File No. 33-7497
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. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17 [X]
(Check appropriate box or boxes.)
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
(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
Mark N. Jacobs, 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)
----
X on April 1, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) 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
beneficial interest 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 November 30, 1996 was filed on January 21,
1997.
PREMIER NEW YORK MUNICIPAL BOND FUND
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 4
4 General Description of Registrant 6, 29
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 29
7 Purchase of Securities Being Offered 12
8 Redemption or Repurchase 20
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-30
13 Investment Objectives and Policies B-2
14 Management of the Fund B-12
15 Control Persons and Principal B-15
Holders of Securities
16 Investment Advisory and Other B-16
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER NEW YORK MUNICIPAL BOND FUND
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-27
18 Capital Stock and Other Securities B-30
19 Purchase, Redemption and Pricing B-18, B-21,
of Securities Being Offered B-26
20 Tax Status *
21 Underwriters Cover, B-17
22 Calculations of Performance Data B-27
23 Financial Statements B-54
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-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-10
30 Location of Accounts and Records C-13
31 Management Services C-13
32 Undertakings C-13
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
PROSPECTUS APRIL 1, 1997
Registration Mark
Dreyfus Premier New York Municipal Bond Fund (the "Fund") is
an open-end, non-diversified, management investment company, known as a
mutual fund. The Fund's investment objective is to maximize current income
exempt from Federal, New York State and New York City income taxes to the
extent consistent with the preservation of capital.
By this Prospectus, the Fund is offering three Classes of
shares -- Class A, Class B and Class C -- which are described herein. See
"Alternative Purchase Methods."
The Fund provides free redemption checks with respect to
Class A, 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 all Classes of shares by telephone
using the TELETRANSFER Privilege.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read and
retained for future reference.
The Statement of Additional Information, dated April 1, 1997,
which may be revised from time to time, provides a further discussion of
certain areas in this Prospectus and other matters which may be of
interest to some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The
Securities and Exchange Commission maintains a Web site (http://www.sec.gov)
that contains the Statement of Additional Information, material
incorporated by reference, and other information regarding the Fund. For
a free copy of the Statement of Additional Information, write to the Fund
at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
1-800-554-4611. When telephoning, ask for Operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Fee Table.......................................... 3
Condensed Financial Information.................... 4
Alternative Purchase Methods....................... 5
Description of the Fund............................ 6
Management of the Fund............................. 11
How to Buy Shares.................................. 12
Shareholder Services............................... 16
How to Redeem Shares............................... 20
Distribution Plan and Shareholder Services Plan.... 25
Dividends, Distributions and Taxes................. 25
Performance Information............................ 27
General Information................................ 29
Appendix........................................... 30
Page 2
<TABLE>
FEE TABLE
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).............................. 4.50% None None
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)................ None* 4.00% 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees......................... .55% .55% .55%
12b-1 Fees.............................. None .50% .75%
Other Expenses........................... .37% .39% .29%
Total Fund Operating Expenses........... .92% 1.44% 1.59%
Example
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) except where noted, redemption
at the end of each time period: CLASS A CLASS B CLASS C
1 Year............................ $ 54 $55/$15** $26/$16**
3 Years........................... $ 73 $76/$46** $ 50
5 Years........................... $ 94 $99/$79** $ 87
10 Years.......................... $153 $145*** $189
* A contingent deferred sales charge of 1.00% may be assessed on certain redemptions of Class A shares purchased
without an initial sales charge as part of an investment of $1 million or more.
** Assuming no redemption of shares.
*** Ten year figure assumes conversion of Class B shares to
Class A shares at the end of the sixth year following the date of purchase.
</TABLE>
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES
A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT
IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- ------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Long-term
investors in Class B or Class C shares could pay more in 12b-1 fees than
the economic equivalent of paying a front-end sales charge. The
information in the foregoing table does not reflect any fee waivers or
expense reimbursement arrangements that may be in effect. Certain Service
Agents (as defined below) may charge their clients direct fees for
effecting transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Shares," "How
to Redeem Shares," and "Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following tables 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 beneficial interest 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.
<TABLE>
CLASS A SHARES
-------------------------------------------------------------------------------------------------
YEAR ENDED NOVEMBER 30,
-------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $13.50 $11.88 $12.54 $13.08 $12.88 $13.56 $13.97 $14.97 $13.01 $14.93
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net .85 .91 .95 .94 .89 .86 .80 .75 .75 .73
Net realized and unrealized
gain (loss)
on investments (1.62) .66 .54 (.20) .68 .56 1.00 (1.86) 1.92 .01
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from
Investment
Operations... (.77) 1.57 1.49 .74 1.57 1.42 1.80 (1.11) 2.67 .74
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income-net... (.85) (.91) (.95) (.94) (.89) (.86) (.80) (.75) (.75) (.73)
Dividends from net realized
gain on investments _ _ _ _ _ (.15) _ (.10) _ _
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Distributions (.85) (.91) (.95) (.94) (.89) (1.01) (.80) (.85) (.75) (.73)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of year.. $11.88 $12.54 $13.08 $12.88 $13.56 $13.97 $14.97 $13.01 $14.93 $14.94
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN(2).... (6.28%)(3) 13.52% 12.23% 5.93% 12.63% 10.79% 13.16% (7.76%) 20.93% 5.17%
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets _ _ _ .06% .52% .72% .78% .89% .94% .92%
Ratio of net investment
income to
average net assets 7.42%(3) 7.18% 7.11% 7.19% 6.69% 6.16% 5.41% 5.25% 5.27% 4.99%
Decrease reflected in above
expense ratios due to
undertakings by The
Dreyfus Corporation 1.50%(3) 1.50% 1.50% 1.34% .60% .34% .18% .04% _ _
Portfolio Turnover Rate 17.00%(4) 47.00% 21.67% 7.02% 12.45% 12.55% 19.55% 31.76% 74.11% 53.74%
Net Assets, end of year
(000's omitted) $963 $2,202 $11,800 $39,748 $70,333 $108,247 $164,046 $137,978 $146,207 $135,413
(1) From December 31, 1986 (commencement of operations) to November 30,
1987.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
<TABLE>
Page 4
Class B Shares Class C Shares
------------------------------------------------ ---------------------
Year Ended Year Ended
November 30, November 30,
------------------------------------------------ ---------------------
1993(1) 1994 1995 1996 1995(2) 1996
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $14.04 $14.97 $13.02 $14.93 $14.61 $14.93
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net... .62 .67 .67 .65 .14 .62
Net realized and unrealized gain (loss)
on investments.......... .93 (1.85) 1.91 .01 .32 .02
------- ------- ------- ------- ------- -------
Total from Investment Operations 1.55 (1.18) 2.58 .66 .46 .64
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net (.62) (.67) (.67) (.65) (.14) (.62)
Dividends from net realized gain
on investments.......... -- (.10) -- -- -- --
------- ------- ------- ------- ------- -------
Total Distributions..... (.62) (.77) (.67) (.65) (.14) (.62)
------- ------- ------- ------- ------- -------
Net Asset Value, end of year $14.97 $13.02 $14.93 $14.94 $14.93 $14.95
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(3) 12.78%(4) (8.20)% 20.20% 4.61% 14.19%(4) 4.43%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.34%(4) 1.44% 1.46% 1.44% 1.74%(4) 1.59%
Ratio of net investment income
to average net assets... 4.41%(4) 4.70% 4.72% 4.45% 4.00%(4) 3.98%
Decrease reflected in above expense ratios
due to undertakings by
The Dreyfus Corporation. .16%(4) .04% -- -- -- --
Portfolio Turnover Rate. 19.55%(5) 31.76% 74.11% 53.74% 74.11%(5) 53.74%
Net Assets, end of year (000's omitted) $45,101 $52,970 $66,873 $71,392 $1 $485
(1) From January 15, 1993 (commencement of initial offering) to November 30, 1993.
(2) From September 11, 1995 (commencement of initial offering)to November 30, 1995.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
</TABLE>
Further information about the Fund's performance is contained
in its 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.
ALTERNATIVE PURCHASE METHODS
The Fund offers you three methods of purchasing Fund shares.
You may choose the Class of shares that best suits your needs, given the
amount of your purchase, the length of time you expect to hold your
shares and any other relevant circumstances. Each Fund share represents
an identical pro rata interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 4.50% of the public offering price
imposed at the time of purchase. The initial sales charge may be reduced
or waived for certain purchases. See "How to Buy Shares _ Class A
Shares." These shares are subject to an annual service fee at the rate of
.25 of 1% of the value of the average daily net assets of Class A. See
"Distribution Plan and Shareholder Services Plan _ Shareholder Services
Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which
is assessed if you redeem Class B shares within the first six years of
purchase. See "How to Buy
Page 5
Shares _ Class B Shares" and "How to Redeem Shares _ Contingent Deferred
Sales Charge -- Class B Shares." These shares also are subject to an
annual service fee at the rate of .25 of 1% of the value of the average
daily net assets of Class B. In addition, Class B shares are subject to
an annual distribution fee at the rate of .50 of 1% of the value of the
average daily net assets of Class B. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class B will
cause such Class to have a higher expense ratio and to pay lower
dividends than Class A. Approximately six years after the date of
purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to a 1% CDSC, which is assessed only if you redeem Class C shares
within one year of purchase. See "How to Buy Shares -- Class C Shares"
and "How to Redeem Shares -- Contingent Deferred Sales Charge." These
shares also are subject to an annual service fee at the rate of .25 of
1%, and an annual distribution fee at the rate of .75 of 1%, of the value
of the average daily net assets of Class C. See "Distribution Plan and
Shareholder Services Plan." The distribution fee paid by Class C will
cause such Class to have a higher expense ratio and to pay lower
dividends than Class A.
The decision as to which Class of shares is more beneficial
to you depends on the amount and the intended length of your investment.
You should consider whether, during the anticipated life of your
investment in the Fund, the accumulated distribution fee and CDSC, if
any, on Class B or Class C shares would be less than the initial shares
charge on Class A shares purchased at the same time, and to what extent,
if any, such differential would be offset by the return of Class A.
Additionally, investors qualifying for reduced initial sales charges who
expect to maintain their investment for an extended period of time might
consider purchasing Class A shares because the accumulated continuing
distribution fees on Class B or Class C shares may exceed the initial
sales charge on Class A shares during the life of the investment.
Finally, you should consider the effect of the CDSC period and any
conversion rights of the Classes in the context of your own investment
time frame. For example, while Class C shares have a shorter CDSC period
than Class B shares, Class C shares do not have a conversion feature and,
therefore, are subject to an ongoing distribution fee. Thus, Class A and
Class B shares may be more attractive than Class C shares to investors
with long term investment outlooks. Generally, Class A shares may be more
appropriate for investors who invest $1,000,000 or more in Fund shares,
and for investors who invest between $100,000 and $999,999 in Fund shares
with long term investment outlooks. Class A shares will not be
appropriate for investors who invest less than $50,000 in Fund shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to maximize current income
exempt from Federal, New York State and New York City income taxes to the
extent consistent with the preservation of capital. To accomplish its
investment objective, the Fund invests primarily in the debt securities
of the State of New York, its political subdivisions, authorities and
corporations, the interest from which is, in the opinion of bond counsel
to the issuer, exempt from Federal, New York
Page 6
State and New York City income taxes (collectively, "New York
Municipal Obligations"). To the extent acceptable New York Municipal
Obligations are at any time unavailable for investment by the Fund, the
Fund will invest temporarily in other debt securities the interest from
which is, in the opinion of bond counsel to the issuer, exempt from
Federal, but not New York State and New York City, income tax. The Fund's
investment objective cannot be changed without approval by the holders of
a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. There can be
no assurance that the Fund's investment objective will be achieved.
MUNICIPAL OBLIGATIONS
Debt securities 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 do not carry the pledge of the credit of the issuing
municipality, but generally are guaranteed by the corporate entity on
whose behalf they are issued. Notes are short-term instruments which are
obligations of the issuing municipalities or agencies and are sold in
anticipation of a bond sale, collection of taxes or receipt of other
revenues. Municipal Obligations include municipal lease/purchase
agreements which are similar to installment purchase contracts for
property or equipment issued by municipalities. Municipal Obligations bear
fixed, floating or variable rates of interest, which are determined in
some instances by formulas under which the Municipal Obligation's interest
rate will change directly or inversely to changes in interest rates or an
index, or multiples thereof, in many cases subject to a maximum and
minimum. Certain Municipal Obligations are subject to redemption at a
date earlier than their stated maturity pursuant to call options, which
may be separated from the related Municipal Obligation and purchased and
sold separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at
least 80% of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations. At least 65% of
the value of the Fund's net assets (except when maintaining a temporary
defensive position) will be invested in bonds, debentures and other debt
instruments. At least 65% of the value of the Fund's net assets will be
invested in New York Municipal Obligations and the remainder may be
invested in securities that are not New York Municipal Obligations and
therefore may be subject to New York State and New York City income
taxes. See "Investment Considerations and Risks _ Investing in New York
Municipal Obligations" below, and "Dividends, Distributions and Taxes."
At least 70% 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 Baa by Moody's Investors Service, Inc. ("Moody's") or BBB
by Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service,
L.P. ("Fitch"). The Fund may invest up to 30% of the value of its net
assets in Municipal Obligations which, in the case of bonds, are rated
lower than Baa by Moody's and BBB by S&P and Fitch and as low as the
lowest rating assigned by Moody's, S&P or Fitch. The Fund may
Page 7
invest in short-term Municipal Obligations which are rated in the two
highest rating categories by Moody's, S&P or Fitch. See "Appendix B" in
the Statement of Additional Information. Municipal Obligations rated Baa
by Moody's or BBB by S&P or Fitch 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 outstanding
investment characteristics and have speculative characteristics.
Investments rated Ba or lower by Moody's and BB or lower by S&P and Fitch
ordinarily provide higher yields but involve greater risk because of their
speculative characteristics. The Fund may invest in Municipal Obligations
rated C by Moody's or D by S&P or Fitch, which is the lowest rating
assigned by such rating organizations and indicates that the Municipal
Obligation is in default and interest and/or repayment of principal is in
arrears. See "Investment Considerations and Risks _ Lower Rated Bonds"
below for a further discussion of certain risks. The Fund also may invest
in securities which, while not rated, are determined by The Dreyfus
Corporation to be of comparable quality to the rated securities in which
the Fund may invest; for purposes of the 70% requirement described in this
paragraph, such unrated securities shall be deemed to have the rating so
determined. The Fund also may invest in Taxable Investments of the quality
described under "Appendix -- Certain Portfolio Securities -- Taxable
Investments." Under normal market conditions, the weighted average
maturity of the Fund's portfolio is expected to exceed ten years.
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
"Investment Considerations and Risks" below.
The Fund's annual portfolio turnover rate is not expected to
exceed 100%. The Fund may engage in various investment techniques, such
as options and futures transactions, lending portfolio securities and
short-selling. Use of certain of these techniques may give rise to
taxable income. See "Dividends, Distributions and Taxes." For a
discussion of the investment techniques and their related risks see
"Investment Considerations and Risks" and "Appendix _ Investment
Techniques" below and "Investment Objective and Management Policies _
Management Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- Even though interest-bearing securities are investments
which promise a stable stream of income, the prices of such securities
are inversely affected by changes in interest rates and, therefore, are
subject to the risk of market price fluctuations. Certain securities that
may be purchased by the Fund, such as those with interest rates that
fluctuate directly or indirectly based upon 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
Page 8
changes in the credit rating or financial condition of the
issuing entities. Once the rating of a portfolio security has been
changed, the Fund will consider all circumstances deemed relevant in
determining whether to hold the security. The Fund's net asset value
generally will not be stable and should fluctuate based upon changes in
the value of the Fund's portfolio securities. Securities in which the
Fund invests may earn a higher level of current income than certain
shorter-term or higher quality securities which generally have greater
liquidity, less market risk and less fluctuation in market value.
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS -- You should consider
carefully the special risks inherent in the Fund's investment in New York
Municipal Obligations. These risks result from the financial condition of
New York State, certain of its public bodies and municipalities, and New
York City. Beginning in early 1975, New York State, New York City and
other State entities faced serious financial difficulties which
jeopardized the credit standing and impaired the borrowing abilities of
such entities and contributed to high interest rates on, and lower market
prices for, debt obligations issued by them. A recurrence of such
financial difficulties or a failure of certain financial recovery
programs could result in defaults or declines in the market values of
various New York Municipal Obligations in which the Fund may invest. If
there should be a default or other financial crisis relating to New York
State, New York City, a State or City agency, or a State municipality,
the market value and marketability of outstanding New York Municipal
Obligations in the Fund's portfolio and the interest income to the Fund
could be adversely affected. Moreover, the national recession and the
significant slowdown in the New York and regional economy in the early
1990's added substantial uncertainty to estimates of the State's tax
revenues, which, in part, caused the State to incur cash-basis operating
deficits in the General Fund and issue deficit notes during the fiscal
periods 1989 through 1992. The State's financial operations improved,
however, during recent fiscal years. For its fiscal periods 1993 through
1996, the State recorded balanced budgets on a cash basis, with
substantial fund balances in the General Fund in fiscal 1992-93 and
1993-94 and smaller fund balances in fiscal 1994-95 and 1995-96. There
can be no assurance that New York will not face substantial potential
budget gaps in future years. In January 1992, Moody's lowered from A to
Baa1 the ratings on certain appropriation-backed debt of New York State
and its agencies. The State's general obligation, State-guaranteed and
New York State Local Government Assistance Corporation bonds continue to
be rated A by Moody's. In January 1992, S&P lowered from A to A- its
ratings of New York State general obligation bonds and stated that it
continued to assess the ratings outlook as negative. The ratings of
various agency debt, State moral obligations, contractual obligations,
lease purchase obligations and State guarantees also were lowered. In
February 1991, Moody's lowered its rating on New York City's general
obligation bonds from A to Baa1 and in July 1995, S&P lowered its rating
on such bonds from A- to BBB+. The rating changes reflected the rating
agencies' concerns about the financial condition of New York State and
City, the heavy debt load of the State and City, and economic
uncertainties in the region. You should obtain and review a copy of the
Statement of Additional Information which more fully sets forth these and
other risk factors.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than
25% of the value of its total assets in Municipal Obligations which are
related in such a way that an economic, business or political development
or change affecting one such security also would affect the other
securities; for example, securities the interest upon which is paid from
revenues of similar types of projects. As a result, the Fund may be
subject to greater risk as compared to a fund that does not follow this
practice.
Page 9
Certain municipal lease/purchase obligations in which the
Fund may invest may contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in future
years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by
the leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors
including the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance of
Municipal Obligations may reduce the volume of Municipal Obligations
qualifying for Federal tax exemption. One effect of these provisions
could be to increase the cost of the Municipal Obligations available for
purchase by the Fund and thus reduce available yield. Shareholders should
consult their tax advisers concerning the effect of these provisions on
an investment in the Fund. Proposals that may restrict or eliminate the
income tax exemption for interest on Municipal Obligations may be
introduced in the future. If any such proposal were enacted that would
reduce the availability of Municipal Obligations for investment by the
Fund so as to adversely affect Fund shareholders, the Fund would
reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration.
If legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Fund would treat such security as a permissible
Taxable Investment within the applicable limits set forth herein.
ZERO-COUPON SECURITIES -- The Fund may invest in zero coupon
securities and pay-in-kind bonds (bonds which pay interest through the
issuance of additional bonds). Federal income tax law requires the holder
of a zero coupon security or of certain pay-in-kind bonds to accrue
income with respect to these securities prior to the receipt of cash
payments. To maintain its qualification as a regulated investment company
and avoid liability for Federal income taxes, the Fund may be required to
distribute such income accrued with respect to these securities and may
have to dispose of portfolio securities under disadvantageous
circumstances in order to generate cash to satisfy these distribution
requirements.
LOWER RATED BONDS -- The Fund may invest up to 30% of its net assets
in higher yielding (and, therefore, higher risk) debt securities, such as
those rated Ba by Moody's or BB by S&P or Fitch or as low as the lowest
rating assigned by Moody's, S&P or Fitch (commonly known as junk bonds).
They may be subject to certain risks with respect to the issuing entity
and to greater market fluctuations than certain lower yielding, higher
rated fixed-income securities. The retail secondary market for these
securities may be less liquid than that of higher rated securities;
adverse conditions could make it difficult at times for the Fund to sell
certain securities or could result in lower prices than those used in
calculating the Fund's net asset value. See "Appendix -- Certain Portfolio
Securities -- Ratings."
USE OF DERIVATIVES -- The Fund may invest, to a limited extent, in
derivatives ("Derivatives"). These are financial instruments which derive
their performance, at least in part, from the performance of an
underlying asset, index or interest rate. The Derivatives the Fund may
use include options and futures. While Derivatives can be used
effectively in furtherance of the Fund's investment objective, under
certain market conditions, they can increase the volatility of the Fund's
net asset value, can decrease the liquidity of the Fund's portfolio and
make more difficult the accurate pricing of the Fund's portfolio. See
"Appendix_Investment Techniques_Use of Derivatives" below and "Investment
Objective and Management Policies_Management Policies_Derivatives" in the
Statement of Additional Information.
Page 10
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the
Fund's assets that may be invested in the securities of a single issuer
is not limited by the 1940 Act. A "diversified" investment company is
required by the 1940 Act generally, with respect to 75% of its total
assets, to invest not more than 5% of such assets in the securities of a
single issuer. Since a relatively high percentage of the Fund's assets may
be invested in the obligations of a limited number of issuers, the Fund's
portfolio may be more sensitive to changes in the market value of a
single issuer. However, to meet Federal tax requirements, at the close of
each quarter the Fund may not have more than 25% of its total assets
invested in any one issuer and, with respect to 50% of total assets, not
more than 5% of its total assets invested in any one issuer. These
limitations do not apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
made independently from those of other investment companies advised by
The Dreyfus Corporation. If, however, such other investment companies
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. The Dreyfus Corporation is a wholly-owned
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation ("Mellon"). As of January 31, 1997, The Dreyfus
Corporation managed or administered approximately $85 billion in assets
for approximately 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the authority of the Fund's Board in accordance with
Massachusetts law. The Fund's primary portfolio manager is Monica S.
Wieboldt. She has held that position since January 1996 and has been
employed by The Dreyfus Corporation since November 1983. The Fund's other
portfolio managers are identified in the Statement of Additional
Information. The Dreyfus Corporation also provides research services for
the Fund and for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc. AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $233 billion
in assets as of December 31, 1996, including approximately $86 billion in
proprietary mutual fund assets. As of December 31, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial
or administration services, for more than $1.046 trillion in assets
including approximately $57 billion in mutual fund assets.
Page 11
For the fiscal year ended November 30, 1996, the Fund paid
The Dreyfus Corporation a monthly management fee at the annual rate of
.55 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 expense ratio of the Fund and increasing yield to
investors. 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.
In allocating brokerage transactions, The Dreyfus Corporation
seeks to obtain the best execution of orders at the most favorable net
price. Subject to this determination, The Dreyfus Corporation may
consider, among other things, the receipt of research services and/or the
sale of shares of the Fund or other funds managed, advised or
administered by The Dreyfus Corporation as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See
"Portfolio Transactions" in the Statement of Additional Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at 60 State Street, Boston,
Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The Bank
of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian.
HOW TO BUY SHARES
GENERAL -- Fund shares may be purchased only by clients of certain
financial institutions (which may include banks), securities dealers
("Selected Dealers") and other industry professionals (collectively,
"Service Agents"), except that 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 may purchase Class A shares
directly through the Distributor. Subsequent purchases may be sent
directly to the Transfer Agent or your Service Agent.
When purchasing Fund shares, you must specify which Class is
being purchased. Share 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 retirement plans. The Fund reserves the right to reject any
purchase order.
Service Agents may receive different levels of compensation
for selling different Classes of shares. Management understands that some
Service Agents may impose certain conditions on their clients which are
different from those described in this Prospectus, and to the extent
permitted by applicable regulatory authority, may charge their clients
direct fees. You should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. The initial investment must be
accompanied by the Account Application. The Fund reserves the right to
vary the initial and subsequent investment minimum requirements at any
time.
Page 12
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"The Dreyfus Family of Funds." Payments which are mailed should be sent
to Dreyfus Premier New York Municipal Bond Fund, P.O. Box 6587,
Providence, Rhode Island 02940-6587. If you are opening a new account,
please enclose your Account Application indicating which Class of shares
is being purchased. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be enclosed.
Neither initial nor subsequent investments should be made by third party
check.
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
#8900119284/Dreyfus Premier New York Municipal Bond Fund, 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,
and must indicate the Class of shares being purchased. If your initial
purchase of Fund shares is by wire, please call 1-800-554-4611 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the 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.
Fund shares also may be purchased through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark and the Government Direct Deposit
Privilege described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may provide you with a
convenient way to invest for long-term financial goals. You should be
aware, however, that periodic investment plans do not guarantee a profit
and will not protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share of each Class is determined as of the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. For
purposes of determining net asset value, options and futures contracts
will be valued 15 minutes after the close of trading on the floor of the
New York Stock Exchange. Net asset value per share of each Class is
computed by dividing the value of the Fund's net assets represented by
such Class (i.e., the value of its assets less liabilities) by the total
number of shares of such Class outstanding. The Fund's investments are
valued each business day by an independent pricing service approved by
the Fund's Board and are valued at fair value as determined by the
pricing service. The pricing service's procedures are reviewed under the
general supervision of the Fund's Board. For further information
regarding the
Page 13
methods employed in valuing Fund investments, see "Determination of Net
Asset Value" in the Statement of Additional Information.
If an order is received in proper form by the Transfer Agent
by the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time) on any business day, Fund shares
will be purchased at the public offering price determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, Fund shares will be purchased at the public offering price
determined as of the close of trading on the floor of the New York Stock
Exchange on the next business day, except where shares are purchased
through a dealer as provided below.
Orders for the purchase of Fund shares received by dealers by
the close of trading on the floor of the New York Stock Exchange on a
business day and transmitted to the Distributor or its designee by the
close of its business day (normally 5:15 p.m., New York time) will be
based on the public offering price per share determined as of the close
of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the orders will be based on the next determined public
offering price. It is the dealer's responsibility to transmit orders so
that they will be received by the Distributor or its designee before the
close of its business day.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Account Application for further information 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").
CLASS A SHARES -- The public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
<TABLE>
Total Sales Load
--------------------------------------
As a % of As a % of Dealers' Reallowance
offering price net asset value as a % of
Amount of Transaction per share per share offering price
----------------------- ---------------- ---------------- --------------------------
<S> <C> <C> <C>
Less than $50,000......... 4.50 4.70 4.25
$50,000 to less than $100,000 4.00 4.20 3.75
$100,000 to less than $250,000 3.00 3.10 2.75
$250,000 to less than $500,000 2.50 2.60 2.25
$500,000 to less than $1,000,000 2.00 2.00 1.75
$1,000,000 or more........ -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales charge as part of
an investment of at least $1,000,000 and redeemed within one year of
purchase. The Distributor may pay Service Agents an amount up to 1% of
the net asset value of Class A shares purchased by their clients that are
subject to a CDSC. The terms contained in the section of the Prospectus
entitled "How to Redeem Shares -- Contingent Deferred Sales Charge"
(other than the amount of the CDSC and its time periods) are applicable to
the Class A shares subject to a CDSC. Letter of Intent and Right of
Accumulation apply to such purchases of Class A shares.
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage-related or clearing arrangement with an
NASD member firm or other financial institution with respect to sales of
Fund shares) may purchase Class A shares for themselves directly or
pursuant to an employee benefit plan or other program, or for their
spouses or minor children at net asset value, provided that they have
furnished the Distributor with such information as it may request from
time to time in
Page 14
order to verify eligibility for this privilege. This privilege also
applies to full-time employees of financial institutions affiliated with
NASD member firms whose full-time employees are eligible to
purchase Class A shares at net asset value. In addition, Class A shares
are offered at net asset value to 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.
Class A shares may be purchased at net asset value through
certain brokers-dealers and other financial institutions which have
entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by The
Dreyfus Corporation or its affiliates. The purchase of Class A shares of
the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii) been obligated to pay at any
time during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i)qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United States, (ii) a State, county or city or
instrumentality thereof, (iii) a charitable organization (as defined in
Section 501(c)(3) of the Code investing $50,000 or more in Fund shares,
and (iv) a charitable remainder trust (as defined in Section 501(c)(3) of
the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its own
expense, may provide additional promotional incentives to dealers that
sell shares of funds advised by The Dreyfus Corporation which are sold
with a sales load, such as the Fund. In some instances, those incentives
may be offered only to certain dealers who have sold or may sell
significant amounts of such shares.
CLASS B SHARES -- The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Shares."
The Distributor compensates certain Service Agents for selling Class B
and Class C shares at the time of purchase from the Distributor's own
assets. The proceeds of the CDSC and the distribution fee, in part, are
used to defray these expenses.
CLASS C SHARES -- The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
redemptions of Class C shares made within the first year of purchase. See
"Class B Shares" above and "How to Redeem Shares."
RIGHT OF ACCUMULATION -- CLASS A SHARES -- Reduced sales loads apply
to any purchase of Class A shares, shares of other funds in the Dreyfus
Premier Family of Funds, shares of certain other funds advised by The
Dreyfus Corporation which are sold with a sales load and shares acquired
by a previous exchange of such shares (hereinafter referred to as
"Eligible Funds"), by you and any related "purchaser" as defined in the
Statement of Additional Information, where
Page 15
the aggregate investment, including such purchase, is $50,000 or more.
If, for example, you have previously purchased and still hold Class A
shares of the Fund, or of any other Eligible Fund or combination thereof,
with an aggregate current market value of $40,000 and subsequently
purchase Class A shares of the Fund or an Eligible Fund having a current
value of $20,000, the sales load applicable to the subsequent purchase
would be reduced to 4% of the offering price. All present holdings of
Eligible Funds may be combined to determine the current offering price of
the aggregate investment in ascertaining the sales load applicable to
each subsequent purchase.
To qualify for reduced sales loads, at the time of purchase
you or your Service Agent must notify the Distributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account
designated in one of these documents and your Fund account. Only a bank
account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of shares by calling 1-800-554-4611 or,
if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES
Clients of certain Service Agents may purchase, in exchange
for Class A, Class B or Class C shares of the Fund, shares of the same
Class in 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. You also may exchange your Fund shares that are
subject to a CDSC for shares of Dreyfus Worldwide Dollar Money Market
Fund, Inc. The shares so purchased will be held in a special account
created solely for this purpose ("Exchange Account"). Exchange of shares
from an Exchange Account only can be made into certain other funds
managed or administered by The Dreyfus Corporation. No CDSC is charged
when an investor exchanges into an Exchange Account; however, the
applicable CDSC will be imposed when shares are redeemed from an Exchange
Account or other applicable Fund account. Upon redemption, the applicable
CDSC will be calculated without regard to the time such shares were held
in an Exchange Account. See "How to Redeem Shares." Redemption proceeds
for Exchange Account shares are paid by Federal wire or check only.
Exchange Account shares also are eligible for the Auto-Exchange
Privilege, Dividend Sweep and the Automatic Withdrawal Plan. To use this
service, you should consult your Service Agent or call 1-800-554-4611 to
determine if it is available and whether any conditions are imposed on
its use.
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must
Page 16
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
1-800-554-4611. Except in the case of personal retirement plans, the
shares being exchanged must have a current value of at least $500;
furthermore, when establishing a new account by exchange, the shares being
exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. The ability
to issue exchange instructions by telephone is given to all Fund
shareholders automatically, unless you check the applicable"No" box on the
Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by
calling 1-800-554-4611, or by oral request from any of the authorized
signatories on the account by calling 1-800-554-4611. If you have
established the Telephone Exchange Privilege, you may telephone exchange
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) by calling 1-800-554-4611. If you are calling from
overseas, call 516-794-5452. See "How to Redeem Shares -- Procedures."
Upon an exchange into a new account, the following shareholder services
and privileges, as applicable and where available, will be automatically
carried over to the fund into which the exchange is made: Telephone
Exchange Privilege, Check Redemption Privilege, TELETRANSFER Privilege,
and the dividend/capital gain distribution option (except for 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 of
Class A shares into funds sold with a sales load. No CDSC will be imposed
on Class B or Class C shares at the time of an exchange; however, Class B
or Class C shares acquired through an exchange will be subject on
redemption to the higher CDSC applicable to the exchanged or acquired
shares. The CDSC applicable on redemption of the acquired Class B or
Class C shares will be calculated from the date of the initial purchase
of the Class B or Class C shares exchanged. If you are exchanging Class A
shares 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 you are exchanging were: (a) purchased with a
sales load, (b) acquired by a previous exchange from shares purchased
with a sales load, or (c) acquired through reinvestment of dividends or
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange your Service Agent must notify the
Distributor. 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 administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves
the right to reject any exchange request in whole or in part. The
availability of Fund Exchanges may be modified or terminated at any time
upon notice to shareholders. See "Dividends, Distributions and Taxes."
AUTO-EXCHANGE PRIVILEGE
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 the same class of other funds in the Dreyfus
Premier Family of Funds or certain other funds in the Dreyfus Family of
Funds of which you are a shareholder. The amount you designate, which can
be expressed either in terms of a specific dollar or share amount ($100
minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may
be
Page 17
charged with respect to exchanges of Class A shares into funds sold
with a sales load. No CDSC will be imposed on Class B or Class C shares
at the time of an exchange; however, Class B or Class C shares acquired
through an exchange will be subject on redemption to the higher CDSC
applicable to the exchanged or acquired shares. The CDSC applicable on
redemption of the acquired Class B or Class C shares will be calculated
from the date of the initial purchase of the Class B or Class C shares
exchanged. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified or
cancelled by the Fund or the Transfer Agent. You may modify or cancel
your exercise of this Privilege at any time by mailing written
notification to Dreyfus Premier New York Municipal Bond Fund, P.O. Box
6587, Providence, Rhode Island 02940-6587. The Fund may charge a service
fee for the use of this Privilege. No such fee currently is contemplated.
For more information concerning this Privilege and the funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds eligible
to participate in this Privilege, or to obtain an Auto-Exchange
Authorization Form, please call toll free 1-800-554-4611. See "Dividends,
Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase Fund
shares (minimum of $100 and maximum of $150,000 per transaction) at
regular intervals selected by you. Fund shares are purchased by
transferring funds from the bank account designated by you. At your
option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on
either the first or fifteenth day, or twice a month, on both days. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. To establish a
Dreyfus-AUTOMATIC Asset Builder account, you must file an authorization
form with the Transfer Agent. You may obtain the necessary authorization
form by calling 1-800-554-4611. You may cancel your participation in this
Privilege or change the amount of purchase at any time by mailing written
notification to Dreyfus Premier New York Municipal Bond Fund, P.O. Box
6587, Providence, Rhode Island 02940-6587, 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.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE
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 Government Direct Deposit, you must file with the Transfer
Agent a completed Direct Deposit Sign-Up Form for each type of payment
that you desire to include in this Privilege. The appropriate form may be
obtained from your Service Agent or by calling 1-800-554-4611. 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.
DIVIDEND OPTIONS
Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of the same Class of another fund in the Dreyfus Premier Family of
Funds or 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
Page 18
load. If you are investing in a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges
a CDSC, the shares purchased will be subject on redemption to the CDSC, if
any, applicable to the purchased shares. See "Shareholder Services" in the
Statement of Additional Information. Dividend ACH permits you to transfer
electronically dividends or dividends and capital gain distributions, if
any, from the Fund to a designated bank account. Only an account
maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call toll free 1-800-554-4611.
You may cancel these privileges by mailing written notification to
Dreyfus Premier New York Municipal Bond Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. To select a new fund after cancellation, you
must submit a new Dividend 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 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
1-800-554-4611. 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.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A shares where the
sales load is imposed concurrently with withdrawals of Class A shares
generally are undesirable.
LETTER OF INTENT -- CLASS A SHARES
By signing a Letter of Intent form, which can be obtained by
calling 1-800-554-4611, you become eligible for the reduced sales load
applicable to the total number of Eligible Fund shares purchased in a
13-month period pursuant to the terms and conditions set forth in the
Letter of Intent. A minimum initial purchase of $5,000 is required. To
compute the applicable sales load, the offering price of shares you hold
(on the date of submission of the Letter of Intent) in any Eligible Fund
that may be used toward "Right of Accumulation" benefits described above
may be used as a credit toward completion of the Letter of Intent.
However, the reduced sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduc-
Page 19
tion, the sales load will be adjusted to reflect your total purchase at
the end of 13 months. If total purchases are less than the amount
specified, you will be requested to remit an amount equal to the
difference between the sales load actually paid and the sales load
applicable to the aggregate purchases actually made. If such remittance
is not received within 20 days, the Transfer Agent, as attorney-in-fact
pursuant to the terms of the Letter of Intent, will redeem an appropriate
number of Class A shares held in escrow to realize the difference.
Signing a Letter of Intent does not bind you to purchase, or the Fund to
sell, the full amount indicated at the sales load in effect at the time
of signing, but you must complete the intended purchase to obtain the
reduced sales load. At the time you purchase Class A shares, you must
indicate your intention to do so under a Letter of Intent. Purchases
pursuant to a Letter of Intent will be made at the then-current net asset
value plus the applicable sales load in effect at the time such Letter of
Intent was executed.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If you fail
to specify the Class of shares to be redeemed or if you own fewer shares
of the Class than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions from you
or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents may charge their clients a 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 THE TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDERRegistration Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE
TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK,
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT
HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL
REJECT REQUESTS TO REDEEM SHARES PURSUANT TO THE TELETRANSFER PRIVILEGE,
FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT
OF THE PURCHASE CHECK, THE 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 30 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
Page 20
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
redemption of Class B shares which reduces the current net asset value of
your Class B shares to an amount which is lower than the dollar amount of
all payments by you for the purchase of Class B shares of the Fund held
by you at the time of redemption. No CDSC will be imposed to the extent
that the net asset value of the Class B shares redeemed does not exceed
(i) the current net asset value of Class B shares acquired through
reinvestment of dividends or capital gain distributions, plus (ii)
increases in the net asset value of Class B shares above the dollar
amount of all your payments for the purchase of Class B shares of the
Fund held by you at the time of redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC for
Class B shares, except for Class B shares purchased by shareholders who
beneficially owned Class B shares on November 30, 1996:
<TABLE>
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ------------------------
<S> <C> <C>
First.................................................... 4.00
Second................................................... 4.00
Third.................................................... 3.00
Fourth................................................... 3.00
Fifth.................................................... 2.00
Sixth.................................................... 1.00
The following table sets forth the rates of the CDSC for
Class B shares purchased by shareholders who beneficially owned Class B
shares on November 30, 1996:
Year Since CDSC as a % of Amount
Purchase Payment Invested or Redemption
Was Made Proceeds
----------------- ------------------------
First.................................................... 3.00
Second................................................... 3.00
Third.................................................... 2.00
Fourth................................................... 2.00
Fifth.................................................... 1.00
Sixth.................................................... 0.00
</TABLE>
In determining whether a CDSC is applicable to a redemption,
the calculation will be made in a manner that results in the lowest
possible rate. It will be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase in
net asset value of Class B shares above the total amount of payments for
the purchase of Class B shares made during the preceding six years (five
years for shareholders beneficially owning Class B shares on November 30,
1996); then of amounts representing the cost of shares purchased six years
(five years for shareholders beneficially owning Class B shares on
November 30, 1996) prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest
Page 21
period of time within the applicable six-year period (five-year period
for shareholders beneficially owning Class B shares on November 30, 1996).
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder acquired
five additional shares through dividend reinvestment. During the second
year after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be
applied to the value of the reinvested dividend shares and the amount
which represents appreciation ($260). Therefore, $240 of the $500
redemption proceeds ($500 minus $260) would be charged at a rate of 4%
(the applicable rate in the second year after purchase) for a total CDSC
of $9.60.
CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be
the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge -- Class B Shares" above.
WAIVER OF CDSC -- The CDSC will be waived in connection with (a)
redemptions made within one year after the death or disability, as
defined in Section 72(m)(7) of the Code, of the shareholder, (b)
redemptions 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
exceeds $1,000,000, (c) redemptions as a result of a combination of any
investment company with the Fund by merger, acquisition of assets or
otherwise, (d) a distribution following retirement under a tax-deferred
retirement plan or upon attaining age 70 1/2 in the case of an IRA or
Keogh plan or custodial account pursuant to Section 403(b) of the Code
and (e) redemptions pursuant to the Automatic Withdrawal Plan, as
described in the Fund's Prospectus. If the Fund's Board determines to
discontinue the waiver of the CDSC, the disclosure in the Fund's
Prospectus will be revised appropriately. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such waiver will
have the CDSC waived as provided in the Fund's Prospectus at the time of
the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to confirmation
of your entitlement.
PROCEDURES
You may redeem Fund shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent, through the Check Redemption Privilege with respect to Class A
shares only, or the TELETRANSFER Privilege. If you are a client of a
Selected Dealer, you may redeem shares through the Selected Dealer. Other
redemption procedures may be in effect for clients of certain Service
Agents. The Fund makes available to certain large institutions the ability
to issue redemption instructions through compatible computer facilities.
The Fund reserves the right to refuse any request made by telephone,
including requests made shortly after a change of address, and may limit
the amount involved or the number of such requests. The Fund may modify
or terminate any redemption Privilege at any time or charge a service fee
upon notice
Page 22
to shareholders. No such fee currently is contemplated. Shares for which
certificates have been issued are not eligible for the Check Redemption or
TELETRANSFER Privilege.
Your redemption request may direct that the redemption
proceeds be used to purchase shares of other funds advised or
administered by The Dreyfus Corporation that are not available through
the Exchange Privilege. The applicable CDSC will be charged upon the
redemption of Class B or Class C shares. Your redemption proceeds will be
invested in shares of the other fund on the next business day. Before you
make such a request, you must obtain and should review a copy of the
current prospectus of the fund being purchased. Prospectuses may be
obtained by calling 1-800-554-4611. The prospectus will contain
information concerning minimum investment requirements and other
conditions that may apply to your purchase.
You may redeem Fund shares by telephone if you have checked
the appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select the TELETRANSFER
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions (including over The Dreyfus TouchRegistration
Mark automated telephone system) from any person representing himself or
herself to be you, or a representative of your Service Agent, 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 TELETRANSFER 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 TELETRANSFER redemption had been used. During the delay, the
Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Dreyfus Premier New York
Municipal Bond Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587.
Written redemption requests must specify the Class of shares being
redeemed. 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 contact your Service Agent or call the
telephone number listed on the cover of this Prospectus.
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 -- CLASS A SHARES -- You may write
Redemption Checks drawn on your Fund account. Redemption Checks may be
made payable to the order of any person in the amount of $500 or more.
Potential fluctuations in the net asset value of Class A shares should be
considered in determining the amount of the check. Redemption Checks
should not
Page 23
be used to close your account. Redemption Checks are free, but
the Transfer Agent will impose a fee for stopping payment of a Redemption
Check upon your request or if the Transfer Agent cannot honor the
Redemption Check due to insufficient funds or other valid reason. You
should date your Redemption Checks with the current date when you write
them. Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented before the
date of the check, all postdated Redemption Checks which are dated within
six months of presentment for payment, if they are otherwise in good
order. This Privilege will be terminated immediately, without notice,
with respect to any account which is, or becomes, subject to backup
withholding on redemptions (See "Dividends, Distributions and Taxes").
Any Redemption Check written on an account which has become subject to
backup withholding on redemptions will not be honored by the Transfer
Agent.
TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your
Fund account and your bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House
member may be designated. Redemption proceeds will be on deposit in your
account at an Automated Clearing House member bank ordinarily two days
after receipt of the redemption request or, at your request, paid by check
(maximum $150,000 per day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account not more than $250,000 within
any 30-day period.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of shares by calling 1-800-554-4611 or,
if you are calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee by the close of its business day (normally
5:15 p.m., New York time) are effected at the price determined as of the
close of trading on the floor of the New York Stock Exchange on that day.
Otherwise, the shares will be redeemed at the next determined net asset
value. It is the responsibility of the Selected Dealer to transmit orders
on a timely basis. The Selected Dealer may charge the shareholder a fee
for executing the order. This repurchase arrangement is discretionary and
may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- Upon written request, you may reinvest up
to the number of Class A or Class B shares you have redeemed, within 45
days of redemption, at the then-prevailing net asset value without a
sales load, or reinstate your account for the purpose of exercising Fund
Exchanges. Upon reinvestment, with respect to Class B shares, or Class A
shares if such
Page 24
shares were subject to a CDSC, the shareholder's account will be
credited with an amount equal to the CDSC previously paid upon redemption
of the Class A or Class B shares reinvested. The Reinvestment Privilege
may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class B and Class C shares are subject to a Distribution Plan
and Class A, Class B and Class C shares are subject to a Shareholder
Services Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the 1940 Act, the Fund pays the Distributor for distributing the
Fund's Class B and Class C shares at an annual rate of .50 of 1% of the
value of the average daily net assets of Class B and .75 of 1% of the
value of the average daily net assets of Class C.
SHAREHOLDER SERVICES PLAN
Under the Shareholder Services Plan, the Fund pays the
Distributor for the provision of certain services to the holders of Class
A, Class B and Class C shares a fee at the annual rate of .25 of 1% of
the value of the average daily net assets of each such Class. 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. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines
the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net
investment income on each day the New York Stock Exchange is open for
business. Fund shares begin earning income dividends on the day
immediately available funds ("Federal Funds" (monies of member banks
within the Federal Reserve System which are held on deposit at a Federal
Reserve Bank)) are received by the Transfer Agent in written or
telegraphic form. If a purchase order is not accompanied by remittance in
Federal Funds, there may be a delay between the time the purchase order
becomes effective and the time the shares purchased start earning
dividends. If your payment is not made in Federal Funds, it must be
converted into Federal Funds. This usually occurs within one business day
of receipt of a bank wire and within two business days of receipt of a
check drawn on a member bank of the Federal Reserve System. Checks drawn
on banks which are not members of the Federal Reserve System may take
considerably longer to convert into Federal Funds.
Dividends usually are paid on the last calendar day of each
month and are automatically reinvested in additional shares of the Class
from which they were paid at net asset value without a sales load or, at
your option, paid in cash. The Fund's earnings for Saturdays, Sundays and
holidays are declared as dividends on the preceding 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. If you are an omnibus accountholder and
indicate in a partial redemption request that a portion of any accrued
dividends to which such account is entitled belongs to an underlying
accountholder who has redeemed all shares in his or her account, such
portion of the accrued dividends 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 1940 Act. The Fund will not make
distributions from net realized securi-
Page 25
ties gains unless capital loss carryovers, if any, have been utilized or
have expired. You may choose whether to receive dividends and
distributions in cash or to reinvest in additional Fund shares of the
same Class from which they were paid at net asset value without a sales
load. All expenses are accrued daily and deducted before declaration of
dividends to investors. Dividends paid by each Class will be calculated
at the same time and in the same manner and will be of the same amount,
except that the expenses attributable solely to a particular Class will
be borne exclusively by such Class. Class B and Class C shares will
receive lower per share dividends than Class A shares because of the
higher expenses borne by the relevant Class. See "Fee Table."
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 and distributions derived from
Taxable Investments, from income or gain derived from securities
transactions and from the use of certain of the investment techniques
described under "Appendix -- Investment Techniques," will be subject to
Federal income tax. The Fund anticipates that a substantial portion of
the dividends paid by it will not be subject to Federal, New York State
or New York City personal income taxes. To the extent that you are
obligated to pay state or local taxes outside of the State of New York,
dividends earned by an investment in the Fund may represent taxable
income. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and gains
from the sale or other disposition of certain market discount bonds, paid
by the Fund are subject to Federal income tax as ordinary income whether
or not reinvested. 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 subject to Federal income tax as long-term capital gains 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, or (ii) a factor in
determining the extent to which a shareholder's Social Security benefits
are taxable. If the Fund purchases such securities, the portion of the
Fund's dividends related thereto will not necessarily be tax exempt to an
investor who is subject to the alternative minimum tax and/or tax on
Social Security benefits and may cause an investor to be subject to such
taxes.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year. These statements set forth the dollar amount of income exempt
from Federal tax and the dollar amount, if any, subject to Federal tax.
These dollar amounts will vary depending on the size and length of time
of your investment in the Fund. If the Fund pays dividends derived from
taxable income, it intends to designate as taxable the same percentage of
the day's dividends as the actual taxable income earned on that day bears
to total income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares if you exchange your Class A shares
for shares of another fund advised by The
Page 26
Dreyfus Corporation within 91 days of purchase and such other fund reduces
or eliminates its otherwise applicable sales load for the purpose of the
exchange. In this case, the amount of the sales load charge for Class A
shares, up to the amount of the reduction of the sales load charged in the
exchange, is not included in the basis of your Class A shares for purposes
of computing gain or loss on the exchange, and instead is added to the
basis of the fund shares received on the exchange.
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.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of taxable
dividends, distributions from net realized securities gains and the
proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect
or if a shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified
for the fiscal year ended November 30, 1996 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income tax
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. The Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains.
You should consult your tax adviser regarding specific
questions as to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of
shares may be calculated on several bases, including current yield, tax
equivalent yield, average annual total return and/or total return. These
total return figures reflect changes in the price of the shares and
assume that any income dividends and/or capital gain distributions made
by the Fund during the measuring period were reinvested in shares of the
same Class. Class A total return figures include the maximum initial
sales charge and Class B and Class C total return figures include any
applicable CDSC. These figures also take into account any applicable
service and distribution fees. As a result, at any given time, the
performance of Class B and Class C should be expected to be lower than
that of Class A. Performance for each Class will be calculated
separately.
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 (or maximum offering price in the case of Class A) 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 accor-
Page 27
dance 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 average annual total return for one, five
and ten year periods, or for shorter periods depending upon the length of
time during which the Fund has operated.
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 (maximum offering price in the case of Class A) 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. Total return also may be calculated by
using the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the
period for Class A shares or without giving effect to any applicable CDSC
at the end of the period for Class B or Class C shares. Calculations
based on the net asset value per share do not reflect the deduction of
the applicable sales charge on Class A shares, which, if reflected, would
reduce the performance quoted.
Performance will vary from time to time and past results are
not necessarily representative of future results. Investors 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
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 organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust (the "Trust Agreement") dated June 4,
1986, and commenced operations on December 31, 1986. Before July 2, 1990,
the Fund's name was Premier New York Tax Exempt Bond Fund and before
April 1, 1997, its name was Premier New York Municipal Bond Fund. The
Fund is authorized to issue an unlimited number of shares of beneficial
interest, par value $.001 per
Page 28
share. The Fund's shares are classified into three classes _ Class A,
Class B and Class C. Each share has one vote and shareholders will vote
in the aggregate and not by class except as otherwise required by law.
Only holders of Class B or Class C shares, as the case may be, will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or
executed by the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations, a possibility which management
believes is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to reimbursement
from the general assets of the Fund. The Fund intends to conduct its
operations in such a way so as to avoid, as far as possible, ultimate
liability of the shareholders for liabilities of the Fund. As discussed
under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove
Trustees.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144.
Page 29
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund may borrow money from banks, but 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 value of the Fund's total assets, the Fund will not make
any additional investments.
SHORT-SELLING -- In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of that
security. To complete the transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. The price at such time may be more or less than the price at
which the security was sold by the Fund, which would result in a loss or
gain, respectively.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a
national securities exchange to the extent of more than 5% of the value
of the Fund's net assets. The Fund may not make a short sale which
results in the Fund having sold short in the aggregate more than 5% of
the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in order to
hedge an unrealized gain on the security. At no time will the Fund have
more than 15% of the value of its net assets in deposits on short sales
against the box.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations
and Risks -- Use of Derivatives." These instruments and certain related
risks are described more specifically under "Investment Objective and
Management Policies -- Management Policies -- Derivatives" in the
Statement of Additional Information.
Derivatives can be volatile and involve various types and
degrees of risk, depending upon the characteristics of the particular
Derivative and the portfolio as a whole. Derivatives permit the Fund to
increase or decrease the level of risk, or change the character of the
risk, to which its portfolio is exposed in much the same way as the Fund
can increase or decrease the level of risk, or change the character of
the risk, of its portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inappropriate times or
judges the market conditions incorrectly, such investments may lower the
Fund's return or result in a loss. The Fund also could experience losses
if its Derivatives were poorly correlated with its other investments, or
if the Fund were unable to liquidate its position because of an illiquid
secondary market. The market for many Derivatives is, or suddenly can
become, illiquid. Changes in liquidity may result in significant, rapid
and unpredictable changes in the prices for Derivatives.
Although the Fund is not a commodity pool, certain
Derivatives subject the Fund to the rules of the Commodity Futures
Trading Commission which the limit the extent to which the Fund can
invest in such Derivatives. The Fund may invest in futures contracts and
options
Page 30
with respect thereto for hedging purposes without limit. However,
the Fund may not invest in such contracts and options for other purposes
if the sum of the amount of initial margin deposits and premiums paid for
unexpired options with respect to such contracts, other than bona fide
hedging purposes, exceeds 5% of the liquidation value of the Fund's
assets, after taking into account unrealized profits and unrealized
losses on such contracts and options; provided, however, that in the case
of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5% limitation.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call and put options. The Fund may write
(i.e., sell) covered call and put option contracts to the extent of 20%
of the value of its net assets at the time of such option contracts are
written. When required by the Securities and Exchange Commission, the Fund
will set aside permissible liquid assets in a segregated account to cover
its obligations relating to its transactions in Derivatives. To maintain
this required cover, the Fund may have to sell portfolio securities at
disadvantageous prices or times since it may not be possible to liquidate
a Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to
be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned securities which affords the Fund an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed
33 1/3 % of the value of the Fund's total assets, and the Fund will
receive collateral consisting of cash, U. S. Government securities or
irrevocable letters of credit which will be maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities. Such loans are terminable 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.
FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations
and other securities on a forward commitment or when-issued basis, which
means delivery and payment take place a number of days after the date of
the commitment to purchase. The payment obligation and the interest rate
receivable on a forward commitment or when-issued security are fixed when
the Fund enters into the commitment, but the Fund does not make payment
until it receives delivery from the counterparty. The Fund will commit to
purchase such securities only with the intention of actually acquiring
the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. A segregated account of the
Fund consisting of permissible liquid assets at least equal at all times
to the amount of the commitments will be established and maintained at
the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and
variable rate demand notes and bonds, which are tax exempt obligations
ordinarily having stated maturities in excess of one year, but which
permit the holder to demand payment of principal at any time or at
specified intervals. Variable rate demand notes include master demand
notes which are obligations that permit the Fund to invest fluctuating
amounts at varying rates of interest, pursuant to direct arrangements
between the Fund, as lender, and the borrower. These obligations permit
daily changes in the amount borrowed. Because these obligations are
direct lending arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and there
generally is no established secondary market for these obligations,
although they are redeemable at face value, plus
Page 31
accrued interest. Accordingly, where these obligations are not secured by
letters of credit or other credit support arrangements, the Fund's right
to redeem is dependent on the ability of the borrower to pay principal
and interest on demand. Each obligation purchased by the Fund will meet
the quality criteria established for the purchase of Municipal
Obligations.
TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from
financial institutions participation interests in Municipal Obligations
(such as industrial development bonds and municipal lease/purchase
agreements). A participation interest gives the Fund an undivided
interest in the Municipal Obligation in the proportion that the Fund's
participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating or
variable rates of interest. If the participation interest is unrated, it
will be backed by an irrevocable letter of credit or guarantee of a bank
that the Fund's Board has determined meets prescribed quality standards
for banks, or the payment obligation otherwise will be collateralized by
U.S. Government securities. For certain participation interests, the Fund
will have the right to demand payment, on not more than seven days'
notice, for all or any part of the Fund's participation interest in the
Municipal Obligation, plus accrued interest. As to these instruments, the
Fund intends to exercise its right to demand payment only upon a default
under the terms of the Municipal Obligation, as needed to provide
liquidity to meet redemptions, or to maintain or improve the quality of
its investment portfolio.
TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A
tender option bond is a Municipal Obligation (generally held pursuant to
a custodial arrangement) having a relatively long maturity and bearing
interest at a fixed rate substantially higher than prevailing short-term
tax exempt rates, that has been coupled with the agreement of a third
party, such as a bank, broker-dealer or other financial institution,
pursuant to which such institution grants the security holders the
option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic fees
equal to the difference between the Municipal Obligation's fixed coupon
rate and the rate, as determined by a remarketing or similar agent at or
near the commencement of such period, that would cause the securities,
coupled with the tender option, to trade at par on the date of such
determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the
prevailing short-term tax exempt rate. The Dreyfus Corporation, on behalf
of the Fund, will consider on an ongoing basis the creditworthiness of
the issuer of the underlying Municipal 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.
CUSTODIAL RECEIPTS -- The Fund may purchase custodial receipts
representing the right to receive certain future principal and interest
payments on Municipal Obligations which underlie the custodial receipts.
A number of different arrangements are possible. In a typical custodial
receipt arrangement, an issuer or a third party owner of Municipal
Obligations deposits such obligations with a custodian in exchange for
two classes of custodial receipts. The two classes have different
characteristics, but, in each case, payments on the two classes are based
on payments received on the underlying Municipal Obligations. One class
has the characteristics of a typical auction rate security, where at
specified intervals its interest rate is adjusted, and ownership changes,
based on an auction mechanism. This class's interest rate generally is
expected to be below the coupon rate of the underlying Municipal
Obligations and generally is at a level comparable to that of a Municipal
Obligation of similar quality and
Page 32
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. In no event will the aggregate interest
paid with respect to the two classes exceed the interest paid by the
underlying Municipal Obligations. The value of the second class and
similar securities should be expected to fluctuate more than the value of
a Municipal Obligation of comparable quality and maturity and their
purchase by the Fund should increase the volatility of its net asset value
and, thus, its price per share. These custodial receipts are sold in
private placements. The Fund also may purchase directly from issuers, and
not in a private placement, Municipal Obligations having characteristics
similar to custodial receipts. These securities may be issued as part of
a multi-class offering and the interest rate on certain classes may be
subject to a cap or floor.
STAND-BY COMMITMENTS -- The Fund may acquire "stand-by commitments"
with respect to Municipal Obligations held in its portfolio. Under a
stand-by commitment, the Fund obligates a broker, dealer or bank to
repurchase, at the Fund's option, specified securities at a specified
price and, in this respect, stand-by commitments are comparable to put
options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will
acquire stand-by commitments solely to facilitate portfolio liquidity and
does not intend to exercise its rights thereunder for trading purposes.
The Fund may pay for stand-by commitments if such action is deemed
necessary, thus increasing to a degree the cost of the underlying
Municipal Obligation and similarly decreasing such security's yield to
investors. Gains realized in connection with stand-by commitments will be
taxable. The Fund also may acquire call options on specific Municipal
Obligations. The Fund generally would purchase these call options to
protect the Fund from the issuer of the related Municipal Obligation
redeeming, or other holder of the call option from calling away, the
Municipal Obligation before maturity. The sale by the Fund of a call
option that it owns on a specific Municipal Obligation could result in
the receipt of taxable income by the Fund.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon
securities which are debt securities issued or sold at a discount from
their face value which do not entitle the holder to any periodic payment
of interest prior to maturity or a specified redemption date (or cash
payment date). The amount of the discount varies depending on the time
remaining until maturity or cash payment date, prevailing interest rates,
liquidity of the security and perceived credit quality of the issuer. Zero
coupon securities 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 interests in such stripped debt
obligations and coupons. The market prices of zero coupon securities
generally are more volatile than the market prices of securities that pay
interest periodically and are likely to respond to a greater degree to
changes in interest rates than non-zero coupon securities having similar
maturities and credit qualities.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, and repurchase agreements
providing for settlement in more than seven days after notice. As to
these securities, the Fund is subject to a risk that should the Fund
desire to sell them when a ready buyer is not available at a price the
Fund deems representative of their value, the value of the Fund's net
assets could be adversely affected.
Page 33
TAXABLE INVESTMENTS -- From time to time, on a temporary basis other
than for temporary defensive purposes (but not to exceed 20% of the value
of the Fund's net assets) or for temporary defensive purposes, the Fund
may invest in taxable short-term investments ("Taxable Investments")
consisting of: notes of issuers having, at the time of purchase, a
quality rating within the two highest grades of Moody's, S&P or Fitch;
obligations of the U.S. Government, its agencies or instrumentalities;
commercial paper rated not lower than P-1 by Moody's, A-1 by S&P or F-1
by Fitch; certificates of deposit of U.S. domestic banks, including
foreign branches of domestic banks, with assets of one billion dollars or
more; time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors.
See "Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net
assets be invested in Taxable Investments. When the Fund has adopted a
temporary defensive position, including when acceptable New York
Municipal Obligations are unavailable for investment by the Fund, in
excess of 35% of the Fund's net assets may be invested in securities that
are not exempt from New York State and New York City income taxes. Under
normal market conditions, the Fund anticipates that not more than 5% of
the value of its total assets will be invested in any one category of
Taxable Investments. Taxable Investments are more fully described in the
Statement of Additional Information, to which reference hereby is made.
RATINGS -- Bonds rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Bonds
rated BB by S&P are regarded as having predominantly speculative
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face
major ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Bonds rated BB by Fitch are
considered speculative and the payment of principal and interest may be
affected at any time by adverse economic changes. Bonds rated C by Moody's
are regarded as having extremely poor prospects of ever attaining any real
investment standing. Bonds rated D by S&P are in default and the payment
of interest and/or repayment of principal is in arrears. Bonds rated DDD,
DD or D by Fitch are in actual or imminent default, are extremely
speculative and should be valued on the basis of their ultimate recovery
value in liquidation or reorganization of the issuer; DDD represents the
highest potential for recovery of such bonds; and D represents the lowest
potential for recovery. Such bonds, though high yielding, are
characterized by great risk. See "Appendix B" in the Statement of
Additional Information for a general description of Moody's, S&P and
Fitch ratings of Municipal Obligations.
The ratings of Moody's, S&P and Fitch represent their
opinions as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that ratings are
relative and subjective and, although ratings may be useful in evaluating
the safety of interest and principal payments, they do not evaluate the
market value risk of these bonds. Although these ratings may be an
initial 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.
Page 34
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.
Page 35
Copy Rights 1997 Dreyfus Service Corporation 021p040197
Page 36
_____________________________________________________________________________
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
CLASS A, CLASS B AND CLASS C SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
APRIL 1, 1997
_____________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier New York Municipal Bond Fund (the "Fund"), dated April 1,
1997, 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.
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-12
Management Agreement........................................B-16
Purchase of Shares..........................................B-18
Distribution Plan and Shareholder Services Plan.............B-19
Redemption of Shares........................................B-21
Shareholder Services........................................B-22
Determination of Net Asset Value............................B-25
Dividends, Distributions and Taxes..........................B-26
Portfolio Transactions......................................B-27
Performance Information.....................................B-28
Information About the Fund..................................B-30
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors.......................B-30
Appendix A..................................................B-32
Appendix B..................................................B-45
Financial Statements........................................B-54
Report of Independent Auditors..............................B-63
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the Fund"
and "Appendix."
Portfolio Securities
Municipal Obligations. The average distribution of investments (at
value) in Municipal Obligations by ratings for the fiscal year ended
November 30, 1996, computed on a monthly basis, was as follows:
<TABLE>
Fitch Moody's Standard
Investors Investors & Poor's
Service, L.P. Service, Inc. Ratings Group Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
- ---------- ------------- -------------- -----------
<S> <C> <C> <C>
AAA Aaa AAA 30.9%
AA Aa AA 11.3
A A A 27.0
BBB Baa BBB 23.9
BB Ba BB 3.4
F-1 MIG 1/P-1 SP-1/A-1 1.5
Not Rated Not Rated Not Rated 2.0*
------
100.0%
=======
</TABLE>
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* Included under the Not Rated category are securities comprising 2.0% 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 Baa/BBB rating
category.
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 obligations 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.
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,
including fees paid under the Fund's Shareholder Services Plan and, with
respect to Class B and Class C shares, the Distribution Plan, 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.
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
Fund's 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.
Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased by
the Fund pursuant to Rule 144A under the Securities Act of 1933, as amended,
the Fund intends to treat such securities as liquid securities in accordance
with procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board has directed the Manager to monitor
carefully the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other
relevant information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to Rule
144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in the Fund's investments during such
period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the U.S. Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest rates may fluctuate based
on generally recognized reference rates or the relationship of rates. While
the U.S. Government provides financial support to such U.S. Government
sponsored agencies or instrumentalities, no assurance can be given that it
will always do so, since it is not so obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in excess
of one billion dollars. Time deposits which may be held by the Fund will not
benefit from insurance from 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.
In a repurchase agreement, the Fund buys a security, and at the time of
sale, the seller agrees to repurchase the obligation at a mutually agreed
upon time and price (usually within seven days). The repurchase agreement
thereby determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. The Fund's custodian or subcustodian will have custody of, and
will hold in a segregated account, securities acquired by the Fund under a
repurchase agreement. Repurchase agreements are considered by the staff of
the Securities and Exchange Commission to be loans by the Fund. In an
attempt to reduce the risk of incurring a loss on a repurchase agreement, the
Fund will enter into repurchase agreements only with domestic banks with
total assets in excess of $1 billion, or primary government securities
dealers reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. Repurchase agreements could
involve risks in the event of a default or insolvency of the other party to
the agreement, including possible delays or restrictions upon the Fund's
ability to dispose of the underlying securities.
Management Policies
Short-Selling. Until the Fund closes its short position or replaces the
borrowed security, it will: (a) maintain a segregated account, containing
permissible liquid assets, at such a level that the amount deposited in the
account plus the amount deposited with the broker as collateral always equals
the current value of the security sold short; or (b) otherwise cover its
short position.
Lending Portfolio Securities. In connection with its securities lending
transactions, the Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part
of the interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must be
able to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in connection
with the loan.
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest than
"traditional" securities would.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of counterparties
to over-the-counter Derivatives in the same manner as it would review the
credit quality of a security to be purchased by the Fund. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the other
party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.
Futures Transactions--In General. The Fund may enter into futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade. Engaging in
these transactions involves risk of loss to the Fund which could adversely
affect the value of the Fund's net assets. Although the Fund intends to
purchase or sell futures contracts only if there is an active market for such
contracts, no assurance can be given that a liquid market will exist for any
particular contract at any particular time. Many futures exchanges and
boards of trade limit the amount of fluctuation permitted in futures contract
prices during a single trading day. Once the daily limit has been reached in
a particular contract, no trades may be made that day at a price beyond that
limit or trading may be suspended for specified periods during the trading
day. Futures contract prices could move to the limit for several consecutive
trading days with little or no trading, thereby preventing prompt liquidation
of futures positions and potentially subjecting the Fund to substantial
losses.
Successful use of futures by the Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant
market, and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if the Fund uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit of
the increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell securities
to meet daily variation margin requirements. The Fund may have to sell such
securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, the Fund may be required to segregate permissible liquid
assets in connection with its commodities transactions in an amount generally
equal to the value of the underlying commodity. The segregation of such
assets will have the effect of limiting the Fund's ability otherwise to
invest those assets.
Specific Futures Transactions. The Fund may purchase and sell interest rate
futures contracts. An interest rate future obligates the Fund to purchase or
sell an amount of a specific debt security at a future date at a specific
price.
Options--In General. The Fund may purchase and write (i.e., sell) call or
put options with respect to interest rate futures contracts. A call option
gives the purchaser of the option the right to buy, and obligates the writer
to sell, the underlying security or securities at the exercise price at any
time during the option period, or at a specific date. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price at
any time during the option period, or at a specific date.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may cease
to exist for a variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow, or other unforeseen events, at
times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading rotations,
restrictions on certain types of orders or trading halts or suspensions in
one or more options. There can be no assurance that similar events, or
events that may otherwise interfere with the timely execution of customers'
orders, will not recur. In such event, it might not be possible to effect
closing transactions in particular options.
Successful use by the Fund of options will be subject to the Manager's
ability to predict correctly movements in interest rates. To the extent the
Manager's predictions are incorrect, the Fund may incur losses.
Futures Developments. The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by the
Fund or which are not currently available but which may be developed, to the
extent such opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Before entering into such
transactions or making any such investment, the Fund will provide appropriate
disclosure in its Prospectus or Statement of Additional Information.
Forward Commitments. Municipal Obligations and other securities
purchased on a forward commitment or when-issued basis are subject to changes
in value (generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based upon
the public's perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest rates. Securities purchased on
a when-issued basis may expose the Fund to risks because they may experience
such fluctuations prior to their actual delivery. Purchasing securities on a
when-issued basis can involve the additional risk that the yield available in
the market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a when-issued
basis when the Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net asset
value per share.
Investment Considerations and Risks
Investing in New York Municipal Obligations. Each investor should
consider carefully the special risks inherent in the Fund's investment in New
York Municipal Obligations. These risks result from the financial condition
of New York State and certain of its public bodies and municipalities, and
New York City. Beginning in early 1975, New York State, New York City and
other State entities faced serious financial difficulties which jeopardized
the credit standing and impaired the borrowing abilities of such entities and
contributed to high interest rates on, and lower market prices for, debt
obligations issued by them. A recurrence of such financial difficulties or a
failure of certain financial recovery programs could result in defaults or
declines in the market values of various New York Municipal Obligations in
which the Fund may invest. If there should be a default or other financial
crisis relating to New York State, New York City, a State or City agency, or
a State municipality, the market value and marketability of outstanding New
York Municipal Obligations in the Fund's portfolio and the interest income to
the Fund could be adversely affected. Moreover, the national recession and
the significant slowdown in the New York and regional economies in the early
1990's added substantial uncertainty to estimates of the State's tax
revenues, which, in part, caused the State to incur cash-basis operating
deficits in the General Fund and issue deficit notes during the fiscal
periods 1989 through 1992. The State's financial operations have improved,
however, during recent fiscal years. For its fiscal periods 1993 through
1996, the State recorded balanced budgets on a cash basis, with substantial
fund balances in the General Fund in fiscal 1992-93 and 1993-94 and smaller
fund balances in fiscal 1994-95 and 1995-96. As of January 1997, the State
projected an operating surplus in the General Fund on fiscal 1996-97. There
can be no assurance that New York will not face substantial potential budget
gaps in future years. In January 1992, Moody's lowered from A to Baa1 the
ratings on certain appropriation-backed debt of New York State and its
agencies. The State's general obligation, State-guaranteed and New York
State Local Government Assistance Corporation bonds continue to be rated A by
Moody's. In January 1992, S&P lowered from A to A- its ratings of New York
State general obligation bonds and stated that it continues to assess the
ratings outlook as negative. The ratings of various agency debt, State moral
obligations, contractual obligations, lease purchase obligations and State
guarantees also were lowered. In February 1991, Moody's lowered its rating
on New York City's general obligation bonds from A to Baa1 and in July 1995,
S&P lowered its rating on such bonds from A- to BBB+. The rating changes
reflected the rating agencies' concerns about the financial condition of New
York State and City, the heavy debt load of the State and City, and economic
uncertainties in the region. Investors should review "Appendix A" which more
fully sets forth these and other risk factors.
Lower Rated Bonds. The Fund is permitted to invest in securities rated
Ba by Moody's or BB by S&P or Fitch and as low as the lowest rating assigned
by Moody's, S&P or Fitch. Such bonds, though higher yielding, are
characterized by risk. See "Description of the Fund--Investment
Considerations and Risks--Lower Rated Bonds" in the Prospectus for a
discussion of certain risks and "Appendix B" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of these bonds
tend to be more sensitive to economic conditions than are higher rated
securities. These bonds generally are considered by Moody's, S&P and Fitch
to be predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation and generally
will involve more credit risk than securities in the higher rating
categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally is
not as liquid as the secondary market for higher rated securities. The lack
of a liquid secondary market may have an adverse impact on market price and
yield and the Fund's ability to dispose of particular issues when necessary
to meet the Fund's liquidity needs or in response to a specific economic
event such as a deterioration in the creditworthiness of the issuer. The
lack of a liquid secondary market for certain securities also may make it
more difficult for the Fund to obtain accurate market quotations for purposes
of valuing the Fund's portfolio and calculating its net asset value. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of these securities. In such
cases, judgment may play a greater role in valuation because less reliable
objective data may be available.
These bonds may be particularly susceptible to economic downturns. It
is likely that any economic recession could disrupt severely the market for
such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
The credit risk factors pertaining to lower rated securities also apply
to lower rated zero coupon bonds, in which the Fund may invest up to 5% of
its total assets. Zero coupon bonds carry an additional risk in that, unlike
bonds which pay interest throughout the period to maturity, the Fund will
realize no cash until the cash payment date unless a portion of such
securities are sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. See "Dividends, Distribution and Taxes."
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 10 as
fundamental policies, which cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. Investment
restriction number 11 is not a fundamental policy and may be changed by vote
of a majority of the Fund's Board members at any time. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus and those
arising out of transactions in futures and options.
2. Borrow money, except from banks 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) based on 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 value of the Fund's
total assets, the Fund will not make any additional investments.
Transactions in futures and options and the entry into short sales
transactions do not involve any borrowing for purposes of this restriction.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes. The
deposit of assets in escrow in connection with the writing of covered put and
call options and the purchase of securities on a when-issued or
delayed-delivery basis and collateral arrangements with respect to initial or
variation margin for futures contracts and options on futures contracts or
indices will not be deemed to be pledges of the Fund's assets.
4. Purchase securities on margin, but the Fund may make margin
deposits in connection with transactions in futures, including those related
to indices, and options on futures or indices.
5. 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.
6. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests, but
this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein, or prevent the Fund from
purchasing and selling futures contracts, including those relating to
indices, and options on futures contracts or indices.
7. Make loans to others, except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and in
the Fund's Prospectus; 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 Trustees.
8. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
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.
9. Invest in companies for the purpose of exercising control.
10. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
11. 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 that are not subject to the
demand feature described in the Fund's Prospectus and floating and variable
rate demand obligations as to which no secondary market exists and the Fund
cannot exercise the demand feature described in the Fund's Prospectus on less
than seven days' notice), if, in the aggregate, more than 15% of the value of
its net assets would be so invested.
For purposes of Investment Restriction No. 8, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together as
an "industry."
If a percentage restriction is adhered to at the time of investment, a
later increase in percentage resulting from a change in values or assets will
not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best interest
of the Fund and its shareholders, the Fund reserves the right to revoke the
commitment by terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below. Each Board member who is deemed to be an "interested person" of
the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Fund
CLIFFORD L. ALEXANDER, JR., Board Member. President of Alexander &
Associates, Inc., a management consulting firm. From 1977 to 1981, Mr.
Alexander served as Secretary of the Army and Chairman of the Board of
the Panama Canal Company, and from 1975 to 1977, he was a member of the
Washington, D.C. law firm of Verner, Liipfert, Bernhard, McPherson and
Alexander. He is a director of American Home Products Corporation,
Cognizant Corporation, a service provider of marketing information and
information technology, The Dun & Bradstreet Corporation, MCI
Communications Corporation, Mutual of America Life Insurance Company,
and TLC Beatrice International Holdings, Inc. He is 63 years old and
his address is 400 C Street, N.E., Washington, D.C. 20002.
PEGGY C. DAVIS, Board Member. Shad Professor of Law, New York University
School of Law. Professor Davis has been a member of the New York
University law faculty since 1983. Prior to that time, she served for
three years as a judge in the courts of New York State; was engaged for
eight years in the practice of law, working in both corporate and non-
profit sectors; and served for two years as a criminal justice
administrator in the government of the City of New York. She writes and
teaches in the fields of evidence, constitutional theory, family law,
social sciences and the law, legal process and professional methodology
and training. She is 54 years old and her address is c/o New York
University School of Law, 249 Sullivan Street, New York, New York 10012.
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He also is
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads and buttons, Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware, and Staffing Resources,
Inc. For more than five years prior to January 1995, he was President,
a director and, until August 1994, Chief Operating Officer of the
Manager and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until August
24, 1994, the Fund's distributor. From August 1994 to December 31,
1994, he was a director of Mellon Bank Corporation. He is 53 years old
and his address is 200 Park Avenue, New York, New York 10166.
ERNEST KAFKA, Board Member. A physician engaged in private practice
specializing in the psychoanalysis of adults and adolescents. Since
1981, he has served as an Instructor at the New York Psychoanalytic
Institute and, prior thereto, held other teaching positions. He is
Associate Clinical Professor of Psychiatry at Cornell Medical School.
For more than the past five years, Dr. Kafka has held numerous
administrative positions, including President of the New York
Psychoanalytic Society, and has published many articles on subjects in
the field of psychoanalysis. He is 64 years old and his address is 23
East 92nd Street, New York, New York 10128.
SAUL B. KLAMAN, Board Member. Chairman and Chief Executive Officer of SBK
Associates, which provides research and consulting services to financial
institutions. Dr. Klaman was President of the National Association of
Mutual Savings Banks until November 1983, President of the National
Council of Savings Institutions until June 1985, Vice Chairman of
Golembe Associates and BEI Golembe, Inc. until 1989, and Chairman
Emeritus of BEI Golembe, Inc. until November 1992. He also served as an
Economist to the Board of Governors of the Federal Reserve System and on
several Presidential Commissions, and has held numerous consulting and
advisory positions in the fields of economics and housing finance. He
is 77 years old and his address is 431-B Dedham Street, The Gables,
Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Board Member. President of Lincoln Center for the
Performing Arts, Inc. Mr. Leventhal was Deputy Mayor for Operations of
New York City from September 1979 to March 1984 and Commissioner of the
Department of Housing Preservation and Development of New York City from
February 1978 to September 1979. Mr. Leventhal was an associate and
then a member of the New York law firm of Poletti Freidin Prashker
Feldman and Gartner from 1974 to 1978. He was Commissioner of Rent and
Housing Maintenance for New York City from 1972 to 1973. Mr. Leventhal
also serves as Chairman of Citizens Union, an organization which strives
to reform and modernize city and state governments. He is 54 years old
and his address is 70 Lincoln Center Plaza, New York, New York 10023-
6583.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the Board
members of the Fund who are not "interested persons" of the Fund, as defined
in the 1940 Act, will be selected and nominated by the Board members who are
not "interested persons" of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund for the fiscal year ended
November 30, 1996, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parenthesis next to each Board member's total compensation) for the year
ended December 31, 1996, were as follows:
<TABLE>
Total Compensation
Aggregate from Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund* Board Member
- --------------- ------------------- -------------------
<S> <C> <C>
Clifford L. Alexander, Jr. $2,500 $ 82,436 (17)
Peggy C. Davis $2,500 $ 73,084 (15)
Joseph S. DiMartino $3,125 $517,076 (94)
Ernest Kafka $2,500 $ 69,584 (15)
Saul B. Klaman $2,500 $ 73,584 (15)
Nathan Leventhal $2,250 $ 71,084 (15)
_________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $972 for all Board members as a group.
</TABLE>
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
He is 32 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company, Inc.
He is 40 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by the Manager.
From December 1989 through November 1996, he was employed with GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as Director of the GE Investment Services. He is 35 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed as
an Associate Examiner at the National Association of Securities Dealers,
Inc. He is 27 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. She is 27 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on March 10, 1997.
The following entities owned of record 5% or more of the Fund's shares
outstanding as of March 10, 1997: Class A - BHC Securities, 2005 Market St.,
Fl. 1200, Philadelphia, PA 19103-7042 - 30.74%; and Class C - Yusif and
Hafiza Mujawalla JT WROS, 1089 Lynn Pl., Woodmere, N.Y. 11598-1323 - 95.22%.
A shareholder who beneficially owned, directly or indirectly, 25% or more of
the Fund's voting securities may be deemed to be a "control person" (as
defined in the 1940 Act) of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of the
Fund, provided that in either event the continuance also is approved by a
majority of the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Agreement was
approved by shareholders on August 3, 1994 and was last approved by the
Fund's Board, including a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of any party to the
Agreement, at a meeting held on July 17, 1996. The Agreement is terminable
without penalty, on 60 days' notice, by the Fund's Board or by vote of the
holders of a majority of the Fund's 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 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash,
Vice Chairman-Distribution and a director; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; William F. Glavin, Jr., Vice
President-Corporate Development; Mark N. Jacobs, Vice President, General
Counsel and Secretary; Patrice M. Kozlowski, Vice President-Corporate
Communications; Mary Beth Leibig, Vice President-Human Resources; Jeffrey N.
Nachman, Vice President-Mutual Fund Accounting; Andrew S. Wasser, Vice
President-Information Services; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides the
Fund with portfolio managers who are authorized by the Fund's Board to
execute purchases and sales of securities. The Fund's portfolio managers are
Joseph P. Darcy, A. Paul Disdier, Douglas J. Gaylor, Karen M. Hand, Stephen
C. Kris, Richard J. Moynihan, Jill C. Shaffro, 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 and for other funds advised by the Manager.
All purchases and sales are reported for the Board's review at the meeting
subsequent to such transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
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 without limitation, the following: taxes,
interest, loan commitment fees, interest and distributions paid on securities
sold short, brokerage fees and commissions, if any, fees of Board members who
are not officers, directors or employees or holders of 5% or more of the
outstanding voting securities of the Manager, Securities and Exchange
Commission fees and 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 the
Fund's existence, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders, costs of
shareholders' reports and meetings and any extraordinary expenses. In
addition, shares of each Class are subject to an annual service fee and Class
B and Class C shares are subject to an annual distribution fee. See
"Distribution Plan and Shareholder Services Plan."
As compensation for the Manager's services to the Fund, the Fund has
agreed to pay the Manager a monthly management fee at the annual rate of .55
of 1% of the value of the Fund's average daily net assets. For the fiscal
years ended November 30, 1994, 1995 and 1996, the management fees payable
amounted to $1,185,186, $1,118,961 and $1,146,191, respectively. The fee
payable for fiscal 1994 was reduced by $86,817, pursuant to an undertaking in
effect, resulting in a net fee paid to the Manager of $1,098,369 in fiscal
1994.
The Manager has agreed that if in any fiscal year the aggregate expenses
of the Fund, exclusive of taxes, brokerage fees, interest on borrowings and
(with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the payment to be made to the Manager under the
Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be, on a monthly
basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the
value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement dated August 24, 1994. The
Distributor also acts as distributor for the other funds in the Dreyfus
Premier Family of Funds, funds in the Dreyfus Family of Funds and for certain
other investment companies. In some states, certain financial institutions
effecting transactions in Fund shares may be required to register as dealers
pursuant to state law.
For the period August 24, 1994 through November 30, 1994 and for the
fiscal years ended November 30, 1995 and 1996, the Distributor retained
$8,174, $21,770 and $______, respectively, from sales loads on Class A shares
and $132,566, $192,587 and $120,860, respectively, from contingent deferred
sales charges ("CDSC") on Class B shares. For the period September 11, 1995
(commencement of initial offering) through November 30, 1996, no amount was
retained from the CDSC on Class C shares. For the period December 1, 1993
through August 23, 1994, Dreyfus Service Corporation, as the Fund's
distributor during such period, retained $50,856 from sales loads on Class A
shares, and $131,696 from CDSCs on Class B shares.
Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary purchasing
securities for a single trust estate or a single fiduciary account (including
a pension, profit-sharing or other employee benefit trust created pursuant
to a plan qualified under Section 401 of the Internal Revenue Code of 1986,
as amended (the "Code")) although more than one beneficiary is involved; or a
group of accounts established by or on behalf of the employees of an employer
or affiliated employers pursuant to an employee benefit plan or other program
(including accounts established pursuant to Sections 403(b), 408(k), and 457
of the Code); or an organized group which has been in existence for more than
six months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single dealer,
or by other means which result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares of the Fund aggregating less than $50,000 subject to the schedule of
sales charges set forth in the Fund's Prospectus at a price based upon the
net asset value of the Class A shares on November 30, 1996.
Net Asset Value per Share...................... $14.94
Per Share Sales Charge - 4.5% of offering price
(4.7% of net asset value per share)......... .70
Per Share Offering Price to the Public..........$15.64
Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt to
notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities dealer
("Selected Dealer") and his order to purchase Fund shares is paid for other
than in Federal Funds, the Selected Dealer, acting on behalf of its customer,
will complete the conversion into, or itself advance, Federal Funds generally
on the business day following receipt of the customer order. The order is
effective only when so converted and received by the Transfer Agent. An
order for the purchase of Fund shares placed by an investor with sufficient
Federal Funds or a cash balance in his brokerage account with a Selected
Dealer will become effective on the day that the order, including Federal
Funds, is received by the Transfer Agent.
TeleTransfer Privilege. TeleTransfer purchase orders may be made at any
time. Purchase orders received by 4:00 P.M., New York time, on any business
day that the Transfer Agent and the New York Stock Exchange are open for
business will be credited to the shareholder's Fund account on the next bank
business day following such purchase order. Purchase orders made after 4:00
P.M., New York time, on any business day the Transfer Agent and the New York
Stock Exchange are open for business, or orders made on Saturday, Sunday or
any Fund holiday (e.g., when the New York Stock Exchange is not open for
business), will be credited to the shareholder's Fund account on the second
bank business day following such purchase order. To qualify to use the
TeleTransfer Privilege, the initial payment for purchase of Fund shares must
be drawn on, and redemption proceeds paid to, the same bank and account as
are designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Shares--TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan and
Shareholder Services Plan."
Class B and Class C shares are subject to a Distribution Plan and Class
A, Class B and Class C shares are subject to a Shareholder Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act provides, among other things, that
an investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board has
adopted such a plan (the "Distribution Plan") with respect to Class B and
Class C shares, pursuant to which the Fund pays the Distributor for
distributing Class B and Class C shares. The Fund's Board believes that
there is a reasonable likelihood that the Distribution Plan will benefit the
Fund and holders of Class B and Class C shares.
A quarterly report of the amounts expended under the Distribution Plan,
and the purposes for which such expenditures were incurred, must be made to
the Board for its review. In addition, the Distribution Plan provides that
it may not be amended to increase materially the costs which holders of Class
B or Class C shares may bear for distribution pursuant to the Distribution
Plan without the approval of such shareholders and that other material
amendments of the Distribution Plan must be approved by the Board, and by the
Board members who are not "interested persons" (as defined in the 1940 Act)
of the Fund and have no direct or indirect financial interest in the
operation of the Distribution Plan, by vote cast in person at a meeting
called for the purpose of considering such amendments. The Distribution Plan
is subject to annual approval by such vote of the Board members cast in
person at a meeting called for the purpose of voting on the Distribution
Plan. The Distribution Plan was last so approved at a meeting held on July
17, 1996. As to each such Class, the Distribution Plan may be terminated at
any time by vote of a majority of the Board members who are not "interested
persons" and have no direct or indirect financial interest in the operation
of the Distribution Plan, or by vote of the holders of a majority of such
Class of shares.
For the fiscal year ended November 30, 1996, the Fund paid the
Distributor $347,273, with respect to Class B, and $1,062, with respect to
Class C, under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder Services
Plan, pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class A, Class B and Class C shares. 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 such shareholder accounts. Under the Shareholder Service
Plan, the Distributor may make payments to certain financial institutions
(which may include banks), Selected Dealers and other financial industry
professionals (collectively, "Service Agents") in respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Fund's Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund and who have no direct or indirect
financial interest in the operation of the Shareholder Services Plan or in
any agreements entered into in connection with the Shareholder Services Plan,
by vote cast in person at a meeting called for the purpose of considering
such amendments. The Shareholder Services Plan is subject to annual approval
by such vote of the Board members cast in person at a meeting called for the
purpose of voting on the Shareholder Services Plan. The Shareholder Services
Plan was last so approved on July 17, 1996. As to each Class of shares, the
Shareholder Services Plan is terminable at any time by vote of a majority of
the Board members who are not "interested persons" and who have no direct or
indirect financial interest in the operation of the Shareholder Services Plan
or in any agreements entered into in connection with the Shareholder Services
Plan.
For the fiscal year ended November 30, 1996, the Fund paid the
Distributor $347,006, with respect to Class A, $173,636, with respect to
Class B, and $354, with respect to Class C, under the Shareholder Services
Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
Check Redemption Privilege--Class A. An investor may indicate on the
Account Application, Shareholder Services Form or by later written request
that the Fund provide Redemption Checks ("Checks") drawn on the investor's
Fund account. Checks will be sent only to the registered owner(s) of the
account and only to the address of record. The Account Application,
Shareholder Services Form or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent, will
cause the Fund to redeem a sufficient number of full and fractional Class A
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 Class A
shares in an investor's account, the Check will be returned marked
insufficient funds. Checks should not be used to close an account.
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a TeleTransfer
transaction will be effected through the Automated Clearing House ("ACH")
system unless more prompt transmittal specifically is requested. Redemption
proceeds will be on deposit in the investor's account at an ACH member bank
ordinarily two business days after receipt of the redemption request. See
"Purchase of Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each owner
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.
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 Fund's Board
reserves the right to make payments in whole or in part in securities (which
may include non-marketable securities) or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's portfolio is
valued. If the recipient sold such securities, brokerage charges might be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund 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."
Fund Exchanges. Class A, Class B and Class C shares of the Fund may be
exchanged for shares of the respective Class of certain other funds advised
or administered by the Manager. Shares of the same Class of such funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:
A. Class A shares of funds purchased without a sales load may be
exchanged
for Class A shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
B. Class A shares of funds purchased with or without a sales load may be
exchanged without a sales load for Class A shares of other funds sold
without a sales load.
C. Class A shares of funds purchased with a sales load, Class A shares
of
funds acquired by a previous exchange from Class A shares purchased
with a sales load, and additional Class A shares acquired through
reinvestment of dividends or distributions of any such funds
(collectively referred to herein as "Purchased Shares") may be
exchanged for Class A 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.
D. Class B or Class C shares of any fund may be exchanged for the same
Class of shares of other funds without a sales load. Class B or
Class C shares of any fund exchanged for the same Class of shares of
another fund will be subject to the higher applicable CDSC of the two
exchanged funds and, for purposes of calculating CDSC rates and
conversion periods, will be deemed to have been held since the date
the Class B or Class C shares being exchanged were initially
purchased.
To accomplish an exchange under item C above, an investor's Service
Agent must notify the Transfer Agent of the investor's prior ownership of
such Class A shares and the investor's account number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic exchange instructions (including over The Dreyfus Touchr
automated telephone system) from any person representing himself or herself
to be the investor or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone exchanges
may be subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchange.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for shares of the same Class of the fund into which the exchange is
being made. For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a
Simplified Employee Pension Plan ("SEP-IRAs") with only one participant, the
minimum initial investment is $750. To exchange shares held in corporate
plans, 403(b)(7) Plans and SEP-IRAs with more than one participant, the
minimum initial investment is $100 if the plan has at least $2,500 invested
among shares of the same Class of the funds in the Dreyfus Premier Family of
Funds of Dreyfus Family of Funds. To exchange shares held in personal
retirement plans, the shares exchanged must have a current value of at least
$100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A, Class B or Class C shares of
the Fund, shares of the same Class of another fund in the Dreyfus Premier
Family of Funds or Dreyfus Family of Funds. This Privilege is available only
for existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Fund Exchanges." Enrollment in or
modification or cancellation of this Privilege is effective three business
days following notification by the investor. An investor will be notified if
his account falls below the amount designated 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.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-554-4611. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Auto-Exchange Privilege may be modified or terminated at any time upon notice
to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest automatically
dividends or dividends and capital gain distributions, if any, from the Fund
in shares of the same Class of another fund in the Dreyfus Premier Family of
Funds or Dreyfus Family of Funds of which the investor is a shareholder.
Shares of the same Class of other funds purchased pursuant to the privilege
will be purchased on the basis of relative net asset value per share as
follows:
A. Dividends and distributions paid with respect to Class A shares by a
fund may be invested without imposition of a sales load in Class A shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid with respect to Class A shares by a
fund which does not charge a sales load may be invested in Class A shares
of other funds sold with a sales load, and the applicable sales load will
be deducted.
C. Dividends and distributions paid with respect to Class A shares by a
fund which charges a sales load may be invested in Class A 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 with respect to Class B or Class C
shares by a fund may be invested without imposition of any applicable CDSC
in the same Class of shares of other funds and the relevant Class of
shares of such other funds will be subject on redemption to any applicable
CDSC.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service") approved
by the Fund's Board. When, in the judgment of the Service, quoted bid prices
for investments are readily available and are representative of the bid side
of the market, these investments are valued at the mean between the quoted
bid prices (as obtained by the Service from dealers in such securities) and
asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute a majority
of the portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices
of municipal bonds of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. The
Service may employ electronic data processing techniques and/or a matrix
system to determine valuations. The Service's procedures are reviewed by the
Fund's officers under the general supervision of the Fund's Board. Expenses
and fees, including the management fee and fees pursuant to the Shareholder
Services Plan and, with respect to the Class B and Class C shares only, the
Distribution Plan, are accrued daily and are taken into account for the
purpose of determining the net asset value of the relevant Class of shares.
Because of the difference in operating expenses incurred by each Class, the
per share net asset value of each Class will differ.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Management believes that the Fund has qualified as a "regulated
investment company" under the Code for the fiscal year ended November 30,
1996, and the Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. As a regulated investment
company, the Fund will pay no Federal income tax on net investment income and
net realized capital gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of the
Code. To qualify as a regulated investment company, the Fund must distribute
to its shareholders at least 90% of its net income (consisting of net
investment income from tax exempt obligations and taxable obligations, if
any, and net short-term capital gains), must derive less than 30% of its
annual gross income from gain on the sale of securities held for less than
three months, and must meet certain asset diversification and other
requirements. The term "regulated investment company" does not imply the
supervision of management or investment practices or policies by any
government agency.
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 the Prospectus. In
addition, the Code provides that if a shareholder has not held his 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.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, all or a portion of the
gains realized from the disposition of certain market discount bonds will be
treated as ordinary income under Section 1276 of the Code. In addition, all
or a portion of the gain realized from engaging in "conversion transactions"
may be treated as ordinary income under Section 1258 of the Code.
"Conversion transactions" are defined to include certain forward, futures,
option and "straddle" transactions, transactions marketed or sold to produce
capital gains, or transactions described in Treasury regulations to be issued
in the future.
Under Section 1256 of the Code, gain or loss the Fund realizes from
certain financial futures and options transactions will be treated as 60%
long-term capital gain or loss and 40% short-term capital gain or loss. Gain
or loss will arise upon exercise or lapse of such futures and options as well
as from closing transactions. In addition, any such futures and options
remaining unexercised at the end of the Fund's taxable year will be treated
as sold for their then fair market value, resulting in additional gain or
loss to the Fund characterized in the manner described above.
Offsetting positions held by the Fund involving certain futures and
options transactions may be considered, for tax purposes, to constitute
"straddles." "Straddles" are defined to include "offsetting positions" in
actively traded personal property. The tax treatment of "straddles" is
governed by Sections 1092 and 1258 of the Code, which, in certain
circumstances, overrides or modifies the provisions of Sections 1256 and 988
of the Code. As such, all or a portion of any short or long-term capital
gain from certain "straddle" transactions may be recharacterized to ordinary
income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in certain futures or options transactions, such "straddles" would
be characterized as "mixed straddles" if the futures or options transactions
comprising a part of such "straddles" were governed by Section 1256 of the
Code. The Fund may make one or more elections with respect to "mixed
straddles." Depending on which election is made, if any, the results to the
Fund may differ. If no election is made, to the extent the "straddle" rules
apply to positions established by the Fund, losses realized by the Fund will
be deferred to the extent of unrealized gain in the offsetting position.
Moreover, as a result of the "straddle" and conversion transaction rules,
short-term capital losses on "straddle" positions may be recharacterized as
long-term capital losses and long-term capital gains may be treated as short-
term capital gains or ordinary income.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could, under special tax rules, affect the amount, timing and
character of distributions to shareholders. For example, the Fund could be
required to take into account annually a portion of the discount (or deemed
discount) at which such securities were issued and to distribute such portion
in order to maintain its qualification as a regulated investment company. In
such case, the Fund may have to dispose of securities which it might
otherwise have continued to hold in order to generate cash to satisfy these
distribution requirements.
PORTFOLIO TRANSACTIONS
Portfolio securities 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.
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's portfolio turnover rate for the fiscal years ended November
30, 1994, 1995 and 1996 was 31.76%, 74.11% and 53.74%, respectively. 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.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
Current yield for the 30-day period ended November 30, 1996 was 4.42%
for Class A, 4.11% for Class B and 3.92% for Class C. 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 maximum offering price per share in the case of Class A or the
net asset value per share in the case of Class B or Class C 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 combined 1996 Federal, New York State and New York City
personal tax rate of 46.60%, the tax equivalent yield for the 30-day period
ended November 30, 1996 was 8.28% for Class A, 7.70% for Class B, and 7.34%
for Class C. 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, New York State and New York City marginal personal income
tax rates presently in effect. For Federal income tax purposes, a 39.60% tax
rate has been used. For New York State and New York City personal income tax
purposes, tax rates of 7.875% and 4.46%, respectively, have been used. The
tax equivalent yield figure, however, does not reflect the potential effect
of any state or local (including, but not limited to, county, district or
city, other than New York City) taxes, including applicable surcharges. In
addition, there may be pending legislation which could affect such stated
rates 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 average annual total return for the 1, 5 and 9.915 year periods
ended November 30, 1996 for Class A was .046%, 7.03% and 7.30%, respectively.
The average annual total return for the 1 and 3.877 year periods ended
November 30, 1996 for Class B was .061% and 6.00%, respectively. The average
annual total return for the 1 and 1.222 year periods ended November 30, 1996
for Class C was 3.43% and 6.27%, respectively. Average annual total return
is calculated by determining the ending redeemable value of an investment
purchased at net asset value (maximum offering price in the case of Class A)
per share 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. A Class' average annual total return figures calculated in
accordance with such formula provides that in the case of Class A the maximum
sales load has been deducted from the hypothetical initial investment at the
time of purchase or in the case of Class B or Class C the maximum applicable
CDSC has been paid upon redemption at the end of the period.
The total return for Class A for the period December 31, 1986
(commencement of operations) through November 30, 1996 was 101.13%. Based on
net asset value per share, the total return for Class A was 110.65% for this
period. The total return for Class B for the period January 15, 1993
(commencement of initial offering of Class B shares) through November 30,
1996 was 25.36%. Without giving effect to the applicable CDSC, the total
return for Class B was 28.36% for this period. The total return for Class C
for the period September 11, 1995 (commencement of initial offering of Class
C shares) through November 30, 1996 was 7.72%. Total return is calculated by
subtracting the amount of the Fund's net asset value (maximum offering price
in the case of Class A) 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 any
applicable CDSC), and dividing the result by the net asset value (maximum
offering price in the case of Class A) per share at the beginning of the
period. Total return also may be calculated based on the net asset value per
share at the beginning of the period for Class A shares or without giving
effect to any applicable CDSC at the end of the period for Class B or Class C
shares. In such cases, the calculation would not reflect the deduction of
the sales charge which, if reflected, would reduce the performance quoted.
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 not as representative of the Fund's
past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or events,
including those relating to or arising from actual or proposed tax
legislation. Advertising materials for the Fund also may refer to
statistical or other information concerning trends relating to investment
companies, as compiled by industry associations such as the Investment
Company Institute, and to Morningstar ratings and related analysis supporting
such rating.
From time to time, advertising material for the Fund may include
biographical information relating to its portfolio managers and may refer to,
or include commentary by a portfolio manager relating to investment strategy,
asset growth, current or past business, political, economic or financial
conditions and other matters of general interest to investors.
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. Shares
have no preemptive or subscription rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
The Manager's legislative efforts led to the 1976 Congressional
Amendment to the Code permitting an incorporated mutual fund to pass through
tax exempt income to its shareholders. The Manager offered to the public the
first incorporated tax exempt fund and currently manages or administers over
$25 billion in tax exempt assets.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-of-
pocket expenses. For the period December 1, 1996 (effective date of transfer
agency agreement) through November 30, 1996, the Fund paid the Transfer Agent
$89,405.
The Bank of New York, 90 Washington Street, New York, New York 10286, is
the Fund's custodian. Neither the Transfer Agent nor The Bank of New York
has any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038-
4982, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The financial condition of New York State (the "State") and certain of
its public bodies (the "Agencies") and municipalities, particularly New York
City (the "City"), could affect the market values and marketability of New
York Municipal Obligations which may be held by the Fund. The following
information constitutes only a brief summary, does not purport to be a
complete description, and is based on information drawn from official
statements relating to securities offerings of the State, the City and the
Municipal Assistance Corporation for the City of New York ("MAC") available
as of the date of this Statement of Additional Information. While the Fund
has not independently verified such information, it has no reason to believe
that such information is not correct in all material respects.
A national recession commenced in mid-1990. The downturn continued
through the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic growth during the remainder of the 1991 calendar
year. For the calendar year 1992, the national economy continued to recover,
although at a rate below all post-war recoveries. The recession was more
severe in the State than in other parts of the nation, owing to a significant
retrenchment in the financial services industry, cutbacks in defense
spending, and an overbuilt real estate market. The State economy remained in
recession until 1993, when employment growth resumed. Since early 1993, the
State has gained approximately 100,000 jobs. The State's economy expanded
modestly during 1995. Although industries that export goods and services
abroad are expected to benefit from the lower dollar, growth will be slowed
by government cutbacks at all levels. On an average annual basis, employment
growth in 1995 was estimated to be about the same as 1994. Both personal
income and wages were estimated to have recorded moderate gains in 1995.
Employment growth is expected to slow significantly in 1996 as the pace of
national economic growth slackens, entire industries experience
consolidations, and governmental employment continues to shrink. Personal
income is estimated to have increased by approximately 5.0% in 1996.
The State's budget for the 1996-97 fiscal year was enacted by the
Legislature on July 13, 1996, more than three months after the start of the
fiscal year. Prior to adoption of the budget, the Legislature enacted
appropriations for disbursements considered to be necessary for State
operations and other purposes, including all necessary appropriations for
debt service. The State Financial Plan for the 1996-97 fiscal year was
formulated on July 25, 1996 and is based on the State's budget as enacted by
the Legislature and signed into law by the Governor, as well as actual
results for the first quarter of the 1996-97 fiscal year.
After adjustments for comparability between fiscal years, the adopted
1996-97 budget projects a year-over-year increase in General Fund
disbursements of 0.2%. Adjusted State Funds (excluding Federal grants)
disbursements are projected to increase by 1.6% from the prior fiscal year.
All Governmental Funds projected disbursements increase by 4.1% over the
prior fiscal year, after adjustments for comparability.
The 1996-97 State Financial Plan is projected to be balanced on a cash
basis. As compared to the Governor's proposed budget as revised on March 20,
1996, the State's adopted budget for 1996-97 increases General Fund spending
by $842 million, primarily from increases for education, special education
and higher education ($563 million). The balance represents funding
increases to a variety of other programs, including community projects and
increased assistance to fiscally distressed cities. Resources used to fund
these additional expenditures include $540 million in increased revenues
projected for 1996-97 based on higher-than-projected tax collections during
the first half of calendar 1996, $110 million in projected receipts from a
new State tax amnesty program, and other resources including certain non-
recurring resources. The total amount of non-recurring resources included in
the 1996-97 State budget is projected to be $1.3 billion, or 3.9% of total
General Fund receipts.
The State revised the cash basis 1996-97 State Financial Plan on January
14, 1997, in conjunction with the release of the Executive Budget for the
1997-98 fiscal year. The 1996-97 General Fund Financial Plan continues to be
balanced. The Division of the Budget projects that, prior to taking the
actions described below, the General Fund Financial Plan would have shown an
operating surplus of approximately $1.3 billion. These actions include
implementing reduced personal income tax withholding to reflect the impact of
tax reduction actions which took effect on January 1, 1997. The Financial
Plan assumes the use of $250 million for this purpose. In addition, $943
million is projected to be used to pay tax refunds during the 1996-97 fiscal
year or reserved to pay refunds during the 1997-98 fiscal year, which
produces a benefit for the 1997-98 Financial Plan. Finally, $65 million is
projected to be deposited into the Tax Stabilization Reserve Fund ("TSRF")
(in addition to the required deposit of $15 million), increasing the cash
balance in that fund to $317 million by the end of 1996-97.
The projected surplus results primarily from growth in the underlying
forecast for projected receipts. As compared to the enacted budget, revenues
are expected to increase by more than $1 billion, while disbursements are
expected to fall by $228 million. These changes from original Financial Plan
projections reflect actual results through December 1996 as well as modified
economic and social services caseload projections for the balance of the
fiscal year. The General Fund's closing balance is expected to be $358
million at the end of 1996-97.
The 1997-98 Financial Plan projects balance on a cash basis in the
General Fund. It reflects a continuing strategy of substantially reduced
State spending, including program restructurings, reductions in social
welfare spending, and efficiency and productivity initiatives. Total General
Fund receipts and transfers from other funds are projected to be $32.88
billion, a decrease of $88 million from total receipts projected in the
current fiscal year. Total General Fund disbursements and transfers to other
funds are projected to be $32.84 billion, a decrease of $56 million from
spending totals projected for the current fiscal year.
The State Financial Plan was based upon forecasts of national and State
economic activity. Economic forecasts have frequently failed to predict
accurately the timing and magnitude of changes in the national and the State
economies. Many uncertainties exist in forecasts of both the national and
State economies, including consumer attitudes toward spending, Federal
financial and monetary policies, the availability of credit and the condition
of the world economy, which could have an adverse effect on the State. There
can be no assurance that the State economy will not experience worse-than-
predicted results, with corresponding material and adverse effects on the
State's projections of receipts and disbursements.
There can be no assurance that the State will not face substantial
potential budget gaps in future years resulting from a significant disparity
between tax revenues projected from a lower recurring receipts base and the
spending required to maintain State programs at current levels. To address
any potential budgetary imbalance, the State may need to take significant
actions to align recurring receipts and disbursements in future fiscal years.
On June 6, 1990, Moody's changed its ratings on all the State's
outstanding general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P changed its ratings on all of the State's outstanding
general obligation bonds from AA- to A and from A to A-, respectively. In
February 1991, Moody's lowered its rating on the City's general obligation
bonds from A to Baa1 and in July 1995, S&P lowered its rating on such bonds
from A- to BBB+. Ratings reflect only the respective views of such
organizations, and their concerns about the financial condition of New York
State and City, the debt load of the State and City and any economic
uncertainties about the region. There is no assurance that a particular
rating will continue for any given period of time or that any such rating
will not be revised downward or withdrawn entirely if, in the judgment of the
agency originally establishing the rating, circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the mid-
1970s, some of the Agencies and municipalities (in particular, the City)
faced extraordinary financial difficulties, which affected the State's own
financial condition. These events, including a default on short-term notes
issued by the New York State Urban Development Corporation ("UDC") in
February 1975, which default was cured shortly thereafter, and a continuation
of the financial difficulties of the City, created substantial investor
resistance to securities issued by the State and by some of its
municipalities and Agencies. For a time, in late 1975 and early 1976, these
difficulties resulted in a virtual closing of public credit markets for State
and many State related securities.
In response to the financial problems confronting it, the State
developed and implemented programs for its 1977 fiscal year that included the
adoption of a balanced budget on a cash basis (a deficit of $92 million that
actually resulted was financed by issuing notes that were paid during the
first quarter of the State's 1978 fiscal year). In addition, legislation was
enacted limiting the occurrence of additional so-called "moral obligation"
and certain other Agency debt, which legislation does not, however, apply to
MAC debt.
GAAP-Basis Projected Results--1996-97 Fiscal Year. For the 1996-97 fiscal
year, the General Fund GAAP Financial Plan is projected to show total
revenues of $33.04 billion, total expenditures of $32.92 billion, and net
other financing sources and uses of $771 million. The surplus of $886
million primarily reflects an increase in projected revenues.
GAAP-Basis Results--1995-96 Fiscal Year. The State completed its 1995-96
fiscal year with a combined Governmental Funds operating surplus of $432
million, which included an operating surplus in the General Fund of $380
million, in the Capital Projects Funds of $276 million and in the Debt
Service Funds of $185 million. There was an operating deficit of $409
million in the Special Revenue Funds. The State's Combined Balance Sheet as
of March 31, 1996 showed an accumulated deficit in its combined Governmental
Funds of $1.23 billion, reflecting liabilities of $14.59 billion and assets
of $13.35 billion. This accumulated Governmental Funds deficit includes a
$2.93 billion accumulated deficit in the General Fund and an accumulated
deficit of $712 million in the Capital Projects Fund type as partially offset
by accumulated surpluses of $468 million and $1.94 billion in the Special
Revenue and Debt Service fund types, respectively.
GAAP-Basis Results--1994-95 Fiscal Year. The State's Combined Balance Sheet
as of March 31, 1995 showed an accumulated deficit in its combined
Governmental Funds of $1.666 billion reflecting liabilities of $14.778
billion and assets of $13.112 billion. This accumulated Governmental Funds
deficit includes a $3.308 billion accumulated deficit in the General Fund, as
well as accumulated surpluses in the Special Revenue and Debt Service fund
types of $877 million and $1.753 billion, respectively, and a $988 million
accumulated deficit in the Capital Projects Fund type.
The State completed its 1994-95 fiscal year with a combined Governmental
Funds operating deficit of $1.791 billion, which included operating deficits
in the General Fund of $1.426 billion, in the Capital Projects Funds of $366
million, and in the Debt Service Funds of $38 million. There was an
operating surplus in the Special Revenue Funds of $39 million.
GAAP-Basis Results--1993-94 Fiscal Year. The State reported a General Fund
operating surplus of $914 million for the 1993-94 fiscal year, as compared to
an operating surplus of $2.065 billion for the prior fiscal year. The 1993-
94 fiscal year surplus reflects several major factors, including the cash
basis surplus recorded in 1993-94, the use of $671 million of the 1992-93
surplus to fund operating expenses in 1993-94, net proceeds of $575 million
in bonds issued by the New York Local Government Assistance Corporation
("LGAC") and the accumulation of a $265 million balance in the Contingency
Reserve Fund ("CRF"). Revenues increased $543 million (1.7%) over prior
fiscal year revenues with the largest increase occurring in personal income
taxes. Expenditures increased $1.659 billion (5.6%) over the prior fiscal
year, with the largest increase occurring in State aid for social services
programs.
The Special Revenue Fund and Debt Service Fund ended 1993-94 with
operating surpluses of $149 million and $23 million, respectively. The
Capital Projects Fund ended with an operating deficit of $35 million.
GAAP-Basis Results--1992-93 Fiscal Year. The State completed its 1992-93
fiscal year with a GAAP-basis operating surplus of $2.065 billion in the
General Fund and an accumulated deficit of $2.551 billion. The Combined
Statement of Revenues, Expenditures and Changes in Fund Balances reported
total revenues of $31.085 billion, total expenditures of $29.337 billion, and
net other financing sources and uses of $317 million. The surplus primarily
reflects the 1992-93 cash-basis surplus and the net proceeds of $881 million
in bonds issued by LGAC.
The Special Revenue, Debt Service and Capital Projects fund types ended
the 1992-93 fiscal year with GAAP-basis operating surpluses of $131 million,
$381 million, and $57 million, respectively.
State Financial Plan--Cash-Basis Results--General Fund. The General
Fund is the principal operating fund of the State and is used to account for
all financial transactions, except those required to be accounted for in
another fund. It is the State's largest fund and receives almost all State
taxes and other resources not dedicated to particular purposes. General Fund
moneys are also transferred to other funds, primarily to support certain
capital projects and debt service payments in other fund types.
In the State's 1996-97 fiscal year, the General Fund is expected to
account for approximately 47% of total Governmental Funds disbursements and
71% of total State Funds disbursements. The General Fund is projected to be
balanced on a cash basis for the 1996-97 fiscal year. Total receipts and
transfers from other funds are projected to be $33.17 billion, an increase of
$365 million from the prior fiscal year. Total General Fund disbursements
and transfers to other funds are projected to be $33.12 billion, an increase
of $444 million from the total in the prior fiscal year.
New York State's financial operations have improved during recent fiscal
years. During the period 1989-90 through 1991-92, the State incurred General
Fund operating deficits that were closed with receipts from the issuance of
tax and revenue anticipation notes ("TRANs"). First, the national recession,
and then the lingering economic slowdown in the New York and regional
economy, resulted in repeated shortfalls in receipts and three budget
deficits. During its last four fiscal years, however, the State recorded
balanced budgets on a cash basis, with positive fund balances as described
below.
The State ended its 1995-96 fiscal year on March 31, 1996 with a General
Fund cash surplus. The Division of the Budget reported that revenues
exceeded projections by $270 million, while spending for social service
programs was lower than forecast by $120 million and all other spending was
lower by $55 million. From the resulting benefit of $445 million, a $65
million voluntary deposit was made into the TSRF, and $380 million was used
to reduce 1996-97 Financial Plan liabilities by accelerating 1996-97
payments, deferring 1995-96 revenues, and making a deposit to the tax refund
reserve account.
The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance is
attributable to the $65 million voluntary deposit to the TSRF, a $15 million
required deposit to the TSRF, a $40 million deposit to the Contingency
Reserve Fund ("CRF"), and a $9 million deposit to the Revenue Accumulation
Fund. The closing fund balance includes $237 million on deposit in the TSRF,
to be used in the event of any future General Fund deficit as provided under
the State Constitution and State Finance Law. In addition, $41 million is on
deposit in the CRF. The CRF was established in State fiscal year 1993-94 to
assist the State in financing the costs of extraordinary litigation. The
remaining $9 million reflects amounts on deposit in the Revenue Accumulation
Fund. This fund was created to hold certain tax receipts temporarily before
their deposit to other accounts. In addition, $678 million was on deposit in
the tax refund reserve account, of which $521 million was necessary to
complete the restructuring of the State's cash flow under the New York Local
Government Assistance Corporation ("LGAC") program.
General Fund receipts totaled $32.81 billion, a decrease of 1.1% from
1994-95 levels. This decrease reflects the impact of tax reductions enacted
and effective in both 1994 and 1995. General Fund disbursements totaled
$32.68 billion for the 1995-96 fiscal year, a decrease of 2.2% from 1994-95
levels.
The State ended its 1994-95 fiscal year with the General Fund in
balance. The $241 million decline in the fund balance reflects the planned
use of $264 million from the CRF, partially offset by the required deposit of
$23 million to the TSRF. In addition, $278 million was on deposit in the tax
refund reserve account, $250 million of which was deposited to continue the
process of restructuring the State's cash flow as part of the LGAC program.
The closing fund balance of $158 million reflects $157 million in the TSRF
and $1 million in the CRF.
General Fund receipts totaled $33.16 billion, an increase of 2.9% from
1993-94 levels. General Fund disbursements totaled $33.40 billion for the
1994-95 fiscal year, an increase of 4.7% from the previous fiscal year. The
increase in disbursements was primarily the result of one-time litigation
costs for the State, funded by the use of the CRF, offset by $188 million in
spending reductions initiated in January 1995 to avert a potential gap in the
1994-95 State Financial Plan. These actions included savings from a hiring
freeze, halting the development of certain services, and the suspension of non-
essential capital projects.
The State ended its 1993-94 fiscal year with a General Fund cash
surplus, primarily the result of an improving national economy, State
employment growth, tax collections that exceeded earlier projections and
disbursements that were below expectations. A deposit of $268 million was
made to the CRF, with a withdrawal during the year of $3 million, and a
deposit of $67 million was made to the TSRF. These three transactions
resulted in the change in fund balance of $332 million. In addition, a
deposit of $1.14 billion was made to the tax refund reserve account, of which
$1.03 billion was available for budgetary purposes in the 1994-95 fiscal
year. The remaining $114 million was redeposited in the tax refund reserve
account at the end of the State's 1994-95 fiscal year to continue the process
of restructuring the State's cash flow as part of the LGAC program. The
General Fund closing balance was $399 million, of which $265 million was on
deposit in the CRF and $134 million in the TSRF. The CRF was initially
funded with a transfer of $100 million attributable to a positive margin
recorded in the 1992-93 fiscal year.
General Fund receipts totaled $32.23 billion, an increase of 2.6% from
1992-93 levels. General Fund disbursements totaled $31.90 billion for the
1993-94 fiscal year, 3.5% higher than the previous fiscal year. Receipts
were higher in part due to improved tax collections from renewed State
economic growth, although the State continued to lag behind the national
economic recovery. Disbursements were higher due in part to increased local
assistance costs for school aid and social services, accelerated payment of
certain Medicaid expenses, and the cost of an additional payroll for State
employees.
Cash-Basis Results--Other Governmental Funds. Activity in the three other
governmental funds has remained relatively stable over the last three fiscal
years, with Federally-funded programs comprising approximately two-thirds of
these funds. The most significant change in the structure of these funds has
been the redirection, beginning in the 1993-94 fiscal year, of a portion of
transportation-related revenues from the General Fund to two new dedicated
funds in the Special Revenue and Capital Projects Fund types. These revenues
are used to support the capital programs of the Department of Transportation
and the Metropolitan Transportation Authority ("MTA").
The Special Revenue Funds account for State receipts from specific
sources that are legally restricted in use to specified purposes and include
all moneys received from the Federal government. Revenues in Special Revenue
Funds in the State's 1995-96 fiscal year increased $1.45 billion over the
prior fiscal year as a result of increases in federal grants and lottery
revenues. Disbursements from Special Revenue Funds in the State's 1995-96
fiscal year increased $1.21 billion over the prior fiscal year as a result of
increased costs for social services programs and an increase in the
distribution of lottery proceeds to school districts.
The Capital Projects Funds are used to finance the acquisition and
construction of major capital facilities and to aid local government units
and Agencies in financing capital construction. Revenues in the Capital
Projects Funds in the State's 1995-96 fiscal year increased $260 million
primarily because a larger share of the petroleum business tax was shifted
from the General Fund to the Dedicated Highway and Bridge Trust Fund and by
an increase in federal grant revenues. Expenditures increased $194 million
because of increased expenditures for education and health and environmental
projects.
The Debt Service Funds serve to fulfill State debt service on long-term
general obligation State debt and other State lease/purchase and contractual
obligation financing commitments. Revenues in the Debt Service Funds in the
State's 1995-96 fiscal year increased $10 million because of increases in
both dedicated taxes and mental hygiene patient fees. Expenditures increased
$201 million.
State Borrowing Plan. The State anticipates that its capital programs
will be financed, in part, through borrowings by the State and public
authorities in the 1996-97 fiscal year. The State expects to issue $411
million in general obligation bonds (including $153.6 million for purposes of
redeeming outstanding BANs) and $154 million in general obligation commercial
paper. The Legislature has also authorized the issuance of up to $101
million in COPs during the State's 1996-97 fiscal year for equipment
purchases. The projection of the State regarding its borrowings for the 1996-
97 fiscal year may change if circumstances require.
State Agencies. The fiscal stability of the State is related, at least
in part, to the fiscal stability of its localities and various of its
Agencies. Various Agencies have issued bonds secured, in part, by
non-binding statutory provisions for State appropriations to maintain various
debt service reserve funds established for such bonds (commonly referred to
as "moral obligation" provisions).
At September 30, 1995, there were 17 Agencies that had outstanding debt
of $100 million or more. The aggregate outstanding debt, including refunding
bonds, of these 17 Agencies was $73.45 billion as of September 30, 1995. As
of March 31, 1995, aggregate Agency debt outstanding as State-supported debt
was $27.9 billion and as State-related was $36.1 billion. Debt service on
the outstanding Agency obligations normally is paid out of revenues generated
by the Agencies' projects or programs, but in recent years the State has
provided special financial assistance, in some cases on a recurring basis, to
certain Agencies for operating and other expenses and for debt service
pursuant to moral obligation indebtedness provisions or otherwise.
Additional assistance is expected to continue to be required in future years.
Several Agencies have experienced financial difficulties in the past.
Certain Agencies continue to experience financial difficulties requiring
financial assistance from the State. Failure of the State to appropriate
necessary amounts or to take other action to permit certain Agencies to meet
their obligations could result in a default by one or more of such Agencies.
If a default were to occur, it would likely have a significant effect on the
marketability of obligations of the State and the Agencies. These Agencies
are discussed below.
The New York State Housing Finance Agency ("HFA") provides financing for
multifamily housing, State University construction, hospital and nursing home
development, and other programs. In general, HFA depends upon mortgagors in
the housing programs it finances to generate sufficient funds from rental
income, subsidies and other payments to meet their respective mortgage
repayment obligations to HFA, which provide the principal source of funds for
the payment of debt service on HFA bonds, as well as to meet operating and
maintenance costs of the projects financed. From January 1, 1976 through
March 31, 1987, the State was called upon to appropriate a total of $162.8
million to make up deficiencies in the debt service reserve funds of HFA
pursuant to moral obligation provisions. The State has not been called upon
to make such payments since the 1986-87 fiscal year.
UDC has experienced, and expects to continue to experience, financial
difficulties with the housing programs it had undertaken prior to 1975,
because a substantial number of these housing program mortgagors are unable
to make full payments on their mortgage loans. Through a subsidiary, UDC is
currently attempting to increase its rate of collection by accelerating its
program of foreclosures and by entering into settlement agreements. UDC has
been, and will remain, dependent upon the State for appropriations to meet
its operating expenses. The State also has appropriated money to assist in
the curing of a default by UDC on notes which did not contain the State's
moral obligation provision.
The MTA oversees New York City's subway and bus lines by its affiliates,
the New York City Transit Authority and the Manhattan and Bronx Surface
Transit Operating Authority (collectively, the "TA"). Through MTA's
subsidiaries, the Long Island Rail Road Company, the Metro-North Commuter
Railroad Company and the Metropolitan Suburban Bus Authority, the MTA
operates certain commuter rail and bus lines in the New York metropolitan
area. In addition, the Staten Island Rapid Transit Authority, an MTA
subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (the "TBTA"),
the MTA operates certain toll bridges and tunnels. Because fare revenues are
not sufficient to finance the mass transit portion of these operations, the
MTA has depended and will continue to depend for operating support upon a
system of State, local government and TBTA support and, to the extent
available, Federal operating assistance, including loans, grants and
subsidies. If current revenue projections are not realized and/or operating
expenses exceed current projections, the TA or commuter railroads may be
required to seek additional State assistance, raise fares or take other
actions.
Over the past several years the State has enacted several
taxes--including a surcharge on the profits of banks, insurance corporations
and general business corporations doing business in the 12-county region (the
"Metropolitan Transportation Region") served by the MTA and a special .25%
regional sales and use tax--that provide additional revenues for mass transit
purposes, including assistance to the MTA. In addition, since 1987, State
law has required that the proceeds of .25% mortgage recording tax paid on
certain mortgages in the Metropolitan Transportation Region be deposited in a
special MTA fund for operating or capital expenses. Further, in 1993, the
State dedicated a portion of certain additional State petroleum business tax
receipts to fund operating or capital assistance to the MTA. For the 1996-97
State fiscal year, total State assistance to the MTA is estimated at
approximately $1.09 billion.
In 1981, the State Legislature authorized procedures for the adoption,
approval and amendment of a five-year plan for the capital program designed
to upgrade the performance of the MTA's transportation systems and to
supplement, replace and rehabilitate facilities and equipment, and also
granted certain additional bonding authorization therefor.
State legislation accompanying the 1996-97 adopted State budget
authorized the MTA, TBTA and TA to issue an aggregate of $6.5 billion in
bonds to finance a portion of a new $11.98 billion MTA capital plan for the
1995 through 1999 calendar years (the "1995-99 Capital Program"), and
authorized the MTA to submit the 1995-99 Capital Program to the Capital
Program Review Board for approval. This plan supersedes the overlapping
portion of the MTA's 1992-96 Capital Program. This is the fourth capital
plan since the Legislature authorized procedures for the adoption, approval
and amendment of MTA capital programs and is designed to upgrade the
performance of the MTA's transportation systems by investing in new rolling
stock, maintaining replacement schedules for existing assets and bringing the
MTA system into a state of good repair. The 1995-99 Capital Program assumes
the issuance of an estimated $5.1 billion in bonds under this $6.5 billion
aggregate bonding authority. The remainder of the plan is projected to be
financed through assistance from the State, the Federal government, and the
City of New York, and from various other revenues generated from actions
taken by the MTA.
There can be no assurance that such governmental actions will be taken,
that sources currently identified will not be decreased or eliminated, or
that the 1995-1999 Capital Program will not be delayed or reduced. If the
MTA capital program is delayed or reduced because of funding shortfalls or
other factors, ridership and fare revenues may decline, which could, among
other things, impair the MTA's ability to meet its operating expenses without
additional State assistance.
The cities, towns, villages and school districts of the State are
political subdivisions of the State with the powers granted by the State
Constitution and statutes. As the sovereign, the State retains broad powers
and responsibilities with respect to the government, finances and welfare of
these political subdivisions, especially in education and social services.
In recent years the State has been called upon to provide added financial
assistance to certain localities.
Other Localities. Certain localities in addition to the City could have
financial problems leading to requests for additional State assistance during
the last several State fiscal years. The potential impact on the State of
such actions by localities is not included in the projections of the State
receipts and disbursements in the State's 1996-97 fiscal year.
Fiscal difficulties experienced by the City of Yonkers resulted in the re-
establishment of the Financial Control Board for the City of Yonkers by
the State in 1984. That Board is charged with oversight of the fiscal
affairs of Yonkers. Future actions taken by the State to assist Yonkers
could result in increased State expenditures for extraordinary local
assistance.
Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the
City of Troy in 1994. The Supervisory Board's powers were increased in 1995,
when Troy MAC was created to help Troy avoid default on certain obligations.
The legislation creating Troy MAC prohibits the City of Troy from seeking
federal bankruptcy protection while Troy MAC bonds are outstanding.
Seventeen municipalities received extraordinary assistance during the
1996 legislative session through $50 million in special appropriations
targeted for distressed cities.
Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1994, the total indebtedness of all
localities in the State, other than the City, was approximately $17.7
billion. A small portion (approximately $82.9 million) of this indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant
to enabling State legislation. State law requires the Comptroller to review
and make recommendations concerning the budgets of those local government
units other than the City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding.
Seventeen localities had outstanding indebtedness for deficit financing at
the close of their fiscal year ending in 1994.
From time to time, Federal expenditure reductions could reduce, or in
some cases eliminate, Federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities to increase local revenues to sustain those expenditures. If the
State, the City or any of the Agencies were to suffer serious financial
difficulties jeopardizing their respective access to the public credit
markets, the marketability of notes and bonds issued by localities within the
State could be adversely affected. Localities also face anticipated and
potential problems resulting from certain pending litigation, judicial
decisions and long-range economic trends. The longer-range, potential
problems of declining city population, increasing expenditures and other
economic trends could adversely affect localities and require increasing
State assistance in the future.
Certain litigation pending against the State or its officers or
employees could have a substantial or long-term adverse effect on State
finances. Among the more significant of these litigations are those that
involve: (i) the validity and fairness of agreements and treaties by which
various Indian tribes transferred title to the State of approximately six
million acres of land in central New York; (ii) certain aspects of the
State's Medicaid rates and regulations, including reimbursements to providers
of mandatory and optional Medicaid services; (iii) contamination in the Love
Canal area of Niagara Falls; (iv) a challenge to the State's practice of
reimbursing certain Office of Mental Health patient-care expenses with
clients' Social Security benefits; (v) a challenge to the methods by which
the State reimburses localities for the administrative costs of food stamp
programs; (vi) a challenge to the State's possession of certain funds taken
pursuant to the State's Abandoned Property law; (vii) alleged responsibility
of State officials to assist in remedying racial segregation in the City of
Yonkers; (viii) an action, in which the State is a third party defendant, for
injunctive or other appropriate relief, concerning liability for the
maintenance of stone groins constructed along certain areas of Long Island's
shoreline; (ix) actions challenging the constitutionality of legislation
enacted during the 1990 legislative session which changed the actuarial
funding methods for determining contributions to State employee retirement
systems; (x) an action against State and City officials alleging that the
present level of shelter allowance for public assistance recipients is
inadequate under statutory standards to maintain proper housing; (xi) an
action challenging legislation enacted in 1990 which had the effect of
deferring certain employer contributions to the State Teachers' Retirement
System and reducing State aid to school districts by a like amount; (xii) a
challenge to the constitutionality of financing programs of the Thruway
Authority authorized by Chapters 166 and 410 of the Laws of 1991 (described
below in this Part); (xiii) a challenge to the constitutionality of financing
programs of the Metropolitan Transportation Authority and the Thruway
Authority authorized by Chapter 56 of the Laws of 1993 (described below in
this Part); (xiv) challenges to the delay by the State Department of Social
Services in making two one-week Medicaid payments to the service providers;
(xv) challenges by commercial insurers, employee welfare benefit plans, and
health maintenance organizations to provisions of Section 2807-c of the
Public Health Law which impose 13%, 11% and 9% surcharges on inpatient
hospital bills and a bad debt and charity care allowance on all hospital
bills paid by such entities; (xvi) challenges to the promulgation of the
State's proposed procedure to determine the eligibility for and nature of
home care services for Medicaid recipients; (xvii) a challenge to State
implementation of a program which reduces Medicaid benefits to certain home-
relief recipients; and (xviii) challenges to the rationality and retroactive
application of State regulations recelebrating nursing home Medicaid rates.
(2) New York City. In the mid-1970s, the City had large accumulated
past deficits and until recently was not able to generate sufficient tax and
other ongoing revenues to cover expenses in each fiscal year. However, the
City has achieved balanced operating results for each of its fiscal years
since 1981 as reported in accordance with the then-applicable GAAP standards.
The City's ability to maintain balanced operating results in future years is
subject to numerous contingencies and future developments.
In 1975, the City became unable to market its securities and entered a
period of extraordinary financial difficulties. In response to this crisis,
the State created MAC to provide financing assistance to the City and also
enacted the New York State Financial Emergency Act for the City of New York
(the "Emergency Act") which, among other things, created the Financial
Control Board (the "Control Board") to oversee the City's financial affairs
and facilitate its return to the public credit markets. The State also
established the Office of the State Deputy Comptroller ("OSDC") to assist the
Control Board in exercising its powers and responsibilities. On June 30,
1986, the Control Board's powers of approval over the City Financial Plan
were suspended pursuant to the Emergency Act. However, the Control Board,
MAC and OSDC continue to exercise various monitoring functions relating to
the City's financial condition. The City prepares and operates under a
four-year financial plan which is submitted annually to the Control Board for
review and which the City periodically updates.
The City's independently audited operating results for each of its
fiscal years from 1981 through 1995 show a General Fund surplus reported in
accordance with GAAP. The City has eliminated the cumulative deficit in its
net General Fund position.
During the 1990 and 1991 fiscal years, as a result of the slowing
economy, the City has experienced significant shortfalls in almost all of its
major tax sources and increases in social services costs, and has been
required to take actions to close substantial budget gaps in order to
maintain balanced budgets in accordance with the Financial Plan.
According to a recent OSDC economic report, the City's economy was slow
to recover from the recession and was expected to have experienced a weak
employment situation, and moderate wage and income growth, during the 1995-96
period. Also, Financial Plan reports of OSDC, the Control Board, and the
City Comptroller have variously indicated that many of the City's balanced
budgets have been accomplished, in part, through the use of non-recurring
resource, tax and fee increases, personnel reductions and additional State
assistance; that the City has not yet brought its long-term expenditures in
line with recurring revenues; that the City's proposed gap-closing programs,
if implemented, would narrow future budget gaps; that these programs tend to
rely heavily on actions outside the direct control of the City; and that the
City is therefore likely to continue to face futures projected budget gaps
requiring the City to reduce expenditures and/or increase revenues.
According to the most recent staff reports of OSDC, the Control Board and the
City Comptroller during the four-year period covered by the current Financial
Plan, the City is relying on obtaining substantial resources from initiatives
needing approval and cooperation of its municipal labor unions, Covered
Organizations, and City Council, as well as the State and Federal
governments, among others, and there can be no assurance that such approval
can be obtained.
The City requires certain amounts of financing for seasonal and capital
spending purposes. The City issued $1.75 billion of notes for seasonal
financing purposes during the 1994 fiscal year. The City's capital financing
program projects long-term financing requirements of approximately $17
billion for the City's fiscal years 1995 through 1998 for the construction
and rehabilitation of the City's infrastructure and other fixed assets. The
major capital requirement include expenditures for the City's water supply
system, and waste disposal systems, roads, bridges, mass transit, schools and
housing. In addition, the City and the Municipal Water Finance Authority
issued about $1.8 billion in refunding bonds in the 1994 fiscal year.
State Economic Trends. The State historically has been one of the
wealthiest states in the nation. For decades, however, the State has grown
more slowly than the nation as a whole, gradually eroding its relative
economic position. Statewide, urban centers have experienced significant
changes involving migration of the more affluent to the suburbs and an influx
of generally less affluent residents. Regionally, the older Northeast cities
have suffered because of the relative success that the South and the West
have had in attracting people and business. The City has also had to face
greater competition as other major cities have developed financial and
business capabilities which make them less dependent on the specialized
services traditionally available almost exclusively in the City.
During the 1982-83 recession, overall economic activity in the State
declined less than that of the nation as a whole. However, in the calendar
years 1984 through 1991, the State's rate of economic expansion was somewhat
slower than that of the nation. In the 1990-91 recession, the economy of the
State, and that of the rest of the Northeast, was more heavily damaged than
that of the nation as a whole and has been slower to recover. The total
employment growth rate in the State has been below the national average since
1984. The unemployment rate in the State dipped below the national rate in
the second half of 1981 and remained lower until 1991; since then, it has
been higher. According to data published by the U.S. Bureau of Economic
Analysis, during the past ten years, total personal income in the State rose
slightly faster than the national average only from 1986 through 1988.
APPENDIX B
Description of S&P, Moody's & Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature and provisions of the obligation; and
(3) protection afforded by, and relative position of, the obligation in the
event of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
A
Principal and interest payments on bonds in this category are regarded
as safe. This rating describes the third strongest capacity for payment of
debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local economic
base, in debt burden, in the balance between revenues and expenditures, or in
quality of management. Under certain adverse circumstances, any one such
weakness might impair the ability of the issuer to meet debt obligations at
some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management performance
appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several of
the above factors could contribute to a lesser capacity for payment of debt
service. The difference between "A" and "BBB" rating is that the latter
shows more than one fundamental weakness, or one very substantial fundamental
weakness, whereas the former shows only one deficiency among the factors
considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the pledged
revenues could show substantial variations, with the revenue flow possibly
being subject to erosion over time. Basic security provisions are no more
than adequate. Management performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC or 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 interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C 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 sign (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
SP-3
The issuers of these municipal notes exhibit speculative capacity to pay
principal and interest.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the likelihood
of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation 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.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
A-3
Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher
designations.
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 some time 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.
Generally, Moody's provides either a generic rating or a rating with a
numerical modifier of 1 for bonds in each of the generic rating categories
Aa, A, Baa, Ba and B. Moody's also provides numerical modifiers of 2 and 3
in each of these categories for bond issues in the health care, higher
education and other not-for-profit sectors; the modifier 1 indicates that the
issue ranks in the higher end of its generic rating category; the modifier 2
indicates that the issue is in the mid-range of the generic category; and the
modifier 3 indicates that the issue is in the low end of the generic
category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). Such ratings recognize the
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 Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment
of short-term promissory obligations, and ordinarily will be evidenced by
leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate
reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirements for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to meet
the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of interest
and/or principal payments. Such bonds are extremely speculative and should
be valued on the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. DDD represents the highest potential for
recovery on these bonds and D represents 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 AAA category covering 12-36 months or the
DDD, DD or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
Although the credit analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect 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.
<PAGE>
<TABLE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments November 30, 1996
Principal
Long-Term Municipal Investments--98.5% Amount Value
- ---------------------------------------------------------------------------- -------------- ----------------
New York--93.6%
<S> <C> <C>
Albany Industrial Development Agency, Lease Revenue:
(New York State Assembly Building Project) 7.75%, 1/1/2010................ $ 1,000,000 $ 1,108,030
(New York State Department of Health Building Project) 7.25%, 10/1/2010... 1,455,000 1,565,856
Metropolitan Transportation Authority:
Commuter Facilities Revenue:
6.125%, 7/1/2014 (Insured; MBIA)........................................ 2,990,000 3,175,380
Service Contract 7.50%, 7/1/2016 (Prerefunded 7/1/2000) (a)............. 1,350,000 1,523,313
Transit Facilities Revenue 6%, 7/1/2016 (Insured; FSA).................... 3,000,000 3,167,970
Municipal Assistance Corp. for the City of New York, Refunding 5.50%, 7/1/2007 2,250,000 2,363,242
New York City:
6.75%, 2/1/2009........................................................... 3,000,000 3,258,360
5.875%, 8/15/2016......................................................... 4,900,000 4,843,160
6%, 2/15/2020............................................................. 4,500,000 4,485,555
6.625%, 8/1/2025.......................................................... 5,090,000 5,351,982
Refunding:
6.375%, 8/1/2004........................................................ 1,000,000 1,065,150
5.875%, 8/1/2024........................................................ 4,000,000 3,908,760
New York City Housing Development Corp., MFHR, Refunding 5.625%, 5/1/2012.... 1,500,000 1,499,160
New York City Industrial Development Agency:
Civic Facility Revenue (YMCA of Greater New York Project) 8%, 8/1/2016.... 1,500,000 1,617,435
Special Facility Revenue (American Airlines Inc. Project) 6.90%, 8/1/2024. 2,000,000 2,170,640
New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue:
5.50%, 6/15/2019 (Insured; MBIA).......................................... 4,000,000 3,946,480
5.875%, 6/15/2026 (Insured; MBIA)......................................... 2,500,000 2,537,200
Refunding:
6%, 6/15/2010........................................................... 4,100,000 4,426,319
5.50%, 6/15/2023........................................................ 3,870,000 3,819,342
New York City Trust, Cultural Resources Revenue (New York Botanical Gardens)
5.80%, 7/1/2026 (Insured; MBIA)........................................... 2,000,000 2,043,540
State of New York 5.625%, 10/1/2020.......................................... 7,265,000 7,317,163
New York State Dormitory Authority, Revenues:
(Consolidated City University System):
5.75%, 7/1/2007 (Insured; AMBAC)........................................ 3,150,000 3,373,020
5.75%, 7/1/2009 (Insured; AMBAC)........................................ 3,000,000 3,195,180
7.625%, 7/1/2020 (Prerefunded 7/1/2000) (a)............................. 750,000 849,382
Refunding:
5.50%, 7/1/2016 (Insured; AMBAC)...................................... 2,200,000 2,200,814
5.625%, 7/1/2016...................................................... 4,000,000 4,018,680
Court Facilities Lease 5.50%, 5/15/2010................................... 2,100,000 2,070,516
(State University Educational Facilities):
7.70%, 5/15/2012 (Prerefunded 5/15/2000) (a)............................ 1,000,000 1,131,200
6.75%, 5/15/2021 (Prerefunded 5/15/2002) (a)............................ 3,400,000 3,849,208
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) November 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
- ---------------------------------------------------------------------------- -------------- ----------------
New York (continued)
New York State Dormitory Authority, Revenues (continued):
(State University Educational Facilities) (continued):
Refunding:
5.375%, 5/15/2007 (Insured; FGIC)..................................... $ 6,000,000 $ 6,298,620
5.25%, 5/15/2010...................................................... 5,870,000 5,696,307
5.875%, 5/15/2011 (Insured; FGIC)..................................... 5,000,000 5,374,300
New York State Energy Research and Development Authority,
Electric Facilities Revenue:
(Consolidated Edison Co. Project):
7.25%, 11/1/2024...................................................... 1,250,000 1,316,463
7.125%, 12/1/2029..................................................... 5,000,000 5,661,850
(Long Island Lighting Co. Project) 7.15%, 2/1/2022...................... 2,585,000 2,672,192
New York State Environmental Facilities Corp.:
PCR (Pilgrim State Sewer Project) 6.30%, 3/15/2016........................ 3,000,000 3,251,580
SWDR (Occidental Petroleum Corp. Project)
6.10%, 11/1/2030 (Guaranteed; Occidental Petroleum Corp.)............... 1,000,000 1,000,100
New York State Housing Finance Agency, Revenue:
Health Facilities, Refunding (New York City):
7.90%, 11/1/1999........................................................ 760,000 808,154
6%, 11/1/2007........................................................... 4,000,000 4,132,520
Housing Project Mortgage, Refunding 6.10%, 11/1/2015 (Insured; FSA)....... 2,000,000 2,062,980
Service Contract Obligation 7.30%, 3/15/2021 (Prerefunded 9/15/2001) (a) . 1,000,000 1,146,120
New York State Local Government Assistance Corp. Sales Tax Revenue:
5.375%, 4/1/2014.......................................................... 3,870,000 3,828,862
5%, 4/1/2023.............................................................. 2,000,000 1,852,420
Refunding 5.375%, 4/1/2019................................................ 4,000,000 3,928,240
New York State Medical Care Facilities Finance Agency, Insured Mortgage Revenue:
6.05%, 2/15/2015 (Insured; FHA)........................................... 3,000,000 3,079,380
Hospital and Nursing Home 7.45%, 8/15/2031 (Insured; FHA)................. 1,000,000 1,104,780
(Saint Luke's Roosevelt Hospital Center):
7.45%, 2/15/2029 (Insured; FHA) (Prerefunded 2/15/2000) (a)............. 500,000 557,445
Refunding 5.60%, 8/15/2013 (Insured; FHA)............................... 3,000,000 3,028,110
New York State Mortgage Agency, Homeownership Mortgage Revenue:
6.45%, 10/1/2020.......................................................... 2,680,000 2,751,904
8.05%, 4/1/2022........................................................... 545,000 577,188
New York State Power Authority, Revenue and General Purpose
7%, 1/1/2018 (Prerefunded 1/1/2010) (a)................................... 1,940,000 2,287,726
New York State Thruway Authority:
Highway and Bridge Trust Fund, Revenue 5.25%, 4/1/2014 (Insured; AMBAC)... 4,000,000 3,957,080
Service Contract Revenue (Local Highway and Bridge):
7.25%, 1/1/2010 (Prerefunded 1/1/2001) (a).............................. 1,000,000 1,125,690
5.75%, 4/1/2016......................................................... 2,000,000 2,002,300
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) November 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
- ---------------------------------------------------------------------------- -------------- ----------------
New York (continued)
New York State Urban Development Corp., Revenue:
(Alfred Technology Resources Inc. Project)
7.875%, 1/1/2020 (Prerefunded 1/1/2000) (a)............................. $ 1,000,000 $ 1,122,340
Correctional Capital Facilities:
6.10%, 1/1/2011......................................................... 4,000,000 4,100,240
5.375%, 1/1/2025........................................................ 5,000,000 4,743,300
Refunding 6.50%, 1/1/2011 (Insured; FSA)................................ 3,190,000 3,619,246
(Onondaga County Convention Project) 7.875%, 1/1/2020
(Prerefunded 1/1/2001) (a).............................................. 1,475,000 1,700,926
Local or Guaranteed Housing, Refunding 5.50%, 7/1/2016.................... 3,550,000 3,590,790
Port Authority of New York and New Jersey, Port Airport and Marina Revenue
(Consolidated One Hundred Fifth Series) 5.50%, 9/1/2014 (Insured; MBIA)... 2,500,000 2,506,000
Rensselaer County Industrial Development Agency, IDR (Albany International Corp.)
7.55%, 6/1/2007 (LOC; Norstar Bank) (b)................................... 1,500,000 1,735,110
Triborough Bridge and Tunnel Authority:
(Convention Center Project) 7.25%, 1/1/2010............................... 1,000,000 1,160,180
Revenue:
6%, 1/1/2012............................................................ 2,000,000 2,177,820
5.20%, 1/1/2022......................................................... 1,620,000 1,574,591
5.20%, 1/1/2027......................................................... 1,900,000 1,834,108
Special Obligation 6.25%, 1/1/2012 (Insured; AMBAC)....................... 4,000,000 4,256,600
U.S. Related--4.9%
Guam Airport Authority, Airport Revenue 6.70%, 10/1/2023..................... 2,000,000 2,080,140
Puerto Rico Industrial Medical Educational and Environmental Pollution Control
Facilities Financing Authority, HR, Refunding (Saint Luke's Hospital Project)
6.25%, 6/1/2010........................................................... 1,100,000 1,149,830
Puerto Rico Public Buildings Authority, Revenue:
(Government Facilities)
6.25%, 7/1/2011 (Insured; AMBAC, Guaranteed; Commonwealth of Puerto Rico) 3,875,000 4,348,641
Public Education and Health Facilities, Refunding
5.70%, 7/1/2009 (Guaranteed; Commonwealth of Puerto Rico)............... 2,235,000 2,344,135
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $188,889,578)....................................................... $199,428,345
=============
Short-Term Municipal Investments--1.5%
- ------------------------------------------------------------------------
New York;
Port Authority of New York and New Jersey, Special Obligation Revenue, VRDN
4.10% (SBPA; Morgan Guaranty Trust Co.) (c)
(cost $3,000,000)......................................................... $ 3,000,000 $ 3,000,000
=============
TOTAL INVESTMENTS--100.0%
(cost $191,889,578)....................................................... $202,428,345
=============
</TABLE>
<PAGE>
Premier New York Municipal Bond Fund
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
Summary of Abbreviations
- --------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
AAA Aaa AAA 37.8%
AA Aa AA 8.4
A A A 26.4
BBB Baa BBB 23.3
BB Ba BB 1.3
F1 MIG1 SP1 1.5
Not Rated (e) Not Rated (e) Not Rated (e) 1.3
-------
100.0%
=======
<FN>
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) Secured by letters of credit.
(c) 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.
(d) Fitch
currently provides creditworthiness information for a limited number of
investments.
(e) Securities which, while not rated by Fitch, Moody's and
Standard & Poor's, have been determined by the Manager to be of comparable
quality to those rated securities in which the Fund may invest.
</TABLE>
See notes to financial statements.
<PAGE>
Premier New York Municipal Bond Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1996
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments..... $191,889,578 $202,428,345
Cash........................................................ 6,282,775
Receivable for investment securities sold................... 7,113,785
Interest receivable......................................... 3,291,903
Receivable for shares of Beneficial Interest subscribed..... 80,538
Prepaid expenses............................................ 15,269
-------------
219,212,615
-------------
LIABILITIES: Due to The Dreyfus Corporation.............................. 93,005
Due to Distributor.......................................... 71,603
Payable for investment securities purchased................. 11,444,070
Payable for shares of Beneficial Interest redeemed.......... 235,858
Accrued expenses............................................ 78,117
-------------
11,922,653
-------------
NET ASSETS.................................................................... $207,289,962
=============
REPRESENTED BY: Paid-in capital............................................. $195,849,297
Accumulated net realized gain (loss) on investments......... 901,898
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.................................... 10,538,767
-------------
NET ASSETS..................................................................... $207,289,962
=============
</TABLE>
NET ASSET VALUE PER SHARE
---------------------------
<TABLE>
<CAPTION>
Class A Class B Class C
------------- ------------ ----------
<S> <C> <C> <C>
Net Assets....................................................... $135,412,690 $71,392,104 $485,168
Shares Outstanding............................................... 9,063,409 4,777,710 32,461
NET ASSET VALUE PER SHARE........................................ $14.94 $14.94 $14.95
====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Operations Year Ended November 30, 1996
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $12,294,470
EXPENSES: Management fee--Note 2(a)........................ $ 1,146,191
Shareholder servicing costs--Note 2(c)........... 646,609
Distribution fees--Note 2(b)..................... 348,335
Professional fees................................ 47,393
Custodian fees................................... 22,102
Prospectus and shareholders' reports............. 18,245
Trustees' fees and expenses--Note 2(d)........... 15,275
Registration fees................................ 11,423
Miscellaneous.................................... 17,962
------------
Total Expenses.............................. 2,273,535
------------
INVESTMENT INCOME--NET......................................................... 10,020,935
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments......... $ 948,259
Net unrealized appreciation (depreciation) on investments (1,028,664)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ (80,405)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 9,940,530
============
</TABLE>
See notes to financial statements.
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1996 November 30, 1995
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................ $ 10,020,935 $ 10,398,309
Net realized gain (loss) on investments............................... 948,259 452,878
Net unrealized appreciation (depreciation) on investments............. (1,028,664) 26,991,860
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 9,940,530 37,843,047
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (6,921,593) (7,565,208)
Class B shares...................................................... (3,093,704) (2,833,091)
Class C shares...................................................... (5,638) (10)
------------- -------------
Total Dividends................................................... (10,020,935) (10,398,309)
------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 11,521,767 9,960,037
Class B shares...................................................... 10,872,905 12,795,103
Class C shares...................................................... 473,073 1,000
Dividends reinvested:
Class A shares...................................................... 5,056,435 5,506,451
Class B shares...................................................... 2,351,435 2,200,257
Class C shares...................................................... 4,027 10
Cost of shares redeemed:
Class A shares...................................................... (27,212,542) (26,739,496)
Class B shares...................................................... (8,777,575) (9,034,959)
------------- -------------
Increase (Decrease) in Net Assets from Beneficial Interest
Transactions (5,710,475) (5,311,597)
------------- -------------
Total Increase (Decrease) in Net Assets......................... (5,790,880) 22,133,141
NET ASSETS:
Beginning of Period................................................... 213,080,842 190,947,701
------------- -------------
End of Period......................................................... $207,289,962 $213,080,842
============= =============
</TABLE>
See notes to financial statements.
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------------
Year Ended Year Ended
November 30, 1996 November 30, 1995
------------------ ------------------
CAPITAL SHARE TRANSACTIONS:
Class A
-------
<S> <C> <C>
Shares sold........................................................... 786,787 698,060
Shares issued for dividends reinvested................................ 345,086 386,165
Shares redeemed....................................................... (1,861,748) (1,893,114)
---------- ----------
Net Increase (Decrease) in Shares Outstanding..................... (729,875) (808,889)
========== ==========
Class B
-------
Shares sold........................................................... 740,327 893,122
Shares issued for dividends reinvested................................ 160,501 154,097
Shares redeemed....................................................... (601,695) (637,271)
---------- ----------
Net Increase (Decrease) in Shares Outstanding..................... 299,133 409,948
========== ==========
Class C*
-------
Shares sold........................................................... 32,116 68
Shares issued for dividends reinvested................................ 276 1
---------- ----------
Net Increase (Decrease) in Shares Outstanding..................... 32,392 69
========== ==========
<FN>
- ------------------------
* From September 11, 1995 (commencement of initial offering) to November 30,
1995.
</TABLE>
See notes to financial statements.
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Financial Highlights
Reference is hereby made to page 4 and 5 of the Fund's Prospectus dated
April 1, 1997.
See notes to financial statments.
<PAGE>
Premier New York Municipal Bond Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Premier New York Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. The Fund's investment objective is to maximize current
income exempt from Federal, New York State and New York City income taxes to the
extent 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.
On October 31, 1996, the Board of Trustees approved an Agreement and Plan of
Reorganization providing for the transfer of all or substantially all of the
assets and liabilities of Premier Insured Municipal Bond Fund, New York Series
to the Fund in a tax free exchange for shares of the Fund at net asset value and
the assumption of stated liabilities (the "Exchange"). The Exchange is subject
to the approval of Premier Insured Municipal Bond Fund, New York Series
shareholders.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the distributor
of the Fund's shares. The Fund is authorized to issue an unlimited number of
$.001 par value shares in the following classes of shares: Class A, Class B and
Class C. Class A shares are subject to a sales charge imposed at the time of
purchase and Class B shares are subject to a contingent deferred sales charge
imposed at the time of redemption on redemptions made within five years of
purchase and Class C shares are subject to a contingent deferred sales charge
imposed at the time of redemptions on redemptions made within one year of
purchase. Other differences between the three Classes include the services
offered to and the expenses borne by each Class and certain voting rights.
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 these estimates.
(A) PORTFOLIO VALUATION: The Fund investments (excluding options and financial
futures on municipal and U.S. treasury securities) are valued each business day
by an independent pricing service ("Service") approved by the Board of Trustees.
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. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(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.
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(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 .55 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 fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the Fund, the Fund may
deduct from payments to be made to the Manager, or the Manager will bear the
amount of such excess to the extent required by state law. There was no expense
reimbursement for the period ended November 30, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $2,123 during the period ended November 30, 1996 from commissions
earned on sales of the Fund's shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act,
the Fund pays the Distributor for distributing the Fund's Class B and Class C
shares at an annual rate of .50 of 1% of the value of the average daily net
assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended November 30, 1996, $347,273
was charged to the Fund for the Class B shares and $1,062 was charged to the
Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the Distributor at an
annual rate of .25 of 1% of the value of the average daily net assets of Class
A, Class B and Class C shares for the provision of certain services. 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. The Distributor may make payments to Service Agents (a
securities dealer, financial institution or other industry professional) in
respect of these services. The Distributor determines the amounts to be paid to
Service Agents. For the period ended November 30, 1996, $347,006, $173,636 and
$354 were charged to the Class A, Class B and Class C shares, respectively, by
the Distributor pursuant to the Shareholder Services 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. Such compensation
amounted to $89,405 for the period ended November 30, 1996.
<PAGE>
Premier New York Municipal Bond Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $1,000 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended November 30, 1996
amounted to $108,805,467 and $116,999,751 respectively.
At November 30, 1996, accumulated net unrealized appreciation on
investments was $10,538,767, consisting of $10,656,734 gross
unrealized appreciation and $117,967 gross unrealized depreciation.
At November 30, 1996, 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).
<PAGE>
Premier New York Municipal Bond Fund
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Premier New York Municipal Bond Fund
We have audited the accompanying statement of assets and liabilities of
Premier New York Municipal Bond Fund, including the statement of investments, as
of November 30, 1996, 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
November 30, 1996 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
Premier New York Municipal Bond Fund at November 30, 1996, 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
New York, New York
January 7, 1997
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement
Condensed Financial Information for the period from December
31, 1986 (commencement of operations) to November 30, 1987 and
for each of the nine years ended November 30, 1996.
Included in Part B of the Registration Statement:
Statement of Investments-- November 30, 1996.
Statement of Assets and Liabilities--November 30, 1996.
Statement of Operations--year ended November 30, 1996.
Statement of Changes in Net Assets--for each of the two
years ended November 30, 1995 and 1996.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors,
dated January 7, 1997.
All Schedules, 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) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1) of Post-Effective
Amendment No. 14 to the Registration Statement on Form N-1A, filed
on September 8, 1995.
(1)(b) Amendment to Agreement and Declaration of Trust.
(2) Registrant's By-Laws, as amended, are incorporated by reference to
Exhibit (2) of Post-Effective Amendment No. 11 to the Registration
Statement on Form N-1A, filed on March 8, 1994.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 12 to the Registration Statement on
Form N-1A, filed on January 27, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 12 to the Registration
Statement on Form N-1A, filed on January 27, 1995.
(6)(b) Forms of Shareholder Services Plan Agreements are incorporated by
reference to Exhibit (6)(b) of Post-Effective Amendment No. 14 to
the Registration Statement on Form N-1A, filed on September 8,
1995.
(6)(c) Forms of Distribution Plan Agreements are incorporated by reference
to Exhibit (6)(c) of Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A, filed on September 8, 1995.
(8)(a) Registrant's Custody Agreement is incorporated by reference to
Exhibit (8)(a) of Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A, filed on September 8, 1995.
(8)(b) Sub-Custodian Agreements are incorporated by reference to Exhibit
(8)(b) of Post-Effective Amendment No. 14 to the Registration
Statement on Form N-1A, filed on September 8, 1995.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(9) Shareholder Services Plan is incorporated by reference to Exhibit
(9) of Post-Effective Amendment No. 14 to the Registration
Statement on Form N-1A, filed on September 8, 1995.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Exhibit (10) of Post-Effective Amendment No. 14 to the
Registration Statement on Form N-1A, filed on September 8, 1995.
(11) Consent of Independent Auditors.
(15) Distribution Plan is incorporated by reference to Exhibit (15) of
Post-Effective Amendment No. 14 to the Registration Statement on
Form N-1A, filed on September 8, 1995.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A, filed on March 8, 1994.
(17) Financial Data Schedule.
(18) Rule 18f-3 Plan.
Other Exhibits
_____________
(a) Powers of Attorney of the Trustees and officers.
(b) Certificate of Secretary.
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 March 10, 1997
______________ _____________________________
Beneficial Interest
(Par value $.001)
Class A 2,460
Class B 2,202
Class C 4
Item 27. Indemnification
_______ _______________
Reference is made to Article VIII of the Registrant's Amended and
Restated Declaration of Trust incorporated by reference to Exhibit
(1) of Post-Effective Amendment No. 14 to the Registration
Statement on Form N-1A, filed on September 8, 1995. The application
of these provisions is limited by Article 10 of the Registrant's By-
Laws, as amended, incorporated by reference to Exhibit (2) of Post-
Effective Amendment No. 11 to the Registration Statement on Form N-
1A, filed on March 8, 1994, and by the following undertaking set
forth in the rules promulgated by the Securities and Exchange
Commission:
Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be
permitted to trustees, officers and controlling
persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and
Exchange Commission such indemnification is against
public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim
for indemnification is against such liabilities
(other than the payment by the registrant of
expenses incurred or paid by a trustee, officer or
controlling person of the registrant in the
successful defense of any such action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as
expressed in such Act and will be governed by the
final adjudication of such issue.
Reference is also made to the Distribution Agreement incorporated by
reference to Exhibit (6)(a) of Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A, filed on January 27, 1995.
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 and manager 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:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***
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
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****;
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
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 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ 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.
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 Funds, 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 GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
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) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, 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 MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
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 S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Keeley++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. 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 Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares 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 certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and 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 27th day of March, 1997.
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
BY: /s/Marie E. Connolly*
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, 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 3/27/97
- --------------------- Executive
Marie E. Connolly Officer)and Treasurer
/s/Joseph F. Tower, III* Vice President and Assistant 3/27/97
- ---------------------- Treasurer (Principal Accounting
Joseph F. Tower, III and Financial Officer)
/s/Clifford L. Alexander, Jr.* Board member 3/27/97
- -----------------------------
Clifford L. Alexander, Jr.
/s/Peggy C. Davis* Board member 3/27/97
- -------------------
Peggy C. Davis
/s/Joseph S. DiMartino* Chairman of the Board 3/27/97
- -----------------------
Joseph S. DiMartino
/s/Ernest Kafka* Board member 3/27/97
- ----------------
Ernest Kafka
/s/Saul B. Klaman* Board member 3/27/97
- ------------------
Saul B. Klaman
/s/Nathan Leventhal* Board member 3/27/97
- --------------------
Nathan Leventhal
BY: __________________________*
Elizabeth A. Keeley,
Attorney-in-Fact
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
INDEX OF EXHIBITS
(1)(b) Amendment to Agreement and Declaration of Trust
(11) Consent of Independent Auditors
(17) Financial Data Schedule
Other Exhibits
(a) Powers of Attorney
(b) Certificate of Secretary
PREMIER NEW YORK MUNICIPAL BOND FUND
ARTICLES OF AMENDMENT
Premier New York Municipal Bond Fund, a business trust formed by
an Amended and Restated Agreement and Declaration of Trust dated July 24,
1992 pursuant to the laws of The Commonwealth of Massachusetts (the
"Trust"), hereby certifies to the Secretary of State of The Commonwealth of
Massachusetts that:
FIRST: The Agreement and Declaration of Trust of the Trust is
hereby amended by striking out Article I, Section 1 and inserting in lieu
thereof the following:
"Section 1. Name. This Trust shall be known as
'Dreyfus Premier New York Municipal Bond Fund.'"
SECOND: The amendment to the Agreement and Declaration of Trust
herein made was duly approved at a meeting of the Trustees of the Trust on
January 8, 1997 pursuant to Article IX, Section 8 of the Agreement and
Declaration of Trust.
IN WITNESS WHEREOF, Premier New York Municipal Bond Fund has
caused these Articles to be filed in its name and on its behalf by its
Trustees.
PREMIER NEW YORK MUNICIPAL BOND FUND
By: /s/JOSEPH S. DIMARTINO
Joseph S. DiMartino, Trustee
By: /s/CLIFFORD L. ALEXANDER, JR.
Clifford L. Alexander, Jr., Trustee
By: /s/PEGGY C. DAVIS
Peggy C. Davis, Trustee
By: /s/ERNEST KAFKA
Ernest Kafka, Trustee
By: /s/SAUL B. KLAMAN
Saul B. Klaman, Trustee
By: /s/NATHAN LEVENTHAL
Nathan Leventhal, Trustee
STATE OF NEW YORK )
: ss:
COUNTY OF NEW YORK )
On this 8th day of January, 1997, before me personally appeared the
above-named Trustees of the Trust, to me known, and known to me to be the
persons described in and who executed the foregoing instrument, and who duly
acknowledged to me that they had executed the same.
Notary Public
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated January 7, 1997, in this Registration Statement (Form N-1A 33-7497)
of Dreyfus Premier New York Municipal Bond Fund.
ERNST & YOUNG LLP
New York, New York
March 27, 1997
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<PER-SHARE-NII> .650
<PER-SHARE-GAIN-APPREC> .010
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<AVG-DEBT-OUTSTANDING> 0
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<DISTRIBUTIONS-OF-GAINS> 0
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THE DREYFUS FAMILY OF FUNDS
(Dreyfus Premier Family of Fixed-Income Funds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "1940 Act"), requires that the Board of an investment company desiring
to offer multiple classes pursuant to said Rule adopt a plan setting forth
the separate arrangement and expense allocation of each class, and any
related conversion features or exchange privileges.
The Board, including a majority of the non-interested Board
members, of each of the investment companies, or series thereof, listed on
Schedule A attached hereto (each, a "Fund") which desires to offer multiple
classes has determined that the following plan is in the best interests of
each class individually and the Fund as a whole:
1. Class Designation: Fund shares shall be divided into Class A,
Class B and Class C.
2. Differences in Services: The services offered to shareholders
of each Class shall be substantially the same, except that Right of
Accumulation, Letter of Intent, and Checkwriting services shall be available
only to holders of Class A shares.
3. Differences in Distribution Arrangements: Class A shares
shall be offered with a front-end sales charge, as such term is defined under
the Conduct Rules of the National Association of Securities Dealers, Inc.,
and a deferred sales charge (a "CDSC"), as such term is defined under said
Conduct Rules, may be assessed on certain redemptions of Class A shares
purchased without an initial sales charge as part of an investment of $1
million or more. The amount of the sales charge and the amount of and
provisions relating to the CDSC pertaining to the Class A shares are set
forth on Schedule B hereto.
Class B shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC and shall be charged an annual distribution
fee under a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940
Act. The amount of and provisions relating to the CDSC, and the amount of
the fees under the Distribution Plan pertaining to the Class B shares, are
set forth on Schedule C hereto.
Class C shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC and shall be charged an annual distribution
fee under a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940
Act. The amount of and provisions relating to the CDSC, and the amount of
the fees under the Distribution Plan pertaining to the Class C shares, are
set forth on Schedule D hereto.
Each Class of shares shall be subject to an annual service fee at
the rate of .25% of the value of the average daily net assets of such Class
pursuant to a Shareholder Services Plan.
4. Expense Allocation. The following expenses shall be
allocated, to the extent practicable, on a Class-by-Class basis: (a) fees
under the Distribution Plan and Shareholder Services Plan; (b) printing and
postage expenses related to preparing and distributing materials, such as
shareholder reports, prospectuses and proxies, to current shareholders of a
specific Class; (c) Securities and Exchange Commission and Blue Sky
registration fees incurred by a specific Class; (d) the expense of
administrative personnel and services as required to support the shareholders
of a specific Class; (e) litigation or other legal expenses relating solely
to a specific Class; (f) transfer agent fees identified by the Fund's
transfer agent as being attributable to a specific Class; and (g) Board
members' fees incurred as a result of issues relating to a specific Class.
5. Conversion Features. Class B shares shall automatically
convert to Class A shares after a specified period of time after the date of
purchase, based on the relative net asset value of each such Class without
the imposition of any sales charge, fee or other charge, as set forth on
Schedule E hereto. No other Class shall be subject to any automatic
conversion feature.
6. Exchange Privileges. Shares of a Class shall be exchangeable
only for (a) shares of the same Class of other investment companies managed
or administered by The Dreyfus Corporation and (b) shares of certain other
investment companies specified from time to time.
Dated: April 12, 1995
Revised as of: March 31, 1997
SCHEDULE A
Dreyfus Premier California Municipal Bond Fund
Dreyfus Premier GNMA Fund
Dreyfus Premier Insured Municipal Bond Fund
Dreyfus Premier Municipal Bond Fund
Dreyfus Premier New York Municipal Bond Fund
Dreyfus Premier State Municipal Bond Fund
SCHEDULE B
Front-End Sales Charge--Class A Shares--The public offering price for Class A
shares shall be the net asset value per share of that Class plus a sales load
as shown below:
Total
Sales
Load
Amount of Transaction As a % of As a % of
offering net asset
price per value per
share share
Less than $50,000............... 4.50 4.70
$50,000 to less than $100,000... 4.00 4.20
$100,000 to less than $250,000.. 3.00 3.10
$250,000 to less than $500,000.. 2.50 2.60
$500,000 to less than $1,000,000. 2.00 2.00
$1,000,000 or more............... -0- -0-
Contingent Deferred Sales Charge--Class A Shares--A CDSC of 1.00% shall be
assessed at the time of redemption of Class A shares purchased without an
initial sales charge as part of an investment of at least $1,000,000 and
redeemed within one year of purchase. The terms contained in Schedule C
pertaining to the CDSC assessed on redemptions of Class B shares (other than
the amount of the CDSC and its time periods), including the provisions for
waiving the CDSC, shall be applicable to the Class A shares subject to a
CDSC. Letter of Intent and Right of Accumulation shall apply to such
purchases of Class A shares.
SCHEDULE C
Contingent Deferred Sales Charge--Class B Shares--A CDSC payable to the
Fund's Distributor shall be imposed on any redemption of Class B shares which
reduces the current net asset value of such Class B shares to an amount which
is lower than the dollar amount of all payments by the redeeming shareholder
for the purchase of Class B shares of the Fund held by such shareholder at
the time of redemption. No CDSC shall be imposed to the extent that the net
asset value of the Class B shares redeemed does not exceed (i) the current
net asset value of Class B shares acquired through reinvestment of dividends
or capital gain distributions, plus (ii) increases in the net asset value of
the shareholder's Class B shares above the dollar amount of all payments for
the purchase of Class B shares of the Fund held by such shareholder at the
time of redemption.
If the aggregate value of the Class B shares redeemed has declined
below their original cost as a result of the Fund's performance, a CDSC may
be applied to the then-current net asset value rather than the purchase
price.
In circumstances where the CDSC is imposed, the amount of the
charge shall depend on the number of years from the time the shareholder
purchased the Class B shares until the time of redemption of such shares.
Solely for purposes of determining the number of years from the time of any
payment for the purchase of Class B shares, all payments during a month shall
be aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC for Class B
shares, except for Class B shares purchased by shareholders who beneficially
owned Class B shares on November 30, 1996:
CDSC as a % of
Year Since Amount Invested
Purchase Payment or Redemption
Was Made Proceeds
First ........................ 4.00
Second........................ 4.00
Third......................... 3.00
Fourth........................ 3.00
Fifth......................... 2.00
Sixth......................... 1.00
The following table sets forth the rates of the CDSC for Class B
shares purchased by shareholders who beneficially owned Class B shares on
November 30, 1996:
CDSC as a % of
Year Since Amount Invested
Purchase Payment or Redemption
Was Made Proceeds
First......................... 3.00
Second........................ 3.00
Third......................... 2.00
Fourth........................ 2.00
Fifth......................... 1.00
Sixth......................... 0.00
In determining whether a CDSC is applicable to a redemption, the
calculation shall be made in a manner that results in the lowest possible
rate. Therefore, it shall be assumed that the redemption is made first of
amounts representing shares acquired pursuant to the reinvestment of
dividends and distributions; then of amounts representing the increase in net
asset value of Class B shares above the total amount of payments for the
purchase of Class B shares made during the preceding six years (five years
for shareholders beneficially owning Class B shares on November 30, 1996);
then of amounts representing the cost of shares purchased six years (five
years for shareholders beneficially owning Class B shares on November 30,
1996) prior to the redemption; and finally, of amounts representing the cost
of shares held for the longest period of time within the applicable six-year
period (five-year period for shareholders beneficially owning Class B shares
on November 30, 1996).
Waiver of CDSC--The CDSC shall be waived in connection with (a) redemptions
made within one year after the death or disability, as defined in Section
72(m)(7) of the Internal Revenue Code of 1986, as amended (the "Code"), of
the shareholder, (b) redemptions 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
Fund's Distributor exceeds one million dollars, (c) redemptions as a result
of a combination of any investment company with the Fund by merger,
acquisition of assets or otherwise, (d) a distribution following retirement
under a tax-deferred retirement plan or upon attaining age 70-1/2 in the case
of an IRA or Keogh plan or custodial account pursuant to Section 403(b) of
the Code, and (e) redemptions pursuant to any systematic withdrawal plan as
described in the Fund's prospectus. Any Fund shares subject to a CDSC which
were purchased prior to the termination of such waiver shall have the CDSC
waived as provided in the Fund's prospectus at the time of the purchase of
such shares.
Amount of Distribution Plan Fees--Class B Shares--.50 of 1% of the value of
the average daily net assets of Class B.
SCHEDULE D
Contingent Deferred Sales Charge--Class C Shares--A CDSC of 1.00% payable to
the Fund's Distributor shall be imposed on any redemption of Class C shares
within one year of the date of purchase. The basis for calculating the
payment of any such CDSC shall be the method used in calculating the CDSC for
Class B shares. In addition, the provisions for waiving the CDSC shall be
those set forth for Class B shares.
Amount of Distribution Plan Fees--Class C Shares--.75 of 1% of the value of
the average daily net assets of Class C.
SCHEDULE E
Conversion of Class B Shares--Approximately six years after the date of
purchase, Class B shares automatically shall convert to Class A shares, based
on the relative net asset values for shares of each such Class, and shall no
longer be subject to the distribution fee. At that time, Class B shares that
have been acquired through the reinvestment of dividends and distributions
("Dividend Shares") shall be converted in the proportion that a shareholder's
Class B shares (other than Dividend Shares) converting to Class A shares
bears to the total Class B shares then held by the shareholder which were not
acquired through the reinvestment of dividends and distributions.
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Elizabeth A. Keeley,
Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E. Pelletier and
each of them, with full power to act without the other, his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments to the Registration Statement of Dreyfus Premier New York
Municipal Bond Fund (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 agents, and each of
them, full power and authority to do and perform each and every act and thing
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.
/s/Clifford L. Alexander, Jr. March 27, 1997
- --------------------------------
Clifford L. Alexander, Jr.
/s/Peggy C. Davis March 27, 1997
- --------------------------------
Peggy C. Davis
/s/Joseph S. DiMartino March 27, 1997
- --------------------------------
Joseph S. DiMartino
/s/Ernst Kafka March 27, 1997
- --------------------------------
Ernst Kafka
/s/Saul B. Klaman March 27, 1997
- --------------------------------
Saul B. Klaman
/s/Nathan Leventhal March 27, 1997
- --------------------------------
Nathan Leventhal
DREYFUS PREMIER NEW YORK MUNICIPAL BOND FUND
Certificate of Assistant Secretary
The undersigned, Elizabeth A. Keeley, Vice President and Assistant
Secretary of Dreyfus Premier New York Municipal Bond Fund (the "Fund"),
hereby certifies that set forth below is a copy of the resolution adopted by
the Fund's Board authorizing the signing by Elizabeth A. Keeley, Marie E.
Connolly, Richard W. Ingram, Mark A. Karpe 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 Elizabeth A. Keeley, Marie E. Connolly,
Richard W. Ingram, Mark A. Karpe 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 March 27, 1997.
-----------------------
Elizabeth A. Keeley
Vice President and
Assistant Secretary
