersigned, hereby constitutes and appoints Frederick C. Dey,
Eric B. Fischman, Ruth D. Leibert and John Pelletier and each of them,
with full power to act without the other, her true and lawful attorney-in-
fact and agent, with full power of substitution and resubstitution; for
her and in her name, place and stead, in any and all capacities (until
revoked in writing) to sign any and all amendments to the Registration
Statement for Dreyfus Municipal Bond Fund, Inc. (including Post-Effective
Amendments and amendments thereto); and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact,
and each of them, full power and authority to do and perform each and
every act ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Consent as of
, 1994.
/s/ Marie E. Connolly
---------------------
Marie E. Connolly
OTHER EXHIBIT
DREYFUS MUNICIPAL BOND FUND, INC.
Certificate of Assistant Secretary
The undersigned, Ruth D. Leibert, Assistant Secretary of Dreyfus
Municipal Bond Fund, Inc. (the "Fund"), hereby certifies that set forth below
is a copy of the resolution adopted by the Fund's Board of Directors
authorizing the signing by Frederick C. Dey, Eric B. Fischman, Ruth D.
Leibert and John Pelletier on behalf of the proper officers of the Fund
pursuant to a power of attorney.
RESOLVED, that the Registration Statement and any and
all amendments and supplements thereto, may be signed by any one of Frederick
C. Dey, Eric B. Fischman, Ruth D. Leibert and John Pelletier as the attorney-
in-fact for the proper officers of the Fund, with full power of substitution
and resubstitution; and that the appointment of each of such persons as such
attorney-in-fact hereby is authorized and approved; and that such attorneys-
in-fact, and each of them, shall have full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection with such Registration Statement and any and all amendments and
supplements thereto, as fully to all intents and purposes as the officer, for
whom he or she is acting as attorney-in-fact, might or could do in person.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the Seal
of the Fund on , 1994.
Ruth D. Leibert
Assistant Secretary
(SEAL)
<TABLE> <S> <C>
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<NAME> DREYFUS MUNICIPAL BOND FUND, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1994
<PERIOD-END> AUG-31-1994
<INVESTMENTS-AT-COST> 3,908,840
<INVESTMENTS-AT-VALUE> 3,972,331
<RECEIVABLES> 125,535
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<TOTAL-ASSETS> 4,098,020
<PAYABLE-FOR-SECURITIES> 86,880
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,663
<TOTAL-LIABILITIES> 89,543
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,922,366
<SHARES-COMMON-STOCK> 323,558
<SHARES-COMMON-PRIOR> 345,368
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<ACCUMULATED-NET-GAINS> 22,620
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 63,491
<NET-ASSETS> 4,008,477
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 278,670
<OTHER-INCOME> 0
<EXPENSES-NET> 29338
<NET-INVESTMENT-INCOME> 249,332
<REALIZED-GAINS-CURRENT> 40,066
<APPREC-INCREASE-CURRENT> (349,064)
<NET-CHANGE-FROM-OPS> (59,666)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 249,332
<DISTRIBUTIONS-OF-GAINS> 110,424
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 271,726
<NUMBER-OF-SHARES-REDEEMED> (311,906)
<SHARES-REINVESTED> 18,370
<NET-CHANGE-IN-ASSETS> (715,912)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 92,978
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25,448
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 29,338
<AVERAGE-NET-ASSETS> 4,299,593
<PER-SHARE-NAV-BEGIN> 13.68
<PER-SHARE-NII> .75
<PER-SHARE-GAIN-APPREC> (.96)
<PER-SHARE-DIVIDEND> (.75)
<PER-SHARE-DISTRIBUTIONS> (.33)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.39
<EXPENSE-RATIO> .007
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
