LETTER TO SHAREHOLDERS
Dear Shareholder:
As your Fund's semi-annual reporting period ended on October 31, 1994,
the net asset value per share for Class A shares was $13.36, a decrease of
$.45 per share from $13.81 on April 30, 1994. Tax exempt income dividends of
approximately $.42 per share were paid during the six-month period,
representing an annualized distribution rate per share of 5.93% based on the
October 31 closing maximum offering price. For Class B shares during the same
period, the closing net asset value per share was $13.37, a decrease of $.44
per share from $13.81 on April 30, 1994. Tax exempt income dividends of
approximately $.38 per share were paid during the period, representing an
annualized distribution rate per share of 5.64%, based on the closing net
asset value. We are pleased to inform you that all dividends paid from net
investment income were fully exempt from Federal income tax.*
FIXED-INCOME MARKETS
These past 12 months have been disappointing for all fixed-income
markets. As an example, long-term U.S. Treasury Bond yields are up over 200
basis points. At the beginning of the calendar year, there was speculation in
the municipal bond market that reinvestment would be so great, and bond
issuance so sparse, that the prices of municipal bonds would stay firm in
spite of any contrary trend in the markets. This might have proven to be true
had the trend been for fixed-income products to drift sideways or to trade to
the lower end of their trading ranges. However, the world of fixed income
experienced a more dramatic correction to which even the positive outlook for
municipals could not remain impervious. The interest rate change started with
the Federal Reserve Board's 25 basis-point increase in the Federal Funds rate
on February 4, and has continued through four additional rate hikes, some as
large as 50 basis points. Most analysts think more rate increases are
imminent.
A DEFENSIVE STRATEGY
Since the initial market corrections in the spring, we have taken some
defensive portfolio measures. Keeping more cash on hand, selling bonds as
they became market discounts and adding some shorter maturity securities have
helped limit the Fund's volatility. During the market's recent declines,
these moves kept the Fund's net asset value in a relatively more stable
position.
OUR OUTLOOK
Looking forward, we currently expect the trend in short-term rates to be
higher. We think the Federal Reserve is likely to raise rates in this sector
until it receives convincing evidence of slower economic growth. Intermediate
and long-term interest rates, because they tend to anticipate inflation, have
some added complexity. Currently, inflation has only materialized in the
early phases of production. Although this threat seems distant, recent
higher-than-expected figures for Gross Domestic Product and from the National
Association of Purchasing Managers survey confirm our market view that
inflation may gain momentum at the consumer level. The result could be rising
long-term rates, which encourages us to remain cautious.
We have included a current Statement of Investments and recent financial
statements for your review. We look forward to
serving your investment needs in the future.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
November 14, 1994
New York, N.Y.
* Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--97.8% 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 $ 7,602,843
ARIZONA--.5%
Tucson Airport Authority, Special Facility Revenue
(Lockheed Aermod Center, Inc.) 8.70%, 9/1/2019.......................... 2,500,000 2,765,500
CALIFORNIA--4.2%
California, RAW 5.75%, 4/25/1996............................................ 25,000,000 25,309,000
COLORADO--7.9%
Colorado Health Facilities Authority, Retirement Facilities Revenue
(Liberty Heights) Zero Coupon, 7/15/2024................................ 10,000,000 1,154,900
Dawson Ridge, Metropolitan District Number 1, Refunding:
Zero Coupon, 10/1/2017.................................................. 9,930,000 1,920,164
Zero Coupon, 10/1/2022.................................................. 47,535,000 6,422,454
Denver City and County, Airport Revenue:
7.75%, 11/15/2021....................................................... 8,000,000 7,685,760
7.25%, 11/15/2023....................................................... 10,000,000 9,044,400
7.50%, 11/15/2023....................................................... 5,000,000 4,687,350
7%, 11/15/2025.......................................................... 18,225,000 16,033,444
CONNECTICUT--2.1%
Connecticut Development Authority, First Mortgage Gross Revenue
(Elim Park Baptist Home, Inc. Project) 9%, 12/1/2020.................... 3,000,000 3,108,720
Connecticut Housing Finance Authority (Housing Mortgage Finance Program)
6.70%, 11/15/2022....................................................... 10,000,000 9,680,800
FLORIDA--2.2%
Palm Beach County, Solid Waste IDR:
(Okeelanta Power LP Project) 6.85%, 2/15/2021........................... 6,750,000 6,170,377
(Osceola Power LP) 6.95%, 1/1/2022...................................... 7,500,000 6,966,825
GEORGIA--1.4%
Atlanta, Airport Facilities, Refunding 7.25%, 1/1/2017...................... 5,000,000 5,151,150
Hogansville, Combined Public Utility System Revenue, Refunding
(Asset Guaranty) 6%, 10/1/2023.......................................... 3,475,000 3,030,930
ILLINOIS--10.0%
Chicago, Skyway Toll Bridge Revenue, Refunding 6.75%, 1/1/2017.............. 5,425,000 5,082,032
Chicago O'Hare International Airport, Special Facility Revenue:
(American Airlines, Inc. Project) 7.875%, 11/1/2025..................... 6,000,000 5,921,220
(United Airlines, Inc.):
8.20%, 5/1/2018....................................................... 2,165,000 2,257,814
8.50%, 5/1/2018....................................................... 3,500,000 3,641,085
East Chicago, PCR, Refunding (Inland Steel Co. Project Number 10) 6.80%, 6/1/2013 9,000,000 8,238,690
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
ILLINOIS (CONTINUED)
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010....................................................... $ 7,210,000 $ 7,511,522
8.50%, 9/1/2010....................................................... 4,535,000 4,635,042
8.25%, 8/1/2012....................................................... 4,280,000 4,187,638
Retirement Housing (Regency Park) Zero Coupon, 7/15/2023................ 84,000,000 10,289,160
Illinois Health Facilities Authority, Revenue:
(Beverly Farm Foundation) 9.125%, 12/15/2015............................ 2,000,000 2,113,560
(Delnor Community Hospital Project) 8%, 5/15/2019 (Prerefunded 5/15/1999) (a) 5,500,000 6,159,725
INDIANA--1.2%
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017........................ 7,500,000 7,335,150
KENTUCKY--.5%
Perry County, SWDR (TJ International Project) 7%, 6/1/2024.................. 3,500,000 3,280,935
LOUISIANA--3.6%
Lake Charles Non-Profit Housing Development Corp., First Mortgage Revenue,
Refunding (Chateau Project) 7.875%, 2/15/2025 (Insured; FHA)............ 1,000,000 1,006,100
Louisiana Public Facilities Authority, Revenue (Student Loan) 7%, 9/1/2006.. 3,000,000 3,022,890
Parish of West Feliciana, PCR:
(Gulf States Utilities - II) 7.70%, 12/1/2014........................... 10,000,000 10,470,600
(Gulf States Utilities - III) 7.70%, 12/1/2014.......................... 6,500,000 6,805,890
MARYLAND--.4%
Maryland Community Development Administration, Department of Housing and
Community Development (Single Family Program) 7.70%, 4/1/2015........... 2,085,000 2,143,901
MASSACHUSETTS--1.6%
Massachusetts Health and Educational Facilities Authority, Revenue
(Tufts University) 6.99%, 8/15/2018 (b)................................. 4,000,000 3,223,680
Massachusetts Housing Finance Agency, SFHR 7.95%, 6/1/2023.................. 2,000,000 2,045,340
New England Education Loan Marketing Corp., Student Loan Revenue
6.90%, 11/1/2009........................................................ 4,000,000 4,014,840
MICHIGAN--2.6%
Greater Detroit Resources Recovery Authority, Revenue:
9.25%, Series A, 12/13/2008 (c)......................................... 8,440,000 8,927,072
9.25%, Series D, 12/13/2008 (c)......................................... 250,000 264,428
9.25%, Series E, 12/13/2008 (c)......................................... 1,000,000 1,057,710
9.25%, Series H, 12/13/2008 (c)......................................... 2,045,000 2,163,017
Wayne County Building Authority 8%, 3/1/2017 (c)............................ 1,500,000 1,712,445
Western Townships Utilities Authority, Sewer Disposal System
(Limited Tax) 8.20%, 1/1/2018........................................... 1,500,000 1,649,280
MINNESOTA--.8%
Minnesota Housing Finance Agency, Single Family Mortgage 6.25%, 7/1/2014 (d) 5,000,000 4,872,600
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEBRASKA--1.9%
Nebraska Higher Education Loan Program, Revenue 6.40%, 6/1/2013............. $ 12,500,000 $ 11,640,125
NEVADA--2.1%
Clark County, IDR (Southwest Gas Corp.) 7.50%, 9/1/2032..................... 13,000,000 12,726,480
NEW HAMPSHIRE--.6%
New Hampshire Housing Finance Authority, Single Family Residential Mortgage
7.70%, 7/1/2029......................................................... 3,620,000 3,664,960
NEW JERSEY--5.4%
Camden County Pollution Control Financing Authority, Solid Waste RRR
7.50%, 12/1/2010........................................................ 2,000,000 1,936,460
New Jersey Housing and Mortgage Finance Agency, Revenue 7.192%, 10/1/2020 (b) 6,000,000 5,527,500
New Jersey Economic Development Authority, First Mortgage Gross Revenue
(The Evergreens) 9.25%, 10/1/2022 (c)................................... 15,000,000 15,284,400
Union County Utilities Authority, Solid Waste Revenue 7.20%, 6/15/2014...... 9,500,000 9,421,720
NEW MEXICO--.3%
New Mexico Educational Assistance Foundation, Student Loan Revenue
6.85%, 12/1/2005........................................................ 2,000,000 2,005,600
NEW YORK--17.4%
Metropolitan Transportation Authority, Service Contract, Commuter Facilities
7.50%, 7/1/2016......................................................... 3,000,000 3,351,180
New York City:
8%, 6/1/2000............................................................ 2,200,000 2,408,142
7.50%, 2/1/2001......................................................... 5,000,000 5,362,700
6%, 5/15/2008........................................................... 8,970,000 8,229,706
7.50%, 8/15/2008........................................................ 2,000,000 2,066,040
7.10%, 2/1/2009......................................................... 5,000,000 5,063,350
7%, 2/1/2020............................................................ 12,000,000 11,823,480
New York City Industrial Development Agency, Special Facilities Revenue
(American Airlines, Inc. Project) 8%, 7/1/2020.......................... 3,250,000 3,330,112
New York City Municipal Water Finance Authority, Water and Sewer Systems
Revenue:
7%, 6/15/2001........................................................... 2,490,000 2,713,577
7.375%, 6/15/2009 (Prerefunded 6/15/1999) (a)........................... 4,000,000 4,364,160
7%, 6/15/2015 (Prerefunded 6/15/2001) (a)............................... 2,510,000 2,561,581
New York State Dormitory Authority, Revenue:
City University Systems 7.625%, 7/1/2020 (Prerefunded 7/1/2000) (a)..... 4,000,000 4,492,400
State University Educational Facilities 7%, 5/15/2018 (Prerefunded 5/15/2000) (a) 3,295,000 3,598,394
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 3,140,940
7.50%, 1/1/2026................................................... 2,000,000 2,104,280
(Long Island Lighting Co.) 7.15%, 6/1/2020............................ 4,000,000 3,767,960
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEW YORK (CONTINUED)
New York State Housing Finance Agency, Revenue:
(Refunding - Health Facilities - New York City) 8%, 11/1/2008......... $ 5,000,000 $ 5,519,850
Service Contract Obligation 7.30%, 3/15/2021 (Prerefunded 9/15/2001) (a) 5,000,000 5,559,450
New York State Local Government Assistance Corp.
7%, 4/1/2016 (Prerefunded 4/1/2001) (a)................................. 5,500,000 6,021,400
New York State Medical Care Facilities Finance Agency, Revenue:
4.90%, 8/15/2006 (Insured; FSA)......................................... 16,600,000 14,523,506
(Mental Health Service Facilities Improvement):
7.875%, 8/15/2020..................................................... 1,295,000 1,380,004
Refunding 7.875%, 8/15/2000 (Prerefunded 8/15/2000) (a)............... 1,150,000 1,301,719
New York State Mortgage Agency, Homeowner Mortgage Revenue 5.70%, 4/1/2023.. 1,475,000 1,418,788
NORTH CAROLINA--2.4%
North Carolina Eastern Municipal Power Agency, Power System Revenue
5.75%, 1/1/2019......................................................... 16,800,000 14,454,720
OHIO--.6%
Gateway Economic Development Corp., Greater Cleveland Excise Tax Revenue
7.50%, 9/1/2005......................................................... 3,500,000 3,793,965
OKLAHOMA--.7%
Tulsa Municipal Airport Trust, Revenue (American Airlines, Inc.) 7.375%, 12/1/2020 4,300,000 4,047,160
PENNSYLVANIA--6.6%
Blair County Hospital Authority, Revenue (Altoona Hospital) 7.835%, 7/1/2013 (b) 5,000,000 4,736,800
Lancaster County Hospital Authority, Revenue (Health Center - United Church
Homes Project) 9.125%, 10/1/2014........................................ 1,465,000 1,604,732
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.75%, 11/1/2014........................................................ 2,000,000 1,900,000
9.50%, 11/1/2016 (c).................................................... 3,000,000 2,940,000
Montgomery County Higher Education and Health Authority, Revenue
(AHF/Montgomery, Inc. Project) 10.50%, 9/1/2020......................... 3,500,000 3,681,230
Pennsylvania Convention Center Authority, Revenue, Refunding 6.70%, 9/1/2014 8,125,000 7,633,275
Pennsylvania Intergovernmental Cooperative Authority, Special Tax Revenue
(Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 5,500,000 5,881,535
Philadelphia, Water and Sewer Revenue 7.35%, 9/1/2004....................... 4,970,000 5,446,822
Philadelphia Hospital and Higher Education Facility Authority, HR
(Graduate Health Systems) 7.25%, 7/1/2018............................... 6,100,000 5,879,119
RHODE ISLAND--.4%
Rhode Island Depositors Economic Protection Corp.,
6.95%, 8/1/2022 (Prerefunded 8/1/2002) (a).............................. 2,000,000 2,184,980
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
TENNESSEE--3.0%
Maury County Industrial Development Board, PCR, Refunding
(Saturn Corp. Project) 6.50%, 9/1/2024.................................. $ 5,500,000 $ 5,143,875
McMinn County Industrial Development Board, PCR
(Calhoun Newsprint Co. Project) 7.625%, 3/1/2016........................ 3,000,000 3,050,250
Metropolitan Government of Nashville and Davidson County, IDB, Revenue
(Refunding - Multi-Family Mortgage - Picadilly) 6.95%, 7/1/2027 (Insured; FHA) 6,705,000 6,686,897
Tennessee Housing Development Agency, Mortgage Finance 6.90%, 7/1/2025...... 3,000,000 2,921,370
TEXAS--9.2%
Alliance Airport Authority, Special Facilities Revenue
(American Airlines, Inc. Project):
7%, 12/1/2011......................................................... 10,700,000 9,984,170
7.50%, 12/1/2029...................................................... 6,000,000 5,688,540
Brazos River Authority, PCR (Texas Utilities Electric Co. Project)
7.875%, 3/1/2021........................................................ 490,000 514,446
Dallas - Fort Worth International Airport Facility Improvement Corp., Revenue :
(American Airlines, Inc.) 7.50%, 11/1/2025.............................. 13,000,000 12,301,250
(Delta Airlines, Inc.) 7.125%, 11/1/2026................................ 4,200,000 3,786,762
Gulf Coast Waste Disposal Authority, Revenue
(Champion International Corp.) 7.45%, 5/1/2026.......................... 7,000,000 7,032,130
Port Corpus Christi Authority, PCR, Refunding
(Hoechst Celanese Co. Project) 7.50%, 8/1/2012.......................... 4,000,000 4,243,960
Texas Housing Agency, SFMR 7.875%, 9/1/2012................................. 950,000 977,369
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation Center)
8.20%, 10/1/2012 (Prerefunded 10/1/2002) (a)............................ 8,840,000 10,365,961
UTAH--3.7%
Carbon County, SWDR, Refunding:
(East Carbon Development Corp.) 9%, 7/1/2012............................ 4,000,000 4,107,120
(Sunnyside Cogeneration) 9.25%, 7/1/2018................................ 15,000,000 15,738,600
Utah Housing Finance Agency, Single Family Mortgage 6.05%, 1/1/2026......... 2,250,000 2,126,632
VIRGINIA--.5%
Virginia Housing Development Authority, Commonwealth Mortgage
6.20%, 7/1/2021......................................................... 3,255,000 2,892,067
WASHINGTON--.5%
Pilchuck Development Public Corp., Revenue, Refunding (Industrial - Little Neck
Properties Project) 6.25%, 8/1/2010 (LOC; US Bank of Washington) (e).... 3,090,000 3,002,306
WEST VIRGINIA--1.5%
West Virginia Parkways Economic Development and Tourism Authority:
7.24%, 5/15/2013 (b).................................................... 5,000,000 3,778,650
7.829%, 5/16/2019 (Insured; FGIC) (b)................................... 4,000,000 3,000,000
PREMIER MUNICIPAL BOND FUND
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
WEST VIRGINIA (CONTINUED)
West Virginia Water Development Authority, Water Development Revenue
(Loan Program II) 7.50%, 11/1/2029 (Prerefunded 11/1/1999) (a).......... $ 1,900,000 $ 2,105,295
WYOMING--.7%
Sweetwater County, SWDR (FMC Corp. Project) 7%, 6/1/2024.................... 1,575,000 1,496,029
Wyoming Community Development Authority, Single Family Mortgage 8%, 6/1/2021 2,405,000 2,458,511
--------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $593,206,156).................. $584,664,475
==============
CONTRACTS
SUBJECT
PUT OPTIONS--.8% TO PUT
--------------
U. S. Treasury Notes
December '94 @$104 (cost $4,038,469).................................... 1,500 $ 5,015,625
==============
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS--1.4% AMOUNT
--------------
NEW JERSEY--1.0%
New Jersey Economic Development Authority, VRDN:
Industrial and Economic Development Revenue (Merck & Co., Inc.):
3.65% (f)............................................................. $ 2,000,000 $ 2,000,000
3.90% (f)............................................................. 800,000 800,000
PCR, Refunding (Hoffman - LaRoche) 3.25% (f)............................ 2,800,000 2,800,000
WASHINGTON--.4%
Washington Public Power, Supply Systems Revenue, VRDN
(Nuclear Project 3) 3.65% (f)........................................... 2,500,000 2,500,000
--------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $8,100,000).................... $ 8,100,000
==============
TOTAL INVESTMENTS--100.0%
(cost $605,344,625)..................................................... $597,780,100
==============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FHA Federal Housing Administration RRR Resource Recovery Revenue
FSA Financial Security Assurance RAW Revenue Anticipation Warrant
HR Hospital Revenue SFHR Single Family Housing Revenue
IDB Industrial Development Board SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 19.2%
AA Aa AA 8.3
A A A 15.2
BBB Baa BBB 31.8
BB Ba BB 4.0
F-1 MIGI, VMIG1 & P1 SP1 & A1 4.8
Not Rated (h) Not Rated (h) Not Rated (h) 16.7
--------
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 municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Inverse floater security - the interest rate is subject to change
periodically.
(c) Wholly or partially held by the custodian in a segregated account as
collateral for open option positions and a delayed delivery security.
(d) Purchased on delayed delivery basis.
(e) Secured by letters of credit.
(f) 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.
(g) Fitch currently provides creditworthiness information for a limited
number of investments.
(h) 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.
See independent accountants' review report and notes to financial statements.
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF CALL OPTIONS WRITTEN OCTOBER 31, 1994 (UNAUDITED)
CONTRACTS
SUBJECT
ISSUER TO CALL VALUE
- -------- ---------- ------------
<S> <C> <C>
U.S. Treasury Notes:
December '94 @ $102..................................................... 200 $ (34,375)
December '94 @ $103..................................................... 1,000 (46,875)
December '94 @ $104..................................................... 500 (7,812)
------------
(premiums received $584,796).......................................... $ (89,062)
============
STATEMENT OF PUT OPTIONS WRITTEN OCTOBER 31, 1994 (UNAUDITED)
CONTRACTS
SUBJECT
ISSUER TO PUT VALUE
- -------- ---------- ------------
U.S. Treasury Notes:
December '94 @ $99...................................................... 1,000 $ (156,250)
December '94 @ $100..................................................... 2,000 (781,250)
December '94 @ $102..................................................... 1,500 (2,273,438)
------------
(premiums received $3,496,335)........................................ $(3,210,938)
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $605,344,625)_see statement..................................... $597,780,100
Cash.................................................................... 2,528,821
Interest receivable..................................................... 13,525,969
Receivable for shares of Beneficial Interest subscribed................. 268,289
Prepaid expenses........................................................ 48,613
--------------
614,151,792
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 287,029
Payable for investment securities purchased............................. 5,044,271
Outstanding call and put options written, at value
(premiums received $4,081,131)_see statement.......................... 3,300,000
Payable for shares of Beneficial Interest redeemed...................... 2,614,937
Accrued expenses and other liabilities.................................. 200,733 11,446,970
------------ --------------
NET ASSETS ................................................................ $602,704,822
==============
REPRESENTED BY:
Paid-in capital......................................................... $618,805,577
Accumulated net realized capital losses and distributions in excess of net
realized gain on investments.......................................... (9,317,361)
Accumulated net unrealized (depreciation) on investments_Note 3(b)...... (6,783,394)
--------------
NET ASSETS at value......................................................... $602,704,822
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 37,766,863
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 7,339,617
==============
NET ASSET VALUE per share:
Class A Shares
($504,610,679 /37,766,863 shares)..................................... $13.36
=======
Class B Shares
($98,094,143 / 7,339,617 shares)...................................... $13.37
=======
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 22,155,118
EXPENSES:
Management fee_Note 2(a).............................................. $ 1,754,477
Shareholder servicing costs_Note 2(c)................................. 1,026,584
Distribution fees (Class B shares)_Note 2(b).......................... 249,123
Custodian fees........................................................ 29,218
Prospectus and shareholders' reports.................................. 28,831
Professional fees..................................................... 28,145
Registration fees..................................................... 26,690
Trustees' fees and expenses_Note 2(d)................................. 12,562
Miscellaneous......................................................... 17,596
-------------
TOTAL EXPENSES.................................................... 3,173,226
--------------
INVESTMENT INCOME--NET............................................ 18,981,892
--------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments (including
options transactions)_Note 3(a)....................................... $ (5,458,673)
Net realized (loss) on financial futures_Note 3(a)...................... (2,345,292)
-------------
NET REALIZED (LOSS)................................................... (7,803,965)
Net unrealized (depreciation) on investments............................ (12,626,298)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (20,430,263)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (1,448,371)
=============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1994
1994 (UNAUDITED)
-------------- ------------------
<S> <C> <C>
OPERATIONS:
Investment income_net.................................................. $ 38,105,215 $ 18,981,892
Net realized (loss) on investments..................................... (1,468,275) (7,803,965)
Net unrealized (depreciation) on investments for the period............ (29,828,947) (12,626,298)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.. 6,807,993 (1,448,371)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net:
Class A shares....................................................... (34,640,947) (16,254,847)
Class B shares....................................................... (3,464,268) (2,727,045)
From net realized gain on investments:
Class A shares....................................................... (1,935,559) ___
Class B shares....................................................... (249,175) ___
In excess of net realized gain on investments:
Class A shares....................................................... (39,975) ___
Class B shares....................................................... (5,146) ___
-------------- --------------
TOTAL DIVIDENDS.................................................. (40,335,070) (18,981,892)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 104,748,904 15,961,727
Class B shares....................................................... 83,821,633 9,501,486
Dividends reinvested:
Class A shares....................................................... 22,085,600 9,533,897
Class B shares....................................................... 2,282,208 1,603,098
Cost of shares redeemed:
Class A shares....................................................... (80,102,730) (49,769,346)
Class B shares....................................................... (4,090,771) (5,375,411)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS.......................................... 128,744,844 (18,544,549)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 95,217,767 (38,974,812)
NET ASSETS:
Beginning of period.................................................... 546,461,867 641,679,634
-------------- --------------
End of period.......................................................... $641,679,634 $602,704,822
============= ================
</TABLE>
<TABLE>
SHARES
--------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------ ------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1994 APRIL 30, OCTOBER 31, 1994
CAPITAL SHARE TRANSACTIONS: 1994 (UNAUDITED) 1994 (UNAUDITED)
-------------- ----------------- -------------- -------------------
<S> <C> <C> <C> <C>
Shares sold......................... 7,100,350 1,159,566 5,676,601 690,423
Shares issued for dividends reinvested 1,502,278 695,762 155,727 116,991
Shares redeemed..................... (5,500,645) (3,632,614) (281,527) (392,247)
============= ============ ========== =============
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING................. 3,101,983 (1,777,286) 5,550,801 415,167
============= ============ ========== =============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
PREMIER MUNICIPAL BOND FUND
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
CLASS A SHARES CLASS B SHARES
------------------------------------------------------- -----------------------------------
SIX MONTHS SIX MONTHS
ENDED OCTOBER ENDED OCTOBER
YEAR ENDED APRIL 30, 31, 1994 YEAR ENDED APRIL 30 31, 1994
-------------------------------------------- ------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED) 1993(1) 1994 (UNAUDITED)
------ ------ ------ ------ ------ --------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............. $12.97 $12.77 $13.28 $13.75 $14.45 $13.81 $14.02 $14.45 $13.81
------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net... .99 .98 .94 .92 .89 .42 .24 .80 .38
Net realized and unrealized gain
(loss) on investments. (.20) .51 .49 .91 (.59) (.45) .43 (.59) (.44)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS........ .79 1.49 1.43 1.83 .30 (.03) .67 .21 (.06)
------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net............ (.99) (.98) (.94) (.92) (.89) (.42) (.24) (.80) (.38)
Dividends from net realized gain
on investments........ -- -- (.02) (.21) (.05) -- -- (.05) --
Dividends in excess of net realized
gain on investments... -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS... (.99) (.98) (.96) (1.13) (.94) (.42) (.24) (.85) (.38)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $12.77 $13.28 $13.75 $14.45 $13.81 $13.36 $14.45 $13.81 $13.37
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2) 6.25% 12.13% 11.08% 13.76% 1.84% (.54%)(3) 16.80%(3) 1.26% (.93%)(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets............ -- .22% .54% .74% .85% .91%(3) 1.15%(3) 1.40% 1.44%(3)
Ratio of net investment income
to average net assets. 7.51% 7.43% 6.90% 6.43% 6.01% 6.04%(3) 5.13%(3) 5.33% 5.47%(3)
Decrease reflected in above
expense ratios due to
undertakings by the Manager 1.15% .82% .40% .20% .06% -- .10%(3) .05% -_
Portfolio Turnover Rate. 63.53% 41.30% 50.72% 30.99% 22.15% 24.62%(4) 30.99% 22.15% 24.62%(4)
Net Assets, end of period
(000's Omitted)....... $100,784 $247,195 $388,793 $526,606 $546,036 $504,611 $19,855 $95,643 $98,094
- ---------------------------
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified, open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The
Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager
became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor")
was engaged as the Fund's distributor. The Distributor, located at One
Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of
Institutional Administration Services, Inc., a provider of mutual fund
administration services, the parent company of which is Boston Institutional
Group, Inc.
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 are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(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, if any, 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.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the 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. The most stringent state
expense limitation applicable to the Fund presently requires reimbursement of
expenses in any full fiscal year that such expenses (exclusive of
distribution expenses and certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 Million and 1 1/2% of the excess
over $100 Million of the average value of the Fund's net assets in accordance
with California "blue sky" regulations. There was no expense reimbursement
for the six months ended October 31, 1994.
Dreyfus Service Corporation retained $27,652 during the six months ended
October 31, 1994 from commissions earned on sales of the Fund's Class A
shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $63,511
from contingent deferred sales charges imposed upon redemptions of the Fund's
Class B shares.
(B) On August 3, 1994, the Fund's shareholders approved a revised
Distribution Plan with respect to Class B shares only (the "Class B
Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the
Class B Distribution Plan, effective August 24, 1994, the Fund pays the
Distributor for distributing the Fund's Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Fund pay Dreyfus Service Corporation 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. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the six months ended October 31, 1994, $93,936 was charged to the
Fund pursuant to the Class B Distribution Plan and $155,187 was charged to
the Fund pursuant to the prior 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. From May 1, 1994 through August 23,
1994, $425,801 and $77,593 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
October 31, 1994, $247,127 and $46,969 were charged to Class A and Class B
shares, respectively, by the Distributor pursuant to the Shareholder Services
Plan.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(D) Prior to August 24, 1994 certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. 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.
NOTE 3--SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding option transactions, amounted to $225,830,695 and $233,676,346,
respectively, for the six months ended October 31, 1994, and consisted
entirely of long-term and short-term municipal investments.
In addition, the following table summarizes the Fund's call/put options
written transactions for the six months ended October 31, 1994:
<TABLE>
OPTIONS TERMINATED
------------------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST GAIN
------------ -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding April 30, 1994........ 400 $ 296,552
Contracts written........................... 19,900 8,759,315
------------ --------------
20,300 9,055,867
------------ --------------
Contracts terminated:
Closed.................................... 3,250 1,680,884 $1,044,832 $ 636,052
Exercised................................. 695 336,715 ___ 336,715
Expired................................... 10,155 2,957,137 ___ 2,957,137
------------ -------------- ------------- --------------
Total contracts terminated............ 14,100 4,974,736 $1,044,832 $3,929,904
------------ -------------- ============= ==============
Contracts outstanding October 31, 1994...... 6,200 $4,081,131
=========== ============
</TABLE>
As a writer of call 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 gain, to the extent of the premiums, if the price of
the underlying financial instrument decreases between the date the option is
written and the date on which the option is terminated. Generally, the Fund
would realize a loss, if the price of the financial instrument increases
between those dates.
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
gain, to the extent of the premiums, if the price of the underlying financial
instrument increases between the date the option is written and the date on
which the option is terminated. Generally, the Fund would realize a loss, if
the price of the financial instrument declines between those dates.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market
value of the contract at the close of each day's trading. Accordingly,
variation margin payments are made or received to reflect daily unrealized
gains or losses. When the contracts are closed, the Fund recognizes a
realized gain or loss. These investments require initial margin deposits with
a custodian, which consist of cash or cash equivalents, up to approximately
10% of the contract amount. The amount of these deposits is determined by the
exchange or Board of Trade on which the contract is traded and is subject to
change. At October 31, 1994, there were no financial futures contracts
outstanding.
PREMIER MUNICIPAL BOND FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) At October 31, 1994, accumulated net unrealized depreciation on
investments was $6,783,394, consisting of $17,676,190 gross unrealized
appreciation and $24,459,584 gross unrealized depreciation.
At October 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER MUNICIPAL BOND FUND
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER MUNICIPAL BOND FUND
We have reviewed the accompanying statement of assets and liabilities of
Premier Municipal Bond Fund, including the statements of investments and call
and put options written, as of October 31, 1994, and the related statements
of operations and changes in net assets and financial highlights for the six
month period ended October 31, 1994. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
April 30, 1994 and financial highlights for each of the five years in the
period ended April 30, 1994 and in our report dated June 3, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
December 7, 1994
SEMI-ANNUAL REPORT
PREMIER MUNICIPAL
BOND FUND
OCTOBER 31, 1994
(Dreyfus Lion Logo)
PREMIER MUNICIPAL
BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 022/612SA9410BKR
