Dreyfus
Premier Municipal
Bond Fund
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
18 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
Municipal Bond Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Municipal
Bond Fund, covering the six-month period from May 1, 1999 through October 31,
1999. Inside, you' ll find valuable information about how the fund was managed
during the reporting period, including a discussion with the fund's portfolio
manager, Samuel Weinstock.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last fall'
s interest-rate cuts. Higher interest rates led to some erosion of municipal
bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Municipal Bond Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier Municipal Bond Fund perform during the period?
For the six-month period ended October 31, 1999, Dreyfus Premier Municipal Bond
Fund' s Class A shares provided a -6.21% total return; its Class B shares
provided a -6.46% total return and its Class C shares provided a -6.56% total
return.(1) This compares to a -5.32% total return(2) for the Lipper General
Municipal Debt Funds category average for the same period.
We attribute the fund's relative underperformance compared to its benchmark over
the past six months to a declining municipal bond market and a rising
interest-rate environment. When the market is down, spreads between securities
open up or widen. This phenomenon will also occur in the opposite direction when
markets are rising. During the current period, this credit-widening environment
negatively impacted the fund.
What is the fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
practical from a diversified portfolio of municipal bonds without undue risk.
Maximizing total returns, which includes both income and changes in share price,
is a secondary goal.
To achieve our objectives, we employ four primary strategies. First, we strive
to identify the maturity range that we believe will provide the most favorable
returns over the next two years. Second, we evaluate issuers' credit quality to
find bonds that we believe provide high yields at an attractive price. Third, we
look for bonds with attractively high interest payments, even if they sell at a
premium to face value. Fourth, we assess individual bonds' early redemption
features, focusing on those that cannot be redeemed soon by their issuers.
Typically, the bonds we select for the fund will have several of these
qualities.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates over the past six months. When the reporting period began on May
1, 1999, investors were concerned that economic recovery in overseas markets and
continued economic strength in the United States might rekindle long-dormant
inflationary pressures. In fact, in an attempt to forestall a potential
reacceleration of inflation, the Federal Reserve Board raised short-term
interest rates twice during the summer of 1999. This change in monetary policy
caused municipal bond prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds offered tax-exempt yields during the period that
compared very favorably with taxable yields after adjusting for taxes.
The DE MINIMIS tax effect on market discount bonds in municipals can also
accelerate downward pressure on existing holdings. Once a bond falls below its
DE MINIMIS cutoff level, the next owner of the bond pays an ordinary tax rate on
the appreciation instead of a capital gains rate. To compensate buyers, these
securities are offered at a greater discount to face value (lower prices) as the
market heads lower. Depending on how many shares are owned and if the market is
passing below the cutoff level for a particular bond fund, performance can lag.
What is the fund's current strategy?
In a rising interest-rate environment, an important part of our strategy has
been to focus on maintaining the fund's average duration within the neutral
range. Because a fund's duration naturally extends as interest rates rise and
some bonds' prices fall below levels at which issuers might redeem them early,
bond funds tend to become more sensitive to the adverse short-term effects of
higher interest rates. Accordingly, we sold some of our longer maturity bonds,
including those priced at discounts to face value.
We attempted to reinvest the proceeds of those sales in tax-exempt bonds that we
believed would remain highly liquid in a declining market. Accordingly, new
purchases focused on insured(3) and highly rated bonds in the 10-year maturity
range. We also took steps to upgrade the fund by using high quality bonds to
replace pre-refunded bonds as well as bonds that are near their redemption
dates. Typically, these new purchases were available at face value or modest
premiums, and had maturities of seven years or less. Because of uncertainties in
the pre-refunded bond market sector, these new purchases often gave us the
potential to enhance the fund's income stream.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES AND SOME INCOME
MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN
INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
(3) PORTFOLIO INSURANCE EXTENDS TO THE REPAYMENT OF PRINCIPAL AND PAYMENT OF
INTEREST IN THE EVENT OF DEFAULT. IT DOES NOT EXTEND TO THE MARKET VALUE OF
PORTFOLIO SECURITIES OR TO THE VALUE OF THE FUND'S SHARES..
The Fund
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STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS Amount ($) Value ($)
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ALABAMA--.9%
Courtland Industrial Development Board, SWDR
(Champion International Corporation Project)
6%, 8/1/2029 4,750,000 4,325,825
ARIZONA--1.0%
Maricopa County Pollution Control Corporation, PCR
(Public Service Co. - New Mexico Project)
6.30%, 12/1/2026 5,000,000 4,766,150
CALIFORNIA--1.8%
Foothill/Eastern Transportation Corridor Agency,
Toll Road Revenue 6%, 1/1/2034 5,000,000 5,380,450
Riverside County Public Finance Authority, COP
5.75%, 5/15/2019 3,500,000 3,123,015
COLORADO--7.7%
Arapahoe County Capital Improvement Trust Fund,
Highway Revenue (E-470 Project):
Zero Coupon, 8/31/2005 2,530,000 1,894,338
Zero Coupon, 8/31/2007 (Prerefunded 8/31/2005) 4,000,000 (a) 2,672,720
7%, 8/31/2026 (Prerefunded 8/31/2005) 11,000,000 (a) 12,489,510
Dawson Ridge, Metropolitan District Number 1
Zero Coupon, 10/1/2017 9,930,000 2,951,692
Denver City and County, Airport Revenue:
7.50%, 11/15/2023 (Prerefunded 11/15/2004) 2,060,000 (a) 2,345,413
7.50%, 11/15/2023 9,715,000 10,642,880
7%, 11/15/2025 3,405,000 3,506,401
CONNECTICUT--4.5%
Connecticut Clean Water Fund, Revenue:
5.125%, 9/1/2013 10,000 9,635
7.375%, 9/1/2013 995,000 (b,c) 920,594
5.125%, 9/1/2014 10,000 9,493
7.375%, 9/1/2014 1,745,000 (b,c) 1,564,637
5.125%, 9/1/2016 40,000 37,107
7.375%, 9/1/2016 1,760,000 (b,c) 1,501,843
Connecticut Development Authority, PCR
(Connecticut Light & Power) 5.85%, 9/1/2028 8,000,000 7,340,160
Mashantucket Western Pequot Tribe, Special Revenue
5.75%, 9/1/2027 10,750,000 9,762,290
DELAWARE--.8%
Delaware Housing Authority, MFMR 7%, 5/1/2025 3,725,000 3,903,949
Lee County Industrial Development Authority,
Health Care Facilities Revenue (Cypress Cove Health Park):
5.625%, 10/1/2002 2,000,000 1,987,440
5.875%, 10/1/2004 2,000,000 1,974,340
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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FLORIDA--3.3%
Palm Beach County, Solid Waste IDR:
(Okeelanta Power LP Project) 6.85%, 2/15/2021 6,750,000 (d) 4,134,375
(Osceola Power LP) 6.95%, 1/1/2022 7,500,000 (d) 4,518,750
Santa Rosa Bay Bridge Authority, Revenue 6.25%, 7/1/2028 3,000,000 2,966,160
GEORGIA--1.3%
Burke County Development Authority, PCR
(Georgia Power Plant) 5.45%, 5/1/2034 (Insured; MBIA) 7,000,000 6,245,330
HAWAII--.3%
Hawaii Department of Transportation,
Special Facilities Revenue (Continental Airlines, Inc.)
5.625%, 11/15/2027 1,850,000 1,577,236
ILLINOIS--2.6%
Carol Stream, First Mortgage Revenue
(Windsor Park Manor Project) 6.50%, 12/1/2007 2,000,000 2,015,580
Chicago O'Hare International Airport, Special Facility Revenue:
6.386%, 4/1/2011 2,725,000 (b,c) 2,225,126
(United Airlines Project) 5.20%, 4/1/2011 50,000 45,604
East Chicago, PCR
(Inland Steel Co. Project) 7.125%, 6/1/2007 3,000,000 2,990,190
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility):
8.75%, 3/1/2010 177,000 180,122
8.50%, 9/1/2010 1,550,000 1,600,592
8.25%, 8/1/2012 2,835,000 3,048,050
INDIANA--5.8%
Indiana Development Finance Authority:
Environmental Improvement Revenue (USX Corp. Project)
6.15%, 7/15/2022 4,000,000 3,749,080
Exempt Facilities Revenue (Inland Steel)
5.75%, 10/1/2011 11,500,000 10,121,150
PCR (Inland Steel Co., Project Number 12)
6.85%, 12/1/2012 4,000,000 3,843,040
Indianapolis Airport Authority, Special Facilities Revenue
(United Airlines Project) 6.50%, 11/15/2031 10,000,000 9,698,800
KENTUCKY--1.8%
Kentucky Economic Development Finance Authority,
Hospital System Improvement Revenue
(Appalachian Regional Health Center) 5.85%, 10/1/2017 3,000,000 2,631,150
Perry County, SWDR (TJ International Project):
7%, 6/1/2024 3,500,000 3,614,030
6.55%, 4/15/2027 2,500,000 2,520,050
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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LOUISIANA--2.7%
DeSoto Parish, PCR (Cleco Utility Group, Inc. Project)
5.875%, 9/1/2029 (Insured; AMBAC) 3,110,000 3,020,308
Louisiana Housing Finance Agency, MFHR
(LaBelle Projects) 9.75%, 10/1/2020 4,100,000 4,563,259
Saint Charles Parish, PCR:
6.35%, 10/1/2003 5,100,000 (b,c) 5,056,905
(Entergy, Inc. Project) 5.35%, 10/1/2029 50,000 49,788
MAINE--.6%
Jay, SWDR (International Paper Co.) 6.20%, 9/1/2019 3,250,000 3,109,763
MARYLAND--.7%
Maryland Energy Financing Administration, SWDR
(Wheelabrator Water Projects) 6.45%, 12/1/2016 3,000,000 3,083,790
MASSACHUSETTS--2.2%
Massachusetts Industrial Finance Agency:
Health Care Facility Revenue (Metro Health
Foundation, Inc. Project) 6.75%, 12/1/2027 8,000,000 7,731,200
Water Treatment Revenue (American Hingham)
6.95%, 12/1/2035 2,640,000 2,778,310
MICHIGAN--3.0%
Michigan Hospital Finance Authority, HR
(Genesys Regional Medical - A) 5.375%, 10/1/2013 4,000,000 3,881,640
Wayne Charter County, Special Airport Facilities Revenue:
(Metropolitan Wayne County)
5.25%, 12/1/2014 (Insured; MBIA) 3,965,000 3,700,217
(Northwest Airlines, Inc.) 6.75%, 12/1/2015 4,985,000 5,025,628
Wayne County Building Authority
8%, 3/1/2017 (Prerefunded 3/1/2002) 1,500,000 (a) 1,643,805
NEBRASKA-1.0%
Nebraska Investment Finance Authority, SFHR
5.70%, 9/1/2029 5,000,000 4,726,250
NEW JERSEY-2.6%
Cherry Hill Township School District
4.75%, 2/15/2019 (Insured; FSA) 1,630,000 1,419,860
New Jersey Building Authority, Building Revenue:
5%, 6/15/2011 45,000 43,590
6.301%, 6/15/2011 6,400,000 (b,c) 5,988,096
New Jersey Sports and Exposition Authority, Revenue
(Monmouth Park) 8%, 1/1/2025 (Prerefunded 1/1/2005) 4,000,000 (a) 4,651,320
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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NEW MEXICO--1.7%
Farmington, PCR:
(Public Service Co. - San Juan Project) 6.375%, 4/1/2022 5,000,000 4,798,500
(Tucson Electric Power Co. of San Juan) 6.95%, 10/1/2020 3,000,000 3,054,600
NEW YORK--17.0%
New York City:
7.10%, 2/1/2009 350,000 372,239
7.10%, 2/1/2009 (Prerefunded 2/1/2002) 210,000 (a) 224,954
New York City Industrial Development Agency
IDR, (Laguardia Associates LP Project)
5.80%, 11/1/2013 8,710,000 8,227,466
New York State Dormitory Authority, Revenues:
6.63%, 2/15/2013 (Insured; MBIA) 6,400,000 (b,c) 5,688,192
(Bronx/Lebanon Hospital)
5.20%, 2/15/2013 (Insured; MBIA) 60,000 56,717
(Mental Health Services Facilities)
5.125%, 2/15/2012 (Insured; MBIA) 3,365,000 3,196,784
(Special Act School Districts Program)
5.25%, 7/1/2013 (Insured; FSA) 3,000,000 2,863,140
New York State Energy Research and Development Authority,
Electric Facilities Revenue (Long Island Lighting Co.):
7.15%, 9/1/2019 2,535,000 2,673,715
7.15%, 9/1/2019 (Prerefunded 6/15/2002) 1,115,000 (a) 1,204,178
7.15%, 6/1/2020 2,980,000 3,143,065
7.15%, 6/1/2020 (Prerefunded 6/15/2002) 1,020,000 (a) 1,101,579
7.15%, 12/1/2020 1,320,000 1,392,230
7.15%, 12/1/2020 (Prerefunded 6/15/2002) 3,680,000 (a) 3,981,024
7.15%, 2/1/2022 (Prerefunded 6/15/2002) 7,500,000 (a) 8,099,850
New York State Thruway Authority
Service Contract Revenue:
6.754%, 4/1/2010 4,950,000 (b,c) 4,720,716
(Local Highway and Bridge) 5.25%, 4/1/2010 100,000 97,761
New York State Urban Development Corporation, Revenue
(Correctional Facilities Service Contract):
5.25%, 1/1/2010 (Insured; AMBAC) 5,000,000 4,955,000
5.25%, 1/1/2011 (Insured; AMBAC) 4,000,000 3,921,920
5.25%, 1/1/2012 (Insured; AMBAC) 3,500,000 3,397,135
5.25%, 1/1/2013 (Insured; AMBAC) 3,660,000 3,506,939
Port Authority of New York and New Jersey:
5.35%, 9/15/2014 (Insured; FGIC) 6,750,000 6,557,490
Special Obligation Revenue (JFK International Airport
Terminal) 6.25%, 12/1/2013 (Insured; MBIA) 6,000,000 6,337,200
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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NEW YORK (CONTINUED)
Scotia Housing Authority, Housing Revenue
(Coburg Village, Inc. Project) 6.10%, 7/1/2018 5,400,000 4,925,988
NORTH CAROLINA--1.7%
Charlotte, Special Facilities Revenue
(Charlotte/Douglas International Airport)
5.60%, 7/1/2027 5,000,000 4,070,650
North Carolina Eastern Municipal Power Agency,
Power System Revenue 7%, 1/1/2013 3,500,000 3,769,115
OHIO--1.7%
Ohio Water Development Authority, Pollution Control
Facilites Revenue (Cleveland Electric) 6.10%, 8/1/2020 8,500,000 7,900,155
OKLAHOMA--1.5%
Holdenville Industrial Authority, Correctional Facility Revenue:
6.60%, 7/1/2010 (Prerefunded 7/1/2006) 2,045,000 (a) 2,247,516
6.70%, 7/1/2015 (Prerefunded 7/1/2006) 4,625,000 (a) 5,108,914
OREGON--.1%
Oregon, EDR (Georgia Pacific Corp. Project)
5.70%, 12/1/2025 500,000 440,100
PENNSYLVANIA--4.2%
Beaver County Industrial Development Authority, PCR
(Ohio Edison Company Project) 4.65%, 6/1/2033 5,000,000 4,829,450
Blair County Hospital Authority, Revenue (Altoona Hospital)
8.292%, 7/1/2013 (Insured; AMBAC) 5,000,000 (b) 5,324,350
Dauphin County General Authority, Office and Parking Revenue
(Riverfront Office) 5.50%, 1/1/2008 4,205,000 3,960,269
Montgomery County Higher Education and Health Authority
First Mortgage Revenue (AHF/Montgomery, Inc. Project)
10.50%, 9/1/2020 3,395,000 3,555,889
Pennsylvania Intergovernmental Cooperative Authority
Special Tax Revenue (Philadelphia Funding Program)
6.80%, 6/15/2022 (Prerefunded 6/15/2002) 2,000,000 (a) 2,118,820
RHODE ISLAND--.7%
Providence, Special Tax Increment Obligation
6.65%, 6/1/2016 3,000,000 3,085,620
TENNESSEE-2.9%
Memphis Center Revenue Finance Corporation,
Sports Facility Revenue (Memphis Redbirds)
6.50%, 9/1/2028 8,000,000 7,531,520
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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TENNESSEE (CONTINUED)
Shelby County Health Educational and Housing Facilities,
Multi-Family Housing Board Revenue (Cameron Kirby):
5.90%, 7/1/2018 3,000,000 2,979,600
7.25%, 7/1/2023 3,055,000 3,096,884
TEXAS--7.9%
Alliance Airport Authority, Special Facilities Revenue:
8.736%, 4/1/2021 2,500,000 (b,c) 2,288,900
(Federal Express Corp. Project) 6.375%, 4/1/2021 40,000 38,420
Brazo River Authority, PCR
(Utilities Electric Company) 5.55%, 6/1/2030 5,000,000 4,213,400
Dallas-Fort Worth International Airport Facility Improvement
Corporation, Revenue (American Airlines, Inc.)
6.375%, 5/1/2035 7,500,000 7,210,350
Gulf Coast Waste Disposal Authority, Revenue
(Waste Disposal - Valero Energy Corp.) 5.60%, 4/1/2032 6,000,000 5,034,780
Houston Airport System, Special Facilities Improvement
Revenue (Continental Airline Terminal)
6.125%, 7/15/2017
(Guaranteed; Continental Airline, Inc.) 8,375,000 7,837,827
Rio Grande City Consolidated Independent School District
Public Facilities Corporation, LR
6.75%, 7/15/2010 6,000,000 6,256,800
Texas Public Property Finance Corporation, Revenue
(Mental Health and Retardation Center)
8.20%, 10/1/2012 (Prerefunded 10/1/2002) 1,900,000 (a) 2,131,800
Tyler Health Facilities Development Corporation, HR
(Mother Frances Hospital) 5.625%, 7/1/2013 2,680,000 2,427,705
UTAH--2.5%
Carbon County, SWDR:
(East Carbon Development Corp.) 9%, 7/1/2012 3,800,000 3,985,136
(Sunnyside Cogeneration--A) 7.10%, 8/15/2023 7,600,000 7,572,944
(Sunnyside Cogeneration--B) Zero Coupon, 8/15/2024 2,320,000 381,942
VIRGINIA--1.0%
Virginia Housing Development Authority,
Commonwealth Mortgage 5.50%, 1/1/2022 3,000,000 2,796,270
Henrico County Industrial Development Authority,
Solid Waste Revenue (Browning Ferris Industry, Inc.)
5.875%, 3/1/2017 2,000,000 1,773,100
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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WEST VIRGINIA--1.6%
Upshur County, SWDR (TJ International Project)
7%, 7/15/2025 7,000,000 7,438,200
U.S. RELATED-7.5%
Puerto Rico Commonwealth:
6.25%, 7/1/2013 (Insured; MBIA) 3,000,000 3,224,460
5.65%, 7/1/2015 (Insured; MBIA) 690,000 693,864
Puerto Rico Commonwealth (continued):
Public Improvement:
5.50%, 7/1/2012 (Insured; MBIA) 8,000,000 8,105,120
5.50%, 7/1/2013 (Insured; MBIA) 5,000,000 5,016,300
5.25%, 7/1/2014 (Insured; MBIA) 2,925,000 2,818,998
6.50%, 7/1/2014 (Insured; MBIA) 5,000,000 5,469,400
5.25%, 7/1/2015 (Insured; MBIA) 3,000,000 2,862,570
Zero Coupon, 7/1/2015 (Insured; MBIA) 2,400,000 981,120
Puerto Rico Commonwealth Highway and Transportation
Authority, Highway Revenue 5%, 7/1/2036 2,500,000 2,097,150
Puerto Rico Telephone Authority, Revenue 6.44%, 1/25/2007
(Insured; MBIA, Prerefunded 1/1/2003) 3,950,000 (a,b) 4,157,375
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TOTAL INVESTMENTS (cost $470,721,809) 96.6% 456,639,191
CASH AND RECEIVABLES (NET) 3.4% 15,954,159
NET ASSETS 100.0% 472,593,350
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Summary of Abbreviations
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors Assurance
Corporation Insurance Corporation
EDR Economic Development Revenue MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company MSMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue
LR Lease Revenue
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Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
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AAA Aaa AAA 31.6
AA Aa AA .6
A A A 6.3
BBB Baa BBB 24.6
BB Ba BB 7.1
B B B 3.5
Not Rated(e) Not Rated(e) Not Rated(e) 26.3
100.0
(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) SECURITIES 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 OCTOBER 31,
1999, THESE SECURITIES AMOUNTED TO $29,955,009 OR 6.3% OF NET ASSETS.
(D) NON-INCOME PRODUCING SECURITY; INTEREST PAYMENTS IN DEFAULT.
(E) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
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The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 470,721,809 456,639,191
Cash 7,908,684
Receivable for investment securities sold 17,356,283
Interest receivable 8,008,687
Receivable for shares of Beneficial Interest subscribed 85,187
Prepaid expenses 27,986
490,026,018
- -------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 243,080
Due to Distributor 137,092
Payable for investment securities purchased 16,000,000
Payable for shares of Beneficial Interest redeemed 569,404
Accrued expenses 483,092
17,432,668
- -------------------------------------------------------------------------------
NET ASSETS ($) 472,593,350
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 492,656,180
Accumulated net realized gain (loss) on investments (5,980,212)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (14,082,618)
- -------------------------------------------------------------------------------
NET ASSETS ($) 472,593,350
NET ASSET VALUE PER SHARE
Class A Class B Class C
- -------------------------------------------------------------------------------
Net Assets 392,221,235 73,734,665 6,637,450
Shares Outstanding 29,935,692 5,627,288 505,807
- -------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.10 13.10 13.12
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 15,407,211
EXPENSES:
Management fee--Note 3(a) 1,417,783
Shareholder servicing costs--Note 3(c) 829,055
Distribution fees--Note 3(b) 257,214
Registration fees 31,280
Professional fees 23,120
Custodian fees 21,352
Trustees' fees and expenses--Note 3(d) 17,866
Prospectus and shareholders' reports 7,994
Loan commitment fees--Note 2 1,727
Miscellaneous 14,511
TOTAL EXPENSES 2,621,902
INVESTMENT INCOME--NET 12,785,309
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (11,721,334)
Net unrealized appreciation (depreciation) on investments (34,016,896)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (45,738,230)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (32,952,921)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- -------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 12,785,309 27,649,465
Net realized gain (loss) on investments (11,721,334) 8,312,856
Net unrealized appreciation (depreciation)
on investments (34,016,896) (14,148,587)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (32,952,921) 21,813,734
- -------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (10,546,317) (22,022,212)
Class B shares (2,080,917) (5,367,735)
Class C shares (158,075) (259,518)
Net realized gain on investments:
Class A shares -- (6,305,305)
Class B shares -- (1,759,660)
Class C shares -- (100,844)
TOTAL DIVIDENDS (12,785,309) (35,815,274)
- -------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 67,081,134 152,264,177
Class B shares 5,478,375 21,488,965
Class C shares 1,121,464 6,589,948
Dividends reinvested:
Class A shares 5,957,946 16,928,404
Class B shares 1,083,217 4,048,469
Class C shares 36,229 93,487
Cost of shares redeemed:
Class A shares (76,162,894) (174,041,478)
Class B shares (37,252,957) (29,371,046)
Class C shares (1,965,090) (1,389,501)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (34,622,576) (3,388,575)
TOTAL INCREASE (DECREASE) IN NET ASSETS (80,360,806) (17,390,115)
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 552,954,156 570,344,271
END OF PERIOD 472,593,350 552,954,156
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 4,902,640 10,430,316
Shares issued for dividends reinvested 437,463 1,160,521
Shares redeemed (5,570,122) (11,923,145)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 230,019 (332,308)
- -------------------------------------------------------------------------------
CLASS B(A)
Shares sold 393,884 1,467,908
Shares issued for dividends reinvested 79,355 277,529
Shares redeemed (2,700,554) (2,023,258)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,227,315) (277,821)
- -------------------------------------------------------------------------------
CLASS C
Shares sold 82,591 448,068
Shares issued for dividends reinvested 2,659 6,406
Shares redeemed (143,536) (95,671)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (58,286) 358,803
A FOR THE PERIOD ENDED OCTOBER 31, 1999, 1,780,069 CLASS B SHARES REPRESENTING
$24,567,779 WERE AUTOMATICALLY CONVERTED TO 1,781,087 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.33 14.69 14.11 13.85 13.86 13.81
Investment Operations:
Investment income--net .35 .72 .79 .82 .86 .84
Net realized and unrealized gain
(loss) on investments (1.23) (.15) .66 .27 (.01) .05
Total from Investment Operations (.88) .57 1.45 1.09 .85 .89
Distributions:
Dividends from investment
income--net (.35) (.72) (.79) (.82) (.86) (.84)
Dividends from net realized gain
on investments -- (.21) (.08) (.01) -- --
Total Distributions (.35) (.93) (.87) (.83) (.86) (.84)
Net asset value, end of period 13.10 14.33 14.69 14.11 13.85 13.86
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (12.32)(b) 3.96 10.52 8.03 6.08 6.72
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .96(b) .91 .91 .91 .92 .92
Ratio of net investment income
to average net assets 5.33(b) 4.96 5.42 5.84 5.98 6.16
Portfolio Turnover Rate 50.70(c) 46.84 26.33 28.17 36.59 38.60
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 392,221 432,276 447,869 457,327 474,044 495,616
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.33 14.69 14.11 13.85 13.86 13.81
Investment Operations:
Investment income--net .31 .65 .72 .75 .78 .77
Net realized and unrealized gain
(loss) on investments (1.23) (.15) .66 .27 (.01) .05
Total from Investment Operations (.92) .50 1.38 1.02 .77 .82
Distributions:
Dividends from investment
income--net (.31) (.65) (.72) (.75) (.78) (.77)
Dividends from net realized gain
on investments -- (.21) (.08) (.01) -- --
Total Distributions (.31) (.86) (.80) (.76) (.78) (.77)
Net asset value, end of period 13.10 14.33 14.69 14.11 13.85 13.86
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (12.81)(b) 3.43 9.95 7.49 5.53 6.15
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.77(b) 1.42 1.42 1.43 1.43 1.44
Ratio of net investment income
to average net assets 5.60(b) 4.44 4.89 5.33 5.46 5.62
Portfolio Turnover Rate 50.70(c) 46.84 26.33 28.17 36.59 38.60
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 73,735 112,583 119,457 109,485 106,931 99,411
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (Unaudited) (CONTINUED)
- --------------------------------------------------------------------------------
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 14.35 14.71 14.12 13.87 14.28
Investment Operations:
Investment income--net .30 .61 .68 .72 .60
Net realized and unrealized gain (loss)
on investments (1.23) (.15) .67 .26 (.41)
Total from Investment Operations (.93) .46 1.35 .98 .19
Distributions:
Dividends from investment income--net (.30) (.61) (.68) (.72) (.60)
Dividends from net realized gain
on investments -- (.21) (.08) (.01) --
Total Distributions (.30) (.82) (.76) (.73) (.60)
Net asset value, end of period 13.12 14.35 14.71 14.12 13.87
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (13.01)(c) 3.16 9.73 7.16 1.56(c)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.81(c) 1.67 1.69 1.64 1.77(c)
Ratio of net investment income to
average net assets 4.72(c) 4.11 4.55 5.01 4.84(c)
Portfolio Turnover Rate 50.70(d) 46.84 26.33 28.17 36.59
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 6,637 8,095 3,019 1,049 340
(A) FROM JULY 13, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Municipal Bond Fund (the "fund" ) is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal income tax to the extent consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager") serves
as the fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A., which is a wholly-owned subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in each of the following classes of shares: Class A, Class B and
Class C. Class A shares are subject to a sales charge imposed at the time of
purchase, Class B shares are subject to a contingent deferred sales charge ("
CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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. Under the terms of the custody
agreement, the fund receives net earnings credits based on available cash
balances left on deposit.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the 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--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of the borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$7,973 during the period ended October 31, 1999 from commissions earned on sales
of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $229,797 and $27,417, respectively, pursuant to the
Plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets of their shares for the provision of certain services. The services
provided may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $520,409, $114,899 and $9,139, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $78,080 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999 amounted to
$256,345,632 and $308,647,757, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$14,082,618, consisting of $11,965,979 gross unrealized appreciation and
$26,048,597 gross unrealized depreciation.
At October 31, 1999, 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).
For More Information
Dreyfus Premier Municipal Bond Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call your financial representative or 1-800-554-4611
BY MAIL Write to: The Dreyfus Premier Family of Funds 144 Glenn Curtiss
Boulevard Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 022/662SA9910
