File No. 33-9654
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]
Amendment No. 9 [X]
(Check appropriate box or boxes.)
Dreyfus New York Insured Tax Exempt Bond Fund
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212)922-6000
Daniel C. Maclean III, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
----
on (date) pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
X on April 28, 1995 pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new
effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of
its beneficial interest under the Securities Act of 1933 pursuant
to Section 24(f) of the Investment Company Act of 1940.
Registrant's Rule 24f-2 Notice for the fiscal year ended December
31, 1994 was filed on February 15, 1995.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 2
3 Condensed Financial Information 2
4 General Description of Registrant 3, 21
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 21
7 Purchase of Securities Being Offered 11
8 Redemption or Repurchase 15
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-24
13 Investment Objectives and Policies B-2
14 Management of the Fund B-9
15 Control Persons and Principal B-12
Holders of Securities
16 Investment Advisory and Other B-12
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
<PAGE>
Dreyfus New York Insured Tax Exempt Bond Fund
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-24
19 Purchase, Redemption and Pricing B-14, 16, 20
of Securities Being Offered
20 Tax Status *
21 Underwriters B-14
22 Calculations of Performance Data B-23
23 Financial Statements B-47
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-4
Common Control with Registrant
26 Number of Holders of Securities C-4
27 Indemnification C-4
28 Business and Other Connections of C-5
Investment Adviser
29 Principal Underwriters C-29
30 Location of Accounts and Records C-38
31 Management Services C-38
32 Undertakings C-38
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
<PAGE>
PROSPECTUS May 1, 1995
Dreyfus New York Insured Tax Exempt Bond Fund
Dreyfus New York Insured Tax Exempt Bond Fund (the "Fund")
is an open-end, non-diversified, management investment company,
known as a municipal bond fund. Its goal is to provide you with
as high a level of current income exempt from Federal, New York
State and New York City income taxes as is consistent with the
preservation of capital. The Fund invests primarily in a
portfolio of New York Municipal Obligations (as defined below)
that are insured as to the timely payment of principal and
interest by recognized insurers of Municipal Obligations.
You can invest, reinvest or redeem shares at any time
without charge or penalty imposed by the Fund.
The Fund provides free redemption checks, which you can use
in amounts of $500 or more for cash or to pay bills. You continue
to earn income on the amount of the check until it clears. You
can purchase or redeem shares by telephone using Dreyfus
TeleTransfer.
The Dreyfus Corporation professionally manages the Fund's
portfolio.
The Fund bears certain costs of advertising, administration
and/or distribution pursuant to a plan adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940.
This Prospectus sets forth concisely information about the
Fund that you should know before investing. It should be read and
retained for future reference.
The Statement of Additional Information, dated May 1, 1995,
which may be revised from time to time, provides a further
discussion of certain areas in this Prospectus and other matters
which may be of interest to some investors. It has been filed
with the Securities and Exchange Commission and is incorporated
herein by reference. For a free copy, write to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
1-800-645-6561. When telephoning, ask for Operator 666.
Mutual fund shares are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and are not federally
insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. The net asset value of funds
of this type fluctuate from time to time.
TABLE OF CONTENTS
Page
Annual Fund Operating Expenses 3
Condensed Financial Information 4
Description of the Fund 4
Management of the Fund 14
How to Buy Fund Shares 15
Shareholder Services 16
How to Redeem Fund Shares 19
Service Plan 22
Dividends, Distributions and Taxes 22
Performance Information 24
General Information 25
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
[This Page Intentionally Left Blank]
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
<S> <C> <C> <C> <C>
Management Fees .60%
12b-1 Fees (distribution and servicing) .26%
Other Expenses .12%
Total Fund Operating Expenses 98%
Example: 1 Year 3 Years 5 Years 10 Years
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $10 $31 $54 $120
</TABLE>
The amounts listed in the example should not be considered as
representative of past or future expenses and actual expenses may
be greater or less than those indicated. Moreover, while the
example assumes a 5% annual return, the Fund's actual performance
will vary and may result in an actual return greater or less than
5%.
The purpose of the foregoing table is to assist you in
understanding the various costs and expenses borne by the Fund,
and therefore indirectly by investors, the payment of which will
reduce investors' return on an annual basis. Long-term investors
could pay more in 12b-1 fees than the economic equivalent of
paying a front-end sales charge. The information in the foregoing
table does not reflect any fee waiver or expense reimbursement
arrangements that may be in effect. Certain Service Agents (as
defined below) may charge their clients direct fees for effecting
transactions in Fund shares; such fees are not reflected in the
foregoing table. See "Management of the Fund" and "Service
Plan."
<PAGE>
Condensed Financial Information
The information in the following table has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report
thereon appears in the Statement of Additional Information.
Further financial data and related notes are included in the
Statement of Additional Information, available upon
request.
Financial Highlights
Contained below is per share operating performance data for a
share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data
for each year indicted. This information has been derived from
the Fund's financial statements.
<TABLE>
<CAPTION>
Year Ended December 31,
1987(1) 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:
Net asset value, beginning of year $12.50 $10.17 $10.56 $10.75 $10.64 $11.33 $11.60 $12.04
Investment Operations:
Investment income-net .64 .73 .71 .72 .66 .63 .60 .60
Net realized and unrealized gain
(loss) on investments (2.33) .39 .19 (.11) .69 .31 .66 (1.39)
Total from Investment Operations (1.69) 1.12 .90 .61 1.35 .94 1.26 (.79)
Distributions:
Dividends from investment income-net (.64) (.73) (.71) (.72) (.66) (.63) (.60) (.59)
Dividends from net realized
gain on investments -- -- -- -- -- (.04) (.22) --
Total Distributions (.64) (.73) (.71) (.72) (.66) (.67) (.82) (.59)
Net asset value, end of year $10.17 $10.56 $10.75 $10.64 $11.33 $11.60 $12.04 $10.66
TOTAL INVESTMENT RETURN (15.62%)(2) 11.32% 8.76% 5.91% 13.06% 8.55% 11.08% (6.62%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- .23% .50% .50% .88% .90% .96% .98%
Ratio of net investment income
to average net assets 7.12%(2) 7.00% 6.64% 6.74% 6.01% 5.49% 5.01% 5.31%
Decrease reflected in above expense
ratios due to undertakings by The
Dreyfus Corporation (limited to the
expense limitation provision of the
management agreement) 1.50%(2) 1.27% .72% .61% .71% .11% .02% .01%
Portfolio Turnover Rate 48.74%(3) 32.10% 54.18% 63.12% 15.95% 16.12% 19.89% 12.79%
Net Assets, end of year (000's Omitted) $25,768 $44,619 $66,384 $92,259 $147,527 $180,326 $198,257 $151,696
</TABLE>
________
(1) From February 18, 1987 (commencement of operations) to
December 31, 1987.
(2) Annualized.
(3) Not annualized.
Further information about the Fund's performance is contained
in the Fund's annual report, which may be obtained without charge
by writing to the address or calling the number set forth on the
cover page of this Prospectus.
Description of the Fund
Investment Objective - The Fund's goal is to provide you with as
high a level of current income exempt from Federal, New York
State and New York City income taxes as is consistent with the
preservation of capital. To accomplish this goal, the Fund
invests primarily in the debt securities of the State of New
York, its political subdivisions, authorities and corporations,
the interest from which is, in the opinion of bond counsel to the
issuer, exempt from Federal, New York State and New York City
income taxes (collectively, "New York Municipal Obligations")
that are insured as to the timely payment of principal and
interest by recognized insurers of Municipal Obligations (as
defined below). To the extent acceptable insured New York
Municipal Obligations are at any time unavailable for investment
by the Fund, the Fund will invest temporarily in New York
Municipal Obligations that are not subject to insurance, insured
Municipal Obligations and/ or other debt securities the interest
from which is, in the opinion of bond counsel to the issuer,
exempt from Federal income tax. The Fund's investment objective
cannot be changed without approval by the holders of a majority
(as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. There can be no assurance that the
Fund's investment objective will be achieved.
Municipal Obligations - Debt securities the interest from which
is, in the opinion of bond counsel to the issuer, exempt from
Federal income tax ("Municipal Obligations") generally include
debt obligations issued to obtain funds for various public
purposes as well as certain industrial development bonds issued
by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of
its faith, credit and taxing power for the payment of principal
and interest. Revenue bonds are payable from the revenue derived
from a particular facility or class of facilities or, in some
cases, from the proceeds of a special excise or other specific
revenue source, but not from the general taxing power. Tax exempt
industrial development bonds, in most cases, are revenue bonds
and generally do not carry the pledge of the credit of the
issuing municipality, but generally are guaranteed by the
corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues. Municipal
Obligations include municipal lease/purchase agreements which are
similar to installment purchase contracts for property or
equipment issued by municipalities. Municipal Obligations bear
fixed, floating or variable rates of interest, which are
determined in some instances by formulas under which the
Municipal Obligation's interest rate will change directly or
inversely to changes in interest rates or an index, or multiples
thereof, in many cases subject to a maximum and minimum. Certain
Municipal Obligations are subject to redemption at a date earlier
than their stated maturity pursuant to call options, which may be
separated from the related Municipal Obligation and purchased and
sold separately.
Management Policies - It is a fundamental policy of the Fund
that it will invest at least 80% of the value of its net assets
(except when maintaining a temporary defensive position)
in Municipal Obligations. Generally, at least 65% of the value of
the Fund's net assets (except when maintaining a temporary
defensive position) will be invested in bonds, debentures and
other debt instruments that are insured New York Municipal
Obligations. See "Insurance Feature" and "Risk Factors
Investing in New York Municipal Obligations" below, and
"Dividends, Distributions and Taxes."
The Municipal Obligations
purchased by the Fund will be rated no lower than Baa by Moody's
Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
Corporation ("S&P") or Fitch Investors Service, Inc. ("Fitch").
Municipal Obligations rated BBB by S&P or Fitch or Baa by Moody's
are considered investment grade obligations; those rated BBB by
S&P and Fitch are regarded as having an adequate capacity to pay
principal and interest, while those rated Baa by Moody's are
considered medium grade obligations which lack outstanding
investment characteristics and have speculative characteristics
as well. See "Appendix B" in the Statement of Additional
Information. The Fund also may invest in securities which, while
not rated, are determined by The Dreyfus Corporation to be of
comparable quality to the rated securities in which the Fund may
invest. The Fund also may invest in Taxable Investments of the
quality described below.
The Fund may invest more than 25% of the value of its total
assets in Municipal Obligations which are related in such a way
that an economic, business or political development or change
affecting one such security also would affect the other
securities; for example, securities the interest upon which is
paid from revenues of similar types of projects. As a result, the
Fund may be subject to greater risk as compared to a fund that
does not follow this practice.
From time to time, the Fund may invest more than 25% of the
value of its total assets in industrial development bonds which,
although issued by industrial development authorities, may be
backed only by the assets and revenues of the non-governmental
users. Interest on Municipal Obligations (including certain
industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a preference item for the
purpose of the alternative minimum tax. Where a regulated
investment company receives such interest, a proportionate share
of any exempt-interest dividend paid by the investment company
may be treated as such a preference item to shareholders. The
Fund will invest no more than 20% of the value of its net assets
in Municipal Obligations the interest from which gives rise to a
preference item for the purpose of the alternative minimum tax
and, except for temporary defensive purposes, in other
investments subject to Federal income tax. See "Risk Factors -
Other Investment Considerations" below.
The Fund may purchase floating and variable rate demand
notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit
the holder to demand payment of principal at any time or at
specified intervals. Variable rate demand notes include master
demand notes which are obligations that permit the Fund to invest
fluctuating amounts at varying rates of interest, pursuant to
direct arrangements between the Fund, as lender, and the
borrower. These obligations permit daily changes in the amount
borrowed. Frequently, such obligations are secured by letters of
credit or other credit support arrangements provided by banks.
Use of letters of credit or other credit support arrangements
will not adversely affect the tax exempt status of these
obligations. Because these obligations are direct lending
arrangements between the lender and borrower, it is not
contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus
accrued interest. Accordingly, where these obligations are not
secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand.
Each obligation purchased by the Fund will meet the quality
criteria established for the purchase of Municipal Obligations.
The Dreyfus Corporation, on behalf of the Fund, will consider on
an ongoing basis the creditworthiness of the issuers of the
floating and variable rate demand obligations in the Fund's
portfolio.
The Fund may purchase from financial institutions
participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase
agreements). A participation interest gives the Fund an undivided
interest in the Municipal Obligation in the proportion that the
Fund's participation interest bears to the total principal amount
of the Municipal Obligation. These instruments may have fixed,
floating or variable rates of interest. If the participation
interest is unrated, or has been given a rating below that which
otherwise is permissible for purchase by the Fund, the
participation interest will be backed by an irrevocable letter of
credit or guarantee of a bank that the Board of Trustees has
determined meets the prescribed quality standards for banks set
forth below, or the payment obligation otherwise will be
collateralized by U.S. Government securities. For certain
participation interests, the Fund will have the right to demand
payment, on not more than seven days' notice, for all or any part
of the Fund's participation interest in the Municipal Obligation,
plus accrued interest. As to these instruments, the Fund intends
to exercise its right to demand payment only upon a default under
the terms of the Municipal Obligation, as needed to provide
liquidity to meet redemptions, or to maintain or improve the
quality of its investment portfolio.
The Fund may purchase custodial receipts representing the
right to receive certain future principal and interest payments
on Municipal Obligations which underlie the custodial receipts. A
number of different arrangements are possible. In a typical
custodial receipt arrangement, an issuer or a third party owner
of Municipal Obligations deposits such obligations with a
custodian in exchange for two classes of custodial receipts. The
two classes have different characteristics, but, in each case,
payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the
characteristics of a typical auction rate security, where at
specified intervals its interest rate is adjusted, and ownership
changes, based on an auction mechanism. This class's interest
rate generally is expected to be below the coupon rate of the
underlying Municipal Obligations and generally is at a level
comparable to that of a Municipal Obligation of similar quality
and having a maturity equal to the period between interest rate
adjustments. The second class bears interest at a rate that
exceeds the interest rate typically borne by a security of
comparable quality and maturity; this rate also is adjusted, but
in this case inversely to changes in the rate of interest of the
first class. If the interest rate on the first class exceeds the
coupon rate of the underlying Municipal Obligations, its interest
rate will exceed the rate paid on the second class. In no event
will the aggregate interest paid with respect to the two classes
exceed the interest paid by the underlying Municipal Obligations.
The value of the second class and similar securities should be
expected to fluctuate more than the value of a Municipal
Obligation of comparable quality and maturity and their purchase
by the Fund should increase the volatility of its net asset value
and, thus, its price per share. These custodial receipts are sold
in private placements. The Fund also may purchase directly from
issuers, and not in a private placement, Municipal Obligations
having characteristics similar to custodial receipts. These
securities may be issued as part of a multiclass offering, and
the interest rate on certain classes may be subject to a cap or
floor.
The Fund may invest up to 15% of the value of its net assets
in
securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that
are not readily marketable, such as certain securities that are
subject to legal or contractual restrictions on resale, and
repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to
a risk that should the Fund desire to sell them when a ready
buyer is not available at a price that the Fund deems
representative of their value, the value of the Fund's net assets
could be adversely affected.
The Fund may acquire "stand-by commitments" with respect to
Municipal Obligations held in its portfolio. Under a stand-by
commitment, the Fund obligates a broker, dealer or bank to
repurchase at the Fund's option specified securities at a
specified price and, in this respect, stand-by commitments are
comparable to put options. The exercise of a stand-by commitment,
therefore, is subject to the ability of the seller to make
payment on demand. The Fund will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to
exercise its rights thereunder for trading purposes. The Fund may
pay for stand-by commitments if such action is deemed necessary,
thus increasing to a degree the cost of the underlying Municipal
Obligation and similarly decreasing such security's yield to
investors. Gains realized in connection with stand-by commitments
will be taxable. The Fund also may acquire call options on
specific Municipal Obligations. The Fund generally would purchase
these call options to protect the Fund from the issuer of the
related Municipal Obligation redeeming, or other holder of the
call option from calling away, the Municipal Obligation before
maturity. The sale by the Fund of a call option that it owns on a
specific Municipal Obligation could result in the receipt of
taxable income by the Fund.
The Fund may purchase tender option bonds. A tender option
bond is a Municipal Obligation (generally held pursuant to a
custodial arrangement) having a relatively long maturity and
bearing interest at a fixed rate substantially higher than the
prevailing short-term tax exempt rates, that has been coupled
with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which
such institution grants the security holders the option, at
periodic intervals, to tender their securities to the institution
and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic
fees equal to the difference between the Municipal Obligation's
fixed coupon rate and the rate, as determined by a remarketing or
similar agent at or near the commencement of such period, that
would cause the securities, coupled with the tender option, to
trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a
demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of
the Fund, will consider on an ongoing basis the creditworthiness
of the issuer of the underlying Municipal Obligations, of any
custodian and of the third party provider of the tender option.
In certain instances and for certain tender option bonds, the
option may be terminable in the event of a default in payment of
principal or interest on the underlying Municipal Obligations and
for other reasons.
From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value
of the Fund's net assets) or for temporary defensive purposes,
the Fund may invest in taxable short-term investments ("Taxable
Investments") consisting of: notes of issuers having, at the time
of purchase, a quality rating within the two highest grades of
Moody's, S&P or Fitch; obligations of the U.S. Government, its
agencies or instrumentalities; commercial paper not rated lower
than P-1 by Moody's, A-l by S&P or F-l by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of
domestic banks, with net assets of one billion dollars or more;
time deposits; bankers' acceptances and other short-term bank
obligations; and repurchase agreements in respect of any of the
foregoing. Dividends paid by the Fund that are attributable to
income earned by the Fund from Taxable Investments will be
taxable to investors. See "Dividends, Distributions and Taxes."
Except for temporary defensive purposes, at no time will more
than 20% of the value of the Fund's net assets be invested in
Taxable Investments and Municipal Obligations the interest from
which gives rise to a preference item for the purpose of the
alternative minimum tax. When the Fund has adopted a temporary
defensive position, including when acceptable New York Municipal
Obligations are unavailable for investment by the Fund, in excess
of 35% of the Fund's net assets may be invested in securities
that are not exempt from New York State and New York City income
taxes. Under normal market conditions, the Fund anticipates that
not more than 5% of the value of its total assets will be
invested in any one category of Taxable Investments. Taxable
Investments are more fully described in the Statement of
Additional Information, to which reference hereby is made.
From time to time, the Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions
needing to borrow securities to complete certain transactions.
Such loans may not exceed 331/3% of the value of the Fund's total
assets. In connection with such loans, the Fund will receive
collateral consisting of cash, U.S. Government securities or
irrevocable letters of credit which will be maintained at all
times in an amount equal to at least 100% of the current market
value of the loaned securities. The Fund can increase its income
through the investment of such collateral. The Fund continues to
be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be terminable
at any time upon specified notice. The Fund might experience risk
of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Fund.
As a fundamental policy, the Fund is permitted to borrow to
the extent permitted under the Investment Company Act of 1940.
However, the Fund currently intends to borrow money only for
temporary or emergency (not leveraging) purposes, in an amount up
to 15% of the value of the Fund's total assets (including the
amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total
assets, the Fund will not make any additional investments.
Certain Fundamental Policies - The Fund may: (i) borrow money to
the extent permitted under the Investment Company Act of 1940,
which currently limits borrowing to no more than 33 1/3% of the
value of the Fund's total assets; and (ii) invest up to 25% of
its total assets in the securities of issuers in any industry,
provided that there is no such limitation on investments in
Municipal Obligations and, for temporary defensive purposes, in
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without approval by
the holders of a majority (as defined in the Investment Company
Act of 1940) of the Fund's outstanding voting shares. See
"Investment Objective and Management Policies - Investment
Restrictions" in the Statement of Additional Information.
Certain Additional Non-Fundamental Policies - The Fund may (i)
pledge, hypothecate, mortgage or otherwise encumber its assets,
but only to secure permitted borrowings; and (ii) invest up to
15% of the value of its net assets in repurchase agreements
providing for settlement in more than seven days after notice and
in other illiquid securities (which securities could include
participation interests (including municipal lease/purchase
agreements) that are not subject to the demand feature described
above, and floating and variable rate demand obligations as to
which the Fund cannot exercise the related demand feature
described above and as to which there is no secondary market).
See "Investment Objective and Management Policies - Investment
Restrictions" in the Statement of Additional Information.
Insurance Feature - At the time they are purchased by the Fund,
the Municipal Obligations held in the Fund's portfolio that are
subject to insurance will be insured as to timely payment of
principal and interest under an insurance policy (i) purchased by
the Fund or by a previous owner of the Municipal Obligation
("Mutual Fund Insurance") or (ii) obtained by the issuer or
underwriter of the Municipal Obligation ("New Issue Insurance").
The insurance of principal refers to the face or par value of the
Municipal Obligation and is not affected by nor does it insure
the price paid therefor by the Fund or the market value thereof.
The value of Fund shares is not insured.
New Issue Insurance is obtained by the issuer of the
Municipal Obligations and all premiums respecting such securities
are paid in advance by such issuer. Such policies are
non-cancellable and continue in force so long as the Municipal
Obligations are outstanding and the insurer remains in business.
Certain types of Mutual Fund Insurance obtained by the Fund
are
effective only so long as the Fund is in existence, the insurer
remains in business and the Municipal Obligations described in
the policy continue to be held by the Fund. The Fund will pay the
premiums with respect to such insurance. Depending upon the terms
of the policy, in the event of a sale of any Municipal Obligation
so insured by the Fund, the Mutual Fund Insurance may terminate
as to such Municipal Obligation on the date of sale and in such
event the insurer may be liable only for those payments of
principal and interest which then are due and owing. Other types
of Mutual Fund Insurance may not have this termination feature.
The Fund may purchase Municipal Obligations with this type of
insurance from parties other than the issuer and the insurance
would continue for the Fund's benefit.
Typically, the insurer may not withdraw coverage on insured
securities held by the Fund, nor may the insurer cancel the
policy for any reason except failure to pay premiums when due.
The insurer may reserve the right at any time upon 90 days'
written notice to the Fund to refuse to insure any additional
Municipal Obligations purchased by the Fund after the effective
date of such notice. The Fund's Board of Trustees has reserved
the right to terminate the Mutual Fund Insurance policy if it
determines that the benefits to the Fund of having its portfolio
insured are not justified by the expense involved. See "Risk
Factors -- Special Investment Considerations" below.
Mutual Fund Insurance and New Issue Insurance may be obtained
from Financial Guaranty Insurance Company ("Financial Guaranty"),
Municipal Bond Investors Assurance Corporation ("MBIA"), AMBAC
Indemnity Corporation ("AMBAC Indemnity") and Capital Guaranty
Insurance Company ("Capital Guaranty"), although the Fund may
purchase insurance from, or Municipal Obligations insured by,
other insurers.
The following information regarding these insurers has been
derived from information furnished by the insurers. The Fund has
not independently verified any of the information, but the Fund
is not aware of facts which would render such information
inaccurate.
Financial Guaranty is a New York stock insurance company
regulated by the New York State Department of Insurance and
authorized to provide insurance in 50 states and the District of
Columbia. Financial Guaranty is a wholly-owned subsidiary of FGIC
Corporation, a Delaware holding company, which is a wholly-owned
subsidiary of General Electric Capital Corporation. Financial
Guaranty, in addition to providing insurance for the payment of
interest on and principal of Municipal Obligations held in unit
investment trust and mutual fund portfolios, provides New Issue
Insurance and insurance for secondary market issues of Municipal
Obligations and for portions of new and secondary market issues
of Municipal Obligations. As of December 31, 1994, Financial
Guaranty reported total capital and surplus of approximately $___
million and admitted assets of approximately $___ billion. The
claims-paying ability of Financial Guaranty is rated "AAA" by
S&P, "Aaa" by Moody's and "AAA" by Fitch.
MBIA is the principal operating subsidiary of MBIA Inc., the
principal shareholders of which are the Aetna Casualty and Surety
Company and Credit Local de France, CAECL S.A. Approximately 11%
of the outstanding common stock of MBIA Inc. is owned by such
shareholders and the remainder is publicly-held. Neither MBIA
Inc. nor its shareholders are obligated to pay the debts of or
claims against MBIA. MBIA is a limited liability corporation
domiciled in New York and licensed to do business in 50 states
and the District of Columbia. As of December 31, 1994, MBIA had
admitted assets of approximately $__ billion, total liabilities
of approximately $__ billion and total capital and surplus of
approximately $__ million. The claims-paying ability of MBIA is
rated "AAA" by S&P and "Aaa" by Moody's.
AMBAC Indemnity is a Wisconsin-domiciled stock insurance
company, regulated by the Insurance Department of the State of
Wisconsin and licensed to do business in 50 states, the District
of Columbia and the Commonwealth of Puerto Rico. AMBAC Indemnity
is a wholly-owned subsidiary of AMBAC Inc., a publicly-held
company. AMBAC Indemnity had admitted assets of approximately $__
billion and statutory capital of approximately $__ billion as of
December 31, 1994. Statutory capital consists of AMBAC
Indemnity's statutory contingency reserve and policyholders'
surplus. The claims-paying ability of AMBAC Indemnity is rated
"AAA" by S&P and "Aaa" by Moody's.
Capital Guaranty is an "Aaa/AAA" rated monoline stock
insurance company incorporated in the State of Maryland, and is a
wholly-owned subsidiary of Capital Guaranty Corporation, a
publicly-owned Maryland insurance holding company, the shares of
which are traded on the New York Stock Exchange. Capital Guaranty
is authorized to provide insurance in 49 states, the District of
Columbia and three U.S. territories. As of December 31, 1994, the
total statutory policyholders' surplus and contingency reserve of
Capital Guaranty was $___ million and the total admitted assets
were $___ million.
Additional information concerning the insurance feature appears
in the Statement of Additional Information to which your
attention is directed.
Risk Factors - Investing in New York Municipal Obligations - You
should consider carefully the special risks inherent in the
Fund's investment in New York Municipal Obligations. These risks
result from the financial condition of New York State, certain of
its public bodies and municipalities and New York City. Beginning
in early 1975, New York State, New York City and other State
entities faced serious financial difficulties which jeopardized
the credit standing and impaired the borrowing abilities of such
entities and contributed to high interest rates on, and lower
market prices for, debt obligations issued by them. A recurrence
of such financial difficulties or a failure of certain financial
recovery programs could result in defaults or declines in the
market values of various New York Municipal Obligations in which
the Fund may invest. If there should be a default or other
financial crisis relating to New York State, New York City, a
State or City agency, or a State municipality, the market value
and marketability of outstanding New York Municipal Obligations
in the Fund's portfolio and the interest income to the Fund could
be adversely affected. Moreover, the significant slowdown in the
New York and regional economy in the early 1990's added
substantial uncertainty to estimates of the State's tax revenues,
which, in part, caused the State to overestimate its General Fund
tax receipts in the 1992 fiscal year by $575 million. The 1992
fiscal year was the fourth consecutive year in which the State
incurred a cash-basis operating deficit in the General Fund and
issued deficit notes. The State's 1993 and 1994 fiscal years,
however, were characterized by national and regional economies
that performed better than projected. After reflecting a 1993
year-end deposit to the State's refund reserve account of $671
million, reported 1992-93 General Fund receipts were $45 million
higher than originally projected in April 1992. The State
completed the 1994 fiscal year with an operating surplus in the
General Fund of $914 million. In September 1994, however, the
State projected a General Fund operating deficit of $690 million
for the 1995 fiscal year. There can be no assurance that New York
will not face substantial potential budget gaps in future years.
In January 1992, Moody's lowered from A to Baal its ratings of
certain appropriation-backed debt of New York State and its
agencies. The State's general obligation, state-guaranteed and
New York State Local Government Assistance Corporation bonds
continued to be rated A by Moody's. In January 1992, S&P lowered
from A to A- its ratings of New York State general obligation
bonds and stated that it continued to assess the ratings outlook
as negative. S&P also lowered its ratings of various agency debt,
State moral obligations, contractual obligations, lease purchase
obligations and State guarantees. In February 1991, Moody's
lowered its rating of New York City's general obligation bonds
from A to Baal. The rating changes reflected the rating agencies'
concerns about the financial condition of New York State and
City, the heavy debt load of the State and City and economic
uncertainties in the region. You should obtain and review a copy
of the Statement of Additional Information which more fully sets
forth these and other risk factors.
Special Investment Considerations - The insurance feature is
intended to reduce financial risk, but the cost thereof and the
restrictions on investments imposed by the guidelines in the
insurance policy will result in a reduction in the yield on the
Municipal Obligations purchased by the Fund.
Because coverage under certain
Mutual Fund Insurance policies may terminate upon sale of a
security from the Fund's portfolio, insurance with this
termination feature should not be viewed as assisting the
marketability of securities in the Fund's portfolio, whether or
not the securities are in default or subject to a serious risk of
default. The Dreyfus Corporation intends to retain any Municipal
Obligations subject to such insurance which are in default or, in
the view of The Dreyfus Corporation, in significant risk of
default and to recommend to the Board of Trustees that the Fund
place a value on the insurance which will be equal to the
difference between the market value of the defaulted security and
the market value of similar securities of minimum investment
grade (i.e., rated Baa by Moody's or BBB by S&P or Fitch) which
are not in default. To the extent that the Fund holds defaulted
securities subject to Mutual Fund Insurance with this termination
feature, it may be limited in its ability in certain
circumstances to purchase other Municipal Obligations. While a
defaulted Municipal Obligation is held in the Fund's portfolio,
the Fund continues to pay the insurance premium thereon but also
is entitled to collect interest payments from the insurer and
retains the right to collect the full amount of principal from
the insurer when the security comes due.
Unlike certain
Mutual Fund Insurance policies, New Issue Insurance does not
terminate with respect to a Municipal Obligation once it is sold
by the Fund. Therefore, the Fund expects that the market value,
and thus the marketability, of a defaulted security covered by
New Issue Insurance generally will be greater than the market
value of an otherwise comparable defaulted security covered by
Mutual Fund Insurance with the termination feature. The Fund, at
its option, may purchase from Financial Guaranty secondary market
insurance ("Secondary Market Insurance") on any Municipal
Obligation purchased by the Fund. By purchasing Secondary Market
Insurance, the Fund would obtain, upon payment of a single
premium, insurance against nonpayment of scheduled principal and
interest for the remaining term of the Municipal Obligation
regardless of whether the Fund then owned such security. Such
insurance coverage would be non-cancellable and would continue in
force so long as the security so insured is outstanding and the
insurer remains in business. The purpose of acquiring Secondary
Market Insurance would be to enable the Fund to sell a Municipal
Obligation to a third party as a high rated insured Municipal
Obligation at a market price greater than what otherwise might be
obtainable if the security were sold without the insurance
coverage.
Other Investment Considerations - Even though
interest-bearing securities are investments which promise a
stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore,
are subject to the risk of market price fluctuations. Certain
securities that may be purchased by the Fund, such as those with
interest rates that fluctuate directly or indirectly based on
multiples of a stated index, are designed to be highly sensitive
to changes in interest rates and can subject the holders thereof
to extreme reductions of yield and possibly loss of principal.
The values of fixed-income securities also may be affected by
changes in the credit rating or financial condition of the
issuing entities. Once the rating of a portfolio security has
been changed, the Fund will consider all circumstances deemed
relevant in determining whether to continue to hold the security.
Certain securities purchased by the Fund, such as those rated Baa
by Moody's and BBB by S&P and Fitch, may be subject to such risk
with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated
fixed-income securities. Obligations which are rated Baa are
considered medium grade obligations; they are neither highly
protected nor poorly secured, and are considered by Moody's to
have speculative characteristics. Bonds rated BBB by S&P are
regarded as having adequate capacity to pay interest and repay
principal, and while such bonds normally exhibit adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to
pay interest and repay principal for bonds in this category than
in higher rated categories. Bonds rated BBB by Fitch are
considered to be of satisfactory credit quality; while the
obligor's ability to pay interest and repay principal is
considered to be adequate, adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. See
"Appendix B" in the Statement of Additional Information. The
Fund's net asset value generally will not be stable and should
fluctuate based upon changes in the value of the Fund's portfolio
securities.
New issues of Municipal Obligations usually are
offered on a when-issued basis, which means that delivery and
payment for such Municipal Obligations ordinarily take place
within 45 days after the date of the commitment to purchase. The
payment obligation and the interest rate that will be received on
the Municipal Obligations are fixed at the time the Fund enters
into the commitment. The Fund will make commitments to purchase
such Municipal Obligations only with the intention of actually
acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable, although
any gain realized on such sale would be taxable. The Fund will
not accrue income in respect of a when-issued security prior to
its stated delivery date. No additional when-issued commitments
will be made if more than 20% of the value of the Fund's net
assets would be so committed.
Municipal Obligations purchased on
a when-issued basis and the securities held in the Fund's
portfolio are subject to changes in value (both generally
changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the
public's perception of the creditworthiness of the issuer and
changes, real or anticipated, in the level of interest rates.
Municipal Obligations purchased on a when-issued basis may expose
the Fund to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing Municipal Obligations
on a when-issued basis can involve the additional risk that the
yield available in the market when the delivery takes place
actually may be higher than that obtained in the transaction
itself. A segregated account of the Fund consisting of cash, cash
equivalents or U.S. Government securities or other high quality
liquid debt securities at least equal at all times to the amount
of the when-issued commitments will be established and maintained
at the Fund's custodian bank. Purchasing Municipal Obligations on
a when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value
of the Fund's net assets and its net asset value per share.
Certain municipal lease/purchase obligations in which the
Fund
may invest may contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease payments in
future years unless money is appropriated for such purpose on a
yearly basis. Although "non-appropriation" lease/purchase
obligations are secured by the leased property, disposition of
the leased property in the event of foreclosure might prove
difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus
Corporation will consider, on an ongoing basis, a number of
factors including the likelihood that the issuing municipality
will discontinue appropriating funding for the leased property.
Certain provisions in the Code relating to the issuance of
Municipal Obligations may reduce the volume of Municipal
Obligations qualifying for Federal tax exemption. One effect of
these provisions could be to increase the cost of the Municipal
Obligations available for purchase by the Fund and thus reduce
available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the
Fund. Proposals that may restrict or eliminate the income tax
exemption for interest on Municipal Obligations may be introduced
in the future. If any such proposal were enacted that would
reduce the availability of Municipal Obligations for investment
by the Fund so as to adversely affect Fund shareholders, the Fund
would reevaluate its investment objective and policies and submit
possible changes in the Fund's structure to shareholders for
their consideration. If legislation were enacted that would treat
a type of Municipal Obligation as taxable, the Fund would treat
such security as a permissible Taxable Investment within the
applicable limits set forth herein.
The Fund's classification
as a "non-diversified" investment company means that the
proportion of the Fund's assets that may be invested in the
securities of a single issuer is not limited by the Investment
Company Act of 1940. A "diversified" investment company is
required by the Investment Company Act of 1940 generally to
invest, with respect to 75% of its total assets, not more than 5%
of such assets in the securities of a single issuer. However, the
Fund intends to conduct its operations so as to qualify as a
"regulated investment company" for purposes of the Code which
requires that, at the end of each quarter of its taxable year,
(i) at least 50% of the market value of the Fund's total assets
be invested in cash, U.S. Government securities, the securities
of other regulated investment companies and other securities,
with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater than 5% of
the value of the Fund's total assets, and (ii) not more than 25%
of the value of its total assets be invested in the securities of
any one issuer (other than U.S. Government securities or the
securities of other regulated investment companies). Since a
relatively high percentage of the Fund's assets may be invested
in the obligations of a limited number of issuers, the Fund's
portfolio securities may be more susceptible to any single
economic, political or regulatory occurrence than the portfolio
securities of a diversified investment company.
Investment
decisions for the Fund are made independently from those of other
investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or
desire to dispose of, Municipal Obligations or Taxable
Investments at the same time as the Fund, available investments
or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
Management of the Fund
The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the
Fund's investment adviser. The Dreyfus Corporation is a
wholly-owned subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of December 31, 1994, The Dreyfus Corporation managed or
administered approximately $70 billion in assets for more than
1.9 million investor accounts nationwide.
The Dreyfus
Corporation supervises and assists in the overall management of
the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Trustees
in accordance with Massachusetts law. The Fund's primary
portfolio manager is L. Lawrence Troutman. He has held that
position since February 18, 1986 and has been employed by The
Dreyfus Corporation since 1985. The Fund's other portfolio
managers are identified under "Management of the Fund" in the
Fund's Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund as well
as for other funds advised by The Dreyfus Corporation through a
professional staff of portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under
the Federal Bank Holding Company Act of 1956, as amended. Mellon
provides a comprehensive range of financial products and services
in domestic and selected international markets. Mellon is among
the twenty-five largest bank holding companies in the United
States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National
Association, Mellon Bank (MD), The Boston Company, Inc., AFCO
Credit Corporation and a number of companies known as Mellon
Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $193
billion in assets as of December 31, 1994, including
approximately $70 billion in mutual fund assets. As of December
31, 1994, various subsidiaries of Mellon provided non-investment
services, such as custodial or administration services, for
approximately $654 billion in assets, including approximately $74
billion in mutual fund assets.
Under the terms of the
Management Agreement, the Fund has agreed to pay The Dreyfus
Corporation a monthly fee at the annual rate of .60 of 1% of the
value of the Fund's average daily net assets. From time to time,
The Dreyfus Corporation may waive receipt of its fees and or
voluntarily assume certain expenses of the Fund, which would have
the effect of lowering the Fund's overall expense ratio and
increasing yield to investors at the time such amounts are waived
or assumed, as the case may be. The Fund will not pay The Dreyfus
Corporation at a later time for any amounts it may waive, nor
will the Fund reimburse The Dreyfus Corporation for any amounts
it may assume. For the fiscal year ended December 31, 1994, the
Fund paid The Dreyfus Corporation a monthly management fee at the
effective annual rate of .58 of 1% of the value of the Fund's
average daily net assets pursuant to undertakings by The Dreyfus
Corporation.
The Dreyfus Corporation may pay the Fund's
distributor for shareholder services from The Dreyfus
Corporation's own assets, including past profits but not
including the management fee paid by the Fund. The Fund's
distributor may use part or all of these payments to pay Service
Agents in respect of these services.
The Fund bears certain
costs of distributing Fund shares in accordance with a plan (the
"Service Plan") adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. See "Annual Fund Operating
Expenses" and "Service Plan."
The Fund's distributor is Premier
Mutual Fund Services, Inc. (the "Distributor"), located at One
Exchange Place, Boston, Massachusetts 02109. The Distributor 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
Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671,
is the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Bank of New York, 110 Washington Street,
New York, New York 10286, is the Fund's Custodian.
How to Buy Fund Shares
Fund shares are sold through the Distributor or certain
financial institutions (which may include banks), securities
dealers ("Selected Dealers") and other industry professionals,
such as investment advisers, accountants and estate planning
firms (collectively, "Service Agents") that have entered into
service agreements with the Distributor. Share certificates are
issued only upon your written request. No certificates are issued
for fractional shares. It is not recommended that the Fund be
used as a vehicle for Keogh, IRA or other qualified plans. The
Fund reserves the right to reject any purchase order.
The
minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which has made an aggregate minimum
initial purchase for its customers of $2,500. Subsequent
investments must be at least $100. The initial investment must be
accompanied by the Fund's Account Application. For full-time or
part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation,
Board members of a fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor
child of any of the foregoing, the minimum initial investment is
$1,000. For full-time or part-time employees of The Dreyfus
Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund
account, the minimum initial investment is $50. The Fund reserves
the right to vary further the initial and subsequent investment
minimum requirements at any time.
You may purchase Fund shares
by check or wire, or through the Dreyfus TeleTransfer Privilege
described below. Checks should be made payable to "The Dreyfus
Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387,
Providence, Rhode Island 02940-9387, together with your Account
Application. For subsequent investments, your Fund account number
should appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105,
Newark, New Jersey 07101-0105. Neither initial nor subsequent
investments should be made by third party check. Purchase orders
may be delivered in person only to a Dreyfus Financial Center.
These orders will be forwarded to the Fund and will be processed
only upon receipt thereby. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone
numbers listed under "General Information."
Wire payments may be
made if your bank account is in a commercial bank that is a
member of the Federal Reserve System or any other bank having a
correspondent bank in New York City. Immediately available funds
may be transmitted by wire to The Bank of New York,
DDA#8900052198/Dreyfus New York Insured Tax Exempt Bond Fund, for
purchase of Fund shares in your name. The wire must include your
Fund account number (for new accounts, your Taxpayer
Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, please call
1-800-645-6561 after completing your wire payment to obtain your
Fund account number. Please include your Fund account number on
the Fund's Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted
until the Account Application is received. You may obtain further
information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees
and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not
clear. Other purchase procedures may be in effect for clients of
certain Service Agents. The Fund makes available to certain large
institutions the ability to issue purchase instructions through
compatible computer facilities.
Subsequent investments also
may be made by electronic transfer of funds from an account
maintained in a bank or other domestic financial institution that
is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must
specify your Fund account registration and your Fund account
number preceded by the digits "1111."
Management understands
that some Service Agents may impose certain conditions on their
clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory
authorities, may charge their clients direct fees for Servicing
(as defined under "Service Plan"). These fees would be in
addition to any amounts which might be received under the Service
Plan. Each Service Agent has agreed to transmit to its clients a
schedule of such fees. You should consult your Service Agent in
this regard.
Fund shares are sold on a continuous basis at the
net asset value per share next determined after an order in
proper form is received by the Transfer Agent. Net asset value
per share is determined as of the close of trading on the floor
of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for
business. Net asset value per share is computed by dividing the
value of the Fund's net assets (i.e., the value of its assets
less liabilities) by the total number of shares outstanding. The
Fund's investments are valued each business day by an independent
pricing service approved by the Board of Trustees and are valued
at fair value as determined by the pricing service. The pricing
service's procedures are reviewed under the general supervision
of the Board of Trustees. For further information regarding the
methods employed in valuing Fund investments, see "Determination
of Net Asset Value" in the Fund's Statement of Additional
Information.
Federal regulations require that you provide a
certified TIN upon opening or reopening an account. See
"Dividends, Distributions and Taxes" and the Fund's Account
Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you
to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").
Dreyfus TeleTransfer Privilege - You may purchase Fund
shares (minimum $500, maximum $150,000 per day) by telephone if
you have checked the appropriate box and supplied the necessary
information on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between the bank account designated in one of
these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund
may modify or terminate this Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TeleTransfer
Privilege, you may request a Dreyfus TeleTransfer purchase of
Fund shares by telephoning 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306.
Shareholder Services
The
services and priveledges described under this heading may not be
available to clients of certain Service Agent and some Service
Agents may impose certain conditions on their clients which are
different from those described in this Prospectus. You should
consult your Service Agent in this regard.
Fund Exchanges - You
may purchase, in exchange for shares of the Fund, shares of
certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in
your state of residence. These funds have different investment
objectives which may be of interest to you. If you desire to use
this service, you should consult your Service Agent or call
1-800-645-6561 to determine if it is available and whether any
conditions are imposed on its use.
To request an exchange, you or
your Service Agent acting on your behalf must give exchange
instructions to the Transfer Agent in writing or by telephone.
Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of Personal Retirement Plans,
the shares being exchanged must have a current value of at least
$500; furthermore, when establishing a new account by exchange,
the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the
exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders
automatically, unless you to check the applicable "NO" box on the
Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established
for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder
Services Form, also available by calling, 1-800-645-6561. If you
have established the Telephone Exchange Privilege, you may
telephone exchange instructions by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. See "How to
Redeem Fund Shares-Procedures." Upon an exchange into a new
account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried
over to the fund into which the exchange is made: Telephone
Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TeleTransfer
Privilege, and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset
value;
however, a sales load may be charged with respect to exchanges
into funds sold with a sales load. If you are exchanging into a
fund that charges a sales load, you may qualify for share prices
which do not include the sales load or which reflect a reduced
sales load, if the shares of the fund from which you are
exchanging were: (a) purchased with a sales load, (b) acquired by
a previous exchange from shares purchased with a sales load, or
(c) acquired through reinvestment of dividends or distributions
paid with respect to the foregoing categories of shares. To
qualify, at the time of an exchange you must notify the Transfer
Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through
a check of appropriate records. See "Shareholder Services" in the
Statement of Additional Information. No fees currently are
charged shareholders directly in connection with exchanges,
although the Fund reserves the right, upon not less than 60 days'
written notice, to charge shareholders a nominal fee in
accordance with rules promulgated by the Securities and Exchange
Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges
may be modified or terminated at any time upon notice to
shareholders.
The exchange of shares by one fund for shares of
another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or
loss.
Dreyfus Auto-Exchange Privilege - Dreyfus Auto-Exchange
Privilege enables you to invest regularly (on a semi-monthly,
monthly, quarterly or annual basis), in exchange for shares of
the Fund, in shares of other funds in the Dreyfus Family of Funds
of which you are currently an investor. The amount you designate,
which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on
the first and/or fifteenth day of the month according to the
schedule you have selected. Shares will be exchanged at the
then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales
load. See "Shareholder Services" in the Statement of Additional
Information. The right to exercise this Privilege may be modified
or canceled by the Fund or the Transfer Agent. You may modify or
cancel your exercise of this Privilege at any time by mailing
written notification to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. The Fund may charge a
service fee for the use of this Privilege. No such fee currently
is contemplated. The exchange of shares of one fund for shares of
another is treated for Federal income tax purposes as a sale of
the shares given in exchange by the shareholder and, therefore,
an exchanging shareholder may realize a taxable gain or loss. For
more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization
Form, please call toll free 1-800-645-6561.
Dreyfus-Automatic
Asset Builder - Dreyfus-Automatic Asset Builder permits you to
purchase Fund shares (minimum of $100 and maximum of $150,000 per
transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by
you will be debited in the specified amount, and Fund shares will
be purchased, once a month, on either the first or fifteenth day,
or twice a month, on both days. Only an account maintained at a
domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a
Dreyfus-Automatic Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the
necessary authorization form by calling 1-800-645-6561. You may
cancel your participation in this Privilege or change the amount
of purchase at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671, and the notification will be effective three business
days following receipt. The Fund may modify or terminate this
Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Dreyfus Government Direct Deposit
Privilege - Dreyfus Government Direct Deposit Privilege enables
you to purchase Fund shares (minimum of $100 and maximum of
$50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from
the Federal government automatically deposited into your Fund
account. You may deposit as much of such payments as you elect.
To enroll in Dreyfus Government Direct Deposit, you must file
with the Transfer Agent a completed Direct Deposit Sign-Up Form
for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling
1-800-645-6561. Death or legal incapacity will terminate your
participation in this Privilege. You may elect at any time to
terminate your participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate your
participation upon 30 days' notice to you.
Dreyfus Dividend
Options - Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain
distributions, if any, paid by the Fund in shares of another fund
in the Dreyfus Family of Funds of which you are a shareholder.
Shares of the other fund will be purchased at the then-current
net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales
load. If you are investing in a fund that charges a sales load,
you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load. If you are investing
in a fund that charges a contingent deferred sales charge, the
shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased
shares. See "Shareholder Services" in the Statement of Additional
Information. Dreyfus Dividend ACH permits you to transfer
electronically on the payment date dividends or dividends and
capital gain distributions, if any, from the Fund to a designated
bank account. Only an account maintained at a financial
institution which is an Automated Clearing House member so
designated. Banks may charge a fee for this service.
For more
information concerning these privileges, or to request a Dividend
Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. Enrollment in or cancellation of these privileges is
effective three business days following receipt. These privileges
are available only for existing accounts and may not be used to
open new accounts. Minimum subsequent investments do not apply to
Dreyfus Dividend Sweep. The Fund may modify or terminate these
privileges at any time or charge a service fee. No such fee
currently is contemplated.
Dreyfus Payroll Savings Plan - Dreyfus
Payroll Savings Plan permits you to purchase Fund shares (minimum
of $100 per transaction) automatically on a regular basis.
Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing
Dreyfus account electronically through the Automated Clearing
House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with
your employer's payroll department. Your employer must complete
the reverse side of the form and return it to The Dreyfus Family
of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You
may obtain the necessary authorization form by calling
1-800-645-6561. You may change the amount of purchase or cancel
the authorization only by written notification to your employer.
It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer
Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee
currently is contemplated.
Automatic Withdrawal Plan - The
Automatic Withdrawal Plan permits you to request withdrawal of a
specified dollar amount (minimum of $50) on either a monthly or
quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by
calling 1-800-645-6561. There is a service charge of 50 cents for each
withdrawal check. The Automatic Withdrawal Plan may be ended at
any time by you, the Fund or the Transfer Agent. Shares for which
certificates have been issued may not be redeemed through the
Automatic Withdrawal Plan.
How to Redeem Fund Shares
General - You
may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
The
Fund imposes no charges when shares are redeemed. Service Agents
may charge a nominal fee for effecting redemptions of Fund
shares. Any certificates representing Fund shares being redeemed
must be submitted with the redemption request. The value of the
shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
The
Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the
Securities and Exchange Commission. However, if you have
purchased Fund shares by check, by Dreyfus TeleTransfer Privilege
or through Dreyfus-Automatic Asset Builder and subsequently
submit a written redemption request to the Transfer Agent, the
redemption proceeds will be transmitted to you promptly upon bank
clearance of your purchase check, Dreyfus TeleTransfer purchase
or Dreyfus-Automatic Asset Builder order, which may take up to
eight business days or more. In addition, the Fund will not honor
Redemption Checks under the Check Redemption Privilege, and will
reject requests to redeem shares by wire or telephone or pursuant
to the Dreyfus TeleTransfer Privilege, for a period of eight
business days after receipt by the Transfer Agent of the purchase
check, the Dreyfus TeleTransfer purchase or the Dreyfus-Automatic
Asset Builder order against which such redemption is requested.
These procedures will not apply if your shares were purchased by
wire payment, or if you otherwise have a sufficient collected
balance in your account to cover the redemption request. Prior to
the time any redemption is effective, dividends on such shares
will accrue and be payable, and you will be entitled to exercise
all other rights of beneficial ownership. Fund shares will not be
redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account
at its option upon not less than 30 days' written notice if your
account's net asset value is $500 or less and remains so during
the notice period.
Procedures - You may redeem Fund shares by
using the regular redemption procedure through the Transfer
Agent, the Check Redemption Privilege, the Wire Redemption
Privilege, the Telephone Redemption Privilege, the Dreyfus
TeleTransfer Privilege or, if you are a client of a Selected
Dealer, through the Selected Dealer. If you have given your
Service Agent authority to instruct the Transfer Agent to redeem
shares and to credit the proceeds of such redemptions to a
designated account at your Service Agent, you may redeem shares
only in this manner and in accordance with the regular redemption
procedure described below. If you wish to use the other
redemption methods described below, you must arrange with your
Service Agent for delivery of the required application(s) to the
Transfer Agent. Other redemption procedures may be in effect for
clients of certain Service Agents. The Fund makes available to
certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
You may
redeem Fund shares by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. If you select
a telephone redemption privilege or telephone exchange privilege
(which is granted automatically unless you refuse it), you
authorize the Transfer Agent to act on telephone instructions
from any person representing himself or herself to be you, or a
representative of your Service Agent, and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the
Transfer Agent to employ reasonable procedures, such as requiring
a form of personal identification, to confirm that instructions
are genuine and, if it does not follow such procedures, the Fund
or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent instructions. Neither the Fund nor the
Transfer Agent will be liable for following telephone
instructions reasonably believed to be genuine.
During times of
drastic economic or market conditions, you may experience
difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases,
you should consider using the other redemption procedures
described herein. Use of these other redemption procedures may
result in your redemption request being processed at a later time
than it would have been if telephone redemption had been used.
During the delay, the Fund's net asset value may
fluctuate.
Regular Redemption - Under the regular redemption
procedure, you may redeem shares by written request mailed to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. These requests will be forwarded
to the Fund and will be processed only upon receipt thereby. For
the location of the nearest Dreyfus Financial Center, please call
one of the telephone numbers listed under "General Information."
Redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be
guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer
Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers
listed under "General Information."
Redemption proceeds of at
least $1,000 will be wired to any member bank of the Federal
Reserve System in accordance with a written signature-guaranteed
request.
Check Redemption Privilege - You may request on the
Account Application, Shareholder Services Form or by later
written request that the Fund provide Redemption Checks drawn on
the Fund's account. Redemption Checks may be made payable to the
order of any person in the amount of $500 or more. Potential
fluctuations in the net asset value of Fund shares should be
considered in determining the amount of the check. Redemption
Checks should not be used to close your account. Redemption
Checks are free, but the Transfer Agent will impose a fee for
stopping payment of a Redemption Check upon your request or if
the Transfer Agent cannot honor the Redemption Check due to
insufficient funds or other valid reason. You should date your
Redemption Checks with the current date when you write them.
Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented
before the date of the check, all postdated Redemption Checks
which are dated within six months of presentment for payment, if
they are otherwise in good order. Shares for which certificates
have been issued may not be redeemed by Redemption Check. This
Privilege may be modified or terminated at any time by the Fund
or the Transfer Agent upon notice to shareholders.
Wire Redemption
Privilege - You may request by wire or telephone that redemption
proceeds (minimum $1,000) be wired to your account at a bank
which is a member of the Federal Reserve System, or a
correspondent bank if your bank is not a member. To establish the
Wire Redemption Privilege, you must check the appropriate box and
supply the necessary information on the Fund's Account
Application or file a Shareholder Services Form with the Transfer
Agent. You may direct that redemption proceeds be paid by check
(maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of less than $1,000
will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of
not more than $250,000 wired within any 30-day period. You may
telephone redemption requests by calling 1-800-221-4060 or, if
you are calling from overseas, call 1-401-455-3306. The Fund
reserves the right to refuse any redemption request, including
requests made shortly after a change of address, and may limit
the amount involved or the number of such requests. This
Privilege may be modified or terminated at any time by the
Transfer Agent or the Fund. The Fund's Statement of Additional
Information sets forth instructions for transmitting redemption
requests by wire. Shares for which certificates have been issued
are not eligible for this Privilege.
Telephone Redemption
Privilege - You may redeem Fund shares (maximum $150,000 per day)
by telephone if you have checked the appropriate box on the
Fund's Account Application or have filed a Shareholder Services
Form with the Transfer Agent. The redemption proceeds will be
paid by check and mailed to your address. You may telephone
redemption instructions by calling 1-800-221-4060 or, if you are
calling from overseas, call 1-401-455-3306. The Fund reserves the
right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This
Privilege may be modified or terminated at any time by the
Transfer Agent or the Fund. Shares for which certificates have
been issued are not eligible for this Privilege.
Dreyfus
TeleTransfer Privilege - You may redeem Fund shares (minimum $500
per day) by telephone if you have checked the appropriate box and
supplied the necessary information on the Fund's Account
Application or have filed a Shareholder Services Form with the
Transfer Agent. The proceeds will be transferred between your
Fund account and the bank account designated in one of these
documents. Only such an account maintained in a domestic
financial institution which is an Automated Clearing House member
may be so designated. Redemption proceeds will be on deposit in
your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or,
at your request, paid by check (maximum $150,000 per day) and
mailed to your address. Holders of jointly registered Fund or
bank accounts may redeem through the Dreyfus TeleTransfer
Privilege for transfer to their bank account not more than
$250,000 within any 30-day period. The Fund reserves the right to
refuse any request made by telephone, including requests made
shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or
terminate this Privilege at any time or charge a service fee upon
notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you
may
request a Dreyfus TeleTransfer redemption of Fund shares by
telephoning 1-800-221-4060 or, if you are calling from overseas,
call 1-401-455-3306. Shares issued in certificate form are not
eligible for this Privilege.
Redemption Through a Selected Dealer
- - If you are a customer of a Selected Dealer, you may make
redemption requests to your Selected Dealer. If the Selected
Dealer transmits the redemption request so that it is received by
the Transfer Agent by the close of trading on the floor of the
New York Stock Exchange (currently 4:00 p.m., New York time), the
redemption request will be effective on that day. If a redemption
request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the
redemption request will be effective on the next business day. It
is the responsibility of the Selected Dealer to transmit a
request so that it is received in a timely manner. The proceeds
of the redemption are credited to your account with the Selected
Dealer. See "How to Buy Fund Shares" for a discussion of
additional conditions or fees that may be imposed upon
redemption.
Service Plan
Under the Service Plan, adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, the Fund
(a) reimburses the Distributor for payments to certain Service
Agents for distributing the Fund's shares and servicing
shareholder accounts ("Servicing") and (b) pays The Dreyfus
Corporation, Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and
marketing relating to the Fund and for Servicing, at an aggregate
annual rate of .25 of 1% of the value of the Fund's average daily
net assets. Each of the Distributor and Dreyfus may pay one or
more Service Agents a fee in respect of the Fund's shares owned
by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or
holder of record. Each of the Distributor and Dreyfus determine
the amounts, if any, to be paid to Service Agents under the
Service Plan and the basis on which such payments are made. The
fees payable under the Service Plan are payable without regard to
actual expenses incurred.
The Fund also bears the costs of
preparing and printing prospectuses and statements of additional
information used for regulatory purposes and for distribution to
existing shareholders. Under the Service Plan, the Fund bears (a)
the costs of preparing, printing and distributing prospectuses
and statements of additional information used for other purposes,
and (b) the costs associated with implementing and operating the
Service Plan (such as costs of printing and mailing service
agreements), the aggregate of such amounts not to exceed in any
fiscal year of the Fund the greater of $100,000 or .005 of 1% of
the value of the Fund's average daily net assets for such fiscal
year. Each item for which a payment may be made under the Service
Plan may constitute an expense of distributing Fund shares as the
Securities and Exchange Commission construes such term under Rule
12b-1.
Dividends, Distributions and Taxes
The Fund ordinarily
declares dividends from net investment income on each day the New
York Stock Exchange is open for business. Dividends usually are
paid on the last business day of each month, and are
automatically reinvested in additional Fund shares at net asset
value or, at your option, paid in cash. The Fund's earnings for
Saturdays, Sundays and holidays are declared as dividends on the
next business day. If you redeem all shares in your account at
any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the
redemption. Distributions from net realized securities gains, if
any, generally are declared and paid once a year, but the Fund
may make distributions on a more frequent basis to comply with
the distribution requirements of the Code, in all events in a
manner consistent with the provisions of the Investment Company
Act of 1940. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any,
have been utilized or have expired. You may choose whether to
receive distributions in cash or to invest in additional Fund
shares at net asset value. All expenses are accrued daily and
deducted before declaration of dividends to investors.
Except for
dividends from Taxable Investments, the Fund anticipates that
substantially all dividends from net investment income paid by
the Fund will not be subject to Federal, New York State or New
York City income taxes. To the extent you are obligated to pay
state or local taxes outside of the State of New York, dividends
earned by an investment in the Fund may represent taxable income.
Dividends derived from Taxable Investments, together with
distributions from any net realized short-term securities gains
and all or a portion of any gains realized from the sale or other
disposition of certain market discount bonds, paid by the Fund
are subject to Federal income tax as ordinary income whether or
not reinvested. No dividend paid by the Fund will qualify for the
dividends received deduction allowable to certain U.S.
corporations. Distributions from net realized long-term
securities gains of the Fund generally are subject to Federal
income tax as long-term capital gains if you are a citizen or
resident of the United States. The Code provides that the net
capital gain of an individual generally will not be subject to
Federal income tax at a rate in excess of 28%. Under the Code,
interest on indebtedness incurred or continued to purchase or
carry Fund shares which is deemed to relate to exempt-interest
dividends is not deductible.
Although all or a substantial
portion of the dividends paid by the Fund may be excluded by
shareholders of the Fund from their gross income for Federal
income tax purposes, the Fund may purchase specified private
activity bonds, the interest from which may be (i) a preference
item for purposes of the alternative minimum tax, (ii) a
component of the "adjusted current earnings" preference item for
purposes of the corporate alternative minimum tax as well as a
component in computing the corporate environmental tax or (iii) a
factor in determining the extent to which a shareholder's Social
Security benefits are taxable. If the Fund purchases such
securities, the portion of the Fund's dividends related thereto
will not necessarily be tax exempt to an investor who is subject
to the alternative minimum tax and/or tax on Social Security
benefits and may cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and
distributions
will be mailed to you annually. You also will receive periodic
summaries of your account which will include information as to
dividends and distributions from securities gains, if any, paid
during the year. These statements set forth the dollar amount of
income exempt from Federal tax and the dollar amount, if any,
subject to Federal tax. These dollar amounts will vary depending
on the size and length of time of your investment in the Fund. If
the Fund pays dividends derived from taxable income, it intends
to designate as taxable the same percentage of the day's dividend
as the actual taxable income earned on that day bears to total
income earned on that day. Thus, the percentage of the dividend
designated as taxable, if any, may vary from day to day.
Federal regulations generally require the Fund to withhold
("backup withholding") and remit to the U.S. Treasury 31% of
taxable dividends, distributions from net realized securities
gains and the proceeds of any redemption, regardless of the
extent to which gain or loss may be realized, paid to a
shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct,
or that such shareholder has not received notice from the IRS of
being subject to backup withholding as a result of a failure to
properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to
institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to
properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or
employee identification number of the record owner of the
account. Any tax withheld as a result of backup withholding does
not constitute an additional tax imposed on the record owner of
the account, and may be claimed as a credit on the record owner's
Federal income tax return.
Management of the Fund believes
that the Fund has qualified for the fiscal year ended December
31, 1994 as a "regulated investment company" under the Code. The
Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification
relieves the Fund of any liability for Federal income taxes to
the extent its earnings are distributed in accordance with
applicable provisions of the Code. In addition, the Fund is
subject to a non-deductible 4% excise tax, measured with respect
to certain undistributed amounts of taxable investment income and
capital gain.
You should consult your tax adviser regarding
specific questions as to Federal, state or local
taxes.
Performance Information
For purposes of advertising,
performance may be calculated on several bases, including current
yield, tax equivalent yield, average annual total return and/or
total return.
Current yield refers to the Fund's annualized net
investment income per share over a 30-day period, expressed as a
percentage of the net asset value per share at the end of the
period. For purposes of calculating current yield, the amount of
net investment income per share during that 30-day period,
computed in accordance with regulatory requirements, is
compounded by assuming that it is reinvested at a constant rate
over a six-month period. An identical result is then assumed to
have occurred during a second six-month period which, when added
to the result for the first six months, provides an "annualized"
yield for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the
pre-tax
yield which, after being taxed at a stated rate, would be
equivalent to a stated current yield calculated as described
above.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund
was purchased with an initial payment of $1,000 and that the
investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and
distributions during the period. The return is expressed as a
percentage rate which, if applied on a compounded annual basis,
would result in the redeemable value of the investment at the end
of the period. Advertisements of the Fund's performance will
include the Fund's average annual total return for one, five and
ten year periods, or for shorter time periods depending upon the
length of time during which the Fund has operated.
Total
return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return
generally is expressed as a percentage rate which is calculated
by combining the income and principal changes for a specified
period and dividing by the net asset value per share at the
beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return.
Performance will vary from time to time and past results are
not
necessarily representative of future results. You should remember
that performance is a function of portfolio management in
selecting the type and quality of portfolio securities and is
affected by operating expenses. Performance information, such as
that described above, may not provide a basis for comparison with
other investments or other investment companies using a different
method of calculating performance.
Comparative performance
information may be used from time to time in advertising or
marketing the Fund's shares, including data from CDA Investment
Technologies, Inc., Lipper Analytical Services, Inc., Moody's
Bond Survey Bond Index, Lehman Brothers Municipal Bond Index,
Morningstar, Inc. and other industry publications.
General Information
The Fund was organized as an unincorporated
business trust under the laws of the Commonwealth of
Massachusetts pursuant to an Agreement and Declaration of Trust
(the "Trust Agreement") dated September 19, 1986, and commenced
operations on February 18, 1987. The Fund is authorized to issue
an unlimited number of shares of beneficial interest, par value
$.001 per share. Each share has one vote.
On August 3, 1994,
the Fund's shareholders voted to (a) approve (i) a new Management
Agreement with The Dreyfus Corporation and (ii) a new Service
Plan, both of which became effective upon consummation of the
merger between The Dreyfus Corporation and a subsidiary of Mellon
Bank, N.A., and (b) change certain of the Fund's investment
restrictions to permit the Fund to (i) borrow money to the extent
permitted under the Investment Company Act of 1940, as amended,
and (ii) pledge its assets to the extent necessary to secure
permitted borrowings.
Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for
the obligations of the Fund. However, the Trust Agreement
disclaims shareholder liability for acts or obligations of the
Fund and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by
the Fund or a Trustee. The Trust Agreement provides for
indemnification from the Fund's property for all losses and
expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund itself would be unable
to meet its obligations, a possibility which management believes
is remote. Upon payment of any liability incurred by the Fund,
the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Trustees
intend to conduct the operations of the Fund in such a way so as
to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of the Fund. As described under
"Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder
meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose
of voting to remove Trustees.
The Transfer Agent maintains a
record of your ownership and sends you confirmations and
statements of account.
Shareholder inquiries may be made by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or by calling toll free 1-800-645-6561. In
New York City, call 1-718-895-1206; on Long Island, call
794-5452.
No person has been authorized to give any information
or to make any representations other than those contained in this
Prospectus and in the Fund's official sales literature in
connection with the offer of the Fund's shares, and, if given or
made, such other information or representations must not be
relied upon as having been authorized by the Fund. This
Prospectus does not constitute an offer in any State in which, or
to any person to whom, such offering may not lawfully be made.
<PAGE>
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<PAGE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
This Statement of Additional Information, which is not a
prospectus, supplements and should be read in conjunction with
the current Prospectus of Dreyfus New York Insured Tax Exempt
Bond Fund (the "Fund"), dated May 1, 1995, as it may be
revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144, or call the following
numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is
the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . B-9
Management Agreement. . . . . . . . . . . . . . . . . . . . B-13
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . B-15
Service Plan. . . . . . . . . . . . . . . . . . . . . . . . B-16
Redemption of Fund Shares . . . . . . . . . . . . . . . . . B-17
Shareholder Services. . . . . . . . . . . . . . . . . . . . B-19
Determination of Net Asset Value. . . . . . . . . . . . . . B-21
Portfolio Transactions. . . . . . . . . . . . . . . . . . . B-22
Dividends, Distributions and Taxes. . . . . . . . . . . . . B-23
Performance Information . . . . . . . . . . . . . . . . . . B-23
Information About the Fund. . . . . . . . . . . . . . . . . B-25
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . B-25
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . B-26
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . B-39
Financial Statements. . . . . . . . . . . . . . . . . . . . B-45
Report of Independent Auditors. . . . . . . . . . . . . . . B-56
<PAGE>
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in
Municipal Obligations by
ratings for the fiscal year ended December 31, 1994, computed on
a monthly basis, was as follows:
<TABLE>
<CAPTION>
Fitch Investors Moody's Investors Standard & Poor's Percentage
Service, Inc. ("Fitch") or Services, Inc. ("Moody's") or Corporation ("S&P") of Value
<S> <C> <C> <C>
AAA Aaa AAA 99.0%
F-1 MIG 1 SP-1 1.0%
100.0%
</TABLE>
Municipal Obligations. The term "Municipal Obligations"
generally includes debt obligations issued
to obtain funds for various public purposes, including the
construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and
sewer works. Other public purposes for which Municipal
Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating
expenses and lending such funds to other
public institutions and facilities. In addition, certain types
of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for
the construction, equipment, repair or
improvement of privately operated housing facilities, sports
facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain
local facilities for water supply, gas, electricity, or sewage or
solid waste disposal; the interest paid on such
obligations may be exempt from Federal income tax, although
current tax laws place substantial limitations
on the size of such issues. Such obligations are considered to
be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the
opinion of bond counsel to the issuer. There
are, of course, variations in the security of Municipal
Obligations, both within a particular classification and
between classifications.
Floating and variable rate demand obligations are tax exempt
obligations ordinarily having stated
maturities in excess of one year, but which permit the holder to
demand payment of principal at any time, or
at specified intervals. The issuer of such obligations
ordinarily has a corresponding right, after a given
period, to prepay in its discretion the outstanding principal
amount of the obligations plus accrued interest
upon a specified number of days' notice to the holders thereof.
The interest rate on a floating rate demand
obligation is based on a known lending rate, such as a bank's
prime rate, and is adjusted automatically each
time such rate is adjusted. The interest rate on a variable rate
demand obligation is adjusted automatically
at specified intervals.
The yields on Municipal Obligations are dependent on a
variety of factors, including general
economic and monetary conditions, money market factors,
conditions in the Municipal Obligations market,
size of a particular offering, maturity of the obligation and
rating of the issue. The imposition of the Fund's
management fee, as well as other operating expenses, including
fees paid under the Service Plan, will have
the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease
obligations") have special risks not ordinarily associated with
Municipal Obligations. Although lease
obligations do not constitute general obligations of the
municipality for which the municipality's taxing power
is pledged, a lease obligation ordinarily is backed by the
municipality's covenant to budget for, appropriate
and make the payments due under the lease obligation. However,
certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has no
obligation to make lease or installment
purchase payments in future years unless money is appropriated
for such purpose on a yearly basis.
Although "non-appropriation" lease obligations are secured by the
leased property, disposition of the
property in the event of foreclosure might prove difficult. The
staff of the Securities and Exchange
Commission currently considers certain lease obligations to be
illiquid. Determination as to the liquidity of
such securities is made in accordance with guidelines established
by the Fund's Board. Pursuant to such
guidelines, the Board has directed the Manager to monitor
carefully the Fund's investment in such securities
with particular regard to (1) the frequency of trades and quotes
for the lease obligation; (2) the number of
dealers willing to purchase or sell the lease obligation and the
number of other potential buyers; (3) the
willingness of dealers to undertake to make a market in the lease
obligation; (4) the nature of the
marketplace trades including the time needed to dispose of the
lease obligation, the method of soliciting
offers and the mechanics of transfer; and (5) such other factors
concerning the trading market for the lease
obligation as the Manager may deem relevant. In addition, in
evaluating the liquidity and credit quality of a
lease obligation that is unrated, the Fund's Board has directed
the Manager to consider; (a) whether the
lease can be cancelled; (b) what assurance there is that the
assets represented by the lease can be sold; (c)
the strength of the leasee's general credit (e.g., its debt,
administrative, economic, and financial
characteristics); (d) the likelihood that the municipality will
discontinue appropriating funding for the for the
leased property because the property is no longer deemed
essential to the operations of the municipality
(e.g., the potential for an "event of nonappropriation"); (e) the
legal recourse in the event of failure to
appropriate; and (f) such other factors concerning credit quality
as the Manager may deem relevant. The
Fund will not invest more than 15% of the value of its net assets
in lease obligations that are illiquid and in
other illiquid securities. See "investment Restriction No. 11"
below.
The Fund will purchase tender option bonds only when it is
satisfied that the custodial and tender
option arrangements, including the fee payment arrangements, will
not adversely affect the tax exempt status
of the underlying Municipal Obligations and that payment of any
tender fees will not have the effect of
creating taxable income for the Fund. Based on the tender option
bond agreement, the Fund expects to be
able to value the tender option bond at par; however, the value
of the instrument will be monitored to assure
that it is valued at fair value.
Insurance Feature. The Mutual Fund Insurance policies
provide for a policy period of one year
which the insurer typically renews for successive annual periods
at the request of the Fund for so long as the
Fund is in compliance with the terms of the relevant policy. The
insurance premiums are payable monthly
by the Fund and are adjusted for purchases and sales of covered
Municipal Obligations during the month on
a daily basis. Premium rates for each issue of Municipal
Obligations covered by the Mutual Fund Insurance
are fixed for as long as the Fund owns the security, although
similar Municipal Obligations purchased at
different times may have different premiums. In addition to the
payment of premiums, each Mutual Fund
Insurance policy requires that the Fund notify the insurer on a
daily basis as to all Municipal Obligations in
the insured portfolio and permits the insurer to audit its
records. The insurer cannot cancel coverage
already in force with respect to Municipal Obligations owned by
the Fund and covered by the Mutual Fund
Insurance policy, except for nonpayment of premiums.
Municipal Obligations are eligible for Mutual Fund Insurance
if, at the time of purchase by the
Fund, they are identified separately or by category in
qualitative guidelines furnished by the insurer and are
in compliance with the aggregate limitations set forth in such
guidelines. Premium variations are based in
part on the rating of the security being insured at the time the
Fund purchases such security. The insurer
may prospectively withdraw particular securities from the
classifications of securities eligible for insurance or
change the aggregate amount limitation of each issue or category
of eligible Municipal Obligations but must
continue to insure the full amount of such securities previously
acquired so long as they remain in the Fund's
portfolio. The qualitative guidelines and aggregate amount
limitations established by the insurer from time
to time will not necessarily be the same as the Fund or the
Manager would use to govern selection of
securities for the Fund's portfolio. Therefore, from time to
time such guidelines and limitations may affect
portfolio decisions.
New Issue Insurance provides that in the event of a
municipality's failure to make payment of
principal or interest on an insured Municipal Obligation, the
payment will be made promptly by the insurer.
There are no deductible clauses or cancellation provisions, and
the tax exempt status of the securities is not
affected. The premiums, whether paid by the issuing municipality
or the municipal bond dealer underwriting
the issue, are paid in full for the life of the Municipal
Obligation. The statement of insurance is attached to
or printed on the instrument evidencing the Municipal Obligation
purchased by the Fund and becomes part
of the Municipal Obligation. The benefits of the insurance
accompany the Municipal Obligations in any
resale.
Ratings of Municipal Obligations. Subsequent to its
purchase by the Fund, an issue of rated
Municipal Obligations may cease to be rated or its rating may be
reduced below the minimum required for
purchase by the Fund. Neither event will require the sale of
such Municipal Obligations by the Fund, but
the Manager will consider such event in determining whether the
Fund should continue to hold the
Municipal Obligations. To the extent that the ratings given by
Moody's, S&P or Fitch for Municipal
Obligations may change as a result of changes in such
organizations or their rating systems, the Fund will
attempt to use comparable ratings as standards for its
investments in accordance with the investment policies
contained in the Fund's Prospectus and this Statement of
Additional Information. The ratings of Moody's,
S&P and Fitch represent their opinions as to the quality of the
Municipal Obligations which they undertake
to rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial
criterion for selection of portfolio investments,
the Manager also will evaluate these securities and the
creditworthiness of the issuers of such securities
based upon financial and other available information. See
"Appendix B."
Lending Portfolio Securities. To a limited extent, the Fund
may lend its portfolio securities to
brokers, dealers and other financial institutions, provided it
receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current
market value of the securities loaned. By
lending its portfolio securities, the Fund can increase its
income through the investment of the cash
collateral. For purposes of this policy, the Fund considers
collateral consisting of U.S. Government
securities or irrevocable letters of credit issued by banks whose
securities meet the standards for investment
by the Fund to be the equivalent of cash. Such loans may not
exceed 33/% of the value of the Fund's total
assets. From time to time, the Fund may return to the borrower
or a third party which is unaffiliated with
the Fund, and which is acting as a "placing broker," a part of
the interest earned from the investment of
collateral received for securities loaned.
The Securities and Exchange Commission currently requires
that the following conditions must be
met whenever portfolio securities are loaned: (1) the Fund must
receive at least 100% cash collateral from
the borrower; (2) the borrower must increase such collateral
whenever the market value of the securities
rises above the level of such collateral; (3) the Fund must be
able to terminate the loan at any time; (4) the
Fund must receive reasonable interest on the loan, as well as any
interest or other distributions payable on
the loaned securities, and any increase in market value; and (5)
the Fund may pay only reasonable custodian
fees in connection with the loan. These conditions may be
subject to future modification.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule
144A under the Securities Act of 1933, as amended, for certain of
these securities held by the Fund, the
Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the
Fund's Board of Trustees. Because it is not possible to predict
with assurance how the market for restricted
securities pursuant to Rule 144A will develop, the Fund's Board
of Trustees has directed the Manager to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity,
availability of stable price information and other relevant
information. To the extent that for a period of
time qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing
the level of illiquidity in the Fund's portfolio
during such period.
Taxable Investments. Securities issued or guaranteed by the
U.S. Government or its agencies or
instrumentalities include U.S. Treasury securities, which differ
in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or
less; Treasury Notes have initial maturities of
one to ten years; and Treasury Bonds generally have initial
maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example,
Government National Mortgage Association pass-through
certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal
Home Loan Banks, by the right of the
issuer to borrow from the U.S. Treasury; others, such as those
issued by the Federal National Mortgage
Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency
or instrumentality; and others, such as those issued by the
Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear
fixed, floating or variable rates of interest.
Principal and interest may fluctuate based on generally
recognized reference rates or the relationship of
rates. While the U.S. Government provides financial support to
such U.S. Government sponsored agencies
or instrumentalities, no assurance can be given that it will
always do so, since it is not so obligated by law.
The Fund will invest in such securities only when it is satisfied
that the credit risk with respect to the issuer
is minimal.
Commercial paper consists of short-term, unsecured
promissory notes issued to finance short-term
credit needs.
Certificates of deposit are negotiable certificates
representing the obligation of a bank to repay
funds deposited with it for a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period
of time at a stated interest rate. Investments in time deposits
generally are limited to London branches of
domestic banks that have total assets in excess of one billion
dollars. Time deposits which may be held by
the Fund will not benefit from insurance from the Bank Insurance
Fund or the Savings Association
Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft
drawn on it by a customer. These instruments reflect the
obligation both of the bank and of the drawer to
pay the face amount of the instrument upon maturity. Other
short-term obligations may include uninsured,
direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by the Fund of
an underlying debt instrument,
subject to an obligation of the seller to repurchase, and the
Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's
custodian or sub-custodian will have custody
of, and will hold in a segregated account, securities acquired by
the Fund under a repurchase agreement.
Repurchase agreements are considered by the staff of the
Securities and Exchange Commission to be loans
by the Fund. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, the Fund will
enter into repurchase agreements only with domestic banks with
total assets in excess of one billion dollars
or primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect
to securities of the type in which the Fund may invest, and will
require that additional securities be
deposited with it if the value of the securities purchased should
decrease below resale price. The Manager
will monitor on an ongoing basis the value of the collateral to
assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by the Fund in
connection with the sale of the securities if
the seller does not repurchase them in accordance with the
repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller
of the securities, realization on the
securities by the Fund may be delayed or limited. The Fund will
consider on an ongoing basis the
creditworthiness of the institutions with which it enters into
repurchase agreements.
Risk Factors--Investing in New York Municipal Obligations.
Each investor should consider carefully
the special risks inherent in the Fund's investment in New York
Municipal Obligations. These risks result
from the financial condition of New York State and certain of its
public bodies and municipalities, including
New York City. Beginning in early 1975, New York State, New York
City and other State entities faced
serious financial difficulties which jeopardized the credit
standing and impaired the borrowing abilities of
such entities and contributed to high interest rates on, and
lower market prices for, debt obligations issued
by them. A recurrence of such financial difficulties or a
failure of certain financial recovery programs could
result in defaults or declines in the market values of various
New York Municipal Obligations in which the
Fund may invest. If there should be a default or other financial
crisis relating to New York State, New York
City, a State or City agency, or a State municipality, the market
value and marketability of outstanding New
York Municipal Obligations in the Fund's portfolio and the
interest income to the Fund could be adversely
affected. Moreover, the significant slowdown in the New York and
regional economy in the early 1990's
added substantial uncertainty to estimates of the State's tax
revenues, which, in part, caused the State to
overestimate its General Fund tax receipts in the 1992 fiscal
year. For the 1992 fiscal year, the State
incurred a cash-basis operating deficit in the General Fund of
$575 million. The 1992 fiscal year was the
fourth consecutive year in which the State incurred a cash-basis
operating deficit in the General Fund and
issued deficit notes. The State's 1993 and 1994 fiscal years,
however, were characterized by national and
regional economies that performed better than projected. After
reflecting a 1993 year-end deposit to the
State's refund reserve account of $671 million, reported 1992-93
General Fund receipts were $45 million
higher than originally projected in April 1992. The State
completed the 1994 fiscal year with an operating
surplus in the General Fund of $914 million. In September 1994,
however, the State projected a General
Fund operating deficit of $690 million for the 1995 fiscal year.
There can be no assurance that New York
will not face substantial potential budget gaps in future years.
In January 1992, Moody's lowered from A to
Baa1 its ratings of certain appropriation-backed debt of New York
State and its agencies. The State's
general obligation, State-guaranteed and New York State Local
Government Assistance Corporation bonds
continued to be rated A by Moody's. In January 1992, S&P lowered
from A to A- ratings of New York
State general obligation bonds and stated that it continued to
assess the ratings outlook as negative. S&P
also lowered its ratings of various agency debts, State moral
obligations, contractual obligations, lease
purchase obligations and State guarantees. In February 1991,
Moody's lowered its rating of New York City's
general obligation bonds from A to Baa1. The rating changes
reflected the rating agencies' concerns about
the financial condition of New York State and City, the heavy
debt load of the State and City, and economic
uncertainties in the region. Investors should review Appendix A
which more fully sets forth these and other
risk factors.
Investment Restrictions. The Fund has adopted investment
restrictions numbered 1 through 7 below
as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority
(as defined in the Investment Company Act of 1940, as amended
(the "Act")) of the Fund's outstanding
voting shares. Investment restrictions numbered 8 through 11 are
not fundamental policies and may be
changed by vote of a majority of Trustees at any time. The Fund
may not:
1. Invest more than 25% of its total assets in securities
of issuers in any single industry;
provided that there shall be no such limitation on the purchase
of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or
instrumentalities.
2 Borrow money, except to the extent permitted under the
Act (which currently limits
borrowing to no more than 33/% of the value of the Fund's total
assets). For purposes of this investment
restriction, the entry into options, forward contracts, futures
contracts, including those relating to indices,
and options on futures contracts or indices shall not constitute
borrowing.
3. Purchase or sell real estate, commodities or commodity
contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal
Obligations secured by real estate or interest
therein, or prevent the Fund from purchasing and selling options,
forward contracts, futures contracts,
including those relating to indices, and options on futures
contracts or indices.
4. Underwrite the securities of other issuers, except that
the Fund may bid separately or as
part of a group for the purchase of Municipal Obligations
directly from an issuer for its own portfolio to
take advantage of the lower purchase price available, and except
to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
5. Make loans to others, except through the purchase of
debt obligations and the entry into
repurchase agreements; however, the Fund may lend its portfolio
securities in an amount not to exceed
33/% of the value of its total assets. Any loans of portfolio
securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Fund's Board of Trustees.
6. Issue any senior security (as such term is defined in
Section 18(f) of the Act), except to the
extent that the activities permitted in Investment Restriction
Nos. 2, 3 and 10 may be deemed to give rise to
a senior security.
7. Sell securities short or purchase securities on margin,
but the Fund may make margin
deposits in connection with transactions in options, forward
contracts, futures contracts, including those
relating to indices, and options on futures contracts or indices.
8. Purchase securities other than Municipal Obligations
and Taxable Investments and those
arising out of transactions in futures and options or as
otherwise provided in the Fund's Prospectus.
9. Invest in securities of other investment companies,
except to the extent permitted under the
Act.
10. Pledge, hypothecate, mortgage or otherwise encumber its
assets, except to the extent
necessary to secure permitted borrowings and to the extent
related to the deposit of assets in escrow in
connection with the purchase of securities on a when-issued or
delayed-delivery basis and collateral and
initial or variation margin arrangements with respect to options,
forward contracts, futures contracts,
including those related to indices, and options on futures
contracts or indices.
11. Enter into repurchase agreements providing for
settlement in more than seven days after
notice or purchase securities which are illiquid (which
securities could include participation interests
(including municipal lease/purchase agreements) that are not
subject to the demand feature described in the
Fund's Prospectus and floating and variable rate demand
obligations as to which the Fund cannot exercise
the demand feature described in the Fund's Prospectus on less
than seven days notice and as to which there
is no secondary market) if, in the aggregate, more than 15% of
its net assets would be so invested.
For purposes of Investment Restriction No. 1, industrial
development bonds, where the payment of
principal and interest is the ultimate responsibility of
companies within the same industry, are grouped
together as an "industry." If a percentage restriction is
adhered to at the time of investment, a later increase
or decrease in percentage resulting from a change in values or
assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the
restrictions listed above so as to permit
the sale of Fund shares in certain states. Should the Fund
determine that a commitment is no longer in the
best interests of the Fund and its shareholders, the Fund
reserves the right to revoke the commitment by
terminating the sale of Fund shares in the state involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information
as to their principal business
occupations during at least the last five years, are shown below.
Each Trustee who is deemed to be an
"interested person" of the Fund, as defined in the Act, is
indicated by an asterisk.
Trustees of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1,
1995, Mr. DiMartino has served as
Chairman of the Board for various funds in the Dreyfus
Family of Funds. For more than five years
prior thereto, he was President, a director and, until
August 1994, Chief Operating Officer of the
Manager and Executive Vice President and a director of
Dreyfus Service Corporation, a wholly-
owned subsidiary of the Manager and, until August 1994, the
Fund's distributor. From August 24,
1994 to December 31, 1994, he was a director of Mellon Bank
Corporation. Mr. DiMartino is a
director and former Treasurer of the Muscular Dystrophy
Association; a trustee of Bucknell
University; and a director of the Noel Group, Inc. Mr.
DiMartino is also a Board member of 59
other funds in the Dreyfus Family of Funds. He is 51 years
old and his address is 200 Park Avenue,
New York, New York 10166.
GORDON J. DAVIS, Director. Since October 1994, Mr. Davis has
been a senior partner with the law firm
of LeBoeuf, Lambe, Greene & MacRae. From 1983 to September
1994, he was a senior partner
with the law firm of Lord Day & Lord, Barrett Smith. Mr.
Davis was Commissioner of Parks and
Recreation for the City of New York from 1978 to 1983. He
is also a Director of Consolidated
Edison, a utility company, and Phoenix Home Life Insurance
Company and a member of various
other corporate and not-for-profit boards. He is also a
Board member of 11 other funds in the
Dreyfus Family of Funds. Mr. Davis is 53 years old and his
address is 241 Central Park West, New
York, New York 10024.
*DAVID P. FELDMAN, Director. Corporate Vice President-Investment
Management of
AT&T. He is also a trustee of Corporate Property Investors,
a real estate investment
company. He is also a Board member of other funds in the
Dreyfus Family of Funds. Mr. Feldman
is 55 years old and his address is One Oak Way, Berkeley
Heights, New Jersey 07922.
LYNN MARTIN, Director. Holder of the Davee Chair at the J.L.
Kellogg Graduate School of
Management, Northwestern University. During the Spring
Semester 1993, she was a Visiting Fellow
at the Institute of Policy, Kennedy School of Government,
Harvard University. Ms. Martin also is a
consultant to the international accounting firm of Deloitte
& Touche, and chairwoman of its
Council on the Advancement of Women. From January 1991
through January 1993, Ms. Martin
served as Secretary of the United States Department of
Labor. From 1981 to 1991, she was United
States Congresswoman for the State of Illinois. She also is
a Director of Harcout General
Corporation, a publishing, insurance and retailing company,
Ameritech Corporation, a
telecommunications and information company, and Ryder
Systems Incorporated, a transportation
company. She is also a Board member of 11 other funds in
the Dreyfus Family of Funds. Ms.
Martin is 53 years old and her address is 3750 Lake Shore
Drive, Chicago, Illinois 60613.
EUGENE McCARTHY, Director. Writer and columnist; former Senator
from Minnesota
from 1958-1970. He is also a Board member of 11 other funds
in the Dreyfus Family of Funds. Mr.
McCarthy is 78 years old and his address is P.O. Box 22,
Woodville, Virginia 22749.
DANIEL ROSE, Director. President and Chief Executive Officer of
Rose Associates, Inc., a New York
based real estate development and management firm. In July
1994, Mr. Rose received a
Presidential appointment to serve as a Director of th Baltic
American Enterprise Fund, which will
make equity investments and loans and provide technical
business assistance to new business
concerns in the Baltic States. He is also Chairman of the
Housing Committee of The Real Estate
Board of New York, Inc., and a Trustee of Corporate Property
Investors, a real estate investment
company. He is also a Board member of 21 other funds in the
Dreyfus Family of Funds. Mr. Rose
is 65 years old and his address is c/o Rose Associates,
Inc., 380 Madison Avenue, New York, New
York 10017.
SANDER VANOCUR, Director. Since January 1992, Mr. Vanocur has
been the President of Old Owl
Communications, a full-service communications firm, and
since
November 1989, he has served as a Director of the Damon
Runyon-Walter Winchell Cancer
Research Fund. From June 1986 to December 1991, he was a
Senior Correspondent of ABC News
and, from October 1986 to December 1991, he was Anchor of
the ABC News program "Business
World," a weekly business program on the ABC television
network. He is also a Board member of
21 other funds in the Dreyfus Family of Funds. Mr. Vanocur
is 67 years old and his address is 2928
P Street, N.W., Washington, D.C. 20007.
ANNE WEXLER, Director. Chairman of the Wexler Group, consultants
specializing in
government relations and public affairs. She is also a
Director of American Cyanamid Company,
Alumax, The Continental Corporation, Comcast Corporation,
The New England Electric System,
NOVA and a member of the Board of the Carter Center of Emory
University, the Council of
Foreign Relations, the National Park Foundation; the
Visiting Committee of the John F. Kennedy
School of Government at Harvard University and the Board of
Visitors of the University of
Maryland School of Public Affairs. Ms. Wexler is also a
Board member of 16 other funds in The
Dreyfus Family of Funds. She is 65 years old and her
address is 1317 F Street, N.W., Washington,
D.C. 20004.
REX WILDER, Director. Financial Consultant. He is also a Board
member of 11 other funds in the
Dreyfus Family of Funds. Mr. Wilder is 74 years old and his
address is 290 Riverside Drive, New
York, New York 10025.
For so long as the Fund's plan described in the section
captioned "Service Plan" remains in effect,
the Trustees of the Fund who are not "interested persons" of the
Fund, as defined in the Act, will be
selected and nominated by the Trustees who are not "interested
persons" of the Fund.
No meetings of shareholders will be held for the purpose of
electing Trustees unless and until such
time as less than a majority of the Trustees holding office have
been elected by shareholders, at which time
the Trustees then in office will call a shareholders' meeting for
the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds of the
outstanding shares of the Fund may remove a
Trustee through a declaration in writing or by vote cast in
person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of
shareholders for the purpose of voting upon the
question of removal of any such Trustee when requested in writing
to do so by the shareholders of record of
not less than 10% of the Fund's outstanding shares.
The Fund typically pays its Directors an annual retainer and
a per meeting fee end reimbursed them
for their expenses. For the fiscal year ended December 31, 1994,
the aggregate amount of compensation
paid to each Director by the Fund and all other funds in the
Dreyfus Family of Funds for which such person
in a Board member were as follows:
<TABLE>
<CAPTION> (5)
(3) Total
(2) Pension or (4) Compensation From
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to Board
Member Fund Fund's Expenses Retirement Board Members
<S> <C> <C> <C> <C>
Gordon J. Davis $3,500 none none $29,602
Joseph S. DiMartino $ none none $
Lynn Martin $3,000 none none $26,852
David P. Feldman $3,500 none none $85,631
Eugene McCarthy $3,500 none none $29,403
Daniel Rose $3,500 none none $62,006
Salvatore Saraceno** $ 404 none none $ 5,480
Sander Vanocur $3,500 none none $62,006
Rex Wilder $3,500 none none $ 5,480
Anne Wexler $1,182 none none $26,329
</TABLE>
______________________________
* Amount does not include reimburses expenses for attending
Board meeting, which amounted to $356,712 for all Directors as a
group.
** Deceased as of February, 1994.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief
Operating Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From December 1991 to July 1994, she was President and Chief
Compliance Officer of Funds Distributor, Inc., a
wholly-owned subsidiary of The Boston Company, Inc. Prior
to December
1991, she served as Vice President and Controller, and later
as Senior Vice President, of The Boston Company Advisors,
Inc.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice
President and General Counsel of the Distributor and an
officer of other investment companies advised or
administered by the
Manager. From February 1992 to July 1994, he served as
Counsel for The Boston Company Advisors, Inc. From August
1990 to February 1992, he was employed as an Associate at
Ropes &
Gray, and prior to August 1990, he was employed as an
Associate at Sidley & Austin.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior
Vice President of the Distributor and an officer of other
investment companies advised or administered by the Manager.
From
1988 to August 1994, he was Manager of the High Performance
Fabric Division of Springs Industries Inc.
ERIC B. FISCHMAN, Vice President and Assistant Secretary.
Associate General Counsel of the Distributor and an officer
of other investment companies advised or administered the
Manager. From
September 1992 to August 1994, he was an attorney with the
Board of Governors of the Federal Reserve System.
JOSEPH F. TOWER, III, Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the
Distributor and an officer of other investment companies
advised or administered by
the Manager. From July 1988 to August 1994, he was employed
by The Boston Company, Inc. where he held various management
positions in the Corporate Finance and Treasury areas.
JOHN J. PYBURN, Assistant Treasurer. Vice President of the
Distributor and an officer of other investment companies
advised or administered by the Manager. From 1984 to July
1994, he was
Assistant Vice President in the Mutual Fund Accounting
Department of the Manager.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of
the Distributor and an officer of other investment companies
advised or administered by the Manager. From January 1992
to July
1994, he was a Senior Legal Product Manager and, from
January 1990 to January 1992, a mutual fund accountant, for
The Boston Company Advisors, Inc.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President
of the Distributor and an officer of other investment
companies advised or administered by the Manager. From
March 1992 to July
1994, she was a Compliance Officer for The Managers Funds, a
registered investment company. From March 1990 until
September 1991, she was Development Director of The Rockland
Center for the Arts and, prior thereto, was employed as a
Research Assistant for the Bureau of National Affairs.
The address of each officer of the Fund is 200 Park Avenue,
New York, New York 10166.
Trustees and officers of the Fund, as a group, owned less
than 1% of the Fund's shares of beneficial interest outstanding
on February 17, 1995.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Management of the Fund."
The Manager provides management services pursuant to the
Management Agreement (the "Agreement") dated August 24, 1994 with
the Fund, which is subject to annual approval by (i) the
Fund's Board of Trustees or (ii) vote of a majority (as defined
in the Act) of the outstanding voting securities of the Fund,
provided that in either event the continuance also is approved by
a majority
of the Trustees who are not "interested persons" (as defined in
the Act) of the Fund or the Manager, by vote cast in person at a
meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders on August 3, 1989 and was
last approved by the Fund's Board of Trustees, including a
majority of the Trustees who are not "interested persons" of any
party
to the Agreement, at a meeting held on November 7, 1994. The
Agreement is terminable without penalty, on 60 days' notice, by
the Fund's Board of Trustees or by vote of the holders of a
majority of
the Fund's outstanding voting shares, or, upon not less than 90
days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the
Act).
The following persons are officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive
Officer; W. Keith Smith, Vice Chairman of the Board;
Lawrence S. Kash, Vice Chairman-Distribution and director; Robert
E. Riley, President, Chief Operating Officer and director; Philip
L. Toia, Vice Chairman-Operations and Administration; Paul H.
Snyder, Vice President-Finance and Chief Financial Officer;
Barbara E. Casey, Vice President-Dreyfus Retirement Services;
Diane M. Coffey, Vice President-Corporate Communications; Elie M.
Genadry, Vice President-Institutional Sales; Henry D. Gottmann,
Vice President-Retail Sales and Service; Daniel C. Maclean, Vice
President and General Counsel; Mark N. Jacobs, Vice President-
Legal and Secretary; Jeffrey N. Nachman, Vice President-Mutual
Fund Accounting; Katherine C. Wickham, Vice President-Human
Resources; Maurice Bendrihem, Controller; and Mandell L. Berman,
Frank V. Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian
M. Smerling and David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in
accordance with the stated policies of the Fund, subject to the
approval of the Fund's Board of Trustees. The Manager is
responsible for investment decisions, and provides the Fund with
portfolio manager who are authorized by the Board of Trustees to
execute purchases and sales of securities. The Fund's portfolio
managers are Richard J. Moynihan, A. Paul Disdier, Karen M. Hand,
Stephen C. Kris, Jill C. Shaffro, L. Lawrence Troutman, Samuel J.
Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of
portfolio managers and securities analysts who provide research
services for the Fund as well as for other funds advised by the
Manager.
All purchases and sales are reported for the Trustees' review at
the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne
by the Fund, except to the extent specifically assumed by the
Manager. The expenses borne by the Fund include: taxes,
interest,
loan commitment fees, interest and distributions paid on
securities sold short, brokerage fees and commissions, if any,
fees of Trustees who are not officers, directors, employees or
holders of 5% or
more of the outstanding voting securities of the Manager,
Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians,
transfer and dividend
disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
maintaining the Fund's existence, costs of independent pricing
services, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports
and meetings and any extraordinary expenses. Pursuant to the
Fund's
Service Plan, the Fund bears expenses for advertising, marketing
and distributing the Fund's shares and servicing shareholder
accounts, and also bears the cost of preparing and printing
prospectuses
and statements of additional information and costs associated
with implementing and operating such plan. See "Service Plan."
The Manager maintains office facilities on behalf of the
Fund, and furnishes statistical and research data, clerical help,
accounting, data processing, bookkeeping and internal auditing
and certain other required services. The Manager also may make
such advertising and promotional expenditures, using its own
resources, as it from time to time deems appropriate.
As compensation for the Manager's services, the Fund has
agreed to pay the Manager a monthly management fee at the annual
rate of .60 of 1% of the value of the Fund's average daily net
assets. The management fees for the fiscal years ended December
31, 1992, 1993 and 1994 amounted to $963,013, $1,178,284 and $
1,034,322, respectively. Such fees were reduced by $171,331,
$38,503
and $0 respectively, pursuant to undertakings in effect;
resulting in net fees paid by the Fund to the Manager of $791,682
in fiscal 1992, $1,139,781 in fiscal 1993 and $1,034,322 in
fiscal 1994.
The Manager has agreed that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage,
interest on borrowings and (with the prior written consent of the
necessary
state securities commissions) extraordinary expenses, but
including the management fee, exceed 1 1/2% of the value of the
Fund's average net assets for the fiscal year, the Fund may
deduct from the
payment to be made to the Manager under the Agreement, or the
Manager will bear, such excess expense. Such deduction or
payment, if any, will be estimated daily, and reconciled and
effected or
paid, as the case may be, on a monthly basis.
The aggregate of the fees payable to the Manager is not
subject to reduction as the value of the Fund's net assets
increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's
distributor pursuant to an agreement dated August 24, 1994. The
Distributor also acts as distributor for the other funds in the
Dreyfus
Family of Funds and for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer
purchase orders may be made between the hours of 8:00 a.m. and
4:00 p.m., New York time, on any business day that The
Shareholder
Services Group, Inc., the Fund's transfer and dividend disbursing
agent (the "Transfer Agent"), and the New York Stock Exchange are
open. Such purchases will be credited to the shareholder's Fund
account on the next bank business day. To qualify to use the
Dreyfus TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to,
the
same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the
proceeds of a particular redemption are to be wired to an account
at any other bank,
the request must be in writing and signature-guaranteed. See
"Redemption of Fund Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account
with a minimum investment of $100 without filing a new Account
Application during the calendar year the account is closed or
during the following calendar year, provided the information on
the old Account Application is still applicable.
SERVICE PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Service Plan."
Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the Act, provides, among other
things, that an investment company may bear expenses of
distributing its
shares only pursuant to a plan adopted in accordance with the
Rule. Pursuant to which the Fund (a) reimburses the Distributor
for payments to certain financial institutions (which may include
banks),
securities dealers and other financial industry professionals
(collectively, "Service Agents") for distributing the Fund's
shares and for servicing shareholders accounts and (b) pays the
Manager and
Dreyfus Service Corporation and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating
to the Fund and Servicing. The Fund's Board of Trustees has
adopted
such a plan (the "Plan"). The Fund's Board of Trustees believes
that there is a reasonable likelihood that the Plan will benefit
the Fund and its shareholders. In some states, banks or other
financial
institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
A quarterly report of the amounts expended under the Plan,
and the purposes for which such expenditures were incurred, must
be made to the Board of Trustees for its review. In addition,
the Plan provides that it may not be amended to increase
materially the costs which the Fund may bear for distribution
pursuant to the Plan without shareholder approval and that other
material
amendments of the Plan must be approved by the Board of Trustees,
and by the Trustees who are not "interested persons" (as defined
in the Act) of the Fund or the Manager and have no direct or
indirect financial interest in the operation of the Plan or in
the related service agreements, by vote cast in person at a
meeting called for the purpose of considering such amendments.
The Plans and
the related service agreements are subject to annual approval by
such vote of the Trustees cast in person at a meeting called for
the purpose of voting on the Plan. The Plan approved by
shareholders
on August 3, 1994 and was last approved by the Board of Trustees
at a meeting held on November 7, 1994. The Plan is terminable at
any time by vote of a majority of the Trustees who are not
"interested persons" and have no direct or indirect financial
interest in the operation of the Plan or in any of the related
service agreements or by vote of a majority of the Fund's shares.
Any service
agreement is terminable without penalty, at any time, by such
vote of the Trustees or, upon not more than 60 days' written
notice to the Service Agent, by vote of the holders of a majority
of the Fund's
shares, or, upon 15 days' notice, by the Distributor. Each
service agreement will terminate automatically in the event of
its assignment (as defined in the Act).
Prior Service Plan. For the period from January 1, 1994
through August 23, 1994, the Fund paid Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and the
Fund's
distributor during such period, $289,028 pursuant to the Plan, of
which $______ represented expenditures related to advertising,
marketing, and distributing the Fund's shares and servicing Fund
shareholders. In addition, the Fund paid $7,167 for printing the
Fund's prospectuses and statements of additional information.
Under the Plan, for the period from August 24, 1994 through
December
31, 1994, the total amount payable by the Fund was $145,904 for
(a) payments made to Service Agents for distributing Fund shares
and servicing shareholder accounts, and (b) paid the Manager.
Dreyfus Service Corporation and their affiliates of either of
them, $______ for advertising and marketing Fund Shares and for
servicing shareholder accounts. In addition, the Fund paid
$______ for
printing the Fund's prospectuses and statements of additional
information as well as implementing and operating the Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the
Account Application or by later written request that the Fund
provide Redemption Checks ("Checks") drawn on the Fund's ac-
count. Checks will be sent only to the registered owner(s) of
the account and only to the address of record. The Account
Application or later written request must be manually signed by
the
registered owner(s). Checks may be made payable to the order of
any person in an amount of $500 or more. When a Check is
presented to the Transfer Agent for payment, the Transfer Agent,
as the
investor's agent, will cause the Fund to redeem a sufficient
number of full or fractional shares in the investor's account to
cover the amount of the Check. Dividends are earned until the
Check clears.
After clearance, a copy of the Check will be returned to the
investor. Investors generally will be subject to the same rules
and regulations that apply to checking accounts, although
election of this
Privilege creates only a shareholder-transfer agent relationship
with the Transfer Agent.
If the amount of the Check is greater than the value of the
shares in an investor's account, the Check will be returned
marked insufficient funds. Checks should not be used to close an
account.
Wire Redemption Privilege. By using this Privilege, the
investor authorizes the Transfer Agent to act on wire or
telephone redemption instructions from any person representing
himself or
herself to be the investor, or a representative of the investor's
Service Agent, and reasonably believed by the Transfer Agent to
be genuine. Ordinarily, the Fund will initiate payment for
shares
redeemed pursuant to this Privilege on the next business day
after receipt by the Transfer Agent of a redemption request in
proper form. Redemption proceeds will be transferred by Federal
Reserve
wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form.
Redemption proceeds, if wired, must be in the amount of $1,000 or
more
and will be wired to the investor's account at the bank of record
designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to
a
correspondent bank if the investor's bank is not a member. Fees
ordinarily are imposed by such bank and usually are borne by the
investor. Immediate notification by the correspondent bank to
the
investor's bank is necessary to avoid a delay in crediting the
funds to the investor's bank account.
Investors with access to telegraphic equipment may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas
transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator at 1-800-654-7171, toll free. Investors should
advise the
operator that the above transmittal code must be used and should
also inform the operator of the Transfer Agent's answer back
sign.
To change the commercial bank or account designated to
receive redemption proceeds, a written request must be sent to
the Transfer Agent. This request must be signed by each
shareholder,
with each signature guaranteed as described below under "Share
Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware
that if they have selected the Dreyfus TeleTransfer Privilege,
any request for a wire redemption will be effected as a Dreyfus
TeleTransfer transaction through the Automated Clearing House
("ACH") system unless more prompt transmittal specifically is
requested. Redemption proceeds will be on deposit in the
investor's
account at an ACH member bank ordinarily two business days after
receipt of the redemption request. See "Purchase of Fund
Shares--Dreyfus TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates
representing Fund shares to be redeemed must be submitted with
the redemption request. Written redemption requests must be
signed by each
shareholder, including each holder of a joint account, and each
signature must be guaranteed. Signatures on endorsed
certificates submitted for redemption also must be guaranteed.
The Transfer
Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted
from domestic banks, brokers, dealers, credit unions, national
securities
exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New
York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Signature Program ("STAMP") and the
Stock Exchanges Medallion Program. Guarantees must be signed by
an authorized signatory of the guarantor and "Signa-
ture-Guaranteed" must appear with the signature. The Transfer
Agent may request additional documentation from corporations,
executors, administrators, trustees or guardians and may accept
other
suitable verification arrangements from foreign investors, such
as consular verification. For more information with respect to
signature-guarantees, please call one of the telephone numbers
listed on the
cover.
Redemption Commitment. The Fund has committed itself to pay
in cash all redemption requests by any shareholder of record,
limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of the Fund's net assets at the
beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In
the
case of requests for redemption in excess of such amount, the
Board of Trustees reserves the right to make payments in whole or
part in securities or other assets of the Fund in case of an
emergency
or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such
event, the securities would be valued in the same manner as the
Fund's
portfolio is valued. If the recipient sold such securities,
brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than
customary weekend and holiday closings), (b) when trading in the
markets the Fund ordinarily utilizes is restricted, or when an
emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the Securities and
Exchange Commission by
order may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services."
Fund Exchanges. Shares of other funds purchased by exchange
will be purchased on the basis of relative net asset value per
share as follows:
A. Exchanges for shares of funds that are offered
without a sales load will be made without a sales load.
B. Shares of funds purchased without a sales load may
be exchanged for shares of other funds sold with a sales load,
and the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be
exchanged without a sales load for shares of other funds sold
without a sales load.
D. Shares of funds purchased with a sales load, shares
of funds acquired by a previous exchange from shares purchased
with a sales load, and additional shares acquired through
reinvestment of dividends or distributions of any
such funds (collectively referred to herein as "Purchased
Shares") may be exchanged for shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds
the maximum sales load that could have been imposed in
connection with the Purchased Shares (at the time
the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders
must notify the Transfer Agent of their prior ownership of fund
shares and their account number.
To request an exchange, an investor, or the investor's
Service Agent acting on the investor's behalf, must give exchange
instructions to the Transfer Agent in writing, or by telephone.
The
ability to issue exchange instructions by Telephone is given to
all Fund shareholders automatically unless the investor checks
the applicable "NO" box on the Account Application, indicating
that the
investor specifically refuses this Privilege. By using the
Telephone Exchange Privilege, the investor authorizes the
Transfer Agent to act on telephonic instructions from any person
representing himself
or herself to be the investor or a representative of the
investor's Service Agent, and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to
limitations as to
the amount involved or the number of telephone exchanges
permitted. Shares in certificate form are not eligible for
telephone exchange.
To establish a Personal Retirement Plan by exchange, shares
of the fund being exchanged must have a value of at least the
minimum initial investment required for the fund into which the
exchange is being made. For Dreyfus-sponsored Keogh Plans, IRAs
and IRAs set up under a Simplified Employee Pension Plan
("SEP-IRAs") with only one participant, the minimum initial
investment
is $750. To exchange shares held in Corporate Plans, 403(b)(7)
Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500
invested
among the funds in the Dreyfus Family of Funds. To exchange
shares held in Personal Retirement Plans, the shares exchanged
must have a current value of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange
Privilege permits an investor to purchase, in exchange for shares
of the Fund, shares of another fund in the Dreyfus Family of
Funds.
This Privilege is available only for existing accounts. Shares
will be exchanged on the basis of relative net asset value
described above under "Fund Exchange." Enrollment in or
modification or
cancellation of this Privilege is effective three business days
following notification by the investor. An investor will be
notified if his account falls below the amount designated to be
exchanged under
this Privilege. In this case, an investor's account will fall to
zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction.
Shares held
under IRA and other retirement plans are eligible for this
Privilege. Exchanges of IRA shares may be made between IRA
accounts and from regular accounts to IRA accounts, but not from
IRA
accounts to regular accounts. With respect to all other
retirement accounts exchanges may be made only among those
accounts.
Fund exchanges and the Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares
of the fund being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other
identifying designations.
Shareholder Services Forms and prospectuses of the other
funds may be obtained by calling 1-800-654-6561. The Fund
reserves the right to reject any exchange request in whole or in
part.
The Exchange Services or Dreyfus Auto-Exchange Privilege may be
modified or terminated at any time upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan
permits an investor with a $5,000 minimum account to request
withdrawal of a specified dollar amount (minimum of $50) on
either a monthly or quarterly basis. Withdrawal payments are the
proceeds from the sale of Fund shares, not the yield on the
shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and
eventually may be depleted. There is a service charge of $.50
for each withdrawal check. Automatic Withdrawal may be
terminated at any time
by the investor, the Fund or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows
investors to invest on the payment date their dividends or
dividends and capital gain distributions, if any, from the Fund
in shares of
another fund in the Dreyfus Family of Funds of which the investor
is a shareholder. Shares of other funds purchased pursuant to
this privilege will be purchased on the basis of relative net
asset value
per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.
C. Dividends and distributions paid by a fund which charges
a sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares
exceeds the maximum sales load charged by the fund from which
dividends or distributions are being swept, without giving effect
to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a contingent
deferred sales charge ("CDSC") and the applicable CDSC, if any,
will be
imposed upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"How to Buy Fund Shares."
Valuation of Portfolio Securities. The Fund's investments
are valued by an independent pricing service (the "Service")
approved by the Board of Trustees. When, in the judgment of the
Service, quoted bid prices for investments are readily available
and are representative of the bid side of the market, these
investments are valued at the mean between the quoted bid prices
(as obtained
by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute
a majority
of the portfolio securities) are carried at fair value as
determined by the Service, based on methods which include
consideration of: yields or prices of municipal bonds of
comparable quality, coupon,
maturity and type; indications as to values from dealers; and
general market conditions. The Service may employ electronic
data processing techniques and/or a matrix system to determine
valuations.
The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Board of Trustees. Expenses
and fees, including the management fees (reduced by the expense
limitation, if any) and fees pursuant to the Service Plan, are
accrued daily and are taken into account for the purpose of
determining the net asset value of Fund shares.
Subject to guidelines established by the Fund's Board of
Trustees, the Manager intends to retain in the Fund's portfolio
Municipal Obligations which are insured under the Mutual Fund
Insurance policy and which are in default or in significant risk
of default in the payment of principal or interest until the
default has been cured or the principal and interest are paid by
the issuer or
the insurer. In establishing fair value for these securities the
Board of Trustees will give recognition to the value of the
insurance feature as well as the market value of the securities.
Absent any
unusual or unforeseen circumstances, the Manager will recommend
valuing these securities at the same price as similar securities
of a minimum investment grade (i.e., rated Baa by Moody's or BBB
by
S&P or Fitch).
New York Stock Exchange Closings. The holidays (as
observed) on which the New York Stock Exchange is closed
currently are: New Year's Day, Presidents' Day, Good Friday,
Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold
to parties acting as either principal or agent. Newly-issued
securities ordinarily are purchased directly from the issuer or
from an
underwriter; other purchases and sales usually are placed with
those dealers from which it appears that the best price or
execution will be obtained. Usually no brokerage commissions, as
such, are
paid by the Fund for such purchases and sales, although the price
paid usually includes an undisclosed compensation to the dealer
acting as agent. The prices paid to underwriters of newly-issued
securities usually include a concession paid by the issuer to the
underwriter, and purchases of after-market securities from
dealers ordinarily are executed at a price between the bid and
asked price.
No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's
portfolio managers in their best judgment. The primary
consideration is prompt and effective execution of orders at the
most
favorable price. Subject to that primary consideration, dealers
may be selected for research, statistical or other services to
enable the Manager to supplement its own research and analysis
with the
views and information of other securities firms.
Research services furnished by brokers through which the
Fund effects securities transactions may be used by the Manager
in advising other funds it advises and, conversely, research
services
furnished to the Manager by brokers in connection with other
funds the Manager advises may be used by the Manager in advising
the Fund. Although it is not possible to place a dollar value on
these
services, it is the opinion of the Manager that the receipt and
study of such services should not reduce the expenses of its
research department.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Dividends, Distributions and Taxes."
The Internal Revenue Code of 1986, as amended, (the "Code"),
provides that if a shareholder has not held his Fund shares for
more than six months (or such shorter period as the Internal
Revenue Service may prescribe by regulation) and has received an
exempt-interest dividend with respect to such shares, any loss
incurred on the sale of such shares will be disallowed to the
extent of
the exempt-interest dividend received. In addition, any dividend
or distribution paid shortly after an investor's purchase may
have the effect of reducing the net asset value of his shares
below the cost
of his investment. Such a distribution would be a return on
investment in an economic sense although taxable as stated in
"Dividends, Distributions and Taxes" in the Prospectus.
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of any gains realized from the sale or other
disposition of
certain market discount bonds will be treated as ordinary income
under Section 1276 of the Code. In addition, all or a portion of
the gain realized from engaging in "conversion transactions" may
be
treated as ordinary income under Section 1258. "Conversion
transactions" are defined to include certain forward, futures,
option and "straddle" transactions, transactions marketed or sold
to produce
capital gains, or transactions described in Treasury regulations
to be issued in the future.
Investment by the Fund in securities at a discount or
providing for deferred interest or payment of interest in the
form of additional obligations could, under special tax rules,
affect the amount,
timing and character of distributions to shareholders. For
example, the Fund could be required to take into account annually
a portion of the discount (or deemed discount) at which such
securities
were issued and to distribute such portion in order to maintain
its qualification as a regulated investment company. In such
case, the Fund may have to dispose of securities which it might
otherwise
have continued to hold in order to generate cash to satisfy these
distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Performance Information."
The Fund's current yield for the 30-day period ended
December 31, 1994 was 5.59%. Current yield is computed pursuant
to a formula which operates as follows: The amount of the Fund's
expenses accrued for the 30-day period (net of reimbursements) is
subtracted from the amount of the dividends and interest earned
(computed in accordance with regulatory requirements) by the Fund
during the period. That result is then divided by the product
of: (a) the average daily number of shares outstanding during
the period that were entitled to receive dividends, and (b) the
net asset
value per share on the last day of the period less any
undistributed earned income per share reasonably expected to be
declared as a dividend shortly thereafter. The quotient is then
added to 1, and
that sum is raised to the 6th power, after which 1 is subtracted.
The current yield is then arrived at by multiplying the result by
2.
Based upon a combined 1995 Federal, New York State and New
York City personal income tax rate of 47.05%, the Fund's tax
equivalent yield for the 30-day period ended December 31, 1995
was 10.56%. Tax equivalent yield is computed by dividing that
portion of the current yield (calculated as described above)
which is tax exempt by 1 minus a stated tax rate and adding the
quotient to
that portion, if any, of the yield of the Fund that is not tax
exempt.
The tax equivalent yield noted above represents the
application of the highest Federal, New York State and New York
City marginal personal income tax rates currently in effect. For
Federal
income tax purposes, a 39.60% tax rate has been used. For New
York State and New York City personal income tax purposes, tax
rates of 7.875% and 4.46%, respectively, have been used. The tax
equivalent figure, however, does not reflect the potential effect
of any other local (including, but not limited to, county,
district or city, other than New York City) taxes, including
applicable surcharges.
In addition, there may be pending legislation which could affect
such stated tax rates or yields. Each investor should consult
its tax adviser, and consider its own factual circumstances and
applicable
tax laws, in order to ascertain the relevant tax equivalent
yield.
The Fund's average annual total return for the 1, 5 and
7.868 year periods ended December 31, 1994 was -6.62%, 6.16% and
4.47%, respectively. Average annual total return is calculated
by
determining the ending redeemable value of an investment
purchased with a hypothetical $1,000 payment made at the
beginning of the period (assuming the reinvestment of dividends
and distributions),
dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in
the period) and subtracting 1 from the result.
The Fund's total return for the period February 18, 1987 to
December 31, 1994 was 41.07%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at
the
beginning of a stated period from the net asset value per share
at the end of the period (after giving effect to the reinvestment
of dividends and distributions during the period) and dividing
the result
by the net asset value per share at the beginning of the period.
From time to time, the Fund may use hypothetical equivalent
yields or charts in its advertising. These hypothetical yields
or charts will be used for illustrative purposes only and not as
representative of the Fund's past or future performance.
Advertising materials for the Fund also may refer to or discuss
then-current or past economic conditions, developments and/or
events, and
actual or proposed tax legislation. From time to time,
advertising materials for the Fund also may refer to statistical
or other information concerning trends relating to investment
companies, as
compiled by industry associations such as the Investment Company
Institute and may refer to Morningstar ratings and related
analyses supporting the rating.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"General Information."
Each Fund share has one vote and, when issued and paid for
in accordance with the terms of the offering, is fully paid and
non-assessable. Fund shares are of one class and have equal
rights
as to dividends and in liquidation. Shares have no preemptive,
subscription or conversion rights and are freely transferable.
The Fund sends annual and semi-annual financial statements
to all its shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New
York 10286, is the Fund's custodian. The Shareholder Services
Group, Inc., a subsidiary of First Data Corporation, P.O. Box
9671, Providence, Rhode Island 02940-9671, is the Fund's transfer
and dividend disbursing agent. Neither The Bank of New York nor
The Shareholder Services Group, Inc. has any part in determining
the investment policies of the Fund or which portfolio securities
are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2696, as counsel for the Fund, has rendered its
opinion as to certain legal matters regarding the due
authorization
and valid issuance of the shares of beneficial interest being
sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Fund.
<PAGE>
APPENDIX A
RISK FACTORS--INVESTING IN NEW YORK MUNICIPAL OBLIGATIONS
The financial condition of New York State (the "State") and
certain of its public
bodies (the "Agencies") and municipalities, particularly New York
City (the "City"), could
affect the market values and marketability of New York Municipal
Obligations which
may be held by the Fund. The following information constitutes
only a brief summary,
does not purport to be a complete description, and is based on
information drawn from
official statements relating to securities offerings of the
State, the City and the Municipal
Assistance Corporation for the City of New York ("MAC") available
as of the date of
this Statement of Additional Information. While the Fund has not
independently verified
such information, it has no reason to believe that such
information is not correct in all
material respects.
A national recession commenced in mid-1990. The downturn
continued through
the remainder of the 1990-91 fiscal year, and was followed by a
period of weak economic
growth during the remainder of the 1991 calendar year. For the
calendar year 1992, the
national economy continued to recover, although at a rate below
all post-war recoveries.
The recession was more severe in the State than in other parts of
the nation, owing to a
significant retrenchment in the financial services industry,
cutbacks in defense spending,
and an overbuilt real estate market. The State economy remained
in recession until
1993, when employment growth resumed. Since early 1993, the
State has gained
approximately 100,000 jobs. The State's economic forecast calls
for employment to
increase in 1994 and 1995. Employment growth will moderate in
1995 when the pace of
national economic growth is projected to slacken and entire
industries adjust to changing
markets and the State's economy absorbs the full impact of these
developments.
Personal income is estimated to increase by 5.3% in 1994, and a
more moderate rate in
1995.
The State's budget for the 1994-95 fiscal year was enacted by
the Legislature on
June 7, 1994, more than two months after the start of the fiscal
year. Prior to adoption
of the budget, the Legislature enacted appropriations for
disbursements considered to be
necessary for State operations and other purposes, including all
necessary appropriations
for debt service. The State Financial Plan for 1994-95 fiscal
year was formulated on June
16, 1994 and is based on the State's budget as enacted by the
Legislature and signed into
law by the Governor.
The State Financial Plan is based upon forecasts of national
and
State economic
activity. Economic forecasts have frequently failed to predict
accurately the timing and
magnitude of changes in the national and the State economies.
Many uncertainties exist
in forecasts of both the national and State economies, including
consumer attitudes
toward spending, Federal financial and monetary policies, the
availability of credit and
the condition of the world economy, which could have an adverse
effect on the State.
There can be no assurance that the State economy will not
experience worse-than-
predicted results in the 1994-95 fiscal year, with corresponding
material and adverse
effects on the State's projections of receipts and disbursements.
The State issued its first update to the GAAP-basis Financial
Plan for the State's
1994-95 fiscal year on September 1, 1994. In the September
GAAP-basis update, the
Division of the Budget projected a General Fund Operating deficit
of $690 million. The
prior projection of the 1994-95 GAAP-basis State Financial Plan,
issued in February 1994
as part of the 1994-95 Executive Budget (the "February 1994
Projection"), projected an
operating surplus in the General Fund of $7 million.
In the February 1994 projection, General Fund operating
results
over the 1993-94
and 1994-95 fiscal year projection period were anticipated to
reduce the accumulated
deficit by $256 million. The impact of the reported results for
the State's 1993-94 fiscal
year and the revised projection on the accumulated deficit is
substantially the same.
Combining the $914 million operating surplus for the State's
1993-94 fiscal year with the
projected $690 million operating deficit for the 1994-95 fiscal
year results in an
anticipated $224 million reduction in the accumulated deficit.
Total revenues in the General Fund are projected at $32.825
billion, consisting of
$30.783 billion in tax revenues and $2.042 billion in
miscellaneous revenue. Personal
income tax revenue is projected to reach $17.712 billion, or
nearly 58% of total tax
revenue. User taxes and fees are projected to total $6.561
billion, or nearly 21% of total
taxes. Business taxes are projected at $5.442 billion, or 18%,
while revenue from other
taxes is projected at $1.068 billion or 3% of total tax revenue.
Total expenditures in the
General Fund are projected at $33.633 billion, including $23.778
billion for grants to local
governments, $8.033 billion for State operations, $1.807 billion
for general State charges,
and $15 million for debt service. Compared to the projections
made in February,
expenditures for grants to local governments are substantially
increased, while
expenditures for state operations are reduced.
There can be no assurance that the State will not face
substantial potential budget
gaps in future years resulting from a significant disparity
between tax revenues projected
from a lower recurring receipts base and the spending required to
maintain State
programs at current levels. To address any potential budgetary
imbalance, the State may
need to take significant actions to align recurring receipts and
disbursements in future
fiscal years.
On June 6, 1990, Moody's changed its ratings on all the
State's
outstanding
general obligation bonds from A1 to A. On March 26, 1990 and
January 13, 1992, S&P
changed its ratings on all of the State's outstanding general
obligation bonds from AA- to
A and from A to A-, respectively. Ratings reflect only the
respective views of such
organizations, and their concerns about the financial condition
of New York State and
City, the debt load of the State and City and any economic
uncertainties about the
region. There is no assurance that a particular rating will
continue for any given period
of time or that any such rating will not be revised downward or
withdrawn entirely if, in
the judgment of the agency originally establishing the rating,
circumstances so warrant.
(1) The State, Agencies and Other Municipalities. During the
mid-1970s, some
of the Agencies and municipalities (in particular, the City)
faced extraordinary financial
difficulties, which affected the State's own financial condition.
These events, including a
default on short-term notes issued by the New York State Urban
Development
Corporation ("UDC") in February 1975, which default was cured
shortly thereafter, and a
continuation of the financial difficulties of the City, created
substantial investor resistance
to securities issued by the State and by some of its
municipalities and Agencies. For a
time, in late 1975 and early 1976, these difficulties resulted in
a virtual closing of public
credit markets for State and many State related securities.
In response to the financial problems confronting it, the
State
developed and
implemented programs for its 1977 fiscal year that included the
adoption of a balanced
budget on a cash basis (a deficit of $92 million that actually
resulted was financed by
issuing notes that were paid during the first quarter of the
State's 1978 fiscal year). In
addition, legislation was enacted limiting the occurrence of
additional so-called "moral
obligation" and certain other Agency debt, which legislation does
not, however, apply to
MAC debt.
State Financial Results. New York State's financial
operations
have improved
during recent fiscal years. During the period 1989-90 through
1991-92, the State incurred
General Fund operating deficits that were closed with receipts
from the issuance of tax
and revenue anticipation notes ("TRANs"). First, the national
recession, and then the
lingering economic slowdown in the New York and regional economy,
resulted in
repeated shortfalls in receipts and three budget deficits. For
its 1992-93 and 1993-94
fiscal years, the State recorded balanced budgets on a cash
basis, with substantial fund
balances in each year as described below.
On July 29, 1994, the Office of the State Comptroller issued
the
General Purpose
Financial Statements of the State of New York for the 1993-94
fiscal year. The
Statements were prepared on GAAP-basis and were independently
audited in accordance
with generally accepted auditing standards. The State's Combined
Balance Sheet as of
March 31, 1994 showed an accumulated surplus in its combined
governmental funds of
$370 million, reflecting liabilities of $13.219 billion and
assets of $13.589 billion. This
accumulated Governmental Funds surplus includes a $1.637 billion
accumulated deficit in
the General Fund, as well as accumulated surpluses in the Special
Revenue and Debt
Service fund types and a $622 million accumulated deficit in the
Capital Projects Fund
type.
The State completed its 1993-94 fiscal year with a combined
Governmental Funds
operating surplus of $1.051 billion, which included an operating
surplus in the General
Fund of $914 million, in the Special Revenue Funds of $149
million and in the Debt
Service Funds of $23 million, and an operating deficit in the
Capital Projects Funds of
$35 million. The following table updates Table 6 of the Annual
Information Statement.
The State reported a General Fund operating surplus of $914
million for the
1993-94 fiscal year, as compared to an operating surplus of
$2.065 billion for the prior
fiscal year. The 1993-94 fiscal year surplus reflects several
major factors, including the
cash basis surplus recorded in 1993-94, the use of $671 million
of the 1992-93 surplus to
fund operating expenses in 1993-94, net proceeds of $575 million
in bonds issued by the
Local Government Assistance Corporation, and the accumulation of
$265 million balance
in the Contingency Reserve Fund. Revenues increased $543 million
(1.7%) over prior
fiscal year revenues with the largest increase occurring in
personal income taxes.
Expenditures increased $1.659 billion (5.6%) over the prior
fiscal year, with the largest
increase occurring in State aid for social services programs.
The State ended its 1993-94 fiscal year with a balance of
$1.140
billion in the tax
refund reserve account, $265 million in its Contingency Reserve
Fund and $134 million in
its tax stabilization reserve fund. These fund balances were
primarily the result of an
improving national economy, State employment growth, tax
collections that exceeded
earlier projections and disbursements that were below
expectations. Deposits to the
personal income tax refund reserve have the effect of reducing
reported personal income
tax receipts in the fiscal year when made and withdrawals from
such reserve increase
receipts in the fiscal year when made. The balance in the tax
reserve account will be
used to pay taxpayer refunds, rather than drawing from 1994-95
receipts.
Of the $1.140 billion deposited in the tax refund reserve
account, $1.026 billion
was available for budgetary planning purposes in the 1994-95
fiscal year. The remaining
$114 million will be redeposited in the tax refund reserve
account at the end of the
State's 1994-95 fiscal year to continue the process of
restructuring the State's cash flow as
part of the New York Local Government Assistance Corporation
("LGAC") program.
The balance in the contingency reserve fund will be used to meet
the cost of litigation
facing the State. The tax stabilization reserve fund may be used
only in the event of an
unanticipated General Fund cash-basis deficit during the 1994-95
fiscal year.
Before the deposit of $1.140 billion in the tax refund reserve
account, General
Fund receipts in 1993-94 exceeded those originally projected when
the State Financial
Plan for the year was formulated on April 16, 1993 by $1.002
billion. Greater-than-
expected receipts in the personal income tax, the bank tax, the
corporation franchise tax
and the estate tax accounted for most of this variance, and more
than offset weaker-than-
projected collections from the sales and use tax and
miscellaneous receipts. Collections
from individual taxes were affected by various factors including
changes in Federal
business laws, sustained profitability of banks, strong
performance of securities firms, and
higher-than-expected consumption of tobacco products following
price cuts.
The higher receipts resulted, in part, because the New York
economy performed
better than forecasted. Employment growth started in the first
quarter of the State's
1993-94 year, and although this lagged the national economic
recovery, the growth in
New York began earlier than forecasted. The New York economy
exhibited signs of
strength in the service sector, in construction, and in trade.
Long Island, and the Mid-
Hudson Valley continued to lag the rest of the State in economic
growth. Approximately
100,000 jobs are believed to have been added during the 1993-94
fiscal year.
Disbursements and transfer from the General Fund were $303
million below the
level projected in April 1993, an amount that would have been
$423 million had the State
not accelerated the payment of Medicaid billings, which in the
April 1993 State Financial
Plan were planned to be deferred into the 1994-95 fiscal year.
Compared to the
estimates included in the State Financial Plan formulated in
April 1993, disbursements
were lower for Medicaid, capital projects, and debt service (due
to refundings). In
addition, $114 million of school and payments were funded from
the proceeds of LGAC
bonds. Disbursements were higher-than-expected for general
support for public schools.
The State also made the first of six required payments to the
State of Delaware related
to the settlement of Delaware's litigation against the State
regarding the disposition of
abandoned property receipts.
During the 1993-94 fiscal year, the State also established and
funded a
Contingency Reserve Fund ("CRF") as a way to assist the State in
financing the cost of
litigation affecting the State. The CRF was initially funded
with a transfer of $100
million attributable to the positive margin recorded in the
1992-93 fiscal year. In
addition, the State augmented this initial deposit with $132
million on debt service
savings attributable to the refinancing of State and public
authority bonds during 1993-94.
A year-end transfer of $36 million was also made to the CRF,
which, after a
disbursement for authorized fund purposes, brought the CRF
balance at the end of 1993-
94 to $265 million. This amount was $165 million higher than the
amount originally
targeted for this reserve fund.
For its 1992-93 fiscal year the State had a balanced budget on
a
cash basis with a
positive margin of $671 million in the General Fund that was
deposited in the refund
reserve account.
After reflecting a 1992-93 year-end deposit to the refund
reserve account of $671
million, reported 1992-93 General Fund receipts were $45 million
higher than originally
projected in April 1992. If not for that year-end transaction,
which had the effect of
reducing 1992-93 receipts by $671 million and making those
receipts available in 1993-94,
General Fund receipts would have been $716 million higher than
originally projected.
The favorable performance was primarily attributable to
personal
income tax
collections that were more than $700 million higher than
originally projected (before
reflecting the refund reserve transaction). The withholding and
estimated payment
components of the personal income tax exceeded original estimates
by more than $800
million combined, reflecting both stronger economic activity,
particularly at year's end,
and the tax-induced one-time acceleration of income into 1992.
Modest shortfalls were
experienced in other components of the income tax.
There were large, but largely offsetting, variances in other
categories. Significantly
higher-than-projected business tax collections and the receipt of
unbudgeted payments
from the Medical Malpractice Insurance Association and the New
York Racing
Association approximately offset the loss of an anticipated $200
million Federal
reimbursement, the loss of certain budgeted hospital differential
revenue as a result of
unfavorable court decisions, and shortfalls in certain
miscellaneous revenue sources.
Disbursements and transfers to other funds totaled $30.829
billion, an increase of
$45 million above projections in April 1992. After adjusting for
the impact of a $150
million payment from the Medical Malpractice Insurance
Association to health insurers
made pursuant to legislation passed in January 1993, actual
disbursements were $105
million lower than projected. This reduction primarily reflected
higher-than-anticipated
costs for educational programs, as offset by lower costs in
virtually all other categories of
spending, including Medicaid, local health programs, agency
operations, fringe benefits,
capital projects and debt service.
During its 1989-90, 1990-91 and 1991-92 fiscal years, the
State
incurred cash-basis
operating deficits in the General Fund of $775 million, $1.081
billion and $575 million,
respectively, prior to the issuance of short-term tax and revenue
anticipation notes
("TRANs"), owing to lower-than-projected receipts.
Governmental Funds. The principal operating fund of the State
is the General
Fund. It receives all State income that is not required by law
to be deposited in another
fund. General Fund receipts, including transfers from other
funds, totalled $32.229
billion in the State's 1993-94 fiscal year. General Fund
receipts in the State's 1994-95
fiscal year are estimated in the State Financial Plan at $34.321
billion. Including transfers
to other funds, total General Fund disbursements in the 1993-94
fiscal year were $31.897
billion, and are estimated to total $34.248 billion in the
State's 1994-95 fiscal year.
The Special Revenue Funds account for State receipts from
specific sources that
are legally restricted in use to specified purposes and include
all moneys received from
the Federal government. Total receipts in Special Revenue Funds
are projected at
$24.598 billion in the State's 1994-95 fiscal year. Federal
grants are projected to account
for 75% of the total projected receipts in Special Revenue Funds
in the State's 1994-95
fiscal year.
Disbursements from Special Revenue Funds are projected to be
$24.982 billion
for the State's 1994-95 fiscal year. Grants to local governments
disbursed from this fund
type are projected to account for 75% of disbursements from this
fund for the 1994-95
fiscal year.
The Capital Projects Funds are used to finance the acquisition
and construction of
major capital facilities and to aid local government units and
Agencies in financing
capital constructions. Federal grants for capital projects,
largely highway-related, are
projected to account for 33% of the $3.233 billion in total
projected receipts in Capital
Projects Funds in the State's 1994-95 fiscal year. Total
disbursements for capital projects
are projected to be $3.730 billion during the State's 1994-95
fiscal year. Of total
disbursements from Capital Projects Funds, approximately 54% is
for various
transportation purposes, including highways and mass
transportation facilities; 4% is for
programs of the Department of Correctional Services and other
public protection
activities; 16% is for health and mental hygiene facilities; 13%
is for environmental and
recreational programs; 5% is for educational programs; and 5% is
for housing and
economic development programs. The balance is for the
maintenance of State office
facilities and various other capital programs.
The Debt Service Funds serve to fulfill State debt service on
long-term general
obligation State debt and other State lease/purchase and
contractual obligation financing
commitments. Total receipts in Debt Service Funds are projected
to reach $2.318 billion
in the State's 1994-95 fiscal year. Total disbursements from
Debt Service Funds for debt
service, lease/purchase and contractual obligation financing
commitments are projected to
be $2.246 billion for the 1994-95 fiscal year.
State Borrowing Plan. The State issued $850 million in TRANs
on
May 4, 1993 to
fund its day-to-day operations and certain local assistance
payments to its municipalities
and school districts. All of these TRANs matured on December 31,
1993.
The State anticipates that its 1994-95 borrowings for capital
purposes will consist
of approximately $374 million in general obligation bonds
(including $140 million for the
purpose of redeeming outstanding bond anticipation notes) and
$140 million in new
commercial paper issuances. The Legislature has authorized the
issuance of up to $69
million in certificates of participation for real property and
equipment acquisitions during
the State's 1994-95 fiscal year. The projections of the State
regarding its borrowings for
the 1994-95 fiscal year may change if actual receipts fall short
of State projections or if
other circumstances require.
In addition, the LGAC is authorized to provide net proceeds of
$315 million
during the 1994-95 fiscal year to make payments to local
governmental units, otherwise
made by the State, reduces the State's future liabilities.
State Agencies. The fiscal stability of the State is related,
at least in part, to the
fiscal stability of its localities and various of its Agencies.
Various Agencies have issued
bonds secured, in part, by non-binding statutory provisions for
State appropriations to
maintain various debt service reserve funds established for such
bonds (commonly
referred to as "moral obligation" provisions).
At September 30, 1993, there were 18 Agencies that had
outstanding debt of $100
million or more. The aggregate outstanding debt, including
refunding bonds, of these 18
Agencies was $63.5 billion as of September 30, 1993. As of March
31, 1994, aggregate
Agency debt outstanding as State-supported debt was $21.1 billion
and as State-related
was $29.4 billion. Debt service on the outstanding Agency
obligations normally is paid
out of revenues generated by the Agencies' projects or programs,
but in recent years the
State has provided special financial assistance, in some cases on
a recurring basis, to
certain Agencies for operating and other expenses and for debt
service pursuant to moral
obligation indebtedness provisions or otherwise. Additional
assistance is expected to
continue to be required in future years.
Several Agencies have experienced financial difficulties in
the
past. Certain
Agencies continue to experience financial difficulties requiring
financial assistance from
the State. Failure of the State to appropriate necessary amounts
or to take other action
to permit certain Agencies to meet their obligations could result
in a default by one or
more of such Agencies. If a default were to occur, it would
likely have a significant
effect on the marketability of obligations of the State and the
Agencies. These Agencies
are discussed below.
The New York State Housing Finance Agency ("HFA") provides
financing for
multifamily housing, State University construction, hospital and
nursing home
development, and other programs. In general, HFA depends upon
mortgagors in the
housing programs it finances to generate sufficient funds from
rental income, subsidies
and other payments to meet their respective mortgage repayment
obligations to HFA,
which provide the principal source of funds for the payment of
debt service on HFA
bonds, as well as to meet operating and maintenance costs of the
projects financed.
From January 1, 1976 through March 31, 1987, the State was called
upon to appropriate
a total of $162.8 million to make up deficiencies in the debt
service reserve funds of
HFA pursuant to moral obligation provisions. The State has not
been called upon to
make such payments since the 1986-87 fiscal year and no payments
are anticipated
during the 1993-94 fiscal year.
UDC has experienced, and expects to continue to experience,
financial difficulties
with the housing programs it had undertaken prior to 1975,
because a substantial number
of these housing program mortgagors are unable to make full
payments on their
mortgage loans. Through a subsidiary, UDC is currently
attempting to increase its rate
of collection by accelerating its program of foreclosures and by
entering into settlement
agreements. UDC has been, and will remain, dependent upon the
State for
appropriations to meet its operating expenses. The State also
has appropriated money to
assist in the curing of a default by UDC on notes which did not
contain the State's moral
obligation provision.
The Metropolitan Transportation Authority (the "MTA") oversees
New York
City's subway and bus lines by its affiliates, the New York City
Transit Authority and the
Manhattan and Bronx Surface Transit Operating Authority
(collectively, the "TA").
Through MTA's subsidiaries, the Long Island Rail Road Company,
the Metro-North
Commuter Railroad Company and the Metropolitan Suburban Bus
Authority, the MTA
operates certain commuter rail and bus lines in the New York
metropolitan area. In
addition, the Staten Island Rapid Transit Authority, an MTA
subsidiary, operates a rapid
transit line on Staten Island. Through its affiliated agency,
the Triborough Bridge and
Tunnel Authority (the "TBTA"), the MTA operates certain toll
bridges and tunnels.
Because fare revenues are not sufficient to finance the mass
transit portion of these
operations, the MTA has depended and will continue to depend for
operating support
upon a system of State, local government and TBTA support and, to
the extent available,
Federal operating assistance, including loans, grants and
operating subsidies.
The TA and the commuter railroads, which are on a calendar
fiscal year, ended
1993 with their budgets balanced on a cash basis. The TA had a
closing cash balance of
approximately $39 million.
Over the past several years the State has enacted several
taxes--including a
surcharge on the profits of banks, insurance corporations and
general business
corporations doing business in the 12-county region (the
"Metropolitan Transportation
Region") served by the MTA and a special .25% regional sales and
use tax--that provide
additional revenues for mass transit purposes, including
assistance to the MTA. The
surcharge, which expires in November 1995, yielded $533 million
in calendar year 1993,
of which the MTA was entitled to receive approximately 90%, or
approximately $480
million.
For 1994, the TA projects that it will end the year with $77.6
million cash surplus.
For the 1994-95 State fiscal year, total State assistance to the
MTA is estimated at $1.3
billion.
A subway fire on December 28, 1990 and a subway derailment on
August 28,
1991, each of which caused fatalities and many injuries, have
given rise to substantial
claims for damages against both the TA and the City.
In 1981, the State Legislature authorized procedures for the
adoption, approval
and amendment of a five-year plan for the capital program
designed to upgrade the
performance of the MTA's transportation systems and to
supplement, replace and
rehabilitate facilities and equipment, and also granted certain
additional bonding
authorization therefor.
On April 5, 1993, the Legislature approved, and the Governor
subsequently signed
into law, legislation authorizing a five-year $9.56 billion
capital plan for the MTA for
1992-1996. The MTA has submitted a 1992-1996 Capital Program
based on this
legislation for the approval of the MTA Capital Program Review
Board (the "CPRB"), as
State law requires. On July 1, 1993, the CPRB indicated that it
was withholding approval
pending the resolution of certain related issues. If approved,
the 1992-1996 Capital
Program would succeed two previous five-year capital programs of
the periods covering
1982-1986 and 1987-1991. The 1987-1991 Capital Program totalled
approximately $8.0
billion, including $6.2 billion for TA capital projects.
The 1992-1996 Capital Program would supersede a one-year
program
adopted in
1992. State budget legislation for the 1992-93 fiscal year had
required the MTA to
submit a one-year capital program for 1992 instead of a five-year
program. The one-year
program, which contained $1.635 billion of projects for transit
and commuter facilities
combined, was approved by the CPRB in May 1992, but the five-year
program for 1992-
1996, required to be submitted subsequently by the MTA as an
amendment to the one-
year plan, was disapproved without prejudice by the CPRB in
December 1992.
There can be no assurance that such governmental actions will
be
taken, that
sources currently identified will not be decreased or eliminated,
or that the 1992-1996
Capital Program will not be delayed or reduced. If the MTA
capital program is delayed
or reduced because of funding shortfalls or other factors,
ridership and fare revenues
may decline, which could, among other things, impair the MTA's
ability to meet its
operating expenses without additional State assistance.
The cities, towns, villages and school districts of the State
are political subdivisions
of the State with the powers granted by the State Constitution
and statutes. As the
sovereign, the State retains broad powers and responsibilities
with respect to the
government, finances and welfare of these political subdivisions,
especially in education
and social services. In recent years the State has been called
upon to provide added
financial assistance to certain localities.
Other Localities. Certain localities in addition to the City
could have financial
problems leading to requests for additional State assistance
during the State's 1994-95
fiscal year and thereafter. The potential impact on the State of
such actions by localities
is not included in the projections of the State receipts and
disbursements in the State's
1994-95 fiscal year.
Municipalities and school districts have engaged in
substantial
short-term and
long-term borrowings. In 1992, the total indebtedness of all
localities in the State, other
than the City, was approximately $15.7 billion. A small portion
(approximately $71.6
million) of this indebtedness represented borrowing to finance
budgetary deficits and was
issued pursuant to enabling State legislation. State law
requires the Comptroller to
review and make recommendations concerning the budgets of those
local government
units other than the City authorized by State law to issue debt
to finance deficits during
the period that such deficit financing is outstanding. Seventeen
localities had outstanding
indebtedness for deficit financing at the close of their fiscal
year ending in 1992.
Certain proposed Federal expenditure reductions would reduce,
or
in some cases
eliminate, Federal funding of some local programs and accordingly
might impose
substantial increased expenditure requirements on affected
localities to increase local
revenues to sustain those expenditures. If the State, the City
or any of the Agencies were
to suffer serious financial difficulties jeopardizing their
respective access to the public
credit markets, the marketability of notes and bonds issued by
localities within the State
could be adversely affected. Localities also face anticipated
and potential problems
resulting from certain pending litigation, judicial decisions and
long-range economic
trends. The longer-range, potential problems of declining city
population, increasing
expenditures and other economic trends could adversely affect
localities and require
increasing State assistance in the future.
Because of significant fiscal difficulties experienced from
time
to time by the City
of Yonkers, a Financial Control Board was created by the State in
1984 to oversee
Yonkers' fiscal affairs. Future actions taken by the Governor or
the State Legislature to
assist Yonkers in this crisis could result in the allocation of
State resources in amounts
that cannot yet be determined.
Certain litigation pending against the State or its officers
or
employees could have
a substantial or long-term adverse effect on State finances.
Among the more significant
of these litigations are those that involve: (i) the validity and
fairness of agreements and
treaties by which various Indian tribes transferred title to the
State of approximately six
million acres of land in central New York; (ii) certain aspects
of the State's Medicaid
rates and regulations, including reimbursements to providers of
mandatory and optional
Medicaid services; (iii) contamination in the Love Canal area of
Niagara Falls; (iv) a
challenge to the State's practice of reimbursing certain Office
of Mental Health
patient-care expenses with clients' Social Security benefits; (v)
a challenge to the methods
by which the State reimburses localities for the administrative
costs of food stamp
programs; (vi) a challenge to the State's possession of certain
funds taken pursuant to
the State's Abandoned Property law; (vii) alleged responsibility
of State officials to assist
in remedying racial segregation in the City of Yonkers; (viii) an
action, in which the State
is a third party defendant, for injunctive or other appropriate
relief, concerning liability
for the maintenance of stone groins constructed along certain
areas of Long Island's
shoreline; (ix) actions challenging the constitutionality of
legislation enacted during the
1990 legislative session which changed the actuarial funding
methods for determining
contributions to State employee retirement systems; (x) an action
against State and City
officials alleging that the present level of shelter allowance
for public assistance recipients
is inadequate under statutory standards to maintain proper
housing; (xi) an action
challenging legislation enacted in 1990 which had the effect of
deferring certain employer
contributions to the State Teachers' Retirement System and
reducing State aid to school
districts by a like amount; (xii) a challenge to the
constitutionality of financing programs
of the Thruway Authority authorized by Chapters 166 and 410 of
the Laws of 1991
(described below in this Part); (xiii) a challenge to the
constitutionality of financing
programs of the Metropolitan Transportation Authority and the
Thruway Authority
authorized by Chapter 56 of the Laws of 1993 (described below in
this Part); (xiv)
challenges to the delay by the State Department of Social
Services in making two one-
week Medicaid payments to the service providers; (xv) challenges
by commercial insurers,
employee welfare benefit plans, and health maintenance
organizations to provisions of
Section 2807-c of the Public Health Law which impose 13%, 11% and
9% surcharges on
inpatient hospital bills and a bad debt and charity care
allowance on all hospital bills paid
by such entities; (xvi) challenges to the promulgation of the
State's proposed procedure
to determine the eligibility for and nature of home care services
for Medicaid recipients;
(xvii) a challenge to State implementation of a program which
reduces Medicaid benefits
to certain home-relief recipients; and (xviii) challenges to the
rationality and retroactive
application of State regulations recalibrating nursing home
Medicaid rates.
Adverse developments or decisions in such cases could affect
the
ability of the
State to maintain a balanced 1994-95 State Financial Plan.
(2) New York City. In the mid-1970s, the City had large
accumulated past
deficits and until recently was not able to generate sufficient
tax and other ongoing
revenues to cover expenses in each fiscal year. However, the
City's operating results for
the fiscal year ending June 30, 1993 were balanced in accordance
with GAAP, the
eleventh consecutive year in which the City achieved balanced
operating results in
accordance with GAAP. The City's ability to maintain balanced
operating results in
future years is subject to numerous contingencies and future
developments.
The City's economy, whose rate of growth slowed substantially
over the past three
years, is currently in recession. During the 1990 and 1991
fiscal years, as a result of the
slowing economy, the City has experienced significant shortfalls
in almost all of its major
tax sources and increases in social services costs, and has been
required to take actions to
close substantial budget gaps in order to maintain balanced
budgets in accordance with
the Financial Plan.
In 1975, the City became unable to market its securities and
entered a period of
extraordinary financial difficulties. In response to this
crisis, the State created MAC to
provide financing assistance to the City and also enacted the New
York State Financial
Emergency Act for the City of New York (the "Emergency Act")
which, among other
things, created the Financial Control Board (the "Control Board")
to oversee the City's
financial affairs and facilitate its return to the public credit
markets. The State also
established the Office of the State Deputy Comptroller ("OSDC")
to assist the Control
Board in exercising its powers and responsibilities. On June 30,
1986, the Control
Board's powers of approval over the City Financial Plan were
suspended pursuant to the
Emergency Act. However, the Control Board, MAC and OSDC continue
to exercise
various monitoring functions relating to the City's financial
condition. The City prepares
and operates under a four-year financial plan which is submitted
annually to the Control
Board for review and which the City periodically updates.
The City's independently audited operating results for each of
its fiscal years from
1981 through 1993 show a General Fund surplus reported in
accordance with GAAP.
The City has eliminated the cumulative deficit in its net General
Fund position. In
addition, the City's financial statements for the 1993 fiscal
year received an unqualified
opinion from the City's independent auditors, the eleventh
consecutive year the City has
received such an opinion.
In August 1993, the City adopted and submitted to the Control
Board for its
review a four-year Financial Plan covering fiscal years 1994
through 1997 (the "Financial
Plan"). The Financial Plan was based on the City's fiscal year
1994 expense budget
adopted June 14, 1993 as well as certain changes incorporated
subsequent to the budget
adoption process. On November 23, 1993, the City adopted and
submitted to the
Control Board for its review a first quarter modification to the
Financial Plan (the
"November Modification") incorporating various re-estimates of
revenues and
expenditures. For fiscal year 1994, the November Modification
includes additional
resources stemming primarily from the City Comptroller's fiscal
year 1993 annual audit,
savings from a reduction in prior years' accrued expenditures,
and higher State and
Federal aid resulting from claims by the City for reimbursement
of various social services
costs. These resources were used to fund new needs in the
November Modification
including higher costs in the uniformed agencies, at the Board of
Education (the "BoE")
and for certain social services, the unlikelihood of the sale of
the Off-Track Betting
Corporation (the "OTB"), and lower estimates of miscellaneous and
other revenues.
After taking these adjustments into account, the November
Modification projects a
balanced budget for fiscal year 1994, based upon revenues of
$31,585 billion. For fiscal
years 1995, 1996 and 1997, the November Modification projects
budget gaps of $1.730
billion, $2.513 billion and $2.699 billion, respectively. These
gaps are higher by about
$450 million in fiscal year 1995 and by about $700 million in
each of fiscal years 1996 and
1997 than in the Financial Plan, primarily on account of the
nonrecurring value of the
fiscal year 1994 revenue adjustments, the loss of certain
one-time resources funding BoE
fiscal year 1994 spending needs, and the reclassification of
anticipated State aid from the
baseline revenue estimates to the gap-closing program. To offset
these larger gaps, the
November Modification relies on additional City, State and other
actions.
On December 1, 1993, a three-member panel appointed by the
Mayor
to address
City structural budget imbalance released a report setting forth
its findings and
recommendations. In its report, the panel noted that budget
imbalance is likely to be
greater than the City now projects by $255 million in fiscal year
1995, rising to nearly $1.5
billion in fiscal year 1997. The report provided a number of
options that the City should
consider in addressing the structural balance issue such as
severe cuts in City-funded
personnel levels, increases in residential property taxes and the
sales tax, and the
imposition of bridge tolls and solid waste collection fees. The
report also noted that
additional State actions will be required in many instances to
allow the City to cut its
budget without grave damage to basic services.
On December 21, 1993, OSDC issued a report reviewing the
November
Modification. The report noted that while the outlook for fiscal
year 1994 has improved
since August, it will be necessary for the City to manage its
budget aggressively in order
to stay on course for budget balance this year. For fiscal years
1995 through 1997, the
report expressed concern that the gaps identified by the City in
the November
Modification are the largest as a percentage of City-fund
revenues that the City has faced
at this point in the fiscal year since budget balance in
accordance with GAAP was first
achieved in fiscal year 1981.
On December 21, 1993, the staff of the Control Board issued
its
report on the
November Modification. The report states that the plan is now
more realistic in terms of
the gaps it portrays and the solutions it offers. However, the
solutions are mostly limited
to fiscal year 1994 while the gap for fiscal year 1995 has been
increased by $450 million.
Beginning in fiscal year 1995, budget gaps average over $1
billion annually. Therefore,
the staff recommends that prompt action to replace many
current-year one-shots with
recurring savings is critical.
On February 2, 1994, the Mayor presented to the City Council
and
the Control
Board a mid-year modification to the Financial Plan (the
"February Modification"). The
February Modification projects a balanced budget for fiscal year
1994, based upon
revenues of $31.735 billion, including a general reserve of $81
million. For fiscal years
1995, 1996 and 1997, the February Modification projects gaps of
$2.261 billion, $3.167
billion and $3.253 billion, respectively, and assumes no wage and
salary increases beyond
the expiration of current labor agreements which expire in fiscal
years 1995 and 1996.
These gaps have grown since November by about $530 million in
fiscal year 1995, and
$650 million and $550 million in fiscal years 1996 and 1997,
respectively, owing in large
part to lower estimates of real property tax revenues. To close
the budget gap projected
for fiscal year 1995, the February Modification includes a
gap-closing program that
consists of the following major elements: (i) an agency program
of $1.048 billion; (ii)
fringe benefit and pension savings of $400 million; (iii) an
intergovernmental aid package
of $400 million; (iv) a workforce reduction program of $144
million; and (v) the
assumption of a $234 million surplus roll from fiscal year 1994.
Implementation of many
of the gap-closing initiatives requires the cooperation of the
municipal labor unions, the
City Council and the State and Federal governments. The February
Modification also
includes a tax reduction program, with most of the financial
impact affecting the later
years of the Plan period.
The City requires certain amounts of financing for seasonal
and
capital spending
purposes. The City has issued $1.75 billion of notes for
seasonal financing purposes
during the 1994 fiscal year. The City's capital financing
program projects long-term
financing requirements of approximately $17 billion for the
City's fiscal years 1995
through 1998 for the construction and rehabilitation of the
City's infrastructure and other
fixed assets. The major capital requirement include expenditures
for the City's water
supply system, and waste disposal systems, roads, bridges, mass
transit, schools and
housing. In addition, the City and the Municipal Water Finance
Authority have issued
about $1.8 billion in refunding bonds in the 1994 fiscal year.
State Economic Trends. The City accounts for approximately
41%
of the State's
population and personal income, and the City's financial health
affects the State in
numerous ways. The State has long been one of the wealthiest
states in the nation. For
decades, however, the State economy has grown more slowly than
that of the nation as a
whole, resulting in the gradual erosion of its relative economic
affluence. The causes of
this relative decline are varied and complex, in many cases
involving national and
international developments beyond the State's control. In recent
years, the State's
economic position has improved in a manner consistent with that
of the Northeast as a
whole.
Part of the reason for the long-term relative decline in the
State's economy has
been attributed to the combined State and local tax burden, which
is among the highest
in the United States. The burdens of State and local taxation,
in combination with many
other causes of regional economic dislocation, may have
contributed to the decision of
businesses and individuals to relocate outside, or not locate
within, the State. In 1987,
the State enacted a major personal income tax reduction and
reform program and also
reduced the tax rate on corporation income. In addition, the
State has provided various
tax incentives to encourage business relocation and expansion.
The State, however, in its
1989-90, 1990-91 and 1991-92 fiscal years substantially increased
taxes and fees to help
close projected budget gaps in those years, and in 1990-91,
1991-92 and 1992-93 delayed
and restructured the remainder of the personal income tax
reduction program originally
enacted in 1987. Under legislation proposed with the 1993-94
budget, the rules for
calculating tax liability for the 1993 tax year will be the same
as those for the 1992 tax
year (deferring for a fourth year a previously scheduled tax
reduction), and the tax
reduction program will be frozen at current rates. Also, in July
1991 State legislation was
enacted to phase out the benefit of graduated income tax tables
for taxpayers with
adjusted gross income above $100,000.
<PAGE>
APPENDIX B
Description of S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of
an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the
issuer or obtained
by S&P from other sources it considers reliable, and will
include: (1) likelihood of
default-capacity and willingness of the obligor as to the timely
payment of interest and
repayment of principal in accordance with the terms of the
obligation; (2) nature and
provisions of the obligation; and (3) protection afforded by, and
relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the
laws of bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA is the highest rating assigned by S&P.
Capacity
to pay interest
and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and
repay principal and
differs from the highest rated issues only in a small degree.
A
Principal and interest payments on bonds in this category are
regarded as safe.
This rating describes the third strongest capacity for payment of
debt service. It differs
from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the
local
economic base,
in debt burden, in the balance between revenues and expenditures,
or in quality of
management. Under certain adverse circumstances, any one such
weakness might impair
the ability of the issuer to meet debt obligations at some future
date.
Revenue Bonds -- Debt service coverage is good, but not
exceptional. Stability of
the pledged revenues could show some variations because of
increased competition or
economic influences on revenues. Basic security provisions,
while satisfactory, are less
stringent. Management performance appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions,
several of the
above factors could contribute to a lesser capacity for payment
of debt service. The
difference between "A" and "BBB" rating is that the latter shows
more than one
fundamental weakness, or one very substantial fundamental
weakness, whereas the
former shows only one deficiency among the factors considered.
Revenue Bonds -- Debt coverage is only fair. Stability of
the
pledged revenues
could show substantial variations, with the revenue flow possibly
being subject to erosion
over time. Basic security provisions are no more than adequate.
Management
performance could be stronger.
Plus (+) or minus (-): The ratings from AA to BBB may be
modified by the
addition of a plus or minus designation to show relative standing
within the major ratings
categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or
strong capacity to pay
principal and interest. Those issues determined to possess
overwhelming safety
characteristics are given a plus (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory
capacity to pay principal
and interest.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the
likelihood of
timely payment of debt having an original maturity of no more
than 365 days. Issues
assigned an A rating are regarded as having the greatest capacity
for timely payment.
Issues in this category are delineated with the numbers 1, 2 and
3 to indicate the relative
degree of safety.
A-1
This designation indicates that the degree of safety
regarding
timely payment is
either overwhelming or very strong. Those issues determined to
possess overwhelming
safety characteristics are denoted with a plus (+) designation.
<PAGE>
A-2
Capacity for timely payment on issues with this designation is
strong. However,
the relative degree of safety is not as high as for issues
designated A-1.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality.
They carry the
smallest degree of investment risk and are generally referred to
as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable
margin and principal is
secure. While the various protective elements are likely to
change, such changes as can
be visualized are most unlikely to impair the fundamentally
strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what
generally are known as
high-grade bonds. They are rated lower than the best bonds
because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the
long-term risks appear somewhat larger than in Aaa securities.
A
Bonds which are rated A possess many favorable investment
attributes and are to
be considered as upper medium-grade obligations. Factors giving
security to principal
and interest are considered adequate, but elements may be present
which suggest a
susceptibility to impairment sometime in the future.
Baa
Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they
are neither highly protected nor poorly secured. Interest
payments and principal security
appear adequate for the present but certain protective elements
may be lacking or may
be characteristically unreliable over any great length of time.
Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing
within the major rating categories, except in the Aaa category.
The modifier 1 indicates
a ranking for the security in the higher end of a rating
category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating
category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other
short-term loans are
designated Moody's Investment Grade (MIG). Such ratings
recognize the differences
between short-term credit risk and long-term risk. Factors
affecting the liquidity of the
borrower and short-term cyclical elements are critical in
short-term ratings, while other
factors of major importance in bond risk, long-term secular
trends for example, may be
less important over the short run.
A short-term rating may also be assigned on an issue having a
demand feature.
Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR.
Short-term ratings on issues with demand features are
differentiated by the use of
the VMIG symbol to reflect such characteristics as payment upon
periodic demand
rather than fixed maturity dates and payment relying on external
liquidity. Additionally,
investors should be alert to the fact that the source of payment
may be limited to the
external liquidity with no or limited legal recourse to the
issuer in the event the demand
is not met.
Moody's short-term ratings are designated Moody's Investment
Grade as MIG 1
or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a
MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present
strong
protection by
established cash flows, superior liquidity support or
demonstrated broad-based access to
the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection
are ample although
not so large as in the preceding group.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper
rating
assigned by
Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term
promissory obligations, and ordinarily will be evidenced by
leading market positions in
well established industries, high rates of return on funds
employed, conservative
capitalization structures with moderate reliance on debt and
ample asset protection,
broad margins in earnings coverage of fixed financial charges and
high internal cash
generation, and well established access to a range of financial
markets and assured
sources of alternate liquidity.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability
to meet the
obligations of a specific debt issue or class of debt. The
ratings take into consideration
special features of the issue, its relationship to other
obligations of the issuer, the current
financial condition and operative performance of the issuer and
of any guarantor, as well
as the political and economic environment that might affect the
issuer's future financial
strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of
the
highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay
principal, which is unlikely to be affected by reasonably
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of
very
high credit
quality. The obligor's ability to pay interest and repay
principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in
the AAA and AA
categories are not significantly vulnerable to foreseeable future
developments, short-term
debt of these issuers is generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of
high
credit quality.
The obligor's ability to pay interest and repay principal is
considered to be strong, but
may be more vulnerable to adverse changes in economic conditions
and circumstances
than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit
quality. The obligor's ability to pay interest and repay
principal is considered to be
adequate. Adverse changes in economic conditions and
circumstances, however, are
more likely to have an adverse impact on these bonds and,
therefore, impair timely
payment. The likelihood that the ratings of these bonds will
fall below investment grade
is higher than for bonds with higher ratings.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative
position of a credit within the rating category. Plus and minus
signs, however, are not
used in the AAA category covering 12-36 months.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are
payable on demand or
have original maturities of up to three years, including
commercial paper, certificates of
deposit, medium-term notes, and municipal and investment notes.
Although the credit analysis is similar to Fitch's bond
rating
analysis, the short-
term rating places greater emphasis than bond ratings on the
existence of liquidity
necessary to meet the issuer's obligations in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this
rating are regarded as
having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating
reflect
an assurance of
timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Quality. Issues carrying this rating have a
satisfactory degree of
assurance for timely payments, but the margin of safety is not as
great as the F-1+ and
F-1 categories.
<PAGE>
<TABLE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
<CAPTION>
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--100.0% AMOUNT VALUE
<S> <C> <C>
Briarcliff Manor (Water Improvement) 6%, 9/1/2013 (Insured; FGIC) $ 175,000 $ 167,233
Broome County, COP, Public Safety Facility
5.25%, 4/1/2022 (Insured; MBIA) 3,875,000 3,138,130
East Rockaway Union Free School District 6.10%, 9/1/2012 (Insured; FGIC) 100,000 97,098
Havestraw-Stony Point Central School District:
6.10%, 6/15/2001 (Insured; MBIA) 15,000 15,360
6.10%, 6/15/2002 (Insured; MBIA) 15,000 15,342
Metropolitan Transportation Authority:
Commuter Facility, Refunding (Service Contract)
7.50%, 7/1/2017 (Insured; AMBAC) 1,000,000 1,044,700
Transit Facility Revenue:
7%, 7/1/2009 (Insured; AMBAC) 5,400,000 5,750,622
6%, 7/1/2016 (Insured; AMBAC) 3,250,000 3,024,125
5%, 7/1/2017 (Insured; BIGI) 60,000 48,349
6.50%, 7/1/2018 (Insured; FGIC) 4,000,000 3,952,520
New York City:
7%, 8/1/2006 (Insured; MBIA) 660,000 695,389
7%, 8/1/2006 (Insured; MBIA) 340,000 352,716
7.25%, 3/15/2018 (Insured; FSA) 1,000,000 1,031,470
6%, 8/1/2018 (Insured; FSA) 4,900,000 4,501,287
New York City Housing Development Corp., General Housing
5.80%, 5/1/2002 (Insured; AMBAC) 400,000 397,608
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue:
6.50%, 6/15/1997 (Insured; AMBAC) (Prerefunded 6/15/1997)(a) 260,000 270,707
7.625%, 6/15/2017 (Insured; FGIC) (Prerefunded 6/15/1998)(a) 1,500,000 1,625,130
6%, 6/15/2019 (Insured; FSA) 2,300,000 2,126,994
6.20%, 6/15/2021 (Insured; AMBAC) 2,000,000 1,890,920
6.50%, 6/15/2021 (Insured; AMBAC) 2,240,000 2,184,717
5.50%, 6/15/2023 (Insured; MBIA) 5,000,000 4,241,550
New York City Transit Authority, Transit Facility Revenue
(Livingston Plaza Project) 6%, 1/1/2021 (Insured; FSA) 5,300,000 4,839,960
New York State 7.10%, 3/1/2020 (Insured; AMBAC) 1,650,000 1,690,640
New York State Dormitory Authority, Revenue:
(City University) 6.30%, 7/1/2024 (Insured; AMBAC) 2,800,000 2,667,084
(Colgate University) 6.50%, 7/1/2021 (Insured; MBIA) 4,000,000 3,950,200
(International House) 7.60%, 7/1/2009 (Insured; FGIC) 2,000,000 2,145,040
(New York University) 6%, 7/1/2015 (Insured; FGIC) 1,750,000 1,638,508
(Refunding - Ithaca College) 6.25%, 7/1/2021 (Insured; MBIA) 2,000,000 1,920,140
(Refunding - Mount Sinai School of Medicine):
6.75%, 7/1/2009 (Insured; MBIA) 3,000,000 3,087,810
5%, 7/1/2021 (Insured; MBIA) 1,000,000 787,410
(State University Educational) 7.25%, 5/15/2015 (Insured; FGIC)
(Prerefunded 5/15/2000)(a) 1,000,000 1,093,860
New York State Energy Research and Development Authority, Revenue:
Facilities
(Con Edison Co. of New York Inc. Project):
Refunding 5.25%, 8/15/2020 (Insured; MBIA) 4,800,000 3,882,912
6.375%, 12/1/2027 (Insured; MBIA) 5,000,000 4,721,700
6%, 3/15/2028 (Insured; MBIA) 4,000,000 3,580,000
Pollution Control:
(Central Hudson Gas and Electric)
7.375%, 10/1/2014 (Insured; FGIC) 1,700,000 1,788,417
(Refunding - Niagara Mohawk Power Corp.)
6.625%, 10/1/2013 (Insured; FGIC) 4,500,000 4,518,630
(Refunding - Rochester Gas and Electric Project)
6.50%, 5/15/2032 (Insured; MBIA) 9,800,000 9,389,380
New York State Environmental Facility Corp., Water Facilities Revenue
(Jamaica Water Supply Province) 7.625%, 4/1/2029 (Insured; AMBAC) 4,000,000 4,188,720
New York State Housing Finance Agency, Multi-Family Housing Revenue
7.45%, 11/1/2028 (Insured; AMBAC) 2,000,000 2,047,940
New York State Medical Care Facilities Finance Agency,
Revenue:
(Aurelia Osborn Fox Memorial Hospital) 6.50%, 11/1/2019 (Insured; FSA) 3,000,000 2,941,710
(Buffalo General Hospital) 7.70%, 2/15/2022 (Insured; MBIA) 1,000,000 1,059,270
(Hospital and Nursing Home) 7.60%, 2/15/2029 (Insured; MBIA) 2,000,000 2,100,220
(Mental Health Service Facilities Improvement):
7.625%, 2/15/1998 (Insured; MBIA) (Prerefunded 2/15/1998)(a) 1,055,000 1,137,849
7.625%, 2/15/2008 (Insured; MBIA) 945,000 1,001,284
6.25%, 8/15/2018 (Insured; AMBAC) 4,820,000 4,605,173
7.375%, 8/15/2019 (Insured; MBIA) 1,345,000 1,398,235
7.375%, 8/15/2019 (Insured; MBIA) (Prerefunded 8/15/1999)(a) 785,000 854,849
(North Shore University Hospital Mortgage Project)
7.20%, 11/1/2020 (Insured; MBIA) 5,750,000 5,911,747
(Saint Francis Hospital Project) 7.625%, 11/1/2021 (Insured; FGIC) 1,785,000 1,879,908
(Sisters of Charity Hospital) 6.625%, 11/1/2018 (Insured; AMBAC) 2,000,000 1,996,180
New York State Mortgage Agency, Revenue (Homeownership Mortgage):
7.50%, 4/1/2016 (Insured; MBIA) 2,785,000 2,873,062
7.50%, 10/1/2017 (Insured; MBIA) 1,500,000 1,551,765
New York State Power Authority 7.875%, 1/1/2013 (Insured; MBIA) 1,850,000 1,968,178
New York State Urban Development Corp., Revenue (Correctional Facilities):
7.50%, 1/1/2012 (Insured; AMBAC) (Prerefunded 1/1/1998)(a) 2,000,000 2,151,960
7.75%, Series C, 1/1/2013 (Insured; AMBAC) (Prerefunded 1/1/1998)(a) 1,000,000 1,082,830
7.75%, Series D, 1/1/2013 (Insured; AMBAC) (Prerefunded 1/1/1998)(a) 1,250,000 1,349,550
Port Authority of New York and New Jersey:
5.875%, 7/15/2018 (Insured; MBIA) 3,600,000 3,246,588
6.25%, 1/15/2027 (Insured; AMBAC) 2,000,000 1,881,840
Triborough Bridge and Tunnel Authority, Special Obligation Refunding:
6%, 1/1/2015 (Insured; AMBAC) 4,000,000 3,756,640
6.875%, 1/1/2015 (Insured; FGIC) 3,000,000 3,059,970
6%, 1/1/2019 (Insured; MBIA) 3,000,000 2,784,630
Yonkers 7.80%, 8/1/2009 (Insured; FGIC) 2,900,000 3,174,543
TOTAL INVESTMENTS
(cost $148,929,705) $148,278,299
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation FGIC Financial Guaranty Insurance Company
BIGI Bond Investors Guaranty Insurance FSA Financial Security Assurance
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH(b) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
<S> <C> <C> <C> <C> <C>
AAA Aaa AAA 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) Fitch currently provides creditworthiness information for a
limited number of investments.
(c) At December 31, 1994, 27.7% of the Fund's net assets are
insured by
AMBAC and 43.3% are insured by MBIA.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $148,929,705)-see statement $148,278,299
Interest receivable 3,300,683
Receivable for shares of Beneficial Interest subscribed 440,000
Prepaid expenses 6,620
152,025,602
LIABILITIES:
Due to The Dreyfus Corporation $ 77,202
Due to Custodian 110,096
Due to Distributor 32,500
Payable for shares of Beneficial Interest redeemed 23,027
Accrued expenses 86,869 329,694
NET ASSETS $151,695,908
REPRESENTED BY:
Paid-in capital $153,624,538
Accumulated undistributed investment income-net 23,283
Accumulated net realized (loss) on investments (1,300,507)
Accumulated net unrealized (depreciation) on investments-Note 3 (651,406)
NET ASSETS at value applicable to 14,233,013 shares outstanding
(unlimited number of $.001 par value shares of Beneficial
Interest authorized) $151,695,908
NET ASSET VALUE, offering and redemption price per share
($151,695,908 - 14,233,013 shares) $10.66
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME $ 10,844,143
EXPENSES:
Management fee-Note 2(a) $ 1,034,322
Shareholder servicing costs-Note 2(b) 529,247
Professional fees 45,703
Trustees' fees and expenses-Note 2(c) 26,137
Prospectus and shareholders' reports-Note 2(b) 21,479
Custodian fees 17,446
Registration fees 6,288
Miscellaneous 18,444
1,699,066
Less-reimbursement of prospectus costs-Note 2(b) 11,132
TOTAL EXPENSES 1,687,934
INVESTMENT INCOME--NET 9,156,209
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments-Note 3 $ (1,233,401)
Net unrealized (depreciation) on investments (20,566,482)
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS (21,799,883)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(12,643,674)
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
1993 1994
<S> <C> <C>
OPERATIONS:
Investment income--net $ 9,829,107 $ 9,156,209
Net realized gain (loss) on investments 2,913,561 (1,233,401)
Net unrealized appreciation (depreciation) on investments for the year 7,896,383 (20,566,482)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 20,639,051 (12,643,674)
DIVIDENDS TO SHAREHOLDERS:
From investment income--net (9,829,107) (9,132,926)
From net realized gain on investments (3,513,228) ___
In excess of net realized gain on investments (67,106) ___
TOTAL DIVIDENDS (13,409,441) (9,132,926)
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold 92,107,533 38,170,749
Dividends reinvested 9,955,907 6,467,485
Cost of shares redeemed (91,361,631) (69,423,052)
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 10,701,809 (24,784,818)
TOTAL INCREASE (DECREASE) IN NET ASSETS 17,931,419 (46,561,418)
NET ASSETS:
Beginning of year 180,325,907 198,257,326
End of year (including undistributed investment income--net;
$23,283 in 1994) $198,257,326 $151,695,908
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold 7,690,615 3,391,665
Shares issued for dividends reinvested 826,830 579,744
Shares redeemed (7,602,611) (6,202,246)
TOTAL INCREASE (DECREASE) IN SHARES OUTSTANDING 914,834 (2,230,837)
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Prospectus dated May 1,
1995
See notes to financial statements.
<PAGE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of
1940 ("Act") as a non-diversified open-end management investment
company. Dreyfus Service Corporation, until August 24, 1994,
acted as the distributor of the Fund's shares, which are sold to
the public without a sales load. 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.
(A) PORTFOLIO VALUATION: The Fund's investments 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.
(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.
The Fund follows an investment policy of investing primarily
in municipal obligations of one state. Economic changes affecting
the state and certain of its public bodies and municipalities may
affect the ability of issuers within the state to pay interest
on, or repay principal of, municipal obligations held by the
Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund
to declare dividends daily from investment income-net. Such
dividends are paid monthly. Dividends from net realized capital
gain are normally declared and paid annually, but the Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by
capital loss carryovers, it is the policy of the Fund not to
distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to
continue to qualify as a regulated investment company, which can
distribute tax exempt dividends, by complying with the applicable
provisions of the Internal Revenue Code, and to make
distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal
income and excise taxes.
The Fund has an unused capital loss carryover of
approximately of $1,300,000 available for Federal income tax
purposes to be applied against future net securities profit, if
any, realized subsequent to December 31, 1994. If not applied,
the carryover expires in fiscal 2002.
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 .60
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, interest on borrowings,
brokerage and extraordinary expenses, exceed 1 1/2% of the
average daily value of the
Fund's net assets for any full year. There was no expense
reimbursement for the year ended December 31, 1994.
(B) On August 3, 1994, Fund shareholders approved a revised
Service Plan (the "Plan") pursuant to Rule 12b-1 under the Act.
Pursuant to the Plan, effective August 24, 1994, the Fund (a)
reimburses the Distributor for payments to certain Service Agents
for distributing the Fund's shares and servicing shareholder
accounts and (b) pays the Manager, Dreyfus Service
Corporation or any affiliate (collectively "Dreyfus") for
advertising and marketing relating to the Fund and servicing
shareholder accounts, at an aggregate annual rate of .25 of 1% of
the value of the Fund's average daily net
assets. Each of the Distributor and Dreyfus may pay Service
Agents (a securities dealer, financial institution or other
industry professional) a fee in respect of the Fund's shares
owned by shareholders with whom the Service Agent has a servicing
relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and
Dreyfus determine the amounts to be paid to Service Agents to
which it will make payments and the basis on which such payments
are made. The Plan also separately provides
for the Fund to bear the costs of preparing, printing and
distributing certain of the Fund's prospectuses and statements of
additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005
of 1% of the Fund's average daily net assets
for any full year. Prior to August 24, 1994, the Fund's Service
Plan ("prior Service Plan") provided that the Fund pay Dreyfus
Service Corporation at an annual rate of .25 of 1% of the value
of the Fund's average daily net assets, for costs and
expenses in connection with advertising, marketing and
distributing the Fund's shares and for servicing shareholder
accounts. Dreyfus Service Corporation made payments to one or
more Service Agents based on the value of
the Fund's shares owned by clients of the Service Agent. The
prior Service Plan also separately provided for the Fund to bear
the costs of preparing,
printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with
implementing and operating the prior Service Plan, not to exceed
the greater of $100,000 or .005 of 1% of the Fund's average daily
net assets for any full year.
During the year ended December 31, 1994, $145,904 was charged
to the Fund pursuant to the Plan, of which $3,965 was waived by
the Manager and $296,195 was charged to the Fund pursuant to the
prior Service Plan, of which $7,167 was waived by the Manager.
(C) 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 an annual fee of $2,500
and an attendance fee of $250 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment
securities amounted to $44,425,370 and $64,512,440, respectively,
for the year ended December 31, 1994, and consisted entirely of
long-term and short-term municipal investments.
At December 31, 1994, accumulated net unrealized depreciation
on investments was $651,406, consisting of $3,836,711 gross
unrealized appreciation and $4,488,117 gross unrealized
depreciation.
At December 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).
<PAGE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
We have audited the accompanying statement of assets and
liabilities of Dreyfus New York Insured Tax Exempt Bond Fund,
including the statement of investments, as of December 31, 1994,
and the related statement of operations
for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial
highlights for each of the years indicated therein. These
financial statements and financial highlights are the
responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation
of securities owned as of December 31, 1994 by correspondence
with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of Dreyfus New York Insured Tax
Exempt Bond Fund at December 31, 1994, the results of its
operations for the year then ended, the changes in
its net assets for each of the two years in the period then
ended, and the financial highlights for each of the indicated
years, in conformity with generally accepted accounting
principles.
Ernst & Young LLP Signature Logo
New York, New York
February 3, 1995
<PAGE>
<PAGE>
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
PART C. OTHER INFORMATION
_________________________
Item 24.Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information -- for the period
from February
18, 1987 (commencement of operations) to December 31,
1987 and
for each of the seven years in the period ended
December 31,
1994.
Included in Part B of the Registration Statement:
Statement of Investments-- December 31, 1994.
Statement of Assets and Liabilities-- December 31,
1994.
Statement of Operations--year ended December 31,
1994.
Statement of Changes in Net Assets--for the years
ended
December 31, 1993 and 1994.
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors,
dated
February 1, 1995.
Schedules No. I through VII and other financial statement
information, for
which provision is made in the applicable accounting regulations
of the
Securities and Exchange Commission, are either omitted because
they are not
required under the related instructions, they are inapplicable,
or the
required information is presented in the financial statements or
notes
thereto which are included in Part B of the Registration
Statement.
Item 24.Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1) Registrant's Declaration of Trust and Amendments thereto
are
incorporated by reference to Exhibit (1) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form
N-1A, filed
on December 23, 1986.
(2) Registrant's By-Laws are incorporated by reference to
Exhibit (2)
of Post-Effective Amendment No. 8 to the Registration
Statement on
Form N-1A filed on March 25, 1994.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of Pre-Effective
Amendment No. 1 to the Registration Statement on Form
N-1A, filed
on December 31, 1986.
(5) Management Agreement.
(6)(a) Distribution Agreement.
(6)(b) Forms of Service Agreements.
(8)(a) Amended and Restated Custody Agreement dated August 18,
1989 is
incorporated by reference to Exhibit 8(a) of
Post-Effective
Amendment No. 4 to the Registration Statement on Form
N-1A, filed
on April 26, 1990.
(8)(b) Sub-Custodian Agreements are incorporated by reference to
Exhibit
8(b) of Post-Effective Amendment No. 2 to the
Registration
Statement on Form N-1A, filed on April 26, 1988.
(10) Opinion and consent of Registrant's counsel is
incorporated by
reference to Exhibit (10) of Pre-Effective Amendment No.
1 to the
Registration Statement on Form N-1A, filed on December
23, 1986.
(11) Consent of Independent Auditors.
(15) Service Plan.
(16) Schedules of Computation of Performance Data are
incorporated by
reference to Exhibit (16) of Post-Effective Amendment No.
8 to the
Registration Statement on Form N-1A filed on March 25,
1994.
<PAGE>
Item 24.Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney.
(b) Certificate of Secretary.
Item 25.Persons Controlled by or under Common Control with
Registrant.
_______
______________________________________________________________
Not Applicable
Item 26.Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of February 17, 1995
______________ ______________________________
Shares of beneficial interest 3343
(Par value $.001)
Item 27. Indemnification
_______ _______________
The Statement as to the general effect of any contract,
arrangements or statute under which a Trustee, officer,
underwriter
or affiliated person of the Registrant is insured or
indemnified in
any manner against any liability which may be incurred in
such
capacity, other than insurance provided by any Trustee,
officer,
affiliated person or underwriter for their own protection,
is
incorporated by reference to Item 27 of Part C of
Pre-Effective
Amendment No. 1 to the Registration Statement on Form
N-1A, filed
on December 23, 1986.
Reference is also made to the Distribution Agreement filed
herewith.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary
companies
comprise a financial service organization whose
business
consists primarily of providing investment management
services
as the investment adviser, manager and distributor for
sponsored
investment companies registered under the Investment
Company Act
of 1940 and as an investment adviser to institutional
and
individual accounts. Dreyfus also serves as
sub-investment
adviser to and/or administrator of other investment
companies.
Dreyfus Service Corporation, a wholly-owned subsidiary
of
Dreyfus, serves primarily as distributor of shares of
investment
companies sponsored by Dreyfus and of other investment
companies
for which Dreyfus acts as investment adviser,
sub-investment
adviser or administrator. Dreyfus Management, Inc.,
another
wholly-owned subsidiary, provides investment management
services
to various pension plans, institutions and individuals.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
(continued)
Officers and Directors of Investment Adviser
Name and Position
with Dreyfus Other Businesses
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees of
Skillman Foundation.
Member of The Board of Vintners Intl.
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
ALVIN E. FRIEDMAN Senior Adviser to Dillon, Read & Co. Inc.
Director 535 Madison Avenue
New York, New York 10022;
Director and member of the Executive
Committee of Avnet, Inc.**
LAWRENCE M. GREENE Director:
Director Dreyfus America Fund
JULIAN M. SMERLING None
Director
DAVID B. TRUMAN Educational consultant;
Director Past President of the Russell Sage
Foundation
230 Park Avenue
New York, New York 10017;
Past President of Mount Holyoke College
South Hadley, Massachusetts 01075;
DAVID B. TRUMAN Former Director:
(cont'd) Student Loan Marketing Association
1055 Thomas Jefferson Street, N.W.
Washington, D.C. 20006;
Former Trustee;
College Retirement Equities Fund
730 Third Avenue
New York, New York 10017
HOWARD STEIN Chairman of the Board;
Chairman of the Board and Dreyfus Acquisition
Corporation*;
Chief Executive Officer The Dreyfus Consumer Credit
Corporation;
Dreyfus Management, Inc.*:
Dreyfus Service Corporation;*
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation;*
Director:
Avnet, Inc.**;
Dreyfus America Fund++++;
The Dreyfus Fund International
Limited+++++;
World Balanced Fund+++;
Dreyfus Partnership Management,
Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Precious Metals, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*:
Trustee:
Corporate Property Investors
New York, New York;
W. KEITH SMITH Chairman and Chief Executive Officer:
Vice Chairman of the Board The Boston Company
One Boston Place
Boston, Massachusetts 02108
Vice Chairman of the Board:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
ROBERT E. RILEY Director:
President, Chief Dreyfus Service Corporation
Operating Officer,
and a Director
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and
Director:
Dreyfus Service Organization,
Inc.*:
Director:
The Dreyfus Consumer Credit
Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company
One Boston Place
Boston, Massachusetts 02108;
Laurel Capital Advisors
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Group Holdings, Inc.
Executive Vice President
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258;
Boston Safe Deposit & Trust
One Boston Place
Boston, Massachusetts 02108
PHILIP L. TOIA Chairman of the Board and Trust Investment
Vice Chairman-Operations Officer:
and Administration The Dreyfus Trust Company+++;
Chairman of the Board and Chief Executive
Officer:
Major Trading Corporation*;
Director:
The Dreyfus Security Savings Bank
F.S.B.+;
Dreyfus Service Corporation*;
Seven Six Seven Agency, Inc.*;
President and Director:
Dreyfus Acquisition Corporation*;
The Dreyfus Consumer Credit
Corporation*;
Dreyfus-Lincoln, Inc.*;
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*:
Dreyfus Partnership Management, Inc.+;
Dreyfus Service Organization*;
The Truepenny Corporation*;
Formerly, Senior Vice President:
The Chase Manhattan Bank, N.A. and
The Chase Manhattan Capital Markets
Corporation
One Chase Manhattan Plaza
New York, New York 10081
PAUL H. SNYDER Director:
Vice President-Finance Pennsylvania Economy League
and Chief Financial Philadelphia, Pennsylvania;
Officer Children's Crisis Treatment Center
Philadelphia, Pennsylvania;
Dreyfus Service Corporation*
Director and Vice President:
Financial Executives Institute;
Philadelphia Chapter
Philadelphia, Pennsylvania
BARBARA E. CASEY President:
Vice President- Dreyfus Retirement Services Division;
Dreyfus Retirement Executive Vice President:
Services Boston Safe Deposit & Trust Co.
One Boston Place
Boston, Massachusetts 02108;
DIANE M. COFFEY None
Vice President-
Corporate Communications
ELIE M. GENADRY President:
Vice President- Institutional Services Division of
Dreyfus
Institutional Sales Service Corporation*;
Broker-Dealer Division of Dreyfus
Service
Corporation*;
Group Retirement Plans Division of
Dreyfus
Service Corporation;
Executive Vice President:
Dreyfus Service Corporation*;
Dreyfus Service Organization, Inc.*;
Vice President:
The Dreyfus Trust Company++;
HENRY D. GOTTMANN Executive Vice President:
Vice President-Retail Dreyfus Service Corporation*;
Sales and Service Vice President:
Dreyfus Precious Metals*;
DANIEL C. MACLEAN Director, Vice President and Secretary:
Vice President and General Dreyfus Precious Metals, Inc.*;
Counsel Director and Vice President:
The Dreyfus Consumer Credit
Corporation*;
Director and Secretary:
Dreyfus Partnership Management, Inc.*:
Major Trading Corporation*;
The Truepenny Corporation+;
Director:
The Dreyfus Trust Company++;
Secretary:
Seven Six Seven Agency, Inc.*;
JEFFREY N. NACHMAN None
Vice President-Mutual Fund
Accounting
KATHERINE C. WICKHAM Formerly, Assistant Commissioner:
Vice President- Department of Parks and Recreation of
the
Human Resources City of New York
830 Fifth Avenue
New York, New York 10022
MAURICE BENDRIHEM Treasurer:
Dreyfus Partnership Management, Inc.*;
Dreyfus Service Organization, Inc.*;
Seven Six Seven Agency, Inc.*;
The Truepenny Corporation*;
Controller:
Dreyfus Acquisition Corporation*;
The Dreyfus Trust Company++;
The Dreyfus Consumer Credit
Corporation*;
Assistant Treasurer:
Dreyfus Precious Metals*
Formerly, Vice President-Financial
Planning,
Administration and Tax:
Showtime/The Movie Channel, Inc.
1633 Broadway
New York, New York 10019
MARK N. JACOBS Vice President, Secretary and Director:
Vice President-Fund Lion Management, Inc.*;
Legal and Compliance Secretary:
The Dreyfus Consumer Credit
Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.*;
Major Trading Corporation*;
The Truepenny Corporation*
_______________________
* The address of the business so indicated is 200 Park
Avenue, New York, New York 10166.
** The address of the business so indicated is 80 Cutter
Mill Road, Great Neck, New York 11021.
*** The address of the business so indicated is 45
Broadway, New York, New York 10006.
**** The address of the business so indicated is Five
Triad Center, Salt Lake City, Utah 84180
+ The address of the business so indicated is Atrium
Building, 80 Route 4 East, Paramus, New Jersey 07652
++ The address of the business so indicated is 144 Glen
Curtiss Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is One
Rockefeller Plaza, New York, New York 10020.
++++ The address of the business so indicated is 2
Boulevard Royal, Luxembourg.
+++++ The address of the business so indicated is Nassau,
Bahama Islands
<PAGE>
Item 29. Principal Underwriters
- -------- ----------------------
(a) Other investment companies for which Registrant's
principal underwriter (exclusive distributor) acts as principal
underwriter or exclusive distributor:
1) Comstock Partners Strategy Fund, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC Money Market Fund, Inc.
7) Dreyfus BASIC Municipal Fund, Inc.
8) Dreyfus BASIC U.S. Government Money Market Fund
9) Dreyfus California Intermediate Municipal Bond
Fund
10) Dreyfus California Tax Exempt Bond Fund, Inc.
11) Dreyfus California Tax Exempt Money Market Fund
12) Dreyfus Capital Value Fund, Inc.
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond
Fund
16) Dreyfus Connecticut Municipal Money Market Fund,
Inc.
17) The Dreyfus Convertible Securities Fund, Inc.
18) Dreyfus Edison Electric Index Fund, Inc.
19) Dreyfus Florida Intermediate Municipal Bond Fund
20) Dreyfus Florida Municipal Money Market Fund
21) Dreyfus Focus Funds, Inc.
22) The Dreyfus Fund Incorporated
23) Dreyfus Global Fund, Inc.
24) Dreyfus Global Growth, L.P. (A Strategic Fund)
25) Dreyfus Global Investing, Inc.
26) Dreyfus GNMA Fund, Inc.
27) Dreyfus Government Cash Management
28) Dreyfus Growth and Income Fund, Inc.
29) Dreyfus Growth Opportunity Fund, Inc.
30) Dreyfus Institutional Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Equity Fund, Inc.
35) Dreyfus Investors GNMA Fund
36) The Dreyfus/Laurel Funds, Inc.
37) The Dreyfus/Laurel Funds Trust
38) The Dreyfus/Laurel Tax-Free Municipal Funds
39) The Dreyfus/Laurel Investment Series
40) The Dreyfus Leverage Fund, Inc.
41) Dreyfus Life and Annuity Index Fund, Inc.
42) Dreyfus Liquid Assets, Inc.
43) Dreyfus Massachusetts Intermediate Municipal Bond
Fund
44) Dreyfus Massachusetts Municipal Money Market Fund
45) Dreyfus Massachusetts Tax Exempt Bond Fund
46) Dreyfus Michigan Municipal Money Market Fund, Inc.
47) Dreyfus Money Market Instruments, Inc.
48) Dreyfus Municipal Bond Fund, Inc.
49) Dreyfus Municipal Cash Management Plus
50) Dreyfus Municipal Money Market Fund, Inc.
51) Dreyfus New Jersey Intermediate Municipal Bond
Fund
52) Dreyfus New Jersey Municipal Bond Fund, Inc.
53) Dreyfus New Jersey Municipal Money Market Fund,
Inc.
54) Dreyfus New Leaders Fund, Inc.
55) Dreyfus New York Insured Tax Exempt Bond Fund
56) Dreyfus New York Municipal Cash Management
57) Dreyfus New York Tax Exempt Bond Fund, Inc.
58) Dreyfus New York Tax Exempt Intermediate Bond Fund
59) Dreyfus New York Tax Exempt Money Market Fund
60) Dreyfus Ohio Municipal Money Market Fund, Inc.
61) Dreyfus 100% U.S. Treasury Long Term Fund
62) Dreyfus 100% U.S. Treasury Long Term Fund
63) Dreyfus 100% U.S. Treasury Money Market Fund
64) Dreyfus 100% U.S. Treasury Short Term Fund
65) Dreyfus Pennsylvania Intermediate Municipal Bond
Fund
66) Dreyfus Pennsylvania Municipal Money Market Fund
67) Dreyfus Short-Intermediate Government Fund
68) Dreyfus Short-Intermediate Municipal Bond Fund
69) Dreyfus Short-Term Income Fund, Inc.
70) The Dreyfus Socially Responsible Growth Fund, Inc.
71) Dreyfus Strategic Growth, L.P.
72) Dreyfus Strategic Income
73) Dreyfus Strategic Investing
74) Dreyfus Tax Exempt Cash Management
75) Dreyfus Treasury Cash Management
76) Dreyfus Treasury Prime Cash Management
77) Dreyfus Variable Investment Fund
78) Dreyfus-Wilshire Target Funds, Inc.
79) Dreyfus Worldwide Dollar Money Market Fund, Inc.
80) General California Municipal Bond Fund, Inc.
81) General California Municipal Money Market Fund
82) General Government Securities Money Market Fund,
Inc.
83) General Money Market Fund, Inc.
84) General Municipal Bond Fund, Inc.
85) General Municipal Money Market Fund, Inc.
86) General New York Municipal Bond Fund, Inc.
87) General New York Municipal Money Market Fund
88) Pacific American Fund
89) Peoples Index Fund, Inc.
90) Peoples S&P MidCap Index Fund, Inc.
91) Premier Insured Municipal Bond Fund
92) Premier California Municipal Bond Fund
93) Premier GNMA Fund
94) Premier Growth Fund, Inc.
95) Premier Municipal Bond Fund
96) Premier New York Municipal Bond Fund
97) Premier State Municipal Bond Fund
<PAGE>
(b)
<TABLE>
<CAPTION>
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ________________________________________
<S> <C> <C>
Marie E. Connolly+ Director, President, Chief President and
Operating Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Assistant
and Chief Financial Officer Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Frederick C. Dey++ Senior Vice President Vice President
and Assistant
Treasurer
Eric B. Fischman++ Vice President and Associate Vice President
General Counsel and Assistant
Secretary
Lynn H. Johnson+ Vice President None
Ruth D. Leibert++ Assistant Vice President Assistant
Secretary
Paul D. Furcinito++ Assistant Vice President Assistant
Secretary
Paul Prescott+ Assistant Vice President None
Leslie M. Gaynor+ Assistant Treasurer None
Mary Nelson+ Assistant Treasurer None
John J. Pyburn++ Vice President Assistant
Treasurer
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
</TABLE>
________________________________
+ Principal business address is One Exchange Place, Boston,
Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New
York 10166.
<PAGE>
Item 30. Location of Accounts and Records
________________________________
1. The Shareholder Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
110 Washington Street
New York, New York 10286
3. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of
voting upon
the question of removal of a trustee or trustees when
requested
in writing to do so by the holders of at least 10% of
the
Registrant's outstanding shares of beneficial interest
and in
connection with such meeting to comply with the
provisions of
Section 16(c) of the Investment Company Act of 1940
relating to
shareholder communications.
(2) To furnish each person to whom a prospectus is
delivered with a
copy of the Fund's latest Annual Report to
Shareholders, upon
request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933
and
the
Investment Company Act of 1940, the Registrant has duly caused
this
Amendment to the Registration Statement to be signed on its
behalf by the
undersigned, thereunto duly authorized, in the City of New York,
and State of
New York on the 27th day of February, 1995.
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
BY: /s/Marie E. Connolly*
Marie E. Connolly, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933 and
the
Investment Company Act of 1940, this Amendment to the
Registration Statement
has been signed below by the following persons in the capacities
and on the
date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
___________________________ ______________________________ ___________
<S> <C> <C>
/s/Marie E. Connolly* President (Principal Executive 02/27/95
Marie E. Connolly Officer) and Treasurer
/s/Joseph F. Tower, III* Assistant Treasurer (Principal 02/27/95
Joseph F. Tower, III Financial Officer)
/s/Joseph S. DiMartino* Chairman of the Board and Trustee 02/27/95
Joseph S. DiMartino
/s/Gordon J. Davis* Trustee 02/27/95
Gordon J. Davis
/s/David P. Feldman* Trustee 02/27/95
David P. Feldman
/s/Lynn Martin* Trustee 02/27/95
Lynn Martin
/s/Eugene McCarthy* Trustee 02/27/95
Eugene McCarthy
/s/Daniel Rose* Trustee 02/27/95
Daniel Rose
/s/Sander Vanocur* Trustee 02/27/95
Sander Vanocur
/s/Anne Wexler* Trustee 02/27/95
Anne Wexler
/s/Rex Wilder* Trustee 02/27/95
Rex Wilder
*BY:/s/Ruth D. Leibert
Ruth D. Leibert,
Attorney-in-Fact
</TABLE>
<PAGE>
INDEX OF EXHIBITS
Page
(5) Management Agreement.......................
(6)(a) Distribution Agreement......................
(6)(b) Forms of Service Agreement.................
(11) Consent of Independent Auditors............
(15) Service Plan...............................
Other Exhibits
(a) Powers of Attorney......................
(b) Certificate of Secretary................
<PAGE>
EXHIBIT 5
MANAGEMENT AGREEMENT
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
August 24, 1994
The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Dear Sirs:
The above-named investment company (the "Fund")
herewith confirms its agreement with
you as follows:
The Fund desires to employ its capital by investing
and reinvesting the same in investments
of the type and in accordance with the limitations specified in
its charter documents and in its Prospectus
and Statement of Additional Information as from time to time in
effect, copies of which have been or will
be submitted to you, and in such manner and to such extent as
from time to time may be approved by the
Fund's Board. The Fund desires to employ you to act as its
investment adviser.
In this connection it is understood that from time
to time you will employ or associate with
yourself such person or persons as you may believe to be
particularly fitted to assist you in the
performance of this Agreement. Such person or persons may be
officers or employees who are employed
by both you and the Fund. The compensation of such person or
persons shall be paid by you and no
obligation may be incurred on the Fund's behalf in any such
respect.
Subject to the supervision and approval of the
Fund's Board, you will provide investment
management of the Fund's portfolio in accordance with the Fund's
investment objectives and policies as
stated in its Prospectus and Statement of Additional Information
as from time to time in effect. In
connection therewith, you will obtain and provide investment
research and will supervise the Fund's
investments and conduct a continuous program of investment,
evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. You will furnish to the Fund
such statistical information, with respect
to the investments which the Fund may hold or contemplate
purchasing, as the Fund may reasonably
request. The Fund wishes to be informed of important
developments materially affecting its portfolio and
shall expect you, on your own initiative, to furnish to the Fund
from time to time such information as you
may believe appropriate for this purpose.
In addition, you will supply office facilities
(which may be in your own offices), data
processing services, clerical, accounting and bookkeeping
services, internal auditing and legal services,
internal executive and administrative services, and stationery
and office supplies; prepare reports to the
Fund's stockholders, tax returns, reports to and filings with the
Securities and Exchange Commission and
state Blue Sky authorities; calculate the net asset value of the
Fund's shares; and generally assist in all
aspects of the Fund's operations. You shall have the right, at
your expense, to engage other entities to
assist you in performing some or all of the obligations set forth
in this paragraph, provided each such
entity enters into an agreement with you in form and substance
reasonably satisfactory to the Fund. You
agree to be liable for the acts or omissions of each such entity
to the same extent as if you had acted or
failed to act under the circumstances.
You shall exercise your best judgment in rendering
the services to be provided to the Fund
hereunder and the Fund agrees as an inducement to your
undertaking the same that you shall not be
liable hereunder for any error of judgment or mistake of law or
for any loss suffered by the Fund,
provided that nothing herein shall be deemed to protect or
purport to protect you against any liability to
the Fund or to its security holders to which you would otherwise
be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of
your duties hereunder, or by reason of
your reckless disregard of your obligations and duties hereunder.
In consideration of services rendered pursuant to
this Agreement, the Fund will pay you on
the first business day of each month a fee at the annual rate of
.60 of the 1% of the value of the Fund's
average daily net assets. Net asset value shall be computed on
such days and at such time or times as
described in the Fund's then-current Prospectus and Statement of
Additional Information. Upon any
termination of this Agreement before the end of any month, the
fee for such part of a month shall be
pro-rated according to the proportion which such period bears to
the full monthly period and shall be
payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to you,
the value of the Fund's net assets shall
be computed in the manner specified in the Fund's charter
documents for the computation of the value of
the Fund's net assets.
You will bear all expenses in connection with the
performance of your services under this
Agreement. All other expenses to be incurred in the operation of
the Fund will be borne by the Fund,
except to the extent specifically assumed by you. The expenses
to be borne by the Fund include, without
limitation, the following: organizational costs, taxes,
interest, loan commitment fees, interest and
distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members
who are not your officers, directors or employees or holders of
5% or more of your outstanding voting
securities, Securities and Exchange Commission fees and state
Blue Sky qualification fees, advisory fees,
charges of custodians, transfer and dividend disbursing agents'
fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of
independent pricing services, costs of
maintaining the Fund's existence, costs attributable to investor
services (including, without limitation,
telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of
additional information for regulatory purposes and for
distribution to existing stockholders, costs of
stockholders' reports and meetings, and any extraordinary
expenses.
If in any fiscal year the aggregate expenses of the
Fund (including fees pursuant to this
Agreement, but excluding interest, taxes, brokerage and, with the
prior written consent of the necessary
state securities commissions, extraordinary expenses) exceed
1-1/2% of the average value of the Fund's
net assets for the fiscal year, the Fund may deduct from the fees
to be paid hereunder, or you will bear,
such excess expense. Your obligation pursuant hereto will be
limited to the amount of your fees here-
under. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as
the case may be, on a monthly basis.
The Fund understands that you now act, and that
from time to time hereafter you may act,
as investment adviser to one or more other investment companies
and fiduciary or other managed
accounts, and the Fund has no objection to your so acting,
provided that when the purchase or sale of
securities of the same issuer is suitable for the investment
objectives of two or more companies or
accounts managed by you which have available funds for
investment, the available securities will be
allocated in a manner believed by you to be equitable to each
company or account. It is recognized that
in some cases this procedure may adversely affect the price paid
or received by the Fund or the size of
the position obtainable for or disposed of by the Fund.
In addition, it is understood that the persons
employed by you to assist in the performance
of your duties hereunder will not devote their full time to such
service and nothing contained herein shall
be deemed to limit or restrict your right or the right of any of
your affiliates to engage in and devote time
and attention to other businesses or to render services of
whatever kind or nature.
You shall not be liable for any error of judgment
or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this
Agreement relates, except for a loss resulting
from willful misfeasance, bad faith or gross negligence on your
part in the performance of your duties or
from reckless disregard by you of your obligations and duties
under this Agreement. Any person, even
though also your officer, director, partner, employee or agent,
who may be or become an officer, Board
member, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting
on any business of the Fund, to be rendering such services to or
acting solely for the Fund and not as
your officer, director, partner, employee or agent or one under
your control or direction even though paid
by you.
This Agreement shall continue until December 11,
1994, and thereafter shall continue
automatically for successive annual periods ending on December
11th of each year, provided such
continuance is specifically approved at least annually by (i) the
Fund's Board or (ii) vote of a majority (as
defined in the Investment Company Act of 1940) of the Fund's
outstanding voting securities, provided that
in either event its continuance also is approved by a majority of
the Fund's Board members who are not
"interested persons" (as defined in said Act) of any party to
this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This
Agreement is terminable without penalty,
on 60 days' notice, by the Fund's Board or by vote of holders of
a majority of the Fund's shares or, upon
not less than 90 days' notice, by you. This Agreement also will
terminate automatically in the event of its
assignment (as defined in said Act).
The Fund recognizes that from time to time your
directors, officers and employees may
serve as directors, trustees, partners, officers and employees of
other corporations, business trusts,
partnerships or other entities (including other investment
companies) and that such other entities may
include the name "Dreyfus" as part of their name, and that your
corporation or its affiliates may enter into
investment advisory or other agreements with such other entities.
If you cease to act as the Fund's
investment adviser, the Fund agrees that, at your request, the
Fund will take all necessary action to
change the name of the Fund to a name not including "Dreyfus" in
any form or combination of words.
This Agreement has been executed on behalf of the
Fund by the undersigned officer of the
Fund in his capacity as an officer of the Fund. The obligations
of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding
upon any Board member, officer or
shareholder of the Fund individually.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by
signing and returning to us the enclosed copy hereof.
Very truly
yours,
DREYFUS NEW YORK INSURED TAX
EXEMPT BOND FUND
By:___________________________
Accepted:
THE DREYFUS CORPORATION
By:_______________________________
<PAGE>
EXHIBIT (6)(a)
DISTRIBUTION AGREEMENT
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, New York 11556-0144
August 24, 1994
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named investment
company
(the "Fund") has agreed that you shall be, for the period of
this agreement, the distributor of (a) shares of each Series of
the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series
are set forth on such Exhibit, shares of the Fund. For purposes
of this agreement the term "Shares" shall mean the authorized
shares of the relevant Series, if any, and otherwise shall mean
the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of
Shares covered by, and in accordance with, the registration
statement and prospectus then in effect under the Securities Act
of 1933, as amended, and will transmit promptly any orders
received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the
Fund has notified you in writing.
1.2 You agree to use your best efforts to solicit
orders for the sale of Shares. It is contemplated that you will
enter into sales or servicing agreements with securities
dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and
estate planning firms, and in so doing you will act only on your
own behalf as principal.
1.3 You shall act as distributor of Shares in
compliance with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as
amended, by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange
Act of 1934, as amended.
1.4 Whenever in their judgment such action is
warranted by market, economic or political conditions, or by
abnormal circumstances of any kind, the Fund's officers may
decline to accept any orders for, or make any sales of, any
Shares until such time as they deem it advisable to accept such
orders and to make such sales and the Fund shall advise you
promptly of such determination.
1.5 The Fund agrees to pay all costs and expenses in
connection with the registration of Shares under the Securities
Act of 1933, as amended, and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and
for supplying information, prices and other data to be furnished
by the Fund hereunder, and all expenses in connection with the
preparation and printing of the Fund's prospectuses and
statements of additional information for regulatory purposes and
for distribution to shareholders; provided however, that nothing
contained herein shall be deemed to require the Fund to pay any
of the costs of advertising the sale of Shares.
1.6 The Fund agrees to execute any and all documents
and to furnish any and all information and otherwise to take all
actions which may be reasonably necessary in the discretion of
the Fund's officers in connection with the qualification of
Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all
expenses which may be incurred in connection with such
qualification. You shall pay all expenses connected with your
own qualification as a dealer under state or Federal laws and,
except as otherwise specifically provided in this agreement, all
other expenses incurred by you in connection with the sale of
Shares as contemplated in this agreement.
1.7 The Fund shall furnish you from time to time, for
use in connection with the sale of Shares, such information with
respect to the Fund or any relevant Series and the Shares as you
may reasonably request, all of which shall be signed by one or
more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information,
when so signed by the Fund's officers, shall be true and
correct. The Fund also shall furnish you upon request with:
(a) semi-annual reports and annual audited reports of the Fund's
books and accounts made by independent public accountants
regularly retained by the Fund, (b) quarterly earnings statements
prepared by the Fund, (c) a monthly itemized list of
the securities in the Fund's or, if applicable, each Series'
portfolio, (d) monthly balance sheets as soon as practicable
after the end of each month, and (e) from time to time such
additional information regarding the Fund's financial condition
as you may reasonably request.
1.8 The Fund represents to you that all registration
statements and prospectuses filed by the Fund with the Securi-
ties and Exchange Commission under the Securities Act of 1933,
as amended, and under the Investment Company Act of 1940, as
amended, with respect to the Shares have been carefully prepared
in conformity with the requirements of said Acts and rules and
regulations of the Securities and Exchange Commission there-
under. As used in this agreement the terms "registration state-
ment" and "prospectus" shall mean any registration statement and
prospectus, including the statement of additional information
incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto
which at any time shall have been filed with said Commission.
The Fund represents and warrants to you that any registration
statement and prospectus, when such registration statement
becomes effective, will contain all statements required to be
stated therein in conformity with said Acts and the rules and
regulations of said Commission; that all statements of fact
contained in any such registration statement and prospectus will
be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Fund may but
shall not be obligated to propose from time to time such amend-
ment or amendments to any registration statement and such
supplement or supplements to any prospectus as, in the light of
future developments, may, in the opinion of the Fund's counsel,
be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from
you to do so, you may, at your option, terminate this agreement
or decline to make offers of the Fund's securities until such
amendments are made. The Fund shall not file any amendment to
any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance;
provided, however, that nothing contained in this agreement
shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to
any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and
unconditional.
1.9 The Fund authorizes you to use any prospectus in
the form furnished to you from time to time, in connection with
the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person
who controls you within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which you, your officers and directors, or any such con-
trolling person, may incur under the Securities Act of 1933, as
amended, or under common law or otherwise, arising out of or
based upon any untrue statement, or alleged untrue statement, of
a material fact contained in any registration statement or any
prospectus or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in either any registration statement or any prospectus or
necessary to make the statements in either thereof not
misleading; provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any such control-
ling person shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus in reliance upon and in
conformity with written information furnished to the Fund by you
specifically for use in the preparation thereof. The Fund's
agreement to indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned
upon the Fund's being notified of any action brought against
you, your officers or directors, or any such controlling person,
such notification to be given by letter or by telegram addressed
to the Fund at its address set forth above within ten days after
the summons or other first legal process shall have been served.
The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to
the person against whom such action is brought by reason of any
such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 1.9. The Fund
will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing
chosen by the Fund and approved by you. In the event the Fund
elects to assume the defense of any such suit and retain counsel
of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case the Fund does not
elect to assume the defense of any such suit, or in case you do
not approve of counsel chosen by the Fund, the Fund will
reimburse you, your officers and directors, or the controlling
person or persons named as defendant or defendants in such suit,
for the fees and expenses of any counsel retained by you or
them. The Fund's indemnification agreement contained in this
paragraph 1.9 and the Fund's representations and warranties in
this agreement shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and
shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their respective
estates, and to the benefit of any controlling persons and their
successors. The Fund agrees promptly to notify you of the
commencement of any litigation or proceedings against the Fund
or any of its officers or Board members in connection with the
issue and sale of Shares.
1.10 You agree to indemnify, defend and hold the Fund,
its several officers and Board members, and any person who con-
trols the Fund within the meaning of Section 15 of the Securi-
ties Act of 1933, as amended, free and harmless from and against
any and all claims, demands, liabilities and expenses (including
the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection there-
with) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933,
as amended, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting
from such claims or demands, shall arise out of or be based upon
any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Fund
specifically for use in the Fund's registration statement and
used in the answers to any of the items of the registration
statement or in the corresponding statements made in the pro-
spectus, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Fund and
required to be stated in such answers or necessary to make such
information not misleading. Your agreement to indemnify the
Fund, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or
Board members, or any such controlling person, such notification
to be given by letter or telegram addressed to you at your
address set forth above within ten days after the summons or
other first legal process shall have been served. You shall
have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or
omission on your part, and in any other event the Fund, its
officers or Board members, or such controlling person shall each
have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which
you may have to the Fund, its officers or Board members, or to
such controlling person by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise
than on account of your indemnity agreement contained in this
paragraph 1.10. This agreement of indemnity will inure
exclusively to the Fund's benefit, to the benefit of the Fund's
officers and Board members, and their respective estates, and to
the benefit of any controlling persons and their successors.
You agree promptly to notify the Fund of the commencement of any
litigation or proceedings against you or any of your officers or
directors in connection with the issue and sale of Shares.
1.11 No Shares shall be offered by either you or the
Fund under any of the provisions of this agreement and no orders
for the purchase or sale of such Shares hereunder shall be
accepted by the Fund if and so long as the effectiveness of the
registration statement then in effect or any necessary amend-
ments thereto shall be suspended under any of the provisions of
the Securities Act of 1933, as amended, or if and so long as a
current prospectus as required by Section 10 of said Act, as
amended, is not on file with the Securities and Exchange
Commission; provided, however, that nothing contained in this
paragraph 1.11 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase any
Shares from any shareholder in accordance with the provisions of
the Fund's prospectus or charter documents.
1.12 The Fund agrees to advise you immediately in
writing:
(a) of any request by the Securities and Exchange
Commission for amendments to the registration statement
or prospectus then in effect or for additional
information;
(b) in the event of the issuance by the Securities
and Exchange Commission of any stop order suspending
the effectiveness of the registration statement or pro-
spectus then in effect or the initiation of any
proceeding for that purpose;
(c) of the happening of any event which makes
untrue any statement of a material fact made in the
registration statement or prospectus then in effect or
which requires the making of a change in such registra-
tion statement or prospectus in order to make the
statements therein not misleading; and
(d) of all actions of the Securities and
Exchange Commission with respect to any amendments to
any registration statement or prospectus which may from
time to time be filed with the Securities and Exchange
Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you
shall be offered for sale at a price per share (the "offering
price") approximately equal to (a) their net asset value
(determined in the manner set forth in the Fund's charter
documents) plus (b) a sales charge, if any and except to those
persons set forth in the then-current prospectus, which shall be
the percentage of the offering price of such Shares as set forth
in the Fund's then-current prospectus. The offering price, if
not an exact multiple of one cent, shall be adjusted to the
nearest cent. In addition, Shares of any class of the Fund
offered for sale by you may be subject to a contingent deferred
sales charge as set forth in the Fund's then-current prospectus.
You shall be entitled to receive any sales charge or contingent
deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you
and such dealer and the Fund's then-current prospectus.
3. Term
This agreement shall continue until the date (the
"Reapproval Date") set forth on Exhibit A hereto (and, if the
Fund has Series, a separate Reapproval Date shall be specified
on Exhibit A for each Series), and thereafter shall continue
automatically for successive annual periods ending on the day
(the "Reapproval Day") of each year set forth on Exhibit A
hereto, provided such continuance is specifically approved at
least annually by (i) the Fund's Board or (ii) vote of a
majority (as defined in the Investment Company Act of 1940) of
the Shares of the Fund or the relevant Series, as the case may
be, provided that in either event its continuance also is
approved by a majority of the Board members who are not
"interested persons" (as defined in said Act) of any party to
this agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This agreement is
terminable without penalty, on 60 days' notice, by vote of
holders of a majority of the Fund's or, as to any relevant
Series, such Series' outstanding voting securities or by the
Fund's Board as to the Fund or the relevant Series, as the case
may be. This agreement is terminable by you, upon 270 days'
notice, effective on or after the fifth anniversary of the date
hereof. This agreement also will terminate automatically, as to
the Fund or relevant Series, as the case may be, in the event of
its assignment (as defined in said Act).
4. Exclusivity
So long as you act as the distributor of Shares, you
shall not perform any services for any entity other than
investment companies advised or administered by The Dreyfus
Corporation. The Fund acknowledges that the persons employed by
you to assist in the performance of your duties under this
agreement may not devote their full time to such service and
nothing contained in this agreement shall be deemed to limit or
restrict your or any of your affiliates right to engage in and
devote time and attention to other businesses or to render
services of whatever kind or nature.
5. Miscellaneous
This agreement has been executed on behalf of the Fund
by the undersigned officer of the Fund in his capacity as an
officer of the Fund. The obligations of this agreement shall
only be binding upon the assets and property of the Fund and
shall not be binding upon any Board member, officer or
shareholder of the Fund individually.
Please confirm that the foregoing is in accordance with
your understanding and indicate your acceptance hereof by
signing below, whereupon it shall become a binding agreement
between us.
Very truly yours,
DREYFUS NEW YORK INSURED TAX
EXEMPT BOND FUND
By:
Accepted:
PREMIER MUTUAL FUND SERVICES, INC.
By:________________________
<PAGE>
EXHIBIT A
Reapproval Date Reapproval Day
December 11, 1995 December 11th
<PAGE>
EXHIBIT (6)(b)
APPENDIX A
TO BANK AFFILIATED BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing
shareholders
of, and administering shareholder accounts in, certain mutual
fund(s)
managed, advised or administered by The Dreyfus Corporation or
its
subsidiaries or affiliates (hereinafter referred to individually
as the
"Fund" and collectively as the "Funds"). You are the principal
underwriter
as defined in the Investment Company Act of 1940, as amended (the
"Act"),
and the exclusive agent for the continuous distribution of shares
of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services
for our
clients who own shares of the Funds ("clients"), which
services may include, without limitation: assisting clients
in changing dividend options,
account designations and addresses; performing
sub-accounting; establishing and maintaining shareholder
accounts and records; processing purchase and redemption
transactions; providing periodic statements and/or reports
showing a client's account balance and integrating
such statements with those of other transactions and
balances in the client's other accounts serviced by us;
arranging for bank wires; and providing such other
information and services as you reasonably may
request, to the extent we are permitted by applicable
statute, rule or regulation. In this regard, if we are a
subsidiary or affiliate of a federally chartered and
supervised bank or other banking organization, you
recognize that we may be subject to the provisions of the
Glass-Steagall Act and other laws, rules, regulations or
requirements governing, among other things, the
conduct of our activities. As such, we are restricted in
the activities we may undertake and for which we may be paid
and, therefore, intend to perform only those activities as
are consistent with our statutory and regulatory
obligations. We represent and warrant to, and agree
with you, that the compensation payable to us hereunder,
together with any other compensation payable to us by
clients in connection with the investment of their assets in
shares of the Funds, will be properly disclosed by us to
our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of
the space, equipment and facilities currently used in our
business, or all or any personnel employed by us) as is
necessary or beneficial for providing information and
services to each Fund's shareholders, and to assist you in
servicing accounts of clients. We shall transmit promptly
to clients all communications sent to us for transmittal to
clients by or on behalf of you, any Fund, or any Fund's
investment adviser, custodian or transfer or dividend
disbursing agent.
3. We agree that neither we nor any of our employees or agents
are authorized to make any representation concerning shares
of any Fund, except those contained in the then current
Prospectus for such Fund, copies of which will be supplied
by you to us in reasonable quantities upon request. If we
are a subsidiary or an affiliate of a federally supervised
bank or thrift institution, we agree that in providing
services hereunder we shall at all times act in compliance
with the Interagency Statement on Retail Sales of
Nondeposit Investment Products issued by The Board of
Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and the Office
of Thrift Supervision (February 15, 1994) or any successor
interagency requirements as in force at the time such
services are provided. We shall have no authority to act
as agent for the Funds or for you.
4. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw the sale
of shares of any or all of the Funds.
5. We acknowledge that this Agreement shall become effective
for a Fund only when approved by vote of a majority of (i)
the Fund's Board of Directors or Trustees or Managing
General Partners, as the case may be (collectively
"Directors," individually "Director"), and (ii)
Directors who are not "interested persons" (as defined in
the Act) of the Fund and have no
direct or indirect financial interest in this Agreement,
cast in person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the
calendar year next following the date of execution, and
thereafter shall continue automatically for successive
annual periods ending on the last day of each
calendar year. For all Funds as to which Board approval of
this Agreement is required, such continuance must be
approved specifically at least annually by a vote of a
majority of (i) the Fund's Board of Directors and
(ii) Directors who are not "interested persons" (as defined
in the Act) of the Fund and have no direct or indirect
financial interest in this Agreement, by vote cast in
person at a meeting called for the purpose of
voting on such approval. For any Fund as to which Board
approval of this Agreement is required, this Agreement is
terminable without penalty, at any time, by a majority of
the Fund's Directors who are not "interested persons" (as
defined in the Act) and have no direct or indirect
financial interest in this Agreement or, upon not more than
60 days' written notice, by vote of holders of a majority
of the Fund's shares. As to all Funds, this Agreement is
terminable without penalty upon 15 days' notice by
either party. In addition, you may terminate this Agreement
as to any or all Funds immediately, without penalty, if the
present investment adviser of such Fund(s) ceases to serve
the Fund(s) in such capacity, or if you cease to act
as distributor of such Fund(s). Notwithstanding anything
contained herein,
if we fail to perform the shareholder servicing and
administrative functions contemplated herein by you as to
any or all of the Funds, this Agreement shall be terminable
effective upon receipt of notice thereof by us. This
Agreement also shall terminate automatically in the
event of its assignment (as defined in the Act).
7. In consideration of the services and facilities described
herein, we shall be entitled to receive from you, and you
agree to pay to us, the fees described as payable to us in
each Fund's Service Plan adopted pursuant to Rule 12b-1
under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments
pursuant to this Agreement shall be paid only so long as
this Agreement and such Plan are in effect. We agree that
no Director, officer or shareholder of the Fund
shall be liable individually for the performance of the
obligations hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such
information relating to our services hereunder as may be
required to be maintained by you and/or such Fund under
applicable federal or state laws, and the rules,
regulations, requirements or conditions of applicable
regulatory and self-regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have
the right or authority to assume, create or incur any
liability or any obligation of any kind, express or
implied, against or in the name of or on behalf
of the other party.
10. All notices required or permitted to be given pursuant to
this Agreement shall be given in writing and delivered by
personal delivery or by postage prepaid, registered or
certified United States first class mail, return receipt
requested, or by telecopier, telex, telegram or
similar means of same day delivery (with a confirming copy
by mail as provided herein). Unless otherwise notified in
writing, all notices to you shall be given or sent to you
at One Exchange Place, Tenth Floor, Boston, MA 02109,
Attention: President (with a copy to the same address,
Attention: General Counsel), and all notices to us shall be
given or sent to us at our address which shall be furnished
to you in writing on or before the effective date of this
Agreement.
11. This Agreement shall be construed in accordance with the
internal laws of the State of New York, without giving
effect to principles of conflict of laws.
APPENDIX A
TO BROKER-DEALER AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing
shareholders
of, and administering shareholder accounts in, certain mutual
fund(s)
managed, advised or administered by The Dreyfus Corporation or
its
subsidiaries or affiliates (hereinafter referred to individually
as the
"Fund" and collectively as the "Funds"). You are the principal
underwriter
as defined in the Investment Company Act of 1940, as amended (the
"Act"),
and the exclusive agent for the continuous distribution of shares
of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services
for our
clients who own shares of the Funds ("clients"), which services
may
include, without limitation: answering client inquiries about the
Funds;
assisting clients in changing dividend options, account
designations and
addresses; performing sub-accounting; establishing and
maintaining
shareholder accounts and records; processing purchase and
redemption
transactions; investing client account cash balances
automatically in
shares of one or more of the Funds; providing periodic statements
and/or
reports showing a client's account balance and integrating such
statements with those of other transactions and balances in the
client's
other accounts serviced by us; arranging for bank wires; and
providing
such other information and services as you reasonably may
request, to the
extent we are permitted by applicable statute, rule or
regulation. We
represent and warrant to, and agree with you, that the
compensation
payable to us hereunder, together with any other compensation
payable to
us by clients in connection with the investment of their assets
in shares
of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the
space,
equipment and facilities currently used in our business, or all
or any
personnel employed by us) as is necessary or beneficial for
providing
information and services to each Fund's shareholders, and to
assist you in
servicing accounts of clients. We shall transmit promptly to
clients all
communications sent to us for transmittal to clients by or on
behalf of
you, any Fund, or any Fund's investment adviser, custodian or
transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents
are
authorized to make any representation concerning shares of any
Fund,
except those contained in the then current Prospectus for such
Fund,
copies of which will be supplied by you to us in reasonable
quantities upon
request. We shall have no authority to act as agent for the Funds
or for
you.
4. You reserve the right, at your discretion and without
notice, to
suspend the sale of shares or withdraw the sale of shares of any
or all of
the Funds.
5. We acknowledge that this Agreement shall become effective
for a
Fund only when approved by vote of a majority of (i) the Fund's
Board of
Directors or Trustees or Managing General Partners, as the case
may be
(collectively "Directors," individually "Director"), and (ii)
Directors who
are not "interested persons" (as defined in the Act) of the Fund
and have no
direct or indirect financial interest in this Agreement, cast in
person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the
calendar year
next following the date of execution, and thereafter shall
continue
automatically for successive annual periods ending on the last
day of each
calendar year. For all Funds as to which Board approval of this
Agreement
is required, such continuance must be approved specifically at
least
annually by a vote of a majority of (i) the Fund's Board of
Directors and
(ii) Directors who are not "interested persons" (as defined in
the Act) of
the Fund and have no direct or indirect financial interest in
this
Agreement, by vote cast in person at a meeting called for the
purpose of
voting on such approval. For any Fund as to which Board approval
of this
Agreement is required, this Agreement is terminable without
penalty, at
any time, by a majority of the Fund's Directors who are not
"interested
persons" (as defined in the Act) and have no direct or indirect
financial
interest in this Agreement or, upon not more than 60 days'
written notice,
by vote of holders of a majority of the Fund's shares. As to all
Funds, this
Agreement is terminable without penalty upon 15 days' notice by
either
party. In addition, you may terminate this Agreement as to any or
all Funds
immediately, without penalty, if the present investment adviser
of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you
cease to act
as distributor of such Fund(s). Notwithstanding anything
contained herein,
if we fail to perform the shareholder servicing and
administrative
functions contemplated herein by you as to any or all of the
Funds, this
Agreement shall be terminable effective upon receipt of notice
thereof by
us. This Agreement also shall terminate automatically in the
event of its
assignment (as defined in the Act).
7. In consideration of the services and facilities described
herein, we
shall be entitled to receive from you, and you agree to pay to
us, the fees
described as payable to us in each Fund's Service Plan adopted
pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant
to this
Agreement shall be paid only so long as this Agreement and such
Plan are
in effect. We agree that no Director, officer or shareholder of
the Fund
shall be liable individually for the performance of the
obligations
hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such
information
relating to our services hereunder as may be required to be
maintained by
you and/or such Fund under applicable federal or state laws, and
the rules,
regulations, requirements or conditions of applicable regulatory
and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the
right or
authority to assume, create or incur any liability or any
obligation of any
kind, express or implied, against or in the name of or on behalf
of the
other party.
10. All notices required or permitted to be given pursuant to
this
Agreement shall be given in writing and delivered by personal
delivery or
by postage prepaid, registered or certified United States first
class mail,
return receipt requested, or by telecopier, telex, telegram or
similar
means of same day delivery (with a confirming copy by mail as
provided
herein). Unless otherwise notified in writing, all notices to you
shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston,
MA 02109,
Attention: President (with a copy to the same address, Attention:
General
Counsel), and all notices to us shall be given or sent to us at
our address
which shall be furnished to you in writing on or before the
effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the
internal
laws of the State of New York, without giving effect to
principles of
conflict of laws.
<PAGE>
APPENDIX A
TO BANK AGREEMENT
FORM OF SERVICE AGREEMENT
Premier Mutual Fund Services, Inc.
One Exchange Place
Tenth Floor
Boston, MA 02109
Gentlemen:
We wish to enter into an Agreement with you for servicing
shareholders
of, and administering shareholder accounts in, certain mutual
fund(s)
managed, advised or administered by The Dreyfus Corporation or
its
subsidiaries or affiliates (hereinafter referred to individually
as the
"Fund" and collectively as the "Funds"). You are the principal
underwriter
as defined in the Investment Company Act of 1940, as amended (the
"Act"),
and the exclusive agent for the continuous distribution of shares
of the
Funds.
The terms and conditions of this Agreement are as follows:
1. We agree to provide shareholder and administrative services
for our
clients who own shares of the Funds ("clients"), which services
may
include, without limitation: assisting clients in changing
dividend options,
account designations and addresses; performing sub-accounting;
establishing and maintaining shareholder accounts and records;
processing
purchase and redemption transactions; providing periodic
statements
and/or reports showing a client's account balance and integrating
such
statements with those of other transactions and balances in the
client's
other accounts serviced by us; arranging for bank wires; and
providing
such other information and services as you reasonably may
request, to the
extent we are permitted by applicable statute, rule or
regulation. In this
regard, if we are a federally chartered and supervised bank or
other
banking organization, you recognize that we may be subject to the
provisions of the Glass-Steagall Act and other laws, rules,
regulations or
requirements governing, among other things, the conduct of our
activities.
As such, we are restricted in the activities we may undertake and
for
which we may be paid and, therefore, intend to perform only those
activities as are consistent with our statutory and regulatory
obligations.
We represent and warrant to, and agree with you, that the
compensation
payable to us hereunder, together with any other compensation
payable to
us by clients in connection with the investment of their assets
in shares
of the Funds, will be properly disclosed by us to our clients.
2. We shall provide such office space and equipment, telephone
facilities and personnel (which may be all or any part of the
space,
equipment and facilities currently used in our business, or all
or any
personnel employed by us) as is necessary or beneficial for
providing
information and services to each Fund's shareholders, and to
assist you in
servicing accounts of clients. We shall transmit promptly to
clients all
communications sent to us for transmittal to clients by or on
behalf of
you, any Fund, or any Fund's investment adviser, custodian or
transfer or
dividend disbursing agent.
3. We agree that neither we nor any of our employees or agents
are
authorized to make any representation concerning shares of any
Fund,
except those contained in the then current Prospectus for such
Fund,
copies of which will be supplied by you to us in reasonable
quantities upon
request. If we are a federally supervised bank or thrift
institution, we
agree that, in providing services hereunder, we shall at all
times act in
compliance with the Interagency Statement on Retail Sales of
Nondeposit
Investment Products issued by The Board of Governors of the
Federal
Reserve System, the Federal Deposit Insurance Corporation, the
Office of
the Comptroller of the Currency, and the Office of Thrift
Supervision
(February 15, 1994) or any successor interagency requirements as
in force
at the time such services are provided. We shall have no
authority to act
as agent for the Funds or for you.
4. You reserve the right, at your discretion and without
notice, to
suspend the sale of shares or withdraw the sale of shares of any
or all of
the Funds.
5. We acknowledge that this Agreement shall become effective
for a
Fund only when approved by vote of a majority of (i) the Fund's
Board of
Directors or Trustees or Managing General Partners, as the case
may be
(collectively "Directors," individually "Director"), and (ii)
Directors who
are not "interested persons" (as defined in the Act) of the Fund
and have no
direct or indirect financial interest in this Agreement, cast in
person at a
meeting called for the purpose of voting on such approval.
6. This Agreement shall continue until the last day of the
calendar year
next following the date of execution, and thereafter shall
continue
automatically for successive annual periods ending on the last
day of each
calendar year. For all Funds as to which Board approval of this
Agreement
is required, such continuance must be approved specifically at
least
annually by a vote of a majority of (i) the Fund's Board of
Directors and
(ii) Directors who are not "interested persons" (as defined in
the Act) of
the Fund and have no direct or indirect financial interest in
this
Agreement, by vote cast in person at a meeting called for the
purpose of
voting on such approval. For any Fund as to which Board approval
of this
Agreement is required, this Agreement is terminable without
penalty, at
any time, by a majority of the Fund's Directors who are not
"interested
persons" (as defined in the Act) and have no direct or indirect
financial
interest in this Agreement or upon not more than 60 days' written
notice,
by vote of holders of a majority of the Fund's shares. As to all
Funds, this
Agreement is terminable without penalty upon 15 days' notice by
either
party. In addition, you may terminate this Agreement as to any or
all Funds
immediately, without penalty, if the present investment adviser
of such
Fund(s) ceases to serve the Fund(s) in such capacity, or if you
cease to act
as distributor of such Fund(s). Notwithstanding anything
contained herein,
if we fail to perform the shareholder servicing and
administrative
functions contemplated herein by you as to any or all of the
Funds, this
Agreement shall be terminable effective upon receipt of notice
thereof by
us. This Agreement also shall terminate automatically in the
event of its
assignment (as defined in the Act).
7. In consideration of the services and facilities described
herein, we
shall be entitled to receive from you, and you agree to pay to
us, the fees
described as payable to us in each Fund's Service Plan adopted
pursuant to
Rule 12b-1 under the Act, and Prospectus and related Statement of
Additional Information. We understand that any payments pursuant
to this
Agreement shall be paid only so long as this Agreement and such
Plan are
in effect. We agree that no Director, officer or shareholder of
the Fund
shall be liable individually for the performance of the
obligations
hereunder or for any such payments.
8. We agree to provide to you and each applicable Fund such
information
relating to our services hereunder as may be required to be
maintained by
you and/or such Fund under applicable federal or state laws, and
the rules,
regulations, requirements or conditions of applicable regulatory
and self-
regulatory agencies or authorities.
9. This Agreement shall not constitute either party the legal
representative of the other, nor shall either party have the
right or
authority to assume, create or incur any liability or any
obligation of any
kind, express or implied, against or in the name of or on behalf
of the
other party.
10. All notices required or permitted to be given pursuant to
this
Agreement shall be given in writing and delivered by personal
delivery or
by postage prepaid, registered or certified United States first
class mail,
return receipt requested, or by telecopier, telex, telegram or
similar
means of same day delivery (with a confirming copy by mail as
provided
herein). Unless otherwise notified in writing, all notices to you
shall be
given or sent to you at One Exchange Place, Tenth Floor, Boston,
MA 02109,
Attention: President (with a copy to the same address, Attention:
General
Counsel), and all notices to us shall be given or sent to us at
our address
which shall be furnished to you in writing on or before the
effective date
of this Agreement.
11. This Agreement shall be construed in accordance with the
internal
laws of the State of New York, without giving effect to
principles of
conflict of laws.
<PAGE>
EXHIBIT 11
Consent of Independent Auditors
We consent to the reference to our firm under the captions
"Condensed
Financial Information" and "Custodian, Transfer and Dividend
Disbursing
Agent, Counsel and Independent Auditors" and to the use of our
report
dated February 3, 1995, in this Registration Statement (Form N-1A
33-9654)
of Dreyfus New York Insured Tax Exempt Bond Fund.
ERNST & YOUNG LLP
New York, New York
February 28, 1995
<PAGE>
EXHIBIT 15
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
SERVICE PLAN
Introduction: It has been proposed that the above-
captioned investment company (the "Fund") adopt a Service Plan
(the "Plan") in accordance with Rule 12b-1, promulgated under
the Investment Company Act of 1940, as amended (the "Act").
Under the Plan, the Fund would pay for the costs and expenses of
preparing, printing and distributing its prospectuses and
statements of additional information, and would (a)
reimburse the Fund's distributor (the "Distributor") for
payments to third parties for distributing the Fund's shares and
servicing shareholder accounts ("Servicing") (the payments in
this clause (a) being referred to as the "Distributor Payments")
and (b) pay The Dreyfus Corporation, Dreyfus Service Corporation
and any affiliate of either of them (collectively, "Dreyfus")
for advertising and marketing relating to the Fund and for
Servicing (the payments in this clause (b) being referred to as
"Dreyfus Payments"). If this proposal is to be implemented, the
Act and said Rule 12b-1 require that a written plan describing
all material aspects of the proposed financing be adopted by the
Fund.
The Fund's Board, in considering whether the Fund should
implement a written plan, has requested and evaluated such
information as it deemed necessary to an informed determination
as to whether a written plan should be implemented and has
considered such pertinent factors as it deemed necessary to form
the basis for a decision to use assets of the Fund for such
purposes.
In voting to approve the implementation of such a plan, the
Board members have concluded, in the exercise of their
reasonable business judgment and in light of their respective
fiduciary duties, that there is a reasonable likelihood that the
plan set forth below will benefit the Fund and its shareholders.
The Plan: The material aspects of this Plan are as
follows:
1. The Fund shall pay all costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing
shareholders. The Fund also shall pay an amount of the costs
and expenses in connection with (a) preparing, printing and
distributing the Fund's prospectuses and statements of
additional information used for other purposes and (b)
implementing and operating this Plan, such aggregate amount not
to exceed in any fiscal year of the Fund the greater of $100,000
or .005 of 1% of the average daily value of the Fund's net
assets for such fiscal year.
2. (a) The aggregate annual fee the Fund may pay under
this Plan for Distributor Payments and Dreyfus Payments is .25
of 1% of the value of the Fund's average daily net assets for
such year (the "Aggregate Amount").
(b) The Fund shall reimburse the Distributor in respect
of Distributor Payments an amount not to exceed an annual rate
of .25 of 1% of the value of the Fund's average daily net assets
for such year (the "Distributor Amount").
(c) The Fund shall pay Dreyfus in respect of Dreyfus
Payments an annual fee equal to the difference between the
Aggregate Amount and the Distributor Amount for such year.
(d) Each of the Distributor and Dreyfus may pay one or
more securities dealers, financial institutions (which may
include banks) or other industry professionals, such as
investment advisers, accountants and estate planning firms
(severally, a "Service Agent"), a fee in respect of the Fund's
shares owned by investors with whom the Service Agent has a
Servicing relationship or for whom the Service Agent is the
dealer or holder of record. Each of the Distributor and Dreyfus
shall determine the amounts to be paid to the Service Agents to
which it will make payments under this Plan and the basis on
which such payments will be made. Payments to a Service Agent
are subject to compliance by the Service Agent with the terms of
any related Plan agreement between the Service Agent and the
Distributor or Dreyfus, as the case may be.
3. For the purposes of determining the fees payable under
this Plan, the value of the Fund's net assets shall be computed
in the manner specified in the Fund's charter documents as then
in effect for the computation of the value of the Fund's net
assets.
4. The Fund's Board shall be provided, at least quarterly,
with a written report of all amounts expended pursuant to this
Plan. The report shall state the purpose for which the amounts
were expended.
5. This Plan will become effective upon the later to occur
of (i) the consummation of the transactions contemplated by the
Amended and Restated Agreement and Plan of Merger dated as of
December 5, 1993 by and among Mellon Bank Corporation, Mellon
Bank, N.A., XYZ Sub Corporation and The Dreyfus Corporation or
(ii) approval by (a) holders of a majority of the Fund's
outstanding shares, and (b) a majority of the Board members,
including a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan.
6. This Plan shall continue for a period of one year from
its effective date, unless earlier terminated in accordance with
its terms, and thereafter shall continue automatically for
successive annual periods, provided such continuance is approved
at least annually in the manner provided in paragraph 5(b)
hereof.
7. This Plan may be amended at any time by the Fund's
Board, provided that (a) any amendment to increase materially
the costs which the Fund may bear pursuant to this Plan shall be
effective only upon approval by a vote of the holders of a
majority of the Fund's outstanding shares, and (b) any material
amendments of the terms of this Plan shall become effective only
upon approval as provided in paragraph 5(b) hereof.
8. This Plan is terminable without penalty at any time by
(a) vote of a majority of the Board members who are not
"interested persons" (as defined in the Act) of the Fund and
have no direct or indirect financial interest in the operation
of this Plan or in any agreements entered into in connection
with this Plan, or (b) vote of the holders of a majority of the
Fund's outstanding shares.
9. The obligations hereunder and under any related Plan
agreement shall only be binding upon the assets and property of
the Fund and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
Dated: May 31, 1994
<PAGE>
OTHER EXHIBITS (a)
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C.
Dey, Eric B. Fischman, Ruth D.
Leibert and John E. Pelletier and each of them, with full power
to act without the other, his or her true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement for each Fund
listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and
to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority
to do and perform each and every act and thing ratifying and
confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done
by virtue hereof.
/s/ Marie E. Connolly
Marie E. Connolly
President and Treasurer
Dated: October 24, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C.
Dey, Eric B. Fischman, Ruth D.
Leibert and John E. Pelletier and each of them, with full power
to act without the other, his or her true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement for each Fund
listed on Schedule A attached hereto
(including post-effective amendments and amendments thereto), and
to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority
to do and perform each and every act and thing ratifying and
confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done
by virtue hereof.
/s/ Joseph S. DiMartine
Joseph S. DiMartino, Board Member
Dated February 8, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frederick C.
Dey, Eric B. Fischman, Ruth D.
Leibert and John E. Pelletier and each of them, with full power
to act without the other, his or her true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all
capacities (until revoked in writing) to sign any
and all amendments to the Registration Statement for each Fund
listed on Schedule A attached hereto,
(including post-effective amendments and amendments thereto), and
to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and
perform each and every act and thing ratifying and confirming all
that said attorneys-in-fact and agents or
any of them, or their or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue
hereof.
/s/Gordon J. Davis /s/ Daniel Rose
Gordon J. Davis, Board Member Daniel Rose, Board Member
/s/ David P. Feldman /s/ Sander Vanocur
David P. Feldman, Board Member Sander Vanocur, Board Member
/s/ Lynn Martin /s/ Anne Wexler
Lynn Martin, Board Member Anne Wexler, Board Member
/s/ Eugene McCarthy /s/ Rex Wilder
Eugene McCarthy, Board Member Rex Wilder, Board Member
Dated: August 30, 1994
<PAGE>
EXHIBIT A
Dreyfus New Jersey Municipal Bond Fund, Inc.
Dreyfus New York Insured Municipal Bond Fund
<PAGE>
OTHER EXHIBITS (b)
DREYFUS NEW YORK INSURED TAX EXEMPT BOND FUND
Certificate of Secretary
The undersigned, Ruth D. Leibert, Assistant
Secretary of Dreyfus New York
Insured Tax Exempt Bond Fund (the "Fund"), hereby certifies that
set forth below is a true and correct
copy of the resolution adopted by the Fund's Board of Trustees
pursuant to written consent dated August
30, 1994.
RESOLVED, that the Registration Statement and
any and all amendments and supplements thereto,
may be signed by any one of Frederick C. Dey,
Eric B.Fischman, Ruth D. Leibert and John
Pelletier as the attorney-in-fact for the proper
officers of the Fund, with full power of substitution
and resubstitution; and that the appointment of
each of such persons as such attorney-in-fact
hereby is authorized and approved; and that such
attorneys-in-fact, and each of them, shall have full
power and authority to do and perform each and
every act and thing requisite and necessary to be
done in connection with such Registration
Statement and any and all amendments and
supplements thereto, as fully to all intents and
purposes as the officer, for whom he is acting as
attorney-in-fact, might or could do in person.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed
the seal of the Fund on February 27, 1994.
/s/ Ruth D. Leibert
Ruth D. Leibert
Assistant Secretary
(SEAL)
