File No. 33-7496
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. 12 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 12 [X]
(Check appropriate box or boxes.)
PREMIER 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
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
----
x on June 24, 1994 pursuant to paragraph (b) of Rule 485
----
60 days after filing pursuant to paragraph (a) of Rule 485
----
on (date) pursuant to paragraph (a) of Rule 485
----
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 April 30, 1994 was filed on June 21, 1994.
PREMIER 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 5, 31
5 Management of the Fund 16
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 28, 31
7 Purchase of Securities Being Offered 17
8 Redemption or Repurchase 23
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-26
13 Investment Objectives and Policies B-2
14 Management of the Fund B-9
15 Control Persons and Principal B-11
Holders of Securities
16 Investment Advisory and Other B-13
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
PREMIER 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-23
18 Capital Stock and Other Securities B-26
19 Purchase, Redemption and Pricing B-14, 17, 21
of Securities Being Offered
20 Tax Status *
21 Underwriters Cover, B-14
22 Calculations of Performance Data B-24
23 Financial Statements B-36
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
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-29
30 Location of Accounts and Records C-38
31 Management Services C-38
32 Undertakings C-38
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
(Lion Logo) PREMIER MUNICIPAL BOND FUND
PROSPECTUS JUNE 24, 1994
Premier Municipal Bond Fund (the "Fund") is an open-end,
diversified, management investment company, known as a mutual fund. Its
goal is to maximize current income exempt from Federal income tax to the
extent consistent with the preservation of capital.
By this Prospectus, Class A and Class B shares of the Fund
are being offered. 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 on redemptions made within five years of
purchase. Other differences between the two Classes include the services
offered to and the expenses borne by each Class and certain voting
rights, as described herein. The Fund offers these alternatives to permit
an investor to choose the method of purchasing shares that is most
beneficial given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances.
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 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.
Part B (also known as the Statement of Additional Information), dated
June 24, 1994, which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters which may
be of interest to some investors. It has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. For a
free copy, write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or call 1-800-554-4611. When telephoning, ask for
Operator 666.
A MUTUAL FUND'S 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.
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.
Page 1
TABLE OF CONTENTS
Fee Table.......................................... 3
Condensed Financial Information.................... 4
Alternative Purchase Methods....................... 5
Description of the Fund............................ 5
Management of the Fund............................. 16
How to Buy Fund Shares............................. 17
Shareholder Services............................... 20
How to Redeem Fund Shares.......................... 23
Distribution Plan and Shareholder Services Plan.... 27
Dividends, Distributions and Taxes................. 28
Performance Information............................ 30
General Information................................ 31
Page 2
<TABLE>
<CAPTION>
FEE TABLE
CLASS A CLASS B
Shareholder Transaction Expenses
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)......................... 4.50% --
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge).......... -- 3.00%
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Management Fees....................................... .55% .55%
12b-1 Fees............................................ -- .50%
Other Expenses ....................................... .36% .36%
Total Fund Operating Expenses......................... .91% 1.41%
Example
An investor 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 B*
1 Year...................................... $ 54 $ 44 $ 14
3 Years..................................... $ 73 $ 65 $ 45
5 Years..................................... $ 93 $ 87 $ 77
10 Years**.................................. $152 $143 $143
*Assuming no redemption of Class B shares.
**Ten-year figures assume conversion of Class B shares to Class A
shares at the end of the sixth year following the date of purchase.
</TABLE>
- ---------------------------------------------------------------------------
The amounts listed in the example should not be considered as
representative of past or future expenses and actual expenses may be
greater or less than those indicated. Moreover, while the example assumes
a 5% annual return, the Fund's actual performance will vary and may
result in an actual return greater or less than 5%.
- ---------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the various costs and expenses that investors will bear,
directly or indirectly, the payment of which will reduce investors'
return on an annual basis. Total Fund Operating Expenses are limited to
the expense limitation provision of the Management Agreement. Long-term
investors in Class B 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 Fund Shares" and
"Distribution Plan and Shareholder Services Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by
Ernst & Young, 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 year indicated.
This information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
Class A Shares Class B Shares
-------------- ------------------
Year Ended April 30, Year Ended April 30,
-------------------------------------------------------------------------------- --------------
1987(1) 1988 1989 1990 1991 1992 1993 1994 1993(2) 1994
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value,
beginning of year... $14.00 $12.83 $12.30 $12.97 $12.77 $13.28 $13.75 $14.45 $14.02 $14.45
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
Investment Operations:
Investment income-net... .43 .97 1.01 .99 .98 .94 .92 .89 .24 .80
Net realized and unrealized gain
(loss) on investments... (1.17) (.53) .67 (.20) .51 .49 .91 (.59) .43 (.59)
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
Total from
Investment Operations... (.74) .44 1.68 .79 1.49 1.43 1.83 .30 .67 .21
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
Distributions:
Dividends from
investment income-net... (.43) (.97) (1.01) (.99) (.98) (.94) (.92) (.89) (.24) (.80)
Dividends from net realized
gain on investments..... -- -- -- -- -- (.02) (.21) (.05) -- (.05)
Dividends from excess net realized
gain on investments..... -- -- -- -- -- -- -- -- -- --
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
Total Distributions..... (.43) (.97) (1.01) (.99) (.98) (.96) (1.13) (.94) (.24) (.85)
------ ------- ------ ------ ------ ------- ------ ------ ------- ------
Net asset value,
end of year......... $12.83 $12.30 $12.97 $12.77 $13.28 $13.75 $14.45 $13.81 $14.45 $13.81
====== ====== ====== ====== ====== ====== ======= ====== ====== ======
TOTAL INVESTMENT RETURN(3). (12.87%)(4) 3.64% 14.13% 6.25% 12.13% 11.08% 13.76% 1.84% 16.80%(4) 1.26%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets -- -- -- -- .22% .54% .74% .85% 1.15%(4) 1.40%
Ratio of net investment income
to average net assets.... 6.53% 7.81% 7.72% 7.51% 7.43% 6.90% 6.43% 6.01% 5.13%(4) 5.33%
Decrease reflected in above expense ratios due to
undertakings by
the Manager..... 1.50% 1.50% 1.50% 1.15% .82% .40% .20% .06% .10%(4) .05%
Portfolio Turnover Rate.. 36.62%(5) 33.25% 143.20% 63.53% 41.30% 50.72% 30.99% 22.15% 30.99% 22.15%
Net Assets, end of year
(000's omitted).... $1,290 $5,650 $26,342 $100,784 $247,195 $388,793 $526,606 $546,036 $19,855 $95,643
- ------------------------
(1)From November 26, 1986 (commencement of operations) to April 30, 1987.
(2)From January 15, 1993 (commencement of initial offering)to April 30, 1993.
(3)Exclusive of sales charge.
(4)Annualized.
(5)Not annualized
</TABLE>
Further information about the Fund's performance is contained
in the Fund's annual report which may be obtained without charge by
writing to the address or calling the number set forth on the cover page
of this Prospectus.
Page 4
ALTERNATIVE PURCHASE METHODS
The Fund offers you two 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 Class A and Class B
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 Fund 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 3% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within the first five years
of their purchase. See "How to Buy Fund Shares _ Class B Shares" and "How
to Redeem Fund 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 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.
You should consider whether, during the anticipated life of
your investment in the Fund, the accumulated distribution fee and CDSC on
Class B shares prior to conversion would be less than the initial sales
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. In
this regard, generally, Class B shares may be more appropriate for
investors who invest less than $100,000 in Fund shares. 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 shares may exceed the initial sales charge on Class A
shares during the life of the investment. Generally, Class A shares may
be more appropriate for investors who invest $250,000 or more in Fund
shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's goal is to maximize current income exempt from
Federal income tax to the extent consistent with the preservation of
capital. To accomplish this goal, the Fund invests primarily in Municipal
Obligations (described below) rated at least Baa by Moody's Investors
Service, Inc. ("Moody's ") or BBB by Standard & Poor's Corporation
("S&P") or Fitch Investors Service, Inc. ("Fitch"). The Fund's investment
objective cannot be changed without approval by the holders of a majority
(as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the Fund's
investment objective will be achieved.
Page 5
MUNICIPAL OBLIGATIONS
Municipal Obligations are debt securities issued by states,
territories and possessions of the United States and the District of
Columbia and their political subdivisions, agencies and
instrumentalities, or multistate agencies or authorities, the interest
from which is, in the opinion of bond counsel to the issuer, exempt from
Federal income tax. Municipal Obligations generally include debt
obligations issued to obtain funds for various public purposes as well as
certain industrial development bonds issued by or on behalf of public
authorities. Municipal Obligations are classified as general obligation
bonds, revenue bonds and notes. General obligation bonds are secured by
the issuer's pledge of its faith, credit and taxing power for the payment
of principal and interest. Revenue bonds are payable from the revenue
derived from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific revenue
source, but not from the general taxing power. Tax exempt industrial
development bonds, in most cases, are revenue bonds that 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. Generally, at
least 65% of the value of the Fund's net assets (except when maintaining
a temporary defensive position) will be invested in bonds and debentures.
At least 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 or BBB by S&P or 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 invest in short-term Municipal Obligations which are
rated in the two highest rating categories by Moody's, S&P or Fitch. See
"Appendix" in the Statement of Additional Information. Municipal
Obligations rated BBB by S&P or Fitch or Baa by Moody's are considered
investment grade obligations; those rated BBB by S&P and Fitch are
regarded as having an adequate capacity to pay principal and interest,
while those rated Baa by Moody's are considered medium grade obligations
which lack 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 "Risk Factors _ Lower Rated Bonds" below
for a further discussion of certain risks. The Fund also may invest in
securities which, while not rated, are determined by The Dreyfus
Corporation to be of comparable quality to 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
Page 6
described below. Under normal market conditions, the weighted
average maturity of the Fund's portfolio is expected to exceed ten years.
In addition to usual investment practices, the Fund may use
speculative investment techniques such as short-selling and lending its
portfolio securities. The Fund also may purchase, hold or deal in futures
contracts and options on futures contracts for non-speculative purposes.
See "Investment Techniques" below.
The Fund may invest more than 25% of the value of its total
assets in Municipal Obligations which are related in such a way that an
economic, business or political development or change affecting one such
security also would affect the other securities; for example, securities
the interest upon which is paid from revenues of similar types of
projects, or securities whose issuers are located in the same state. As a
result, the Fund may be subject to greater risk as compared to a fund
that does not follow this practice.
From time to time, the Fund may invest more than 25% of the
value of its total assets in industrial development bonds which, although
issued by industrial development authorities, may be backed only by the
assets and revenues of the non-governmental users. Interest on Municipal
Obligations (including certain industrial development bonds) which are
specified private activity bonds as defined in the Internal Revenue Code
of 1986, as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a preference item for the purpose of
the alternative minimum tax. Where a regulated investment company
receives such interest, a proportionate share of any exempt-interest
dividend paid by the investment company may be treated as such a
preference item to shareholders. The Fund may invest without limitation
in such Municipal Obligations if The Dreyfus Corporation determines that
their purchase is consistent with the Fund's investment objective. See
"Risk Factors _ Other Investment Considerations. "
The Fund may purchase floating and variable rate demand notes
and bonds, which are tax exempt obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to demand
payment of principal at any time or at specified intervals. Variable rate
demand notes include master demand notes which are obligations that
permit the Fund to invest fluctuating amounts, which may change daily
without penalty, pursuant to direct arrangements between the Fund, as
lender, and the borrower. The interest rates on these obligations
fluctuate from time to time. Frequently, such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
Use of letters of credit or other credit support arrangements will not
adversely affect the tax exempt status of these obligations. Because
these obligations are direct lending arrangements between the lender and
borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value. Accordingly,
where these obligations are not secured by letters of credit or other
credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. Each
obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations. The Dreyfus
Corporation, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuers of the floating and variable rate demand
obligations in the Fund's portfolio. The Fund will not invest more than
15% of the value of its net assets in floating or variable rate demand
obligations as to which the Fund cannot exercise the demand feature on
not more than seven days' notice if there is no secondary market
available for these obligations, and in other illiquid securities.
The Fund may purchase from financial institutions
participation interests in Municipal Obligations (such as industrial
development bonds and municipal lease/purchase agreements). A
participation interest 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
Page 7
rates of interest. If the participation interest is unrated, the
participation interest will be backed by an irrevocable letter of credit
or guarantee of a bank that the Board of Trustees has determined meets the
prescribed quality standards for banks set forth below, or the payment
obligation otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part of the
Fund's participation interest in the Municipal Obligation, plus accrued
interest. As to these instruments, the Fund intends to exercise its right
to demand payment only upon a default under the terms of the Municipal
Obligation, as needed to provide liquidity to meet redemptions, or to
maintain or improve the quality of its investment portfolio. The Fund will
not invest more than 15% of the value of its net assets in participation
interests that do not have this demand feature if there is no secondary
market available for these instruments, and in other illiquid securities.
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. The Fund will not invest more than 15% of the value of its
net assets in securities that are illiquid, which could include tender
option bonds as to which it cannot exercise the tender feature on not
more than seven days' notice if there is no secondary market available
for these obligations.
The Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase at the Fund's
option specified securities at a specified price and, in this respect,
stand-by commitments are comparable to put options. The exercise of a
stand-by commitment, therefore, is subject to the ability of the seller
to make payment on demand. The Fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise
its rights thereunder for trading purposes. The Fund may pay for stand-by
commitments if such action is deemed necessary, thus increasing to a
degree the cost of the underlying Municipal Obligation and similarly
decreasing such security's yield to investors. The Fund also may acquire
call options on specific Municipal Obligations. The Fund generally would
purchase these call options to protect the Fund from the issuer of the
related Municipal Obligation redeeming, or other holder of the call
option from calling away, the Municipal Obligation before maturity. The
sale by the Fund of a call option that it owns on a specific Municipal
Obligation could result in the receipt of taxable income by the Fund.
The Fund may purchase 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
page 8
different characteristics, but, in each case, payments on the two classes
are based on payments received on the underlying Municipal Obligations.
One class has the characteristics of a typical auction rate security,
where at specified intervals its interest rate is adjusted, and ownership
changes, based on an auction mechanism. This class's interest rate
generally is expected to be below the coupon rate of the underlying
Municipal Obligations and generally is at a level comparable to that of
a Municipal Obligation of similar quality and having a maturity equal to
the period between interest rate adjustments. The second class bears
interest at a rate that exceeds the interest rate typically borne by a
security of comparable quality and maturity; this rate also is adjusted,
but in this case inversely to changes in the rate of interest of the first
class. If the interest rate on the first class exceeds the coupon rate of
the underlying Municipal Obligations, its interest rate will exceed the rate
paid on the second class. In no event will the aggregate interest paid
with respect to the two classes exceed the interest paid by the
underlying Municipal Obligations. The value of the second class and
similar securities should be expected to fluctuate more than the value of
a Municipal Obligation of comparable quality and maturity and their
purchase by the Fund should increase the volatility of its net asset
value and, thus, its price per share. These custodial receipts are sold
in private placements. The Fund also may purchase directly from issuers,
and not in a private placement, Municipal Obligations having
characteristics similar to custodial receipts. These securities may be
issued as part of a multi-class offering and the interest rate on certain
classes may be subject to a cap or floor.
The Fund may invest up to 15% of the value of its net assets
in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing
for settlement in more than seven days after notice. As to these
securities, the Fund is subject to a risk that should the Fund desire to
sell them when a ready buyer is not available at a price that the Fund
deems representative of their value, the value of the Fund's net assets
could be adversely affected. However, if a substantial market of
qualified institutional buyers develops pursuant to Rule 144A under the
Securities Act of 1933, as amended, for certain of these securities held
by the Fund, the Fund intends to treat such securities as liquid
securities in accordance with procedures approved by the Fund's Board of
Trustees. Because it is not possible to predict with assurance how the
market for restricted securities pursuant to Rule 144A will develop, the
Fund's Board of Trustees has directed The Dreyfus Corporation 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 portfolio
during such period.
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 interest-bearing
securities and are likely to respond to a greater degree to changes in
interest rates than interest-bearing securities having similar maturities
and credit qualities. The Fund may invest up to 5% of its assets in zero
coupon bonds which are rated below investment grade. See "Risk Factors _
Lower Rated Bonds" and "Other Investment Considerations" below, and
"Investment
Page 9
Objective and Management Policies - Risk Factors - Lower Rated Bonds"
and "Dividends, Distributions and Taxes" in the Statement of Additional
Information.
From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may
invest in taxable short-term investments ("Taxable Investments")
consisting of: notes of issuers having, at the time of purchase, a
quality rating within the 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-l by Moody's, A-l by S&P or F-l
by Fitch; certificates of deposit of U.S. domestic banks, including
foreign branches of domestic banks, with assets of one billion dollars or
more; time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to income
earned by the Fund from Taxable Investments will be taxable to investors.
See "Dividends, Distributions and Taxes." Except for temporary defensive
purposes, at no time will more than 20% of the value of the Fund's net
assets be invested in Taxable Investments. Under normal market
conditions, the Fund anticipates that not more than 5% of its total
assets will be invested in any one category of Taxable Investments.
Taxable Investments are more fully described in the Statement of
Additional Information, to which reference hereby is made.
INVESTMENT TECHNIQUES
The Fund may employ, among others, the investment techniques
described below. Use of certain of these techniques may give rise to
taxable income.
WHEN-ISSUED SECURITIES
New issues of Municipal Obligations usually are offered on a
when-issued basis, which means that delivery and payment for such
Municipal Obligations ordinarily take place within 45 days after the date
of the commitment to purchase. The payment obligation and the interest
rate that will be received on the Municipal Obligations are fixed at the
time the Fund enters into the commitment. The Fund will make commitments
to purchase such Municipal Obligations only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable, although any gain
realized on such sale would be taxable. The Fund will not accrue income
in respect of a when-issued security prior to its stated delivery date.
No additional when-issued commitments will be made if more than 20% of
the value of the Fund's net assets would be so committed.
Municipal Obligations purchased on a when-issued basis and
the securities held in the Fund's portfolio are subject to changes in
value (both generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based
upon the public's perception of the creditworthiness of the issuer and
changes, real or anticipated, in the level of interest rates. Municipal
Obligations purchased on a when-issued basis may expose the Fund to risk
because they may experience such fluctuations prior to their actual
delivery. Purchasing Municipal Obligations on a when-issued basis can
involve the additional risk that the yield available in the market when
the delivery takes place actually may be higher than that obtained in the
transaction itself. A segregated account of the Fund consisting of cash,
cash equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal at all times to the amount of the
when-issued commitments will be established and maintained at the Fund's
custodian bank. Purchasing Municipal Obligations on a when-issued basis
when the Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net
asset value per share.
FUTURES TRANSACTIONS -- IN GENERAL
The Fund is not a commodity pool. However, as a substitute
for a comparable market position in the underlying securities and for
hedging purposes, the Fund may engage in futures and options on futures
transactions as described below.
Page 10
The Fund's commodities transactions must constitute bona fide
hedging or other permissible transactions pursuant to regulations
promulgated by the Commodity Futures Trading Commission. In addition, the
Fund may not engage in such transactions if the sum of the amount of
initial margin deposits and premiums paid for unexpired commodity
options, other than for bona fide hedging transactions, would exceed 5%
of the liquidation value of the Fund's assets, after taking into account
unrealized profits and unrealized losses on such contracts it has entered
into; 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%. Pursuant to regulations and/or published
positions of the Securities and Exchange Commission, the Fund may be
required to segregate cash or high quality money market instruments in
connection with its commodities transactions in an amount generally equal
to the value of the underlying commodity.
Initially, when purchasing or selling futures contracts the
Fund will be required to deposit with its custodian in the broker's name
an amount of cash or cash equivalents up to approximately 10% of the
contract amount. This amount is subject to change by the exchange or
board of trade on which the contract is traded and members of such
exchange or board of trade may impose their own higher requirements. This
amount is known as "initial margin" and is in the nature of a performance
bond or good faith deposit on the contract which is returned to the Fund
upon termination of the futures position, assuming all contractual
obligations have been satisfied. Subsequent payments, known as "variation
margin," to and from the broker will be made daily as the price of the
index or securities underlying the futures contract fluctuates, making
the long and short positions in the futures contract more or less
valuable, a process known as "marking-to-market." At any time prior to
the expiration of a futures contract, the Fund may elect to close the
position by taking an opposite position at the then-prevailing price,
which will operate to terminate the Fund's existing position in the
contract.
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 the 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. If it is not possible or the
Fund determines not to close a futures position in anticipation of
adverse price movements, the Fund will be required to make daily cash
payments of variation margin. In such circumstances, an increase in the
value of the portion of the Fund's portfolio being hedged, if any, may
offset partially or completely losses on the futures contract. However,
no assurance can be given that the price of the securities being hedged
will correlate with the price movements in a futures contract and thus
provide an offset to losses on the futures contract.
In addition, to the extent the Fund is engaging in a futures
transaction as a hedging device, due to the risk of an imperfect
correlation between securities in the Fund's portfolio that are the
subject of a hedging transaction and the futures contract used as a
hedging device, it is possible that the hedge will not be fully effective
in that, for example, losses on the portfolio securities may be in excess
of gains on the futures contract or losses on the futures contract may be
in excess of gains on the portfolio securities that were the subject of
the hedge. In futures contracts based on indexes, the risk of imperfect
correlation increases as the composition of the Fund's portfolio varies
from the composition of the index. In an effort to compensate for the
imperfect correlation of movements in the price of the securities being
hedged and movements in the price of futures contracts, the Fund may buy
or sell futures contracts in a greater or lesser dollar amount than the
dollar amount of the securities being hedged if the
Page 11
historical volatility of the futures contract has been less or greater than
that of the securities. Such "over hedging" or "under hedging" may adversely
affect the Fund's net investment results if market movements are not as
anticipated when the hedge is established.
An option on a futures contract gives the purchaser the
right, in return for the premium paid, to assume a position in a futures
contract (a long position if the option is a call and a short position if
the option is a put) at a specified exercise price at any time during the
option exercise period. The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if
the option is a call and a long position if the option is a put). Upon
exercise of the option, the assumption of offsetting futures positions by
the writer and holder of the option will be accompanied by delivery of
the accumulated cash balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract,
at exercise, exceeds, in the case of a call, or is less than, in the case
of a put, the exercise price of the option on the futures contract.
Call options sold by the Fund with respect to futures
contracts will be covered by, among other things, entering into a long
position in the same contract at a price no higher than the strike price
of the call option, or by ownership of the instruments underlying, or
instruments the prices of which are expected to move relatively
consistently with the instruments underlying, the futures contract. Put
options sold by the Fund with respect to futures contracts will be
covered when, among other things, cash or liquid securities are placed in
a segregated account to fulfill the obligation undertaken.
The Fund may utilize municipal bond index futures to protect
against changes in the market value of the Municipal Obligations in its
portfolio or which it intends to acquire. Municipal bond index futures
contracts are based on an index of long-term Municipal Obligations. The
index assigns relative values to the Municipal Obligations included in
the index, and fluctuates with changes in the market value of such
Municipal Obligations. The contract is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash based upon
the difference between the value of the index at the close of the last
trading day of the contract and the price at which the index contract was
originally written. The acquisition or sale of a municipal bond index
futures contract enables the Fund to protect its assets from fluctuations
in rates on tax exempt securities without actually buying or selling such
securities.
INTEREST RATE FUTURES CONTRACTS AND OPTIONS ON INTEREST RATE FUTURES
CONTRACTS
The Fund may purchase and sell interest rate futures
contracts and options on interest rate futures contracts as a substitute
for a comparable market position and to hedge against adverse movements
in interest rates.
To the extent the Fund has invested in interest rate futures
contracts or options on interest rate futures contracts as a substitute
for a comparable market position, the Fund will be subject to the
investment risks of having purchased the securities underlying the
contract.
The Fund may purchase call options on interest rate futures
contracts to hedge against a decline in interest rates and may purchase
put options on interest rate futures contracts to hedge its portfolio
securities against the risk of rising interest rates.
If the Fund has hedged against the possibility of an increase
in interest rates adversely affecting the value of securities held in its
portfolio and rates decrease instead, 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. In
addition, in such situations, if the Fund has insufficient cash, it may
have to sell securities to meet daily variation margin requirements at a
time when it may be disadvantageous to do so. These sales of securities
may, but will not necessarily, be at increased prices which reflect the
decline in interest rates.
The Fund may sell call options on interest rate futures
contracts to partially hedge against declining prices of its portfolio
securities. If the futures price at expiration of the option is below the
exercise price, the Fund will retain the full amount of the option
premium which provides a partial hedge against any decline that may have
occurred in the Fund's portfolio
Page 12
holdings. The Fund may sell put options on interest rate futures
contracts to hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price
at expiration of the option is higher than the exercise price, the Fund
will retain the full amount of the option premium which provides a partial
hedge against any increase in the price of securities which the Fund intends
to purchase. If a put or call option sold by the Fund is exercised, the Fund
will incur a loss which will be reduced by the amount of the premium it
receives. Depending on the degree of correlation between changes in the
value of its portfolio securities and changes in the value of its futures
positions, the Fund's losses from existing options on futures may, to some
extent, be reduced or increased by changes in the value of its portfolio
securities.
The Fund also may sell options on interest rate futures
contracts as part of closing purchase transactions to terminate its
options positions. No assurance can be given that such closing
transactions can be effected or that there will be a correlation between
price movements in the options on interest rate futures and price
movements in the Fund's portfolio securities which are the subject of the
hedge. In addition, the Fund's purchase of such options will be based
upon predictions as to anticipated interest rate trends, which could
prove to be inaccurate.
SHORT-SELLING
The Fund may make short sales of securities, which are
transactions in which the Fund sells a security it does not own in
anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund then 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. Until the security is replaced, the Fund
is required to pay to the lender amounts equal to any interest which
accrues during the period of the loan. To borrow the security, the Fund
also may be required to pay a premium, which would increase the cost of
the security sold. The proceeds of the short sale will be retained by the
broker, to the extent necessary to meet margin requirements, until the
short position is closed out.
Until the Fund replaces a borrowed security in connection
with a short sale, the Fund will: (a) maintain daily a segregated
account, containing cash or U.S. Government securities, at such a level
that (i) the amount deposited in the account plus the amount deposited
with the broker as collateral will equal the current value of the
securities sold short and (ii) the amount deposited in the segregated
account plus the amount deposited with the broker as collateral will not
be less than the market value of the security at the time it was sold
short; or (b) otherwise cover its short position.
The Fund will incur a loss as a result of the short sale if
the price of the security increases between the date of the short sale
and the date on which the Fund replaces the borrowed security. The Fund
will realize a gain if the security declines in price between those
dates. This result is the opposite of what one would expect from a cash
purchase of a long position in a security. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of any
premium or amounts in lieu of interest the Fund may be required to pay in
connection with a short sale.
The Fund anticipates that the frequency of short sales will
vary substantially in different periods, and it does not intend that any
specified portion of its assets, as a matter of practice, will be
invested in short sales. However, no securities will 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 sell short the
securities of any class of an issuer to the extent, at the time of the
transaction, of more than 5% of the outstanding securities of that class.
In addition to the short sales discussed above, the Fund may
make short sales "against the box," a transaction in which the Fund
enters into a short sale of a security which the Fund
Page 13
owns. The proceeds of the short sale will be held by a broker until the
settlement date at which time the Fund delivers the security to close the
short position. The Fund receives the net proceeds from the short sale.
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.
LENDING PORTFOLIO SECURITIES
From time to time, the Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. Such loans may not
exceed 331/3 % of the value of the Fund's total assets. In connection
with such loans, the Fund will receive collateral consisting of cash,
U.S. Government securities or irrevocable letters of credit which will be
maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. The Fund can increase its
income through the investment of such collateral. The Fund continues to
be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned security and receives interest on the
amount of the loan. Such loans will be terminable at any time upon
specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
CERTAIN FUNDAMENTAL POLICIES
The Fund may (i) 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; (ii) pledge, hypothecate, mortgage or
otherwise encumber its assets, but only to secure borrowings for
temporary or emergency purposes; and (iii) invest up to 25% of its assets
in the securities of issuers in any industry, provided that there is no
such limitation on investments in Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities. This paragraph describes fundamental
policies that cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and Management
Policies _ Investment Restrictions" in the Statement of Additional
Information.
ADDITIONAL NON-FUNDAMENTAL POLICY
The Fund may invest up to 15% of the value of its net assets
in repurchase agreements providing for settlement in more than seven days
after notice and in other illiquid securities (which securities could
include participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature described above,
and floating and variable rate demand obligations as to which the Fund
cannot exercise the related demand feature described above and as to
which there is no secondary market). See "Investment Objective and
Management Policies _ Investment Restrictions" in the Statement of
Additional Information.
RISK FACTORS
LOWER RATED BONDS
You should carefully consider the relative risks of investing
in the higher yielding (and, therefore, higher risk) debt securities in
which the Fund may invest up to 30% of the value of its net assets. These
are 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. They
generally are not meant for short-term investing and may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. Bonds rated Ba by Moody's are judged to have speculative
elements; their future cannot be considered as well assured and often the
protection of interest and principal payments may be very moderate. Bonds
rated BB by S&P are regarded as having predominantly speculative
Page 14
characteristics and, while such obligations have less near-term
vulnerability to default than other speculative grade debt, they face
major ongoing uncertainties or exposure to adverse business, financial or
economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. Bonds rated BB by Fitch are
considered speculative and the payment of principal and interest may be
affected at any time by adverse economic changes. Bonds rated C by
Moody's are regarded as having extremely poor prospects of ever attaining
any real investment standing. Bonds rated D by S&P are in default and the
payment of interest and/or repayment of principal is in arrears. Bonds
rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD
represents the highest potential for recovery of such bonds; and D
represents the lowest potential for recovery. Such bonds, though high
yielding, are characterized by great risk. See "Appendix" in the
Statement of Additional Information for a general description of Moody's,
S&P and Fitch ratings of Municipal Obligations. The ratings of Moody's,
S&P and Fitch represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and, although ratings
may be useful in evaluating the safety of interest and principal
payments, they do not evaluate the market value risk of these bonds.
Therefore, although these ratings may be an initial criterion for
selection of portfolio investments, The Dreyfus Corporation also will
evaluate these securities and the ability of the issuers of such
securities to pay interest and principal. The Fund's ability to achieve
its investment objective may be more dependent on The Dreyfus
Corporation's credit analysis than might be the case for a fund that
invested in higher rated securities. Once the rating of a portfolio
security has been changed, the Fund will consider all circumstances
deemed relevant in determining whether to continue to hold the security.
The market price and yield of bonds rated Ba or lower by
Moody's and BB or lower by S&P are more volatile than those of higher
rated bonds. Factors adversely affecting the market price and yield of
these securities will adversely affect the Fund's net asset value. In
addition, the retail secondary market for these bonds may be less liquid
than that of higher rated bonds; adverse market conditions could make it
difficult at times for the Fund to sell certain securities or could
result in lower prices than those used in calculating the Fund's net
asset value.
The Fund may invest up to 5% of the value of its net assets
in zero coupon securities and pay-in-kind bonds (bonds which pay interest
through the issuance of additional bonds) rated Ba or lower by Moody's
and BB or lower by S&P and Fitch. These securities may be subject to
greater fluctuations in value due to changes in interest rates than
interest-bearing securities and thus may be considered more speculative
than comparably rated interest-bearing securities. See "Other Investment
Considerations" below, and "Investment Objective and Management Policies
_ Risk Factors _ Lower Rated Bonds" and "Dividends, Distributions and
Taxes" in the Statement of Additional Information.
OTHER INVESTMENT CONSIDERATIONS
Even though interest-bearing securities are investments which
promise a stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore, are
subject to the risk of market price fluctuations. Certain securities that
may be purchased by the Fund, such as those with interest rates that
fluctuate directly or indirectly based on multiples of a stated index,
are designed to be highly sensitive to changes in interest rates and can
subject the holders thereof to extreme reductions of yield and possibly
loss of principal. The value of fixed-income securities also may be
affected by changes in the credit rating or financial condition of the
issuing entities. The Fund's net asset value generally will not be stable
and should fluctuate based upon changes in the value of the Fund's
portfolio securities. Securities in which the Fund 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.
Page 15
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 income
accrued with respect to these securities and may have to dispose of
portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Certain municipal lease/purchase obligations in which the
Fund may invest may contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in future
years unless money is appropriated for such purpose on a yearly basis.
Although "non-appropriation" lease/purchase obligations are secured by
the leased property, disposition of the leased property in the event of
foreclosure might prove difficult. In evaluating the credit quality of a
municipal lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of factors
including the likelihood that the issuing municipality will discontinue
appropriating funding for the leased property.
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 the available yield. Shareholders
should consult their tax advisers concerning the effect of these
provisions on an investment in the Fund. Proposals that may restrict or
eliminate the income tax exemption for interest on Municipal Obligations
may be introduced in the future. If any such proposal were enacted that
would reduce the availability of Municipal Obligations for investment by
the Fund so as to adversely affect Fund shareholders, the Fund would
reevaluate its investment objective and policies and submit possible
changes in the Fund's structure to shareholders for their consideration.
If legislation were enacted that would treat a type of Municipal
Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth
herein.
Investment decisions for the Fund are made independently from
those of other investment companies advised by The Dreyfus Corporation.
However, if such other investment companies are prepared to invest in, or
desire to dispose of, Municipal Obligations or Taxable Investments at the
same time as the Fund, available investments or opportunities for sales
will be allocated equitably to each investment company. In some cases,
this procedure may adversely affect the size of the position obtained for
or disposed of by the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. As of May 31, 1994, The Dreyfus Corporation managed
or administered approximately $72 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law. The Fund's primary investment officer
is Samuel J. Weinstock. He has held that position since August 1987 and
has been employed by The Dreyfus Corporation since March 1987. The Fund's
other investment officers are identified under "Management of the Fund"
in the Fund's Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund as well as for
other funds advised by The Dreyfus Corporation through a professional
staff of portfolio managers and security analysts.
Under the terms of the Management Agreement, the Fund has
agreed to pay The Dreyfus Corporation a monthly 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
Page 16
the overall expense ratio of the Fund and increasing yield to investors
at the time such amounts are waived or assumed, as the case may be.
The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume. For the fiscal year
ended April 30, 1994, the Fund paid The Dreyfus Corporation a management
fee at the effective annual rate of .49 of 1% of the value of the Fund's
average daily net assets pursuant to undertakings in effect.
The Dreyfus Corporation may pay Dreyfus Service Corporation
for shareholder and distribution services from The Dreyfus Corporation's
own assets, including past profits but not including the management fee
paid by the Fund. Dreyfus Service Corporation may use part or all of such
payments to pay Service Agents in respect of these services.
The Shareholder Services Group, Inc., a subsidiary of First
Data Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is
the Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent").
The Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a
wholly-owned subsidiary of The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166. The shares it distributes are not
deposits or obligations of The Dreyfus Security Savings Bank, F.S.B. and
therefore are not insured by the Federal Deposit Insurance Corporation.
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 Dreyfus Service Corporation. Subsequent purchases may be
sent directly to the Transfer Agent or your Service Agent. 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 which would be
in addition to any amounts which might be received under the Shareholder
Services Plan. Each Service Agent has agreed to transmit to its clients a
schedule of such fees. You should consult your Service Agent in this
regard.
When purchasing Fund shares, you must specify whether the
purchase is for Class A or Class B shares. 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.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Premier Municipal Bond Fund." Payments to open new accounts which are
mailed should be sent to Premier Municipal Bond Fund, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with 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 and sent to Premier
Municipal Bond Fund, P.O. Box 105, Newark, New Jersey 07101-0105. 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,
Page 17
DDA#8900119292/Premier Municipal Bond Fund-Class A shares, or
DDA#8900115017/Premier Municipal Bond Fund-Class B shares, as the case may
be, for purchase of Fund shares in your name. The wire must include your
Fund account number (for new accounts, your Taxpayer Identification Number
("TIN") should be included instead), account registration and dealer number,
if applicable. If your initial purchase of Fund shares is by wire, please
call 1-800-645-6561 after completing your wire payment to obtain your Fund
account number. Please include your Fund account number on the Fund's
Account Application and promptly mail the Account Application to the Fund,
as no redemptions will be permitted until the Account Application is
received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear.
The Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), on each day
the New York Stock Exchange is open for business. For purposes of
determining net asset value, 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 Board of Trustees
and are valued at fair value as determined by the pricing service. The
pricing service's procedures are reviewed under the general supervision
of the Board of Trustees. For further information regarding the methods
employed in valuing Fund investments, see "Determination of Net Asset
Value" in the Fund's Statement of Additional Information.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Fund's Account Application for further information
concerning this requirement. Failure to furnish a certified TIN to the
Fund could subject you to a $50 penalty imposed by the Internal Revenue
Service (the "IRS").
If an order is received 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 Dreyfus Service Corporation 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 dealers' responsibility to transmit orders so that they will be
received by Dreyfus Service Corporation before the close of its business
day.
Page 18
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>
<CAPTION>
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 to less than $3,000,000... 1.00 1.00 1.00
$3,000,000 to less than $5,000,000... .50 .50 .50
$5,000,000 and over.................. .25 .25 .25
</TABLE>
Full-time employees of NASD member firms and full-time employees of other
financial institutions which have entered into an agreement with Dreyfus
Service Corporation 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
Dreyfus Service Corporation with such information as it may request from
time to time in 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.
In fiscal 1994, Dreyfus Service Corporation retained $213,752
from sales loads on Class A shares. The dealer reallowance may be changed
from time to time but will remain the same for all dealers. Dreyfus
Service Corporation, 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, these 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 Fund Shares." Dreyfus
Service Corporation compensates certain Service Agents for selling Class
B shares at the time of purchase from Dreyfus Service Corporation's own
assets. The proceeds of the CDSC and the distribution fee, in part, are
used to defray these expenses. In fiscal 1994, $91,986 was retained by
Dreyfus Service Corporation from the CDSC on Class B shares.
RIGHT OF ACCUMULATION -- CLASS A SHARES
Reduced sales loads apply to any purchase of Class A shares,
shares of other funds in the Premier Family of Funds, shares of certain
other funds advised by The Dreyfus Corporation which are sold with a
sales load and shares of certain other funds 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 the aggregate investment, including such purchase, is
$50,000 or more. If, for example, you have previously purchased
Page 19
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 a purchase
you or your Service Agent must notify Dreyfus Service Corporation 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 Fund shares (minimum $500, maximum $150,000
per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The
proceeds will be transferred between the bank account designated in one
of these documents and your Fund account. Only a bank account maintained
in a domestic financial institution which is an Automated Clearing House
member may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
SHAREHOLDER SERVICES
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.
EXCHANGE PRIVILEGE
The Exchange Privilege enables clients of certain Service
Agents to purchase, in exchange for Class A or Class B 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. If you desire to
use this Privilege, you should consult your Service Agent or Dreyfus
Service Corporation to determine if it is available and whether any
conditions are imposed on its use.
To use this Privilege, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing,
by wire or by telephone. If you previously have established the Telephone
Exchange Privilege, you may telephone exchange instructions by calling
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
See "How to Redeem Fund Shares _ Procedures." Before any exchange, you
must obtain and should review a copy of the current prospectus of the
fund into which the exchange is being made. Prospectuses may be obtained
from Dreyfus Service Corporation. Except in the case of Personal
Retirement Plans, the shares being exchanged must have a current value of
at least $500; furthermore, when establishing a new account by exchange,
the shares being exchanged must have a value of at least the minimum
initial investment required for the fund into which the exchange is being
made. Telephone exchanges may be made only if the appropriate "YES" box
has been checked on the Account Application, or a separate signed
Shareholder Services Form is on file with the Transfer Agent. Upon an
exchange into a new account, the following shareholder services and
privileges, as applicable and where available, will be automatically
carried over to the fund into which the exchange is made: Exchange
Privilege, Check Redemption Privilege,
Page 20
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 shares at the time of an exchange; however, Class B 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 shares will be calculated from the date of the initial
purchase of the Class B 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 of the fund from which you are exchanging were:
(a) purchased with a sales load, (b) acquired by a previous exchange from
shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of your exchange your Service Agent must
notify Dreyfus Service Corporation. Any such qualification is subject to
confirmation of your holdings through a check of appropriate records. See
"Shareholder Services" in the Statement of Additional Information. No
fees currently are charged shareholders directly in connection with
exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal fee in accordance
with the rules promulgated by the Securities and Exchange Commission. The
Fund reserves the right to reject any exchange request in whole or in
part. The Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize a taxable gain or loss.
AUTO-EXCHANGE PRIVILEGE
Auto-Exchange Privilege enables you to invest regularly (on a
semi-monthly, monthly, quarterly or annual basis), in exchange for Class
A or Class B shares of the Fund, in shares of the same Class of other
funds in the Premier Family of Funds or certain other funds in the
Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current
net asset value; however, a sales load may be charged with respect to
exchanges of Class A shares into funds sold with a sales charge. No CDSC w
ill be imposed on Class B shares at the time of an exchange; however, Class
B 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 shares will be
calculated from the date of the initial purchase of the Class B 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 writing to Premier
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. The exchange of shares of one fund for
shares of another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore, an
exchanging shareholder may realize a taxable gain or loss. For more
information concerning this Privilege and the funds in the Premier Family
of Funds or Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain an Auto-Exchange Authorization Form, please call
toll free 1-800-645-6561.
Page 21
AUTOMATIC ASSET BUILDER
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 an Automatic Asset Builder
account, you must file an authorization form with the Transfer Agent. You
may obtain the necessary authorization form from Dreyfus Service
Corporation. You may cancel your participation in this Privilege or
change the amount of purchase at any time by mailing written notification
to Premier 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 Dreyfus Service Corporation or your Service Agent. 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 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 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 ACHpermits you to transfer electronically on the
payment date dividends or dividends and capital gain distributions, if
any, from the Fund to a designated bank account. Only an account
maintained at a domestic financial institution which is an Automated
Clearing House member may be so designated. Banks may charge a fee for
this service.
For more information concerning these privileges, or to
request a Dividend Options Form, please call toll free 1-800-645-6561.
You may cancel these privileges by mailing written notification to
Premier 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
Page 22
account. An application for the Automatic Withdrawal Plan can be obtained
from Dreyfus Service Corporation. There is a service charge of 50cents for
each withdrawal check. The Automatic Withdrawal Plan may be ended at any
time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
Class B 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, available from Dreyfus
Service Corporation, 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 reduction, 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 FUND SHARES
GENERAL
You may request redemption of your Class A or Class B 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
with respect to Class B shares) when shares are redeemed directly through
Dreyfus Service Corporation. Service Agents may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original
cost, depending on 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
Page 23
the rules of the Securities and Exchange Commission. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK, BY THE TELETRANSFER PRIVILEGE OR THROUGH
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, TELETRANSFER
PURCHASE OR 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 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.
CONTINGENT DEFERRED SALES CHARGE -- CLASS B SHARES
A CDSC payable to Dreyfus Service Corporation 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:
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
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
Page 24
during the preceding five years; then of amounts representing the cost of
shares purchased five years prior to the redemption; and finally, of amounts
representing the cost of shares held for the longest period of time
within the applicable five-year period.
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
has 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 3%
(the applicable rate in the second year after purchase) for a total CDSC
of $7.20.
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 Dreyfus Service Corporation
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 701/2 in the case of an IRA or
Keogh plan or custodial account pursuant to Section 403(b) of the Code,
and (e) redemptions by such shareholders as the Securities and Exchange
Commission or its staff may permit. If the Fund's Trustees determine 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 Dreyfus Service Corporation. 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, using the Check Redemption
Privilege with respect to Class A shares only, through the TELETRANSFER
Privilege or, if you are a client of a Selected Dealer, through the
Selected Dealer. If you have given your Service Agent authority to
instruct the Transfer Agent to redeem shares and to credit the proceeds
of such redemptions to a designated account at your Service Agent, you
may redeem shares only in this manner and in accordance with the regular
redemption procedure described below. If you wish to use the other
redemption methods described below, you must arrange with your Service
Agent for delivery of the required application(s) to the Transfer Agent.
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.
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 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
Page 25
from Dreyfus Service Corporation. The prospectus will contain information
concerning minimum investment requirements and other conditions that may
apply to your purchase.
You may redeem or exchange Fund shares by telephone if you
have checked the appropriate box on the Fund's Account Application or
have filed a Shareholder Services Form with the Transfer Agent. If you
select the TELETRANSFER Privilege or telephone exchange privilege, you
authorize the Transfer Agent to act on telephone instructions 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 an 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 Premier Municipal Bond Fund, P.O. Box 6527,
Providence, Rhode Island 02940-6527. 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
If you hold Class A shares, you may request on the Account
Application, Shareholder Services Form or by later written request that
the Fund provide Redemption Checks drawn on the Fund's 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 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. Class A
shares for which certificates have been issued may not be redeemed by
Redemption Check. This Privilege may be modified or terminated at any
time by the Fund or the Transfer Agent upon notice to holders of Class A
shares.
Page 26
TELETRANSFER PRIVILEGE
You may redeem Fund shares (minimum $500 per day) without
charge by telephone if you have checked the appropriate box and supplied
the necessary information on the Fund's Account Application or have filed
a Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between your Fund account and the bank account designated in
one of these documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House member may be
so designated. Redemption proceeds will be on deposit in your account at
an Automated Clearing House member bank ordinarily two days after receipt
of the redemption request or, at your request, paid by check (maximum
$150,000 per day) and mailed to your address. Holders of jointly
registered Fund or bank accounts may redeem through the TELETRANSFER
Privilege for transfer to their bank account only up to $250,000 within
any 30-day period. The Fund reserves the right to refuse any request made
by telephone, including requests made shortly after a change of address,
and may limit the amount involved or the number of such requests. The
Fund may 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 redemption of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares issued in certificate form are not eligible for this Privilege.
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 Fund Shares" for a discussion of additional conditions or
fees that may be imposed upon redemption.
In addition, Dreyfus Service Corporation will accept orders
from Selected Dealers with which it has sales agreements for the
repurchase of shares held by shareholders. Repurchase orders received by
the dealer by the close of trading on the floor of the New York Stock
Exchange on any business day and transmitted to Dreyfus Service
Corporation prior to 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 -- CLASS A SHARES
Upon written request, you may reinvest up to the number of
Class A shares you have redeemed, within 30 days of redemption, at the
then-prevailing net asset value without a sales load, or reinstate your
account for the purpose of exercising the Exchange Privilege. The
Reinvestment Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
Class A and Class B shares are subject to a Shareholder
Services Plan and only Class B shares are subject to a Distribution Plan.
DISTRIBUTION PLAN
Under the Distribution Plan, adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, the Fund pays Dreyfus Service
Corporation for advertising, marketing
Page 27
and distributing Class B shares at an annual rate of .50 of 1% of the value
of the average daily net assets of Class B. Under the Distribution Plan,
Dreyfus Service Corporation may make payments to Service Agents in respect
of these services. Dreyfus Service Corporation determines the amounts to be
paid to Service Agents. Service Agents receive such fees in respect of the
average daily value of the Class B shares owned by their clients. From time
to time, Dreyfus Service Corporation may defer or waive receipt of fees
under the Distribution Plan while retaining the ability to be paid by the
Fund under the Distribution Plan thereafter. The fees payable to Dreyfus
Service Corporation under the Distribution Plan for advertising,
marketing and distributing Class B shares and payments to Service Agents
are payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
Under the Shareholder Services Plan, the Fund pays Dreyfus
Service Corporation for the provision of certain services to the holders
of Class A and Class B shares a fee at the annual rate of .25 of 1% of
the value of the average daily net assets of Class A and Class B. 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. Dreyfus Service Corporation may make
payments to Service Agents in respect of these services. Dreyfus Service
Corporation determines the amounts to be paid to Service Agents. Each
Service Agent is required to disclose to its clients any compensation
payable to it by the Fund pursuant to the Shareholder Services Plan and
any other compensation payable by their clients in connection with the
investment of their assets in Class A or Class B shares.
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 same
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. Distributions from net realized
securities gains, if any, generally are declared and paid once a year,
but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Code, in all events in a manner
consistent with the provisions of the Investment Company Act of 1940. The
Fund will not make distributions from net realized securities gains
unless capital loss carryovers, if any, have been utilized or have
expired. You may choose whether to receive distributions in cash or to
reinvest in additional shares of the same Class from which they were paid
at net asset value. 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
Page 28
solely to Class A or Class B will be borne exclusively by such Class.
Class B shares will receive lower per share dividends than Class A shares
because of the higher expenses borne by Class B. 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. No dividend paid by the Fund will qualify
for the dividends received deduction allowable to certain U.S.
corporations. Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains and all
or a portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund are subject to Federal
income tax as ordinary income whether or not reinvested. 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. Dividends and distributions
attributable to income or gain derived from securities transactions and
from the use of certain of the investment techniques described under
"Description of the Fund _ Investment Techniques," will be subject to
Federal income tax. The Code provides that the net capital gain of an
individual generally will not be subject to Federal income tax at a rate
in excess of 28%. Under the Code, interest on indebtedness incurred or
continued to purchase or carry Fund shares which is deemed to relate to
exempt-interest dividends is not deductible. Dividends and distributions
may be subject to state and local taxes.
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 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 charge on 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.
Although all or a substantial portion of the dividends paid
by the Fund may be excluded by shareholders of the Fund from their gross
income for Federal income tax purposes, the Fund may purchase specified
private activity bonds, the interest from which may be (i) a preference
item for purposes of the alternative minimum tax, (ii) a component of the
"adjusted current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the corporate
environmental tax or (iii) a factor in determining the extent to which a
shareholder's Social Security benefits are taxable. If the Fund purchases
such securities, the portion of the dividends related thereto will not
necessarily be tax exempt to an investor who is subject to the
alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Taxable dividends derived from net investment income,
together with distributions from net realized short-term securities gains
and all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund to a
foreign investor generally are subject to U.S. nonresident withholding
taxes at the rate of 30%, unless the foreign investor claims the benefit
of a lower rate specified in a tax treaty. Distributions from net
realized long-term securities gains paid by the Fund to a foreign
investor as well as the proceeds of any redemptions from a foreign
investor's account, regardless of the extent to which gain or loss may be
realized, generally will not be subject to U.S. nonresident withholding
tax. However, such distributions may be subject to backup withholding, as
described below, unless the foreign investor certifies his non-U.S.
residency status.
Notice as to the tax status of your dividends and
distributions will be mailed to you annually. You also will receive
periodic summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid during
the year. These statements set forth the dollar amount of income exempt
from Federal tax and the dollar
Page 29
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.
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 April 30, 1994 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify, if
such qualification is in the best interests of its shareholders. Such
qualification relieves the Fund of any liability for Federal income taxes
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. In addition, the Fund is subject to a
non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains, if
any.
You should consult your tax adviser regarding specific
questions as to Federal, state or local income 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 gains 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 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 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
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B at the end of the period. For
purposes of calculating current yield, the amount of net investment
income per share during that 30-day period, computed in accordance with
regulatory requirements, is compounded by assuming that it is reinvested
at a constant rate over a six-month period. An identical result is then
assumed to have occurred during a second six-month period which, when
added to the result for the first six months, provides an "annualized"
yield for an entire one-year period. Calculations of the Fund's current
yield may reflect absorbed expenses pursuant to any undertaking that may
be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax
yield which, after being taxed at a stated rate, would be equivalent to a
stated current yield calculated as described above.
Page 30
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to
the reinvestment of dividends and distributions during the period. The
return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's
performance will include the Fund's average annual total return for Class
A and Class B 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
maximum offering price per share in the case of Class A or the net asset
value per share in the case of Class B 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 may also 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 shares. Calculations based on the net asset value per share do
not reflect the deduction of the applicable sales charge 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 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 November 26, 1986. On July 2, 1990, the
Fund's name was changed from Premier Tax Exempt Bond Fund to Premier
Municipal Bond Fund. The Fund is authorized to issue an unlimited number
of shares of beneficial interest, par value $.001 per share. The Fund's
shares are classified into two classes _ Class A and Class B. Each share
has one vote and shareholders will vote in the aggregate and not by class
except as otherwise required by law or when class voting is permitted by
the Board of Trustees. Holders of Class A and Class B shares will be
entitled to vote on matters submitted to shareholders pertaining to the
Shareholder Services Plan and only holders of Class B shares 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.
Page 31
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 Trustees intend
to conduct the operations of the Fund 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.
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 32
__________________________________________________________________________
PREMIER MUNICIPAL BOND FUND
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JUNE 24, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Premier Municipal Bond Fund (the "Fund"), dated June 24, 1994, as it
may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . . . . . . . B-2
Management of the Fund . . . . . . . . . . . . . . . . . . . . . . . . B-9
Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . B-13
Purchase of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . B-14
Distribution Plan and Shareholder Services Plan. . . . . . . . . . . . B-16
Redemption of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . B-17
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . B-21
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . B-22
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . . B-23
Performance Information. . . . . . . . . . . . . . . . . . . . . . . . B-24
Information About the Fund . . . . . . . . . . . . . . . . . . . . . . B-26
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . B-26
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . B-36
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . . B-50
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended April 30, 1994, computed
on a monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
AAA Aaa AAA 12.0%
AA Aa AA 9.8
A A A 24.7
BBB Baa BBB 37.3
BB Ba BB 3.4
F-1 VMIG 1, MIG 1 SP-1 .4
Not Rated Not Rated Not Rated 12.4
------
100.0%
======
______________________________
* Included under the Not Rated category are securities comprising 10.3% of
the Fund's market value which, while not rated, have been determined by
the Manager to be of comparable quality to securities in the following
rating categories: A/A (1.8%); Baa/BBB (6.2%); and D/D (2.3%).
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity or sewage or solid waste disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of one year, but
which permit the holder to demand payment of principal at any time, or at
specified intervals. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940, as amended (the "Act"), the identification of the issuer of
Municipal Obligations depends on the terms and conditions of the security.
When the assets and revenues of an agency, authority, instrumentality or
other political subdivision are separate from those of the government
creating the subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to be the
sole issuer. Similarly, in the case of an industrial development bond, if
that bond is backed only by the assets and revenues of the
non-governmental user, then such non-governmental user would be deemed to
be the sole issuer. If, however, in either case, the creating government
or some other entity guarantees a security, such a guaranty would be
considered a separate security and will be treated as an issue of such
government or other entity.
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. See
"Investment Restriction No. 6" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt status of
the underlying Municipal Obligations and that payment of any tender fees
will not have the effect of creating taxable income for the Fund. Based
on the tender option bond agreement, the Fund expects to be able to value
the tender option bond at par; however, the value of the instrument will
be monitored to assure that it is valued at fair value.
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
with respect to Class A and Class B shares and the Distribution Plan with
respect to Class B shares only, will have the effect of reducing the yield
to investors.
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 its 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 qual-
ity 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.
Futures Contracts and Options on Futures Contracts. Upon exercise of
an option on a futures contract, the writer of the option delivers to the
holder of the option the futures position and the accumulated balance in
the writer's futures margin account, which represents the amount by which
the market price of the futures contract exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on
the futures contract. The potential loss related to the purchase of
options on futures contracts is limited to the premium paid for the option
(plus transaction costs). Because the value of the option is fixed at the
time of sale, there are no daily cash payments to reflect changes in the
value of the underlying contract; however, the value of the option does
change daily and that change would be reflected in the net asset value of
the Fund.
Lending Portfolio Securities. To a limited extent, the Fund may lend
its portfolio securities to brokers, dealers and other financial
institutions, provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current market value
of the securities loaned. By lending its portfolio securities, the Fund
can increase its income through the investment of the cash collateral.
For purposes of this policy, the Fund considers collateral consisting of
U.S. Government securities or irrevocable letters of credit issued by
banks whose securities meet the standards for investment by the Fund to be
the equivalent of cash. Such loans may not exceed 33-1/3% of the value of
the Fund's total assets. From time to time, the Fund may return to the
borrower or a third party which is unaffiliated with the Fund, and which
is acting as a "placing broker," a part of the interest earned from the
investment of collateral received 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 interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the Fund may pay only reasonable custodian fees in
connection with the loan. These conditions may be subject to future
modification.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks,
by the right of the issuer to borrow from the U.S. Treasury; others, such
as those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Principal and interest may fluctuate based on
generally recognized 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. The Fund will
invest in such securities only when it is satisfied that the credit risk
with respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from
insurance from the Bank Insurance Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
or sub-custodian will have custody of, and will hold in a segregated
account, securities acquired by the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the Securities and
Exchange Commission to be loans by the Fund. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the Fund will enter
into repurchase agreements only with domestic banks with total assets in
excess of one billion dollars or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to
securities of the type in which the Fund may invest, and will require that
additional securities be deposited with it if the value of the securities
purchased should decrease below resale price. The Manager will monitor on
an ongoing basis the value of the collateral to assure that it always
equals or exceeds the repurchase price. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does
not repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to the
seller of the securities, realization on the securities by the Fund may be
delayed or limited. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Risk Factors--Lower Rated Bonds. The Fund is permitted to invest in
securities rated below Baa by Moody's and below BBB by S&P and Fitch.
Such bonds, though higher yielding, are characterized by risk. See
"Description of the Fund--Risk Factors--Lower Rated Bonds" in the
Prospectus for a discussion of certain risks and "Appendix" for a general
description of Moody's, S&P and Fitch ratings of Municipal Obligations.
Although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
bonds. The Fund will rely on the Manager's judgment, analysis and
experience in evaluating the creditworthiness of an issuer. In this
evaluation, the Manager will take into consideration, among other things,
the issuer's financial resources, its sensitivity to economic conditions
and trends, the quality of the issuer's management and regulatory matters.
It also is possible that a rating agency might not timely change the
rating on a particular issue to reflect subsequent events. As stated
above, once the rating of a bond in the Fund's portfolio has been changed,
the Manager will consider all circumstances deemed relevant in determining
whether the Fund should continue to hold the bond.
Investors should be aware that the market values of many of these
bonds tend to be more sensitive to economic conditions than are higher
rated securities. These bonds 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 the Distributor or any other persons
concerning the acquisition of such securities, and the Manager will review
carefully the credit and other characteristics pertinent to such new
issues.
Lower rated zero coupon securities and pay-in-kind bonds, in which
the Fund may invest up to 5% of its net assets, involve special
considerations. The credit risk factors pertaining to lower rated
securities also apply to lower rated zero coupon bonds and pay-in-kind
bonds. Such zero coupon, pay-in-kind or delayed interest bonds carry an
additional risk in that, unlike bonds which pay interest throughout the
period to maturity, the Fund will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer
defaults, the Fund may obtain no return at all on its investment. See
"Dividends, Distributions and Taxes."
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 5 and 7 through 12 as fundamental
policies. These restrictions cannot be changed without approval by the
holders of a majority (as defined in the Act) of the Fund's outstanding
voting shares. Investment restriction number 6 is not a fundamental
policy and may be changed by vote of a majority of the Trustees 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 indexes 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 indexes, and options on futures or indexes.
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. 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.
7. 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
related to indexes, and options on futures contracts or indexes.
8. 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.
9. Invest more than 15% of its assets in the obligations of any one
bank for temporary defensive purposes, or invest more than 5% of its
assets in the obligations of any other issuer, except that up to 25% of
the value of the Fund's total assets may be invested, and securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased, without regard to any such
limitations. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Fund will not invest
more than 5% of its assets in the obligations of any one bank, except that
up to 25% of the value of the Fund's total assets may be invested without
regard to such limitation.
10. 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.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
For purposes of Investment Restriction No. 10, 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
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees 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 Trustee who is deemed to be an "interested person"
of the Fund (as defined in the Act) is indicated by an asterisk.
Trustees and Officers of the Fund
CLIFFORD L. ALEXANDER, JR., Trustee. 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, The Dun & Bradstreet Corporation, MCI Communications
Corporation, Mutual of America Life Insurance Company and Equitable
Resources, Inc., a producer and distributor of natural gas and crude
petroleum. His address is 400 C Street, N.E., Washington, D.C.
20002.
PEGGY C. DAVIS, Trustee. 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. Her address is c/o New York University
School of Law, 249 Sullivan Street, New York, New York 10012.
ERNEST KAFKA, Trustee. 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. For
more than the past five years, Dr. Kafka has held numerous
administrative positions and has published many articles on subjects
in the field of psychoanalysis. His address is 23 East 92nd Street,
New York, New York 10128.
SAUL B. KLAMAN, Trustee. 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. His address is 431-B Dedham Street, The Gables,
Newton Center, Massachusetts 02159.
NATHAN LEVENTHAL, Trustee. 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.
His address is 70 Lincoln Center Plaza, New York, New York
10023-6583.
*RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
Each of the "non-interested" Trustees is also a trustee of General
California Municipal Money Market Fund, General New York Municipal Money
Market Fund, Premier California Municipal Bond Fund, Premier GNMA Fund,
Premier Insured Municipal Bond Fund, Premier New York Municipal Bond Fund
and Premier State Municipal Bond Fund and a director of Dreyfus
Appreciation Fund, Inc., General Government Securities Money Market Fund,
Inc., General Money Market Fund, Inc., General Municipal Bond Fund, Inc.,
General Municipal Money Market Fund, Inc., General New York Municipal Bond
Fund, Inc. and Premier Growth Fund, Inc. Mr. Alexander is also a
director of The Dreyfus Socially Responsible Growth Fund, Inc. and The
Dreyfus Third Century Fund, Inc.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Ordinarily meetings of shareholders for the purpose of electing
Trustees will not be held unless and until such time as less than a
majority of the Trustees holding office have been elected by shareholders,
at which time the Trustees then in office will call a shareholders'
meeting for the election of Trustees. Under the Act, shareholders of
record of not less than two-thirds of the outstanding shares of the Fund
may remove a Trustee through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that purpose. Under the Fund's
Agreement and Declaration of Trust, the Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
shareholders of record of not less than 10% of the Fund's outstanding
shares.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $18,941 for the fiscal year ended April 30,
1994 for such Trustees as a group.
Officers of the Fund Not Listed Above
A. PAUL DISDIER, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
ELIE M. GENADRY, Vice President. Vice President--Institutional Sales of
the Manager, Executive Vice President of the Distributor and an
officer of other investment companies advised or administered by the
Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
DONALD A. NANFELDT, Vice President. Executive Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President--Mutual Fund
Accounting of the Manager and an officer of other investment
companies advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
GREGORY S. GRUBER, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on June 3, 1994.
The following persons also are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Peter A. Santoriello, Vice President; Robert H. Schmidt, Vice
President; Kirk V. Stumpp, Vice President--New Product Development; Philip
L. Toia, Vice President; Katherine C. Wickham, Assistant Vice President--
Human Resources; Maurice Bendrihem, Controller; and Mandell L. Berman,
Alvin E. Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B.
Truman, directors.
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 September 5, 1986, as amended, with the
Fund, which is subject to annual approval by (i) the Fund's Board of
Trustees or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of the Fund, provided that in either event
the continuance also is approved by a majority of Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Manager,
by vote cast in person at a meeting called for the purpose of voting on
such approval. The Agreement was approved by shareholders on August 26,
1992 and was last approved by the Fund's Board of Trustees, including a
majority of the Trustees who are not "interested persons" of any party to
the Agreement, at a meeting held on July 21, 1993. The Agreement is
terminable without penalty, on 60 days' notice, by the Board of Trustees
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 Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Trustees. The Manager is responsible for investment
decisions, and provides the Fund with Investment Officers who are
authorized by the Board of Trustees to execute purchases and sales of
securities. The Fund's Investment Officers are A. Paul Disdier, Karen M.
Hand, Stephen C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence
Troutman, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the
Fund as well as for other funds advised by the Manager. All purchases and
sales are reported for the Board of Trustees' review at the meeting
subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of maintaining the Fund's existence,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
meetings, and any extraordinary expenses. Class A and Class B shares are
subject to an annual service fee for ongoing personal services relating to
shareholder accounts and services related to the maintenance of
shareholder accounts. In addition, Class B shares are subject to an
annual distribution fee for advertising, marketing and distributing Class
B shares pursuant to a distribution plan adopted in accordance with
Rule 12b-1 under the Act. See "Distribution Plan and Shareholder Services
Plan."
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
The Manager also may make such advertising and promotional expenditures,
using its own resources, as it from time to time deems appropriate.
As compensation for the Manager's services 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. The
management fees payable for the fiscal years ended April 30, 1992, 1993
and 1994 amounted to $1,785,103, $2,525,162 and $3,526,429, respectively,
which fees were reduced by $1,311,098, $904,536 and $399,146,
respectively, pursuant to undertakings in effect, resulting in net fees
paid to the Manager of $474,005 in fiscal 1992, $1,620,626 in fiscal 1993
and $3,127,283 in fiscal 1994.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 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 FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Premier Family of
Funds, for the funds in the Dreyfus Family of Funds and for certain other
investment companies.
Using Federal Funds. The Shareholder Services Group, 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 customers 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.
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.
TeleTransfer Privilege. TeleTransfer purchase orders may be made
between the hours of 8:00 A.M. and 4:00 P.M., New York time, on any
business day that the Transfer Agent and the New York Stock Exchange are
open. Such purchases will be credited to the shareholder's Fund account
on the next bank business day. To qualify to use the TeleTransfer
Privilege, the initial payment for purchase of Fund shares must be drawn
on, and redemption proceeds paid to, the same bank and account as are
designated on the Account Application or Shareholder Services Form on
file. If the proceeds of a particular redemption are to be wired to an
account at any other bank, the request must be in writing and signature -
guaranteed. See "Redemption of Fund Shares--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 A and Class B shares are subject to a Shareholder Services Plan
and only Class B shares are subject to a Distribution Plan.
Distribution Plan. Rule 12b-1 (the "Rule"), adopted by the
Securities and Exchange Commission under the 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 of Trustees has adopted such a plan (the "Distribution Plan")
with respect to Class B shares pursuant to which the Fund pays the
Distributor for advertising, marketing and distributing Class B shares.
Under the Distribution Plan, the Distributor may make payments to certain
securities dealers, financial institutions (which may include banks) and
other financial industry professionals (collectively, "Service Agents") in
respect of these services. The Fund's Board of Trustees believes that
there is a reasonable likelihood that the Distribution Plan will benefit
the Fund and holders of its Class B shares. In some states, certain
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
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 Trustees for their review. In addition, the Distribution Plan
provides that it may not be amended to increase materially the costs which
holders of Class B shares may bear for distribution pursuant to the
Distribution Plan without the approval of the holders of Class B shares
and that other material amendments of the Distribution Plan must be
approved by the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the Act) of the Fund or the Manager
and have no direct or indirect financial interest in the operation of the
Distribution Plan or in any agreements entered into in connection with 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 Trustees cast in person at a
meeting called for the purpose of voting on the Distribution Plan. The
Distribution Plan was so approved on July 21, 1993. The Distribution Plan
is terminable at any time by vote of a majority of the Trustees who are
not "interested persons" and have no direct or indirect financial interest
in the operation of the Distribution Plan or in any agreements entered
into in connection with the Distribution Plan, or by vote of the holders
of a majority of Class B shares. For the fiscal year ended April 30,
1994, $324,814 was charged to the Fund, with respect to Class B, 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 and Class B
shares.
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 Trustees for their review. In addition, the
Shareholder Services Plan provides that it may not be amended without
approval of the Board of Trustees, and by the Trustees who are not
"interested persons" (as defined in the Act) of the Fund and have no
direct or indirect financial interest in the operation of the 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 cast in person at a meeting
called for the purpose of voting on the Shareholder Services Plan. The
Shareholder Services Plan was so approved on July 21, 1993. The
Shareholder Services Plan is terminable at any time by vote of a majority
of the Trustees 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 April 30, 1994, $1,440,515 was charged to
the Fund, with respect to Class A, and $162,407 was charged to the Fund,
with respect to Class B, under the Shareholder Services Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege - Class A. An investor may indicate on
the appropriate Application or by later written request that the Fund
provide Redemption Checks ("Checks") drawn on the Fund's account. Checks
will be sent only to the registered owner(s) of the account and only to
the address of record. The Account Application or later written request
must be manually signed by the registered owner(s). Checks may be made
payable to the order of any person in an amount of $500 or more. When a
check is presented to the Transfer Agent for payment, the Transfer Agent,
as the investor's agent, will cause the Fund to redeem a sufficient number
of 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 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 Fund 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 Board of Trustees reserves the right to make payments in whole
or in part in readily 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 would
be incurred.
Suspension of Redemption. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or
(c) for such other periods as the Securities and Exchange Commission by
order may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Exchange Privilege. Class A and Class B 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 shares of any fund may be exchanged for Class B
shares of other funds without a sales load. Class B shares
of any fund exchanged for Class B shares of another fund
will be subject to the higher applicable contingent
deferred sales charge ("CDSC") of the two funds and, for
purposes of calculating CDSC rates and conversion periods,
will be deemed to have been held since the date the Class B
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 use this Privilege, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing, by wire or by telephone. Telephone exchanges may be made only if
the appropriate "YES" box has been checked on the Account Application or a
separate signed Shareholder Services Form is on file with the Transfer
Agent. By using this Privilege, the investor authorizes the Transfer
Agent to act on telephonic, telegraphic or written exchange instructions
from any person representing himself or herself to be the investor 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 being required for the shares of the same class of fund into
which the exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and SEP-IRAs with only one participant, the minimum initial investment is
$750. To exchange shares held in Corporate Plans, 403(b)(7) Plans and
SEP-IRAs with more than one participant, the minimum initial investment is
$100 if the plan has at least $2,500 invested among shares of the same
class of the funds in the Dreyfus Family of Funds. To exchange shares
held in Personal Retirement Plans, the shares exchanged must have a
current value of at least $100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for Class A or Class B shares of the
Fund, shares of the same Class of another fund in the Premier Family of
Funds or the Dreyfus Family of Funds. This Privilege is available only
for existing accounts. Shares will be exchanged on the basis of relative
net asset value as described above under "Exchange Privilege." Enrollment
in or modification or cancellation of this Privilege is effective three
business days following notification by the investor. An investor will be
notified if his account falls below the amount designated to be exchanged
under this Privilege. In this case, an investor's account will fall to
zero unless additional investments are made in excess of the designated
amount prior to the next Auto-Exchange transaction. Shares held under IRA
and other retirement plans are eligible for this Privilege. Exchanges of
IRA shares may be made between IRA accounts and from regular accounts to
IRA accounts, but not from IRA accounts to regular accounts. With respect
to all other retirement accounts, exchanges may be made only among those
accounts.
The Exchange Privilege and Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or quarterly
basis. Withdrawal payments are the proceeds from sales of Fund shares,
not the yield on the shares. If withdrawal payments exceed reinvested
dividends and distributions, the investor's shares will be reduced and
eventually may be depleted. An Automatic Withdrawal Plan may be
established by completing the appropriate application available from the
Distributor. There is a service charge of $.50 for each withdrawal check.
Automatic Withdrawal may be terminated at any time by the investor, the
Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan. Class B
shares withdrawn pursuant to the Automatic Withdrawal Plan will be subject
to any applicable CDSC.
Dividend Sweep. Dividend Sweep allows investors to invest on the
payment date their dividends or dividends and capital gain distributions,
if any, from the Fund in shares of the same Class of another fund in the
Premier Family of Funds or the Dreyfus Family of Funds of which the
investor is a shareholder. Shares of the same class of other funds
purchased pursuant to this Privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid 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
shares by a fund may be invested without imposition of any
applicable CDSC in Class B shares of other funds and the
Class B 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
Fund Shares."
Valuation of Portfolio Securities. The Fund's investments are valued
each business day by an independent pricing service (the "Service")
approved by the Board of Trustees. When, in the judgment of the Service,
quoted bid prices for investments are readily available and are
representative of the bid side of the market, these investments are valued
at the mean between the quoted bid prices (as obtained by the Service from
dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other
investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board of Trustees. Expenses and
fees, including the management fee (reduced by the expense limitation, if
any) and fees pursuant to the Shareholder Services Plan, with respect to
the Class A and Class B shares, and fees pursuant to the Distribution
Plan, with respect to the Class B shares only, 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 qualified as a "regulated
investment company" under the Code for the fiscal year ended April 30,
1994 and the Fund intends to continue to so qualify so long as 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 pay out 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. Accordingly, the Fund may be
restricted in the selling of securities held for less than three months,
and in the utilization of certain of the investment techniques described
in the Prospectus under "Description of the Fund--Investment Techniques."
The Code, however, allows the Fund to net certain offsetting positions
making it easier for the Fund to satisfy the 30% test. 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
"Dividends, Distributions and Taxes" 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.
Exempt-interest dividends received with respect to Fund shares may be
partially exempt from certain state or local taxes for the residents of
such state or locality.
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of any
gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Code. In addition, all or a portion of the gain realized from
engaging in "conversion transactions" may be treated as ordinary income
under Section 1258. "Conversion transactions" are defined to include
certain forward, futures, option and "straddle" 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, 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 Section 1256. As
such, all or a portion of any short- or long-term capital gain from
certain "straddle" and/or conversion 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. 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 the
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
Investment Officers 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
April 30, 1993 and 1994 was 30.99% and 22.15%, 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 April 30, 1994 for Class A
was 5.94% and for Class B was 5.61%. Current yield is computed pursuant
to a formula which operates as follows: The amount of 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) 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 on the last day of the period less
any undistributed earned income per share reasonably expected to be
declared as a dividend shortly thereafter. The quotient is then added to
1, and that sum is raised to the 6th power, after which 1 is subtracted.
The current yield is then arrived at by multiplying the result by 2.
Based upon a 1994 Federal tax rate of 39.60%, the tax equivalent
yield for the 30-day period ended April 30, 1994 for Class A was 9.83% and
for Class B was 9.29%. 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 that is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
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) taxes, including applicable surcharges. In addition,
there may be pending legislation which could affect such stated tax rate
or yield. Each investor should consult its tax adviser, and consider its
own factual circumstances and applicable tax laws, in order to ascertain
the relevant tax equivalent yield.
The average annual total return for the 1, 5 and 7.427 year periods
ended April 30, 1994 for Class A was -2.73%, 7.93% and 6.86%, respec-
tively. The average annual total return for the 1 and 1.290 year periods
ended April 30, 1994 for Class B was -1.61% and 2.45, respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number
of years in the period) and subtracting 1 from the result. A Class's
average annual total return 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 the maximum applicable CDSC has been paid upon
redemption at the end of the period.
The total return for the period November 26, 1986 through April 30,
1994 for Class A was 63.67%. Based on net asset value per share, the
total return for Class A was 71.39% for this period. The total return for
the period January 15, 1993 through April 30, 1994 for Class B was 3.17%.
Without giving effect to the applicable CDSC, the total return for Class B
was 6.12% for this period. Total return is calculated by subtracting the
amount of the maximum offering price per share in the case of Class A or
the net asset value in the case of Class B 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 in the case of Class B any applicable CDSC), and dividing
the result by the maximum offering price per share in the case of Class A
or the net asset value in the case of Class B 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 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 shares. In such cases, the calculation would not reflect the
deduction of the sales load with respect to Class A shares or any
applicable CDSC with respect to Class B shares, 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 actual or proposed tax legislation.
From time to time, advertising materials for the Fund may also refer to
statistical or other information concerning trends relating to investment
companies, as compiled by industry associations such as the Investment
Company Institute. From time to time, advertising materials for the Fund
also may refer to Morningstar ratings and related analysis supporting such
ratings.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
non-assessable. Shares have no preemptive or subscription rights and are
freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
On August 26, 1992, the Fund's shareholders approved a proposal to
change certain of the Fund's fundamental policies and investment
restrictions, among other things, to increase (i) the amount the Fund may
borrow from banks for temporary or emergency purposes, (ii) the amount of
the Fund's assets that it may pledge to secure such borrowings, (iii) the
percentage of the Fund's assets which may be invested in illiquid
securities and make such policy non-fundamental and (iv) the amount of the
Fund's portfolio securities which it may lend.
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 $24 billion in tax exempt assets.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, has been selected as auditors of the Fund.
APPENDIX
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default--capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature 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 an 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 payment
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 rating categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+)
designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
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 (+)
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.
B
Issues rated B are regarded as having only an adequate capacity for
timely payment; such capacity may be damaged by changing conditions or
short-term adversities.
C
This rating is assigned to short-term debt obligations with a
doubtful capacity for payment.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection
of interest and principal payments may be very moderate, and therefore not
well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time
may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to
principal or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category
and in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower
end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as 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.
Demand Bond or Notes Ratings
Certain demand securities empower the holder at his option to require
the issuer, usually through a remarketing agent, to repurchase the
security upon notice at par with accrued interest. This is also referred
to as a put option. The ratings of the demand provision may be changed or
withdrawn at any time if, in Fitch's judgment, changing circumstances
warrant such action.
Fitch demand provision ratings carry the same symbols and related
definitions as its short-term ratings.
<TABLE>
<CAPTION>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS-98.1% AMOUNT VALUE
------------- -------------
<S> <C> <C>
ALABAMA-1.3%
Courtland Industrial Development Board, SWDR (Champion International Corp.
Project)
6.375%, 3/1/2029........................................................ $ 8,700,000 $ 8,023,227
ARIZONA-1.5%
Maricopa County Pollution Control Corp., PCR, Refunding
(Public Service Co. - Palo Verde) 6.375%, 8/15/2023..................... 7,000,000 6,243,650
Tucson Airport Authority, Inc., Special Facility Revenue
(Lockheed Aermod Center, Inc.) 8.70%, 9/1/2019.......................... 2,500,000 2,839,150
COLORADO-7.2%
City and County of Denver, Airport Revenue:
7.75%, 11/15/2021....................................................... 8,000,000 8,075,600
7.25%, 11/15/2023....................................................... 10,000,000 9,613,300
7%, 11/15/2025.......................................................... 18,225,000 16,965,288
Colorado Health Facilities Authority, Retirement Facilities Revenue
(Liberty Heights) Zero Coupon, 7/15/2024................................ 10,000,000 1,129,600
Dawson Ridge, Metropolitan District Number 1, Refunding:
Zero Coupon, 10/1/2017.................................................. 9,930,000 2,050,247
Zero Coupon, 10/1/2022.................................................. 47,535,000 7,008,560
CONNECTICUT-2.9%
Connecticut Development Authority, First Mortgage Gross Revenue
(Elim Park Baptist Home, Inc. Project) 9%, 12/1/2020.................... 3,000,000 3,189,810
Connecticut Health and Educational Facilities Authority, Revenue
(Sacred Heart University) 5.80%, 7/1/2023............................... 1,700,000 1,478,303
Connecticut Housing Finance Authority (Housing Mortgage Finance Program)
6.70%, 11/15/2022....................................................... 13,000,000 13,126,490
FLORIDA-1.9%
Lake County Resources Recreation, IDR, Refunding (NRG/Recovery Group)
5.85%, 10/1/2009........................................................ 5,750,000 5,314,610
Palm Beach County, Solid Waste IDR (Okeelanta Power LP Project)
6.85%, 2/15/2021........................................................ 6,750,000 6,299,302
GEORGIA-1.4%
Atlanta, Airport Facilities, Refunding 7.25%, 1/1/2017...................... 5,000,000 5,302,750
Hogansville, Combined Public Utility System Revenue, Refunding (Asset
Guaranty)
6%, 10/1/2023........................................................... 3,475,000 3,279,288
ILLINOIS-12.3%
Alton, Health Facilities Revenue (Barnes-Jewish, Inc. Christian) 5.50%, 5/15/2021 7,000,000 6,113,730
Chicago O'Hare International Airport, Special Facility Revenue:
(American Airlines, Inc. Project) 7.875%, 11/1/2025..................... 6,000,000 6,202,200
(United Airlines, Inc.):
8.20%, 5/1/2018....................................................... 2,195,000 2,346,455
8.50%, 5/1/2018....................................................... 3,500,000 3,748,430
East Chicago, PCR, Refunding (Inland Steel Co. Project Number 10) 6.80%, 6/1/2013 9,000,000 8,566,110
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
ILLINOIS (CONTINUED)
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010....................................................... $ 2,725,000 $ 2,937,359
8.50%, 9/1/2010....................................................... 4,535,000 4,887,642
8.25%, 8/1/2012....................................................... 4,380,000 4,464,359
Retirement Housing (Regency Park) Zero Coupon, 7/15/2023................ 85,000,000 10,319,850
Illinois Health Facilities Authority, Revenue:
(Beverly Farm Foundation) 9.125%, 12/15/2015............................ 2,000,000 2,165,780
(Delnor Community Hospital Project) 8%, 5/15/2019 (Prerefunded 5/15/1999) (a) 5,500,000 6,299,920
(Refunding - Masonic Medical Center) 5.50%, 10/1/2019 .................. 5,000,000 4,197,350
(Trinity Medical Center) 7%, 7/1/2012................................... 6,750,000 6,782,400
Illinois Housing Development Authority, Multi-Family Program 6.75%, 9/1/2021. 7,350,000 7,393,953
INDIANA-1.2%
Indianapolis Local Public Improvement Bond Bank, Refunding 6.75%, 2/1/2020.. 7,500,000 7,473,825
IOWA-1.5%
Council Bluffs, PCR, Refunding (Midwest Power Systems, Inc.) 5.95%, 5/1/2023. 10,000,000 9,237,300
LOUISIANA-4.1%
Lake Charles Non-Profit Housing Development Corp., First Mortgage Revenue,
Refunding (Chateau Project) 7.875%, 2/15/2025 (Insured; FHA)............ 1,000,000 1,005,070
Louisiana Public Facilities Authority, Revenue (Student Loan) 7%, 9/1/2006.. 3,000,000 3,081,720
Parish of Saint Charles, PCR (Louisiana Power and Light Co. Project)
7.50%, 6/1/2021......................................................... 3,750,000 3,894,900
Parish of West Feliciana, PCR:
(Gulf States Utilities - II) 7.70%, 12/1/2014........................... 10,000,000 10,677,800
(Gulf States Utilities - III) 7.70%, 12/1/2014.......................... 6,500,000 6,925,425
MARYLAND-.3%
Maryland Community Development Administration, Department of Housing and
Community Development (Single Family Program) 7.70%, 4/1/2015........... 2,085,000 2,195,693
MASSACHUSETTS-1.6%
Massachusetts Health and Educational Facilities Authority, Revenue
(Tufts University) 8.25%, 8/15/2018 (b)................................. 4,000,000 3,517,600
Massachusetts Housing Finance Agency, SFHR 7.95%, 6/1/2023.................. 2,000,000 2,089,300
New England Education Loan Marketing Corp., Student Loan Revenue
6.90%, 11/1/2009........................................................ 4,000,000 4,127,120
MICHIGAN-4.4%
Detroit, Sewer Disposal Revenue 8.33%, 7/1/2023 (Insured; FGIC) (b)......... 7,500,000 6,375,000
Greater Detroit Resources Recovery Authority, Revenue:
9.25%, Series A, 12/13/2008............................................. 8,440,000 9,019,490
9.25%, Series D, 12/13/2008............................................. 250,000 267,165
9.25%, Series E, 12/13/2008............................................. 1,000,000 1,068,660
9.25%, Series H, 12/13/2008............................................. 2,045,000 2,185,410
Michigan Hospital Finance Authority, Revenue, Refunding (Detroit Medical Center)
6.50%, 8/15/2018........................................................ 5,000,000 4,886,050
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
MICHIGAN (CONTINUED)
Wayne County Building Authority 8%, 3/1/2017................................ $ 1,500,000 $ 1,754,580
Western Townships Utilities Authority, Sewer Disposal System (Limited Tax)
8.20%, 1/1/2018......................................................... 1,500,000 1,682,970
MISSISSIPPI-.3%
Medical Center Educational Building Corp., Revenue
(University Medical Center Project) 5.90%, 12/1/2023.................... 2,250,000 2,115,967
NEBRASKA-2.0%
Nebraska Higher Education Loan Program, Inc., Revenue 6.40%, 6/1/2013....... 12,500,000 12,533,250
NEVADA-4.0%
Clark County, IDR (Southwest Gas Corp.):
7.50%, 9/1/2032......................................................... 13,000,000 13,307,450
6.50%, 12/1/2033........................................................ 13,000,000 11,703,380
NEW HAMPSHIRE-.6%
New Hampshire Housing Finance Authority, Single Family Residential Mortgage
7.70%, 7/1/2029......................................................... 3,675,000 3,818,546
NEW JERSEY-2.8%
Camden County Pollution Control Financing Authority, Solid Waste RRR
7.50%, 12/1/2010........................................................ 2,000,000 2,051,980
New Jersey Economic Development Authority, First Mortgage Gross Revenue
(The Evergreens) 9.25%, 10/1/2022....................................... 15,000,000 15,630,300
NEW MEXICO-.3%
New Mexico Educational Assistance Foundation, Student Loan Revenue
6.85%, 12/1/2005........................................................ 2,000,000 2,028,380
NEW YORK-17.7%
Metropolitan Transportation Authority, Service Contract, Commuter Facilities
7.50%, 7/1/2016 (Prerefunded 7/1/2000) (a).............................. 3,000,000 3,425,970
New York City:
8%, 6/1/2000............................................................ 2,200,000 2,473,900
7.50%, 2/1/2001......................................................... 5,000,000 5,509,750
6%, 5/15/2008........................................................... 8,970,000 8,768,893
7.50%, 8/15/2008........................................................ 2,000,000 2,152,660
7.10%, 2/1/2009......................................................... 5,000,000 5,330,900
6%, 5/15/2009........................................................... 5,000,000 4,853,950
7%, 2/1/2020............................................................ 12,000,000 12,547,920
Refunding 5.70%, 8/1/2009............................................... 3,450,000 3,241,413
New York City Industrial Development Agency, Special Facilities Revenue
(American Airlines, Inc. Project) 8%, 7/1/2020.......................... 3,250,000 3,412,402
New York City Municipal Water Finance Authority, Water and Sewer Systems
Revenue:
7%, 6/15/2001........................................................... 2,490,000 2,779,039
7.375%, 6/15/2009 (Prerefunded 6/15/1999) (a)........................... 4,000,000 4,450,160
7%, 6/15/2015 (Prerefunded 6/15/2001) (a)............................... 2,510,000 2,623,402
New York State Dormitory Authority, Revenue:
City University Systems 7.625%, 7/1/2020 (Prerefunded 7/1/2000) (a)..... 4,000,000 4,594,160
State University Educational Facilities 7%, 5/15/2018 (Prerefunded 5/15/2000) (a) 3,295,000 3,671,658
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
NEW YORK (CONTINUED)
New York State Dormitory Authority, Revenue (continued):
Upstate Community Colleges:
5.25%, 7/1/2005....................................................... $ 1,770,000 $ 1,671,800
5.375%, 7/1/2006...................................................... 1,995,000 1,893,514
New York State Energy Research and Development Authority,
Electric Facilities Revenue:
(Consolidated Edison Co. of New York, Inc.):
7.50%, 7/1/2025................................................... 3,000,000 3,219,300
7.50%, 1/1/2026................................................... 2,000,000 2,138,600
(Long Island Lighting Co.) 7.15%, 6/1/2020............................ 4,000,000 4,073,920
New York State Housing Finance Agency, Revenue:
(Refunding - Health Facilities - New York City) 8%, 11/1/2008........... 5,000,000 5,586,150
Service Contract Obligation 7.30%, 3/15/2021 (Prerefunded 9/15/2001) (a) 5,000,000 5,684,800
New York State Local Government Assistance Corp.
7%, 4/1/2016 (Prerefunded 4/1/2001) (a)................................. 5,500,000 6,156,370
New York State Medical Care Facilities Finance Agency, Revenue
6.622%, 8/15/2006 (Insured; FSA) (b,c).................................. 8,300,000 7,075,750
(Mental Health Service Facilities Improvement):
7.875%, 8/15/2020..................................................... 1,335,000 1,477,151
Refunding 7.875%, 8/15/2000 (Prerefunded 8/15/2000) (a)............... 1,150,000 1,330,527
NORTH CAROLINA-1.1%
North Carolina Eastern Municipal Power Agency, Power System Revenue
8.397%, 1/1/2019 (b,c).................................................. 8,400,000 7,182,000
OHIO-.6%
Gateway Economic Development Corp., Greater Cleveland Excise Tax Revenue
7.50%, 9/1/2005......................................................... 3,500,000 3,852,905
OKLAHOMA-.7%
Tulsa Municipal Airport Trust, Revenue (American Airlines, Inc.) 7.375%, 12/1/2020 4,300,000 4,326,746
PENNSYLVANIA-6.2%
Blair County Hospital Authority, Revenue (Altoona Hospital) 8.46%, 7/1/2013 (b) 5,000,000 5,124,850
Lancaster County Hospital Authority, Revenue (Health Center - United Church
Homes Project) 9.125%, 10/1/2014........................................ 1,465,000 1,618,722
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.75%, 11/1/2014........................................................ 2,000,000 2,000,000
9.50%, 11/1/2016........................................................ 3,000,000 3,085,470
Montgomery County Higher Education and Health Authority, Revenue
(AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020......................... 3,500,000 3,757,600
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating - A):
6.40%, 1/1/2009....................................................... 2,500,000 2,371,600
6.50%, 1/1/2013....................................................... 3,500,000 3,280,795
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 5,500,000 6,023,655
Philadelphia, Water and Sewer Revenue 7.35%, 9/1/2004....................... 4,980,000 5,564,403
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
PENNSYLVANIA (CONTINUED)
Philadelphia Hospital and Higher Education Facility Authority, HR
(Graduate Health Systems) 7.25%, 7/1/2018............................... $ 6,100,000 $ 6,172,773
RHODE ISLAND-.4%
Rhode Island Depositors Economic Protection Corp., Special Obligation
6.95%, 8/1/2022 (Prerefunded 8/1/2002) (a).............................. 2,000,000 2,232,840
TENNESSEE-1.6%
McMinn County Industrial Development Board, PCR
(Calhoun Newsprint Co. Project) 7.625%, 3/1/2016........................ 3,000,000 3,150,180
Metropolitan Government of Nashville and Davidson County, IDB, Revenue
(Refunding - Multi-Family Mortgage - Picadilly) 6.95%, 7/1/2027 (Insured; FHA) 6,705,000 6,898,238
TEXAS-9.3%
Alliance Airport Authority, Inc., Special Facilities Revenue
(American Airlines, Inc. Project):
7%, 12/1/2011......................................................... 10,700,000 10,566,678
7.50%, 12/1/2029...................................................... 6,000,000 6,058,020
Brazos Higher Education Authority, Inc., Student Loan Revenue, Refunding
5.875%, 6/1/2004........................................................ 6,000,000 5,921,160
Brazos River Authority, PCR (Collateralized, Texas Utilities Electric Co.
Project)
7.875%, 3/1/2021........................................................ 490,000 528,499
Dallas - Fort Worth International Airport Facility Improvement Corp., Revenue
(American Airlines, Inc.) 7.50%, 11/1/2025.............................. 13,000,000 13,126,230
Gulf Coast Waste Disposal Authority, Revenue (Champion International Corp.)
7.45%, 5/1/2026......................................................... 7,000,000 7,283,150
Port Corpus Christi Authority, PCR, Refunding (Hoechst Celanese Co. Project)
7.50%, 8/1/2012......................................................... 4,000,000 4,351,960
Texas Housing Agency, SFMR 7.875%, 9/1/2012................................. 985,000 1,012,176
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation
Center)
8.20%, 10/1/2012 (Prerefunded 10/1/2002) (a)............................ 9,075,000 9,392,625
UTAH-3.3%
Carbon County, SWDR, Refunding:
(East Carbon Development Corp.) 9%, 7/1/2012............................ 4,000,000 4,188,680
(Sunnyside Cogeneration) 9.25%, 7/1/2018................................ 15,000,000 16,113,600
VIRGINIA-.8%
Albemarle County Industrial Development Authority, HR, Refunding
(Martha Jefferson Hospital) 5.875%, 10/1/2013........................... 2,360,000 2,238,248
Virginia Housing Development Authority, Commonwealth Mortgage 6.20%, 7/1/2021 3,255,000 3,081,346
WASHINGTON-1.4%
Pierce County Economic Development Corp., Revenue (Solid Waste - Occidental
Petrol)
5.80%, 9/1/2029......................................................... 6,750,000 5,905,778
Pilchuck Development Public Corp., Revenue, Refunding (Industrial - Little
Neck
Properties Project) 6.25%, 8/1/2010 (LOC; US Bank of Washington) (d).... 3,090,000 3,049,336
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1994
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------- -------------
WEST VIRGINIA-1.6%
West Virginia Parkways Economic Development and Tourism Authority:
7.380%, 5/15/2013 (b)................................................... $ 5,000,000 $ 4,198,550
8.595%, 5/16/2019 (Insured; FGIC) (b)................................... 4,000,000 3,530,000
West Virginia Water Development Authority, Water Development Revenue
(Loan Program II) 7.50%, 11/1/2029 (Prerefunded 11/1/1999) (a).......... 1,900,000 2,146,183
WYOMING-.6%
Wyoming Community Development Authority, Single Family Mortgage 8%, 6/1/2021. 3,600,000 3,740,652
U.S. RELATED-1.2%
Guam Government 5.40%, 11/15/2018........................................... 3,775,000 3,249,897
Puerto Rico Commonwealth, Refunding 5.50%, 7/1/2013......................... 5,000,000 4,544,450
-------------
TOTAL MUNICIPAL BONDS (cost $606,166,272)................................... $612,033,098
-------------
-------------
CONTRACTS
SUBJECT TO
PUT OPTIONS-.1% PUT
-------------
U.S. Treasury Notes:
June '94 @ $108......................................................... 100 $ 278,125
June '94 @ $109......................................................... 100 373,438
-------------
TOTAL PUT OPTIONS (cost $334,537)........................................... $ 651,563
-------------
-------------
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENT-1.8% AMOUNT
-------------
FLORIDA;
Orange County Health Facilities Authority, Revenue, VRDN
(Adventist Health Systems/Sunbelt) 3.20% (LOC; Banque Paribas) (d,e)
(cost $11,000,000)...................................................... $ 11,000,000 $ 11,000,000
-------------
-------------
TOTAL INVESTMENTS-100.0%
(cost $617,500,809)..................................................... $623,684,661
-------------
-------------
</TABLE>
<TABLE>
<CAPTION>
PREMIER MUNICIPAL BOND FUND
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
FGIC Financial Guaranty Insurance Corporation PCR Pollution Control Revenue
FHA Federal Housing Administration RRR Resource Recovery Revenue
FSA Financial Security Assurance SFHR Single Family Housing Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDB Industrial Development Board SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- ----------------------
<S> <S> <S> <C>
AAA Aaa AAA 15.9%
AA Aa AA 9.5
A A A 22.5
BBB Baa BBB 34.2
BB Ba BB 2.4
F-1 MIGI, VMIG1 & P1 SP1 & A1 1.8
Not Rated (g) Not Rated (g) Not Rated (g) 13.7
--------
100.0%
--------
--------
</TABLE>
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 tax-exempt issue and to retire the bonds in full at the
earliest refunding date.
(b) Residual interest security - the interest rate is subject to change
periodically.
(c) Security exempt from registration under Rule 144A of the Securities
Act of 1933.
These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At April 30,
1994, these securities amounted to $14,257,750 or 2.2% of net assets.
(d) Secured by letters of credit.
(e) Securities payable on demand. The interest rate, which is subject to
change, is based on bank prime rates or an index of market interest
rates.
(f) Fitch currently provides creditworthiness information for a limited
amount of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's, have been determined by the Fund's Board of Trustees to be of
comparable quality to those rated securities in which the Fund may
invest.
<TABLE>
<CAPTION>
STATEMENT OF PUT OPTIONS WRITTEN APRIL 30, 1994
CONTRACTS
SUBJECT TO
ISSUER PUT VALUE
- ------ ---------- ---------
<S> <C> <C>
U.S. Treasury Notes:
June '94 @ $106......................................................... 200 $(250,000)
June '94 @ $107......................................................... 200 (387,500)
---------
(premiums received $296,552).......................................... $(637,500)
---------
---------
See notes to financial statements.
PREMIER MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1994
ASSETS:
Investments in securities, at value
(cost $617,500,809)-see statement..................................... $623,684,661
Cash.................................................................... 4,099,668
Interest receivable..................................................... 14,134,626
Receivable for shares of Beneficial Interest subscribed................. 1,393,285
Prepaid expenses........................................................ 52,308
--------------
643,364,548
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $460,521
Outstanding put options written, at value
(premiums received $296,552)-see statement............................ 637,500
Payable for shares of Beneficial Interest redeemed...................... 398,614
Accrued expenses........................................................ 188,279 1,684,914
---------- --------------
NET ASSETS ................................................................ $641,679,634
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $637,350,126
Accumulated net realized capital losses and distributions in excess of
net realized
gain on investments-Note 1(c)......................................... (1,513,396)
Accumulated net unrealized appreciation on investments-Note 3(b)........ 5,842,904
--------------
NET ASSETS at value......................................................... $641,679,634
--------------
--------------
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 39,544,149
--------------
--------------
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 6,924,450
--------------
--------------
NET ASSET VALUE per share:
Class A Shares
($546,036,245 / 39,544,149 shares).................................... $13.81
-------
-------
Class B Shares
($95,643,389 / 6,924,450 shares)...................................... $13.81
-------
-------
See notes to financial statements.
PREMIER MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1994
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 43,891,883
EXPENSES:
Management fee-Note 2(a).............................................. $ 3,526,429
Shareholder servicing costs-Note 2(c)................................. 1,962,965
Distribution fees (Class B shares)-Note 2(b).......................... 324,814
Registration fees..................................................... 109,195
Prospectus and shareholders' reports.................................. 79,905
Custodian fees........................................................ 59,319
Professional fees..................................................... 55,345
Trustees' fees and expenses-Note 2(d)................................. 18,941
Miscellaneous......................................................... 48,901
-------------
6,185,814
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 399,146
-------------
TOTAL EXPENSES.................................................. 5,786,668
-------------
INVESTMENT INCOME-NET........................................... 38,105,215
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3(a)............................ $ (1,468,275)
Net unrealized (depreciation) on investments............................ (29,828,947)
-------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (31,297,222)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 6,807,993
-------------
-------------
See notes to financial statements.
PREMIER MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30,
--------------------------------
1993 1994
--------------- -------------
OPERATIONS:
Investment income-net................................................... $ 29,484,374 $ 38,105,215
Net realized gain (loss) on investments................................. 5,305,331 (1,468,275)
Net unrealized appreciation (depreciation) on investments for the year.. 23,331,904 (29,828,947)
--------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 58,121,609 6,807,993
--------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares........................................................ (29,366,677) (34,640,947)
Class B shares........................................................ (117,697) (3,464,268)
Net realized gain on investments:
Class A shares........................................................ (6,801,408) (1,935,559)
Class B shares........................................................ --- (249,175)
Excess net realized gain on investments:
Class A shares........................................................ --- (39,975)
Class B shares........................................................ --- (5,146)
--------------- -------------
TOTAL DIVIDENDS................................................... (36,285,782) (40,335,070)
--------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 148,668,994 104,748,904
Class B shares........................................................ 19,857,135 83,821,633
Dividends reinvested:
Class A shares........................................................ 22,354,888 22,085,600
Class B shares........................................................ 64,777 2,282,208
Cost of shares redeemed:
Class A shares........................................................ (55,003,691) (80,102,730)
Class B shares........................................................ (109,103) (4,090,771)
--------------- -------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 135,833,000 128,744,844
--------------- -------------
TOTAL INCREASE IN NET ASSETS.................................... 157,668,827 95,217,767
NET ASSETS:
Beginning of year....................................................... 388,793,040 546,461,867
--------------- -------------
End of year............................................................. $546,461,867 $641,679,634
--------------- -------------
--------------- -------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- ----------------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
---------------------------------- ----------------------------------
1993 1994 1993* 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................... 10,464,001 7,100,350 1,376,724 5,676,601
Shares issued for dividends reinvested 1,577,117 1,502,278 4,490 155,727
Shares redeemed..................... (3,868,910) (5,500,645) (7,565) (281,527)
--------------- --------------- --------------- ---------------
NET INCREASE IN SHARES OUTSTANDING 8,172,208 3,101,983 1,373,649 5,550,801
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
- -----------------------
* From January 15, 1993 (commencement of initial offering) to April 30, 1993.
See notes to financial statements.
</TABLE>
PREMIER MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus dated June 24, 1994.
See notes to financial statements.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the distributor of the Fund's shares. The
Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
The Fund offers both Class A and Class B shares. 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. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Fund's 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 in the judgment of
the Service are readily available and are representative of the bid side of
the market 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, when appropriate,
discounts on investments, is earned from settlement date and recognized on
the accrual basis. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Fund not to distribute such gain.
Dividends in excess of net realized gains on investments for financial
statement purposes result from current period wash sale loss deferrals to be
recognized in future years and other losses from security transactions during
the year ended April 30, 1994 which are treated for Federal income tax
purposes as arising in fiscal 1995.
(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 provisions available to certain investment
companies, as defined in applicable sections of the Internal Revenue Code,
and to make distributions of income and net realized capital gain sufficient
to relieve it from all, or substantially all, Federal income taxes.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 average
daily value of the Fund's net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year. However, the Manager had
undertaken from May 1, 1993 through January 18, 1994 to reduce the management
fee paid by the Fund, to the extent that the Fund's aggregate expenses
(excluding certain expenses as described above) exceeded specified annual
percentages of the Fund's average daily net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $399,146 for the
year ended April 30, 1994.
The Distributor retained $213,752 during the year ended April 30, 1994
from commissions earned on sales of the Fund's Class A shares.
The Distributor retained $91,986 during the year ended April 30, 1994
from contingent deferred sales charges imposed upon redemptions of the Fund's
Class B shares.
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor, at an
annual rate of .50 of 1% of the value of the Fund's Class B shares average
daily net assets, for costs and expenses in connection with advertising,
marketing and distributing the Fund's Class B shares. The Distributor may
make payments to one or more Service Agents (a securities dealer, financial
institution, or other industry professional) based on the value of the Fund's
Class B shares owned by clients of the Service Agent. During the year ended
April 30, 1994, $324,814 was charged to the Fund pursuant to the Class B
Distribution Plan.
(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 and Class B shares for servicing shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the year ended April 30, 1994,
$1,440,515 and $162,407 were charged to the Class A and Class B shares,
respectively, pursuant to the Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each trustee
who is not an "affiliated person" receives from the Fund an annual fee of
$2,500 and an attendance fee of $250 per meeting.
(E) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger (the "Merger Agreement") providing for the merger of the Manager
with a subsidiary of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Manager and of Mellon. The merger is
expected to occur in mid-1994, but could occur later.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
As a result of regulatory requirements and the terms of the Merger
Agreement, the Manager will seek various approvals from the Fund's board and
shareholders before completion of the merger. Shareholder approval will be
solicited by a proxy statement.
NOTE 3-SECURITIES TRANSACTIONS:
(A) Purchases and sales of securities, excluding option transactions,
amounted to $292,478,175 and $168,116,003, respectively, for the year ended
April 30, 1994, and consisted entirely of municipal bonds and short-term
municipal investments.
In addition, the following table summarizes the Fund's put options
written transactions for the year ended April 30, 1994:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- ------------
<S> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding April 30, 1993......... - -
Contracts Written............................ 400 $296,552
---- ------------
Contracts outstanding April 30, 1994......... 400 $296,552
---- ------------
---- ------------
</TABLE>
As a writer of put options, the Fund receives a premium at the outset
and then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. Generally, the Fund would incur
a loss if the price of the underlying financial instrument declines between
the date the option is written and the date on which the option is terminated.
Generally, the Fund would realize a gain, to the extent of the premiums, if
the price of the financial instrument increases between those dates.
(B) At April 30, 1994, accumulated net unrealized appreciation on
investments was $5,842,904, consisting of $24,571,806 gross unrealized
appreciation and $18,728,902 gross unrealized depreciation.
At April 30, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER MUNICIPAL BOND FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER MUNICIPAL BOND FUND
We have audited the accompanying statement of assets and liabilities of
Premier Municipal Bond Fund, including the statements of investments and put
options written, as of April 30, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1994 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Municipal Bond Fund at April 30, 1994, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
(Ernst and Young Signature Logo)
New York, New York
June 3, 1994
PREMIER 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
November 26, 1986 (commencement of operations) to April 30,
1987 and for each of the seven years ended April 30, 1994.
Included in Part B of the Registration Statement:
Statement of Investments--April 30, 1994.
Statement of Assets and Liabilities--April 30, 1994.
Statement of Operations--year ended April 30, 1994.
Statement of Changes in Net Assets--for the years ended April
30, 1993 and 1994.
Notes to Financial Statements.
Report of Ernst & Young, Independent Auditors dated June 3,
1994.
Schedule No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are
not required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits - List (continued)
(b) Exhibits:
(1) Registrant's Amended and Restated Agreement and Declaration of
Trust is incorporated by reference to Exhibit (1) of Post-
Effective Amendment No. 7. to the Registration Statement on
Form N-1A, filed on June 30, 1992.
(2) Registrant's By-Laws.
(5) Management Agreement between the Registrant and The Dreyfus
Corporation is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 9 to the Registration Statement
on Form N-1A, filed on October 30, 1992.
(6)(a) Distribution Agreement between the Registrant and Dreyfus
Service Corporation is incorporated by reference to
Exhibit (6)(a) of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on October 30,
1992.
(6)(b) Forms of Service Agreements are incorporated by reference to
Exhibit (6)(b) of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on October 30,
1992.
(6)(c) Forms of Distribution Plan Agreements are incorporated by
reference to Exhibit (6)(c) of Post-Effective Amendment No. 9
to the Registration Statement on Form N-1A, filed on October
30, 1992.
(8)(a) Registrant's Custody Agreement is incorporated by reference to
Exhibit (8)(a) of Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A, filed on August 18, 1990.
(8)(b) Forms of Sub-Custodial Agreements.
(9) Shareholder Services Plan.
(10) Opinion and consent on Registrant's counsel are incorporated
by reference to Exhibit (10) of Pre-Effective Amendment No. 1
to the Registration Statement on Form N-1A, filed on September
10, 1986.
Item 24. Financial Statements and Exhibits - List (continued)
(11) Consent of Independent Auditors.
(15) Distribution Plan.
(16) Schedules of Computation of Performance Data.
Other Exhibits
(a) Powers-of-Attorney of the Trustees and Officers are
incorporated by reference to Other Exhibits (a) of Post-
Effective Amendment No. 6 to the Registration Statement
on Form N-1A, filed on August 21, 1991.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibits (b) of Post-Effective Amendment No. 6 to
the Registration Statement on Form N-1A, filed on August
21, 1991.
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 June 3, 1994
Beneficial Interest
(par value $.001)
Class A 13,708
Class B 3,492
Item 27. Indemnification
The statement as to the general effect of any contract,
arrangements or statute under which a trustee, officer,
underwriter or affiliated person of the Registrant is
indemnified is incorporated by reference to Item 27 of Part C
of Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-1A, filed on September 10, 1986.
Reference is also made to the Distribution Agreement filed as
Exhibit (6)(a) of Post-Effective Amendment No. 9 to the
Registration Statement on Form N-1A, filed on October 30,
1992.
Item 28. Business and Other Connections of Investment Adviser
Investment Adviser - The Dreyfus Corporation
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business
consists primarily of providing investment management services
as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a wholly-
owned subsidiary of Dreyfus, serves primarily as distributor
of shares of investment companies sponsored by Dreyfus and of
other investment companies for which Dreyfus acts as sub-
investment adviser and administrator. Dreyfus Management,
Inc., another wholly-owned subsidiary, provides investment
management services to various pension plans, institutions and
individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
ABIGAIL Q. McCARTHY Author, lecturer, columnist and educational
Director consultant
2126 Connecticut Avenue
Washington, D.C. 20008
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
Former Director:
Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee:
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board, President and Investment
Chairman of the Board and Officer:
Chief Executive Officer Dreyfus Capital Growth Fund (A Premier
Fund)++;
Chairman of the Board and Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus New Leaders Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc. ++;
The Dreyfus Third Century Fund, Inc.++;
Chairman of the Board:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund++++;
The Dreyfus Consumer Credit Corporation*;
HOWARD STEIN Dreyfus Land Development Corporation*;
(cont'd) Dreyfus Management, Inc.*;
Dreyfus Service Corporation*;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
President, Managing General Partner and
Investment Officer:
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Strategic Growth, L.P. ++;
Director, President and Investment Officer:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Opportunity Fund, Inc.++;
Premier Growth Fund, Inc.++;
Dreyfus Growth Allocation Fund, Inc.++
Director and Investment Officer:
Dreyfus Growth and Income Fund, Inc.++;
President:
Dreyfus Consumer Life Insurance Company*;
Director:
Avnet, Inc.**;
Comstock Partners Strategy Fund, Inc.***;
Dreyfus A Bonds Plus, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
The Dreyfus Fund International
Limited++++++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Realty Advisors, Inc.+++;
Dreyfus Service Organization, Inc.*;
Dreyfus Strategic Governments Income,
Inc.++;
The Dreyfus Trust Company++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
HOWARD STEIN Seven Six Seven Agency, Inc.*;
(cont'd) World Balanced Fund++++;
Trustee and Investment Officer:
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Strategic Investing++;
Dreyfus Variable Investment Fund++;
Trustee:
Corporate Property Investors
New York, New York;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term Treasury
Fund++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Strategic Income++
JULIAN M. SMERLING Director and Executive Vice President:
Vice Chairman of the Dreyfus Service Corporation*;
Board of Directors Director and Vice President:
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Vice Chairman and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
The Dreyfus Consumer Credit Corporation*;
Dreyfus Partnership Management, Inc.*;
Seven Six Seven Agency, Inc.*
JOSEPH S. DiMARTINO Director and Chairman of the Board:
President, Chief Operating The Dreyfus Trust Company++;
Officer and Director Director, President and Investment Officer:
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
Director and President:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit Corporation*;
JOSEPH S. DiMARTINO Dreyfus Edison Electric Index Fund,
(cont'd) Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Partnership Management, Inc.*;
The Dreyfus Trust Company (N.J.)++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Trustee, President and Investment Officer:
Dreyfus Cash Management++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Premier GNMA Fund++;
Trustee and President:
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
Trustee, Vice President and Investment Officer:
Dreyfus Institutional Short Term
Treasury Fund++;
Trustee and Investment Officer:
Premier GNMA Fund++;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director, Vice President and Investment
Officer:
Dreyfus Balanced Fund, Inc.++;
Director and Vice President:
Dreyfus Service Organization, Inc.*;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
Director and Investment Officer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Short-Term Income Fund, Inc.++;
Premier Growth Fund, Inc.++;
Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Noel Group, Inc.
667 Madison Avenue
New York, New York 10021;
JOSEPH S. DiMARTINO Trustee:
(cont'd) Bucknell University
Lewisburg, Pennsylvania 17837;
President and Investment Officer:
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Vice President and former Treasurer and
Director:
National Muscular Dystrophy Association
810 Seventh Avenue
New York, New York 10019;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Investment Officer:
The Dreyfus Fund Incorporated++;
Dreyfus Investors GNMA Fund++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
President, Chief Operating Officer and
Director:
Major Trading Corporation*
LAWRENCE M. GREENE Chairman of the Board:
Legal Consultant and The Dreyfus Security Savings
Director Bank, F.S.B.+;
Director and Executive Vice President:
Dreyfus Service Corporation*;
Director and Vice President:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Service Organization, Inc.*;
Director:
Dreyfus America Fund++++;
Dreyfus BASIC Municipal Fund ++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
LAWRENCE M. GREENE Dreyfus New Leaders Fund, Inc.++;
(cont'd) Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Precious Metals, Inc.*;
Dreyfus Thrift & Commerce+++;
The Dreyfus Trust Company (N.J.)++;
Seven Six Seven Agency, Inc.*;
Vice President:
Dreyfus Growth Opportunity Fund, Inc.++;
Trustee:
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Investment Officer:
The Dreyfus Fund Incorporated++
ROBERT F. DUBUSS Director and Treasurer:
Vice President Major Trading Corporation*;
Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Vice President:
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Corporation*;
Assistant Treasurer:
The Dreyfus Fund Incorporated++;
Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Dreyfus Thrift & Commerce****
ALAN M. EISNER Director and President:
Vice President and Chief The Truepenny Corporation*;
Financial Officer Vice President and Chief Financial Officer:
Dreyfus Acquisition Corporation*;
Dreyfus Consumer Life Insurance Company*;
Treasurer:
Dreyfus Realty Advisors, Inc.+++;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
Director:
Dreyfus Thrift & Commerce****;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*
DAVID W. BURKE Vice President and Director:
Vice President and Chief The Dreyfus Trust Company++;
Administrative Officer Formerly, President:
CBS News, a division of CBS, Inc.
524 West 57th Street
New York, New York 10019
Director:
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond
Fund, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Intermediate Municipal Bond
Fund, Inc.++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New York Tax Exempt Bond
Fund, Inc.++;
Dreyfus Ohio Municipal Money Market
Fund, Inc.++;
Trustee:
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Tax Exempt Money
Market Fund++;
Dreyfus Cash Management++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt
Bond Fund++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
DAVID W. BURKE Dreyfus Pennsylvania Municipal Money
(cont'd) Market Fund++;
Dreyfus Short-Intermediate Government
Fund++
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++
ELIE M. GENADRY President:
Vice President - Institutional Services Division of Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus Service
Corporation*;
Group Retirement Plans Division of Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Senior Vice President:
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Tax Exempt Cash Management++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Vice President:
The Dreyfus Trust Company++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Vice President-Sales:
The Dreyfus Trust Company (N.J.)++;
Treasurer:
Pacific American Fund+++++
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company (N.J.)++;
Director and Secretary:
Dreyfus Partnership Management, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
Dreyfus America Fund++++;
Dreyfus Consumer Life Insurance Company*;
The Dreyfus Trust Company++;
Vice President:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
DANIEL C. MACLEAN Dreyfus New York Insured Tax Exempt Bond
(cont'd) Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
DANIEL C. MACLEAN Premier New York Municipal Bond Fund++;
(cont'd) Premier State Municipal Bond Fund++;
Secretary:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
DANIEL C. MACLEAN Dreyfus Strategic Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Seven Six Seven Agency, Inc.*;
Director and Assistant Secretary:
The Dreyfus Fund International
Limited++++++
JEFFREY N. NACHMAN Vice President-Financial:
Vice President - Mutual Dreyfus A Bonds Plus, Inc.++;
Fund Accounting Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
JEFFREY N. NACHMAN Dreyfus New Jersey Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc.++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
JEFFREY N. NACHMAN General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Vice President and Treasurer:
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus-Wilshire Target Funds, Inc.++;
First Prairie Cash Management++;
First Prairie U.S. Government Income
Fund++;
JEFFREY N. NACHMAN First Prairie U.S. Treasury Securities
(Cont'd) Cash Management++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Growth Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Assistant Treasurer:
Pacific American Fund+++++
PETER A. SANTORIELLO Director, President and Investment
Vice President Officer:
Dreyfus Balanced Fund, Inc.++;
Director and President:
Dreyfus Management, Inc.*;
Vice President:
Dreyfus Personal Management, Inc.*
ROBERT H. SCHMIDT President and Director:
Vice President Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
Formerly, Chairman and Chief Executive
Officer:
Levine, Huntley, Schmidt & Beaver
250 Park Avenue
New York, New York 10017
KIRK V. STUMPP Senior Vice President and
Vice President - Director of Marketing:
New Product Development Dreyfus Service Corporation*
PHILIP L. TOIA Chairman of the Board and Vice President:
Vice President and Dreyfus Thrift & Commerce****;
Director of Fixed- Director:
Income Research The Dreyfus Security Savings Bank F.S.B.+;
Senior Loan Officer and Director:
The Dreyfus Trust Company++;
Vice President:
The Dreyfus Consumer Credit Corporation*;
President and Director:
Dreyfus Personal Management, Inc.*;
Director:
Dreyfus Realty Advisors, Inc.+++;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
KATHERINE C. WICKHAM Vice President:
Assistant Vice President - Dreyfus Consumer Life Insurance
Human Resources Company++;
Formerly, Assistant Commissioner:
Department of Parks and Recreation of the
City of New York
830 Fifth Avenue
New York, New York 10022
JOHN J. PYBURN Treasurer and Assistant Secretary:
Assistant Vice President The Dreyfus Fund International
Limited++++++;
Treasurer:
Dreyfus A Bonds Plus, Inc.++;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
JOHN J. PYBURN Dreyfus New York Tax Exempt Intermediate
(cont'd) Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
JOHN J. PYBURN Premier California Municipal Bond Fund++;
(cont'd) Premier GNMA Fund++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++
MAURICE BENDRIHEM Treasurer:
Controller Dreyfus Consumer Life Insurance Company*;
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Trust Company (N.J.)++;
The Dreyfus Consumer Credit Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President:
Secretary and Deputy Dreyfus A Bonds Plus, Inc.++;
General Counsel Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Connecticut Intermediate Municipal
Bond Fund++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
Dreyfus Global Bond Fund, Inc.++;
Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Money Market Instruments, Inc.++;
MARK N. JACOBS Dreyfus Municipal Bond Fund, Inc.++;
(cont'd) Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus 100% U.S. Treasury Intermediate
Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
General California Municipal Bond Fund,
Inc.++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Director:
World Balanced Fund++++;
Secretary:
Dreyfus Appreciation Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Value Fund (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
The Dreyfus Consumer Credit Corporation*;
Dreyfus Consumer Life Insurance Company*;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth and Income Fund, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Short Term
Treasury Fund++;
MARK N. JACOBS Dreyfus Insured Municipal Bond Fund,
(cont'd) Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Municipal Money Market
Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Money Market
Fund++;
MARK N. JACOBS General Government Securities Money Market
(cont'd) Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
General Municipal Money Market Fund,
Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Pacific American Fund+++++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
CHRISTINE PAVALOS Assistant Secretary:
Assistant Secretary Dreyfus A Bonds Plus, Inc.++;
Dreyfus Acquisition Corporation*;
Dreyfus Appreciation Fund, Inc.++;
Dreyfus Asset Allocation Fund, Inc.++;
Dreyfus Balanced Fund, Inc.++;
Dreyfus BASIC Money Market Fund, Inc.++;
Dreyfus BASIC Municipal Fund++;
Dreyfus BASIC U.S. Government Money Market
Fund++;
Dreyfus California Intermediate Municipal
Bond Fund++;
Dreyfus California Municipal Income,
Inc.++;
Dreyfus California Tax Exempt Bond Fund,
Inc.++;
Dreyfus California Tax Exempt Money Market
Fund++;
Dreyfus Capital Growth Fund (A Premier
Fund)++;
Dreyfus Capital Value Fund, (A Premier
Fund)++;
Dreyfus Cash Management++;
Dreyfus Cash Management Plus, Inc.++;
Dreyfus Connecticut Intermediate
Municipal Bond Fund++;
Dreyfus Connecticut Municipal Money Market
Fund, Inc.++;
Dreyfus Edison Electric Index Fund,
Inc.++;
Dreyfus Florida Intermediate Municipal
Bond Fund++;
Dreyfus Florida Municipal Money Market
Fund++;
Dreyfus Focus Funds, Inc.++;
The Dreyfus Fund Incorporated++;
CHRISTINE PAVALOS Dreyfus Global Bond Fund, Inc.++;
(cont'd) Dreyfus Global Growth, L.P. (A Strategic
Fund)++;
Dreyfus Global Investing++;
Dreyfus GNMA Fund, Inc.++;
Dreyfus Government Cash Management++;
Dreyfus Growth Allocation Fund,
Inc.++;
Dreyfus Growth and Income, Inc.++;
Dreyfus Growth Opportunity Fund, Inc.++;
Dreyfus Institutional Money Market Fund++;
Dreyfus Institutional Short Term
Treasury Fund++;
Dreyfus Insured Municipal Bond Fund,
Inc.++;
Dreyfus Intermediate Municipal Bond Fund,
Inc.++;
Dreyfus International Equity Fund, Inc.++;
Dreyfus Investors GNMA Fund++;
Dreyfus Life and Annuity Index Fund,
Inc.++;
Dreyfus Liquid Assets, Inc.++;
Dreyfus Management, Inc.*;
Dreyfus Massachusetts Intermediate
Municipal Bond Fund++;
Dreyfus Massachusetts Municipal Money
Market Fund++;
Dreyfus Massachusetts Tax Exempt Bond
Fund++;
Dreyfus Michigan Municipal Money Market
Fund, Inc.++;
Dreyfus Money Market Instruments, Inc.++;
Dreyfus Municipal Bond Fund, Inc.++;
Dreyfus Municipal Cash Management Plus++;
Dreyfus Municipal Income, Inc.++;
Dreyfus Municipal Money Market Fund,
Inc.++;
Dreyfus New Jersey Intermediate Municipal
Bond Fund++;
Dreyfus New Jersey Municipal Bond Fund,
Inc.++;
Dreyfus New Jersey Municipal Money Market
Fund, Inc.++;
Dreyfus New Leaders Fund, Inc.++;
Dreyfus New York Insured Tax Exempt Bond
Fund++;
Dreyfus New York Municipal Cash
Management++;
Dreyfus New York Municipal Income, Inc.++;
Dreyfus New York Tax Exempt Bond Fund,
Inc.++;
Dreyfus New York Tax Exempt Intermediate
Bond Fund++;
Dreyfus New York Tax Exempt Money Market
Fund++;
Dreyfus Ohio Municipal Money Market Fund,
Inc.++;
CHRISTINE PAVALOS Dreyfus 100% U.S. Treasury Intermediate
(cont'd) Term Fund++;
Dreyfus 100% U.S. Treasury Long Term
Fund++;
Dreyfus 100% U.S. Treasury Money Market
Fund++;
Dreyfus 100% U.S. Treasury Short Term
Fund++;
Dreyfus Pennsylvania Intermediate
Municipal Bond Fund++;
Dreyfus Pennsylvania Municipal Money
Market Fund++;
Dreyfus Service Corporation*;
Dreyfus Short-Intermediate Government
Fund++;
Dreyfus Short-Intermediate Municipal Bond
Fund++;
Dreyfus Short-Term Income Fund, Inc.++;
The Dreyfus Socially Responsible Growth
Fund, Inc.++;
Dreyfus Strategic Governments Income,
Inc.++;
Dreyfus Strategic Growth, L.P.++;
Dreyfus Strategic Income++;
Dreyfus Strategic Investing++;
Dreyfus Strategic Municipal Bond Fund,
Inc.++;
Dreyfus Strategic Municipals, Inc.++;
Dreyfus Tax Exempt Cash Management++;
The Dreyfus Third Century Fund, Inc.++;
Dreyfus Treasury Cash Management++;
Dreyfus Treasury Prime Cash Management++;
Dreyfus Variable Investment Fund++;
Dreyfus-Wilshire Target Funds, Inc.++;
Dreyfus Worldwide Dollar Money Market
Fund, Inc.++;
First Prairie Cash Management++;
First Prairie Diversified Asset Fund++;
First Prairie Money Market Fund++;
First Prairie Tax Exempt Bond Fund,
Inc. ++;
First Prairie Municipal Money Market
Fund++;
First Prairie U.S. Government Income
Fund++;
First Prairie U.S. Treasury Securities
Cash Management++;
General California Municipal Bond Fund,
Inc.++;
General California Municipal Money Market
Fund++;
General Government Securities Money Market
Fund, Inc.++;
General Money Market Fund, Inc.++;
General Municipal Bond Fund, Inc.++;
CHRISTINE PAVALOS General Municipal Money Market Fund,
(cont'd) Inc.++;
General New York Municipal Bond Fund,
Inc.++;
General New York Municipal Money Market
Fund++;
Peoples Index Fund, Inc.++;
Peoples S&P MidCap Index Fund, Inc.++;
Premier Insured Municipal Bond Fund++;
Premier California Municipal Bond Fund++;
Premier GNMA Fund++;
Premier Growth Fund, Inc.++;
Premier Municipal Bond Fund++;
Premier New York Municipal Bond Fund++;
Premier State Municipal Bond Fund++;
The Truepenny Corporation*
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 80 Cutter Mill Road,
Great Neck, New York 11021.
*** The address of the business so indicated is 45 Broadway, New York,
New York 10006.
**** The address of the business so indicated is Five Triad Center, Salt
Lake City, Utah 84180.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One Rockefeller Plaza,
New York, New York 10020.
++++ The address of the business so indicated is 2 Boulevard Royal,
Luxembourg.
+++++ The address of the business so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
++++++ The address of the business so indicated is Nassau, Bahama Islands.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Bond Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus Leverage Fund, Inc.
37) Dreyfus Life and Annuity Index Fund, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus Michigan Municipal Money Market Fund, Inc.
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal 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 Ohio Municipal Money Market Fund, Inc.
57) Dreyfus 100% U.S. Treasury Intermediate Term Fund
58) Dreyfus 100% U.S. Treasury Long Term Fund
59) Dreyfus 100% U.S. Treasury Money Market Fund
60) Dreyfus 100% U.S. Treasury Short Term Fund
61) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
62) Dreyfus Pennsylvania Municipal Money Market Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) Dreyfus Short-Term Income Fund, Inc.
66) The Dreyfus Socially Responsible Growth Fund, Inc.
67) Dreyfus Strategic Growth, L.P.
68) Dreyfus Strategic Income
69) Dreyfus Strategic Investing
70) Dreyfus Tax Exempt Cash Management
71) The Dreyfus Third Century Fund, Inc.
72) Dreyfus Treasury Cash Management
73) Dreyfus Treasury Prime Cash Management
74) Dreyfus Variable Investment Fund
75) Dreyfus-Wilshire Target Funds, Inc.
76) Dreyfus Worldwide Dollar Money Market Fund, Inc.
77) First Prairie Cash Management
78) First Prairie Diversified Asset Fund
79) First Prairie Money Market Fund
80) First Prairie Municipal Money Market Fund
81) First Prairie Tax Exempt Bond Fund, Inc.
82) First Prairie U.S. Government Income Fund
83) First Prairie U.S. Treasury Securities Cash Management
84) General California Municipal Bond Fund, Inc.
85) General California Municipal Money Market Fund
86) General Government Securities Money Market Fund, Inc.
87) General Money Market Fund, Inc.
88) General Municipal Bond Fund, Inc.
89) General Municipal Money Market Fund, Inc.
90) General New York Municipal Bond Fund, Inc.
91) General New York Municipal Money Market Fund
92) Pacific American Fund
93) Peoples Index Fund, Inc.
94) Peoples S&P MidCap Index Fund, Inc.
95) Premier Insured Municipal Bond Fund
96) Premier California Municipal Bond Fund
97) Premier GNMA Fund
98) Premier Growth Fund, Inc.
99) Premier Municipal Bond Fund
100) Premier New York Municipal Bond Fund
101) Premier State Municipal Bond Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Howard Stein* Chairman of the Board None
Robert H. Schmidt* President and Director None
Joseph S. DiMartino* Executive Vice President and Director None
Lawrence M. Greene* Executive Vice President and Director None
Julian M. Smerling* Executive Vice President and Director None
Elie M. Genadry* Executive Vice President Vice
President
Henry D. Gottmann* Executive Vice President None
Donald A. Nanfeldt* Executive Vice President Vice
President
Kevin Flood* Senior Vice President None
Roy Gross* Senior Vice President None
Irene Papadoulis** Senior Vice President None
Kirk Stumpp* Senior Vice President and None
Director of Marketing
Diane M. Coffey* Vice President None
Walter T. Harris* Vice President None
William Harvey* Vice President None
Adwick Pinnock** Vice President None
George Pirrone* Vice President/Trading None
Karen Rubin Waldmann* Vice President None
Peter D. Schwab* Vice President/New Products None
Michael Anderson* Assistant Vice President None
Carolyn Sobering* Assistant Vice President-Trading None
Daniel C. Maclean* Secretary Vice
President
Robert F. Dubuss* Treasurer None
Maurice Bendrihem* Controller None
Michael J. Dolitsky* Assistant Controller None
Susan Verbil Goldgraben* Assistant Treasurer None
Christine Pavalos* Assistant Secretary Assistant
Secretary
Broker-Dealer Division of Dreyfus Service Corporation
=====================================================
Positions and offices with Positions and
Name and principal Broker-Dealer Division of offices with
business address Dreyfus Service Corporation Registrant
__________________ ___________________________ _____________
Elie M. Genadry* President Vice
President
Craig E. Smith* Executive Vice President None
Peter Moeller* Vice President and Sales Manager None
Kristina Williams
Pomano Beach, FL Vice President-Administration None
James Barr
Newton, MA Regional Vice President None
Mary B. Brundage
Pasadena, CA Regional Vice President None
Edward Donley
Latham, NY Regional Vice President None
Thomas Ellis
Ranchero Murietta, CA Regional Vice President None
Glenn Farinacci* Regional Vice President None
Peter S. Ferrentino
San Francisco, CA Regional Vice President None
William Frey
Hoffman Estates, IL Regional Vice President None
Suzanne Haley
Tampa, FL Regional Vice President None
Philip Jochem
Warrington, PA Regional Vice President None
Richard P. Kundracik
Waterford, MI Regional Vice President None
Michael Lane
Beaver Falls, PA Regional Vice President None
Fred Lanier
Atlanta, GA Regional Vice President None
Beth Presson
Colchester, VT Regional Vice President None
Joseph Reaves
New Orleans, LA Regional Vice President None
Christian Renninger
Germantown, MD Regional Vice President None
Robert J. Richardson
Houston, TX Regional Vice President None
Kurt Wiessner
Minneapolis, MN Regional Vice President None
Institutional Services Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Institutional Services Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Donald A. Nanfeldt* Executive Vice President Vice
President
Kathleen M. Lewis++ Vice President-Institutional None
Sales Manager
Charles Cardona** Senior Vice President- None
Institutional Services
Stacy Alexander* Vice President-Bank Wholesale None
Eric Almquist* Vice President-Eastern Regional None
Sales Manager
James E. Baskin+++++++ Vice President-Institutional Sales None
Kenneth Bernstein
Boca Raton, FL Vice President-Bank Wholesale None
Stephen Burke* Vice President-Bank Wholesaler None
Sales Manager
Laurel A. Diedrick
Burrows*** Vice President-Bank Wholesale None
Gary F. Callahan
Somerville, NJ Vice President-Bank Wholesale None
Daniel L. Clawson++++ Vice President-Institutional Sales None
Anthony T. Corallo
San Francisco, CA Vice President-Institutional Sales None
Bonnie M. Cymbryla
Brewerton, NY Vice President-Bank Wholesale None
William Davis
Bellevue, WA Vice President None
William E. Findley**** Vice President None
Melinda Miller Gordon* Vice President None
Christina Haydt++ Vice President-Institutional Sales None
Carol Anne Kelty* Vice President-Institutional Sales None
Gwenn Kessler***** Vice President-Bank Wholesale None
Bradford Lange* Vice President-Bank Wholesale None
Eva Machek***** Vice President-Institutional Sales None
Bradley R. Maybury
Seattle, WA Vice President-Bank Wholesale None
Mary McCabe*** Vice President-Bank Wholesale None
James McNamara***** Vice President-Institutional Sales None
James Neiland* Vice President-Bank Wholesale- None
National Accounts Manager
Susan M. O'Connor* Vice President-Institutional
Seminars None
Andrew Pearson+++ Vice President-Institutional Sales None
Jean Heitzman Penny***** Vice President-Institutional Sales None
Dwight Pierce+ Vice President-Bank Wholesale None
Lorianne Pinto* Vice President-Bank Wholesale None
Douglas Rentschler
Grosse Point Park, MI Vice President-Bank Wholesale None
Leah Ryan**** Vice President-Institutional Sales None
Edward Sands* Vice President-Institutional
Administration None
William Schalda* Vice President-Institutional None
Administration
Sue Ann Seefeld++++ Vice President-Institutional Sales None
Brant Snavely
Charlotte, NC Vice President-Bank Wholesale None
Thomas Stallings
Richmond, VA Vice President-Institutional Sales None
Elizabeth Biordi Vice President-Institutional
Wieland* Administration None
Thomas Winnick
Malverne, PA Vice President-Bank Wholesale None
Jeanne Butler* Assistant Vice President-
Institutional Operations None
Roberta Hall***** Assistant Vice President-
Institutional Servicing None
Tracy Hopkins** Assistant Vice President-
Institutional Operations None
Lois Paterson* Assistant Vice President-
Institutional Operations None
Mary Rogers** Assistant Vice President-
Institutional Servicing None
Karen Markovic
Shpall++++++ Assistant Vice President None
Patrick Synan** Assistant Vice President-
Institutional Support None
Emilie Tongalson** Assistant Vice President-
Institutional Servicing None
Tonda Watson**** Assistant Vice President-
Institutional Sales None
Group Retirement Plans Division of Dreyfus Service Corporation
==============================================================
Positions and offices with Positions and
Name and principal Group Retirement Plans Division offices with
business address of Dreyfus Service Corporation Registrant
__________________ _______________________________ _____________
Elie M. Genadry* President Vice
President
Robert W. Stone* Executive Vice President None
Leonard Larrabee* Vice President and Senior Counsel None
George Anastasakos* Vice President None
Bart Ballinger++ Vice President-Sales None
Paula Cleary* Vice President-Marketing None
Ellen S. Dinas* Vice President-Marketing/Communications None
William Gallagher* Vice President-Sales None
Jeffrey Lejune
Dallas, TX Vice President-Sales None
Samuel Mancino** Vice President-Installation None
Joanna Morris* Vice President-Sales None
Joseph Pickert++ Vice President-Sales None
Alison Saunders** Vice President-Enrollment None
Scott Zeleznik* Vice President-Sales None
Alana Zion* Vice President-Sales None
Jeffrey Blake* Assistant Vice President-Sales None
_____________________________________________________
* The address of the offices so indicated is 200 Park Avenue, New
York, New York 10166
** The address of the offices so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
*** The address of the offices so indicated is 580 California Street,
San Francisco, California 94104.
**** The address of the offices so indicated is 3384 Peachtree Road,
Suite 100, Atlanta, Georgia 30326-1106.
***** The address of the offices so indicated is 190 South LaSalle
Street, Suite 2850, Chicago, Illinois 60603.
+ The address of the offices so indicated is P.O. Box 1657, Duxbury,
Massachusetts 02331.
++ The address of the offices so indicated is 800 West Sixth Street,
Suite 1000, Los Angeles, California 90017.
+++ The address of the offices so indicated is 11 Berwick Lane,
Edgewood, Rhode Island 02905.
++++ The address of the offices so indicated is 1700 Lincoln Street,
Suite 3940, Denver, Colorado 80203.
+++++ The address of the offices so indicated is 6767 Forest Hill
Avenue, Richmond, Virginia 23225.
++++++ The address of the offices so indicated is 2117 Diamond Street,
San Diego, California 92109.
+++++++ The address of the offices so indicated is P.O. Box 757,
Holliston, Massachusetts 01746.
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To furnish each person to whom a prospectus is delivered with a
copy of it latest annual report to shareholders, upon request
and without change.
(2) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a trustee or trustees when requested
in writing to do so by the holders of at least 10% of the
Registrant's outstanding shares of beneficial interest 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.
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 23rd day of June, 1994.
PREMIER MUNICIPAL BOND FUND
(Registrant)
By: /s/ Richard J. Moynihan*
________________________________________________
RICHARD J. MOYNIHAN, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration
Statement has been signed below by the following persons in the capacities
and on the date indicated.
Signature Title Date
________________________________ _____________________ _________
/s/ Richard J. Moynihan* President (Principal 06/23/94
________________________________ Executive Officer) and
Richard J. Moynihan Trustee
/s/ John J. Pyburn* Treasurer (Principal 06/23/94
________________________________ Financial and
John J. Pyburn Accounting Officer)
/s/ Clifford L. Alexander, Jr.* Trustee 06/23/94
________________________________
Clifford L. Alexander, Jr.
/s/ Peggy C. Davis* Trustee 06/23/94
________________________________
Peggy C. Davis
/s/ Ernest Kafka* Trustee 06/23/94
________________________________
Ernest Kafka
/s/ Saul B. Klaman* Trustee 06/23/94
________________________________
Saul B. Klaman
/s/ Nathan Leventhal* Trustee 06/23/94
________________________________
Nathan Leventhal
*By:___________________________________
Robert R. Mullery,
Attorney-in-Fact
BY-LAWS
OF
PREMIER TAX EXEMPT BOND FUND
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time in
effect (the "Declaration of Trust"), of the above-captioned Massachusetts
business trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the
Trust shall be located in New York, New York. Its resident agent in
Massachusetts shall be CT Corporation System, 2 Oliver Street, Boston,
Massachusetts, or such other person as the Trustees from time to time may
select.
ARTICLE 2
Meetings of Trustees
2.1 Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the
Trustees from time to time may determine, provided that notice of the
first regular meeting following any such determination shall be given to
absent Trustees.
2.2 Special Meetings. Special meetings of the Trustees may be
held at any time and at any place designated in the call of the meeting
when called by the President or the Treasurer or by two or more Trustees,
sufficient notice thereof being given to each Trustee by the Secretary or
an Assistant Secretary or by the officer or the Trustees calling the
meeting.
2.3 Notice of Special Meetings. It shall be sufficient notice
to a Trustee of a special meeting to send notice by mail at least forty-
eight hours or by telegram at least twenty-four hours before the meeting
addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by
telephone at least twenty-four hours before the meeting. Notice of a
meeting need not be given to any Trustee if a written waiver of notice,
executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting
without protesting prior thereto or at its commencement the lack of notice
to him or her. Neither notice of a meeting nor a waiver of a notice need
specify the purposes of the meeting.
2.4 Notice of Certain Actions by Consent. If in accordance
with the provisions of the Declaration of Trust any action is taken by the
Trustees by a written consent of less than all of the Trustees, then
prompt notice of any such action shall be furnished to each Trustee who
did not execute such written consent, provided that the effectiveness of
such action shall not be impaired by any delay or failure to furnish such
notice.
ARTICLE 3
Officers
3.1 Enumeration; Qualification. The officers of the Trust
shall be a President, a Treasurer, a Secretary, and such other officers,
if any, as the Trustees from time to time may in their discretion elect.
The Trust also may have such agents as the Trustees from time to time may
in their discretion appoint. Officers may be but need not be a Trustee or
shareholder. Any two or more offices may be held by the same person.
3.2 Election. The President, the Treasurer and the Secretary
shall be elected by the Trustees upon the occurrence of any vacancy in any
such office. Other officers, if any, may be elected or appointed by the
Trustees at any time. Vacancies in any such other office may be filled at
any time.
3.3 Tenure. The President, Treasurer and Secretary shall hold
office in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent
shall retain authority at the pleasure of the Trustees.
3.4 Powers. Subject to the other provisions of these By-Laws,
each officer shall have, in addition to the duties and powers herein and
in the Declaration of Trust set forth, such duties and powers as commonly
are incident to the office occupied by him or her as if the Trust were
organized as a Massachusetts business corporation or such other duties and
powers as the Trustees may from time to time designate.
3.5 President. Unless the Trustees otherwise provide, the
President shall preside at all meetings of the shareholders and of the
Trustees. Unless the Trustees otherwise provide, the President shall be
the chief executive officer.
3.6 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder
servicing or similar agent, shall be in charge of the valuable papers,
books of account and accounting records of the Trust, and shall have such
other duties and powers as may be designated from time to time by the
Trustees or by the President.
3.7 Secretary. The Secretary shall record all proceedings of
the shareholders and the Trustees in books to be kept therefor, which
books or a copy thereof shall be kept at the principal office of the
Trust. In the absence of the Secretary from any meeting of the
shareholders or Trustees, an Assistant Secretary, or if there be none or
if he or she is absent, a temporary Secretary chosen at such meeting shall
record the proceedings thereof in the aforesaid books.
3.8 Resignations and Removals. Any Trustee or officer may
resign at any time by written instrument signed by him or her and
delivered to the President or Secretary or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time. The Trustees may remove any officer elected
by them with or without cause. Except to the extent expressly provided in
a written agreement with the Trust, no Trustee or officer resigning and no
officer removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on
account of such removal.
ARTICLE 4
Committees
4.1 Appointment. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees
otherwise may determine, any such committee may make rules for conduct of
its business.
4.2 Quorum; Voting. A majority of the members of any Committee
of the Trustees shall constitute a quorum for the transaction of business,
and any action of such a Committee may be taken at a meeting by a vote of
a majority of the members present (a quorum being present).
ARTICLE 5
Reports
The Trustees and officers shall render reports at the time and
in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may
deem desirable or as may from time to time be required by the Trustees.
ARTICLE 6
Fiscal Year
Except as from time to time otherwise provided by the Trustees,
the fiscal year of the Trust shall end on July 31st in each year.
ARTICLE 7
Seal
The seal of the Trust shall consist of a flat-faced die with the
word "Massachusetts," together with the name of the Trust and the year of
its organization cut or engraved thereon but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and in its
absence shall not impair the validity of, any document, instrument or
other paper executed and delivered by or on behalf of the Trust.
ARTICLE 8
Execution of Papers
Except as the Trustees generally or in particular cases may
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be
signed by the President, any Vice President, or by the Treasurer and need
not bear the seal of the Trust.
ARTICLE 9
Issuance of Share Certificates
9.1 Sale of Shares. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities from time
to time, full and fractional shares of its shares of beneficial interest,
such shares to be issued and sold at a price of not less than net asset
value per share as from time to time determined in accordance with the
Declaration of Trust and these By-Laws and, in the case of fractional
shares, at a proportionate reduction in such price. In the case of shares
sold for securities, such securities shall be valued in accordance with
the provisions for determining value of assets of the Trust as stated in
the Declaration of Trust and these By-Laws. The officers of the Trust are
severally authorized to take all such actions as may be necessary or
desirable to carry out this Section 9.1.
9.2 Share Certificates. In lieu of issuing certificates for
shares, the Trustees or the transfer agent either may issue receipts
therefor or may keep accounts upon the books of the Trust for the record
holders of such shares, who shall in either case, for all purposes
hereunder, be deemed to be the holders of certificates for such shares as
if they had accepted such certificates and shall be held to have expressly
assented and agreed to the terms hereof.
The Trustees at any time may authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a
certificate stating the number of shares owned by him, in such form as
shall be prescribed from time to time by the Trustees. Such certificate
shall be signed by the President or Vice President and by the Treasurer or
Assistant Treasurer. Such signatures may be facsimile if the certificate
is signed by a transfer agent, or by a registrar, other than a Trustee,
officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate shall cease
to be such officer before such certificate is issued, it may be issued by
the Trust with the same effect as if he or she were such officer at the
time of its issue.
9.3 Loss of Certificates. The Trust, or if any transfer agent
is appointed for the Trust, the transfer agent with the approval of any
two officers of the Trust, is authorized to issue and countersign
replacement certificates for the shares of the Trust which have been lost,
stolen or destroyed subject to the deposit of a bond or other indemnity in
such form and with such security, if any, as the Trustees may require.
9.4 Discontinuance of Issuance of Certificates. The Trustees
at any time may discontinue the issuance of share certificates and by
written notice to each shareholder, may require the surrender of share
certificates to the Trust for cancellation. Such surrender and
cancellation shall not affect the ownership of shares in the Trust.
ARTICLE 10
Indemnification
10.1 Trustees, Officers, etc. The Trust shall indemnify each of
its Trustees and officers (including persons who serve at the Trust's
request as directors, officers or trustees of another organization in
which the Trust has any interest as a shareholder, creditor or otherwise)
(hereinafter referred to as a "Covered Person") against all liabilities
and expenses, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and counsel fees
reasonably incurred by any Covered Person in connection with the defense
or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened,
while in office or thereafter, by reason of being or having been such a
Trustee or officer, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the
merits in any such action, suit or other proceeding not to have acted in
good faith in the reasonable belief that such Covered Person's action was
in the best interests of the Trust and except that no Covered Person shall
be indemnified against any liability to the Trust or its Shareholders to
which such Covered Person would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office. Expenses,
including counsel fees so incurred by any such Covered Person (but
excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Trust in advance
of the final disposition or any such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Covered Person to repay
amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article,
provided that (a) such Covered Person shall provide security for his
undertaking, (b) the Trust shall be insured against losses arising by
reason of such Covered Person's failure to fulfill his undertaking, or (c)
a majority of the Trustees who are disinterested persons and who are not
Interested Persons (as that term is defined in the Investment Company Act
of 1940) (provided that a majority of such Trustees then in office act on
the matter), or independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
10.2 Compromise Payment. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise)
without an adjudication in a decision on the merits by a court, or by any
other body before which the proceeding was brought, that such Covered
Person either (a) did not act in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the Trust or (b)
is liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best interest
of the Trust, after notice that it involves such indemnification, by at
least a majority of the Trustees who are disinterested persons and are not
Interested Persons (provided that a majority of such Trustees then in
office act on the matter), upon a determination, based upon a review of
readily available facts (but not a full trial-type inquiry) that such
Covered Person acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust and is not
liable to the Trust or its Shareholders by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of such Covered Person's office, or (b) there has been
obtained an opinion in writing of independent legal counsel, based upon a
review of readily available facts (but not a full trial-type inquiry) to
the effect that such Covered Person appears to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and that such indemnification would not protect
such Covered Person against any liability to the Trust to which such
Covered Person would otherwise be subject by reason of wilful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office. Any approval pursuant to this Section
shall not prevent the recovery from any Covered Person of any amount paid
to such Covered Person in accordance with this Section as indemnification
if such Covered Person is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the Trust or to
have been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.
10.3 Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any
other rights to which any such Covered Person may be entitled. As used in
this Article 10, the term "Covered Person" shall include such person's
heirs, executors and administrators, and a "disinterested person" is a
person against whom none of the actions, suits or other proceedings in
question or another action, suit, or other proceeding on the same or
similar grounds is then or has been pending. Nothing contained in this
article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be
entitled by contract or otherwise under law, nor the power of the Trust to
purchase and maintain liability insurance on behalf of such person.
10.4 Limitation: Notwithstanding any provisions in the
Declaration of Trust and these By-Laws pertaining to indemnification, all
such provisions are limited by the following undertaking set forth in the
rules promulgated by the Securities and Exchange Commission:
In the event that a claim for indemnification is
asserted by a Trustee, officer or controlling person of
the Trust in connection with the registered securities of
the Trust, the Trust will not make such indemnification
unless (i) the Trust has submitted, before a court or
other body, the question of whether the person to be
indemnified was liable by reason of wilful misfeasance,
bad faith, gross negligence, or reckless disregard of
duties, and has obtained a final decision on the merits
that such person was not liable by reason of such conduct
or (ii) in the absence of such decision, the Trust shall
have obtained a reasonable determination, based upon a
review of the facts, that such person was not liable by
virtue of such conduct, by (a) the vote of a majority of
Trustees who are neither interested persons as such term
is defined in the Investment Company Act of 1940, nor
parties to the proceeding or (b) an independent legal
counsel in a written opinion.
The Trust will not advance attorneys' fees or other
expenses incurred by the person to be indemnified unless
the Trust shall have (i) received an undertaking by or on
behalf of such person to repay the advance unless it is
ultimately determined that such person is entitled to
indemnification and one of the following conditions shall
have occurred: (x) such person shall provide security for
his undertaking, (y) the Trust shall be insured against
losses arising by reason of any lawful advances or (z) a
majority of the disinterested, non-party Trustees of the
Trust, or an independent legal counsel in a written
opinion, shall have determined that based on a review of
readily available facts there is reason to believe that
such person ultimately will be found entitled to
indemnification.
ARTICLE 11
Shareholders
11.1 Meetings. A meeting of the shareholders shall be called by
the Secretary whenever ordered by the Trustees, or requested in writing by
the holder or holders of at least 10% of the outstanding shares entitled
to vote at such meeting. If the meeting is a meeting of the shareholders
of one or more series of shares, but not a meeting of all shareholders of
the Trust, then only the shareholders of such one or more series shall be
entitled to notice of and to vote at the meeting. If the Secretary, when
so ordered or requested, refuses or neglects for more than five days to
call such meeting, the Trustees, or the shareholders so requesting may, in
the name of the Secretary, call the meeting by giving notice thereof in
the manner required when notice is given by the Secretary.
11.2 Access to Shareholder List. Shareholders of record may
apply to the Trustees for assistance in communicating with other
shareholders for the purpose of calling a meeting in order to vote upon
the question of removal of a Trustee. When ten or more shareholders of
record who have been such for at least six months preceding the date of
application and who hold in the aggregate shares having a net asset value
of at least $25,000 or at least 1% of the outstanding shares, whichever is
less, so apply, the Trustees shall within five business days either:
(i) afford to such applicants access to a list of names
and addresses of all shareholders as recorded on the books of the Trust;
or
(ii) inform such applicants of the approximate number of
shareholders of record and the approximate cost of mailing material to
them and, within a reasonable time thereafter, mail, at the applicants'
expense, materials submitted by the applicants, to all such shareholders
of record. The Trustees shall not be obligated to mail materials which
they believe to be misleading or in violation of applicable law.
11.3 Record Dates. For the purpose of determining the
shareholders of any series who are entitled to vote or act at any meeting
or any adjournment thereof, or who are entitled to receive payment of any
dividend or of any other distribution, the Trustees from time to time may
fix a time, which shall be not more than 90 days before the date of any
meeting of shareholders or the date of payment of any dividend or of any
other distribution, as the record date for determining the shareholders of
such series having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or
distribution, and in such case only shareholders of record on such record
date shall have such right notwithstanding any transfer of shares on the
books of the Trust after the record date; or without fixing such record
date the Trustees may for any such purposes close the register or transfer
books for all or part of such period.
11.4 Place of Meetings. All meetings of the shareholders shall
be held at the principal office of the Trust or at such other place within
the United States as shall be designated by the Trustees or the President
of the Trust.
11.5 Notice of Meetings. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the
meeting, shall be given at least ten days before the meeting to each
shareholder entitled to vote thereat by leaving such notice with him or at
his residence or usual place of business or by mailing it, postage
prepaid, and addressed to such shareholder at his address as it appears in
the records of the Trust. Such notice shall be given by the Secretary or
an Assistant Secretary or by an officer designated by the Trustees. No
notice of any meeting of shareholders need be given to a shareholder if a
written waiver of notice, executed before or after the meeting by such
shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
11.6 Ballots. No ballot shall be required for any election
unless requested by a shareholder present or represented at the meeting
and entitled to vote in the election.
11.7 Proxies. Shareholders entitled to vote may vote either in
person or by proxy in writing dated not more than six months before the
meeting named therein, which proxies shall be filed with the Secretary or
other person responsible to record the proceedings of the meeting before
being voted. Unless otherwise specifically limited by their terms, such
proxies shall entitle the holders thereof to vote at any adjournment of
such meeting but shall not be valid after the final adjournment of such
meeting.
ARTICLE 12
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part,
by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
Dated: September 5, 1986
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "custodian") for the
investment company identified below (the "Fund") hereby appoints
on the following terms and conditions Bankers Trust Company as
subcustodian (the "Subcustodian") for it and the Subcustodian
hereby accepts such appointment on the following terms and con-
ditions as of the date set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represents to the other and to the Fund that it is
qualified to act as a custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to maintain a
separate account and to hold segregated at all times from
the Subcustodian's securities and from all other customers'
securities held by the Subcustodian, all the Fund's
securities and evidence of rights thereto ("Fund
Securities") deposited, from time to time by the Custodian
with the Subcustodian. The Subcustodian will accept, hold or
dispose of and take other actions with respect to Fund
Securities in accordance with the Instructions of the
Custodian given in the manner set forth in Section 4 and
will take certain other actions as specified in Section 3.
The Subcustodian hereby waives any claim against or lien on
any Fund Securities. The Subcustodian may take steps to
register and continue to hold Fund Securities in the name of
the Subcustodian's nominee and shall take such other steps
as the Subcustodian believes necessary or appropriate to
carry out efficiently the terms of this Agreement. To the
extent that ownership of Fund Securities may be recorded by
a book entry system maintained by any transfer agent or
registrar for such Fund Securities or by Depository Trust
Company, the Subcustodian may hold Fund Securities as a book
entry reflecting the ownership of such Fund Securities by
its nominee and need not possess certificates or any other
evidence of ownership of Fund Securities.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) at the request of the
Custodian, or on its behalf, execute any necessary
declarations or certificates of ownership (provided by the
Custodian or on its behalf) under any tax law now or here-
after in effect, (v) forward to the Custodian, or notify it
by telephone of, confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it as registered holder (and the Custodian
agrees to forward same to the Fund), and (vi) promptly
report to the Custodian any missed payment or other default
upon any Fund Securities known to it as Subcustodian
hereunder (the Subcustodian shall be deemed to have
knowledge of any payment default on any Fund Securities in
respect of which it acts as paying agent). All cash
distributions from the Subcustodian to the Custodian will be
in same day funds, on the same day that same day funds are
received by the Subcustodian unless such distribution
required instructions from the Custodian which were not
timely received. Promptly after the Subcustodian is
furnished with any report of its independent public
accountants on an examination of its internal accounting
controls and procedures for safeguarding securities held in
its custody as subcustodian under this Agreement or under
similar agreements, the Subcustodian will furnish a copy
thereof to the Custodian.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer"), shall be authorized to instruct the Subcustodian
as to the acceptance, holding, presentation, disposition or
any other action with respect to Fund Securities from time
to time by telephone, or in writing signed by such
Authorized Officer and delivered by tested telex, tested
computer printout or such other reasonable method as the
Custodian and Subcustodian shall agree is designed to
prevent unauthorized officer's instructions; provided,
however, the Subcustodian is authorized to accept and act
upon orders from the Custodian, whether given orally, by
telephone or otherwise, which the Subcustodian reasonably
believes to be given by an authorized person. The
Subcustodian will promptly transmit to the Custodian all
receipts and transaction confirmations in respect of Fund
Securities as to which the Subcustodian has received any
instructions. The Authorized Officers shall be as set forth
on Exhibit A attached hereto and, as amended from time to
time, made a part hereof.
5. LIABILITIES. (i) The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provision of this Agreement if
done without willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement. Except as otherwise set forth
herein, the Subcustodian shall have no responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities (except at the instructions
of the Custodian), nor for informing the Custodian with
respect thereto, whether or not the Subcustodian has, or is
deemed to have, knowledge of the aforesaid. The Subcustodian
is under no duty to supervise or to provide investment
counseling or advice to the Custodian or to the Fund
relative to the purchase, sale, retention or other
disposition of any Fund Securities held hereunder. The
Subcustodian shall for the benefit of the Custodian and the
Fund use the same care with respect to receiving,
safekeeping, handling and delivery of Fund Securities as it
uses in respect of its own securities.
(ii) The Subcustodian will indemnify, defend and save
harmless the Custodian and the Fund from and against all
loss, liability, claims and demands incurred by the
Custodian or the Fund arising out of or in connection with
the Subcustodian's willful malfeasance, bad faith, gross
negligence or reckless disregard of its obligations and
duties under this Agreement.
(iii) The Custodian agrees to be responsible for and
indemnify the Subcustodian and any nominee in whose name the
Fund Securities are registered, from and against all loss,
liability, claims and demands incurred by the Subcustodian
and the nominee in connection with the performance of any
activity pursuant to this Agreement, done in good faith and
without negligence, including any expenses, taxes or other
charges which the Subcustodian is required to pay in
connection therewith.
6. Each party may terminate this Agreement at any time
by not less than ten (10) business days' prior written
notice. In the event that such notice is given, the
Subcustodian shall make delivery of the Fund Securities held
in the Subcustodian account to the Custodian or to any third
party within the Borough of Manhattan, specified by the
Custodian in writing within ten (10) days of receipt of the
termination notice, at the Custodian's expense.
7. All communications required or permitted to be given
under this Agreement, unless otherwise agreed by the
parties, shall be addressed a follows:
(i) to the Subcustodian:
Bankers Trust Company
1 Bankers Trust Plaza
14th Floor
New York, NY 10015
Attention: Barara Walter
RMO Safekeeping Unit
(ii) to the Custodian:
The Bank of New York
110 Washington Street
New York, New York 10286
8. MISCELLANEOUS: this Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended by
the parties hereto in writing.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: April 13, 1992
THE BANK OF NEW YORK
Custodian
By: ______________________________________
Title: ____________________________________
As Custodian For
PREMIER MUNICIPAL BOND FUND
BANKERS TRUST COMPANY
As Subcustodian
By: ___________________________________
Title: ___________________________________
EXHIBIT A
TO SUBCUSTODIAN AGREEMENT
DATED: APRIL 13, 1992
The Authorized Officers pursuant to Section 4 of the
Agreement shall be:
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
Dated: April 13, 1992
THE BANK OF NEW YORK
As Custodian
By: ___________________________
Title: ________________________
SUBCUSTODIAN AGREEMENT
The undersigned custodian (the "Custodian") for the
investment company identified in Schedule A attached
(collectively, the "Funds") hereby appoints on the following
terms and conditions Chemical Bank as subcustodian (the
"Subcustodian") for it and the Subcustodian hereby accepts such
appointment on the following terms and conditions as of the date
set forth below.
1. QUALIFICATION. The Custodian and the Subcustodian
each represent to the other and to each Fund that it is
qualified to act as custodian for a registered investment
company under the Investment Company Act of 1940, as amended
(the "1940 Act").
2. SUBCUSTODY. The Subcustodian agrees to hold in a
separate account, segregated at all times from all other
accounts maintained by the Subcustodian, all securities and
evidence of rights thereto of each of the Funds
(collectively, "Fund Securities") deposited, from time to
time by the Custodian with the Subcustodian. The
Subcustodian will accept, hold or dispose of and take such
other reasonable actions with respect to Fund Securities, in
addition to those specified in Section 3, in accordance with
the instructions of the Custodian relating to Fund
Securities given in the manner set forth in Section 4
("Instructions"). The Subcustodian hereby waives any claim
against, or lien on, any Fund Securities for any claim
hereunder. Registered Fund Securities may be held in the
name of the Subcustodian or nominee. To the extent that
ownership of Fund Securities may be recorded by a book entry
system maintained by any transfer agent or registrar for
such Fund Securities (including, but not limited to, any
such system operated by the Subcustodian) or by Depositary
Trust Company, the Subcustodian may hold Fund Securities as
a book entry reflecting the ownership of such Fund
Securities by it or its nominee and need not possess
certificates or any other evidence of ownership.
3. SUBCUSTODIAN'S ACTS WITHOUT INSTRUCTIONS. Except
as otherwise instructed pursuant to Section 4, the
Subcustodian will (i) present all Fund Securities requiring
presentation for any payment thereon, (ii) distribute to the
Custodian cash received thereupon, (iii) collect and
distribute to the Custodian interest and any dividends and
distributions on Fund Securities, (iv) forward to the
Custodian all confirmations, notices, proxies or proxy
soliciting materials relating to the Fund Securities
received by it (and the Custodian agrees to forward same to
the Fund), (v) report to the Custodian any missed payment or
other default upon any Fund Securities known to it as
Subcustodian hereunder, (the Subcustodian shall be deemed to
have knowledge of any payment default on any Fund Securities
in respect of which it acts as paying agent); all cash
distributions from the Subcustodian to the Custodian will be
on same day funds, or the same day that same day funds are
received by the Subcustodians unless such distribution
required instructions from the Custodian which were not
timely received, and (vi) at the request of the Custodian,
or on its behalf, execute any necessary declarations or
certificates of ownership (provided by the Custodian or on
its behalf) under any tax law nor or hereafter in effect.
The Subcustodian will furnish to the Custodian, upon the
Custodian's request, any report of the Subcustodian's
independent public accountants on an examination of its
internal accounting controls and procedures for safeguarding
securities held in its custody for the account of others.
4. INSTRUCTIONS, OTHER COMMUNICATIONS. Any officer of
the Custodian designated from time to time by letter to the
Subcustodian, signed by the President or any Vice President
and any Assistant Vice President, Assistant Secretary or
Assistant Treasurer of the Custodian, as an officer of the
Custodian authorized to give Instructions to the
Subcustodian with respect to Fund Securities (an "Authorized
Officer") shall be authorized to instruct the Subcustodian
as to the acceptance, holding, voting, presentation,
disposition or any other action with respect to Fund
Securities from time to time in writing signed by such
Authorized Officer and delivered by hand, mail, telecopier,
tested telex, tested computer printout or such other
reasonable method as the Custodian and Subcustodian shall
agree is designed to prevent unauthorized officer's
instructions. The Subcustodian is also authorized to accept
an act upon Instructions regardless of the manner in which
given (whether orally, by telephone or otherwise) if the
Subcustodian reasonably believes such Instructions are given
by an Authorized Officer. The Subcustodian will promptly
transmit to the Custodian all receipts, confirmations or
other transactional evidence received by it in respect of
Fund Securities as to which the Subcustodian has received
any Instructions. Instructions and other communications to
the Subcustodian shall be given to Chemical Bank, 55 Water
Street, Room 504, New York, New York, Attention: Debt
Securities Administration, Phone: (212)820-5616 Telex:
(212)269-8510 (or to such other address as the Custodian
or the Fund or Funds giving such notice, shall specify by
notice to the Subcustodian.
5. THE SUBCUSTODIAN. The Subcustodian shall not be
liable for any action taken or omitted to be taken in
carrying out the terms and provisions of this Agreement if
done without willful malfeasance, bad faith, negligence or
reckless disregard of its obligations and duties under this
Agreement.
The Subcustodian shall not have any responsibility for
ascertaining or acting upon any calls, conversions, exchange
offers, tenders, interest rate changes or similar matters
relating to the Fund Securities, except upon Instructions
from the Custodian, nor for informing the Custodian with
respect thereto, unless the Subcustodian has knowledge or is
deemed to have knowledge of the aforesaid. The Subcustodian
shall be deemed to have knowledge in circumstances where it
is acting as tender agent or paying agent for the Fund
Securities. The Subcustodian shall not be under a duty to
supervise or to provide advice (other than notice) to the
Custodian or any of the Funds relative to any purchase,
sale, retention or other disposition of any Fund Securities
held hereunder. The Subcustodian shall for the benefit of
the Custodian and the Funds be required to exercise the same
care with respect to the receiving, safekeeping, handling
and delivery of Fund Securities than it customarily
exercises in respect of its own securities.
The Subcustodian will indemnify, defend and save
harmless the Custodian and the Funds from any loss or
liability incurred by the Custodian arising out of or in
connection with the Subcustodian's willful malfeasance, bad
faith, negligence or reckless disregard of its obligations
and duties under this Agreement; PROVIDED, HOWEVER, that the
Subcustodian shall in no event be liable for any special,
indirect or consequential damages.
The Custodian agrees to be responsible for, and will
indemnify, defend and save harmless the Subcustodian (or any
nominee in whose name any Fund Securities are registered)
for, any loss or liability incurred by the Subcustodian (or
such nominee) arising out of or in connection with any
action taken by the Subcustodian (or such nominee) in
accordance with any Instructions or any other action taken
by the Subcustodian (or such nominee) in good faith and
without negligence pursuant to this Agreement, including any
expenses, taxes or other charges which the Subcustodian (or
such nominee) is required to incur or pay in connection
therewith.
6. RESIGNATION. The Subcustodian may resign as such
at any time upon not less than five business days' prior
written notice to the Custodian. In the event of such
resignation or any other termination of this Agreement, the
Subcustodian shall deliver all Fund Securities then held by
it to the Custodian, or as otherwise directed by the
Custodian pursuant to Instructions received by the
Subcustodian, at the Custodian's expense; PROVIDED, HOWEVER,
that the Subcustodian shall not be required to effect any
such delivery outside the Borough of Manhattan.
7. MISCELLANEOUS. This Agreement (i) shall be
governed by and construed in accordance with the laws of the
State of New York, (ii) may be executed in counterparts each
of which shall be deemed an original but all of which shall
constitute the same instrument, and (iii) may be amended
only by written agreement executed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date set forth below.
Dated: ______________________________
By: ______________________________
[Address]
Telephone:
Telex:
As Custodian for the Funds Listed
in Schedule A attached
CHEMICAL BANK
By: ______________________________
PREMIER MUNICIPAL BOND
SHAREHOLDER SERVICES PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Shareholder
Services Plan (the "Plan") under which the Fund would pay the
Fund's distributor, Dreyfus Service Corporation (the
"Distributor"), for providing personal services and/or
maintaining shareholder accounts. The Distributor would be
permitted to pay certain financial institutions, securities
dealers and other industry professionals (collectively, "Service
Agents") in respect of these services. The Plan is not to be
adopted pursuant to Rule 12b-1 under the Investment Company Act
of 1940, as amended (the "Act"), and the fee under the Plan is
intended to be a "service fee" as defined in Article III, Section
26, of the NASD Rules of Fair Practice.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use Fund assets for such purposes.
In voting to approve the implementation of such a plan,
the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at an
annual rate of .25 of 1% of the value of the Fund's average daily
net assets attributable to each class of Fund shares, in respect
of the provision of personal services to shareholders of the
respective class and/or maintenance of shareholder accounts. The
Distributor shall determine the amounts to be paid to Service
Agents and the basis on which such payments will be made.
Payments to a Service Agent are subject to compliance by the
Service Agent with the terms of any related Plan agreement
between the Service Agent and the Distributor.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets attributable to each
class of Fund shares shall be computed in the manner specified in
the Fund's Declaration of Trust for the computation of the value
of the Fund's net assets attributable to such a class.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by a majority of the Board members, including a majority
of the Board members who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreements
entered into in connection with this Plan, pursuant to a vote
cast in person at a meeting called for the purpose of voting on
the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods ending September 5, provided such
continuance is approved at least annually in the manner provided
in paragraph 4 hereof.
6. This Plan may be amended at any time by the Board,
provided that any material amendments of the terms of this Plan
shall become effective only upon approval as provided in
paragraph 4 hereof.
7. This Plan is terminable without penalty at any
time by vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have
no direct or indirect financial interest in the operation of this
Plan or in any agreements entered into in connection with this
Plan.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and property
of the Fund and shall not be binding upon any Trustee, officer or
shareholder of the Fund individually.
Dated: October 19, 1992
Effective: January 15, 1993
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Custodian,Transfer and Dividend
Disbursing Agent, Counsel, and Independent Auditors" and to the
use of our report dated June 3, 1994, in this Registration Statement
(Form N-1A 33-7496) of Premier Municipal Bond Fund.
ERNST & YOUNG
New York, New York
June 21, 1994
PREMIER MUNICIPAL BOND FUND
DISTRIBUTION PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Distribution
Plan (the "Plan") relating to its Class B shares in accordance
with Rule 12b-1 promulgated under the Investment Company Act of
1940, as amended (the "Act"). Under the Plan, the Fund would pay
the Fund's distributor, Dreyfus Service Corporation (the
"Distributor"), for advertising, marketing and distributing the
Fund's Class B shares. The Distributor would be permitted to pay
certain financial institutions, securities dealers and other
industry professionals (collectively, "Service Agents") in
respect of these services. If the proposal is to be implemented,
the Act and Rule 12b-1 require that a written plan describing all
material aspects of the proposed financing be adopted by the
Fund.
The Fund's Board, in considering whether the Fund
should implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use assets attributable to the Fund's
Class B shares for such purposes.
In voting to approve the implementation of such a plan,
the Board has concluded, in the exercise of its reasonable
business judgment and in light of applicable fiduciary duties,
that there is a reasonable likelihood that the plan set forth
below will benefit the Fund and holders of its Class B shares.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay to the Distributor a fee at an
annual rate of .50 of 1% of the value of the Fund's average daily
net assets attributable to Class B for advertising, marketing and
distributing the Fund's Class B shares. The Distributor may pay
one or more Service Agents a fee in respect of these services.
The Distributor shall determine the amounts to be paid to Service
Agents and the basis on which such payments will be made.
Payments to a Service Agent are subject to compliance by the
Service Agent with the terms of any related Plan agreement
between the Service Agent and the Distributor.
2. For the purposes of determining the fees payable
under this Plan, the value of the net assets attributable to
Class B shall be computed in the manner specified in the Fund's
Declaration of Trust for the computation of the value of the
Fund's net assets attributable to such a class.
3. The Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
4. This Plan will become effective immediately upon
approval by (a) holders of a majority of the Fund's outstanding
Class B shares, and (b) a majority of the Board members,
including a majority of the Board members who are not "interested
persons" (as defined in the Act) of the Fund and have no direct
or indirect financial interest in the operation of this Plan or
in any agreements entered into in connection with this Plan,
pursuant to a vote cast in person at a meeting called for the
purpose of voting on the approval of this Plan.
5. This Plan shall continue for a period of one year
from its effective date, unless earlier terminated in accordance
with its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 4(b)
hereof.
6. This Plan may be amended at any time by the Board,
provided that (a) any amendment to increase materially the costs
which the Fund may bear pursuant to this Plan shall be effective
only upon approval by a vote of holders of a majority of the
Fund's outstanding Class B shares, and (b) any material
amendments of the terms of this Plan shall become effective only
upon approval as provided in paragraph 4(b) hereof.
7. This Plan is terminable without penalty at any
time by (a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and have
no direct or indirect financial interest in the operation of this
Plan or in any agreements entered into in connection with this
Plan, or (b) vote of holders of a majority of the Fund's
outstanding Class B shares.
8. The obligations hereunder and under any related
Plan agreement shall only be binding upon the assets and property
of the Fund and shall not be binding upon any Trustee, officer or
shareholder of the Fund individually.
Dated: October 19, 1992
Effective: January 15, 1993
PREMIER MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 4/30/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 4/30/94 of a $1,000
hypothetical investment made on 11/26/86 (inception)
7.427
1000( 1 + T ) = 1,636.73
T = 6.86%
==========
PREMIER MUNICIPAL BOND FUND - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from inception through 4/30/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.81 + ( 13.81 x 0.73747 ) ] - 14.00
--------------------------------------------
14.00
T = 71.39%
========
PREMIER MUNICIPAL BOND FUND - CLASS A
SEC 30 DAY YIELD CALCULATION
INCOME 4/1/94 - 4/30/94 $3,218,642.39
EXPENSES 4/1/94 - 4/30/94 $413,089.71
Average Shares Entitled to Dividend
4/1/94 - 4/30/94 39,702,782.766
Maximum Offering Price per share 4/30/94 $14.46
x = 3,218,642.39 - 413,089.71
------------------------------------------
39,702,782.766 x 14.46
x = 0.004887
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.004887 ) -1]
30 Day yield = 5.94%
=================
TAX EQUIVALENT YIELD
Taxable portion of yield = 0.00%
Tax exempt portion of yield = 5.94%
----------------
Yield = 5.94%
================
Federal Tax Bracket = 39.60%
================
5.94
Tax Equivalent Yield = -------------------- = 9.83%
( 1 - 0.3960 ) ================
PREMIER MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 4/30/93 through 4/30/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 4/30/94 of a $1,000
hypothetical investment made on 4/30/93
1.00
1000( 1 + T ) = 972.67
T = -2.73%
============
PREMIER MUNICIPAL BOND FUND - CLASS A
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 4/30/89 through 4/30/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 4/30/94 of a $1,000
hypothetical investment made on 4/30/89
5.00
1000( 1 + T ) = 1,464.37
T = 7.93%
============
PREMIER MUNICIPAL BOND FUND - CLASS A
TOTAL RETURN COMPUTATION
Total return computation from inception through 4/30/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = Maximum Offering Price at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.81 + ( 13.81 x 0.73747 ) ] - 14.66
--------------------------------------------
14.66
T = 63.67%
========
PREMIER MUNICIPAL BOND FUND - CLASS B
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from inception through 4/30/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 4/30/94 of a $1,000
hypothetical investment made on 1/15/93 (inception)
1.290
1000( 1 + T ) = 1,031.68
T = 2.45%
==========
PREMIER MUNICIPAL BOND FUND - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 4/30/94
based upon the following formula:
[ C + ( C x B ) ] - A
---------------------
T = A
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
T = Total return
T = [ 13.81 + ( 13.81 x 0.07736 ) ] - 14.02
--------------------------------------------
14.02
T = 6.12%
========
PREMIER MUNICIPAL BOND FUND - CLASS B
SEC 30 DAY YIELD CALCULATION
INCOME 4/1/94 - 4/30/94 $547,903.48
EXPENSES 4/1/94 - 4/30/94 $116,594.44
Average Shares Entitled to Dividend
4/1/94 - 4/30/94 6,758,889.595
NAV per share 4/30/94 $13.81
x = 547,903.48 - 116,594.44
------------------------------------------
6,758,889.595 x 13.81
x = 0.004621
6
30 Day yield = 2 [( 1 + x) -1]
6
30 Day yield = 2 [ ( 1 + 0.004621 ) -1]
30 Day yield = 5.61%
=================
TAX EQUIVALENT YIELD
Taxable portion of yield = 0.00%
Tax exempt portion of yield = 5.61%
----------------
Yield = 5.61%
================
Federal Tax Bracket = 39.60%
================
5.61
Tax Equivalent Yield = -------------------- = 9.29%
( 1 - 0.3960 ) ================
PREMIER MUNICIPAL BOND FUND - CLASS B
AVERAGE ANNUAL TOTAL RETURN COMPUTATION
Average annual total return computation from 4/30/93 through 4/30/94
based upon the following formula:
n
P( 1 + T ) = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value as of 4/30/94 of a $1,000
hypothetical investment made on 4/30/93
1.00
1000( 1 + T ) = 983.91
T = -1.61%
============
PREMIER MUNICIPAL BOND FUND - CLASS B
TOTAL RETURN COMPUTATION
Total return computation from inception through 4/30/94
based upon the following formula:
[ C + ( C x B ) ] - A D x ( E x F )
--------------------- --- -------------
T = A G
where: A = NAV at beginning of period
B = Additional shares purchased through dividend reinvestment
C = NAV at end of period
D = Applicable CDSC
E = Lower of A or C
F = Original shares
G = Original investment
T = Total return
T = [ 13.81 + (13.81 x 0.07736 ) ] - 14.02 -- 0.03 x ( 13.81 x 71.327 )
----------------------------------------- ------------------------
14.02 1000
T = 3.17%
======
