PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier State
Municipal Bond Fund, Pennsylvania Series. For its semi-annual reporting
period ended October 31, 1995, your Series' Class A and Class B shares
produced total returns of 6.36% and 6.09%, respectively.* Tax-free income
dividends of approximately $.446 per share for Class A shares and $.403 per
share for Class B shares were paid.** This amounts to an annualized tax-free
distribution rate per share of 5.06% for Class A shares and 4.79% for Class B
shares.*** Class C shares, from their introduction on August 15, 1995 through
October 31, provided a total return of 4.16%*, and paid tax-free income
dividends of approximately $.162 per share** amounting to an annualized
tax-free distribution per share rate of 4.54%.***
THE ECONOMY
Concerns about lagging economic growth prompted the Federal Reserve Board
to ease the Fed Funds rate in July. The bond market has been well ahead of
the Federal Reserve in perceiving that inflation was under control. Long-term
interest rates have fallen for nearly 12 months and, accordingly, bond
investors have enjoyed significant price appreciation. Economic indicators
remain mixed, some causing concern about possible recession, while others
point toward continued expansion.
During times of business uncertainty, attention often shifts to the
consumer sector of the economy, particularly regarding the consumer's ability
to spend. There are some indications that consumers are being pinched. There
is little doubt that the economic recovery has been productivity-driven. That
is, corporations have succeeded in paring expenses from their cost of doing
business. With this reduction in overhead, bottom line profits have grown
dramatically. Yet little of this corporate prosperity has spilled over into
the consumer sector of the economy. Wages and salaries grew less than 3% over
the past year, barely keeping pace with inflation. An additional consumer
concern, new job creation, is at the slowest pace of the post-World War II
era. Recent retail sales reports were the weakest since June 1991, when the
economy was in recession. Also, there is worry that the coming holiday season
will be a poor one for retailers, since debt-burdened consumers may spend
cautiously.
Yet, there are also significant signs of continued growth. Despite
indications of a potential slowdown in consumer spending, measures of
consumer confidence remain high. Business capital spending and home-building
activity have continued, providing substantial fuel for economic growth.
Business investment in durable equipment, when calculated as a percentage of
Gross Domestic Product (GDP), is at a 35-year high with no sign of a letup.
No wonder industrial production is booming! And while job and wage growth is
slow, the index of hours worked (a key determinant of GDP growth and income
generation) is rising. Providing additional confidence is the fact that the
four-and-a-half-year recovery has been well balanced: corporate debt issuance
has been moderate and the banking system is not overstretched.
We are encouraged by the Federal Reserve's successful handling of several
crises (Mexico, derivatives, Japanese banking), any one of which could have
threatened the monetary system in the U.S. and/or abroad.
MARKET ENVIRONMENT
The municipal bond market recovered strongly in 1995 as long-term
interest rates fell. If economic conditions remain sluggish and Congress is
able to arrive at an acceptable budget accord, there may be a good chance
that the Fed will ease further. We believe this indicates a favorable outlook
for bond markets in general, particularly with inflation under control. But
inflation can only go so low, and we are wary that the bond market's strength
may be counting too much on continued improvement on the price front. Thus,
while we remain confident in this market environment, we are alert to the
stimulatory effect of easing monetary policy and are watchful for any signs
of rekindling inflation. Our primary task _ to maximize current income exempt
from Federal and Pennsylvania State personal income taxes to the extent
consistent with the preservation of capital _ continues to guide our
portfolio management decisions.
While the municipal market and the Series have performed very well this
year, results for municipal securities have been trailing other fixed income
markets. Concerns about tax reform may be limiting investor enthusiasm for
tax exempt securities. Since April, when serious tax reform proposals began
to surface, the municipal rally has lagged, resulting in an increase in
municipal yields as a percentage of comparable taxable bond yields. Today,
long-term municipal bonds are yielding nearly 90% of U.S. Treasuries, which
is a greater yield ratio than existed before the onset of talk about tax
reform. While it could be years before an actual change in the tax code is
adopted, the market's reaction so early in the proposal cycle suggests to us
that the ultimate legislation, if any, may have a less radical effect on the
market than feared.
THE PORTFOLIO
This year's impressive price move has more than offset 1994's decline.
During the summer, in view of both the municipal market's strong showing and
the degree of volatility exhibited in bond prices, we decided to "book some
profits" and take a more cautious approach until a clearer economic picture
developed.
The current environment provides us with an opportunity to rebalance the
portfolio so that it continues to own securities which we believe have the
greatest potential for performance and income. Our trading activity will
continue to concentrate on purchasing bonds which possess desirable
liquidity, call and coupon characteristics.
The municipal market, despite the normal year-end increase in new issue
supply and ongoing concern over tax reform, continues to move higher. We
expect that the issuance of Pennsylvania bonds will remain modest next year.
This will provide a positive technical impetus, but will also challenge us in
our search for appropriate securities.
The high level of volatility exhibited by the market in recent years
underscores the need to maintain a disciplined and long-term focus. Solid
market performance thus far in 1995 has rewarded the patient investor.
Included in this report is a series of detailed statements about your
Series' holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the
Series and in The Dreyfus Corporation.
Very truly yours,
[Richard J. Moynihan signature logo]
Richard J. Moynihan
Director, Municipal Portfolio Management
November 16, 1995
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
without taking into consideration the maximum
initial sales charge in the case of Class A shares or the applicable
contingent deferred sales charge imposed on redemptions in the case of Class
B or Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders. Income may be subject to some state and local taxes for
non-Pennsylvania residents.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share in the case of Class A shares or net asset value per
share in the case of Class B and C shares at the end of the period.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
STATEMENT OF INVESTMENTS OCTOBER 31, 1995 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--98.7% AMOUNT VALUE
-------------- -------------
<S> <C> <C>
PENNSYLVANIA--88.4%
Allegheny County, Airport Revenue, Refunding
(Pittsburgh International Airport)
5.75%, 1/1/2008 (Insured; FSA).......................................... $ 2,005,000 $ 2,060,879
Allegheny County Hospital Development Authority, Revenue
(Magee-Womens Hospital) 5.625%, 10/1/2020 (Insured; FGIC) (a)........... 6,000,000 5,889,300
Allegheny County Industrial Development Authority, Revenue:
Commercial Development, Refunding
(Kaufmann Medical Office Building) 6.80%, 3/1/2015 (Insured; FHA) (a). 3,500,000 3,816,400
Medical Center, Refunding (Presbyterian Medical Center of
Oakmont Pennsylvania, Inc.) 6.75%, 2/1/2026 (Insured; FHA)............ 1,975,000 2,051,314
Specialized Enterprise
(Baldwin Health Center) 8.35%, 2/1/2016 (Insured; FHA)................ 4,545,000 4,748,252
Allegheny County Residential Finance Authority, SFMR:
7.40%, 12/1/2022........................................................ 1,945,000 2,081,267
7.95%, 6/1/2023......................................................... 1,150,000 1,228,959
Beaver County Industrial Development Authority, PCR, Refunding
(Ohio Edison Project) 7.75%, 9/1/2024................................... 3,150,000 3,352,671
(Pennsylvania Power Company Mansfield Project) 7.15%, 9/1/2021.......... 3,000,000 3,097,890
Berks County Municipal Authority:
HR (Reading Hospital Medical Center Project) 5.50%, 10/1/2008 (Insured; MBIA) 3,500,000 3,599,365
Revenue (Phoebe Berks Village, Inc. Project) 8.25%, 5/15/2022........... 2,445,000 2,590,551
Blair County Hospital Authority, Revenue (Altoona Hospital Project)
6.375%, 7/1/2013 (Insured; AMBAC)....................................... 5,000,000 5,268,000
Bradford County Industrial Development Authority, SWDR
(International Paper Company Projects) 6.60%, 3/1/2019.................. 3,250,000 3,367,748
Butler County Hospital Authority, Revenue, Refunding:
Health Center (Saint Francis Health Care Project) 6%, 5/1/2008.......... 1,860,000 1,901,050
Hospital (Butler Memorial Hospital) 8%, 7/1/2016........................ 2,000,000 2,087,220
Cambria County Industrial Development Authority, RRR
(Cambria Cogen Project):
7.75%, 9/1/2019, Series F-1 (LOC; Fuji Bank) (b)...................... 1,750,000 1,875,965
7.75%, 9/1/2019, Series F-2 (LOC; Fuji Bank) (b)...................... 2,750,000 2,947,945
Dauphin County General Authority, HR (Hapsco - Western Pennsylvania Hospital
Project)
5.50%, 7/1/2023 (Insured; MBIA)......................................... 2,300,000 2,216,027
Delaware County Authority:
HR (Crozer - Chester Medical Center) 5.30%, 12/15/2011 (Insured; MBIA).. 2,750,000 2,698,713
Revenue (Elwyn Inc. Project) 8.35%, 6/1/2015............................ 4,300,000 4,772,269
Doylestown Hospital Authority, HR, Refunding
5.20%, 7/1/2008 (Insured; AMBAC)........................................ 2,255,000 2,255,744
Premier State Municipal Bond Fund, Pennsylvania Series
Statement of Investments (continued) October 31, 1995 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
-------------- --------------
Pennsylvania (continued)
Erie Higher Educational Building Authority, College Revenue
(Mercyhurst College Project) 7.85%, 9/15/2019 (Prerefunded 9/15/1999) (c) $ 1,000,000 $ 1,128,740
Lancaster County Solid Waste Management Authority,
Resource Recovery System Revenue 8.50%, 12/15/2010...................... 1,145,000 1,237,631
Langhorne Manor Borough Higher Educational and Health Authority, HR
(Lower Bucks Hospital) 7%, 7/1/2005..................................... 2,375,000 2,386,923
Lehigh County General Purpose Authority, Revenue (Wiley House):
8.75%, 11/1/2014 (LOC; Northeastern Bank of Pennsylvania) (b)........... 3,785,000 3,923,645
9.50%, 11/1/2016........................................................ 2,000,000 2,152,880
Lehigh County Industrial Development Authority, PCR, Refunding
(Pennsylvania Power and Light Company Project)
5.50%, 2/15/2027 (Insured; MBIA)........................................ 5,235,000 5,056,539
Luzerne County Industrial Development Authority, Exempt Facilities Revenue,
Refunding
(Pennsylvania Gas and Water Company Project) 7.125%, 12/1/2022.......... 4,000,000 4,127,680
Meadville 5.25%, 10/1/2025 (Insured; AMBAC) (d)............................. 2,000,000 1,883,680
Montgomery County 6.10%, 10/15/2025......................................... 5,000,000 5,062,550
Montgomery County Higher Educational and Health Authority:
HR (Abington Memorial Hospital) 5.125%, 6/1/2014 (Insured; AMBAC)....... 3,000,000 2,798,820
Revenue:
First Mortgage (Montgomery Income Project) 10.50%, 9/1/2020........... 3,000,000 3,259,650
(Northwestern Corporation) 8.375%, 6/1/2009........................... 2,685,000 2,844,892
Montgomery County Industrial Development Authority,
RRR 7.50%, 1/1/2012 (LOC; Banque Paribas) (b)........................... 5,000,000 5,406,900
Northampton County Industrial Development Authority, Refunding, Revenue:
(Moravian Hall Square Project) 7.45%, 6/1/2014 (LOC; Meridian Bank) (b). 1,800,000 1,945,944
Pollution Control:
(Bethlehem Steel) 7.55%, 6/1/2017..................................... 5,700,000 5,905,257
(Met Edison) 6.10%, 7/15/2021 (Insured; MBIA)......................... 5,000,000 5,115,000
Pennsylvania Convention Center Authority, Revenue, Refunding
6.75%, 9/1/2019......................................................... 3,520,000 3,697,654
Pennsylvania Economic Development Financing Authority:
Exempt Facilities Revenue (Macmillan Ltd. Partnership Project) 7.60%, 12/1/2020 3,500,000 3,850,875
RRR (Northampton Generating Project):
6.40%, 1/1/2009....................................................... 2,500,000 2,501,575
6.50%, 1/1/2013....................................................... 6,500,000 6,354,855
Wastewater Treatment Revenue (Sun Co. Inc. - R and M Project) 7.60%, 12/1/2024 4,240,000 4,655,478
Pennsylvania Higher Education Assistance Agency, Student Loan Revenue,
7.05%, 10/1/2016 (Insured; AMBAC)....................................... 2,500,000 2,680,350
Premier State Municipal Bond Fund, Pennsylvania Series
Statement of Investments (continued) October 31, 1995 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
-------------- --------------
Pennsylvania (continued)
Pennsylvania Higher Educational Facilities Authority, Revenue
College and University (Temple University) 5.75%, 4/1/2031 (Insured; MBIA) $ 3,100,000 $ 3,055,980
Pennsylvania Housing Finance Agency:
6.20%, 4/1/2025......................................................... 6,000,000 5,967,420
Single Family Mortgage:
7.875%, 10/1/2020..................................................... 1,435,000 1,532,709
6.90%, 4/1/2025....................................................... 6,250,000 6,523,125
Philadelphia, Revenue:
Airport (Philadelphia Airport System) 6.10%, 6/15/2025 (Insured; AMBAC). 3,130,000 3,175,291
Water and Wastewater:
Refunding 5.50%, 6/15/2007 (Insured; MBIA)............................ 8,155,000 8,456,001
Refunding 5.625%, 6/15/2008 (Insured; FSA)............................ 5,000,000 5,196,900
6.25%, 8/1/2010 (Insured; MBIA)....................................... 2,730,000 2,982,580
5.50%, 8/1/2014 (Insured; MBIA)....................................... 2,500,000 2,461,000
5.60%, 8/1/2018 (Insured; MBIA)....................................... 4,645,000 4,606,214
Refunding 5.25%, 6/15/2023 (Insured; MBIA)............................ 5,405,000 5,078,970
Philadelphia Hospital and Higher Education Facilities Authority:
HR:
(Albert Einstein Medical Center) 7%, 10/1/2021........................ 1,500,000 1,571,220
(Graduate Health System Obligation) 7.25%, 7/1/2018................... 5,250,000 5,510,663
Refunding (Children's Hospital Philadelphia)
5.375%, 2/15/2014................................................. 5,810,000 5,527,053
Revenue (Northwestern Corporation) 8.375%, 6/1/2009................... 1,885,000 2,023,189
Philadelphia Industrial Development Authority, IDR, Refunding
(Ashland Oil Inc. Project) 5.70%, 6/1/2005.............................. 2,500,000 2,608,625
Philadelphia Municipal Authority, LR, Refunding:
5.60%, 11/15/2009 (Insured; FGIC)....................................... 2,100,000 2,146,053
5.625%, 11/15/2018 (Insured; FGIC)...................................... 3,725,000 3,686,968
Philadelphia School District, Refunding 6.25%, 9/1/2009 (Insured; AMBAC).... 2,000,000 2,187,540
Pittsburgh School District, Refunding
5.50%, 9/1/2013 (Insured; FGIC)......................................... 3,000,000 3,002,580
Pittsburgh Urban Redevelopment Authority:
Mortgage Revenue 7.05%, 4/1/2023........................................ 1,785,000 1,859,417
Single Family Mortgage 7.40%, 4/1/2024.................................. 860,000 912,692
Pittsburgh Water and Sewer Authority, Water and Sewer System Revenue
5.60%, 9/1/2015 (Insured; FSA).......................................... 1,400,000 1,387,806
Schuylkill County Industrial Development Authority, Refunding:
First Mortgage Revenue (Valley Health Concerns) 8.75%, 3/1/2012......... 2,500,000 2,672,875
RRR (Schuylkill Energy Resources Inc.) 6.50%, 1/1/2010.................. 7,330,000 7,443,542
Premier State Municipal Bond Fund, Pennsylvania Series
Statement of Investments (continued) October 31, 1995 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
-------------- --------------
Pennsylvania (continued)
Sewickley Valley Hospital Authority, Revenue
(Allegheny County-Sewickley Valley Hospital Project)
7.50%, 10/1/2014........................................................ $ 850,000 $ 953,564
Southeastern Transportation Authority, Special Revenue
5.75%, 3/1/2020 (Insured; FGIC)......................................... 2,000,000 1,990,740
University of Pennsylvania, Refunding 5.50%, 8/15/2016...................... 6,000,000 5,857,920
University of Pittsburgh, Higher Education (University Capital Project)
6.125%, 6/1/2021 (Insured; MBIA)........................................ 7,000,000 7,182,630
Washington County Industrial Development Authority, Revenue, Refunding
(Presbyterian Medical Center) 6.75%, 1/15/2023 (Insured; FHA)........... 3,000,000 3,183,900
York County Hospital Authority, Revenue
(Health Center - Village at Sprenkle Drive) 7.75%, 4/1/2022............. 1,205,000 1,264,768
U.S. RELATED--10.3%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 4,500,000 4,596,030
Guam Government 5.375%, 11/15/2013.......................................... 4,000,000 3,662,800
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.40%, 7/1/2006....................................................... 10,000,000 9,935,300
5.25%, 7/1/2020 (Insured; FHA)........................................ 6,600,000 6,254,621
Puerto Rico Public Buildings Authority, Guaranteed Public Education and
Health
Facilities, Refunding 5.70%, 7/1/2009................................... 5,000,000 5,150,599
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $272,267,423)................... $283,494,332
=============
SHORT-TERM MUNICIPAL INVESTMENTS--1.3%
PENNSYLVANIA:
Allegheny County Hospital Development Authority, Revenue, VRDN
(Presbyterian University Hospital) 3.85% (e)............................ $ 1,095,000 $ 1,095,000
Schuylkill County Industrial Development Authority, RRR, VRDN
(Northeastern Power Company) 4% (LOC; The Sumitomo Bank) (b,e).......... 1,000,000 1,000,000
Warren County Hospital Authority, Revenue, VRDN
(Warren General Hospital Project) 4% (LOC; PNC Bank) (b,e).............. 1,500,000 1,500,000
--------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $3,595,000).................... $ 3,595,000
==============
TOTAL INVESTMENTS--100.0%
(cost $275,862,423)..................................................... $287,089,332
==============
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Administration Insurance Corporation
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue RRR Resources Recovery Revenue
IDR Industrial Development Revenue SFMR Single Family Mortgage Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (F) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ --------------------
<S> <C> <C> <C>
AAA Aaa AAA 42.8%
AA Aa AA 10.5
A A A 13.6
BBB Baa BBB 19.1
BB Ba BB .8
F1 MIG1/P1 SP1/A1 1.3
Not Rated (g) Not Rated (g) Not Rated (g) 11.9
-------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Wholly held by custodian as collateral for delayed delivery
security.
(b) Secured by letters of credit.
(c) 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.
(d) Purchased on a delayed delivery basis.
(e) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
(g) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Series may invest.
(h) At October 31, 1995, the Series had $76,979,956 (26.3% of net
assets) invested in securities whose payment of principal and interest is
dependent upon revenue generated from health care projects.
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $275,862,423)--see statement.................................... $287,089,332
Interest receivable..................................................... 5,417,146
Receivable for investment securities sold............................... 5,365,581
Receivable for shares of Beneficial Interest subscribed................. 68,869
Prepaid expenses........................................................ 8,470
---------------
297,949,398
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 136,249
Due to Distributor...................................................... 92,590
Due to Custodian........................................................ 3,235,726
Payable for investment securities purchased............................. 1,891,443
Payable for shares of Beneficial Interest redeemed...................... 68,842
Accrued expenses........................................................ 34,053 5,458,903
-------------- ---------------
NET ASSETS ................................................................ $292,490,495
===============
REPRESENTED BY:
Paid-in capital......................................................... $276,528,187
Accumulated undistributed net realized gain on investments.............. 4,735,399
Accumulated net unrealized appreciation on investments_Note 3........... 11,226,909
----------------
NET ASSETS at value......................................................... $292,490,495
================
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 13,175,641
================
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 4,350,424
================
Class C Shares
(unlimited number of $.001 par value shares authorized)............... 62
=======
NET ASSET VALUE per share:
Class A Shares
($219,907,092 / 13,175,641 shares).................................... $16.69
=======
Class B Shares
($72,582,368 / 4,350,424 shares)...................................... $16.68
=======
Class C Shares
($1,035 / 62 shares).................................................. $16.69
=======
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 9,281,775
EXPENSES:
Management fee--Note 2(a)............................................. $ 808,102
Shareholder servicing costs_Note 2(c)................................. 510,409
Distribution fees_Note 2(b)........................................... 180,131
Professional fees..................................................... 24,330
Custodian fees........................................................ 16,345
Prospectus and shareholders' reports.................................. 11,005
Trustees' fees and expenses_Note 2(d)................................. 1,594
Registration fees..................................................... 439
Miscellaneous......................................................... 8,704
--------------
TOTAL EXPENSES.................................................... 1,561,059
-------------
INVESTMENT INCOME--NET............................................ 7,720,716
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments--Note 3................................ $1,712,807
Net unrealized appreciation on investments.............................. 8,480,999
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 10,193,806
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $17,914,522
=============
</TABLE>
See independent accountants' review report and notes to financial statements.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, 1995
1995 (UNAUDITED)
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Investment income--net.............................................. $ 16,303,282 $ 7,720,716
Net realized gain on investments.................................... 3,749,748 1,712,807
Net unrealized appreciation (depreciation) on investments
for the period.................................................... (2,373,737) 8,480,999
----------------- -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 17,679,293 17,914,522
----------------- --------------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net:
Class A shares.................................................... (12,907,659) (5,967,562)
Class B shares.................................................... (3,395,623) (1,753,144)
Class C shares.................................................... ___ (10)
----------------- --------------------
TOTAL DIVIDENDS............................................... (16,303,282) (7,720,716)
----------------- --------------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.................................................... 14,323,499 4,730,512
Class B shares.................................................... 13,962,833 2,832,665
Class C shares.................................................... ___ 1,000
Dividends reinvested:
Class A shares.................................................... 6,652,944 3,127,331
Class B shares.................................................... 2,024,872 1,054,983
Class C shares.................................................... --_ 10
Cost of shares redeemed:
Class A shares.................................................... (37,539,324) (15,603,750)
Class B shares.................................................... (5,465,675) (3,857,610)
---------------- -------------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS (6,040,851) (7,714,859)
----------------- -------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS..................... (4,664,840) 2,478,947
NET ASSETS:
Beginning of period.................................................... 294,676,388 290,011,548
----------------- -------------------
End of period.......................................................... $290,011,548 $292,490,495
================= ===================
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------------- ----------------------------- ----------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
APRIL 30, OCTOBER 31, 1995 APRIL 30, OCTOBER 31, 1995 OCTOBER 31, 1995
1995 (UNAUDITED) 1995 (UNAUDITED) (UNAUDITED)*
----------- ---------------- ---------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS:
Shares sold.......... 900,647 286,951 881,375 171,998 62
Shares issued for dividends
reinvested......... 421,108 189,562 128,216 63,971 --
Shares redeemed...... (2,389,230) (947,262) (350,112) (234,075) --
----------- ---------------- ---------- ----------------- ----------------------
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING (1,067,475) (470,749) 659,479 1,894 62
----------- ---------------- ---------- ----------------- ----------------------
*From August 15, 1995 (commencement of initial offering) to October 31,
1995.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA 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.
<TABLE>
<CAPTION>
CLASS A SHARES
-----------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED APRIL 30, OCTOBER 31, 1995
-----------------------------------------------------
PER SHARE DATA: 1991 1992 1993 1994 1995 (UNAUDITED)
------- ------- --------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $14.68 $15.21 $15.73 $16.61 $16.01 $16.12
------- ------- --------- -------- ---------- -----------------
INVESTMENT OPERATIONS:
Investment income--net................ 1.12 1.06 1.02 .95 .91 .45
Net realized and unrealized gain (loss)
on investments...................... .55 .56 .99 (.57) .11 .57
------- ------- --------- -------- ---------- -----------------
TOTAL FROM INVESTMENT OPERATIONS.... 1.67 1.62 2.01 .38 1.02 1.02
------- ------- --------- -------- ---------- -----------------
DISTRIBUTIONS:
Dividends from investment income_net.. (1.12) (1.06) (1.02) (.95) (.91) (.45)
Dividends from net realized gain
on investments...................... (.02) (.04) (.11) (.03) -- --
------- ------- --------- -------- ---------- -----------------
TOTAL DISTRIBUTIONS................. (1.14) (1.10) (1.13) (.98) (.91) (.45)
------- ------- --------- -------- ---------- -----------------
Net asset value, end of period........ $15.21 $15.73 $16.61 $16.01 $16.12 $16.69
======= ======= ========= ======== ========== =================
TOTAL INVESTMENT RETURN (1)............... 11.74% 10.97% 13.19% 2.17% 6.65% 12.62%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .22% .56% .69% .81% .92% .93%(2)
Ratio of net investment income to
average net assets.................. 7.32% 6.75% 6.24% 5.61% 5.77% 5.37%(2)
Decrease reflected in above expense ratios
due to undertakings by the Manager.. .79% .41% .25% .12% .01% --
Portfolio Turnover Rate............... 25.74% 38.97% 8.64% 7.21% 55.19% 21.39%(3)
Net Assets, end of period (000's Omitted) $113,439 $158,437 $220,920 $235,619 $219,949 $219,907
(1) Exclusive of sales load.
(2) Annualized.
(3) Not annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
FINANCIAL HIGHLIGHTS (CONTINUED)
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.
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
-------------------------------------------------- ----------------------
SIX MONTHS ENDED PERIOD ENDED
YEAR ENDED APRIL 30, OCTOBER 31, 1995 OCTOBER 31, 1995
------------------------------
PER SHARE DATA: 1993(1) 1994 1995 (UNAUDITED) (UNAUDITED)(2)
------- ------- ------- ------------------ ---------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $16.10 $16.60 $16.01 $16.11 $16.18
------- ------- ------- ------------------ ----------------------
INVESTMENT OPERATIONS:
Investment income--net.................. .26 .85 .83 .40 .16
Net realized and unrealized gain (loss)
on investments........................ .50 (.56) .10 .57 .51
------- ------- ------- ------------------ ----------------------
TOTAL FROM INVESTMENT OPERATIONS...... .76 .29 .93 .97 .67
------- ------- ------- ------------------ ----------------------
DISTRIBUTIONS:
Dividends from investment income--net... (.26) (.85) (.83) (.40) (.16)
Dividends from net realized gain
on investments........................ -- (.03) -- -- --
------- ------- ------- ------------------ ----------------------
TOTAL DISTRIBUTIONS................... (.26) (.88) (.83) (.40) (.16)
------- ------- ------- ------------------ ----------------------
Net asset value, end of period.......... $16.60 $16.01 $16.11 $16.68 $16.69
======= ======= ======= ================== ======================
TOTAL INVESTMENT RETURN (3)................. 16.39%(4) 1.65% 6.02% 12.08%(4) 19.47%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets. 1.14%(4) 1.38% 1.44% 1.44%(4) 1.80%(4)
Ratio of net investment income to
average net assets.................... 4.90%(4) 4.95% 5.22% 4.86%(4) 4.53%(4)
Decrease reflected in above expense ratios due
to undertakings by the Manager....... .15%(4) .10% .01% --_ --_
Portfolio Turnover Rate................. 8.64% 7.21% 55.19% 21.39%(5) 21.39%(5)
Net Assets, end of period (000's Omitted) $14,631 $59,057 $70,062 $72,582 $1
(1) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(2) From August 15, 1995 (commencement of initial offering) to October 31, 1995.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA 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 Pennsylvania Series (the "Series").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Distributor, located at One Exchange
Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI
Distribution Services, Inc., a provider of mutual fund administration
services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc.,
the parent company of which is Boston Institutional Group, Inc. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
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 Class A, Class B and Class C shares. Class A shares are
subject to a sales charge imposed at the time of purchase, Class B shares are
subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase and Class C
shares are subject to a contingent deferred sales charge imposed at the time
of redemption on redemptions made within one year of purchase. Other
differences between the three 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, Pennsylvania 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. There was no expense
reimbursement for the six months ended October 31, 1995.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the
Act, the Series pays the Distributor for distributing the Series' Class B and
Class C shares at an annual rate of .50 of 1% of the value of the average
daily net assets of Class B shares and .75 of 1% of the value of the average
daily net assets of Class C shares. During the period ended October 31, 1995,
$180,129 was charged to the Series for the Class B shares and $2 was charged
to the Series for the Class C shares.
(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, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Series and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. For the period ended October 31, 1995,
$277,254, $90,064 and $1 were charged to Class A, Class B and Class C shares,
respectively, by the Distributor pursuant to the Shareholder Services Plan.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $116,549,530 and $128,650,517, respectively, for the six months
ended October 31, 1995, and consisted entirely of long-term and short-term
municipal investments.
At October 31, 1995, accumulated net unrealized appreciation on
investments was $11,226,909, consisting of $11,907,871 gross unrealized
appreciation and $680,962 gross unrealized depreciation.
At October 31, 1995, 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, PENNSYLVANIA SERIES
REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER STATE MUNICIPAL BOND FUND, PENNSYLVANIA SERIES
We have reviewed the accompanying statement of assets and liabilities,
including the statement of investments, of Premier State Municipal Bond Fund,
Pennsylvania Series (one of the Series constituting the Premier State
Municipal Bond Fund) as of October 31, 1995, and the related statements of
operations and changes in net assets and financial highlights for the six
month period ended October 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
April 30, 1995 and financial highlights for each of the five years in the
period ended April 30, 1995 and in our report dated June 6, 1995, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP signature)
New York, New York
December 7, 1995
[Dreyfus lion "d" logo]
PREMIER STATE MUNICIPAL
BOND FUND, PENNSYLVANIA SERIES
200 Park Avenue
New York, NY 10166
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
First Data Investor 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. 058/620/690SA9510
[Dreyfus logo]
Semi-Annual Report
PREMIER STATE
MUNICIPAL BOND FUND
PENNSYLVANIA SERIES
October 31, 1995
