DREYFUS INSURED MUNICIPAL BOND FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Insured
Municipal Bond Fund, Inc. for the 12-month period ended April 30, 1998. Your
Fund produced a total return, including share price changes and dividend
income generated, of 8.31%,* and a tax-free distribution rate per share of
4.76%.** This compares with a 9.30% total return for the Lehman Brothers
Municipal Bond Index during the same period.***
THE ECONOMY
The United States is now in the eighth year of economic expansion.
Inflation continues to rise at the slowest pace since 1964 and the
unemployment rate has fallen to a level not seen in 25 years. Not
surprisingly, consumer confidence has soared. Along with continued evidence
of the robustness of the economy have come heightened expectations that the
Federal Reserve Board will raise interest rates in a preemptive move to avoid
a reignition of inflation. The last increase in short-term rates came in March
1997 when the Federal Open Market Committee (the policy-making arm of the
Fed) hiked the target rate for Federal Funds by one quarter of a percent to
5.5%. (The Federal Funds rate is the rate of interest that banks charge one
another for overnight loans.)
Inflation has remained benign on all fronts, even in the tight labor
market, an area closely watched by the Fed for signs of incipient inflation.
The Labor Department's Employment Cost Index (ECI), a measure of wage, salary
and benefit costs, suggests that wage inflation so far is not a problem. In
fact, the first quarter increase in the ECI (0.7%) was its smallest quarterly
rise in two years. Another inflation gauge, the broad-based Gross Domestic
Product Price Deflator, rose at an annual rate of only 0.9% in the first
quarter, its lowest rate since 1964. Inflation as measured by the Consumer
Price Index has been similarly tame. Prices at the consumer level have risen
at an annual rate of about 1.5% over the reporting period. The lack of
inflation has been even more dramatic at the production level of the economy
where prices have fallen: in the 12 months ended March 31, the Producer Price
Index declined 1.8%. Such a generally tepid price environment has been partly
fostered by the economic problems in Asia which have suppressed worldwide
demand for commodities, particularly oil.
Reflecting a level of confidence not seen in three decades, consumers
increased their spending over the reporting period, the first-quarter rate
rising at the fastest pace in six years. Not surprisingly, the growth rate in
new-home construction over the reporting period was the strongest in four
years. Plentiful and well-paying jobs (total wage and salary income is 7%
higher than a year ago), low interest rates, the absence of inflation and
investment market gains have resulted in a financially healthy consumer with
a corresponding propensity to spend. Strong domestic demand for lower-priced
imports has contributed further to the quiescent inflation environment while
offsetting the drag on the economy resulting from the Asian financial crisis.
It is still widely expected that the Asian economic slowdown will have a
further dampening effect on the U. S. economy. Although the surge in domestic
spending has masked the full impact of the fall in Asian demand, our trade
deficit has reached a ten-year high, a dramatic sign of deterioration.
Expectation of an economic slowdown is another reason why the Fed has been
reluctant to raise short-term interest rates.
The production side of the economy has remained robust. Factory
utilization has been high, production rates strong, and while exports to Asia
have fallen sharply, they are growing in the rest of the world. Such
resilience has been characteristic of one of the longest, most healthy
economic advances in our history. Yet we remain mindful that the concept of
an economic cycle is not dead, nor is inflation, and we are alert for
indications of a resurgence in price pressures.
MARKET ENVIRONMENT
Few periods in recent memory could have been viewed as more favorable
for the fixed income markets than your Fund's most recent fiscal year.
Steady, moderate economic growth, a low level of inflation, generally
declining industrial
commodity prices and a strengthening currency all contributed to create an
overall friendly climate for the bond market. Along the way, however, there
were periodic bouts of volatility arising from more uncertain themes which
surfaced. Early out, on the heels of the Federal Reserve's move to raise
interest rates just prior to the start of the fiscal year, yields rose to the
highest level of the entire period as concerns mounted that continued subdued
inflation in the face of overly tight labor markets was unsustainable. These
anxieties were quickly allayed by the evolution of a school of thought based
on a belief in a "new paradigm" of economic discipline which held that the
economy could grow above what the consensus held was its capacity without a
commensurate increase in inflation due to technological advances in the
workplace which increased worker productivity, as well as global competition
from emerging market nations which limited pricing power domestically. As
these perceptions gathered momentum among market participants, prices
advanced sharply into July when Fed Chairman Alan Greenspan sought to dampen
the market's exuberance in his semi-annual Humphrey Hawkins testimony before
Congress by calling into question this view compared to the weight of
evidence posed by recent economic history. His comments succeeded in forcing
yields to adjust to higher levels in the weeks that followed, which more
adequately reflected the capacity constraints confronting the economy.
The rise was short-lived, however, and relatively mild in nature as
attention soon shifted to a series of economic crises rolling through several
emerging market economies of Southeast Asia, which culminated in the formal
devaluations of the currencies of Thailand, Malaysia and Indonesia. As
concerns mounted over the potential deflationary impact these events would
have around the globe, bond prices began to rise and investors began to
accumulate fixed income securities. Toward the end of 1997, as it became
increasingly apparent that the larger, more established Asian economies such
as Japan and South Korea were not immune to these difficulties, the scope of
the problem expanded and the demand for the "safe haven" of U.S. fixed income
securities pushed yields to their lowest levels of the entire period in
January 1998.
Since then, prices of fixed income securities have been confined to a
relatively narrow range whose extremes are determined by the vacillation of
market sentiment between the poles of this debate - on the one hand, the
question of how long the United States can maintain above-trend economic
growth without significant inflation, and on the other, the degree to which
the deflationary impulse emanating from Asia will subdue domestic growth
going forward. As the Fund's fiscal year drew to a close, a more constructive
view of the market gathered additional support. It became increasingly
apparent that the Government's future borrowing needs would be significantly
curtailed by higher than forecast tax receipts resulting from the robust
level of domestic growth.
While buoyed by the same factors throughout the fiscal year, municipal
bonds underperformed their taxable counterparts on a relative basis. A
comparison of the movements of the yield of the 30-year U.S. Treasury Bond
and the Bond Buyer's 25 Bond Revenue Bond Index illustrates this point
clearly. For the year, Treasury yields declined by 100 basis points (1.00%)
to close the year at 5.95%, while the Revenue Index fell by 49 basis points
(0.49%) to close at 5.52%. The reason for this was that during the early
strength of the markets, municipals were supported by a formidable
supply/demand dynamic which pushed tax exempt yields to levels which, when
viewed as a percentage of taxable yields, were relatively expensive by
historical standards. Consequently, as taxable yields declined over the
period, tax exempt yields moved in a similar though more restrained fashion.
This relative underperformance during the course of the year now places
municipal bonds in a relatively inexpensive light versus taxable alternatives.
PORTFOLIO OVERVIEW
In managing your Fund's assets in such an environment, a decidedly
constructive posture was maintained. While trading activity sought to adjust
portfolio structure to the changing sentiments which drove prices, in general
we strove to create a vehicle that was more responsive to a declining
interest rate environment. During those periods when volatility
increased and prices retreated, emphasis was placed on accumulating
securities bearing strong income characteristics and minimal levels of
principal volatility. As prices advanced, our purchasing focus shifted to
those securities whose principal values would most closely mirror the
anticipated appreciation of the market in general. Throughout the process we
continued to work to enhance the liquidity and performance characteristics of
the Fund by extending the optional redemption provisions of the securities
held in the Portfolio and improving their underlying creditworthiness.
As can be seen by the graph which accompanies this report, for the most
recent reporting period the Fund underperformed the Lehman Brothers Municipal
Bond Index. There were two reasons for this: First, all the securities held
in your Fund are insured by a triple "A" rated guarantor, while the Lehman
Index contains lesser rated securities whose yields are higher in order to
compensate bond holders for the heightened degree of credit risk they are
incurring. Second, the Index is just that, an index. Unlike a mutual fund, it
does not incur fees and expenses that will, over time, impact performance.
We appreciate your investment in the Dreyfus Insured Municipal Bond
Fund, and we want to assure you that we are, at all times, working in the
Fund's best interest.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 18, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
** Distribution rate per share is based upon dividends per share paid from
net investment income during the period, divided by the net asset value per
share at the end of the period. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders.
***SOURCE: LEHMAN BROTHERS: - Unlike the Fund, the Lehman Brothers Municipal
Bond Index is a widely accepted unmanaged total return performance benchmark
for the long-term, investment-grade tax exempt bond market, calculated by
using municipal bonds selected to be representative of the municipal market
overall. However, the bonds in the Index generally are not insured.
Dreyfus Insured Municipal Bond Fund, Inc. April 30, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS INSURED
MUNICIPAL BOND FUND, INC.
AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
Dollars
$22,016
Lehman Brothers
Municipal Bond Index*
$19,755
Dreyfus Insured
Municipal Bond
Fund, Inc.
*Source: Lehman Brothers
Average Annual Total Returns
<TABLE>
<CAPTION>
<S> <C> <C>
One Year Ended Five Years Ended Ten Years Ended
April 30, 1998 April 30, 1998 April 30, 1998
____________________ ____________________ __________________________
8.31% 4.50% 7.04%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Insured
Municipal Bond Fund, Inc. on 4/30/88 to a $10,000 investment made in the
Lehman Brothers Municipal Bond Index on that date. All dividends and capital
gain distributions are reinvested.
The Fund invests primarily in municipal securities which are insured as to
the timely payment of principal and interest by recognized insurers of
municipal securities. The Fund's performance shown in the line graph takes
into account fees and expenses. Unlike the Fund, the Lehman Brothers
Municipal Bond Index is an unmanaged total return performance benchmark for
the long-term, investment-grade tax exempt bond market, calculated by using
municipal bonds selected to be representative of the municipal market
overall; however, THE BONDS IN THE INDEX GENERALLY ARE NOT INSURED. The Index
does not take into account charges, fees and other expenses which can
contribute to the Index potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report. Neither Fund shares nor the market
value of its portfolio securities are insured.
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS APRIL 30, 1998
Principal
Long-Term Municipal Investments-100.0% Amount Value
_____________ _____________
California-9.3%
Contra Costa County, COP, Refunding (Merrithew Memorial Hospital Project)
<S> <C> <C>
5.375%, 11/1/2017 (Insured; MBIA)......................................... $ 2,435,000 $ 2,454,748
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
6%, 7/1/2020 (Insured; MBIA).............................................. 3,865,000 4,112,360
San Francisco City and County Airports Commission, International Airport
Revenue
6.10%, 5/1/2025 (Insured; FGIC)........................................... 8,240,000 8,803,863
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue,
Refunding
Zero Coupon, 1/15/2031 (Insured; MBIA).................................. 10,000,000 1,711,700
Colorado-3.7%
E-470 Public Highway Authority, Revenue, Refunding
Zero Coupon, 9/1/2016 (Insured; MBIA)..................................... 6,550,000 2,461,228
Goldsmith Metropolitan District, Refunding 6.125%, 12/1/2012 (Insured; MBIA) 4,000,000 4,254,560
Delaware-3.5%
Delaware Economic Development Authority, Revenue:
Gas Facilities (Delmarva Power & Light) 7.30%, 7/1/2021 (Insured; FGIC)... 1,000,000 1,090,430
Water (United Water Delaware Inc., Project) 6.20%, 6/1/2025 (Insured; AMBAC) 5,000,000 5,350,650
District of Columbia-2.4%
District of Columbia, Revenue, Refunding (Howard University)
5.75%, 10/1/2013 (Insured; MBIA).......................................... 4,130,000 4,331,090
Florida-1.3%
Florida Housing Finance Agency, SFMR, Refunding
6.65%, 7/1/2026 (Insured; MBIA)........................................... 805,000 860,271
Lee County, Solid Waste System Revenue 7%, 10/1/2011 (Insured; MBIA)........ 1,420,000 1,540,104
Georgia-1.4%
Albany, Sewer System Revenue, Refunding 5.50%, 7/1/2016 (Insured; MBIA)..... 2,500,000 2,579,850
Idaho-.5%
Idaho Building Authority, Building Revenue 5%, 9/1/2021 (Insured; MBIA)..... 1,000,000 963,910
Illinois-5.3%
Carbondale, HR, Refunding (Southern Illinois Hospital Services)
6.875%, 3/1/2015 (Insured; MBIA).......................................... 1,000,000 1,014,640
Chicago O'Hare International Airport, Special Facility Revenue, Refunding
(International Terminal) 6.50%, 1/1/2018 (Insured; FGIC).................. 1,750,000 1,801,573
Metropolitan Pier and Exposition Authority, Dedicated State Tax Revenue
(McCormick Place Expansion Project) 6.50%, 6/15/2027 (Insured; FGIC)...... 6,375,000 6,998,411
Kentucky-6.0%
Louisville and Jefferson County Metropolitan Sewer District, Sewer and Drain
System Revenue,
Refunding:
6.25%, 5/15/2026 (Insured; MBIA)........................................ 4,200,000 4,588,878
4.75%, 5/15/2028 (Insured; FGIC)........................................ 7,000,000 6,385,190
Dreyfus Insured Municipal Bond Fund, Inc.
Statement of Investments (continued) April 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
_____________ _____________
Louisiana-1.0%
Louisiana Public Facilities Authority, HR (Our Lady of the Lake Regional Medical Center)
5.90%, 12/3/2021 (Insured; FSA)........................................... $ 1,700,000 $ 1,760,792
Massachusetts-3.4%
Massachusetts Education Loan Authority, Education Loan Revenue:
7.60%, 1/1/2003 (Insured; MBIA)........................................... 675,000 716,486
7.65%, 1/1/2004 (Insured; MBIA)........................................... 775,000 823,205
Massachusetts Educational Financing Authority, Education Loan Revenue
5.125%, 12/1/2014 (Insured; MBIA)......................................... 2,700,000 2,627,829
Massachusetts Housing Finance Agency, Housing Revenue (Rental-Mortgage)
6.50%, 7/1/2025 (Insured; AMBAC).......................................... 1,000,000 1,068,940
Massachusetts Port Authority, Special Facilities Revenue (US Air Project)
5.75%, 9/1/2016 (Insured; MBIA)........................................... 1,000,000 1,040,220
Michigan-3.0%
Kalamazoo Hospital Finance Authority, Hospital Facilities Revenue (Borgess
Medical Center)
5.625%, 6/1/2014 (Insured; AMBAC)......................................... 3,700,000 3,842,635
Michigan Housing Development Authority, LOR (Greenwood Villa Project)
6.50%, 9/15/2007 (Insured; FSA)........................................... 1,500,000 1,611,270
Missouri-3.2%
Kansas City Municipal Assistance Corp., Leasehold Revenue, Refunding (Roe
Bartle):
5.125%, 4/15/2015 (Insured; MBIA)......................................... 1,000,000 987,160
5%, 4/15/2020 (Insured; MBIA)............................................. 5,000,000 4,825,450
Montana-1.3%
Forsyth, PCR, Refunding (Puget Sound, Power & Light Co.)
7.25%, 8/1/2021 (Insured; AMBAC).......................................... 2,250,000 2,453,940
Nevada-2.0%
Reno, HR (Saint Mary's Hospital) 7.75%, 7/1/2015 (Insured; BIGI)
(Prerefunded 11/1/2000) (a)............................................... 1,345,000 1,446,036
Washoe County, Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA).......................................... 2,000,000 2,173,520
New Jersey-5.6%
New Jersey Economic Development Authority, PCR (Public Service Electric & Gas
Co.)
6.40%, 5/1/2032 (Insured; MBIA)........................................... 7,600,000 8,176,764
New Jersey Health Care Facilities Financing Authority, Revenue, Refunding
(Jersey Shore Medical Center) 6.25%, 7/1/2021 (Insured; AMBAC)............ 100,000 108,700
New Jersey Housing and Mortgage Finance Agency, Revenue:
Home Buyer 6.20%, 10/1/2025 (Insured; MBIA)............................... 1,995,000 2,096,625
Home Mortgage 9.125%, 4/1/2015 (Insured; MBIA)............................ 5,000 5,012
Dreyfus Insured Municipal Bond Fund, Inc.
Statement of Investments (continued) April 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
_____________ _____________
New York-15.9%
Albany Airport Authority, Airport Revenue 5.375%, 12/15/2017 (Insured; FSA). $ 1,250,000 $ 1,248,413
Buffalo Municipal Water Finance Authority, Water System Revenue, Refunding
5%, 7/1/2017 (Insured; FGIC).............................................. 3,795,000 3,672,042
New York State Dormitory Authority, Revenue:
(Beth Israel Medical Center) 6%, 11/1/2015 (Insured; MBIA)................ 8,395,000 8,932,448
(Mount Sinai Medical School) 5.15%, 7/1/2024 (Insured; MBIA).............. 2,500,000 2,470,075
Refunding:
(Siena College) 5.70%, 7/1/2017 (Insured; MBIA)......................... 3,585,000 3,755,574
(University of Rochester) 5%, 7/1/2027 (Insured; MBIA).................. 1,000,000 952,780
New York State Energy, Research and Development Authority, Facilities Revenue
(Con Edison Co.-New York, Inc.) 6.375%, 12/1/2027 (Insured; MBIA)......... 3,000,000 3,188,280
New York State Medical Care Facilities Finance Agency, Revenue (Long-Term
Healthcare)
6.50%, 11/1/2015 (Insured; FSA)........................................... 4,655,000 5,061,056
North Dakota-2.1%
Mercer County, PCR, Refunding (Montana-Dakota Utilities Co. Project)
6.65%, 6/1/2022 (Insured; FGIC)........................................... 3,500,000 3,804,675
Pennsylvania-2.8%
Beaver County Industrial Development Authority, PCR, Refunding
(Ohio Edison Co./Mansfield) 7%, 6/1/2021 (Insured; FGIC).................. 3,000,000 3,245,190
Chester County Health and Educational Facilities Authority, Health System
Revenue
(Jefferson Health System) 5.125%, 5/15/2018 (Insured; AMBAC).............. 2,000,000 1,935,480
Rhode Island-2.5%
Rhode Island Housing and Mortgage Finance Corp., SFMR
9.30%, 7/1/2004 (Insured; FGIC)........................................... 15,000 15,022
Rhode Island Port Authority and Economic Development Corp.,
Airport Revenue 6.625%, 7/1/2024 (Insured; FSA)........................... 4,250,000 4,634,753
Tennessee-.6%
Metropolitan Government, Nashville and Davidson County, Water and Sewer
Revenue,
Refunding 5.20%, 1/1/2013 (Insured; FGIC)................................. 1,000,000 1,025,780
Texas-3.6%
Brazos River Authority, PCR, Refunding (Texas Utilities Electric Co. Project)
6.625%, 6/1/2022 (Insured; FGIC).......................................... 5,500,000 5,956,610
Brownsville Housing Finance Corp., SFMR (Mortgage-Multiple Originators and
Services)
9.625%, 12/1/2011 (Insured; FGIC)......................................... 700,000 714,672
Virginia-8.9%
Prince William County Service Authority, Water and Sewer System Revenue,
Refunding
4.75%, 7/1/2029 (Insured; FGIC)........................................... 5,750,000 5,221,058
Richmond Metropolitan Authority, Expressway Revenue, Refunding
5.25%, 7/15/2022 (Insured; FGIC).......................................... 2,600,000 2,628,340
Dreyfus Insured Municipal Bond Fund, Inc.
Statement of Investments (continued) April 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
_____________ _____________
Virginia (continued)
Virginia Beach Development Authority, Hospital Facility Revenue
(Virginia Beach General Hospital Project) 5.125%, 2/15/2018 (Insured; AMBAC) $ 1,000,000 $ 985,250
Virginia College Building Authority, Educational Facilities Revenue
(Washington and Lee University) 5.25%, 1/1/2026 (Insured; MBIA)........... 7,500,000 7,609,425
Washington-9.1%
King County, Sewer Revenue 6.125%, 1/1/2033 (Insured; MBIA)................. 5,000,000 5,353,750
Washington, MFMR:
(Gilman Meadows Project) 7.40%, 1/1/2030 (Insured; FSA)................... 3,000,000 3,304,770
(Mallard Cove Project 1) 7.40%, 1/1/2030 (Insured; FSA)................... 800,000 881,272
(Mallard Cove Project 2) 7.40%, 1/1/2030 (Insured; FSA)................... 2,700,000 2,974,292
Yakima-Tieton Irrigation District, Revenue, Refunding 6.20%, 6/1/2019 (Insured; FSA) 4,000,000 4,316,480
West Virginia-1.6%
West Virginia, GO 6.50%, 11/1/2026 (Insured; FGIC).......................... 2,600,000 3,032,380
_____________
TOTAL INVESTMENTS (cost $176,066,258)....................................... $183,987,907
=============
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOR Limited Obligation Revenue
BIGI Bond Investors Guaranty Insurance MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GO General Obligation SFMR Single Family Mortgage Revenue
HR Hospital Revenue
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C> <C> <C>
Fitch (b) or Moody's or Standard & Poor's Percentage of Value
_______ ________ __________________ ____________________
AAA Aaa AAA 100.0%
======
Notes to Statement of Investments:
</TABLE>
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Fitch currently provides creditworthiness information for a limited
number of investments.
(c) At April 30, 1998, 46.5% of the Fund's net assets are insured by
MBIA and 29.2% are insured by FGIC.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1998
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $176,066,258 $183,987,907
Interest receivable........................ 3,583,153
Receivable for shares of Common Stock subscribed 400,000
Prepaid expenses........................... 17,735
_____________
187,988,795
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 113,040
Due to Distributor......................... 3,982
Cash overdraft due to Custodian............ 1,381,604
Accrued expenses........................... 53,878
_____________
1,552,504
_____________
NET ASSETS.................................................................. $186,436,291
=============
REPRESENTED BY: Paid-in capital............................ $180,372,072
Accumulated net realized gain (loss) on investments (1,857,430)
Accumulated net unrealized appreciation (depreciation)
on investments-Note 4 7,921,649
_____________
NET ASSETS.................................................................. $186,436,291
=============
SHARES OUTSTANDING
(300 million shares of $.01 par value Common Stock authorized).............. 10,429,818
NET ASSET VALUE, offering and redemption price per share -Note 3(d)......... $17.88
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1998
INVESTMENT INCOME
INCOME Interest Income............................ $10,965,379
EXPENSES: Management fee-Note 3(a)................... $ 1,173,576
Shareholder servicing costs-Note 3(b)...... 507,999
Professional fees.......................... 60,681
Registration fees.......................... 42,717
Directors' fees and expenses-Note 3(c)..... 31,713
Custodian fees............................. 20,945
Prospectus and shareholders' reports-Note 3(b) 12,903
Loan commitment fees-Note 2................ 1,859
Miscellaneous.............................. 14,701
____________
Total Expenses....................... 1,867,094
Less-reduction in management fee due to
undertakings-Note 3(a)................. (203,521)
____________
Net Expenses......................... 1,663,573
____________
INVESTMENT INCOME-NET....................................................... 9,301,806
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments.... $ 3,232,483
Net unrealized appreciation (depreciation) on investment 3,408,483
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 6,640,966
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $15,942,772
=============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
April 30, 1998 April 30, 1997
_______________ _______________
OPERATIONS:
Investment income-net..................................................... $ 9,301,806 $ 10,391,823
Net realized gain (loss) on investments................................... 3,232,483 (996,175)
Net unrealized appreciation (depreciation) on investments................. 3,408,483 3,904,784
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations..... 15,942,772 13,300,432
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net..................................................... (9,301,806) (10,391,823)
Net realized gain on investments.......................................... -- (9,422)
_______________ _______________
Total Dividends................................................. (9,301,806) (10,401,245)
_______________ _______________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold............................................. 72,586,101 200,295,864
Dividends reinvested...................................................... 6,094,336 6,734,884
Cost of shares redeemed................................................... (91,356,721) (225,846,509)
_______________ _______________
Increase (Decrease) in Net Assets from Capital Stock Transactions... (12,676,284) (18,815,761)
_______________ _______________
Total Increase (Decrease) in Net Assets......................... (6,035,318) (15,916,574)
NET ASSETS:
Beginning of Period....................................................... 192,471,609 208,388,183
_______________ _______________
End of Period............................................................. $186,436,291 $192,471,609
=============== ===============
Shares Shares
_______________ _______________
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................... 4,071,401 11,560,758
Shares issued for dividends reinvested.................................... 339,966 386,910
Shares redeemed........................................................... (5,100,142) (12,993,384)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding....................... (688,775) (1,045,716)
=============== ===============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
Year Ended April 30,
_______________________________________________________
PER SHARE DATA: 1998 1997 1996 1995 1994
______ ______ ______ ______ ______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $17.31 $17.13 $17.25 $17.46 $19.23
______ ______ ______ ______ ______
Investment Operations:
Investment income-net........................ .85 .87 .91 .94 1.00
Net realized and unrealized gain (loss)
on investments............................. .57 .18 (.11) (.21) (1.06)
______ ______ ______ ______ ______
Total from Investment Operations............. 1.42 1.05 .80 .73 (.06)
______ ______ ______ ______ ______
Distributions:
Dividends from investment income-net......... (.85) (.87) (.92) (.94) (1.00)
Dividends from net realized gain on investments -- -- -- -- (.63)
Dividends in excess of net realized gain
on investments............................. -- -- -- -- (.08)
______ ______ ______ ______ ______
Total Distributions.......................... (.85) (.87) (.92) (.94) (1.71)
______ ______ ______ ______ ______
Net asset value, end of period............... $17.88 $17.31 $17.13 $17.25 $17.46
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.......................... 8.31% 6.24% 4.58% 4.36% (.74%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .85% .80% .85% .94% .93%
Ratio of net investment income
to average net assets...................... 4.76% 5.03% 5.14% 5.49% 5.25%
Decrease reflected in above expense ratios
due to undertakings by the Manager......... .10% .17% .09% -- --
Portfolio Turnover Rate...................... 64.38% 93.39% 82.86% 41.19% 34.92%
Net Assets, end of period (000's Omitted).... $186,436 $192,472 $208,388 $220,398 $249,513
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-Significant Accounting Policies:
Dreyfus Insured Municipal Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company. The Fund's investment objective is to provide
investors with as high a level of current income exempt from Federal income
tax as is consistent with the preservation of capital. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. (the "Distributor") is the distributor of the Fund's shares, which are
sold to the public without a sales load.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued each
business day by an independent pricing service ("Service") approved by the
Board of Directors. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(c) Dividends to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, it is the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $1,858,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1998. If not
applied, $1,030,000 of the carryover expires in fiscal 2004, and $828,000
expires in fiscal 2005.
Dreyfus Insured Municipal Bond Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 2-Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
April 30, 1998, the Fund did not borrow under the Facility.
NOTE 3-Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, commitment fees, interest on borrowings and
extraordinary expenses, exceed 11\2% of the value of the Fund's average net
assets, the Fund may deduct from the payments to be made to the Manager, or
the Manager will bear such excess. However, the Manager had undertaken from
May 1, 1997 through May 6, 1997 to reduce the management fee paid by the
Fund, to the extent that the Fund's aggregate annual expenses (exclusive of
certain expenses as described above) exceeded specified annual percentages of
the Fund's average daily net assets, and thereafter, through April 30, 1998
to reduce the management fee paid by the Fund, to the extent that the Fund's
aggregate annual expenses (exclusive of certain expenses as described above)
exceed an annual rate of .85 of 1% of the value of the Fund's average daily
net assets. The reduction in management fee, pursuant to the undertakings,
amounted to $203,521 during the period ended April 30, 1998.
(b) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund (a) reimburses the Distributor for payments to
certain Service Agents (a securities dealer, financial institution or other
industry professional) for distributing the Fund's shares and servicing
shareholder accounts ("Servicing") and (b) pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and marketing
relating to the Fund and for Servicing, at an aggregate annual rate of .20 of
1% of the value of the Fund's average daily net assets. Both the Distributor
and Dreyfus may pay one or more Service agents a fee in respect of the Fund's
shares owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
Both the Distributor and Dreyfus determine the amounts, if any, to be paid to
Service Agents under the Plan and the basis on which such payments are made.
The fees payable under the Plan are payable without regard to actual expenses
incurred. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the value of the Fund's average daily net assets for any full fiscal year.
During the period ended April 30, 1998, the Fund was charged $394,182
pursuant to the Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the
period ended April 30, 1998, the Fund was charged $82,899 pursuant to the
transfer agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% less of such
compensation.
Dreyfus Insured Municipal Bond Fund, Inc.
NOTES TO FINANCIAL STATEMENTS (continued)
(d) A .10% redemption fee is charged and retained by the Fund on certain
redemptions of Fund shares (including redemption
through the use of the Fund Exchanges service) where the shares being
redeemed were issued subsequent to a specified effective date and the
redemption or exchange occurs less than fifteen days following the date of
issuance. During the period ended April 30, 1998, redemption fees amounted to
$35,548.
NOTE 4-Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended April 30, 1998
amounted to $120,483,116 and $122,241,602, respectively.
At April 30, 1998, accumulated net unrealized appreciation on investments
was $7,921,649, consisting of $8,734,356 gross unrealized appreciation and
$812,707 gross unrealized depreciation.
At April 30, 1998, 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 INSURED MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Insured Municipal Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Insured Municipal Bond Fund, Inc., including the statement of
investments, as of April 30, 1998, 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 and financial highlights. Our procedures included
confirmation of securities owned as of April 30, 1998 by correspondence with
the custodian. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Insured Municipal Bond Fund, Inc. at April 30, 1998, 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]
New York, New York
June 3, 1998
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended April
30, 1998 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1998 calendar year
on Form 1099-DIV which will be mailed by January 31, 1999.
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS INSURED MUNICIPAL
BOND FUND, INC.
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 306AR984
[Dreyfus logo]
Registration Mark
Insured
Municipal
Bond Fund, Inc.
Annual Report
April 30, 1998
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS INSURED MUNICIPAL BOND FUND, INC. AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
PERIOD LEHMAN BROTHERS DREYFUS
MUNICIPAL INSURED MUNICIPAL
BOND INDEX * BOND FUND, INC.
4/30/88 10,000 10,000
4/30/89 10,893 11,053
4/30/90 11,678 11,617
4/30/91 13,019 12,879
4/30/92 14,257 13,982
4/30/93 16,061 15,849
4/30/94 16,407 15,732
4/30/95 17,499 16,417
4/30/96 18,889 17,168
4/30/97 20,142 18,240
4/30/98 22,016 19,755
* Source: Lehman Brothers
