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 six-month period ended October 31, 1998. Your
Fund produced a total return, including share price changes and dividend income
generated, of 5.52%,* and an annualized tax-free distribution rate per share of
4.55% .** This compares with a total return of 5.11% for the Lehman Brothers
Municipal Bond Index during the same period.***
The Economy
In the face of soaring consumer confidence and strong first-quarter economic
growth, the Federal Reserve Board earlier this year refrained from increasing
interest rates, partially to avoid further roiling international financial
markets. In addition, the Fed evidently felt then that the economic slowdown
overseas might curtail the U.S. economy to some degree, which would alleviate
the need for monetary restraint. The Fed's expectations have proven to be true,
and its judgment accurate. The U.S. balance of trade has worsened and there have
been increasing signs of a slowdown in export-related industries. On September
29, concerns about a weakening U.S. economy caused the Federal Open Market
Committee (the F.O.M.C. is the policy-making arm of the Fed) to pare the Federal
Funds target rate by 25 basis points, the first reduction since January 1996.
(The Federal Funds rate is the rate of interest that banks charge each other for
overnight loans.) Fed Chairman Alan Greenspan described the economic outlook for
the United States as having "weakened measurably." Two weeks later, on October
15, the F.O.M.C. again reduced its target rate by an additional quarter point,
putting the Federal Funds rate at 5.0%.
Despite the concerns of the Fed regarding an economic slowdown, aggregate
economic statistics showed a growing and resilient economy during the reporting
period. Low unemployment and negligible inflation, combined with car makers
rebuilding inventory after a long strike and rising consumer incomes, resulted
in solid economic growth (3.3% ) for the third quarter of this year. While a
significant portion of this gain was due to inventory replenishment after the
automobile strike, the overall results were still an improvement over
second-quarter economic growth of 1.8%. Inflation as measured by the Consumer
Price Index remained at levels not witnessed since 1963.
The Fed' s responsibility is to enact monetary policy that is anticipatory of
future economic conditions. The U.S. trade deficit has continued to widen
because of the global economic slide. Slumping exports have weakened
manufacturing activity since midyear and there is concern that this slackness
could become more pronounced and widen into other sectors of the economy. While
the increase in imports also restrains domestic production, it has helped
contain inflation as well, since domestic producers are reluctant to raise
prices. This provides additional flexibility for the Fed to lower interest rates
still further. So far, economic problems overseas have not caused any measurable
reaction in the U.S. labor market. Only the growth rate in new jobs has eased
from its torrid pace earlier in the year. The unemployment rate has remained
near 30-year lows and worker inflation-adjusted take-home pay has been rising.
The condition of the labor market is a key determinant of consumer confidence
which, of course, relates directly to consumer spending, a force that accounts
for two thirds of all economic activity. Business spending has shown signs of
weakness, so the role of the consumer will be of even greater importance in the
future. It is significant that measures of consumer confidence have receded from
earlier record high levels, largely because of concerns about the volatility of
financial markets.
Market Environment
On the surface, the prevailing conditions in the domestic U.S. economy over
the reporting period would not be viewed as favorable for the bond market. Firm
levels of growth, high rates of capacity utilization, low rates of unemployment,
strong measures of consumer confidence and steadily rising wages would normally
be viewed as a presage of higher yields and lower prices for all fixed income
investments, including municipal bonds. In fact, just the opposite happened.
Long-term bonds enjoyed strong performance over the period, as witnessed by the
decline in yields for 30-year U.S. Treasury bonds to levels not seen since the
Treasury began issuing them.
The reasons for this period of uncharacteristic strength lie in the evolution
of the global market environment we have witnessed in recent years. As political
leaders around the globe have pursued policies which seek to stimulate
unobstructed cross-border trade, and as the technology to support these market
initiatives has evolved, there has emerged an interrelationship of heretofore
disparate events which render no single market unique and isolated. As such,
what guided the fixed income markets over the last six months was the
deflationary impulse emanating from the economic turbulence which has occurred
in Asia and Russia over the past 18 months. As market participants began to
sense the depressant effects these events could have on domestic activity,
skepticism emerged as to the prevailing level of equity valuations and the
earnings forecasts they imply. As the resulting volatility in stocks forced
prices to correct sharply in August, asset allocation models indicated value in
the relative stability of fixed income investments. The resulting flow of
investor assets into bonds during September and October propelled prices to
their highest levels of the period.
While municipal bond yields shared in the relatively strong bond market
performance of the most recent reporting period, they did tend to underperform
their taxable counterparts. A comparison of the relative movement of taxable
yields as measured by 30-year U.S. Treasury bonds and municipal yields as
measured by the Bond Buyer 25 Bond Revenue Index illustrates this point. For the
period, Treasury yields declined by 87 basis points (0.87%) to end the period at
5.16% while the yield on the Revenue Index declined by 28 basis points (0.28%)
to 5.24% . Corresponding with these yield declines, the prices of U.S. Treasury
securities increased more significantly than the prices of municipals. The
reason for this relative underperformance is the formidable amount of supply the
municipal market was forced to absorb as issuers rushed to market to take
advantage of the lower financing costs available. Through October 31, new issue
volume for the year has increased by nearly 32% over the same period of 1997,
climbing to more than $234 billion and putting 1998 on a path to being the
second-largest volume year in history. This relative underperformance has
rendered municipal securities inexpensive in comparison to their taxable
counterparts by recent historical standards, thus meaning potentially more
upside in terms of price performance.
Portfolio Focus
In managing your Fund' s assets in such an environment, a decidedly
constructive posture was maintained throughout the period. This means that cash
reserves were held at minimum levels necessary to fulfill portfolio liquidity
requirements. Trading sought to secure those issues offering not only generous
levels of tax-free income, but also the potential for significant capital
appreciation as interest rates declined over the period. Throughout this process
we continued to monitor the underlying creditworthiness of the Fund's individual
holdings in an effort to maximize the liquidity and credit quality
characteristics of the portfolio.
Going forward, while we continue to maintain a constructive outlook for the
bond market, we remain vigilant for any signals that the current accommodative
stance of monetary policy could be reversed should unintended inflationary
signals emerge. Should this occur, a decidedly more conservative posture will be
employed in which, for example, a greater emphasis could be placed on those
issues bearing higher levels of income and lesser degrees of principal
volatility.
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]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
November 16, 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 (annualized) 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 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.
<TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS OCTOBER 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments--91.9% Amount Value
- ------------------------------------------ ____________ ____________
<S> <C> <C>
California--8.3%
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
6%, 7/1/2020 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,865,000 $ 4,311,330
San Francisco City and County Airports Commission, International Airport Revenu
6.10%, 5/1/2025 (Insured; FGIC)(Prerefunded 5/1/2004)(a) . . . . . . . . . . . . . . . 8,240,000 9,281,618
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue, Refunding
Zero Coupon, 1/15/2031 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 1,965,700
Colorado--1.5%
E-470 Public Highway Authority, Revenue, Refunding
Zero Coupon, 9/1/2016 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . 6,550,000 2,714,517
Delaware--3.6%
Delaware Economic Development Authority, Revenue:
Gas Facilities (Delmarva Power & Light) 7.30%, 7/1/2021 (Insured; FGIC) . . . . . . . . 1,000,000 1,098,000
Water (United Water Delaware Inc., Project) 6.20%, 6/1/2025 (Insured; AMBAC) . . . . . 5,000,000 5,534,550
District of Columbia--2.4%
District of Columbia, Revenue, Refunding (Howard University)
5.75%, 10/1/2013 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,130,000 4,492,490
Florida--1.3%
Florida Housing Finance Agency, SFMR, Refunding
6.65%, 7/1/2026 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790,000 851,296
Lee County, Solid Waste System Revenue 7%, 10/1/2011 (Insured; MBIA) . . . . . . . . . . . 1,420,000 1,556,348
Illinois--4.8%
Chicago O'Hare International Airport, Special Facility Revenue, Refunding
(International Terminal)
6.50%, 1/1/2018 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,750,000 1,798,475
Metropolitan Pier and Exposition Authority, Dedicated State Tax Revenue
(McCormick Place Expansion Project) 6.50%, 6/15/2027 (Insured; FGIC) . . . . . . . . . 6,375,000 7,123,234
Kentucky--6.2%
Louisville and Jefferson County Metropolitan Sewer District, Sewer and Drain
System Revenue,
Refunding:
6.25%, 5/15/2026 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . 4,200,000 4,785,186
4.75%, 5/15/2028 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 6,705,160
Massachusetts--1.9%
Massachusetts Education Loan Authority, Education Loan Revenue:
7.60%, 1/1/2003 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640,000 677,933
7.65%, 1/1/2004 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 735,000 778,960
Massachusetts Housing Finance Agency, Housing Revenue (Rental-Mortgage)
6.50%, 7/1/2025 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,083,640
Massachusetts Port Authority, Special Facilities Revenue (US Air Project)
5.75%, 9/1/2016 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,080,640
Michigan--.9%
Michigan Housing Development Authority, LOR (Greenwood Villa Project)
6.50%, 9/15/2007 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,623,195
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------ ____________ ____________
Missouri--.6%
Kansas City Municipal Assistance Corp., Leasehold Revenue, Refunding (Roe
Bartle):
5.125%, 4/15/2015 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000,000 $ 1,021,100
Montana--1.3%
Forsyth, PCR, Refunding (Puget Sound, Power & Light Co.)
7.25%, 8/1/2021 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,250,000 2,472,525
Nevada--1.9%
Reno, HR (Saint Mary's Hospital) 7.75%, 7/1/2015 (Insured; BIGI)
(Prerefunded 11/1/2000) (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,285,000 1,374,783
Washoe County, Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,209,700
New Jersey--5.7%
New Jersey Economic Development Authority, PCR (Public Service Electric & Gas
Co.)
6.40%, 5/1/2032 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,600,000 8,425,740
New Jersey Health Care Facilities Financing Authority, Revenue, Refunding
(Jersey Shore Medical Center) 6.25%, 7/1/2021 (Insured; AMBAC) . . . . . . . . . . . . 100,000 111,363
New Jersey Housing and Mortgage Finance Agency, Revenue:
Home Buyer 6.20%, 10/1/2025 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . 1,995,000 2,121,463
New York--17.9%
Albany Airport Authority, Airport Revenue 5.375%, 12/15/2017 (Insured; FSA). . . . . . . . 1,250,000 1,292,250
Buffalo Municipal Water Finance Authority, Water System Revenue, Refunding
5%, 7/1/2017 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,795,000 3,816,442
New York State Dormitory Authority, Revenue:
(Beth Israel Medical Center) 6%, 11/1/2015 (Insured; MBIA) . . . . . . . . . . . . . . 8,395,000 9,232,569
(Mount Sinai Medical School) 5.15%, 7/1/2024 (Insured; MBIA) . . . . . . . . . . . . . 2,500,000 2,607,400
(State University Athletic Facility) 5.25%, 7/1/2018 (Insured; MBIA) . . . . . . . . . 2,000,000 2,055,240
Refunding:
(Siena College) 5.70%, 7/1/2017 (Insured; MBIA) . . . . . . . . . . . . . . . . . . 3,585,000 3,893,812
(University of Rochester) 5%, 7/1/2027 (Insured; MBIA) . . . . . . . . . . . . . . 1,000,000 990,160
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 3,220,950
New York State Medical Care Facilities Finance Agency, Revenue (Long-Term
Healthcare)
6.50%, 11/1/2015 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,655,000 5,145,451
Saint Lawrence County Industrial Development Agency, Civic Facility Revenue
(Lawrence University Project) 5.50% 7/1/2013(Insured; MBIA) . . . . . . . . . . . . . . 1,135,000 1,227,968
North Dakota--2.1%
Mercer County, PCR, Refunding (Montana-Dakota Utilities Co. Project)
6.65%, 6/1/2022 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,857,035
Ohio--1.6%
Ontario Local School District, Refunding
5%, 12/1/2023 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 2,980,770
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------ ____________ ____________
Pennsylvania--2.8%
Beaver County Industrial Development Authority, PCR, Refunding
(Ohio Edison Co./Mansfield) 7%, 6/1/2021 (Insured; FGIC) . . . . . . . . . . . . . . . $ 3,000,000 $ 3,269,490
Chester County Health and Educational Facilities Authority, Health System
Revenue
(Jefferson Health System) 5.125%, 5/15/2018 (Insured; AMBAC) . . . . . . . . . . . . . 2,000,000 2,005,140
Rhode Island--2.6%
Rhode Island Housing and Mortgage Finance Corp., SFMR
9.30%, 7/1/2004 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 15,025
Rhode Island Port Authority and Economic Development Corp.,
Airport Revenue 6.625%, 7/1/2024 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . 4,250,000 4,778,020
Tennessee--.6%
Metropolitan Government, Nashville and Davidson County, Water and Sewer Revenue,
Refunding
5.20%, 1/1/2013 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,065,660
Texas--3.6%
Brazos River Authority, PCR, Refunding (Texas Utilities Electric Co. Project)
6.625%, 6/1/2022 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500,000 6,039,110
Brownsville Housing Finance Corp., SFMR (Mortgage-Multiple Originators and
Services)
9.625%, 12/1/2011 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 690,000 701,185
Virginia--8.2%
Danville Industrial Development Authority, HR (Danville Regional Medical Center
5.20%,10/1/2018 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,076,980
Richmond Metropolitan Authority, Expressway Revenue, Refunding:
5.25%, 7/15/2017 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,636,100
5.25%, 7/15/2022 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600,000 2,735,954
Virginia College Building Authority, Educational Facilities Revenue (Washington
and Lee University)
5.25%, 1/1/2026 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500,000 7,932,225
Washington--9.2%
King County, Sewer Revenue 6.125%, 1/1/2033 (Insured; MBIA). . . . . . . . . . . . . . . . 5,000,000 5,549,150
Washington, MFMR:
(Gilman Meadows Project) 7.40%, 1/1/2030 (Insured; FSA) . . . . . . . . . . . . . . . . 3,000,000 3,369,180
(Mallard Cove Project 1) 7.40%, 1/1/2030 (Insured; FSA) . . . . . . . . . . . . . . . . 800,000 898,448
(Mallard Cove Project 2) 7.40%, 1/1/2030 (Insured; FSA) . . . . . . . . . . . . . . . . 2,700,000 3,032,262
Yakima-Tieton Irrigation District, Revenue, Refunding 6.20%, 6/1/2019 (Insured; FSA) . . . 4,000,000 4,399,160
West Virginia--2.9%
West Virginia:
4.50%, 6/1/2023(Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,525,000 2,359,234
6.50%, 11/1/2026 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600,000 3,138,486
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $159,032,195). . . . . . . . . . . . . . . . . $171,519,802
_____________
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------ ____________ ____________
Illinois--1.1%
Illinois Health Facilities Authority, Revenue, Refunding, VRDN 3.70% (Insured; MBIA) (b) . $ 2,000,000 $ 2,000,000
New York--3.7%
New York City, VRDN 3.70% (Insured; AMBAC)(b). . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,000,000
New York City Municipal Water Financing Authority, Water and Sewer System
Revenue,
VRDN 3.70% (Insured; FGIC)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
Utah--1.1%
Emery County, PCR, VRDN (Pacificorp Project) 3.70% (Insured; AMBAC)(b) . . . . . . . . . . 2,000,000 2,000,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $11,000,000). . . . . . . . . . . . . . . . . $ 11,000,000
_____________
TOTAL INVESTMENTS (cost $170,032,195). . . . . . . . . . . . . . . . . . . . . . . . . . . 97.8% $182,519,802
_______ _____________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2% $ 4,193,282
_______ _____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $186,713,084
_______ _____________
Summary of Abbreviations
- -----------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BIGI Bond Investors Guaranty Insurance Insurance Corporation
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
LOR Limited Obligation Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings
- -----------------------------------------------------------------------------
Fitch or Moody's or Standard & Poor's Percentage of Value
_______ ________ __________________ ____________________
AAA Aaa AAA 94.0%
F-1 MIG1/P1 SP1/A1 6.0
_______
100.0%
_______
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities payable on demand. Variable interest rate--subject to periodic
change.
(c) At October 31, 1998, 40.5% of the Fund's net assets are insured by MBIA and
31.4% are insured by FGIC.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1998 (UNAUDITED)
Cost Value
____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $170,032,195 $182,519,802
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 756,261
Interest receivable . . . . . . . . . . . . . . . . . . . 3,573,428
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 18,494
_____________
186,867,985
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 117,258
Due to Distributor . . . . . . . . . . . . . . . . . . . 3,399
Accrued expenses . . . . . . . . . . . . . . . . . . . . 34,244
_____________
154,901
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $186,713,084
_____________
_____________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $174,844,737
Accumulated undistributed investment income--net . . . . 22,785
Accumulated net realized gain (loss) on investments . . . (642,045)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 . . . . . . . . . . . . . . . . 12,487,607
_____________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $186,713,084
_____________
SHARES OUTSTANDING
(300 MILLION SHARES OF $.01 PAR VALUE COMMON STOCK AUTHORITZED). . . . . . . . . . . . . . 10,126,082
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $18.44
________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . $ 5,164,746
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . $ 568,094
Shareholder servicing costs--Note 3(b) . . . . . 246,823
Professional fees . . . . . . . . . . . . . . . . 25,027
Registration fees . . . . . . . . . . . . . . . . 16,839
Directors' fees and expenses--Note 3(c) . . . . . 14,685
Custodian fees . . . . . . . . . . . . . . . . . 9,615
Prospectus and shareholders' reports--Note 3(b) . 7,793
Loan commitment fees--Note 2 . . . . . . . . . . 260
Miscellaneous . . . . . . . . . . . . . . . . . . 6,638
_____________
Total Expenses . . . . . . . . . . . . . . 895,774
Less--reduction in management fee due to
undertaking--Note 3(a) . . . . . . . . . . . . (90,720)
_____________
Net Expenses . . . . . . . . . . . . . . . 805,054
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,359,692
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments . . . . . $ 1,215,385
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . 4,565,958
_____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 5,781,343
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $10,141,035
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1998 Year Ended
(Unaudited) April 30, 1998
________________ _________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,359,692 $ 9,301,806
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 1,215,385 3,232,483
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 4,565,958 3,408,483
______________ _____________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . . . 10,141,035 15,942,772
______________ _____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,336,907) (9,301,806)
______________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 12,885,517 72,586,101
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,904,067 6,094,336
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,316,919) (91,356,721)
______________ _____________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . . . (5,527,335) (12,676,284)
______________ _____________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . . 276,793 (6,035,318)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,436,291 192,471,609
______________ _____________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $186,713,084 $186,436,291
______________ _____________
UNDISTRIBUTED INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . $ 22,785 --
______________ _____________
Shares Shares
______________ _____________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704,449 4,071,401
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 158,761 339,966
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,166,946) (5,100,142)
_____________ _____________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . . . (303,736) (688,775)
______________ _____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
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.
Six Months Ended
October 31, 1998 Year Ended April 30,
_____________________________________________________________
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
____________________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . $17.88 $17.31 $17.13 $17.25 $17.46 $19.23
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . .42 .85 .87 .91 .94 .1.00
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . .56 .57 .18 (.11) (.21) (1.06)
_______ _______ _______ _______ _______ _______
Total from Investment Operations . . . . . .98 1.42 1.05 .80 .73 (.06)
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . (.42) (.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 . . . . . . . . . . . . (.42) (.85) (.87) (.92) (.94) (1.71)
_______ _______ _______ _______ _______ _______
Net asset value, end of period . . . . . . $18.44 $17.88 $17.31 $17.13 $17.25 $17.46
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . 10.95%(1) 8.31% 6.24% 4.58% 4.36% (.74%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . .85%(1) .85% .80% .85% .94% .93%
Ratio of net investment income
to average net assets . . . . . . . . . 4.60%(1) 4.76% 5.03% 5.14% 5.49% 5.25%
Decrease reflected in above expense ratios
due to undertakings by the Manager . . .10%(1) .10% .17% .09% -- --
Portfolio Turnover Rate . . . . . . . . . . 15.92%(2) 64.38% 93.39% 82.86% 41.19% 34.92%
Net Assets, end of period (000's Omitted) . . $186,713 $186,436 $192,472 $208,388 $220,398 $249,513
- -----------------------------
(1) Annualized.
(2) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Insured Municipal Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "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 (the
" 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. Under the terms of the custody
agreement, the Fund received net earnings credits of $6,813 based on available
cash balances left on deposit. Income earned under this arrangement is included
in interest income.
(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 of 1986, as
amended (the "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 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 (UNAUDITED) (CONTINUED)
NOTE 2--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 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 1 1/2% 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, 1998 through
October 31, 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 undertaking, amounted to $90,720 during the period ended October
31, 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 October 31, 1998, the
Fund was charged $191,959 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 October 31, 1998, the Fund was charged $39,190 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.
DREYFUS INSURED MUNICIPAL BOND FUND, INC.
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (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 redemption or exchange occurs less than fifteen
days following the date of issuance. During the period ended October 31, 1998,
redemption fees amounted to $6,413.
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended October 31, 1998
amounted to $28,911,050 and $47,238,641, respectively.
At October 31, 1998, accumulated net unrealized appreciation on investments
was $12,487,607, consisting of $12,505,337 gross unrealized appreciation and
$17,730 gross unrealized depreciation.
At October 31, 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).
(reg.tm)
(reg.tm)
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. 306SA9810
Insured
Municipal
Bond Fund, Inc.
Semi-Annual
Report
October 31, 1998
