LETTER TO SHAREHOLDERS
Dear Shareholder:
Since our last report to shareholders on April 30, 1994, we witnessed a
continuation of the volatility which characterized the trading of all fixed
income vehicles for much of the past year. Early on, as investors gleaned a
sense that economic activity was abating, the markets were buoyed by the
prospects for declining inflationary pressures. This was based on preliminary
data released for the period covering May and early June.
INTEREST RATES AND THE ECONOMY
By July, however, as statistics for job creation, capacity utilization
and industrial production were released, the markets were ill-positioned to
accept the heightened activity indicated. Anxiety levels and long-term
interest rates rose quickly as market participants became obsessed with the
need for another round of monetary tightening by the Federal Reserve Board.
In August, when the Fed did move further along the road toward a more
restrictive policy by raising both the Federal Funds rate and the discount
rate, market participants viewed the moves as decisive and adequate. Such
enthusiasm proved short-lived, however, as investors began to focus on the
Fed's accompanying statement indicating that it had sufficiently removed the
inflationary pressure for the period through the November mid-term elections;
this statement, combined with continued strong growth and surging pressures
on prices, particularly at the intermediate goods level, moved investors to
demand a yield premium on their fixed income securities. This was
compensation for the potential that the Fed's actions were too little, too
late. These factors combined to push most long-term interest rates to their
highest levels in nearly three years.
TAX EXEMPT MARKETS
While municipal securities experienced the same volatility as their
taxable counterparts throughout this period, the rise in tax exempt yields
tended to be a bit more muted due to the formidable technical dynamic they
have enjoyed throughout much of the past year. The rise in individual tax
rates has generated a significant amount of demand for tax exempt income, yet
issuance of municipal bonds has fallen dramatically. Through October of this
year, new issue volume has fallen nationally by more than 40% compared to the
same period in 1993. In the instance of Ohio offerings, a similar decline of
more than 36% was witnessed. A comparison of the relative movements of
30-year U.S. Treasury yields and municipal yields, as represented by the Bond
Buyer Revenue Bond Index, illustrates this point. At our last communique in
April, Government yields stood at 7.28% and the Revenue Index at 6.42%. At
the close of the six-month period on October 31, 1994, the yield of long-term
Treasuries had increased by 69 basis points (.69%) to 7.97%, while the
Revenue Index advanced by 53 basis points (.53%) to 6.95%.
A DEFENSIVE STRATEGY
As noted in our last letter, your Series' position at the start of this
semi-annual period was defensive in nature. We increased cash reserves and
sought to mute the portfolio's volatility by focusing on those issues
offering higher levels of tax exempt income and stronger qualities of
principal stability. This posture continued to guide our management of the
portfolio throughout much of the past six months. As a result of this
strategy, the Series was able to produce income dividends totaling approximate
ly $.37 per share for Class A shareholders, representing an annualized
distribution rate of 5.66% per share, based on the
closing maximum offering price on October 31, 1994. For Class B shareholders,
the Series produced income dividends totaling approximately $.33 per share,
for an annualized distribution rate of 5.36% per share, based on the closing
net asset value on October 31, 1994. All income dividends were exempt from
Federal and Ohio State income taxes.*
OUR OUTLOOK
Moving forward, the current environment for fixed income investments
continues to be clouded by further signs of expanding economic activity and
the likelihood of additional Federal Reserve Board tightening. However, we
believe prevailing economic analysis is beginning to discern the prospects
for an abatement of the expansion and the emergence of a more favorable
foundation for bonds. In the event that firm statistical data lends credence
to this view, we stand prepared to once again assume a more aggressive
posture in managing the Portfolio.
We appreciate your investment in the Premier State Municipal Bond Fund,
Ohio Series, and we want to assure you that we are at all times working in
your Series' best interest.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
November 14, 1994
New York, N.Y.
*Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--98.5% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
OHIO--91.6%
City of Akron 6.75%, 12/1/2014 (Insured; MBIA).............................. $ 3,955,000 $ 4,036,592
Akron Bath Copley Joint Township Hospital District, Revenue:
(Akron Children's Hospital Medical Center) 7.70%, 11/15/2005............ 500,000 538,435
(Akron City Hospital Project) 8.875%, 11/15/2007........................ 500,000 563,040
(Summa Health Systems) 5.75%, 11/15/2008................................ 5,000,000 4,588,950
Akron-Wilbeth Housing Development Corp., First Mortgage Revenue
7.90%, 8/1/2003 (Insured; FHA).......................................... 1,805,000 2,063,638
Allen County, Industrial First Mortgage Revenue, Refunding
6.75%, 11/15/2008 (Guaranteed; K-Mart Corp.)............................ 1,280,000 1,260,595
City of Barberton, Hospital Facilities Revenue
(The Barberton Citizens Hospital Co. Project) 7.25%, 1/1/2012........... 2,400,000 2,479,056
Berea:
7.50%, 12/1/2005 ....................................................... 425,000 471,223
7.55%, 12/1/2006 ....................................................... 455,000 505,487
7.55%, 12/1/2007 ....................................................... 320,000 355,507
Butler County, Hospital Facilities Revenue, Refunding and Improvement
(Fort Hamilton Hughes Hospital) 7.25%, 1/1/2001......................... 4,000,000 3,953,000
City of Cambridge, HR Refunding (Guernsey Memorial Hospital Project)
8%, 12/1/2006........................................................... 2,000,000 2,071,980
Canton 7.875%, 12/1/2008.................................................... 1,000,000 1,122,990
Clermont County, Hospital Facilities Revenue, Refunding (Mercy Health
Systems)
7.50%, 9/1/2019 (Insured; AMBAC)........................................ 1,000,000 1,106,800
City of Cleveland:
Airport System Improvement Revenue 6%, 12/1/2024 (Insured; FGIC)........ 7,000,000 6,325,410
COP (Motor Vehicle, Motorized and Communication Equipment) 7.10%, 7/1/2002 2,000,000 2,037,360
Parking Facility Improvement Revenue 8%, 9/15/2012...................... 5,000,000 5,044,350
Public Power System Revenue (First Mortgage Improvement):
7%, Series A, 11/15/2017.............................................. 1,125,000 1,102,297
7%, Series B, 11/15/2017.............................................. 8,675,000 8,499,939
Waterworks Improvement First Mortgage Revenue:
6.50%, 1/1/2011 (Insured; AMBAC)...................................... 2,000,000 2,007,980
7.875%, 1/1/2016...................................................... 650,000 701,070
Cleveland City School District 8%, 12/1/2001................................ 1,675,000 1,896,820
Cuyahoga County:
Health Care Facilities Revenue (Judson Retirement Community)
8.875%, 11/15/2019.................................................... 3,500,000 3,800,790
HR:
(Fairview General Hospital) 7.375%, 8/1/2019.......................... 4,000,000 4,386,960
(Meridia Health Systems) 7%, 8/15/2023................................ 1,750,000 1,736,875
Refunding:
(Deaconess Hospital) 7.45%, 10/1/2018............................. 5,000,000 5,227,800
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
OHIO (CONTINUED)
Cuyahoga County (continued):
HR (Continued):
Refunding (continued):
(Meridia Health Systems) 7.25%, 8/15/2019......................... $ 4,715,000 $ 4,798,267
Jail Facilities 7%, 10/1/2013........................................... 6,125,000 6,711,836
Refunding:
(Cleveland Clinic Foundation) 8%, 12/1/2015........................... 1,000,000 1,069,410
(Mount Sinai Medical Center) 8.125%, 11/15/2014....................... 1,000,000 1,076,350
Eaton, IDR Refunding (Baxter International Inc. Project) 6.50%, 12/1/2012... 1,500,000 1,438,425
Erie County, Hospital Improvement Revenue, Refunding
(Firelands Community Hospital) 8.875%, 1/1/2015......................... 700,000 764,575
Euclid City School District 7.10%, 12/1/2011................................ 1,000,000 1,043,380
Village of Evendale, IDR Refunding (Ashland Oil Inc. Project) 6.90%, 11/1/2010 2,000,000 1,962,100
Fairlawn, Health Care Facilities Revenue (Village at Saint Edward Project)
8.75%, 10/1/2019........................................................ 2,420,000 2,594,482
Franklin County:
Hospital Improvement Revenue (The Children's Hospital Project) 6.60%, 11/1/2011 1,500,000 1,468,560
HR:
(Holy Cross Health Systems Corp.-Mount Carmel Health) 6.75%, 6/1/2019 2,500,000 2,447,025
Refunding Improvement:
(The Children's Hospital Project) 6.60%, 5/1/2013................. 4,000,000 3,875,640
(Riverside United Hospital) 7.60%, 5/15/2020...................... 5,300,000 5,910,030
(Worthington Christian Village Congregate Care Project):
10.25%, 8/1/2015................................................ 860,000 909,536
7.80%, 2/1/2017 (Insured; FHA).................................. 5,690,000 6,095,982
Gallia County, Local School District 7.375%, 12/1/2004...................... 570,000 633,076
Greater Cleveland Gateway Economic Development Corp.:
Senior Lien Excise Tax Revenue 6.875%, 9/1/2005 (Insured; FSA).......... 1,500,000 1,586,700
Stadium Revenue 7.50%, 9/1/2005......................................... 5,675,000 6,151,643
Hamilton, Gas Systems Revenue 5%, 10/15/2018 (Insured; MBIA)................ 1,825,000 1,455,529
Hamilton County:
Electric Systems Mortgage Revenue, Refunding 8%, 10/15/2022 (Insured; FGIC) 750,000 836,422
Hospital Facilities Improvement Revenue, Refunding (Deaconess Hospital)
7%, 1/1/2012.......................................................... 2,570,000 2,627,208
Hospital Facilities Refunding Revenue (Episcopal Retirement Homes, Inc.)
6.80%, 1/1/2008 (LOC; The Fifth Third Bank) (a)....................... 2,450,000 2,454,238
Mortgage Revenue (Judson Care Center) 7.80%, 8/1/2019 (Insured; FHA).... 3,970,000 4,229,837
Sewer Systems Improvement Revenue, Refunding:
6.70%, 12/1/2013...................................................... 2,000,000 2,155,340
5%, 12/1/2014 (Insured; FGIC)......................................... 2,500,000 2,046,275
Kirtland Local School District 7.50%, 12/1/2009............................. 760,000 822,244
Knox County, IDR (Weyerhaeuser Co. Project) 9%, 10/1/2007................... 1,000,000 1,199,970
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
OHIO (CONTINUED)
Lowellville, Sanitary Sewer Systems Revenue (Browning-Ferris Industries Inc.)
7.25%, 6/1/2006......................................................... $ 1,300,000 $ 1,342,107
Mahoning County, Health Care Facilities Revenue
(Youngstown Osteopathic Hospital Project)
7.60%, 8/1/2010 (LOC; Marine Midland Bank) (a).......................... 3,775,000 4,104,407
Marion County, Health Care Facilities Revenue (United Church Homes Inc.):
8.875%, 12/1/2012....................................................... 2,305,000 2,715,152
Refunding and Improvement 6.375%, 11/15/2010............................ 3,000,000 2,681,760
Miami County, Hospital Facilities Revenue, Refunding
(Upper Valley Medical Center) 8.375%, 5/1/2013.......................... 525,000 566,307
Moraine, Solid Waste Disposal Revenue (General Motors Corp. Project)
6.75%, 7/1/2014......................................................... 5,000,000 4,800,000
Muskingum County, Revenue, Refunding (Franciscan Health Advisory Services)
7.50%, 3/1/2012......................................................... 3,185,000 3,300,902
Northeast Regional Sewer District, Wastewater Improvement Revenue
6.50%, 11/15/2016 (Insured; AMBAC)...................................... 2,000,000 1,988,340
North Royalton City School District 6.10%, 12/1/2019 (Insured; MBIA)........ 2,000,000 1,878,060
State of Ohio:
Economic Development Revenue:
Ohio Enterprise Bond Fund (VSM Corp. Project) 7.375%, 12/1/2011....... 885,000 897,107
(Sponge Inc. Project) 8.375%, 6/1/2014................................ 1,675,000 1,829,385
Higher Educational Facility Revenue (University of Dayton Project)
5.80%, 12/1/2014 (Insured; FGIC)...................................... 1,000,000 915,770
Mortgage Revenue (Odd Fellows Home Ohio Inc. Project)
8.15%, 8/1/2017 (Insured; FHA)........................................ 350,000 379,379
PCR (Standard Oil Co. Project)
6.75%, 12/1/2015 (Guaranteed; British Petroleum Co. p.l.c.)........... 1,350,000 1,382,076
Ohio Air Quality Development Authority, Revenue:
Pollution Control:
(Cincinnati Gas and Electric) 10.125%, 12/1/2015...................... 900,000 972,504
(Pennsylvania Power Co. Project):
5.90%, 5/1/2018 (Insured; AMBAC).................................. 3,240,000 2,889,853
8.10%, 9/1/2018................................................... 1,000,000 1,065,630
Refunding:
(Cleveland Electric Illuminating Co. Project) 6.85%, 7/1/2023..... 5,250,000 4,558,470
(Ohio Edison):
7.45%, 3/1/2016 (Insured; FGIC)................................. 3,500,000 3,695,230
5.625%, 11/15/2029 (Insured; AMBAC)............................. 2,500,000 2,115,200
Refunding (Ohio Power Co. Project) 7.40%, 8/1/2009...................... 1,500,000 1,521,555
Ohio Building Authority:
State Correctional Facilities 8%, 8/1/2006.............................. 400,000 439,816
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
OHIO (CONTINUED)
Ohio Building Authority (continued):
State Facilities:
(Adult Correctional Building) 6.125%, 10/1/2009....................... $ 1,000,000 $ 972,810
(Columbus State Building Project):
7.35%, 10/1/2005.................................................. 1,795,000 1,988,914
7.75%, 10/1/2008.................................................. 500,000 552,055
Refunding (James Rhodes) 6.375%, 12/1/2008............................ 1,670,000 1,679,185
Ohio Capital Corp. for Housing, MFHR Refunding
7.60%, 11/1/2023 (Collateralized; FNMA)................................. 1,250,000 1,288,163
Ohio Higher Educational Facility Community, Revenue:
(Case Western Reserve Project) 7.70%, 10/1/2018......................... 500,000 538,475
(Oberlin College) 7.375%, 10/1/2014..................................... 400,000 440,376
Ohio Housing Finance Agency:
Mortgage Revenue (Saint Francis Court Apartment Project)
8%, 10/1/2026 (Insured; FHA).......................................... 695,000 702,151
SFMR (GNMA Mortgage Backed Securities Program):
8.25%, 12/15/2019 .................................................... 195,000 202,831
8.125%, 3/1/2020 ..................................................... 480,000 498,254
Zero Coupon, 9/1/2021................................................. 19,130,000 2,409,615
7.85%, 9/1/2021 ...................................................... 2,220,000 2,278,009
7.65%, 3/1/2029 ...................................................... 5,685,000 5,856,346
7.80%, 3/1/2030 ...................................................... 3,695,000 3,795,800
Ohio Public Facilities Community, Higher Education Facilities 7.25%, 5/1/2004 1,300,000 1,421,953
Ohio Water Development Authority:
Pollution Control Facilities Revenue:
(Cleveland Electric Illuminating Project) 8%, 10/1/2023............... 5,800,000 5,979,046
(Ohio Edison) 8.10%, 10/1/2023........................................ 3,700,000 3,812,887
(Pennsylvania Power Co. Project) 8.10%, 9/1/2018...................... 2,000,000 2,124,280
Refunding:
(Ohio Edison) 7.625%, 7/1/2023.................................... 9,390,000 9,372,159
(Toledo Edison Co.):
7.55%, 6/1/2023 ................................................ 2,000,000 1,925,220
8%, 10/1/2023 .................................................. 3,635,000 3,570,370
Pure Water Revenue 7.75%, 6/1/2014...................................... 500,000 542,595
Ottawa County, Sanitary Sewer Systems Special Assessment
(Portage-Catawba Island Sewer Project) 7%, 9/1/2011 (Insured; AMBAC).... 1,000,000 1,056,450
Reynoldsburg City School District, School Building Construction and
Improvement
6.55%, 12/1/2017 (Insured; FGIC)........................................ 2,000,000 1,997,480
Ross County, HR (Medical Center Hospital Project) 7.50%, 12/1/2014.......... 2,000,000 2,197,140
Shelby County, Hospital Facilities Revenue, Refunding and Improvement
(The Shelby County Memorial Hospital Association) 7.70%, 9/1/2018....... 2,500,000 2,544,800
South Euclid, Recreation Facilities 7%, 12/1/2011........................... 2,285,000 2,344,936
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
OHIO (CONTINUED)
Springdale, Hospital Facilities First Mortgage Revenue,
(Southwestern Seniors Services, Inc.):
5.875%, 11/1/2012..................................................... $ 3,000,000 $ 2,579,520
6%, 11/1/2018......................................................... 1,250,000 1,026,450
Stark County, Refunding 5.70%, 11/15/2017 (Insured; AMBAC).................. 1,675,000 1,493,162
Student Loan Funding Corp.:
Student Loan Revenue, Refunding 7.20%, 8/1/2003......................... 3,150,000 3,287,686
Student Loan Senior Subordinated Revenue 6.15%, 8/1/2010................ 6,775,000 6,333,812
University of Cincinnati:
COP 6.75%, 12/1/2009 (Insured; MBIA).................................... 750,000 774,585
General Receipts 5.15%, 6/1/2014........................................ 1,000,000 810,730
University of Ohio:
General Receipts 5.875%, 12/1/2012...................................... 3,000,000 2,769,120
Revenue 7.15%, 12/1/2009................................................ 6,000,000 6,522,360
University of Toledo, General Receipts:
5.75%, 12/1/2012 (Insured; FGIC)........................................ 2,000,000 1,835,700
5.35%, 6/1/2025 (Insured; FGIC)......................................... 1,000,000 821,960
Warren 7.75%, 11/1/2010..................................................... 2,785,000 3,146,493
U.S. RELATED--6.9%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 3,000,000 2,842,410
Puerto Rico Highway and Transportation Authority, Highway Revenue, Refunding:
6.544%, 7/1/2007 (b).................................................... 7,750,000 6,229,063
5%, 7/1/2022............................................................ 2,415,000 1,837,115
Puerto Rico Industrial Medical and Environmental Pollution Control Facilities
Financing Authority, (American Home) 5.10%, 12/1/2018................... 1,500,000 1,208,865
Virgin Islands Public Finance Authority, Revenue, Refunding
Matching Fund Loan Notes 7.25%, 10/1/2018............................... 5,200,000 5,158,816
Virgin Islands Water and Power Authority, Electric Systems Revenue 7.40%, 7/1/2011 3,450,000 3,517,861
--------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $292,745,854)..................................................... $296,576,042
==============
SHORT-TERM MUNICIPAL INVESTMENTS--1.5%
OHIO--1.4%
Ohio Air Quality Development Authority, Revenue (JMG Funding Limited
Partnership)
VRDN 3.40% (LOC; Societe Generale) (a,c)................................ $ 700,000 $ 700,000
Scioto County, Marine Term Facilities Revenue, Refunding
(Norfolk Southern Corp. Project) VRDN 3.30% (c)......................... 1,300,000 1,300,000
Student Loan Funding Corp., Cincinnati Student Loan Revenue
VRDN 3.35% (LOC; Fuji Bank) (a,c)....................................... 2,140,000 2,140,000
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED)
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
U.S. RELATED--.1%
Puerto Rico Electric Power Authority, Revenue ARRN 2.79% (Insured; FSA) (b). $ 450,000 $ 450,000
--------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,590,000)....................................................... $ 4,590,000
==============
TOTAL INVESTMENTS--100.0%
(cost $297,335,854)..................................................... $301,166,042
==============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation HR Hospital Revenue
ARRN Adjustable Rate Receipt Notes IDR Industrial Development Revenue
COP Certificate of Participation LOC Letter of Credit
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Administration MFHR Multi-Family Housing Revenue
FNMA Federal National Mortgage Association PCR Pollution Control Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS
FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <S> <C>
AAA Aaa AAA 27.5%
AA Aa AA 6.9
A A A 26.6
BBB Baa BBB 25.3
B B B 5.4
F1 MIG1 SP1 1.4
Not Rated Not Rated Not Rated 6.9
--------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Secured by letters of credit.
(b) Inverse floater security - the interest rate is subject to change
periodically.
(c) Security payable on demand. The interest rate, which is subject to
change, is based upon prime rates or an index of market interest rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) At October 31, 1994, the Fund had $92,870,641 (30.3% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from health care projects.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $297,335,854)-see statement..................................... $301,166,042
Interest receivable..................................................... 6,268,628
Receivable for shares of Beneficial Interest subscribed................. 107,307
Prepaid expenses........................................................ 14,324
--------------
307,556,301
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 145,301
Due to the Distributor.................................................. 78,719
Due to Custodian........................................................ 665,586
Payable for shares of Beneficial Interest redeemed...................... 199,815
Accrued expenses........................................................ 50,158 1,139,579
-------------- --------------
NET ASSETS ................................................................ $306,416,722
==============
REPRESENTED BY:
Paid-in capital......................................................... $302,872,302
Accumulated net realized (loss) on investments.......................... (285,768)
Accumulated net unrealized appreciation on investments-Note 3........... 3,830,188
--------------
NET ASSETS at value......................................................... $306,416,722
==============
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 22,574,126
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 2,412,223
==============
NET ASSET VALUE per share:
Class A Shares
($276,819,694 / 22,574,126 shares).................................... $12.26
=======
Class B Shares
($29,597,028 / 2,412,223 shares)...................................... $12.27
=======
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 10,707,592
EXPENSES:
Management fee--Note 2(a)............................................. $ 883,486
Shareholder servicing costs-Note 2(c)................................. 501,914
Distribution fees (Class B shares)-Note 2(b).......................... 73,523
Professional fees..................................................... 71,863
Custodian fees........................................................ 16,950
Prospectus and shareholders' reports.................................. 12,781
Trustees' fees and expenses-Note 2(d)................................. 1,218
Registration fees..................................................... 1,137
Miscellaneous......................................................... 34,311
--------------
1,597,183
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 28,783
--------------
TOTAL EXPENSES.................................................... 1,568,400
--------------
INVESTMENT INCOME--NET............................................ 9,139,192
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments--Note 3.............................. $ (1,100,713)
Net unrealized (depreciation) on investments............................ (10,014,634)
--------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (11,115,347)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (1,976,155)
===============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1994
1994 (UNAUDITED)
-------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 18,204,926 $ 9,139,192
Net realized gain (loss) on investments................................ 1,272,432 (1,100,713)
Net unrealized (depreciation) on investments for the period............ (10,949,018) (10,014,634)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.. 8,528,340 (1,976,155)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares....................................................... (17,203,535) (8,378,050)
Class B shares....................................................... (1,001,391) (761,142)
Net realized gain on investments:
Class A shares....................................................... (616,962) ___
Class B shares....................................................... (46,746) __
-------------- --------------
TOTAL DIVIDENDS.................................................. (18,868,634) (9,139,192)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares....................................................... 29,869,777 6,989,723
Class B shares....................................................... 21,032,260 4,290,154
Dividends reinvested:
Class A shares....................................................... 11,652,834 5,547,322
Class B shares....................................................... 757,951 528,786
Cost of shares redeemed:
Class A shares....................................................... (34,259,537) (19,374,347)
Class B shares....................................................... (1,396,011) (1,812,068)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST
TRANSACTIONS................................................... 27,657,274 (3,830,430)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 17,316,980 (14,945,777)
NET ASSETS:
Beginning of period.................................................... 304,045,519 321,362,499
-------------- --------------
End of period.......................................................... $321,362,499 $306,416,722
============ =============
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------------------------------------------------
CLASS A CLASS B
------------------------------------ ------------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1994 APRIL 30, OCTOBER 31, 1994
1994 (UNAUDITED) 1994 (UNAUDITED)
-------------- ----------------- ------------ ----------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold......................... 2,243,350 550,241 1,576,802 337,922
Shares issued for dividends reinvested 877,259 439,346 57,130 41,871
Shares redeemed..................... (2,588,901) (1,534,091) (106,127) (143,273)
-------------- -------------- --------------- -------------
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING................... 531,708 (544,504) 1,527,805 236,520
============= ============== ============ ============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
CLASS A SHARES CLASS B SHARES
------------------------------------------------------- -----------------------------------
SIX MONTHS SIX MONTHS
ENDED OCTOBER ENDED OCTOBER
YEAR ENDED APRIL 30, 31, 1994 YEAR ENDED APRIL 30 31, 1994
-------------------------------------------- ----------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED) 1993(1) 1994 (UNAUDITED)
------ ------ ------ ------ ------ --------- ------ ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $11.66 $11.54 $12.00 $12.35 $13.09 $12.70 $12.69 $13.09 $12.71
------ ------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net... .88 .86 .80 .77 .74 .37 .20 .66 .33
Net realized and unrealized
gain (loss) on investments (.08) .46 .36 .81 (.36) (.44) .40 (.35) (.44)
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS........ .80 1.32 1.16 1.58 .38 (.07) .60 .31 (.11)
------ ------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from
investment income--net (.88) (.86) (.80) (.77) (.74) (.37) (.20) (.66) (.33)
Dividends from net realized
gain on investments... (.04) -_ (.01) (.07) (.03) -_ -_ (.03) -_
------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS... (.92) (.86) (.81) (.84) (.77) (.37) (.20) (.69) (.33)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $11.54 $12.00 $12.35 $13.09 $12.70 $12.26 $13.09 $12.71 $12.27
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (2). 6.95% 11.84% 9.97% 13.24% 2.78% (1.25%)(3) 16.36%(3) 2.24% (1.79%)(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets.... -_ .21% .52% .70% .81% .93%(3) 1.17%(3) 1.38% 1.46%(3)
Ratio of net investment
income to average net assets 7.30% 7.20% 6.53% 6.03% 5.57% 5.74%(3) 4.62%(3) 4.89% 5.18%(3)
Decrease reflected in above
expense ratios due to
undertakings by the Manager 1.12% .78% .41% .23% .12% .02%(3) .13%(3) .10% .02%(3)
Portfolio Turnover Rate. 14.58% 3.00% 13.68% 6.08% 7.73% 16.08%(4) 6.08% 7.73% 16.08%(4)
Net Assets, end of
period (000's Omitted) $92,864 $176,223 $243,074 $295,564 $293,706 $276,820 $8,482 $27,657 $29,597
- ---------------------------------------
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Premier State Municipal Bond Fund (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering fifteen series including the Ohio Series (the "Series"). Dreyfus
Service Corporation, until August 24, 1994, acted as the distributor of the
Fund's shares. The Dreyfus Service Corporation is a wholly-owned subsidiary
of The Dreyfus Corporation ("Manager"). Effective August 24, 1994, the
Manager became a subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
The Fund accounts separately for the assets, liabilities and operations
of each series. Expenses directly attributable to each series are charged to
that series' operations; expenses which are applicable to all series are
allocated among them on a pro rata basis.
The Series offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: The Series' investments (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the
Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Series 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 Series.
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series 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 Series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. To
the extent that net realized capital gain can be offset by capital loss
carryovers, if any, it is the policy of the Series not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .55 of 1% of the average
daily value of the Series' net assets and is payable monthly. The Agreement
provides for an expense reimbursement from the Manager should the Series'
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Series for any full fiscal year. However, the Manager
had undertaken from May 1, 1994 through June 30, 1994, to waive receipt of
the management fee payable to it by the Series in excess of an annual rate of
.50 of 1% (excluding certain expenses as described above) of the Series'
average daily net assets and thereafter, had undertaken from July 1, 1994
through July 7, 1994 to reduce the management fee paid by the Series, to the
extent that the Series' aggregate expenses (excluding certain expenses as
described above) exceeded specified annual percentages of the Series' average
daily net assets. The reduction in management fee, pursuant to the
undertakings, amounted to $28,783 for the six months ended October 31, 1994.
Dreyfus Service Corporation retained $16,863 during the six months ended
October 31, 1994 from commissions earned on sales of the Series' Class A
shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $23,606
from contingent deferred sales charges imposed upon redemptions of the
Series' Class B shares.
(B) On August 3, 1994, Series' shareholders approved a revised
Distribution Plan with respect to Class B shares only (the "Class B
Distribution Plan") pursuant to Rule 12-b1 under the Act. Pursuant to the
Class B Distribution Plan, effective August 24, 1994, the Fund pays the
Distributor for distributing the Series' Class B shares at an annual rate of
.50 of 1% of the value of the average daily net assets of Class B shares.
Prior to August 24, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Series pay Dreyfus Service Corporation
at an annual rate of .50 of 1% of the value of the Series Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing the Series' Class B shares, Dreyfus
Service Corporation made payments to one or more Service Agents based on the
value of the Series' Class B shares owned by clients of the Service agent.
During the six months ended October 31, 1994, $28,230 was charged to the
Series pursuant to the Class B Distribution Plan and $45,293 was charged to
the Series pursuant to the prior Class B Distribution Plan.
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(C) Under the Shareholder Services Plan, the Series pays the Distributor,
at an annual rate of .25 of 1% of the value of the average daily net assets
of Class A and Class B shares for servicing shareholder accounts. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to Serv
ice Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. From May 1, 1994 through August 23,
1994 $229,922 and $22,647 were charged to Class A and Class B shares,
respectively, by Dreyfus Service Corporation. From August 24, 1994 through
October 31, 1994, $134,901 and $14,115 were charged to Class A and Class B
shares, respectively, by the Distributor pursuant to the Shareholder
ServicesPlan.
(D) Prior to August 24, 1994 certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $97,013,255 and $98,826,677, respectively, for the six months
ended October 31, 1994, and consisted entirely of long-term and short-term
municipal investments.
At October 31, 1994, accumulated net unrealized appreciation on
investments was $3,830,188, consisting of $10,520,445 gross unrealized
appreciation and $6,690,257 gross unrealized depreciation.
At October 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER STATE MUNICIPAL BOND FUND, Ohio Series
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER STATE MUNICIPAL BOND FUND, OHIO SERIES
We have reviewed the accompanying statement of assets and liabilities,
including the statement of investments, of Premier State Municipal Bond Fund,
Ohio Series (one of the Series constituting the Premier State Municipal Bond
Fund) as of October 31, 1994, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
October 31, 1994. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modification that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepting
auditing standards, the statement of changes in net assets for the year ended
April 30, 1994 and financial highlights for each of the five years in the
period ended April 30, 1994 and in our report dated June 7, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
December 6, 1994
PREMIER STATE MUNICIPAL
BOND FUND, OHIO SERIES
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained in the Prospectus, which must precede or
accompany this report.
Printed in U.S.A. 057/619SA9410BKR
Semi-Annual Report
Premier State
Municipal Bond Fund
Ohio Series
October 31, 1994
(Dreyfus Lion Logo)
