Dreyfus Premier
State Municipal
Bond Fund,
Connecticut Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund, Connecticut Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Connecticut Series, covering the six-month period from May
1, 1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Samuel Weinstock.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in for Dreyfus Premier State Municipal Bond Fund,
Connecticut Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Connecticut Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -4.98% total return; its Class B shares provided a -5.31% total
return; and its Class C shares provided a -5.43% return.(1) In comparison, the
Lipper Connecticut Municipal Debt Funds category average provided a -4.52% total
return(2) for the same period.
We attribute the fund's negative absolute performance to a declining bond market
and rising interest rates. The fund's relative underperformance compared to its
benchmark is primarily a result of our security selection strategy in a
relatively small Connecticut market, where a scarcity of new issuance limited
our investment choices.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Connecticut tax-exempt income
as is practical from a diversified portfolio of municipal bonds without undue
risk. To achieve this objective, we employ four primary strategies. First, we
strive to identify the maturity range that we believe will provide the most
favorable returns over the next two years. Second, we evaluate issuers' credit
quality to find bonds that we believe provide high yields at an attractive
price. Third, we look for bonds with attractively high interest payments, even
if they sell at a premium to face value. Fourth, we assess individual bonds'
early redemption features, focusing on those that cannot be redeemed soon by
their issuers. Typically, the bonds we select for the fund will have several of
these qualities.
We also use computer models to evaluate the likely performance of bonds under
various market scenarios, including a .25 % rise or .50% decline in interest
rates. When we find securities that we believe will provide participation when
the market rises and some protection against market declines, we tend to hold
them for the long term.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that continued economic strength might rekindle long-dormant
inflationary pressures. In fact, in an attempt to forestall a potential
reacceleration of inflation, the Federal Reserve Board raised short-term
interest rates twice during the summer of 1999. This change in monetary policy
caused municipal bond prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Connecticut issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on maintaining
the fund's average duration within the neutral range. Because a fund's duration
naturally extends as interest rates rise and some bonds' prices fall below
levels at which issuers might redeem them early, bond funds tend to become more
sensitive to the adverse short-term effects of higher interest rates.
Accordingly, during the period we sold some of our longer maturity bonds,
including those priced at discounts to face value. We also sold bonds that were
in danger of falling below the prices at which corporations and other
institutional investors remain eligible for municipal bonds' tax advantages.
We attempted to reinvest the proceeds from those sales into tax-exempt
bonds that we believed would remain highly liquid in a declining market.
Accordingly, new purchases at the end of the period focused on insured and
highly rated bonds in the 10-year maturity range. We also took steps to upgrade
the fund by purchasing high quality bonds to replace pre-refunded bonds as well
as bonds that were near their redemption dates. Typically, these new purchases
were available at face value or modest premiums, and had maturities of seven
years or less. Because of uncertainties in the pre-refunded bond market sector,
these new purchases often gave us an opportunity to enhance the fund's income
stream.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR
NON-CONNECTICUT RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE
MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY
TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--96.8% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONNECTICUT--75.8%
Connecticut:
5%, 3/15/2012 70,000 67,584
6.153%, 3/15/2012 5,000,000 (a,b) 4,646,000
5%, 8/1/2012 35,000 33,765
6.074%, 8/1/2012 5,900,000 (a,b) 5,473,194
5.125%, 3/15/2013 6,700,000 6,461,346
5.50%, 5/15/2014 2,000,000 1,989,060
5.50%, 5/15/2015 3,000,000 2,949,210
5.25%, 3/1/2016 5,000,000 4,729,400
(Clean Water Fund) Revenue:
5.25%, 7/15/2012 15,000 14,801
7.262%, 7/15/2012 4,850,000 (a) 4,712,260
Special Tax Obligation Revenue (Transportation
Infrastructure):
5.50%, 11/1/2007 (Insured; FSA) 5,000,000 5,174,950
5.375%, 9/1/2008 2,500,000 2,549,125
7.125%, 6/1/2010 3,400,000 3,878,720
6.75%, 6/1/2011 (Prerefunded 6/1/2003) 8,500,000 (c) 9,139,965
Connecticut Development Authority, Revenue:
First Mortgage Gross:
(Elim Park Baptist Home Inc. Project) 9%, 12/1/2020
(Prerefunded 12/1/1999) 3,565,000 (c) 3,687,208
(Health Care Project, Church Homes Inc.):
5.70%, 4/1/2012 1,240,000 1,141,866
5.80%,4/1/2021 3,000,000 2,687,220
(Health Care Project, Elim Park Baptist Home)
5.375%, 12/1/2018 2,300,000 2,002,173
Life Care Facilities (Seabury Project)
8.75%, 9/1/2006 1,625,000 1,783,275
Pollution Control (Light and Power) 5.85%, 9/1/2028 10,150,000 9,312,828
Water Facilities (Bridgeport Hydraulic) 6.15%, 4/1/2035 2,750,000 2,724,370
Connecticut Health and Educational Facilities Authority,
Revenue:
(Connecticut College) 5.50%, 7/1/2027 (Insured; MBIA) 2,500,000 2,333,600
(Danbury Hospital) 5.75%, 7/1/2029 (Insured; AMBAC) 3,000,000 2,894,340
(Greenwich Academy) 5.75%, 3/1/2026 (Insured; FSA) 3,130,000 3,040,889
(Greenwich Hospital) 5.80%, 7/1/2026 (Insured; MBIA) 9,365,000 9,122,540
(Hartford University):
6.75%, 7/1/2012 3,500,000 3,556,140
6.80%, 7/1/2022 8,500,000 8,646,370
(Hospital for Special Care) 5.375%, 7/1/2017 4,430,000 3,814,540
(Johnson Evergreen Corp.) 8.50%, 7/1/2022 4,500,000 4,732,785
(Loomis Chaffee School Project)
6%, 7/1/2025 (Insured; MBIA) 1,000,000 1,002,640
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
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CONNECTICUT (CONTINUED)
Connecticut Health and Educational Facilities Authority,
Revenue (continued):
(Middlesex Hospital)
6.25%, 7/1/2022 (Insured; MBIA)
(Prerefunded 7/1/2002 3,500,000 (c) 3,725,890
(New Britian General Hospital) 6.125%, 7/1/2014
(Insured; AMBAC) 1,000,000 1,035,830
(New Britain Memorial Hospital) 7.75%, 7/1/2022
(Prerefunded 7/1/2002) 11,000,000 (c) 12,115,840
(Norwalk Hospital) 6.25%, 7/1/2022 (Insured; MBIA)
(Prerefunded 7/1/2002) 3,860,000 (c) 4,109,124
(Nursing Home Program - 3030 Park Fairfield Health
Center Project)
6.25%, 11/1/2021 2,500,000 2,563,075
(Quinnipiac College)
6%, 7/1/2013 (Prerefunded 7/1/2003) 4,100,000 (c) 4,366,008
6%, 7/1/2013 2,445,000 2,393,508
(Sacred Heart University):
6.50%, 7/1/2016 (Prerefunded 7/1/2006) 1,465,000 (c) 1,614,152
6.125%, 7/1/2017 (Prerefunded 7/1/2007) 1,000,000 (c) 1,084,900
6.625%, 7/1/2026 (Prerefunded 7/1/2006) 2,720,000 (c) 3,016,045
(Trinity College) 5.875%, 7/1/2026 (Insured; MBIA) 2,500,000 2,469,900
(University of New Haven):
6.625%, 7/1/2016 4,050,000 4,021,691
6.70%, 7/1/2026 8,605,000 8,608,958
(William W. Backus Hospital) 5.75%, 7/1/2027
(Insured; AMBAC) 2,500,000 2,416,875
(Windham Community Memorial Hospital):
5.75%, 7/1/2011 1,000,000 928,010
6%, 7/1/2020 1,000,000 915,390
(Yale, New Haven Hospital) 5.70%, 7/1/2025
(Insured; MBIA) 7,970,000 7,659,090
Connecticut Housing Finance Authority (Housing Mortgage
Finance Program):
6.20%, 5/15/2012 (Insured; MBIA) 1,000,000 1,049,070
6.125%, 5/15/2018 (Insured; MBIA) 1,655,000 1,697,583
6.45%, 5/15/2022 5,165,000 5,266,544
6.70%, 11/15/2022 15,985,000 16,563,497
6.75%, 11/15/2023 5,010,000 5,274,929
5.45%, 11/15/2029 5,805,000 5,229,260
6%, Series G, 11/15/2027 4,000,000 3,925,360
6%, Subseries F-2, 11/15/2027 4,945,000 4,852,726
5.85%, Subseries B-2, 11/15/2028 9,940,000 9,445,584
5.85%, Subseries C-2, 11/15/2028 6,455,000 6,219,457
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM INVESTMENTS (CONTINUED) Amount ($) Value ($)
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CONNECTICUT (CONTINUED)
Connecticut Resource Recovery Authority, RRR
3.80%, 11/15/1999 6,750,000 6,749,055
Eastern Connecticut Resource Recovery Authority:
Solid Waste Revenue:
6.694%, 1/1/2014 5,000,000 (a) 3,828,300
(Wheelabrator Lisbon Project):
5.50%, 1/1/2014 50,000 44,142
5.50%, 1/1/2020 9,380,000 7,987,351
Greenwich Housing Authority, MFHR (Greenwich Close)
6.25%, 9/1/2017 4,840,000 4,673,214
Sprague, Environmental Improvement Revenue
(International Paper Company Project) 5.70%, 10/1/2021 1,350,000 1,215,203
Stamford 6.60%, 1/15/2010 2,750,000 3,054,315
U. S. RELATED--21.0%
Commonwealth of Puerto Rico (Public Improvement):
5.50%, 7/1/2012 (Insured; MBIA) 1,000,000 1,013,140
5.25%, 7/1/2013 (Insured; MBIA) 6,000,000 5,848,260
5.25%, 7/1/2014 (Insured; MBIA) 1,000,000 963,760
6%, 7/1/2015 (Insured; MBIA) 3,000,000 3,125,430
Zero Coupon, 7/1/2017 (Insured; MBIA) 3,800,000 1,371,648
6.80%, 7/1/2021 (Prerefunded 7/1/2002) (c) 6,000,000 6,480,180
Puerto Rico Aqueduct and Sewer Authority, Revenue
6.25%, 7/1/2013 (Insured;MBIA) 9,000,000 9,673,380
Puerto Rico Electric Power Authority, Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 48,468
6.23, 7/1/2012 2,000,000 (a,b) 1,873,840
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
6.559%, 7/1/2010 3,200,000 (a) 3,244,000
5.50%, 7/1/2015 (Insured; MBIA) 20,000 19,802
7.319%, 7/1/2015 3,990,000 (a) 3,910,918
6.625%, 7/1/2018 (Prerefunded 7/1/2002) 5,000,000 (c) 5,378,800
5.50%, 7/1/2026 (Insured; FSA) 2,850,000 2,717,703
5%, 7/1/2036 2,500,000 2,097,150
5.50%, 7/1/2036 5,000,000 4,599,500
Puerto Rico Industrial Development Company,
General Purpose Revenue
5.375%, 7/1/2016 4,250,000 4,012,723
Puerto Rico Industrial Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority,
Revenue:
(Ana G Mendez University System Project)
5.375%, 2/1/2029 2,250,000 1,999,170
Principal
LONG TERM INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Industrial Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority,
Revenue (continued):
(Teachers Retirement System):
5.50%, 7/1/2016 1,150,000 1,127,173
5.50%, 7/1/2021 1,800,000 1,709,244
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines):
6.30%, 6/1/2023 2,000,000 2,012,000
6.25%, 6/1/2026 3,250,000 3,265,633
University of Puerto Rico, University Revenue
5.50%, 6/1/2015 (Insured; MBIA) 5,000,000 4,945,599
Virgin Islands Water and Power Authority, Refunding
(Electric Systems)
5.30%, 7/1/2021 2,000,000 1,781,339
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TOTAL INVESTMENTS (cost $341,793,074) 96.8% 337,640,900
CASH AND RECEIVABLES (NET) 3.2% 11,221,240
NET ASSETS 100.0% 348,862,140
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond Assurance MFHR Multi-Family Housing Revenue
Corporation RRR Resources Recovery Revenue
FSA Financial Security Assurance
MBIA Municipal Bond Investors Assurance
Insurance Corporation
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
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AAA Aaa AAA 36.2
AA Aa AA 26.5
A A A 2.3
BBB Baa BBB 21.7
BB Ba BB 2.7
F1 MIG1/P1 SP1/A1 2.0
Not Rated(d) Not Rated(d) Not Rated(d) 8.6
100.0
(A) INVERSE FLOATER SECURITY -- THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT OCTOBER 31,
1999, THESE SECURITIES AMOUNTED TO $11,993,034 OR 3.4% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 341,793,074 337,640,900
Receivable for investment securities sold 5,628,369
Receivable for shares of Beneficial Interest subscribed 226,000
Interest receivable 7,153,725
Prepaid expenses 11,847
350,660,841
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 163,254
Due to Distributor 97,894
Cash overdraft due to Custodian 1,300,931
Payable for shares of Beneficial Interest redeemed 177,331
Accrued expenses 59,291
1,798,701
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NET ASSETS ($) 348,862,140
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 350,921,499
Accumulated net realized gain (loss) on investments 2,092,815
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (4,152,174)
- --------------------------------------------------------------------------------
NET ASSETS ($) 348,862,140
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 295,489,093 49,164,752 4,208,295
Shares Outstanding 26,014,646 4,332,211 371,043
NET ASSET VALUE PER SHARE 11.36 11.35 11.34
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 10,826,139
EXPENSES:
Management fee--Note 3(a) 1,012,337
Shareholder servicing costs--Note 3(c) 567,830
Distribution fees--Note 3(b) 152,935
Custodian fees 19,362
Prospectus and shareholders' reports 15,752
Registration fees 14,717
Trustees' fees and expenses--Note 3(d) 2,303
Professional fees 2,041
Loan commitment fees--Note 2 809
Interest expense--Note 2 132
Miscellaneous 12,706
TOTAL EXPENSES 1,800,924
INVESTMENT INCOME--NET 9,025,215
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 1,016,602
Net unrealized appreciation (depreciation) on investments (29,110,559)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (28,093,957)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (19,068,742)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 9,025,215 18,451,596
Net realized gain (loss) on investments 1,016,602 4,383,270
Net unrealized appreciation (depreciation)
on investments (29,110,559) 1,477,323
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (19,068,742) 24,312,189
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (7,717,826) (15,578,898)
Class B shares (1,209,986) (2,715,809)
Class C shares (97,403) (156,889)
Net realized gain on investments:
Class A shares -- (4,072,493)
Class B shares -- (834,380)
Class C shares -- (50,867)
TOTAL DIVIDENDS (9,025,215) (23,409,336)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 23,674,697 43,274,085
Class B shares 5,266,121 11,921,647
Class C shares 501,509 2,477,619
Dividends reinvested:
Class A shares 4,344,173 11,453,214
Class B shares 751,890 2,410,797
Class C shares 46,710 118,461
Cost of shares redeemed:
Class A shares (26,856,679) (47,956,181)
Class B shares (11,126,725) (15,340,812)
Class C shares (954,626) (194,500)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,352,930) 8,164,330
TOTAL INCREASE (DECREASE) IN NET ASSETS (32,446,887) 9,067,183
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 381,309,027 372,241,844
END OF PERIOD 348,862,140 381,309,027
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 2,002,758 3,505,138
Shares issued for dividends reinvested 369,719 925,802
Shares redeemed (2,279,755) (3,878,849)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 92,722 552,091
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 441,788 963,796
Shares issued for dividends reinvested 63,984 194,981
Shares redeemed (938,997) (1,244,687)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (433,225) (85,910)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 42,264 200,538
Shares issued for dividends reinvested 4,006 9,591
Shares redeemed (81,048) (15,793)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (34,778) 194,336
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 619,660 CLASS B SHARES
REPRESENTING $7,373,786 WERE AUTOMATICALLY CONVERTED TO 619,516 CLASS A SHARES..
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.26 12.23 11.81 11.90 11.76 11.81
Investment Operations:
Investment income--net .30 .61 .62 .64 .66 .67
Net realized and unrealized gain
(loss) on investments (.90) .19 .47 .16 .14 (.05)
Total from Investment Operations (.60) .80 1.09 .80 .80 .62
Distributions:
Dividends from investment
income--net (.30) (.61) (.62) (.64) (.66) (.67)
Dividends from net realized gain
on investments -- (.16) (.05) (.25) -- --
Total Distributions (.30) (.77) (.67) (.89) (.66) (.67)
Net asset value, end of period 11.36 12.26 12.23 11.81 11.90 11.76
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (9.88)(b) 6.70 9.44 6.84 6.85 5.47
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .89(b) .89 .90 .93 .92 .89
Ratio of net investment income
to average net assets 4.99(b) 4.94 5.12 5.32 5.45 5.77
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 15.39(c) 21.95 33.31 30.66 28.83 10.48
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 295,489 317,923 310,343 313,881 321,559 335,964
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.26 12.23 11.80 11.89 11.76 11.80
Investment Operations:
Investment income--net .26 .55 .56 .57 .60 .61
Net realized and unrealized gain
(loss) on investments (.91) .19 .48 .16 .13 (.04)
Total from Investment Operations (.65) .74 1.04 .73 .73 .57
Distributions:
Dividends from investment
income--net (.26) (.55) (.56) (.57) (.60) (.61)
Dividends from net realized gain
on investments -- (.16) (.05) (.25) -- --
Total Distributions (.26) (.71) (.61) (.82) (.60) (.61)
Net asset value, end of period 11.35 12.26 12.23 11.80 11.89 11.76
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (10.53)(b) 6.15 8.97 6.28 6.20 4.99
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.41(b) 1.40 1.42 1.45 1.44 1.41
Ratio of net investment income
to average net assets 4.46(b) 4.42 4.59 4.79 4.92 5.21
Decrease reflected in above
expense ratios due to
undertaking by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 15.39(c) 21.95 33.31 30.66 28.83 10.48
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 49,165 58,416 59,315 54,661 38,838 35,425
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.25 12.22 11.79 11.89 11.84
Investment Operations:
Investment income--net .25 .52 .53 .54 .40
Net realized and unrealized gain (loss)
on investments (.91) .19 .48 .15 .05
Total from Investment Operations (.66) .71 1.01 .69 .45
Distributions:
Dividends from investment income--net (.25) (.52) (.53) (.54) (.40)
Dividends from net realized gain
on investments -- (.16) (.05) (.25) --
Total Distributions (.25) (.68) (.58) (.79) (.40)
Net asset value, end of period 11.34 12.25 12.22 11.79 11.89
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (10.77)(c) 5.88 8.68 5.93 5.31(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.65(c) 1.65 1.68 1.70 1.64(c)
Ratio of net investment income to
average net assets 4.23(c) 4.15 4.29 4.56 4.31(c)
Portfolio Turnover Rate 15.39(d) 21.95 33.31 30.66 28.83
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1000) 4,208 4,970 2,583 1,290 1,007
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series including the Connecticut Series (the "fund")
. The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund receives net earnings credit based on available cash
balances left on deposit.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(c) Dividends to shareholders: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
the fund's 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, 1999, Class B and Class C shares were charged $135,669 and $17,266,
respectively, pursuant to the Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 1999, Class A, Class B and Class C shares
were charged $386,563, $67,834 and $5,756, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $74,898 pursuant to the transfer
agency agreement
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$55,255,692 and $79,004,919, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At October 31, 1999, accumulated net unrealized depreciation on investments was
$4,152,174, consisting $7,845,490 gross unrealized appreciation and $11,997,664
gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTES
For More Information
Dreyfus Premier State Municipal Bond Fund, Connecticut
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 064/623SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Florida Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Florida Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Florida Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Florida Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Florida Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -4.80% total return; its Class B shares provided a -5.05% total
return; and its Class C shares provided a -5.19% total return.(1) In comparison,
the Lipper Florida Municipal Debt Funds category average provided a -5.00% total
return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest rate environment. The
modest relative outperformance of the fund's Class A shares compared to its
benchmark is primarily the result of our security selection strategy, which was
designed to help position the fund to take advantage of attractive values
created by the municipal bond market's decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
practical from a diversified portfolio of long-term municipal bonds without
undue risk. To achieve this objective, we employ two primary strategies. First,
for between one-half and three quarters of the total fund, we look for bonds
that potentially can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out-of-favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was adversely affected by rising interest rates over the past six
months. When the reporting period began on May 1, 1999, investors were concerned
that continued economic strength might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999.
As interest rates rose, taxable fixed-income investments such as corporate bonds
became more attractive to institutional investors such as hedge funds and
insurance companies. Accordingly, many of these investors sold large numbers of
municipal bonds into the secondary market, putting pressure on prices.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Florida issuers -- are currently
offering tax-exempt yields that compare very favorably with taxable yields after
adjusting for taxes.
What is the fund's current strategy?
After the recent municipal bond market declines, we have focused primarily on
positioning the fund to take advantage of what we anticipate to be an ensuing
market recovery. This is consistent with our long-term perspective, in which we
measure our success over a full interest-rate cycle. In preparation for the
second "leg" of that cycle in a recovering market, which had not yet
materialized as of October 31, we have focused on tax-exempt securities selling
at deep discounts to their face values. Many of these bonds, in our opinion,
have been punished more severely than circumstances warrant, and we believe that
they should recover strongly when investors once again recognize their true
values.
As a result of this strategy, the fund' s average duration has lengthened
naturally. While this has made the fund more vulnerable to the adverse effects
of higher interest rates over the short term, we believe that it also positions
us to participate more strongly in the market's recovery if interest rates
moderate over the longer term.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-FLORIDA
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--105.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA--98.8%
Brevard County, IDR (Nui Corp. Project)
6.40%, 10/1/2024 (Insured; AMBAC) 1,000,000 1,025,450
Broward County Health Facilities Authority, Revenue
(Broward County Nursing Home)
7.50%, 8/15/2020 (LOC; Allied Irish Bank) 1,000,000 1,050,420
Broward County Housing Finance Authority, MFHR
(Bridgewater Place Apartments) 5.40%, 10/1/2029 2,000,000 1,780,880
Charlotte County:
Healthcare Facilities Revenue (Charlotte Community
Health Project) 9.25%, 7/1/2020 1,550,000 1,603,862
Utility Revenue 5%, 10/1/2023 (Insured; FGIC) 2,500,000 2,194,575
Clark County, IDR, (Nevada Power Co. Project)
5.90%, 10/1/2030 2,500,000 2,203,550
Dade County Housing Finance Authority, SFMR
6.70%, 4/1/2028 (Collateralized: FNMA, GNMA) 4,500,000 4,615,020
Duval County Housing Finance Authority, SFMR:
7.85%, 12/1/2022 (Collateralized; GNMA) 1,800,000 1,847,988
7.70%, 9/1/2024
(Collateralized; GNMA, Insured; FGIC) 805,000 835,212
Escambia County Housing Finance Authority, SFMR
7.80%, 4/1/2022 (Collateralized; GNMA) 555,000 573,776
Florida Board of Education:
Capital Outlay (Public Education):
4.50%, 6/1/2019 (Insured; FSA) 7,000,000 5,774,720
4.50%, 6/1/2022 (Insured; FSA) 3,700,000 2,996,556
Lottery Revenue 4.50%, 7/1/2017 (Insured; FGIC) 2,110,000 1,760,837
Florida Department of Juvenile Justice (Juvenile
Residential) 5.20%, 6/15/2019 (Insured; MBIA) 5,984,000 5,626,815
Florida, Housing Finance Agency:
(Brittany Rosemont Apartments)
7%, 2/1/2035 (Insured; AMBAC) 6,000,000 6,385,020
Single Family Mortgage:
6.65%, 1/1/2024 (Collateralized: FNMA, GNMA) 2,365,000 2,449,099
6.65%, 7/1/2026 (Insured; MBIA) 1,425,000 1,468,064
Hillsborough County, Utility Revenue:
6.625%, 8/1/2011 4,000,000 4,154,480
7%, 8/1/2014 4,765,000 4,968,751
Hillsborough County Aviation Authority, Revenue
(Delta Airlines) 6.80%, 1/1/2024 2,500,000 2,579,700
Hillsborough County Industrial Development Authority,
PCR (Tampa Electric Co. Project)
6.25%, 12/1/2034 (Insured; MBIA) 1,000,000 1,018,410
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Jacksonville Health Facilities Authority, HR
(St. Luke's Hospital) 7.125%, 11/15/2020 13,000,000 13,756,080
Lee County Housing Finance Authority SFMR:
6.30%, 3/1/2029 (Collateralized: FNMA, GNMA) 970,000 1,010,216
(Multi-County Program)
7.45%, 9/1/2027 (Collateralized: FNMA, GNMA) 1,065,000 1,184,472
Marion County, Hospital District Revenue, Improvement
(Munroe Regional Hospital) 5.625%, 10/1/2024 2,500,000 2,270,175
Miami-Dade County Housing Finance Authority,
MFMR (Villa Esperanza Apartments Project)
5.35%, 10/1/2028 1,000,000 881,440
Miramar, Public Service Tax Revenue
6.15%, 10/1/2024 (Insured; FGIC) 1,000,000 1,009,310
Orange County, Tourist Development Tax Revenue
4.75%, 10/1/2024 (Insured; AMBAC) 9,160,000 7,642,096
Orange County Housing Finance Authority, MFHR
(Seminole Pointe Project) 5.75%, 12/1/2023 2,840,000 2,674,286
Osceola County Industrial Development Authority,
Revenue (Community Provider
Pooled Loan Program) 7.75%, 7/1/2017 5,235,000 5,430,266
Palm Beach County, Solid Waste Industrial Development
Revenue:
(Okeelanta Power LP Project) 6.85%, 2/15/2021 7,500,000 (b) 4,593,750
(Osceola Power LP) 6.85%, 1/1/2014 5,800,000 (b) 3,494,500
Palm Beach County Housing Finance Authority
Single Family Mortgage Purchase Revenue
6.55%, 4/1/2027 (Collateralized: FNMA, GNMA) 1,900,000 1,950,559
Pinellas County, PCR (Florida Power Corp.)
7.20%, 12/1/2014 2,000,000 2,112,420
Pinellas County Housing Finance Authority, SFMR:
7.70%, 8/1/2022 (Collateralized; GNMA) 1,650,000 1,709,812
(Multi-County Program)
6.70%, 2/1/2028 (Collateralized: FNMA, GNMA) 4,040,000 4,163,220
Polk County Industrial Development Authority, IDR
(IMC Fertilizer) 7.525%, 1/1/2015 10,000,000 10,331,400
Port Everglades Authority, Port Improvement Revenue
5%, 9/1/2016 (Insured; MBIA) 1,000,000 908,160
St. Lucie, SWDR (Florida Power and Light Co. Project)
7.15%, 2/1/2023 2,000,000 2,089,200
Seminole, Water Control District 6.75%, 8/1/2022 2,000,000 1,950,980
Seminole County, Sales Tax Revenue
4.625%, 10/1/2022 (Insured; MBIA) 2,015,000 1,664,612
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
Tampa:
Alleghany Health System Revenue (St. Joseph)
6.50%, 12/1/2023
(Insured; MBIA, Prerefunded 12/1/2004) 1,000,000 (a) 1,096,610
Solid Waste System Revenue (McKay Bay Refuse)
5.25%, 10/1/2014 (Insured; AMBAC) 4,940,000 4,659,161
Utility Tax
Zero Coupon, 4/1/2017 (Insured; AMBAC) 2,110,000 743,184
Tampa Bay Water, Utility System Revenue:
4.75%, Series A, 10/1/2027 (Insured; FGIC) 5,875,000 4,847,933
4.75%, Series B, 10/1/2027 (Insured; FGIC) 3,500,000 2,888,130
Tampa Sports Authority, Sales Tax Revenue (Tampa Bay
Arena Project) 5.75%, 10/1/2025 (Insured; MBIA) 1,000,000 988,660
Tarpon Springs Health Facilities Authority, Hospital
Revenue (Helen Ellis Memorial Hospital Project)
7.625%, 5/1/2021 3,990,000 4,021,162
Village Center Community Development District,
Recreational Revenue 5%, 11/1/2023 (Insured; MBIA) 2,000,000 1,755,360
NEVADA--1.1%
Clark County, IDR (Nevada Power Co. Project)
5.60%, 10/1/2030 2,000,000 1,685,960
U.S. RELATED--5.6%
Guam Power Authority, Revenue
5%, 10/1/2024 (Insured; AMBAC) 1,000,000 870,900
Commonwealth of Puerto Rico, Public Improvement
4.50%, 7/1/2023 (Insured; FSA) 2,920,000 2,374,661
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2028 (Insured; FSA) 6,000,000 5,216,160
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $166,985,366) 105.5% 158,888,020
LIABILITIES, LESS CASH AND RECEIVABLES (5.5%) (8,338,181)
NET ASSETS 100.0% 150,549,839
Summary of Abbreviations
AMBAC American Municipal Bond Assurance LOC Letter of Credit
Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FNMA Federal National Mortgage Association MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance MFMR Multi-Family Mortgage Revenue
GNMA Government National Mortgage PCR Pollution Control Revenue
Association SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 53.7
AA Aa AA 10.0
A A A 12.5
BBB Baa BBB 10.6
BB Ba BB 2.5
Not Rated(c) Not Rated(c) Not Rated(c) 10.7
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) NON-INCOME ACCRUING SECURITY.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 166,985,366 158,888,020
Interest receivable 2,765,800
Receivable for investment securities sold 1,080,570
Receivable for shares of Beneficial Interest subscribed 29,319
Prepaid expenses 13,548
162,777,257
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 76,930
Due to Distributor 40,382
Cash overdraft due to Custodian 90,344
Payable for investment securities purchased 11,659,546
Payable for shares of Beneficial Interest redeemed 322,007
Accrued expenses 38,209
12,227,418
- --------------------------------------------------------------------------------
NET ASSETS ($) 150,549,839
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 158,494,925
Accumulated net realized gain (loss) on investments 152,260
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (8,097,346)
- --------------------------------------------------------------------------------
NET ASSETS ($) 150,549,839
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 131,327,532 18,851,599 370,708
Shares Outstanding 10,079,696 1,447,544 28,455
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 13.03 13.02 13.03
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,763,580
EXPENSES:
Management fee--Note 3(a) 449,901
Shareholder servicing costs--Note 3(c) 236,442
Distribution fees--Note 3(b) 57,517
Professional fees 19,391
Registration fees 17,010
Prospectus and shareholders' reports 16,052
Custodian fees 8,527
Trustees' fees and expenses--Note 3(d) 1,156
Loan commitment fees--Note 2 320
Miscellaneous 7,359
TOTAL EXPENSES 813,675
INVESTMENT INCOME--NET 3,949,905
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (246,932)
Net unrealized appreciation (depreciation) on investments (11,805,764)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (12,052,696)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,102,791)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,949,905 8,448,485
Net realized gain (loss) on investments (246,932) 2,468,854
Net unrealized appreciation (depreciation)
on investments (11,805,764) (1,559,597)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (8,102,791) 9,357,742
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,449,266) (7,184,648)
Class B shares (492,591) (1,247,785)
Class C shares (8,048) (16,052)
Net realized gain on investments:
Class A shares -- (2,111,066)
Class B shares -- (426,489)
Class C shares -- (6,465)
TOTAL DIVIDENDS (3,949,905) (10,992,505)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 6,845,254 6,795,289
Class B shares 722,256 1,932,433
Class C shares 55,574 289,864
Dividends reinvested:
Class A shares 1,246,885 3,582,522
Class B shares 129,027 564,491
Class C shares 2,053 6,371
Cost of shares redeemed:
Class A shares (15,578,043) (27,626,849)
Class B shares (7,040,762) (8,078,977)
Class C shares (52,268) (261,074)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (13,670,024) (22,795,930)
TOTAL INCREASE (DECREASE) IN NET ASSETS (25,722,720) (24,430,693)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 176,272,559 200,703,252
END OF PERIOD 150,549,839 176,272,559
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 502,601 477,800
Shares issued for dividends reinvested 92,676 250,751
Shares redeemed (1,148,963) (1,932,468)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (533,686) (1,203,917)
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 51,672 134,751
Shares issued for dividends reinvested 9,580 39,521
Shares redeemed (517,199) (567,781)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (455,947) (393,509)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 4,117 20,218
Shares issued for dividends reinvested 153 446
Shares redeemed (3,934) (18,353)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 336 2,311
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 324,025 CLASS B SHARES
REPRESENTING $4,411,438 WERE AUTOMATICALLY CONVERTED TO 323,969 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.03 14.17 14.06 14.48 14.51 14.43
Investment Operations:
Investment income--net .33 .65 .66 .76 .79 .81
Net realized and unrealized gain
(loss) on investments (1.00) .05 .26 (.08) .17 .12
Total from Investment Operations (.67) .70 .92 .68 .96 .93
Distributions:
Dividends from investment
income--net (.33) (.65) (.66) (.76) (.79) (.81)
Dividends from net realized gain
on investments -- (.19) (.15) (.34) (.20) (.04)
Total Distributions (.33) (.84) (.81) (1.10) (.99) (.85)
Net asset value, end of period 13.03 14.03 14.17 14.06 14.48 14.51
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (9.52)(b) 5.00 6.73 4.74 6.63 6.71
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .92(b) .92 .91 .92 .91 .90
Ratio of net investment income
to average net assets 4.90(b) 4.53 4.67 5.27 5.29 5.67
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 23.93(c) 88.48 91.18 71.68 54.37 50.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 131,328 149,185 167,793 202,503 227,478 252,406
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 14.02 14.17 14.05 14.47 14.51 14.42
Investment Operations:
Investment income--net .30 .57 .59 .69 .71 .73
Net realized and unrealized gain
(loss) on investments (1.00) .04 .27 (.08) .16 .13
Total from Investment Operations (.70) .61 .86 .61 .87 .86
Distributions:
Dividends from investment
income--net (.30) (.57) (.59) (.69) (.71) (.73)
Dividends from net realized gain
on investments -- (.19) (.15) (.34) (.20) (.04)
Total Distributions (.30) (.76) (.74) (1.03) (.91) (.77)
Net asset value, end of period 13.02 14.02 14.17 14.05 14.47 14.51
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (10.02)(b) 4.40 6.26 4.21 6.01 6.21
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.42(b) 1.42 1.41 1.42 1.41 1.41
Ratio of net investment income
to average net assets 4.39(b) 4.02 4.16 4.76 4.77 5.13
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 23.93(c) 88.48 91.18 71.68 54.37 50.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 18,852 26,693 32,545 35,802 27,023 25,282
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 14.03 14.17 14.05 14.47 14.65
Investment Operations:
Investment income--net .28 .53 .55 .65 .48
Net realized and unrealized gain (loss)
on investments (1.00) .05 .27 (.08) .02
Total from Investment Operations (.72) .58 .82 .57 .50
Distributions:
Dividends from investment income--net (.28) (.53) (.55) (.65) (.48)
Dividends from net realized gain
on investments -- (.19) (.15) (.34) (.20)
Total Distributions (.28) (.72) (.70) (.99) (.68)
Net asset value, end of period 13.03 14.03 14.17 14.05 14.47
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (10.30)(c) 4.13 5.94 3.95 4.69(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.67(c) 1.75 1.71 1.97 1.99(c)
Ratio of net investment income to
average net assets 4.10(c) 3.69 3.69 4.60 4.20(c)
Portfolio Turnover Rate 23.93(d) 88.48 91.18 71.68 54.37
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 371 394 366 58 35
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series, including the Florida Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund's shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service (" Service" )
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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. Under the terms of the custody
agreement, the fund received net earnings credits of $2,453 during the period
ended October 31, 1999, based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 of 1986, as amended (the
"Code"). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,325 during the period ended October 31, 1999 from commissions earned on sales
of the fund's shares.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $56,044 and $1,473, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 1999, Class A, Class B and Class C shares
were charged $175,987, $28,022 and $491, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $13,595 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$38,818,339 and $38,777,877, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$8,097,346, consisting of $3,477,086 gross unrealized appreciation and
$11,574,432 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, Florida
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 051/615SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund
Georgia Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Georgia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Georgia Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Paul Disdier.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Georgia Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Georgia Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.54% total return; its Class B shares provided a -5.85% total
return; and its Class C shares provided a -5.90% total return.(1 )In comparison,
the Lipper Georgia Municipal Debt Funds category average provided a -5.14% total
return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. Our
modest relative underperformance compared to the fund's benchmark is primarily
the result of a longer average maturity profile compared to the benchmark, as
well as to a relatively small Georgia bond market, where the recent scarcity of
new issuance limited our investment choices.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Georgia tax-exempt income as
is practical from a diversified portfolio of municipal bonds without undue risk.
To achieve this objective, we look for bonds that we expect to provide
consistently high income streams. We strive to find such opportunities through
rigorous analyses of individual bonds' structures. Within the context of our
bond structure analysis, we pay particularly close attention to each bond's
maturity and early redemption features.
What other factors influenced the fund's performance?
The fund was adversely affected by rising interest rates over the past six
months. When the reporting period began on May 1, 1999, investors were concerned
that continued economic strength might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
potential reacceleration of inflation, the Federal Reserve Board raised
short-term interest rates twice during the summer of 1999.
As interest rates rose, taxable fixed-income investments such as corporate bonds
became more attractive to institutional investors such as hedge funds and
insurance companies. Accordingly, many of these investors sold large numbers of
municipal bonds into the secondary market, putting pressure on prices. Some, but
not all, of this increased supply was absorbed by increased demand from
individual investors seeking to manage their income tax liabilities.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Georgia issuers -- are currently
offering tax-exempt yields that compare very favorably with taxable yields after
adjusting for taxes.
What is the fund's current strategy?
We have recently attempted to position the fund for opportunities to upgrade its
holdings and maintain or enhance its income distributions. More specifically, we
have raised cash in anticipation of potentially higher interest rates by selling
long-term bonds that were priced at discounts to their face values. We
redeployed some of those assets in higher yielding, investment grade bonds with
shorter maturities. By replacing longer duration bonds with shorter duration
bonds, we effectively reduced the fund's sensitivity to the adverse effects of
rising interest rates.
We have invested the remainder of the proceeds from longer term bond sales
in very short-term, tax-exempt money market securities. We expect to put that
cash to work when we feel the market stabilizes and opportunities to lock in
high yields arise. We believe that such opportunities are likely to occur toward
the end of the year, when a relative lack of new bond issuance may drive yields
higher. In our view, issuers are likely to wait until after January 1, 2000 to
raise capital in the municipal debt markets in order to avoid potential
Y2K-related market disruptions. Yet demand for municipal bonds should remain
high from individuals seeking to minimize their income tax liabilities.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-GEORGIA
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH 4/30/00, AT WHICH TIME IT
MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED,
THE FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--88.0% Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Atlanta Urban Residential Finance Authority,
MFHR (New Community)
5.50%, 11/20/2027 (Collateralized; GNMA) 1,325,000 1,202,318
Barrow County School District
5.60%, 2/1/2015 (Insured; MBIA) 1,000,000 985,300
Brunswick & Glynn County Development Authority, Revenue
(Pacific Corp. Project) 5.55%, 3/1/2026 1,000,000 855,780
Carroll County Water Authority, Water and Sewer Revenue
4.75%, 7/1/2022 (Insured; AMBAC) 1,000,000 832,600
Cherokee County, Water and Sewer Revenue,
4.75%, 8/1/2028 (Insured; FGIC) 1,000,000 811,580
Clayton County and Clayton County Water Authority,
Water and Sewer Revenue
5.60%, 5/1/2013 (Insured; AMBAC) 900,000 905,139
Columbia County, Water and Sewer Revenue
5.40%, 6/1/2011 (Insured; AMBAC) 750,000 751,905
Fayette County School District 6.125%, 3/1/2015 500,000 536,525
Fulton County, Water and Sewer Revenue
6.375%, 1/1/2014 (Insured; FGIC, Escrowed to Maturity) 260,000 283,184
Gainesville, Water and Sewer Revenue
6%, 11/15/2012 (Insured; FGIC) 300,000 315,969
Georgia:
6.65%, 3/1/2009 1,000,000 1,118,270
5.65%, 3/1/2012 1,000,000 1,025,400
Georgia Housing and Finance Authority, SFMR
6.50%, 12/1/2017 (Insured; FHA) 1,000,000 1,026,810
Georgia Municipal Gas Authority,
Gas Revenue (Warner Robins Project)
5.80%, 1/1/2015 (Insured; MBIA) 1,000,000 1,000,870
Marietta Development Authority, Revenue
(First Mortgage-Life College)
5.75%, 9/1/2014 (Insured; FSA) 850,000 850,723
Marietta School 4.50%, 2/1/2019 1,000,000 821,570
Meriwether County School District
5.50%, 2/1/2016 (Insured; FSA) 750,000 723,772
Metropolitan Atlanta Rapid Transportation Authority,
Sales Tax Revenue
6.25%, 7/1/2020 (Insured; AMBAC) 300,000 314,439
Private Colleges and Universities Authority, Revenue
(Emory University Project) 5.50%, 11/1/2019 750,000 714,615
(Spellman College Project) 6.20%, 6/1/2014 (Insured; FGIC) 1,000,000 1,046,900
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
Royston Hospital Authority, HR
(Ty Cobb Healthcare System, Inc.) 6.50%, 7/1/2027 700,000 665,959
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $17,255,466) 16,789,628
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--10.0%
- -----------------------------------------------------------------------------------------------------------------------------------
GEORGIA--4.7%
Hapeville Development Authority, VRDN
(Hapeville Hotel, Ltd.) 3.55% 900,000(a) 900,000
U. S. RELATED--5.3%
Puerto Rico Commonwealth Highway and
Transportation Authority, VRDN 3.10% 1,000,000(a) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,900,000) 1,900,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $19,155,466) 98.0% 18,689,628
CASH AND RECEIVABLES (NET) 2.0% 382,141
NET ASSETS 100.0% 19,071,769
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond HR Hospital Revenue
Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage VRDN Variable Rate Demand Notes
Association
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 70.6
AA Aa AA 11.1
BBB Baa BBB 8.1
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 10.2
100.0
(A) SECURITY PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(B) AT OCTOBER 31, 1999, THE FUND HAD $4,901,247 (25.7% OF NET ASSETS) INVESTED
IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT UPON
REVENUES GENERATED FROM UTILITY-WATER AND SEWER PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 19,155,466 18,689,628
Cash 83,035
Interest receivable 293,641
Prepaid expenses 12,104
Due from The Dreyfus Corporation 4,255
19,082,663
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to Distributor 7,409
Payable for shares of Beneficial Interest redeemed 13
Accrued expenses 3,472
10,894
- --------------------------------------------------------------------------------
NET ASSETS ($) 19,071,769
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 19,579,124
Accumulated net realized gain (loss) on investments (41,517)
Accumulated net unrealized appreciation (depreciation) (465,838)
on investments--Note 4
- --------------------------------------------------------------------------------
NET ASSETS 19,071,769
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 10,857,472 8,151,884 62,413
Shares Outstanding 850,981 638,719 4,895
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.76 12.76 12.75
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 535,271
EXPENSES:
Management fee--Note 3(a) 54,731
Shareholder servicing costs--Note 3(c) 31,970
Distribution fees--Note 3(b) 24,899
Registration fees 16,306
Professional fees 13,780
Prospectus and shareholders' reports 9,678
Custodian fees 651
Trustees' fees and expenses--Note 3(d) 156
Loan commitment fees--Note 2 70
Miscellaneous 3,311
TOTAL EXPENSES 155,552
Less-reduction in management fee due to
undertaking--Note 3(a) (30,621)
NET EXPENSES 124,931
INVESTMENT INCOME-NET 410,340
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments 25,758
Net unrealized appreciation (depreciation) on investments (1,600,993)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,575,235)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1,164,895)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 410,340 904,128
Net realized gain (loss) on investments 25,758 544,900
Net unrealized appreciation (depreciation)
on investments (1,600,993) (214,880)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,164,895) 1,234,148
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (218,478) (290,432)
Class B shares (191,259) (612,746)
Class C shares (603) (950)
TOTAL DIVIDENDS (410,340) (904,128)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 3,782,002 3,073,890
Class B shares 1,893,866 630,199
Class C shares 84,450 35,401
Dividends reinvested:
Class A shares 136,555 186,394
Class B shares 106,514 298,894
Class C shares 265 409
Cost of shares redeemed:
Class A shares (1,039,949) (784,843)
Class B shares (5,658,983) (6,162,616)
Class C shares (65,246) (32,325)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (760,526) (2,754,597)
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,335,761) (2,424,577)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 21,407,530 23,832,107
END OF PERIOD 19,071,769 21,407,530
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 280,705 220,547
Shares issued for dividends reinvested 10,360 13,383
Shares redeemed (75,025) (56,295)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 216,040 177,635
- --------------------------------------------------------------------------------
CLASS B (A)
Shares sold 139,569 45,364
Shares issued for dividends reinvested 8,065 21,439
Shares redeemed (420,404) (443,237)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (272,770) (376,434)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 6,444 2,553
Shares issued for dividends reinvested 20 29
Shares redeemed (4,939) (2,305)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,525 277
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 183,711 CLASS B SHARES
REPRESENTING $2,462,065 WERE AUTOMATICALLY CONVERTED TO 183,813 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 13.81 13.63 13.22 13.05 12.80 12.69
Investment Operations:
Investment income--net .29 .60 .61 .62 .66 .73
Net realized and unrealized
gain (loss) on investments (1.05) .18 .41 .17 .25 .11
Total from
Investment Operations (.76) .78 1.02 .79 .91 .84
Distributions:
Dividends from investment
income--net (.29) (.60) (.61) (.62) (.66) (.73)
Net asset value, end of period 12.76 13.81 13.63 13.22 13.05 12.80
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (10.99)(b) 5.74 7.76 6.16 7.14 6.87
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .99(b) .99 .95 .98 .74 .25
Ratio of net investment income
to average net assets 4.38(b) 4.27 4.44 4.71 5.00 5.80
Decrease reflected in
above expense ratios due to
undertakings by the Manager .35(b) -- -- -- .21 .78
Portfolio Turnover Rate 16.95(c) 69.13 36.64 50.96 33.09 34.04
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 10,857 8,769 6,232 6,598 8,346 8,985
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 13.82 13.63 13.22 13.06 12.80 12.69
Investment Operations:
Investment income--net .26 .53 .54 .56 .59 .66
Net realized and
unrealized gain (loss)
on investments (1.06) .19 .41 .16 .26 .11
Total from Investment Operations (.80) .72 .95 .72 .85 .77
Distributions:
Dividends from investment
income-net (.26) (.53) (.54) (.56) (.59) (.66)
Net asset value, end of period 12.76 13.82 13.63 13.22 13.06 12.80
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (11.60)(b) 5.29 7.24 5.55 6.69 6.33
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.51(b) 1.49 1.44 1.47 1.24 .75
Ratio of net investment income
to average net assets 3.85(b) 3.79 3.94 4.20 4.46 5.27
Decrease reflected in
above expense ratios due to
undertakings by the Manager .27(b) -- -- -- .20 .80
Portfolio Turnover Rate 16.95(c) 69.13 36.64 50.96 33.09 34.04
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 8,152 12,592 17,558 18,211 20,106 19,429
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 13.80 13.62 13.22 13.05 12.85
Investment Operations:
Investment income--net .24 .44 .47 .51 .38
Net realized and unrealized gain (loss)
on investments (1.05) .18 .40 .17 .20
Total from Investment Operations (.81) .62 .87 .68 .58
Distributions:
Dividends from investment income-net (.24) (.44) (.47) (.51) (.38)
Net asset value, end of period 12.75 13.80 13.62 13.22 13.05
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) (11.70)(c) 4.59 6.61 5.30 6.28(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.71(c) 1.99 1.91 1.80 1.98(c)
Ratio of net investment income
to average net assets 3.61(c) 3.28 3.48 3.87 3.73(c)
Decrease reflected in above expense
ratios due to undertakings by the Manager .44(c) -- -- -- --
Portfolio Turnover Rate 16.95(d) 69.13 36.64 50.96 33.09
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 62 47 42 105 88
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company, and operates as a series company
currently offering thirteen series including the Georgia Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are 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. Under the terms of the custody
agreement, the fund received net earnings credits of $1,287 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, it is the policy of the fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $68,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to April 30, 1999. If not applied, $51,000
of the carryover expires in fiscal 2004 and $17,000 expires in fiscal 2005.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .55 of 1% of the value of the fund' s average
daily net assets and is payable monthly. The Manager has undertaken from July
29, 1999 to April 30, 2000, to reduce the management fee paid by the fund, to
the extent that the fund's aggregate expenses, excluding 12b-1 distribution
fees, taxes, brokerage, commitment fees, interest on borrowings and
extraordinary expenses, exceed an annual rate of .89 of 1% of the value of the
fund's average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $30,621 during the period ended October 31, 1999.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $24,774 and $125, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $12,449, $12,387 and $41, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $5,083 pursuant to the transfer
agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$3,131,509 and $4,871,448, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$465,838, consisting of $293,246 gross unrealized appreciation and $759,084
gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Premier State Municipal Bond Fund, Georgia
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 068SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Maryland Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Maryland Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Maryland Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Maryland Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Maryland Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.03% total return; its Class B shares provided a -5.20% total
return; and its Class C shares provided a -5.38% total return.(1) In comparison,
the Lipper Maryland Municipal Debt Funds category average provided a -4.50%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest rate environment. The
underperformance of the fund' s Class A shares compared to its benchmark is
primarily the result of our security selection strategy in the relatively small
Maryland bond market. This strategy was designed to help position the fund to
take advantage of attractive values created by the municipal bond market's
decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Maryland state tax-exempt
income as is practical from a diversified portfolio of long-term municipal bonds
without undue risk. To achieve this objective, we employ two primary strategies.
First, for between one-half and three quarters of the total fund, we look for
bonds that potentially can provide consistently high current yields. We also try
to ensure that we select bonds that are most likely to obtain attractive prices
if and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out-of-favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was adversely affected by rising interest rates. When the reporting
period began on May 1, 1999, investors were concerned that continued economic
strength might rekindle long-dormant inflationary pressures. In fact, in an
attempt to forestall a potential reacceleration of inflation, the Federal
Reserve Board raised short-term interest rates twice during the summer of 1999.
As interest rates rose, taxable fixed-income investments such as corporate bonds
became more attractive to institutional investors such as hedge funds and
insurance companies. Accordingly, many of these investors sold large numbers of
municipal bonds into the secondary market, putting pressure on prices.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Maryland issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
After the recent municipal bond market declines, we have focused primarily on
positioning the fund to take advantage of what we anticipate to be an ensuing
market recovery. This is consistent with our long-term perspective, in which we
measure our success over a full interest-rate cycle. In preparation for the
second "leg" of that cycle in a recovering market, which had not yet
materialized as of October 31, we have focused on tax-exempt securities selling
at deep discounts to their face values. Many of these bonds, in our opinion,
have been punished more severely than circumstances warrant, and we believe that
they should recover strongly when investors once again recognize their true
values.
As a result of this strategy, the fund' s average duration has lengthened
naturally. While this has made the fund more vulnerable to the adverse effects
of higher interest rates over the short term, we believe that it also positions
us to participate more strongly in the market's recovery if interest rates
moderate over the longer term.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-MARYLAND
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG TERM MUNICIPAL INVESTMENTS--98.0% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND--87.1%
Anne Arundel County:
General Improvement 4.50%, 8/1/2018 870,000 723,762
Water and Sewer:
4.50%, 8/1/2018 515,000 428,434
4.50%, 8/1/2019 1,495,000 1,235,109
4.50%, 8/1/2020 1,455,000 1,191,034
Baltimore:
7%, 10/15/2007 (Insured; MBIA) 500,000 565,875
(Tindeco Wharf Project)
6.60%, 12/20/2024 (Collateralized; GNMA) 4,250,000 4,400,790
Port Facilities Revenue (Consolidated Coal Sales)
6.50%, 12/1/2010 9,740,000 10,396,476
Baltimore City Housing Corp., MFHR
7.25%, 7/1/2023 (Collateralized; FNMA) 3,105,000 3,173,807
Baltimore County:
Mortgage Revenue, Zero coupon, 9/1/2024 2,280,000 522,530
Nursing Facility Mortgage Revenue
(Eastpoint Rehabilitation & Nursing Centers):
6.75%, 4/1/2015 1,000,000 930,840
6.75%, 4/1/2028 1,500,000 1,343,505
PCR (Bethlehem Steel Corp. Project):
7.50%, 6/1/2015 5,785,000 5,984,293
7.55%, 6/1/2017 2,690,000 2,791,870
Carroll County, County Commissioners--
Consolidated Public Improvement
4.70%, 10/1/2016 1,000,000 872,890
Gaithersburg, Hospital Facilities Improvement Revenue
(Shady Grove)
6.50%, 9/1/2012 (Insured; FSA) 10,000,000 11,013,200
Howard County, COP 8.15%, 2/15/2020 605,000 771,091
Maryland, COP (Aviation Administration Facilities Project):
4.75%, 5/1/2015 565,000 493,578
4.75%, 5/1/2016 750,000 648,742
4.75%, 5/1/2017 1,650,000 1,414,759
4.75%, 5/1/2018 1,730,000 1,472,195
Maryland Community Development Administration,
Department of Housing and Community Development:
Housing Revenue 5.65%, 7/1/2039 4,750,000 4,365,535
Multi-Family Development (Auburn Manor Project)
5.30%, 10/1/2028 1,000,000 885,710
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND (CONTINUED)
Maryland Community Development Administration,
Department of Housing and Community Development
(continued):
MFHR:
6.50%, 5/15/2013 3,000,000 3,128,520
6.85%, 5/15/2033 5,000,000 5,214,850
6.70%, 5/15/2036 (Insured; FHA) 7,710,000 8,033,357
Residential 5.25%, 9/1/2029 3,700,000 3,215,448
Single Family Program:
6.95%, 4/1/2011 3,885,000 4,006,523
4.75%, 4/1/2012 2,865,000 2,630,442
4.80%, 4/1/2013 1,500,000 1,366,335
6.55%, 4/1/2026 7,200,000 7,403,616
6.75%, 4/1/2026 3,880,000 3,970,792
5.25%, 4/1/2029 8,330,000 7,244,768
7.45%, 4/1/2032 4,795,000 4,936,836
Maryland Economic Development Corp., Revenue (Health and
Mental Hygiene Providers Facilities Acquisition Program):
8.375%, 3/1/2013 4,045,000 4,259,992
8.75%, 3/1/2017 4,810,000 4,835,397
Maryland Health and Higher Educational Facilities
Authority, Revenue:
(Calvert Memorial Hospital) 5%, 7/1/2028 1,900,000 1,588,210
(Doctors Community Hospital) 5.50%, 7/1/2024 9,890,000 8,397,797
(Helix Health Issue) 5%, 7/1/2027 (Insured; AMBAC) 5,500,000 4,825,040
(Johns Hopkins Hospital):
4.75%, 5/15/2033 7,100,000 5,674,391
4.50%, 5/15/2035 2,395,000 1,813,757
(Loyola College) 5%, 10/1/2039 3,500,000 2,935,030
(Medlantic Helix Issue)
4.75%, 8/15/2028 (Insured; FSA) 32,385,000 26,354,265
(Upper Chesapeake Hospitals)
5.375%, 1/1/2028 (Insured; FSA) 1,500,000 1,374,105
(Union Hospital of Cecil County):
6.70%, 7/1/2009 2,320,000 2,430,687
4.75%, 7/1/2013 1,840,000 1,587,846
5.10%, 7/1/2022 2,500,000 2,109,750
(University of Maryland Medical Systems)
7%, 7/1/2022 (Insured; FGIC) 4,500,000 5,117,040
Maryland Industrial Development Financing Authority, EDR
(Medical Waste Association) 8.75%, 11/15/2010 700,000 683,095
The Fund
STATEMENT OF INVESTMENTS (Unaudited)(CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MARYLAND (CONTINUED)
Maryland Local Government Insurance Trust, COP
7.125%, 8/1/2009 3,250,000 3,385,102
Maryland Stadium Authority, Sports Facility LR
7.60%, 12/15/2019 5,250,000 5,375,790
Montgomery County Housing Opportunities Commission, Revenue:
Multi-Family Mortgage:
7.05%, 7/1/2032 2,485,000 2,556,096
7.375%, 7/1/2032 1,805,000 1,837,400
Single Family Mortgage:
7.375%, 7/1/2017 960,000 985,037
6.625%, 7/1/2026 1,015,000 1,045,897
Zero Coupon, 7/1/2027 12,165,000 2,287,507
Zero Coupon, 7/1/2028 41,975,000 7,557,599
Northeast Waste Disposal Authority, Solid Waste Revenue
(Montgomery County Resource Recovery Project):
6%, 7/1/2008 2,690,000 2,752,677
6.20%, 7/1/2010 13,130,000 13,581,147
6.30%, 7/1/2016 14,205,000 14,532,425
Prince Georges County
Consolidated Public Improvement 6.75%, 7/1/2010 1,170,000 1,234,549
Prince Georges County Housing Authority:
Mortgage Revenue:
(New Keystone Apartment Project)
6.80%, 7/1/2025 (Insured: FHA & MBIA) 4,300,000 4,458,498
(Riverview Terrace)
6.70%, 6/20/2020 (Collateralized; GNMA) 2,000,000 2,101,460
(Stevenson Apartments Project)
6.35%, 7/20/2020 (Collateralized; GNMA) 3,000,000 3,071,760
6%, 9/20/2029 (Collateralized; GNMA) 1,370,000 1,322,009
6.10%, 3/20/2041 (Collateralized; GNMA) 1,545,000 1,493,212
Revenue (Dimensions Health Corporation Project)
5.30%, 7/1/2024 8,350,000 6,738,366
SFMR
6.60%, 12/1/2025 (Collateralized: FNMA & GNMA) 4,270,000 4,391,097
U. S. RELATED--10.9%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 10,000,000 10,483,300
Guam Power Authority, Revenue
5.125%, 10/1/2029 (Insured; MBIA) 4,250,000 3,717,645
Puerto Rico Commonwealth, Public Improvement:
4.50%, 7/1/2023 (Insured; AMBAC) 5,000,000 4,066,200
5%, 7/1/2026 (Insured; FSA) 1,795,000 1,567,161
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Electric Power Authority, Power Revenue:
4.50%, 7/1/2019 (Insured; FSA) 2,970,000 2,481,970
4.75%, 7/1/2024 1,245,000 1,017,601
5%, 7/1/2028 (Insured; FSA) 8,885,000 7,724,264
Puerto Rico Public Buildings Authority, Revenue
5%, 7/1/2027 (Insured; AMBAC) 2,000,000 1,742,320
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $304,592,095) 98.0% 294,272,003
CASH AND RECEIVABLES (NET) 2.0% 5,885,228
NET ASSETS 100.0% 300,157,231
The Fund
STATEMENT OF INVESTMENTS (Unaudited)(CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond Assurance GNMA Government National Mortgage
Corporation Association
COP Certificate of Participation LR Lease Revenue
EDR Economic Development Revenue MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
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
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 33.0
AA Aa AA 34.1
A A A 16.7
BBB Baa BBB 9.1
Not Rated(a) Not Rated(a) Not Rated(a) 7.1
100.0
(A) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(B) AT OCTOBER 31, 1999, THE FUND HAD $90,394,189 (30.1% OF NET ASSETS) AND
$91,748,683 (30.6% OF NET ASSETS) INVESTED IN SECURITIES WHOSE PAYMENT OF
PRINCIPAL AND INTEREST IS DEPENDENT UPON REVENUES GENERATED FROM HEALTH
CARE AND HOUSING PROJECTS, RESPECTIVELY.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 304,592,095 294,272,003
Cash 1,146,550
Interest receivable 5,094,343
Receivable for shares of Beneficial Interest subscribed 10,002
Prepaid expenses 14,674
300,537,572
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 141,185
Due to Distributor 87,497
Payable for shares of Beneficial Interest redeemed 96,501
Accrued Expenses 55,158
380,341
- --------------------------------------------------------------------------------
NET ASSETS ($) 300,157,231
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 308,080,721
Accumulated net realized gain (loss) on investments 2,396,602
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (10,320,092)
- --------------------------------------------------------------------------------
NET ASSETS ($) 300,157,231
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 247,306,258 49,684,867 3,166,106
Shares Outstanding 20,636,259 4,145,345 264,000
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.98 11.99 11.99
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,506,288
EXPENSES:
Management fee--Note 3(a) 876,247
Shareholder servicing costs--Note 3(c) 504,651
Distribution fees--Note 3(b) 151,947
Custodian fees 19,850
Registration fees 18,991
Prospectus and shareholders' reports 11,317
Professional fees 8,538
Trustees' fees and expenses--Note 3(d) 2,159
Loan commitment fees--Note 2 1,001
Miscellaneous 11,741
TOTAL EXPENSES 1,606,442
INVESTMENT INCOME--NET 7,899,846
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (197,543)
Net unrealized appreciation (depreciation) on investments (24,134,765)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (24,332,308)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (16,432,462)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,899,846 15,723,604
Net realized gain (loss) on investments (197,543) 4,875,643
Net unrealized appreciation (depreciation)
on investments (24,134,765) (2,906,514)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (16,432,462) 17,692,733
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (6,567,376) (13,142,319)
Class B shares (1,261,787) (2,475,248)
Class C shares (70,683) (106,037)
Net realized gain on investments:
Class A shares -- (3,920,985)
Class B shares -- (858,010)
Class C shares -- (41,411)
TOTAL DIVIDENDS (7,899,846) (20,544,010)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 18,485,597 19,034,333
Class B shares 8,351,801 16,708,364
Class C shares 751,244 1,950,257
Dividends reinvested:
Class A shares 3,986,467 10,945,576
Class B shares 756,046 2,138,858
Class C shares 43,395 93,797
Cost of shares redeemed:
Class A shares (19,571,596) (26,068,594)
Class B shares (14,995,816) (8,588,073)
Class C shares (613,636) (385,542)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (2,806,498) 15,828,976
TOTAL INCREASE (DECREASE) IN NET ASSETS (27,138,806) 12,977,699
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 327,296,037 314,318,338
END OF PERIOD 300,157,231 327,296,037
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,471,719 1,451,972
Shares issued for dividends reinvested 320,995 834,341
Shares redeemed (1,575,725) (1,987,044)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 216,989 299,269
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 660,815 1,273,167
Shares issued for dividends reinvested 60,819 163,084
Shares redeemed (1,197,030) (657,332)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (475,396) 778,919
- --------------------------------------------------------------------------------
CLASS C
Shares sold 59,354 148,387
Shares issued for dividends reinvested 3,496 7,148
Shares redeemed (48,632) (29,616)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 14,218 125,919
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 792,430 CLASS B SHARES
REPRESENTING $9,966,459 WERE AUTOMATICALLY CONVERTED TO 792,673 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.94 13.05 12.70 12.69 12.54 12.46
Investment Operations:
Investment income--net .32 .65 .67 .68 .67 .70
Net realized and unrealized gain
(loss) on investments (.96) .09 .50 .18 .23 .08
Total from Investment Operations (.64) .74 1.17 .86 .90 .78
Distributions:
Dividends from investment
income--net (.32) (.65) (.67) (.68) (.67) (.70)
Dividends from net realized gain
on investments -- (.20) (.15) (.17) (.08) --
Total Distributions (.32) (.85) (.82) (.85) (.75) (.70)
Net asset value, end of period 11.98 12.94 13.05 12.70 12.69 12.54
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (9.98)(b) 5.76 9.40 6.91 7.24 6.52
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .91(b) .90 .90 .90 .90 .90
Ratio of net investment income
to average net assets 5.05(b) 4.97 5.12 5.29 5.23 5.69
Decrease reflected in above expense
ratios due to undertaking by
the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 22.25(c) 29.30 18.12 43.63 41.65 35.39
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 247,306 264,255 262,560 266,658 283,878 301,834
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.94 13.05 12.70 12.69 12.54 12.46
Investment Operations:
Investment income--net .28 .58 .60 .61 .61 .63
Net realized and unrealized gain
(loss) on investments (.95) .09 .50 .18 .23 .08
Total from Investment Operations (.67) .67 1.10 .79 .84 .71
Distributions:
Dividends from investment
income--net (.28) (.58) (.60) (.61) (.61) (.63)
Dividends from net realized gain
on investments -- (.20) (.15) (.17) (.08) --
Total Distributions (.28) (.78) (.75) (.78) (.69) (.63)
Net asset value, end of period 11.99 12.94 13.05 12.70 12.69 12.54
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (10.32)(b) 5.20 8.83 6.34 6.66 5.94
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.43(b) 1.42 1.42 1.43 1.43 1.44
Ratio of net investment income
to average net assets 4.51(b) 4.44 4.59 4.75 4.68 5.13
Decrease reflected in above expense
ratios due to undertaking by
the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 22.25(c) 29.30 18.12 43.63 41.65 35.39
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 49,685 59,806 50,141 45,329 41,179 35,090
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
--------------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.95 13.06 12.71 12.69 12.67
Investment Operations:
Investment income--net .27 .55 .57 .58 .41
Net realized and unrealized gain (loss)
on investments (.96) .09 .50 .19 .10
Total from Investment Operations (.69) .64 1.07 .77 .51
Distributions:
Dividends from investment income--net (.27) (.55) (.57) (.58) (.41)
Dividends from net realized gain
on investments -- (.20) (.15) (.17) (.08)
Total Distributions (.27) (.75) (.72) (.75) (.49)
Net asset value, end of period 11.99 12.95 13.06 12.71 12.69
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (10.67)(c) 4.93 8.55 6.16 5.57(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.64(c) 1.66 1.67 1.64 1.80(d)
Ratio of net investment income to
average net assets 4.29(c) 4.15 4.29 4.47 4.59(d)
Portfolio Turnover Rate 22.25(d) 29.30 18.12 43.63 41.65
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 3,166 3,235 1,618 202 27
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series including the Maryland Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $8,896 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of the borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$355 during the period ended October 31, 1999, from commissions earned on sales
of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $139,602 and $12,345, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $324,378, $69,801 and $4,115, respectively, pursuant to the
Shareholder Services Plan.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)(CONTINUED)
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $47,376 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$69,497,915 and $75,376,370, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$10,320,092, consisting of $5,393,708 gross unrealized appreciation and
$15,713,800 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTES
For More Information
Dreyfus Premier State Municipal Bond Fund Maryland
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call
your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 052/616SA9910
================================================================================
Dreyfus Premier State Municipal Bond Fund Massachusetts Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments Year 2000 Issues (Unaudited) and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Massachusetts Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Massachusetts Series, covering the six-month period from
May 1, 1999 through October 31, 1999. Inside, you'll find valuable information
about how the fund was managed during the reporting period, including a
discussion with the fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Massachusetts Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Massachusetts Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.35% total return; its Class B shares provided a -5.61% total
return; and its Class C shares provided a -5.80% total return.(1) In comparison,
the Lipper Massachusetts Municipal Debt Funds category average provided a -5.17%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. The
fund' s modest relative underperformance compared to its benchmark is primarily
the result of our security selection strategy in a relatively small
Massachusetts bond market, where a scarcity of new issuance limited our
investment choices.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Massachusetts tax-exempt
income as is practical from a diversified portfolio of long-term municipal bonds
without undue risk. To achieve this objective, we employ two primary strategies.
First, because Massachusetts issues relatively few municipal bonds, we begin by
evaluating supply-and-demand factors. Based on that assessment, we select the
individual Massachusetts tax-exempt bonds that we believe are most likely to
provide the highest returns with the least risk. We look at such criteria as the
bond' s yield, price, age, creditworthiness of its issuer, insurance, and any
provisions for early redemption. Under most circumstances, we look for high
yielding bonds that have 10-year call protection and are selling at a discount
to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the fund's average duration to make cash available for
the purchase of higher yielding securities. Conversely, if we expect demand for
municipal bonds to surge at a time when we anticipate little issuance, we may
increase the fund's average duration to maintain current yields for as long as
practical. At other times, we try to maintain a "neutral" average duration
consistent with other Massachusetts municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that economic recovery in overseas markets and continued economic
strength in the United States might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Massachusetts issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration within the neutral range. Because a
fund's duration naturally extends as interest rates rise and some bonds' prices
fall below levels at which issuers might redeem them early, bond funds tend to
become more sensitive to the adverse short-term effects of higher interest
rates. Accordingly, during the period we sold some of our longer maturity bonds,
including some that were priced at deep discounts to face value. In some cases,
these sales also helped us lock in tax losses that may be used to offset any
taxable capital gains the fund may produce.
We attempted to reinvest the proceeds from those sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding Massachusetts bonds in the secondary market.
However, there was a relative scarcity of Massachusetts bonds with the defensive
characteristics we sought, including high yields and strong credit quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR
NON-MASSACHUSETTS RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL
ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE
FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--89.1% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS--71.6%
Boston Industrial Development Financing Authority,
Sewer Facility Revenue
(Harbor Electric Energy Co. Project) 7.375%, 5/15/2015 2,500,000 2,604,750
Lynn Water and Sewer Commission, General Revenue
7.25%, 12/1/2010 (Insured; MBIA, Prerefunded 12/1/2000) 1,000,000 (a) 1,054,360
Massachusetts Bay Transportation Authority,
General Transportation Systems:
5.50%, 3/1/2021 625,000 589,406
7%, 3/1/2021 1,000,000 1,125,200
Massachusetts Commonwealth
7%, 8/1/2012 (Prerefunded 8/1/2001) 1,850,000 (a) 1,970,861
Massachusetts Development Finance Agency, Revenue
(Northern Berkshire Community) 6.25%, 8/15/2029 1,000,000 981,990
Massachusetts Education Loan Authority,
Education Loan Revenue
7.75%, 1/1/2008 (Insured; MBIA) 855,000 874,998
Massachusetts Health and Educational Facilities Authority,
Revenue:
(Boston College) 4.75%, 6/1/2031 4,500,000 3,566,610
(Boston University) 6%, 5/15/2059 2,500,000 2,400,600
(Brandeis University) 4.75%, 10/1/2028 (Insured; MBIA) 2,450,000 1,995,941
(Medical Center of Central Massachusetts) 7.10%, 7/1/2021 1,000,000 1,064,110
(Milton Hospital) 7%, 7/1/2016 (Insured; MBIA) 2,050,000 2,121,689
(University Hospital) 7.25%, 7/1/2019
(Insured; MBIA, Prerefunded 7/1/2000) 2,750,000 (a) 2,864,565
(Vinfen Corporation) 5.30%, 11/15/2028 2,670,000 2,282,770
Massachusetts Industrial Finance Agency, Revenue:
(College of the Holy Cross) 5%, 9/1/2023 (Insured; MBIA) 3,350,000 2,899,258
(Provider Lease Program) 8.75%, 7/15/2009 120,000 120,173
(Suffolk University) 5.25%, 7/1/2027 1,000,000 892,480
(Water Treatment-American Hingham) 6.95%, 12/1/2035 3,000,000 3,157,170
Health Care Facility (Health Foundation, Inc. Project)
6.75%, 12/1/2027 1,000,000 966,400
Resource Recovery (Ogden Haverhill Project)
5.60%, 12/1/2019 1,000,000 876,940
Massachusetts Port Authority, Revenue
Special Project (Harborside Hyatt) 10%, 3/1/2026 3,000,000 3,191,640
Massachusetts Water Pollution Abatement Trust,
Water Pollution Abatement Revenue
(New Bedford Program) 4.75%, 2/1/2026 (Insured; FGIC) 3,000,000 2,464,410
Massachusetts Water Resource Authority:
4%, 12/1/2018 1,900,000 1,429,788
4.75%, 8/1/2037 (Insured; FSA) 2,000,000 1,584,980
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--17.5%
Guam Airport Authority, Revenue 6.70%, 10/1/2023 1,500,000 1,572,495
Puerto Rico Commonwealth 6%, 7/1/2014 1,000,000 1,018,820
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue:
6.459%, 7/1/2009 1,000,000 (b) 1,013,750
6.559%, 7/1/2010 1,000,000 (b) 1,013,750
5%, 7/1/2036 2,000,000 1,677,720
Puerto Rico Public Buildings Authority,
Guaranteed Government Facilities Revenue
6.25%, 7/1/2015 (Insured; AMBAC) 1,100,000 1,174,437
Virgin Islands Public Finance Authority, Revenue
7.25%, 10/1/2018 (Prerefunded 10/1/2002) 2,750,000 3,030,582
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $54,933,840) 53,582,643
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--11.0%
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS--8.5%
Massachusetts Health and Educational Facilities Authority,
Revenue, VRDN (Capital Assets Program):
3.45% 2,400,000 (c) 2,400,000
3.45% 500,000 (c) 500,000
3.50% 2,200,000 (c) 2,200,000
U. S. RELATED--2.5%
Puerto Rico Commonwealth Highway and
Transportation Authority, VRDN 3.10% 1,500,000 (c) 1,500,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $6,600,000) 6,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $61,533,840) 100.1% 60,182,643
LIABILITIES, LESS CASH AND RECEIVABLES (.1%) (80,127)
NET ASSETS 100.0% 60,102,516
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond MBIA Municipal Bond Investors Assurance
Assurance Corporation Insurance Corporation
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
FGIC Financial Guaranty Insurance Company
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 39.9
AA Aa AA 11.1
A A A 13.9
BBB Baa BBB 17.0
F-1+, F-1 MIG1, VMIG1 & P1 SP1 & A1 11.0
Not Rated (d) Not Rated (d) Not Rated (d) 7.1
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 61,533,840 60,182,643
Cash 790,598
Interest receivable 1,058,273
Prepaid expenses 13,542
62,045,056
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 30,496
Due to Distributor 15,110
Payable for investment securities purchased 1,886,876
Payable for shares of Beneficial Interest redeemed 7,190
Accrued expenses 2,868
1,942,540
- --------------------------------------------------------------------------------
NET ASSETS ($) 60,102,516
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 61,657,187
Accumulated net realized gain (loss) on investments (203,474)
Accumulated net unrealized appreciation (depreciation) on investments--Note 4
(1,351,197)
- --------------------------------------------------------------------------------
NET ASSETS ($) 60,102,516
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSETS ($) 54,658,408 5,281,660 162,448
Shares Outstanding 5,076,003 490,829 15,079
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 10.77 10.76 10.77
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,998,118
EXPENSES:
Management fee--Note 3(a) 178,600
Shareholder servicing costs--Note 3(c) 101,709
Distribution fees--Note 3(b) 16,269
Registration fees 12,089
Professional fees 10,388
Prospectus and shareholders' reports 5,193
Custodian fees 3,988
Trustees' fees and expenses--Note 3(d) 460
Loan commitment fees--Note 2 215
Miscellaneous 4,276
TOTAL EXPENSES 333,187
INVESTMENT INCOME--NET 1,664,931
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (281,896)
Net unrealized appreciation (depreciation) on investments (4,976,462)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (5,258,358)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (3,593,427)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,664,931 3,402,500
Net realized gain (loss) on investments (281,896) 569,381
Net unrealized appreciation (depreciation)
on investments (4,976,462) (43,907)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (3,593,427) 3,927,974
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,516,758) (3,085,284)
Class B shares (142,347) (312,675)
Class C shares (5,826) (4,541)
Net realized gain on investments:
Class A shares -- (981,213)
Class B shares -- (112,114)
Class C shares -- (3,099)
TOTAL DIVIDENDS (1,664,931) (4,498,926)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 2,204,562 7,581,389
Class B shares 558,947 1,829,019
Class C shares 30,931 341,132
Dividends reinvested:
Class A shares 894,284 2,550,054
Class B shares 90,420 263,046
Class C shares 3,596 7,326
Cost of shares redeemed:
Class A shares (6,659,854) (7,190,547)
Class B shares (1,601,650) (1,888,781)
Class C shares (196,520) --
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,675,284) 3,492,638
TOTAL INCREASE (DECREASE) IN NET ASSETS (9,933,642) 2,921,686
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 70,036,158 67,114,472
END OF PERIOD 60,102,516 70,036,158
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (continued)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 197,837 632,649
Shares issued for dividends reinvested 80,343 215,156
Shares redeemed (593,385) (607,023)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (315,205) 240,782
- --------------------------------------------------------------------------------
CLASS B (A)
Shares sold 49,758 154,844
Shares issued for dividends reinvested 8,126 22,203
Shares redeemed (143,986) (160,697)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (86,102) 16,350
- --------------------------------------------------------------------------------
CLASS C
Shares sold 2,692 28,770
Shares issued for dividends reinvested 320 621
Shares redeemed (17,422) --
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (14,410) 29,391
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 95,129 CLASS B SHARES
REPRESENTING $1,056,324 WERE AUTOMATICALLY CONVERTED TO 95,110 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period , assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 11.68 11.75 11.40 11.50 11.53 11.64
Investment Operations:
Investment income--net .29 .59 .61 .63 .66 .69
Net realized and unrealized
gain (loss) on investments (.91) .11 .40 .17 -- (.06)
Total from Investment Operations (.62) .70 1.01 .80 .66 .63
Distributions:
Dividends from investment
income--net (.29) (.59) (.61) (.63) (.66) (.69)
Dividends from net realized
gain on investments -- (.18) (.05) (.27) (.03) --
Dividends in excess of net realized
gain on investments -- -- -- -- -- (.05)
Total Distributions (.29) (.77) (.66) (.90) (.69) (.74)
Net asset value, end of period 10.77 11.68 11.75 11.40 11.50 11.53
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (10.61)(b) 6.08 9.04 7.08 5.69 5.72
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .97(b) .93 .91 .92 .92 .94
Ratio of net investment income
to average net assets 5.17(b) 4.97 5.23 5.46 5.57 6.04
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 40.36(c) 47.11 48.69 24.45 34.86 13.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 54,658 62,958 60,529 65,809 68,812 72,731
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 11.67 11.75 11.40 11.49 11.52 11.63
Investment Operations:
Investment income--net .26 .53 .55 .57 .60 .63
Net realized and unrealized
gain (loss) on investments (.91) .10 .40 .18 -- (.06)
Total from Investment Operations (.65) .63 .95 .75 .60 .57
Distributions:
Dividends from investment
income--net (.26) (.53) (.55) (.57) (.60) (.63)
Dividends from net realized
gain on investments -- (.18) (.05) (.27) (.03) --
Dividends in excess of net
realized gain on investments -- -- -- -- -- (.05)
Total Distributions (.26) (.71) (.60) (.84) (.63) (.68)
Net asset value, end of period 10.76 11.67 11.75 11.40 11.49 11.52
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (11.13)(b) 5.46 8.49 6.63 5.15 5.15
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.49(b) 1.43 1.42 1.43 1.43 1.45
Ratio of net investment income
to average net assets 4.64(b) 4.46 4.71 4.94 5.03 5.47
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 40.36(c) 47.11 48.69 24.45 34.86 13.62
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 5,282 6,733 6,584 6,064 5,255 4,220
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 11.69 11.76 11.41 11.48 11.59
Investment Operations:
Investment income--net .25 .50 .52 .54 .40
Net realized and unrealized gain (loss)
on investments (.92) .11 .40 .20 (.08)
Total from Investment Operations (.67) .61 .92 .74 .32
Distributions:
Dividends from investment income--net (.25) (.50) (.52) (.54) (.40)
Dividends from net realized gain
on investments -- (.18) (.05) (.27) (.03)
Total Distributions (.25) (.68) (.57) (.81) (.43)
Net asset value, end of period 10.77 11.69 11.76 11.41 11.48
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) (11.51)(c) 5.28 8.22 6.55 3.76(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.68(c) 1.70 1.64 1.65 1.69(c)
Ratio of net investment income
to average net assets 4.47(c) 4.06 4.51 4.64 4.72(c)
Decrease reflected in above expense ratios
due to undertakings by the Manager
Portfolio Turnover Rate 40.36(d) 47.11 48.69 24.45 34.86
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1000) 162 345 1 1 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Massachusetts Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. which is a wholly owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are
valued each business day by an independent pricing service ("Service") approved
by the Board of Trustees. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the judgment
of the Service are valued at the mean between the quoted bid prices (as obtained
by the Service from dealers in such securities) and asked prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities) are
carried at fair value as determined by the Service, based on methods which
include consideration of: yields or prices of municipal securities of comparable
quality, coupon, maturity and type; indications as to values from dealers; and
general market conditions. Options and financial futures on municipal and U.S.
treasury securities are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market on each business day. Investments not
listed on an exchange or the national securities market, or securities for which
there were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $4,190 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $15,294 and $975, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $73,210, $7,647 and $325, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $9,611 pursuant to the transfer
agency agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$24,664,946 and $36,066,995, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
At October 31, 1999, accumulated net unrealized depreciation on investment was
$1,351,197, consisting of $1,483,739 gross unrealized appreciation and
$2,834,936 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Premier State Municipal Bond Fund
Massachusetts 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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 063/622SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Michigan Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Michigan Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Michigan Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Michigan Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Michigan Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -4.19% total return; its Class B shares provided a -4.44% total
return; and its Class C shares provided a -4.55% total return.(1) In comparison,
the Lipper Michigan Municipal Debt Funds category average provided a -4.64%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. The
fund's relative outperformance compared to its benchmark is primarily the result
of our security selection strategy in a relatively small Michigan bond market.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Michigan tax-exempt income as
is practical from a diversified portfolio of long-term municipal bonds without
undue risk. To achieve this objective, we employ two primary strategies. First,
we evaluate supply-and-demand factors in the bond market that are affected by
the relatively few municipal bonds issued by Michigan. Based on that assessment,
we select the individual Michigan tax-exempt bonds that we believe are most
likely to provide the highest returns with the least risk. We look at such
criteria as the bond' s yield, price, age, creditworthiness of its issuer,
insurance, and any provisions for early redemption. Under most circumstances, we
look for high yielding bonds that have 10-year call protection and that are
selling at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund's average duration to make cash
available for the purchase of higher yielding securities. Conversely, if we
expect demand for municipal bonds to surge at a time when we anticipate little
issuance, we may increase the fund's average duration to maintain current yields
for as long as practical. At other times, we try to maintain a "neutral" average
duration consistent with other Michigan municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that economic recovery in overseas markets and continued economic
strength in the United States might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Michigan issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration toward the short end of the neutral
range. Because a fund' s duration naturally extends as interest rates rise and
some bonds' prices fall below levels at which issuers might redeem them early,
bond funds tend to become more sensitive to the adverse short-term effects of
higher interest rates. Accordingly, during the period we sold some of our longer
maturity bonds, including some that were priced at deep discounts to face value.
In some cases, these sales also helped us lock in tax losses that may be used to
offset any taxable capital gains the fund may produce.
We attempted to reinvest the proceeds from those sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding Michigan bonds in the secondary market.
However, there was a relative scarcity of Michigan bonds with the defensive
characteristics we sought, including high yields and strong credit quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-MICHIGAN
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--99.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Allegan Hospital Finance Authority, HR (Allegan General
Hospital):
6.875%, 11/15/2017 4,460,000 4,385,250
7%, 11/15/2021 800,000 786,312
Anchor Bay School District
4.75%, 5/1/2026 (Insured; FGIC) 2,250,000 1,834,335
Big Rapids Public School District
4.75%, 5/1/2025 (Insured; FSA) 1,500,000 1,237,215
Brighton Area School District:
Zero Coupon, 5/1/2014 (Insured: AMBAC) 8,000,000 3,432,080
Zero Coupon, 5/1/2020 (Insured: AMBAC) 5,000,000 1,438,150
Capital Region Airport Authority, Airport Revenue
6.70%, 7/1/2021 (Insured; MBIA) 2,500,000 2,634,825
Chippewa County Hospital Finance Authority,
Revenue 5.625%, 11/1/2014 1,625,000 1,463,377
Chippewa Valley Schools 7%, 5/1/2010
(Prerefunded 5/1/2001) 1,275,000 (a) 1,348,873
Clarkston Community School
5.75%, 5/1/2016 (Insured; FGIC)
(Prerefunded 5/1/2005) 1,340,000 (a) 1,414,933
Detroit:
(Unlimited Tax) 6.35%, 4/1/2014 2,995,000 3,117,765
Water Supply Systems Revenue
8.968%, 7/1/2022 (Insured; FGIC) 1,500,000 (b) 1,657,500
Detroit City School District, School Building and Site
Improvement 4.75%, 5/1/2028 (Insured; FGIC) 10,950,000 8,932,024
Dickinson County Healthcare Systems, HR
5.70%, 11/1/2018 3,000,000 2,664,000
Fowlerville Community Schools School District
5.60%, 5/1/2016 (Insured; MBIA) 2,995,000 3,126,301
Grand Rapids Charter Township, Revenue (Porter Hills
Obligation Group) 5.45%, 7/1/2029 500,000 425,800
Grand Rapids Housing Finance Authority,
Multi-Family Revenue
7.625%, 9/1/2023 (Collateralized; FNMA) 1,000,000 1,093,090
Grand Valley State University, College and
University Revenue
5.50%, 2/1/2018 (Insured; FGIC) 2,570,000 2,479,433
Huron Valley School District
Zero Coupon, 5/1/2018 (Insured; FGIC) 6,370,000 2,083,882
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Kalamazoo Hospital Finance Authority,
Hospital Facilities Revenue:
(Borgess Medical Center)
6.25%, 6/1/2014 (Insured; FGIC) 2,000,000 2,121,120
(Bronson Methodist Hospital)
5.75%, 5/15/2016 (Insured; MBIA) 755,000 736,503
Kenowa Hills Public Schools 5.875%, 5/1/2021
(Insured; MBIA) 3,360,000 3,323,611
Kent County, Airport Facilities Revenue
(Kent County International Airport):
5.90%, 1/1/2012 1,145,000 1,218,555
5.90%, 1/1/2013 1,095,000 1,165,343
6.10%, 1/1/2025 3,000,000 3,231,360
Lake Orion Community School District
5.80%, 5/1/2015 (Insured; AMBAC) 2,085,000 2,093,382
Leslie Public School (Ingham and Jackson Counties School
Building and Site) 6%, 5/1/2015
(Insured; AMBAC) (Prerefunded 5/1/2005) 1,000,000 (a) 1,067,910
Lincoln Consolidated School District
5%, 5/1/2028 (Insured; FSA) 1,000,000 853,980
Michigan Building Authority, Lease Revenue
6.75%, 10/1/2007 (Insured; AMBAC) 1,600,000 1,704,832
Michigan Higher Education Student Loan Authority,
Student Loan Revenue:
6.875%, 10/1/2007 (Insured; AMBAC) 2,250,000 2,333,543
7.55%, 10/1/2008 (Insured; MBIA) 500,000 521,235
6.125%, 9/1/2010 1,520,000 1,553,273
Michigan Hospital Finance Authority, HR:
(Crittenton Hospital) 6.70%, 3/1/2007 2,250,000 2,372,940
(Daughters of Charity National Health Systems--Providence
Hospital) 7%, 11/1/2021 (Prerefunded 11/1/2001) 2,700,000 (a) 2,891,214
(Detroit Medical Center) 8.125%, 8/15/2012 75,000 75,669
(Genesys Health Systems)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (a) 5,918,000
(Middle Michigan Obligated Group)
6.625%, 6/1/2010 (Prerefunded 6/1/2000) 2,000,000 (a) 2,032,100
(Sisters of Mercy Health Corp.)
6.25%, 2/15/2009 (Insured; FSA) 1,065,000 1,118,250
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan Housing Development Authority:
(Home Improvement Program) 7.65%, 12/1/2012 1,435,000 1,464,891
Rental Housing Revenue:
6.50%, 4/1/2006 2,000,000 2,111,220
7.70%, 4/1/2023 (Insured; FSA) 4,185,000 4,379,477
Michigan Housing Representatives, COP:
Zero Coupon, 8/15/2022 (Insured; AMBAC) 7,325,000 1,817,186
Zero Coupon, 8/15/2023 (Insured; AMBAC) 2,615,000 608,850
Michigan Municipal Bond Authority, Revenue
(State Revolving Fund):
6.50%, 10/1/2014 (Prerefunded 10/1/2004) 2,500,000 (a) 2,738,250
6.50%, 10/1/2017 (Prerefunded 10/1/2004) 3,500,000 (a) 3,833,550
Michigan Strategic Fund, Limited Obligation Revenue:
(Northeastern Community Mental Health Foundation)
8.25%, 1/1/2009 1,270,000 1,296,657
(NSF International Project)
5.75%, 8/1/2019 (LOC; First of America Bank) 2,075,000 1,981,750
(Ledyard Association Ltd. Partnership Project)
6.25%, 10/1/2011
(Insured; ITT Lyndon Property Insurance Co.) 3,075,000 3,134,102
SWDR (Genesee Power Station Project) 7.50%, 1/1/2021 3,000,000 3,127,590
Monroe County, PCR (Detroit Edison Project):
7.50%, 12/1/2019 (Insured; AMBAC) 4,650,000 4,803,961
7.875%, 12/1/2019 2,720,000 2,810,522
7.65%, 9/1/2020 (Insured; FGIC) 2,250,000 2,348,865
6.55%, 6/1/2024 (Insured; MBIA) 1,700,000 1,764,515
Monroe County Economic Development Corp., Ltd. Obligation
Revenue (Detroit Edison Co. Project)
6.95%, 9/1/2022 (Insured; FGIC) 2,000,000 2,260,020
Northville, Special Assessment (Wayne County)
7.875%, 1/1/2006 1,685,000 1,723,721
Northwestern Michigan College, Community College Improvement
Revenue 7%, 7/1/2011 1,800,000 1,898,388
Oakland County Economic Development Corp., Limited
Obligation Revenue (Pontiac Osteopathic Hospital Project)
9.625%, 1/1/2020 (Prerefunded 1/1/2000) 1,575,000 (a) 1,621,037
Plymouth-Canton Community School District
4.75%, 5/1/2023 (Insured; FSA) 3,000,000 2,496,120
Redford Unified School District
5.50%, 5/1/2015 (Insured; AMBAC) 1,260,000 1,231,108
Romulus Community Schools
Zero Coupon 5/1/2020 (Insured; FGIC) 1,385,000 400,750
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Romulus Economic Development Corp., Ltd. Obligation EDR
(Romulus Hir Ltd. Partnership Project)
7%, 11/1/2015 (Insured; ITT Lyndon Property Insurance Co.) 3,700,000 4,034,961
South Lyon Community Schools:
4.75%, 5/1/2023 (Insured; FGIC) 2,000,000 1,664,080
(School Building) 6.375%, 5/1/2018 (Prerefunded 5/1/2002) 1,500,000 (a) 1,596,270
Saint John's Public Schools 5.10%, 5/1/2025 (Insured; FGIC) 1,790,000 1,577,760
Wayne Charter County, Airport Revenue:
(Detroit Metropolitan Wayne County Airport)
5%, 12/1/2022 1,485,000 1,260,438
Special Facilities (Northwest Airlines Inc.) 6.75%, 12/1/2015 5,730,000 5,776,700
Wayne State University, University Revenues
5.125%, 11/15/2029 (Insured; FGIC) 1,500,000 1,306,275
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $147,304,816) 148,956,979
SHORT-TERM MUNICIPAL INVESTMENTS--1.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan Strategic Fund, VRDN:
Limited Obligation Revenue (Detroit Edison Co. Project)
3.20% (LOC; Barclays Bank PLC) 500,000 (c) 500,000
PCR (Consumers Power Project)
3.20% (Insured; AMBAC) 700,000 (c) 700,000
Midland County Economic Development Corp., Economic
Development Limited Obligation Revenue, VRDN
(Dow Chemical Co. Project) 3.65% 1,500,000 (c) 1,500,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $2,700,000) 2,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $150,004,816) 101.1% 151,656,979
LIABILITIES, LESS CASH AND RECEIVABLES (1.1%) (1,628,264)
NET ASSETS 100.0% 150,028,715
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond HR Hospital Revenue
Assurance Corporation LOC Letter of Credit
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FNMA Federal National Mortgage Association SWDR Solid Waste Disposal Revenue
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 55.6
AA Aa AA 12.6
A A A 8.6
BBB Baa BBB 4.6
F1 Mig1 SP1 1.8
Not Rated (d) Not Rated (d) Not Rated (d) 16.8
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST-SUBJECT TO PERIODIC
CHANGE. (D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND
STANDARD & POOR'S HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE
QUALITY TO THOSE RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 150,004,816 151,656,979
Cash 445,637
Interest receivable 2,855,756
Receivable for investment securities sold 451,510
Receivable for Beneficial Interest subscribed 44,338
Prepaid expenses 12,804
155,467,024
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 70,195
Due to Distributor 40,125
Payable for investment securities purchased 5,216,440
Payable for shares of Beneficial Interest redeemed 81,952
Accrued expenses 29,597
5,438,309
- --------------------------------------------------------------------------------
NET ASSETS ($) 150,028,715
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 148,719,400
Accumulated net realized gain (loss) on investments (342,848)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 1,652,163
NET ASSETS ($) 150,028,715
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 131,474,052 17,189,803 1,364,860
Shares Outstanding 9,043,171 1,182,714 93,870
- ---------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.54 14.53 14.54
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,853,916
EXPENSES:
Management fee--Note 3(a) 442,443
Shareholder servicing costs--Note 3(c) 258,826
Distribution fees--Note 3(b) 55,318
Registration fees 18,116
Professional fees 14,256
Custodian fees 9,087
Prospectus and shareholders' reports 4,966
Trustees' fees and expenses--Note 3(d) 984
Loan commitment fees--Note 2 317
Miscellaneous 3,355
TOTAL EXPENSES 807,668
INVESTMENT INCOME (NET) 4,046,248
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4 ($):
Net realized gain (loss) on investments (1,231,027)
Net unrealized appreciation (depreciation) on investments (9,776,147)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (11,007,174)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (6,960,926)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 4,046,248 8,377,835
Net realized gain (loss) on investments (1,231,027) 1,678,968
Net unrealized appreciation (depreciation)
on investments (9,776,147) (357,792)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (6,960,926) 9,699,011
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,559,897) (7,320,520)
Class B shares (450,330) (996,364)
Class C shares (36,021) (60,951)
Net realized gain on investments:
Class A shares -- (1,532,800)
Class B shares -- (242,336)
Class C shares -- (19,667)
TOTAL DIVIDENDS (4,046,248) (10,172,638)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 5,001,598 10,496,366
Class B shares 1,273,958 6,039,658
Class C shares 47,823 1,596,045
Dividends reinvested:
Class A shares 1,962,302 5,128,473
Class B shares 249,928 750,794
Class C shares 12,173 33,463
Cost of shares redeemed:
Class A shares (11,714,064) (18,726,345)
Class B shares (5,320,289) (5,296,289)
Class C shares (456,632) (368,225)
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS (8,943,203) (346,060)
TOTAL INCREASE (DECREASE) IN NET ASSETS (19,950,377) (819,687)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 169,979,092 170,798,779
END OF PERIOD 150,028,715 169,979,092
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 330,547 668,141
Shares issued for dividends reinvested 131,263 324,921
Shares redeemed (782,456) (1,188,891)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (320,646) (195,829)
- --------------------------------------------------------------------------------
CLASS B (A)
Shares sold 83,128 382,748
Shares issued for dividends reinvested 16,702 47,574
Shares redeemed (352,393) (336,686)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (252,563) 93,636
- --------------------------------------------------------------------------------
CLASS C
Shares sold 3,223 100,814
Shares issued for dividends reinvested 812 2,120
Shares redeemed (30,734) (23,362)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (26,699) 79,572
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 182,754 CLASS B SHARES
REPRESENTING $2,767,935 WERE AUTOMATICALLY CONVERTED TO 182,770 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 15.57 15.61 15.14 15.15 15.14 15.27
Investment Operations:
Investment income--net .38 .78 .80 .81 .83 .85
Net realized and unrealized
gain (loss) on investments (1.03) .12 .48 .21 .20 .11
Total from Investment Operations (.65) .90 1.28 1.02 1.03 .96
Distributions:
Dividends from investment
income--net (.38) (.78) (.80) (.81) (.83) (.85)
Dividends from net realized
gain on investments -- (.16) (.01) (.22) (.19) (.24)
Total Distributions (.38) (.94) (.81) (1.03) (1.02) (1.09)
Net asset value, end of period 14.54 15.57 15.61 15.14 15.15 15.14
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.31)(b) 5.89 8.55 6.89 6.81 6.65
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .93(b) .92 .92 .91 .93 .92
Ratio of net investment income
to average net assets 5.10(b) 4.96 5.12 5.34 5.35 5.66
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 14.21(c) 36.17 41.46 22.32 56.88 48.30
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 131,474 145,764 149,221 155,568 166,538 176,604
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.56 15.61 15.13 15.15 15.13 15.27
Investment Operations:
Investment income--net .35 .70 .72 .74 .75 .77
Net realized and unrealized
gain (loss) on investments (1.03) .11 .49 .20 .21 .10
Total from Investment Operations (.68) .81 1.21 .94 .96 .87
Distributions:
Dividends from investment
income--net (.35) (.70) (.72) (.74) (.75) (0.77)
Dividends from net realized
gain on investments -- (.16) (.01) (.22) (.19) (0.24)
Total Distributions (.35) (.86) (.73) (.96) (.94) (1.01)
Net asset value, end of period 14.53 15.56 15.61 15.13 15.15 15.13
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.81)(b) 5.29 8.08 6.27 6.33 6.01
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.44(b) 1.42 1.42 1.42 1.44 1.44
Ratio of net investment income
to average net assets 4.58(b) 4.44 4.61 4.82 4.82 5.10
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- 0.01
Portfolio Turnover Rate 14.21(c) 36.17 41.46 22.32 56.88 48.30
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 17,190 22,338 20,938 19,338 19,031 16,471
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
--------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996a
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 15.57 15.61 15.14 15.16 15.18
Investment Operations:
Investment income--net .33 .66 .67 .69 .50
Net realized and unrealized gain (loss)
on investments (1.03) .12 .48 .20 .17
Total from Investment Operations (.70) .78 1.15 .89 .67
Distributions:
Dividends from investment income--net (.33) (.66) (.67) (.69) (.50)
Dividends from net realized gain
on investments -- (.16) (.01) (.22) (.19)
Total Distributions (.33) (.82) (.68) (.91) (.69)
Net asset value, end of period 14.54 15.57 15.61 15.14 15.16
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) (9.03)(c) 5.08 7.70 5.94 6.12(c)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.69(c) 1.67 1.69 1.72 1.70(c)
Ratio of net investment income
to average net assets 4.36(c) 4.16 4.26 4.47 4.47(c)
Portfolio Turnover Rate 14.21(d) 36.17 41.46 22.32 56.88
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,365 1,877 640 241 133
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including, the Michigan Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust accounts separately for the assets, liabilities and operations of each
series. Expenses directly attributable to each fund are charged to that series'
operations; expenses which are applicable to all funds are allocated among them
on a pro rata basis.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $4,720 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 nor
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
mally declared and paid annually, but the fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"). To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the policy
of the fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$3,269 during the period ended October 31, 1999, from commisssions earned on
sales of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $49,120 and $6,198, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $174,484, $24,560 and $2,066, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $41,963 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999 amounted to
$22,237,902 and $26,176,340 respectively.
At October 31, 1999, accumulated net unrealized appreciation on investments was
$1,652,163, consisting of $6,100,809 gross unrealized appreciation and
$4,448,646 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund,
Michigan 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
100 Church Street
New York, New York 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 053/617SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Minnesota Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
15 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Minnesota Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Minnesota Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Minnesota Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Minnesota Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -4.69% total return; its Class B shares provided a -5.00% total
return; and its Class C shares provided a -5.12% total return.(1) In comparison,
the Lipper Minnesota Municipal Debt Funds category average provided a -4.67%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. The
fund' s modest relative underperformance compared to its benchmark is primarily
the result of our security selection strategy in a relatively small Minnesota
bond market, where a scarcity of new issuance limited our investment choices.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Minnesota tax-exempt income
as is practical from a diversified portfolio of long-term municipal bonds
without undue risk. To achieve this objective, we employ two primary strategies.
First, because Minnesota issues relatively few municipal bonds, we begin by
evaluating supply-and-demand factors. Based on that assessment, we select the
individual Minnesota tax-exempt bonds that we believe are most likely to provide
the highest returns with the least risk. We look at such criteria as the bond's
yield, price, age, creditworthiness of its issuer, insurance, and any provisions
for early redemption. Under most circumstances, we look for high yielding bonds
that have 10-year call protection and that are selling at a discount to face
value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the fund's average duration to make cash available for
the purchase of higher yielding securities. Conversely, if we expect demand for
municipal bonds to surge at a time when we anticipate little issuance, we may
increase the fund's average duration to maintain current yields for as long as
practical. At other times, we try to maintain a "neutral" average duration
consistent with other Minnesota municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that economic recovery in overseas markets and continued economic
strength in the United States might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Minnesota issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration within the neutral range. Because a
fund's duration naturally extends as interest rates rise and some bonds' prices
fall below levels at which issuers might redeem them early, bond funds tend to
become more sensitive to the adverse short-term effects of higher interest
rates. Accordingly, during the period we sold some of our longer maturity bonds,
including some that were priced at deep discounts to face value. In some cases,
these sales also helped us lock in tax losses that may be used to offset any
taxable capital gains the fund may produce.
We attempted to reinvest the proceeds from those sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding Minnesota bonds in the secondary market.
However, there was a relative scarcity of Minnesota bonds with the defensive
characteristics we sought, including high yields and strong credit quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-MINNESOTA
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--96.1% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MINNESOTA
Anoka County:
RRR (Northern States Power Co.):
4.50%, 12/1/2007 1,300,000 (a) 1,237,587
7.15%, 12/1/2008 1,150,000 1,176,266
SWDR (United Power Association Project)
6.95%, 12/1/2008 (Guaranteed; National Rural
Utilities Cooperative Finance Corp.) 3,825,000 3,956,809
Brooklyn Park 5.85%, 2/1/2016 (Insured; FSA) 1,425,000 1,431,883
Dakota County Housing and Redevelopment Authority, South
Saint Paul Revenue (Single Family-GNMA Program)
8.10%, 9/1/2012 65,000 66,377
Eden Prairie, MFHR:
(Eden Investments Project)
7.40%, 8/1/2025 (Insured; FHA) 500,000 514,705
(Welsh Parkway Apartments) 8%, 7/1/2026 (Insured; FHA) 2,760,000 2,873,684
Edina, Housing Development Revenue (Edina Park
Project) 7.70%, 12/1/2028 (Insured; FHA) 2,500,000 2,551,700
Golden Valley, Revenue (Covenant Retirement Communities)
5.50%, 12/1/2029 2,000,000 1,747,720
Grand Rapids Housing and Redevelopment Authority, Revenue
(Governmental Housing-Lakeshore Project)
5.30%, 10/1/2029 1,000,000 893,030
Harmony, MFHR (Zedakah Foundation Project)
5.95 %, 9/1/2020 1,235,000 1,214,623
Hastings, Health Care Facility Revenue (Regina Medical
Center) 5.30%, 9/15/2028 (Insured; ACA) 2,000,000 1,717,420
Hibbing Economic Development Authority,
Housing Development Revenue
4.70%, 10/1/2028 (Insured; MBIA) 715,000 588,581
Hubbard County, SWDR (Potlatch Corp. Project)
7.375%, 8/1/2013 1,000,000 1,024,040
Inver Grove Heights Independent School District Number 199
5.75%, 2/1/2017 2,225,000 2,213,942
Mahtomedi Independent School District Number 832
Zero Coupon, 2/1/2017 (Insured; MBIA) 1,275,000 457,406
Minneapolis:
Zero Coupon, 12/1/2014 1,825,000 770,187
Health Care Facilities Revenue (Shelter Care Foundation):
6%, 4/1/2010 965,000 907,611
6.50%, 4/1/2029 1,000,000 904,180
Home Ownership Program 7.10%, 6/1/2021 420,000 434,843
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
Minneapolis (continued):
HR (Lifespan Inc.-Minneapolis Children's Medical Center
Project) 7%, 12/1/2020 (Prerefunded 6/1/2001) 5,650,000 (a) 5,996,628
MFHR (Churchill Apartments Project)
7.05%, 10/1/2022 (Insured; FSA) 4,000,000 4,196,800
MFMR (Seward Towers Project)
7.375%, 12/20/2030 (Collateralized; GNMA) 2,350,000 2,424,072
Minneapolis and Saint Paul Metropolitan Airports Commission,
Airport Revenue:
5.125%, 1/1/2025 (Insured; FGIC) 2,500,000 2,201,650
5.125%, 1/1/2031 (Insured; FGIC) 2,150,000 1,865,921
Minneapolis Community Development Agency, Ltd. Tax
Support Development Revenue:
8%, 12/1/2009 300,000 306,438
7.75%, 12/1/2019 2,705,000 2,824,480
7.40%, 12/1/2021 2,000,000 2,132,380
Minneapolis-Saint Paul Housing and Redevelopment Authority,
Health Care Systems Revenue
(Group Health Plan Inc., Project) 6.75%, 12/1/2013 2,750,000 2,782,835
Minneapolis-Saint Paul Housing Finance Board, SFMR:
8.875%, 11/1/2018 (Collateralized; GNMA) 55,000 55,652
8.30%, 8/1/2021 (Collateralized; GNMA) 175,000 177,060
7.30%, 8/1/2031 (Collateralized; GNMA) 4,510,000 4,647,510
Minneapolis Special School District Number 001, COP:
5.90%, 2/1/2017 (Insured; MBIA) 4,400,000 4,423,496
5.65%, 2/1/2018 (Insured; MBIA) 1,075,000 1,051,554
State of Minnesota (Duluth Airport) 6.25%, 8/1/2014 2,500,000 2,579,375
Minnesota Agricultural and Economic Development Board,
Minnesota Small Business Development Loan Revenue
8.125%, 8/1/2009 500,000 502,040
Minnesota Higher Education Facilities Authority:
Adjustable Demand Revenue (Bethel College and Seminary)
5.10%, 4/1/2019 (LOC; Allied Irish Bank PLC) 4,100,000 3,633,461
College and University Revenue:
(College at Saint Benedict) 5.35%, 3/1/2020 1,000,000 898,050
(University of Saint Thomas):
5.35%, 4/1/2017 1,000,000 932,850
5.40%, 4/1/2022 2,200,000 2,031,964
Mortgage Revenue (Augsburg College) 5.30%, 10/1/2027 2,395,000 2,074,405
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
Minnesota Housing Finance Agency, Revenue:
Rental Housing 6.10%, 8/1/2009 1,975,000 1,984,263
Single Family Mortgage:
5.80% 7/1/2021 1,810,000 1,745,003
7.45%, 7/1/2022 (Insured; FHA) 1,600,000 1,647,376
6.95%, 7/1/2026 2,275,000 2,355,262
Minnesota Public Facilities Authority, Water Pollution
Control Revenue:
6.95%, 3/1/2013 (Prerefunded 3/1/2001) 3,000,000 (a) 3,164,340
6.50%, 3/1/2014 (Prerefunded 3/1/2001) 5,200,000 (a) 5,539,144
New Hope, Housing and Health Care Facilities Revenue
(Masonic Home - North Ridge):
5.90, 3/1/2019 1,000,000 890,580
5.875%, 3/1/2029 3,000,000 2,573,340
Northern Municipal Power Agency, Electric System Revenue
Residual Certificates 6.995%, 1/1/2016 (Insured; FSA) 6,765,000 (b) 6,166,703
City of Red Wing, Health Care Facilities Revenue
(River Region Obligation Group) 6.50%, 9/1/2022 3,445,000 3,469,494
Rosemount Independent School District Number 196
Zero Coupon, 4/1/2014 (Insured; MBIA) 3,000,000 1,313,400
Saint Cloud, Hospital Facilities Revenue
(The Saint Cloud Hospital)
7%, 7/1/2020 (Insured; AMBAC) (Prerefunded 7/1/2001) 1,000,000 (a) 1,063,420
Saint Paul Housing and Redevelopment Authority, Revenue:
Hospital (HealthEast Project):
5.70%, 11/1/2015 (Insured; ACA) 2,000,000 1,902,320
5.85%, 11/1/2017 (Insured; ACA) 1,000,000 959,730
Single Family Mortgage
6.90%, 12/1/2021 (Insured; FNMA) 2,045,000 2,108,477
Sartell, PCR (Champion International Corp. Project)
6.95%, 10/1/2012 5,000,000 5,217,100
Seaway Port Authority of Duluth, Industrial Development Dock
and Wharf Revenues (Cargill Inc. Project) 6.80%, 5/1/2012 3,000,000 3,164,520
Southern Municipal Power Agency,
Power Supply System Revenue:
5% 1/1/2016 (Insured; MBIA) 1,470,000 1,329,644
Zero Coupon, 1/1/2021 (Insured; MBIA) 8,000,000 2,205,200
Zero Coupon, 1/1/2025 (Insured; MBIA) 5,255,000 1,127,250
Zero Coupon, 1/1/2026 (Insured; MBIA) 15,530,000 3,125,723
Zero Coupon, 1/1/2027 (Insured; MBIA) 4,800,000 908,688
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
University of Minnesota, College and University Revenue
5.50%, 7/1/2021 5,925,000 5,703,227
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project):
5.375%, 11/15/2018 (Insured; ACA) 5,000,000 4,488,450
5.50%, 11/15/2027 (Insured; ACA) 2,455,000 2,192,315
Western Minnesota Municipal Power Agency, Electric Power
and Light Revenue 5.50%, 1/1/2012 (Insured; AMBAC) 1,000,000 1,003,510
White Bear Lake Independent School District Number 624
5.75%, 2/1/2017 1,265,000 1,258,713
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $146,420,582) 143,028,407
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA
Beltrami County, Environmental Control Revenue,
VRDN (Northwood Panelboard Co. Project)
3.30% (LOC; Union Bank of Switzerland) 3,400,000 (c) 3,400,000
Cohasset, Revenue, VRDN
(Minnesota Power and Light Co. Project)
3.20% (LOC; ABN Amro Bank N.V.) 1,000,000 (c) 1,000,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,400,000) 4,400,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS--100.0%
(cost $150,820,582) 99.1% 147,428,407
CASH AND RECEIVABLES (NET) .9% 1,405,830
NET ASSETS 100.0% 148,834,237
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
ACA American Capital Access LOC Letter of Credit
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors Assurance
Corporation Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
FHA Federal Housing Administration PCR Pollution Control Revenue
FNMA Federal National Mortgage Association RRR Resources Recovery Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage SWDR Solid Waste Disposal Revenue
Association VRDN Variable Rate Demand Notes
HR Hospital Revenue
Summary of Combined Ratings
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 40.1
AA Aa AA 19.5
A A A 18.8
BBB Baa BBB 10.5
F1 MIG1 SP1 3.0
Not Rated(d) Not Rated(d) Not Rated(d) 8.1
100.0
A BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
B INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY
C SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO
PERIODIC CHANGE.
D SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 150,820,582 147,428,407
Cash 208,166
Interest receivable 2,469,327
Receivable for investment securities sold 877,156
Receivable for shares of Beneficial Interest subscribed 2,850
Prepaid expenses 14,195
151,000,101
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 69,992
Due to Distributor 41,221
Payable for investment securities purchased 1,746,165
Payable for shares of Beneficial Interest redeemed 293,916
Accrued expenses 14,570
2,165,864
- --------------------------------------------------------------------------------
NET ASSETS ($) 148,834,237
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 151,795,969
Accumulated net realized gain (loss) on investments 430,443
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,392,175)
- --------------------------------------------------------------------------------
NET ASSETS ($) 148,834,237
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 127,495,595 20,522,275 816,367
Shares Outstanding 8,972,421 1,441,882 57,372
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 14.21 14.23 14.23
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 4,777,820
EXPENSES:
Management fee--Note 3(a) 434,830
Shareholder servicing costs--Note 3(c) 243,640
Distribution fees--Note 3(b) 67,076
Registration fees 16,128
Prospectus and shareholders' reports 11,573
Custodian fees 9,472
Professional fees 8,393
Loan commitment fees--Note 2 306
Miscellaneous 2,149
TOTAL EXPENSES 793,567
INVESTMENT INCOME--NET 3,984,253
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (158,312)
Net unrealized appreciation (depreciation) on investments (11,516,757)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (11,675,069)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (7,690,816)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 3,984,253 8,002,206
Net realized gain (loss) on investments (158,312) 1,265,513
Net unrealized appreciation (depreciation)
on investments (11,516,757) (1,000,899)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (7,690,816) 8,266,820
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (3,382,753) (6,587,991)
Class B shares (576,460) (1,370,327)
Class C shares (25,040) (43,888)
Net realized gain on investments:
Class A shares -- (303,409)
Class B shares -- (72,456)
Class C shares -- (2,946)
TOTAL DIVIDENDS (3,984,253) (8,381,017)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 11,092,758 15,840,640
Class B shares 1,311,724 6,424,682
Class C shares 29,684 759,136
Dividends reinvested:
Class A shares 2,034,904 4,269,607
Class B shares 356,695 925,393
Class C shares 18,290 38,489
Cost of shares redeemed:
Class A shares (10,203,031) (11,847,645)
Class B shares (8,862,393) (6,315,442)
Class C shares (567,891) (31,617)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,789,260) 10,063,243
TOTAL INCREASE (DECREASE) IN NET ASSETS (16,464,329) 9,949,046
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 165,298,566 155,349,520
END OF PERIOD 148,834,237 165,298,566
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 749,009 1,027,749
Shares issued for dividends reinvested 138,655 276,384
Shares redeemed (691,909) (767,790)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 195,755 536,343
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 87,439 414,987
Shares issued for dividends reinvested 24,200 59,803
Shares redeemed (598,258) (409,838)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (486,619) 64,952
- --------------------------------------------------------------------------------
CLASS C
Shares sold 1,990 48,848
Shares issued for dividends reinvested 1,241 2,489
Shares redeemed (38,660) (2,051)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (35,429) 49,286
A DURING THE PERIOD ENDED OCTOBER 31, 1999, 440,598 CLASS B SHARES
REPRESENTING $6,538,272 WERE AUTOMATICALLY CONVERTED TO 441,435 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 15.30 15.30 15.03 14.98 14.90 14.72
Investment Operations:
Investment income--net .38 .78 .82 .82 .82 .83
Net realized and unrealized gain
(loss) on investments (1.09) .04 .27 .09 .08 .18
Total from Investment Operations (.71) .82 1.09 .91 .90 1.01
Distributions:
Dividends from investment
income--net (.38) (.78) (.82) (.82) (.82) (.83)
Dividends from net realized gain
on investments -- (.04) -- (.04) -- --
Total Distributions (.38) (.82) (.82) (.86) (.82) (.83)
Net asset value, end of period 14.21 15.30 15.30 15.03 14.98 14.90
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (9.30)(b) 5.41 7.36 6.16 6.11 7.14
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .91(b) .91 .90 .91 .90 .90
Ratio of net investment income
to average net assets 5.13(b) 5.05 5.32 5.42 5.41 5.68
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 7.11(c) 41.27 13.37 25.82 35.47 51.95
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 127,496 134,314 126,115 129,031 138,058 145,444
A EXCLUSIVE OF SALES CHARGE.
B ANNUALIZED.
C NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 15.33 15.33 15.06 15.01 14.92 14.74
Investment Operations:
Investment income--net .34 .70 .74 .74 .74 .75
Net realized and unrealized gain
(loss) on investments (1.10) .04 .27 .09 .09 .18
Total from Investment Operations (.76) .74 1.01 .83 .83 .93
Distributions:
Dividends from investment
income--net (.34) (.70) (.74) (.74) (.74) (.75)
Dividends from net realized gain
on investments -- (.04) -- (.04) -- --
Total Distributions (.34) (.74) (.74) (.78) (.74) (.75)
Net asset value, end of period 14.23 15.33 15.33 15.06 15.01 14.92
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (9.92)(b) 4.86 6.79 5.60 5.62 6.57
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.44(b) 1.43 1.42 1.44 1.43 1.44
Ratio of net investment income
to average net assets 4.59(b) 4.52 4.79 4.90 4.87 5.13
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 7.11(c) 41.27 13.37 25.82 35.47 51.95
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 20,522 29,562 28,568 26,004 25,617 23,217
A EXCLUSIVE OF SALES CHARGE.
B ANNUALIZED.
C NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
-------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 15.33 15.33 15.06 15.01 14.96
Investment Operations:
Investment income--net .32 .65 .69 .70 .50
Net realized and unrealized gain (loss)
on investments (1.10) .04 .27 .09 .05
Total from Investment Operations (.78) .69 .96 .79 .55
Distributions:
Dividends from investment income--net (.32) (.65) (.69) (.70) (.50)
Dividends from net realized gain
on investments -- (.04) -- (.04) --
Total Distributions (.32) (.69) (.69) (.74) (.50)
Net asset value, end of period 14.23 15.33 15.33 15.06 15.01
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (10.16)(c) 4.53 6.46 5.34 5.15(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.73(c) 1.74 1.73 1.67 1.42(c)
Ratio of net investment income to
average net assets 4.33(c) 4.16 4.40 4.62 4.00(c)
Portfolio Turnover Rate 7.11(d) 41.27 13.37 25.82 35.47
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 816 1,422 667 307 373
A FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
B EXCLUSIVE OF SALES CHARGE.
C ANNUALIZED.
D NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series, including the Minnesota Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such 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 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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$238 during the period ended October 31, 1999, from commissions earned on sales
of the fund's shares.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $62,743 and $4,333, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 1999, Class A, Class B and Class C shares
were charged $164,834, $31,372 and $1,444, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $33,608 pursuant to the transfer
agency agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period October 31, 1999, amounted to
$11,036,639 and $24,310,310, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$3,392,175, consisting of $2,981,053 gross unrealized appreciation and
$6,373,228 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTES
For More Information
Dreyfus Premier State Municipal Bond Fund, Minnesota
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 055/618SA9910
================================================================================
Dreyfus Premier State
Municipal Bond Fund,
New Jersey Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
13 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
New Jersey Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, New Jersey Series, covering the six-month period from May
1, 1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund, New
Jersey Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, New Jersey Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -7.16% total return; its Class B shares provided a -7.41% total
return; and its Class C shares provided a -7.50% total return.(1) In comparison,
the Lipper New Jersey Municipal Debt Funds category average provided a -5.29%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. The
fund' s relative underperformance compared to its benchmark is primarily the
result of our longer-than-average duration, which has been difficult to shorten
due to a lack of new bond issuance. We have attempted to offset our longer
duration with a security selection strategy designed to take advantage of
attractive values created by the market's decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and New Jersey tax-exempt income
as is practical from a diversified portfolio of long-term municipal bonds
without undue risk. To achieve this objective, we employ two primary strategies.
First, because New Jersey issues relatively few municipal bonds, we begin by
evaluating supply-and-demand factors in the bond market. Based on that
assessment, we select the individual New Jersey tax-exempt bonds that we believe
are most likely to provide the highest returns with the least risk. We look at
such criteria as the bond's yield, price, age, creditworthiness of its issuer,
insurance, and any provisions for early redemption. Under most circumstances, we
look for high yielding bonds that have 10-year call protection and that are
selling at a discount to face value.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, we may
reduce the fund' s average duration to make cash available for the purchase of
higher yielding securities. Conversely, if we expect demand for municipal bonds
to surge at a time when we anticipate little issuance, we may increase the
fund' s average duration to maintain current yields for as long as practical. At
other times, we try to maintain a "neutral" average duration consistent with
other New Jersey municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that economic recovery in overseas markets and continued economic
strength in the United States might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from New Jersey issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration. Because a fund's duration naturally
extends as interest rates rise and some bonds' prices fall below levels at which
issuers might redeem them early, bond funds tend to become more sensitive to the
adverse short-term effects of higher interest rates. Accordingly, during the
period we attempted to sell some of our longer maturity bonds, including some
that were priced at deep discounts to face value. In some cases, these sales
also helped us lock in tax losses that may be used to offset any taxable capital
gains the fund may produce.
We attempted to reinvest the proceeds from those sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding New Jersey bonds in the secondary market.
However, there was a relative scarcity of New Jersey bonds with the defensive
characteristics we sought, including high yields and strong credit quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-NEW JERSEY
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN AGREEMENT IN EFFECT THROUGH 4/30/00, AT WHICH TIME IT
MAY BE EXTENDED, TERMINATED OR MODIFIED. HAD THESE EXPENSES NOT BEEN ABSORBED,
THE FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--87.4% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW JERSEY--85.5%
Camden County Improvement Authority, Revenue
(Health Care Redevelopment
Project - Cooper Health System Obligation Group)
5.875%, 2/15/2015 100,000 76,970
East Orange Board of Education COP
(AGH Leasing Inc) Zero Coupon, 8/1/2017 (Insured; FSA) 1,420,000 496,219
Essex County Improvement Authority
Utility System Revenue
(Orange Franchise Acquisition Project)
5.75%, 7/1/2027 (Insured; MBIA) 500,000 492,130
Mercer County Improvement Authority, Revenue
(County Courthouse Project) 5.75%, 11/1/2017 500,000 500,565
New Jersey GO, 5%, 2/1/2014 1,340,000 1,257,268
New Jersey Economic Development Authority, Revenue
First Mortgage
(The Evergreens):
6%, 10/1/2017 650,000 595,296
6%, 10/1/2022 700,000 625,723
(Fellowship Village) 5.50%, 1/1/2018 450,000 399,524
(Educational Testing Service) 4.75%, 5/15/2025
(Insured; MBIA) 900,000 757,503
Special Facility (Continental Airlines Inc. Project)
6.25%, 9/15/2019 1,320,000 1,253,749
(Transportation Project) 6%, 5/1/2016 (Insured; FSA) 1,000,000 1,020,680
Water Facilities (New Jersey American Water Co. Inc. Project)
6.50%, 4/1/2022 (Insured; FGIC) 500,000 514,530
New Jersey Educational Facilities Authority, Revenue:
(Monmouth University) 5.80%, 7/1/2022 395,000 374,709
(Trenton State College) 6%, 7/1/2019 (Insured; AMBAC) 500,000 504,500
New Jersey Health Care Facilities Financing Authority, Revenue:
(Burdette Tomlin Memorial Hospital) 5.50%, 7/1/2019 500,000 457,040
(General Hospital Center at Passaic)
6.75%, 7/1/2019 (Insured; FSA) 550,000 603,999
(Palisades Medical Center Obligation Group)
5.25%, 7/1/2028 250,000 216,680
(Saint Barnabas) Zero Coupon, 7/1/2023 (Insured; MBIA) 1,000,000 236,740
(Saint Elizabeth Hospital Obligation Group) 6%, 7/1/2020 225,000 206,195
(Virtua Health Issue) 4.50%, 7/1/2028 (Insured; FSA) 250,000 195,975
New Jersey Highway Authority, Garden State Parkway General
Revenue 6%, 1/1/2019 640,000 657,254
New Jersey Housing and Mortgage Finance Agency,
Home Buyer Revenue
6.05%, 10/1/2028 (Insured; MBIA) 500,000 504,615
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
New Jersey Turnpike Authority, Turnpike Revenue
6.50%, 1/1/2016 220,000 235,492
Port Authority of New York and New Jersey:
Special Obligation Revenue (Special Project)
(JFK International Air Terminal) 5.75%, 12/1/2022
(Insured; MBIA) 335,000 326,012
South Jersey Transportation Authority, LR
(Raytheon Aircraft Service Inc. Project) 6.15%, 1/1/2022 500,000 469,515
U.S. RELATED--1.9%
Puerto Rico Housing Bank and Finance Agency, SFMR
6.25%, 4/1/2029 (Insured GNMA) 290,000 293,048
TOTAL LONG-TERM INVESTMENTS
(cost $13,982,889) 13,271,931
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--5.9%
- ------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY;
New Jersey Economic Development Authority, VRDN
Dock Facility Revenue (Bayonne/Imtt Project)
(LOC; Bank One Corp.) 3.50% 300,000 (a) 300,000
New Jersey Economic Development Authority, EDR, VRDN:
(Dow Chemical - El Dorado Terminal) 3.45% 200,000 (a) 200,000
(Foreign Trade Zone Project)
(LOC; Bank of New York) 3.50% 200,000 (a) 200,000
Port Authority of New York and New Jersey,
Special Obligation Revenue, VRDN
(Versatile Structure Obligation) 3.60% 200,000 (a) 200,000
TOTAL SHORT-TERM INVESTMENTS
(cost $900,000) 900,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $14,882,889) 93.3% 14,171,931
CASH AND RECEIVABLES (NET) 6.7% 1,017,358
NET ASSETS 100.0% 15,189,289
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond Assurance GO General Obligation
Corporation LOC Letter of Credit
COP Certificate of Participation LR Lease Revenue
EDR Economic Development Revenue MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage VRDN Variable Rate Demand Notes
Association
Summary of Combined Ratings
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 46.7
AA Aa AA 12.4
A A A 6.4
BBB Baa BBB 10.2
BB Ba BB 8.8
B B B .5
F1 MIG1/P1 SP1/A1 6.4
Not Rated(b) Not Rated(b) Not Rated(b) 8.6
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
(C) AT OCTOBER 31, 1999, THE FUND HAD $3,962,702 (26.1%) OF NET ASSETS INVESTED
IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT UPON
REVENUES GENERATED FROM TRANSPORTATION PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 14,882,889 14,171,931
Cash 77,930
Receivable for investment securities sold 732,349
Interest receivable 198,624
Prepaid expenses 14,186
Due from The Dreyfus Corporation 6,596
15,201,616
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to Distributor 7,775
Accrued expenses 4,552
12,327
- --------------------------------------------------------------------------------
NET ASSETS ($) 15,189,289
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 16,064,561
Accumulated net realized gain (loss) on investments (164,314)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (710,958)
- --------------------------------------------------------------------------------
NET ASSETS ($) 15,189,289
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 4,812,511 10,101,895 274,883
Shares Outstanding 403,694 847,696 23,038
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.92 11.92 11.93
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 454,883
EXPENSES:
Management fee--Note 3(a) 44,999
Distribution fees--Note 3(b) 28,584
Shareholder servicing costs--Note 3(c) 31,427
Professional fees 11,717
Registration fees 9,846
Prospectus and shareholders' reports 7,840
Custodian fees 1,920
Trustees' fees and expenses--Note 3(d) 138
Loan commitment fees--Note 2 35
Miscellaneous 5,327
TOTAL EXPENSES 141,833
Less--reduction in management fee due to undertaking--Note 3(a) (30,996)
NET EXPENSES 110,837
INVESTMENT INCOME--NET 344,046
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (366,888)
Net unrealized appreciation (depreciation) on investments (1,212,421)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,579,309)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (1,235,263)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 344,046 642,885
Net realized gain (loss) on investments (366,888) 231,591
Net unrealized appreciation (depreciation)
on investments (1,212,421) (73,816)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,235,263) 800,660
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (116,347) (212,301)
Class B shares (221,502) (424,424)
Class C shares (6,197) (6,160)
Net realized gain on investments:
Class A shares -- (32,649)
Class B shares -- (72,679)
Class C shares -- (1,052)
TOTAL DIVIDENDS (344,046) (749,265)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 466,653 1,206,947
Class B shares 457,201 2,694,789
Class C shares -- 254,987
Dividends reinvested:
Class A shares 69,898 155,326
Class B shares 141,848 318,957
Class C shares 6,060 5,677
Cost of shares redeemed:
Class A shares (412,477) (648,145)
Class B shares (1,067,076) (1,962,099)
Class C shares (48,716) (28,097)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (386,609) 1,998,342
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,965,918) 2,049,737
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 17,155,207 15,105,470
END OF PERIOD 15,189,289 17,155,207
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1998
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 36,589 90,729
Shares issued for dividends reinvested 5,605 11,685
Shares redeemed (32,512) (49,056)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 9,682 53,358
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 36,374 203,083
Shares issued for dividends reinvested 11,369 24,002
Shares redeemed (85,085) (147,804)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (37,342) (79,281)
- --------------------------------------------------------------------------------
CLASS C
Shares sold -- 19,197
Shares issued for dividends reinvested 484 428
Shares redeemed (3,948) (2,111)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,464) 17,514
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 539 CLASS B SHARES REPRESENTING
$6,854 WERE AUTOMATICALLY CONVERTED TO 539 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Year Nine Months Year
Ended Ended Ended Ended
October 31,
1999 April 30, April 30, July 31,
______________ _________________________
CLASS A SHARES (Unaudited) 1999 1998 1997(a) 1996 1995 1994(b)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 13.14 13.08 12.63 12.79 12.71 12.58 12.50
Investment Operations:
Investment income--net .29 .57 .61 .42 .59 .71 .18
Net realized and unrealized gain
(loss) on investments (1.22) .15 .56 (.02) .08 .13 .08
Total from Investment Operations (.93) .72 1.17 .40 .67 .84 .26
Distributions:
Dividends from investment
income--net (.29) (.57) (.61) (.42) (.59) (.71) (.18)
Dividends from net realized gain
on investments -- (.09) (.11) (.14) -- -- --
Total Distributions (.29) (.66) (.72) (.56) (.59) (.71) (.18)
Net asset value, end of period 11.92 13.14 13.08 12.63 12.79 12.71 12.58
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (14.20)(d) 5.52 9.48 4.25(d) 5.31 7.01 2.07(e)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .98(d) 1.08 1.02 1.20(d) 1.14 .10 --
Ratio of net investment income
to average net assets 4.57(d) 4.28 4.73 4.39(d) 4.55 5.60 5.25(d)
Decrease reflected in above
expense ratios due to
undertakings by the Manager
(limited to the expense
limitation provision of the
management agreement) .38(d) -- .03 .10(d) .08 1.35 2.50(d)
Portfolio Turnover Rate 71.90(e) 64.4 50.78 110.12(e) 28.14 43.48 --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 4,813 5,179 4,454 4,837 5,212 4,981 2,318
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) FROM MAY 4, 1994 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1994.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Nine
Ended Months
October 31, Year Ended Ended Year Ended
1999 April 30, April 30, July 31,
______________ _________________________
CLASS B SHARES (Unaudited) 1999 1998 1997(a) 1996 1995 1994(b)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 13.14 13.07 12.63 12.79 12.71 12.58 12.50
Investment Operations:
Investment income--net .26 .50 .55 .37 .52 .65 .16
Net realized and unrealized gain
(loss) on investments (1.22) .16 .55 (.02) .08 .13 .08
Total from Investment Operations (.96) .66 1.10 .35 .60 .78 .24
Distributions:
Dividends from investment
income--net (.26) (.50) (.55) (.37) (.52) (.65) (.16)
Dividends from net realized gain
on investments -- (.09) (.11)(a) (.14) -- -- --
Total Distributions (.26) (.59) (.66) (.51) (.52) (.65) (.16)
Net asset value, end of period 11.92 13.14 13.07 12.63 12.79 12.71 12.58
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (C) (14.70)(d) 5.08 8.85 3.74(d) 4.79 6.48 1.94(e)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.52(d) 1.58 1.53 1.69(d) 1.63 .61 .50(d)
Ratio of net investment income
to average net assets 4.04(d) 3.78 4.20 3.88(d) 4.04 5.00 4.69(d)
Decrease reflected in above
expense ratios due to
undertakings by the Manager
(limited to the expense
limitation provision of the
management agreement) .38(d) -- .03 .09(d) .08 1.29 2.50(d)
Portfolio Turnover Rate 71.90(e) 64.40 50.78 110.12(e) 28.14 43.48 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 10,102 11,628 10,533 8,680 8,910 6,852 2,373
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) FROM MAY 4, 1994 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1994.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Nine
Ended Months Year
October 31, Ended Ended
1999 Year Ended April 30, April 30, July 31,
___________________
CLASS C SHARES (Unaudited) 1999 1998 1997(a) 1996(b)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 13.15 13.09 12.64 12.78 13.21
Investment Operations:
Investment income--net .24 .46 .50 .35 .32
Net realized and unrealized gain
(loss) on investments (1.22) .15 .56 -- (.43)
Total from Investment Operations (.98) .61 1.06 .35 (.11)
Distributions:
Dividends from investment
income--net (.24) (.46) (.50) (.35) (.32)
Dividends from net realized gain
on investments -- (.09) (.11) (.14) --
Total Distributions (.24) (.55) (.61) (.49) (.32)
Net asset value, end of period 11.93 13.15 13.09 12.64 12.78
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (14.88)(d) 4.67 8.55 3.72(d) (1.21)(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.73(d) 1.88 1.91 1.97(d) 1.95(d)
Ratio of net investment income
to average net assets 3.83(d) 3.42 3.65 3.62(d) 3.68(d)
Decrease reflected in above
expense ratios due to
undertakings by the Manager
(limited to the expense
limitation provision of the
management agreement) .34(d) -- .06 .76(d) .02(d)
Portfolio Turnover Rate 71.90(e) 64.40 50.78 110.12(e) 28.14
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 275 349 118 1 6
(A) THE FUND CHANGED ITS FISCAL YEAR END FROM JULY 31 TO APRIL 30.
(B) FROM DECEMBER 4, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO JULY 31, 1996.
(C) EXCLUSIVE OF SALES CHARGE.
(D) ANNUALIZED.
(E) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a
non-diversified, open-end management investment company, and operates as a
series company currently offering thirteen series, including the New Jersey
Series (the "fund"). The fund' s investment objective is to maximize current
income exempt from Federal and, where applicable, from State income taxes,
without undue risk. The Dreyfus Corporation (the "Manager") serves as the fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $362 based on available
cash balances left on deposit. Income earned under this arrangement is included
in interest income.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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
Series may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee
is computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager has undertaken from July
29, 1999 to April 30, 2000, to reduce the management fee paid by the fund, to
the extent that the fund's aggregate expenses, excluding 12b-1 distribution
fees, taxes, brokerage, commitment fees, interest on borrowings and
extraordinary expenses, exceed an annual rate of .77 of 1% of the value of the
fund's average daily net assets. The reduction in management fee, pursuant to
the undertaking, amounted to $30,996 during the period ended October 31, 1999.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $27,370 and $1,214, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $6,365, $13,685 and $405, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $3,658 pursuant to the transfer
agency agreement.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$11,412,738 and $13,290,857, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$710,958, consisting of $42,106 gross unrealized appreciation and $753,064 gross
unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Premier State Municipal Bond Fund, New Jersey
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 380/381SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
North Carolina Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
North Carolina Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, North Carolina Series, covering the six-month period from
May 1, 1999 through October 31, 1999. Inside, you'll find valuable information
about how the fund was managed during the reporting period, including a
discussion with the fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund, North
Carolina Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, North Carolina Series perform
during the period?
For the six-month period ended October 31, 1999, the fund produced the following
total returns: Class A shares provided a -5.54% total return; Class B shares
provided a -5.87% total return; and Class C shares provided a -5.97% total
return.(1) In comparison, the Lipper North Carolina Municipal Debt Funds
category average provided a -5.14% total return(2) for the same period.
We attribute the modest underperformance of the fund relative to its benchmark
to our security selection strategy in a relatively small North Carolina bond
market. Although this strategy was designed to help the fund maintain its
average duration and preserve capital in a rising interest-rate environment, a
scarcity of new bonds limited our investment opportunities.
What is the fund's investment approach?
Our goal is to maximize current income exempt from federal and North Carolina
state income tax from a diversified portfolio of municipal bonds without undue
risk. To achieve this objective, we employ two primary strategies. First, we
evaluate supply-and-demand factors in the bond market that are affected by the
relatively few municipal bonds issued by North Carolina. Based on that
assessment, we select the individual North Carolina tax-exempt bonds that we
believe are most likely to provide the highest returns with the least risk. We
look at such criteria as the bond's yield, price, age, creditworthiness of its
issuer, insurance, and any provisions for early redemption. Under most
circumstances, we look for high yielding bonds that have 10-year call protection
and that are selling at a discount to face value.
While we do not attempt to predict changes in interest rates, we may tactically
manage the fund's average duration -- a measure of sensitiv
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
ity to changes in interest rates -- in anticipation of temporary
supply-and-demand changes. If we expect the supply of newly issued bonds to
increase, we may reduce the fund's average duration to make cash available for
the purchase of higher yielding securities. Conversely, if we expect demand for
municipal bonds to surge at a time when we anticipate little issuance, we may
increase the fund's average duration to maintain current yields for as long as
practical. At other times, we try to maintain a "neutral" average duration
consistent with other North Carolina municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates over the past six months. When the reporting period began on May
1, 1999, investors were concerned that economic recovery in overseas markets and
continued economic strength in the United States might rekindle long-dormant
inflationary pressures. In fact, in an attempt to forestall a potential
reacceleration of inflation, the Federal Reserve Board raised short-term
interest rates twice during the summer of 1999. This change in monetary policy
caused municipal bond prices to fall.
In addition, strong economic conditions contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from North Carolina issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration within the neutral range. Because a
fund's duration naturally extends as interest rates rise, and additionally some
bonds' prices fall below levels at which issuers might redeem them early, bond
funds tend to become more sensitive to the adverse short-term effects of higher
interest rates. Accordingly, during the period we sold some of our longer
maturity bonds, including some that were priced at deep discounts to face value.
In some cases, these sales also helped us lock in tax losses that may be used to
offset any taxable capital gains that the fund may produce.
We attempted to reinvest the proceeds from these sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding North Carolina bonds in the secondary
market. However, there was a relative scarcity of North Carolina bonds with the
defensive characteristics we sought, including high yields and strong credit
quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-NORTH
CAROLINA RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE
MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY
TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--87.2% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA--65.0%
Buncombe County Metropolitan Sewage District,
Sewage System Revenue
6.75%, 7/1/2022 (Prerefunded 7/1/2002) 500,000 (a) 538,775
Charlotte, Special Facilities Revenue
(Charlotte-Douglas International Airport)
5.60%, 7/1/2027 4,000,000 3,256,520
Dare County, Utility System Revenue
4.75%, 6/1/2024 (Insured; MBIA) 750,000 623,932
Monroe, Combined Enterprise System Revenue
4.50%, 3/1/2023 2,630,000 2,094,453
New Hanover County, HR
(New Hanover Regional Medical Center Project)
5.75%, 10/1/2026 (Insured; AMBAC) 3,280,000 3,203,051
New Hanover County Industrial Facilities and
Pollution Control Financing Authority
(Occidental Petroleum) 6.50%, 8/1/2014 1,000,000 1,009,370
North Carolina Eastern Municipal Power Agency,
Power System Revenue:
5.875%, 1/1/2013 1,610,000 1,523,044
6%, 1/1/2013 2,500,000 2,511,300
6%, 1/1/2022 1,000,000 918,570
North Carolina Educational Assistance Authority,
Guaranteed Student Loan Revenue
6.35%, 7/1/2016 3,875,000 3,904,062
North Carolina Housing Finance Agency:
Multi-Family Revenue
5.95%, 7/1/2021 (Insured; FHA) 1,905,000 1,875,415
Single Family Revenue:
5.75%, 3/1/2017 (Insured; FHA) 3,000,000 2,951,280
6.10%, 9/1/2025 (Insured; FHA) 220,000 222,328
6.50%, 9/1/2026 4,125,000 4,223,464
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue:
(Annie Penn Memorial Hospital Project)
7.50%, 8/15/2021 3,750,000 4,058,287
(Deerfield Episcopal Hospital):
6%, 11/1/2019 1,670,000 1,503,234
6%, 11/1/2027 1,330,000 1,164,003
(Firsthealth of the Carolinas) 4.75%, 10/1/2026 400,000 319,440
(Halifax Regional Medical Center) 5%, 8/15/2024 800,000 632,104
(Pitt County Memorial Hospital)
4.75%, 12/1/2028 (Insured; MBIA) 2,990,000 2,407,249
Principal
LONG TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA (CONTINUED)
North Carolina Medical Care Commission,
Health, Hospital and Nursing Home Revenue (continued):
(Wilson Memorial Hospital Project)
Zero Coupon, 11/1/2016 (Insured; AMBAC) 3,055,000 1,106,888
North Carolina Municipal Power Agency Number 1,
Catawba Electric Revenue:
5.50%, 1/1/2015 (Insured; MBIA) 4,000,000 3,865,960
5.75%, 1/1/2015 (Insured; MBIA) 1,590,000 1,556,038
Sampson Area Development Corp.,
Installment Payment Revenue
4.75%, 6/1/2024 (Insured; MBIA) 1,000,000 826,380
Shelby, Combined Enterprise System Revenue
5.625%, 5/1/2014 1,000,000 974,860
University of North Carolina, Multiple Utility Revenues:
Zero Coupon, 8/1/2018 2,500,000 815,950
4.50%, 10/1/2018 1,500,000 1,231,965
4.50%, 10/1/2023 1,580,000 1,254,725
University of North Carolina Hospitals at Chapel Hill, Revenue
5%, 2/15/2024 (Insured; AMBAC) 1,000,000 864,300
Wake County, Hospital System Revenue
Zero Coupon, 10/1/2010 (Insured; MBIA) 2,200,000 1,211,188
U.S. RELATED--22.2%
Guam Airport Authority, Airport and Marina Revenue
6.70%, 10/1/2023 2,000,000 2,096,660
Guam Power Authority, Electric Power and Light Revenues
6.30%, 10/1/2022 2,000,000 2,153,440
Commonwealth of Puerto Rico
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 600,000 (a) 648,018
Commonwealth of Puerto Rico
Infrastructure Financing Authority
6.495%, 7/1/2015 (Insured; AMBAC) 1,940,000 (b) 1,651,212
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines):
6.30%, 6/1/2023 (Guaranteed; AMR Corp.) 1,000,000 1,006,000
6.25%, 6/1/2026 (Guaranteed; AMR Corp.) 2,950,000 2,964,190
Virgin Islands Territory, Hugo Insurance Claims Fund Program
7.75%, 7/1/2011 1,160,000 1,234,170
Virgin Islands Public Finance Authority, Revenues
Matching Fund Loan Notes 7.25%, 10/1/2018 4,000,000 4,408,120
Virgin Islands Water and Power Authority,
Electric System Revenue 7.40%, 7/1/2011 1,690,000 1,791,823
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $72,979,663) 70,601,768
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--12.7% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA--9.0%
North Carolina Medical Care Commission, HR, VRDN:
(Carol Woods Project)
3.25% (LOC; Bank of America) 3,000,000 (c) 3,000,000
(Pooled Financing Project)
3.25% (LOC; First Union National Bank) 1,100,000 (c) 1,100,000
Wake County Industrial Facilities and
Pollution Control Financing Authority,
Revenue, VRDN (Carolina Power and Light Co. Project)
3.10% (LOC; First Union National Bank) 3,200,000 (c) 3,200,000
U.S. RELATED--3.7%
Puerto Rico Highway and Transportation Authority,
Transportation Revenue, VRDN 3.10%
(Insured; AMBAC, SBPA; Bank of Nova Scotia ) 3,000,000 (c) 3,000,000
TOTAL SHORT-TERM INVESTMENTS
(cost $10,300,000) 10,300,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $83,279,663) 99.9% 80,901,768
CASH AND RECEIVABLES (NET) .1% 94,890
NET ASSETS 100.0% 80,996,658
Summary of Abbreviations
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors Assurance
Corporation Insurance Corporation
FHA Federal Housing Administration SBPA Standby Bond Purchase Agreement
HR Hospital Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 34.6
AA Aa AA 12.9
A A A 6.8
BBB Baa BBB 22.1
F1 MIG1 SP1 12.7
Not Rated(d) Not Rated(d) Not Rated(d) 10.9
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY -- THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 83,279,663 80,901,768
Cash 1,410,854
Receivable for investment securities sold 1,346,020
Interest receivable 1,141,340
Receivable for shares of Beneficial Interest subscribed 248,521
Prepaid expenses 13,613
85,062,116
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 37,951
Due to Distributor 28,354
Payable for investment securities purchased 3,895,736
Payable for shares of Beneficial Interest redeemed 93,700
Accrued expenses 9,717
4,065,458
- --------------------------------------------------------------------------------
NET ASSETS ($) 80,996,658
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 83,472,026
Accumulated net realized gain (loss) on investments (97,473)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,377,895)
- --------------------------------------------------------------------------------
NET ASSETS ($) 80,996,658
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 55,215,840 25,292,225 488,593
Shares Outstanding 4,295,192 1,969,123 38,000
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 12.86 12.84 12.86
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
INVESTMENT INCOME ($):
INTEREST INCOME 2,463,071
EXPENSES:
Management fee--Note 3(a) 233,886
Shareholder servicing costs--Note 3(c) 139,206
Distribution fees--Note 3(b) 78,505
Registration fees 14,910
Professional fees 12,428
Custodian fees 4,258
Prospectus and shareholders' reports 2,808
Trustees' fees and expenses--Note 3(d) 528
Loan commitment fees--Note 2 163
Miscellaneous 5,245
TOTAL EXPENSES 491,937
INVESTMENT INCOME--NET 1,971,134
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (268,854)
Net unrealized appreciation (depreciation) on investments (6,680,487)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (6,949,341)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,978,207)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,971,134 3,869,834
Net realized gain (loss) on investments (268,854) 908,096
Net unrealized appreciation (depreciation)
on investments (6,680,487) (152,616)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,978,207) 4,625,314
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,302,984) (1,969,580)
Class B shares (658,478) (1,894,185)
Class C shares (9,672) (6,069)
Net realized gain on investments:
Class A shares -- (212,660)
Class B shares -- (248,449)
Class C shares -- (540)
TOTAL DIVIDENDS (1,971,134) (4,331,483)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 14,536,538 9,826,910
Class B shares 2,581,627 6,026,320
Class C shares 255,368 415,737
Dividends reinvested:
Class A shares 691,362 1,147,257
Class B shares 381,171 1,337,827
Class C shares 3,700 2,035
Cost of shares redeemed:
Class A shares (3,407,601) (4,905,844)
Class B shares (14,693,923) (13,287,728)
Class C shares (164,859) (25,569)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 183,383 536,945
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,765,958) 830,776
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 87,762,616 86,931,840
END OF PERIOD 80,996,658 87,762,616
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,071,445 701,323
Shares issued for dividends reinvested 51,996 81,450
Shares redeemed (253,319) (348,339)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 870,122 434,434
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 189,249 428,998
Shares issued for dividends reinvested 28,594 95,019
Shares redeemed (1,084,315) (947,962)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (866,472) (423,945)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 19,071 29,569
Shares issued for dividends reinvested 278 145
Shares redeemed (12,429) (1,805)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,920 27,909
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 933,181 CLASS B SHARES
REPRESENTING $12,665,399 WERE AUTOMATICALLY CONVERTED TO 932,724 CLASS A SHARES
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 13.95 13.91 13.23 12.91 12.72 12.73
Investment Operations:
Investment income--net .32 .66 .67 .67 .67 .70
Net realized and unrealized gain
(loss) on investments (1.09) .11 .68 .32 .19 (.01)
Total from Investment Operations (.77) .77 1.35 .99 .86 .69
Distributions:
Dividends from investment
income--net (.32) (.66) (.67) (.67) (.67) (.70)
Dividends from net realized gain
on investments -- (.07) -- -- -- --
Total Distributions (.32) (.73) (.67) (.67) (.67) (.70)
Net asset value, end of period 12.86 13.95 13.91 13.23 12.91 12.72
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (10.99)(b) 5.63 10.39 7.81 6.79 5.70
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .96(b) .94 .87 1.04 .98 .65
Ratio of net investment income
to average net assets 4.84(b) 4.68 4.89 5.10 5.11 5.63
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .02 .31
Portfolio Turnover Rate 10.38(c) 41.15 32.28 44.91 47.15 12.02
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 55,216 47,794 41,592 42,130 47,042 50,205
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
---------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 13.94 13.90 13.22 12.90 12.71 12.72
Investment Operations:
Investment income--net .29 .59 .60 .60 .60 .64
Net realized and unrealized gain
(loss) on investments (1.10) .11 .68 .32 .19 (.01)
Total from Investment Operations (.81) .70 1.28 .92 .79 .63
Distributions:
Dividends from investment
income--net (.29) (.59) (.60) (.60) (.60) (.64)
Dividends from net realized gain
on investments -- (.07) -- -- -- --
Total Distributions (.29) (.66) (.60) (.60) (.60) (.64)
Net asset value, end of period 12.84 13.94 13.90 13.22 12.90 12.71
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (11.64)(b) 5.10 9.84 7.27 6.25 5.12
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.49(b) 1.44 1.38 1.54 1.49 1.18
Ratio of net investment income
to average net assets 4.29(b) 4.16 4.39 4.59 4.59 5.08
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .02 .30
Portfolio Turnover Rate 10.38(c) 41.15 32.28 44.91 47.15 12.02
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 25,292 39,535 45,296 43,979 42,668 42,310
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
-------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($)
Net asset value, beginning of period 13.96 13.90 13.22 12.90 12.76
Investment Operations:
Investment income--net .27 .56 .57 .57 .40
Net realized and unrealized gain (loss)
on investments (1.10) .13 .68 .32 .14
Total from Investment Operations (.83) .69 1.25 .89 .54
Distributions:
Dividends from investment income--net (.27) (.56) (.57) (.57) (.40)
Dividends from net realized gain
on investments -- (.07) -- -- --
Total Distributions (.27) (.63) (.57) (.57) (.40)
Net asset value, end of period 12.86 13.96 13.90 13.22 12.90
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (11.84)(c) 5.02 9.58 7.00 5.92(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.68(c) 1.63 1.62 1.77 1.73(c)
Ratio of net investment income to
average net assets 4.06(c) 3.83 4.08 4.31 4.31(c)
Portfolio Turnover Rate 10.38(d) 41.15 32.28 44.91 47.15
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1000) 489 434 44 11 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the North Carolina Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are val
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
ued 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. Under the terms of the custody
agreement, the fund received net earnings credits of $4,585 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$26 during the period ended October 31, 1999, from commissions earned on sales
of the fund's shares.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
the fund' s 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, 1999, Class B and Class C shares were charged $76,718 and $1,787,
respectively, pursuant to the Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $67,357, $38,359 and $596, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $22,692 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$8,353,219 and $16,658,296, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$2,377,895, consisting of $1,430,683 gross unrealized appreciation and
$3,808,578 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, North
Carolina 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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 065/624SA9910
================================================================================
Dreyfus Premier State Municipal Bond Fund
Ohio Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
17 Financial Highlights
20 Notes to Financial Statements
26 Report of Independent Auditors
27 Important Tax Information
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Ohio Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Ohio Series, covering the six-month period from May 1, 1999
through October 31, 1999. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, W. Michael Petty.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund, Ohio
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Ohio Series perform during
the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
produced a -4.52% total return; its Class B shares produced a -4.76% total
return; and its Class C shares produced a -4.88% total return.(1) In comparison,
the Lipper Ohio Municipal Debt Funds category average produced a -4.73% total
return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest-rate environment. The
modest relative outperformance of the fund's Class A shares compared to its
benchmark is primarily the result of our security selection strategy in a
relatively small Ohio bond market.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Ohio tax-exempt income as is
practical from a diversified portfolio of longer term municipal bonds without
undue risk. To achieve this objective, we employ two primary strategies. First,
we evaluate supply-and-demand factors in the bond market that are affected by
the relatively few municipal bonds issued in Ohio. Based on that assessment, we
select the individual Ohio tax-exempt bonds that we believe are most likely to
provide the highest returns with the least amount of risk. We look at such
criteria as the bond' s yield, price, age, creditworthiness of its issuer,
insurance, and any provisions for early redemption. Under most circumstances, we
look for high yielding bonds that have 10-year call protection and are selling
at a discount to face value.
Second, while we do not attempt to predict changes in interest rates, we may
tactically manage the fund' s average duration -- a measure of sensitivity to
changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to increase, we may reduce the fund's average duration to make cash
available for the purchase of higher yielding securities. Conversely, if we
expect demand for municipal bonds to surge at a time when we anticipate little
issuance, we may increase the fund's average duration to maintain current yields
for as long as practical. At other times, we try to maintain a "neutral" average
duration consistent with other Ohio municipal bond funds.
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that economic recovery in overseas markets and continued economic
strength in the United States might rekindle long-dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999. This change in monetary policy caused municipal bond
prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Ohio issuers -- are currently
offering tax-exempt yields that compare very favorably with taxable yields after
adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on
maintaining the fund's average duration toward the short end of the neutral
range. Because a fund' s duration naturally extends as interest rates rise and
some bonds' prices fall below levels at which issuers might redeem them early,
bond funds tend to become more sensitive to the adverse short-term effects of
higher interest rates. Accordingly, during the period, we sold some of our
longer maturity bonds, including some that were priced at deep discounts to face
value. In some cases, these sales also helped us lock in tax losses that may be
used to offset any taxable capital gains the portfolio may produce.
We attempted to reinvest the proceeds from those sales into tax-exempt bonds
with defensive characteristics, which we believed had the potential to help us
preserve capital and maintain an attractive income stream in a declining market.
Although strong economic conditions reduced the issuance of new bonds during the
period, we had few problems finding Ohio bonds in the secondary market. However,
there was a relative scarcity of Ohio bonds with the defensive characteristics
we sought, including high yields and strong credit quality.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-OHIO
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
October 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--94.1% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Akron:
6%, 12/1/2012 1,380,000 1,448,310
Pension Revenue 4.75%, 12/1/2023 (Insured; AMBAC) 1,330,000 1,111,401
Sewer Systems Revenue
5.875%, 12/1/2016 (Insured; MBIA) 1,200,000 1,206,060
Akron-Wilbeth Housing Development Corp., First Mortgage
Revenue 7.90%, 8/1/2003 (Insured; FHA) 1,295,000 1,414,775
Allen County, Industrial First Mortgage Revenue
6.75%, 11/15/2008 (Guaranteed; K-Mart Corp.) 1,280,000 1,304,998
City of Barberton, Hospital Facilities Revenue
(The Barberton Citizens Hospital Co. Project)
7.25%, 1/1/2012 (Prerefunded 1/1/2002) 2,400,000 (a) 2,577,720
Board of Education of the Cleveland City School District
8%, 12/1/2001 1,080,000 1,126,267
Butler County, Hospital Facilities Improvement Revenue
(Fort Hamilton Hughes Group) 7.25%, 1/1/2001 1,775,000 1,782,064
City of Cambridge, HR (Guernsey Memorial Hospital Project)
8%, 12/1/2006 2,000,000 2,112,820
Clermont County, Hospital Facilities Revenue
(Mercy Health Systems):
5.625%, 9/1/2016 (Insured; AMBAC) 4,250,000 4,079,958
7.50%, 9/1/2019
(Prerefunded 9/1/2001) (Insured; AMBAC) 180,000 (a) 190,244
City of Cleveland:
Airport Special Revenue (Continental Airlines Inc. Project)
5.375%, 9/15/2027 5,000,000 4,162,800
COP:
(Motor Vehicle, Motorized and Communication Equipment)
7.10%, 7/1/2002 1,185,000 1,211,165
(Stadium Project)
5.25%, 11/15/2022 (Insured; AMBAC) 9,100,000 8,227,219
Parking Facility Improvement Revenue
8%, 9/15/2012 (Prerefunded 9/15/2002) 5,000,000 (a) 5,555,750
Waterworks Revenue 5.50%, 1/1/2021 (Insured; MBIA) 8,000,000 7,685,280
Cleveland-Cuyahoga County Port Authority, Revenue:
(Capital Improvements Project) 5.375%, 5/15/2019 1,000,000 869,000
(Port of Cleveland) 5.375%, 5/15/2018 2,860,000 2,481,393
(Rock & Roll Hall of Fame)
5.40%, 12/1/2015 (Insured; AMBAC) 2,540,000 2,428,113
Cleveland Public Power System, Revenue
5.833%, 11/15/2018 5,000,000 (b) 4,011,300
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Cuyahoga County:
HR:
Improvement:
(MetroHealth Systems Project) 6.125%, 2/15/2024 4,845,000 4,724,989
(University Hospitals Health)
5.625%, 1/15/2015 (Insured; MBIA) 3,695,000 3,573,730
(Meridia Health Systems)
7%, 8/15/2023 (Prerefunded 8/15/2001) 1,750,000 (a) 1,866,970
Jail Facilities 7%, 10/1/2013 (Prerefunded 10/1/2001) 6,125,000 (a) 6,547,257
Delaware County, Sewer Disposal Improvement
4.75%, 12/1/2024 (Insured; MBIA) 1,000,000 833,800
Eaton, IDR (Baxter International Inc. Project)
6.50%, 12/1/2012 1,500,000 1,554,615
Euclid City School District, Improvement
7.10%, 12/1/2011 (Prerefunded 12/1/2001) 1,000,000 (a) 1,075,730
Village of Evendale, IDR (Ashland Oil Inc. Project)
6.90%, 11/1/2010 2,000,000 2,073,720
Fairfield City School District,
School Improvement Unlimited Tax:
7.20%, 12/1/2011 (Insured; FGIC) 1,000,000 1,130,750
7.20%, 12/1/2012 (Insured; FGIC) 1,250,000 1,410,412
6.10%, 12/1/2015 (Insured; FGIC) 2,000,000 2,040,440
6%, 12/1/2020 (Insured; FGIC) 2,000,000 2,013,540
Findlay 5.875%, 7/1/2017 2,000,000 2,021,460
Franklin County:
Health Care Facilities Revenue, Improvement
(Friendship Village of Columbus)
5.375%, 8/15/2028 (Insured; ACA) 5,000,000 4,458,050
HR:
(Children's Hospital Project):
6.60%, 5/1/2013 4,000,000 4,275,040
5%, 5/1/2018 2,610,000 2,282,341
5.20%, 5/1/2029 (Insured; MBIA) 2,700,000 2,360,340
Holy Cross Health Systems Corp.:
(Mount Carmel Health) 6.75%, 6/1/2019
(Insured; MBIA) (Prerefunded 6/1/2002) 2,500,000 (a) 2,687,150
Improvement 5.80%, 6/1/2016 2,000,000 1,961,300
Improvement (Worthington Christian Village Congregate
Care Project):
10.25%, 8/1/2015 660,000 703,481
7.80%, 2/1/2017 (Insured; FHA) 5,690,000 5,966,306
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Gahanna-Jefferson Public Schools 4.75%, 12/1/2021 1,325,000 1,110,310
Gallia County Local School District 7.375%, 12/1/2004 570,000 634,564
Greater Cleveland Gateway Economic Development Corp.:
Senior Lien Excise Tax Revenue
6.875%, 9/1/2005 (Insured; FSA) 1,500,000 1,577,040
Stadium Revenue 7.50%, 9/1/2005 5,675,000 5,989,906
Greater Cleveland Regional Transit Authority
5.65%, 12/1/2016 (Insured; FGIC) 5,445,000 5,747,197
Hamilton County:
Hospital Facilities Improvement Revenue
Improvement (Deaconess Hospital) 7%, 1/1/2012 2,570,000 2,709,114
Mortgage Revenue (Judson Care Center) 7.80%, 8/1/2019
(Prerefunded 8/1/2000) (Insured; FHA, LOC; Citibank) 3,970,000 (a) 4,132,055
Hilliard School District, School Improvement:
Zero Coupon, 12/1/2013 (Insured; FGIC) 1,655,000 741,572
Zero Coupon, 12/1/2014 (Insured; FGIC) 1,655,000 690,300
Jefferson County (County Jail Construction)
5.75%, 12/1/2019 (Insured; FSA) 6,655,000 6,611,543
Kent State University, University Revenue
5.50%, 5/1/2017 (Insured; MBIA) 1,000,000 962,500
Kirtland Local School District 7.50%, 12/1/2009 760,000 777,229
Knox County, IDR (Weyerhaeuser Co. Project) 9%, 10/1/2007 1,000,000 1,208,660
Lakota Local School District 6.125%, 12/1/2017
(Insured; AMBAC) (Prerefunded 12/1/2005) 1,075,000 (a) 1,153,185
Lorain County, HR (Catholic Healthcare Partners):
5.625%, 9/1/2016 (Insured; MBIA) 2,625,000 2,522,678
5.625%, 9/1/2017 (Insured; MBIA) 3,350,000 3,207,960
Lowellville, Sanitary Sewer Systems Revenue
(Browning-Ferris Industries Inc.)
7.25%, 6/1/2006 1,000,000 1,006,470
Lucas County, HR (Promedia Healthcare Obligation Group)
5.375%, 11/15/2023 (Insured; AMBAC) 1,510,000 1,379,007
Mahoning County, Health Care Facilities Revenue
(Youngstown Osteopathic Hospital Project)
7.60%, 8/1/2010 (LOC; Marine Midland Bank) 3,775,000 3,897,536
Marion County, Health Care Facilities Revenue, Improvement
(United Church Homes Inc.) 6.375%, 11/15/2010 3,000,000 2,947,530
Montgomery County, Limited General Obligation and
Sewer Revenue 5.60%, 12/1/2016 1,380,000 1,355,381
Moraine, SWDR (General Motors Corp. Project):
6.75%, 7/1/2014 5,000,000 5,339,200
5.65%, 7/1/2024 3,800,000 3,608,480
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Middleburg Heights 4.375%, 12/1/2018 5,725,000 4,625,457
North Royalton City School District
6.10%, 12/1/2019 (Insured; MBIA) 2,500,000 2,551,075
State of Ohio:
Economic Development Revenue:
Ohio Enterprise Bond Fund (VSM Corp. Project)
7.375%, 12/1/2011 885,000 927,604
(Sponge Inc. Project) 8.375%, 6/1/2014 1,465,000 1,519,337
Environmental Improvement Revenue
(USX Corp. Project) 5.625%, 5/1/2029 1,000,000 878,570
PCR (Standard Oil Co. Project) 6.75%, 12/1/2015
(Guaranteed; British Petroleum Co. P.L.C.) 2,700,000 2,958,336
Ohio Air Quality Development Authority, PCR:
(Cleveland Electric Illuminating Co. Project)
6.85%, 7/1/2023 5,250,000 5,298,090
(Ohio Edison) 7.45%, 3/1/2016 (Insured; FGIC) 3,500,000 3,604,230
Ohio Building Authority, State Facilities
(Juvenile Correctional Projects)
6.60%, 10/1/2014 (Insured; AMBAC) 1,660,000 1,829,287
Ohio Higher Educational Facility Commission, Revenue
(Higher Educational Facility-Oberlin College)
5%, 10/1/2029 2,800,000 2,397,304
Ohio Housing Finance Agency, SFMR
(GNMA Mortgage Backed Securities Program)
Zero Coupon, 9/1/2021 7,745,000 1,428,565
Ohio Turnpike Commission, Turnpike Revenue,
Highway Improvements:
4.50%, 2/15/2024 (Insured; FGIC) 4,650,000 3,671,221
5.75%, 2/15/2024 (Prerefunded 2/15/2004) 6,100,000 (a) 6,464,292
4.75%, 2/15/2028 (Insured; FGIC) 2,600,000 2,121,990
Ohio Water Development Authority, Revenue:
(Fresh Water) 5.90%, 12/1/2015 (Insured; AMBAC) 4,650,000 4,693,571
Pollution Control Facilities
(Ohio Edison) 8.10%, 10/1/2023 3,700,000 3,786,913
(Toledo Edison Project) 7.55%, 6/1/2023 2,000,000 2,046,300
Ottawa County, Sanitary Sewer Systems Special Assessment
(Portage-Catawba Island Sewer Project)
7%, 9/1/2011 (Insured; AMBAC) (Prerefunded 9/1/2001) 1,000,000 (a) 1,068,520
Parma, Hospital Improvement Revenue
(Parma Community General Hospital Association)
5.375%, 11/1/2029 4,000,000 3,427,880
Portage County, HR (Robinson Memorial Hospital)
5.75%, 11/15/2019 (Insured; AMBAC) 2,000,000 1,927,420
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Shelby County, Hospital Facilities Revenue, Improvement
(The Shelby County Memorial Hospital Association)
7.70%, 9/1/2018 2,500,000 2,746,725
South Euclid, Recreation Facilities
7%, 12/1/2011 (Prerefunded 12/1/2001) 2,285,000 (a) 2,456,078
South-Western City School District
(Franklin and Pickway Counties) School Building Construction
4.75%, 12/1/2026 (Insured; AMBAC) 3,730,000 3,055,803
Southwest Regional Water District, Water Revenue:
6%, 12/1/2015 (Insured; MBIA) 1,600,000 1,620,608
6%, 12/1/2020 (Insured; MBIA) 1,250,000 1,257,438
Springboro, Water System Revenue
4.75%, 12/1/2023 (Insured; AMBAC) 2,600,000 2,158,338
Student Loan Funding Corp.,
Student Loan Revenue 7.20%, 8/1/2003 405,000 410,010
Toledo 5.625%, 12/1/2011 (Insured; AMBAC) 1,000,000 1,022,060
University of Cincinnati, University and College Revenue, COP
6.75%, 12/1/2009 (Prerefunded 12/1/2001) (Insured; MBIA) 750,000 (a) 802,133
Warren:
7.75%, 11/1/2010 (Prerefunded 11/1/2000) 2,785,000 (a) 2,944,943
Waterworks Revenue 5.50%, 11/1/2015 (Insured; FGIC) 1,450,000 1,417,578
Wauseon Exempted Village School District, School Improvement
5.50%, 12/1/2022 (Insured; MBIA) 1,900,000 1,803,575
Westerville, Improvement 4.50%, 12/1/2018 4,650,000 3,842,621
West Holmes Local School District
5.375%, 12/1/2023 (Insured; MBIA) 1,860,000 1,729,540
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $257,682,602) 254,350,887
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--3.9% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Cuyahoga County, HR, VRDN (The Cleveland Clinic)
3.20% (SBPA; Bank of America) 1,200,000 (c) 1,200,000
Montgomery County, Revenue, VRDN (Miami Valley Hospital)
3.15% (SBPA; National City Bank) 1,000,000 (c) 1,000,000
Ohio Air Quality Development Authority, Revenue, VRDN
(Cincinnati Gas and Electric)
3.20% (LOC; ABN Amro Bank) 2,100,000 (c) 2,100,000
State of Ohio, PCR, VRDN (Sohio Air Project) 3.20% 400,000 (c) 400,000
Twinsburg, IDR, VRDN (United Stationers Supply Co.)
3.30% (LOC; PNC Bank) 5,900,000 (c) 5,900,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $10,600,000) 10,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $268,282,602) 98.0% 264,950,887
CASH AND RECEIVABLES (NET) 2.0% 5,386,770
NET ASSETS 100.0% 270,337,657
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
ACA American Capital Access LOC Letter of Credit
AMBAC American Municipal Bond MBIA Municipal Bond Investors Assurance
Assurance Corporation Insurance Corporation
COP Certificate of Participation PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company SBPA Standby Bond Purchase Agreement
FHA Federal Housing Administration SFMR Single Family Mortgage Revenue
FSA Financial Security Assurance SWDR Solid Waste Disposal Revenue
GNMA Government National Mortgage VRDN Variable Rate Demand Notes
Association
HR Hospital Revenue
IDR Industrial Development Revenue
Summary of Combined Ratings
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 44.8
AA Aa AA 13.2
A A A 16.4
BBB Baa BBB 9.8
BB Ba BB 5.2
F1 Mig1 SP1 4.0
Not Rated (d) Not Rated (d) Not Rated (d) 6.6
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 268,282,602 264,950,887
Cash 465,526
Interest receivable 5,176,544
Receivable for shares of Beneficial Interest subscribed 407,207
Receivable for investment securities sold 97,313
Prepaid expenses 11,933
271,109,410
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 127,063
Due to Distributor 79,550
Payable for shares of Beneficial Interest redeemed 521,183
Accrued expenses 43,957
771,753
- --------------------------------------------------------------------------------
NET ASSETS ($) 270,337,657
- --------------------------------------------------------------------------------
COMPOSTION OF NET ASSETS ($):
Paid-in capital 274,551,257
Accumulated net realized gain (loss) on investments (881,885)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,331,715)
- --------------------------------------------------------------------------------
NET ASSETS ($) 270,337,657
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSETS ($) 221,055,825 46,727,300 2,554,532
Shares Outstanding 18,553,720 3,920,915 214,150
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.91 11.92 11.93
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 8,592,883
EXPENSES:
Management fee--Note 3(a) 783,521
Shareholder servicing costs--Note 3(c) 438,000
Distribution fees--Note 3(b) 135,366
Registration fees 15,886
Custodian fees 14,314
Prospectus and shareholders' reports 10,353
Professional fees 9,723
Trustees' fees and expenses--Note 3(d) 1,725
Loan commitment fees--Note 2 556
Miscellaneous 11,916
TOTAL EXPENSES 1,421,360
INVESTMENT INCOME--NET 7,171,523
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (1,282,606)
Net unrealized appreciation (depreciation) on investments (19,061,263)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (20,343,869)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (13,172,346)
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 7,171,523 14,414,062
Net realized gain (loss) on investments (1,282,606) 2,281,303
Net unrealized appreciation (depreciation)
on investments (19,061,263) (767,158)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (13,172,346) 15,928,207
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (5,951,054) (11,917,210)
Class B shares (1,172,298) (2,449,931)
Class C shares (48,171) (46,921)
Net realized gain on investments:
Class A shares -- (2,494,992)
Class B shares -- (594,108)
Class C shares -- (11,846)
TOTAL DIVIDENDS (7,171,523) (17,515,008)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 14,903,348 17,942,916
Class B shares 5,525,722 12,817,223
Class C shares 953,388 1,297,795
Dividends reinvested:
Class A shares 3,735,904 9,379,044
Class B shares 795,502 2,144,631
Class C shares 34,998 49,513
Cost of shares redeemed:
Class A shares (18,054,261) (26,701,239)
Class B shares (10,894,473) (10,126,784)
Class C shares (68,238) (115,318)
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS (3,068,110) 6,687,781
TOTAL INCREASE (DECREASE) IN NET ASSETS (23,411,979) 5,100,980
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 293,749,636 288,648,656
END OF PERIOD 270,337,657 293,749,636
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A (A)
Shares sold 1,201,409 1,387,167
Shares issued for dividends reinvested 304,005 723,830
Shares redeemed (1,468,228) (2,065,623)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 37,186 45,374
- --------------------------------------------------------------------------------
CLASS B (A)
Shares sold 446,124 988,648
Shares issued for dividends reinvested 64,659 165,437
Shares redeemed (879,377) (785,050)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (368,594) 369,035
- --------------------------------------------------------------------------------
CLASS C
Shares sold 77,060 100,043
Shares issued for dividends reinvested 2,851 3,821
Shares redeemed (5,671) (8,879)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 74,240 94,985
A DURING THE PERIOD ENDED OCTOBER 31, 1999, 582,867 CLASS B SHARES REPRESENTING
$7,248,948 WERE AUTOMATICALLY CONVERTED TO 583,323 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rates)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.80 12.86 12.65 12.58 12.62 12.70
Investment Operations:
Investment income--net .32 .65 .67 .69 .71 .73
Net realized and unrealized
gain (loss) on investments (.89) .08 .34 .17 .14 (.05)
Total from Investment Operations (.57) .73 1.01 .86 .85 .68
Distributions:
Dividends from investment
income--net (.32) (.65) (.67) (.69) (.71) (.73)
Dividends from net realized
gain on investments -- (.14) (.13) (.10) (.18) (.03)
Total Distributions (.32) (.79) (.80) (.79) (.89) (.76)
Net asset value, end of period 11.91 12.80 12.86 12.65 12.58 12.62
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) (8.97)(b) 5.72 8.09 6.91 6.77 5.63
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .90(b) .91 .90 .91 .89 .92
Ratio of net investment income
to average net assets 5.13(b) 5.00 5.17 5.40 5.49 5.84
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 17.92(c) 40.36 24.73 29.65 43.90 39.53
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 221,056 237,027 237,618 242,572 257,639 273,225
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.81 12.87 12.65 12.59 12.63 12.71
Investment Operations:
Investment income--net .29 .58 .60 .62 .64 .66
Net realized and unrealized
gain (loss) on investments (.89) .08 .35 .16 .14 (.05)
Total from Investment Operations (.60) .66 .95 .78 .78 .61
Distributions:
Dividends from investment
income--net (.29) (.58) (.60) (.62) (.64) (.66)
Dividends from net realized
gain on investments -- (.14) (.13) (.10) (.18) (.03)
Total Distributions (.29) (.72) (.73) (.72) (.82) (.69)
Net asset value, end of period 11.92 12.81 12.87 12.65 12.59 12.63
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) A (9.44)(b) 5.17 7.62 6.27 6.19 5.06
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets 1.41(b) 1.42 1.41 1.42 1.42 1.44
Ratio of net investment income
to average net assets 4.61(b) 4.47 4.65 4.87 4.94 5.29
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 17.92(c) 40.36 24.73 29.65 43.90 39.53
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 46,727 54,929 50,453 44,746 40,476 32,797
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 12.82 12.88 12.66 12.59 12.68
Investment Operations:
Investment income--net .27 .55 .57 .59 .43
Net realized and unrealized gain (loss)
on investments (.89) .08 .35 .17 .09
Total from Investment Operations (.62) .63 .92 .76 .52
Distributions:
Dividends from investment income--net (.27) (.55) (.57) (.59) (.43)
Dividends from net realized gain
on investments -- (.14) (.13) (.10) (.18)
Total Distributions (.27) (.69) (.70) (.69) (.61)
Net asset value, end of period 11.93 12.82 12.88 12.66 12.59
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) B (9.68)(c) 4.92 7.35 6.07 5.66(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.66(c) 1.66 1.66 1.64 1.63(c)
Ratio of net investment income
to average net assets 4.32(c) 4.20 4.38 4.44 4.66(c)
Portfolio Turnover Rate 17.92(d) 40.36 24.73 29.65 43.90
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ X 1,000) 2,555 1,793 579 694 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Ohio Series (the "fund"). The
fund' s investment objective is to maximize current income exempt from Federal
and, where applicable, from State income taxes, without undue risk. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $7,628 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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 of 1986, as amended (the
("Code"). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility") to be utilized for temporary and
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rats in effect at the time of borrowings. During the period ended October
31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$2,132 during the period ended October 31, 1999, from commissions earned on
sales of the fund's shares.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $127,011 and $8,355, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $289,855, $63,506 and $2,785, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $60,757 pursuant to the transfer
agency agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust 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.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$49,649,373 and $68,410,186, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$3,331,715, consisting of $6,298,337 gross unrealized appreciation and
$9,630,052 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
For More Information
Dreyfus Premier State Municipal Bond Fund
Ohio 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
100 Church Street
New York, New York 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 057/619SA9910
================================================================================
Dreyfus
Premier State
Municipal Bond Fund,
Pennsylvania Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
16 Financial Highlights
19 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund, Pennsylvania Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Pennsylvania Series, covering the six-month period from May
1, 1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Pennsylvania Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Pennsylvania Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.09% total return; its Class B shares provided a -5.34% total
return; and its Class C shares provided a -5.45% total return.(1) In comparison,
the Lipper Pennsylvania Municipal Debt Funds category average provided a -5.33%
total return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest rate environment. The
modest relative outperformance of the fund's Class A shares compared to its
benchmark is primarily the result of our security selection strategy in the
Pennsylvania bond market. This strategy was designed to help position the fund
to take advantage of attractive values created by the municipal bond market's
decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Pennsylvania state tax-exempt
income as is practical from a diversified portfolio of long-term municipal bonds
without undue risk. To achieve this objective, we employ two primary strategies.
First, for between one-half and three quarters of the total fund, we look for
bonds that potentially can provide consistently high current yields. We also try
to ensure that we select bonds that are most likely to obtain attractive prices
if and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out-of-favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the fund's performance?
The fund was adversely affected by rising interest rates over the past six
months. When the reporting period began on May 1, 1999, investors were concerned
that continued economic strength might rekindle long, dormant inflationary
pressures. In fact, in an attempt to forestall a potential reacceleration of
inflation, the Federal Reserve Board raised short-term interest rates twice
during the summer of 1999.
As interest rates rose, taxable fixed-income investments such as corporate bonds
became more attractive to institutional investors such as hedge funds and
insurance companies. Accordingly, many of these investors sold large numbers of
municipal bonds into the secondary market, putting pressure on prices.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Pennsylvania issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
After the recent municipal bond market declines, we have focused primarily on
positioning the fund to take advantage of what we anticipate to be an ensuing
market recovery. This is consistent with our long-term perspective, in which we
measure our success over a full interest-rate cycle. In preparation for the
second "leg" of that cycle in a recovering market, which had not yet
materialized as of October 31, we have focused on tax-exempt securities selling
at deep discounts to their face values. Many of these bonds, in our opinion,
have been punished more severely than circumstances warrant, and we believe that
they should recover strongly when investors once again recognize their true
values.
As a result of this strategy, the fund' s average duration has lengthened
naturally. While this has made the fund more vulnerable to the adverse effects
of higher interest rates over the short term, we believe that it also positions
us to participate more strongly in the market's recovery if interest rates
moderate over the longer term.
November 15, 1999
(1) Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares, or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Had these
charges been reflected, returns would have been lower. Past performance is no
guarantee of future results. Share price, yield and investment return fluctuate
such that upon redemption fund shares may be worth more or less than their
original cost. Income may be subject to state and local taxes for
non-Pennsylvania residents. Some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain investors. Capital gains, if any, are
fully taxable.
(2) Source: Lipper Analytical Services, Inc.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--98.6% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PENNSYLVANIA--94.1%
Allegheny County Hospital Development Authority, Revenue
(Health Center - UPMC Health System):
4.50%, 8/1/2015 (Insured; MBIA) 2,000,000 1,653,060
4.625%, 12/15/2015 (Insured; AMBAC) 3,415,000 2,863,614
4.75%, 12/15/2016 (Insured; AMBAC) 2,245,000 1,894,870
5%, 11/1/2018 1,000,000 865,590
(Hospital - South Hills Health) 5.125%, 5/1/2029 3,000,000 2,420,010
Allegheny County Industrial Development Authority,
Medical Center Revenue
(Presbyterian Medical Center of Oakmont Pennsylvania, Inc.)
6.75%, 2/1/2026 (Insured; FHA) 1,785,000 1,877,445
Allegheny County Residential Finance Authority, SFMR:
7.40%, 12/1/2022 1,420,000 1,468,450
7.95%, 6/1/2023 845,000 869,463
Bangor Area School District:
4.50%, 3/15/2016 (Insured; FSA) 2,040,000 1,707,582
4.50%, Series A 3/15/2017 (Insured; FSA) 1,205,000 999,535
4.50%, Series B 3/15/2017 (Insured; FSA) 2,130,000 1,766,814
Beaver County Industrial Development Authority, PCR
(Pennsylvania Power Company Mansfield Project)
7.15%, 9/1/2021 3,000,000 3,109,770
Berks County Municipal Authority, Revenue
(Phoebe - Devitt Homes Project):
5.50%, 5/15/2015 780,000 676,510
5.75%, 5/15/2022 1,500,000 1,282,095
Blair County Hospital Authority, Revenue
(Altoona Hospital Project)
6.375%, 7/1/2013 (Insured; AMBAC)
(Prerefunded 7/1/2002) 5,000,000 (a) 5,334,400
Bradford County Industrial Development Authority, SWDR
(International Paper Company Projects) 6.60%, 3/1/2019 4,250,000 4,293,732
Butler Area School District, 4.75%, 10/1/2022
(Insured; FGIC) 2,190,000 1,828,672
Charleroi Area School Authority, School Revenue
Zero Coupon, 10/1/2020 (Insured; FGIC) 2,000,000 (b) 548,100
Coatesville Area School District 4.50%, 10/1/2016
(Insured; FSA) 7,355,000 6,099,501
Dauphin County General Authority, Revenue (Office and
Parking, Riverfront Office)
6%, 1/1/2025 3,000,000 2,751,000
East Whiteland Township 5%, 9/1/2019 (Insured; FSA) 2,820,000 2,455,374
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Erie:
Zero Coupon, 11/15/2019 (Insured; FSA) 1,685,000 492,660
Zero Coupon, 11/15/2020 (Insured; FSA) 2,110,000 579,026
Erie County Higher Education Building Authority,
College Revenue
(Mercyhurst College Project) 5.75%, 3/15/2020 2,000,000 1,882,200
Erie School District Zero Coupon, 9/1/2015 (Insured; FSA) 1,135,000 440,891
Franklin County Industrial Development Authority, HR
(The Chambersburg Hospital) 5%, 7/1/2018
(Insured; AMBAC) 1,200,000 1,040,124
Gettysburg Municipal Authority, College Revenue
(Gettysburg College)
4.75%, 8/15/2023 (Insured; AMBAC) 2,000,000 1,662,060
Girtys Run Joint Sewer Authority, Sewer Revenue
4.50%, 11/1/2020 (Insured; FSA) 4,580,000 3,716,349
Harrisburg Authority, Office and Parking Revenue
6%, 5/1/2019 2,000,000 1,872,520
Harrisburg Redevelopment Authority, Revenue:
Zero Coupon, 5/1/2018 (Insured; FSA) 2,750,000 882,062
Zero Coupon, 11/1/2018 (Insured; FSA) 2,750,000 855,360
Zero Coupon, 11/1/2019 (Insured; FSA) 2,750,000 799,727
Zero Coupon, 5/1/2020 (Insured; FSA) 2,750,000 773,877
Zero Coupon, 11/1/2020 (Insured; FSA) 2,750,000 750,310
Lancaster Area Sewer Authority, Revenue
4.50%, 4/1/2018 (Insured; MBIA) 2,730,000 2,233,495
Lower Merion Township School District 5%, 5/15/2023 1,000,000 870,770
Luzerne County Industrial Development Authority, Exempt
Facilities Revenue
(Pennsylvania Gas and Water Company Project)
7.125%, 12/1/2022 4,000,000 4,266,440
Montgomery County Higher Educational and Health
Authority, RRR
First Mortgage (Montgomery Income Project)
10.50%, 9/1/2020 2,875,000 3,011,246
Montgomery County Industrial Development Authority, RRR
7.50%, 1/1/2012 (LOC; Banque Paribas) 14,715,000 15,315,078
Montour School District, Notes:
Zero Coupon, 1/1/2024 (Insured; FGIC) 1,155,000 254,874
Zero Coupon, 1/1/2025 (Insured; FGIC) 2,015,000 416,702
Norristown (Asset Guarantee) Zero Coupon, 12/15/2014 1,465,000 580,829
Northampton County Industrial Development Authority, PCR
(Bethlehem Steel) 7.55%, 6/1/2017 5,700,000 5,872,653
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pennsylvania, COP 5%, 7/1/2015 (Insured; AMBAC) 125,000 110,259
Pennsylvania Economic Development Financing Authority:
RRR (Northampton Generating Project):
6.50%, 1/1/2013 6,500,000 6,548,425
Wastewater Treatment Revenue (Sun Co. Inc. - R and M
Project) 7.60% 4,240,000 4,547,909
Pennsylvania Higher Education Assistance Agency, Student
Loan Revenue
7.05%, 10/1/2016 (Insured; AMBAC) 2,500,000 2,653,525
Pennsylvania Housing Finance Agency:
6.50%, 7/1/2023 2,750,000 2,892,863
Single Family Mortgage:
6.75%, 4/1/2016 3,000,000 3,067,020
6.85%, 4/1/2016 (Insured; FHA) 3,700,000 3,774,370
6.90%, 4/1/2025 6,250,000 6,512,000
Pennsylvania State Higher Educational Facilities Authority,
Revenue
(State System Higher Education):
5%, 6/15/2019 (Insured; AMBAC) 2,000,000 1,753,200
5%, 6/15/2024 (Insured; FSA) 1,770,000 1,526,377
(UPMC Health System) 4.875%, 8/1/2019 (Insured; FSA) 1,250,000 1,045,825
Pennsylvania State University:
5%, 8/15/2017 2,000,000 1,771,900
5%, 5/15/2022 2,000,000 1,738,580
Philadelphia:
4.75%, 5/15/2020 (Insured; FGIC) 8,900,000 7,452,860
Gas Works Revenue:
5%, 7/1/2017 (Insured; FSA) 2,500,000 2,201,175
5%, 7/1/2018 (Insured; FSA) 3,500,000 3,054,660
5%, 7/1/2023 (Insured; FSA) 6,000,000 5,148,300
6.375%, 7/1/2026 (Insured; CMAC) 2,000,000 2,043,100
Water and Wastewater Revenue
5.75%, 6/15/2013 (Insured; MBIA) 8,000,000 8,039,440
Philadelphia Authority for Industrial Development, Industrial
and Commercial (Girard Estate Coal Mining Project)
5.50%, 11/15/2016 900,000 890,559
Philadelphia Hospital and Higher Education Facilities, HR
(Temple University Hospital) 6.625%, 11/15/2023 16,240,000 16,311,294
Philadelphia School District 4.50%, 4/1/2023
(Insured; MBIA) 16,625,000 13,269,576
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
Pittsburgh and Allegheny County Public Auditorium Authority,
Excise Tax (Hotel Room) 5%, 2/1/2024 (Insured, AMBAC) 2,250,000 1,942,335
Pittsburgh Urban Redevelopment Authority Mortgage Revenue:
7.05%, 4/1/2023 1,785,000 1,829,518
(Sidney Square Project) 6.65%, 9/1/2028 3,350,000 3,412,277
Pittsburgh Water and Sewer Authority, Water and Sewer
Systems Revenue
5%, 9/1/2017 3,000,000 2,666,400
Pottstown School District:
5%, 6/1/2018 (Insured; MBIA) 1,170,000 1,032,151
4.75%, 6/1/2022 (Insured; MBIA) 3,760,000 3,143,849
Schuylkill County Industrial Development Authority
First Mortgage Revenue (Valley Health Concerns)
8.75%, 3/1/2012 2,500,000 2,503,600
Southeast Delco School District:
Zero Coupon, 2/1/2020 (Insured; MBIA) 2,055,000 591,943
Zero Coupon, 2/1/2023 (Insured; MBIA) 2,055,000 490,076
Southeastern Transportation Authority, Special Revenue
4.75%, 3/1/2024 (Insured; FGIC) 2,775,000 2,298,338
Spring-Ford Area School District 4.75%, 3/1/2022
(Insured; FGIC) 8,935,000 7,478,238
State Public School Building Authority, School Revenue
(School District of York Project) 4.75%, 2/15/2014
(Insured; FGIC) 1,655,000 1,472,040
Washington County Industrial Development Authority, PCR
(West Pennsylvania Power Company Mitchell)
6.05%, 4/1/2014 (Insured; FGIC) 3,000,000 3,064,290
Washington County Industrial Development Authority, Revenue
(Presbyterian Medical Center) 6.75%, 1/15/2023
(Insured; FHA) 3,000,000 3,184,140
U.S. RELATED--4.5%
Commonwealth of Puerto Rico (Public Improvement)
4.50%, 7/1/2023 5,000,000 4,066,200
Guam Airport Authority, Revenue 6.50%, 10/1/2023 2,000,000 2,039,640
Puerto Rico Electric Power Authority, Power Revenue
5%, 7/1/2023 5,500,000 4,781,480
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $248,035,394) 237,684,572
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--.7% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA;
Geisinger Authority Health System, Revenue VRDN
(Geisinger Health) 3.60% 1,000,000 (c) 1,000,000
Pennsylvania State Higher Educational Facilities Authority,
VRDN
(Carnegie Mellon University) 3.60% 600,000 (c) 600,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,600,000) 1,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $249,635,394) 99.3% 239,284,572
CASH AND RECEIVABLES (NET) .7% 1,666,646
NET ASSETS 100.0% 240,951,218
Summary of Abbreviations
AMBAC American Municipal Bond Assurance LOC Letter of Credit
Corporation MBIA Municipal Bond Investors Assurance
CMAC Capital Market Assurance Corporation Insurance Corporation
COP Certificate of Participation PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
FHA Federal Housing Administration SFMR Single Family Mortgage Revenue
FSA Financial Security Assurance SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 58.8
AA Aa AA 7.6
A A A 11.0
BBB Baa BBB 14.4
F1 MIG1 SP1 .7
Not Rated(d) Not Rated(d) Not Rated(d) 7.5
100.0
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Purchased on a delayed delivery basis.
(c) Securities payable on demand. Variable interest rate--subject to periodic
change.
(d) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the fund may invest.
See notes to financial statements.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 249,635,394 239,284,572
Interest receivable 4,139,674
Receivable for shares of Beneficial Interest subscribed 84,013
Prepaid expenses 11,676
243,519,935
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 112,753
Due to Distributor 73,638
Cash overdraft due to Custodian 135,640
Payable for investment securities purchased 2,004,649
Payable for shares of Beneficial Interest redeemed 188,828
Accrued expenses 53,209
2,568,717
- --------------------------------------------------------------------------------
NET ASSETS ($) 240,951,218
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 246,864,063
Accumulated net realized gain (loss) on investments 4,437,977
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (10,350,822)
- --------------------------------------------------------------------------------
NET ASSETS ($) 240,951,218
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 188,907,252 50,974,228 1,069,738
Shares Outstanding 12,323,476 3,328,368 69,749
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 15.33 15.32 15.34
See notes to financial statements.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 7,509,956
EXPENSES:
Management fee--Note 3(a) 701,368
Shareholder servicing costs--Note 3(c) 430,718
Distribution fees--Note 3(b) 152,361
Custodian fees 13,222
Prospectus and shareholders' reports 12,984
Registration fees 12,903
Professional fees 8,161
Trustees' fees and expenses--Note 3(d) 1,548
Loan commitment fees--Note 2 816
Miscellaneous 8,583
TOTAL EXPENSES 1,342,664
INVESTMENT INCOME--NET 6,167,292
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 994,878
Net unrealized appreciation (depreciation) on investments (20,615,846)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (19,620,968)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (13,453,676)
See notes to financial statements.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 6,167,292 12,843,754
Net realized gain (loss) on investments 994,878 5,906,216
Net unrealized appreciation (depreciation)
on investments (20,615,846) (3,365,196)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (13,453,676) 15,384,774
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (4,829,789) (9,548,326)
Class B shares (1,317,756) (3,269,922)
Class C shares (19,747) (25,507)
Net realized gain on investments:
Class A shares -- (3,137,642)
Class B shares -- (1,225,935)
Class C shares -- (9,155)
TOTAL DIVIDENDS (6,167,292) (17,216,487)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 19,537,303 15,324,595
Class B shares 5,436,062 9,317,671
Class C shares 400,039 888,826
Dividends reinvested:
Class A shares 2,423,080 6,692,004
Class B shares 853,332 2,958,657
Class C shares 11,304 12,609
Cost of shares redeemed:
Class A shares (13,805,527) (21,037,691)
Class B shares (19,613,353) (17,742,150)
Class C shares (165,255) (460,642)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (4,923,015) (4,046,121)
TOTAL INCREASE (DECREASE) IN NET ASSETS (24,543,983) (5,877,834)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 265,495,201 271,373,035
END OF PERIOD 240,951,218 265,495,201
See notes to financial statements.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 1,217,395 918,902
Shares issued for dividends reinvested 152,839 398,920
Shares redeemed (867,560) (1,253,979)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 502,674 63,843
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 336,709 556,572
Shares issued for dividends reinvested 53,782 176,403
Shares redeemed (1,222,920) (1,062,694)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (832,429) (329,719)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 25,290 53,260
Shares issued for dividends reinvested 715 752
Shares redeemed (10,443) (27,571)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 15,562 26,441
(a) During the period ended October 31, 1999, 891,489 Class B shares
representing $14,294,384 were automatically converted to 891,446 Class A shares
See notes to financial statements.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 16.56 16.68 16.23 16.17 16.12 16.01
Investment Operations:
Investment income--net .40 .82 .85 .85 .87 .91
Net realized and unrealized gain
(loss) on investments (1.23) .16 .71 .24 .32 .11
Total from Investment Operations (.83) .98 1.56 1.09 1.19 1.02
Distributions:
Dividends from investment
income--net (.40) (.82) (.85) (.85) (.87) (.91)
Dividends from net realized gain
on investments -- (.28) (.26) (.18) (.27) --
Total Distributions (.40) (1.10) (1.11) (1.03) (1.14) (.91)
Net asset value, end of period 15.33 16.56 16.68 16.23 16.17 16.12
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (5.09)(b) 5.97 9.83 6.89 7.46 6.65
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .93(b) .92 .92 .92 .92 .92
Ratio of net investment income
to average net assets 4.96(b) 4.90 5.09 5.22 5.28 5.77
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 26.56(c) 48.14 34.82 60.57 52.69 55.19
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 188,907 195,728 196,055 201,229 216,802 219,949
(a) Exclusive of sales charge.
(b) Annualized
(c) Not annualized
See notes to financial statements.
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 16.55 16.67 16.23 16.16 16.11 16.01
Investment Operations:
Investment income--net .36 .74 .77 .77 .79 .83
Net realized and unrealized gain
(loss) on investments (1.23) .16 .70 .25 .32 .10
Total from Investment Operations (.87) .90 1.47 1.02 1.11 .93
Distributions:
Dividends from investment
income--net (.36) (.74) (.77) (.77) (.79) (.83)
Dividends from net realized gain
on investments -- (.28) (.26) (.18) (.27) --
Total Distributions (.36) (1.02) (1.03) (.95) (1.06) (.83)
Net asset value, end of period 15.32 16.55 16.67 16.23 16.16 16.11
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (5.34)(b) 5.43 9.20 6.41 6.92 6.02
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.45(b) 1.43 1.43 1.43 1.43 1.44
Ratio of net investment income
to average net assets 4.43(b) 4.39 4.57 4.71 4.76 5.22
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- -- .01
Portfolio Turnover Rate 26.56(c) 48.14 34.82 60.57 52.69 55.19
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 50,974 68,869 74,855 71,671 72,610 70,062
(a) Exclusive of sales charge.
(b) Annualized
(c) Not annualized
See notes to financial statements.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 1999 Year Ended April 30,
-------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 16.57 16.69 16.23 16.16 16.18
Investment income--net .34 .69 .70 .69 .53
Net realized and unrealized gain (loss)
on investments (1.23) .16 .72 .25 .25
Total from Investment Operations (.89) .85 1.42 .94 .78
Distributions:
Dividends from investment income--net (.34) (.69) (.70) (.69) (.53)
Dividends from net realized gain
on investments -- (.28) (.26) (.18) (.27)
Total Distributions (.34) (.97) (.96) (.87) (.80)
Net asset value, end of period 15.34 16.57 16.69 16.23 16.16
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (5.80)(c) 5.16 8.91 5.92 6.71(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.70(c) 1.69 1.69 1.83 1.70(c)
Ratio of net investment income to
average net assets 4.18(c) 4.07 3.98 4.28 4.46(c)
Portfolio Turnover Rate 26.56(d) 48.14 34.82 60.57 52.69
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 1,070 898 463 32 21
(a) From August 15, 1995 (commencement of initial offering) to April 30, 1996.
(b) Exclusive of sales charge.
(c) Annualized.
(c) Not annualized.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company and operates as a series company
currently offering thirteen series including the Pennsylvania Series (the
" fund" ). The fund's investment objective is to maximize current income exempt
from Federal and, where applicable, from State income taxes, without undue risk.
The Dreyfus Corporation (the "Manager") serves as the fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $8,001 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility") to be utilized for temporary and
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$2,206 during the period ended October 31, 1999, from commissions earned on
sales of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
shares at an annual rate of .50 of 1% of the value of the average daily net
assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $148,814 and $3,547, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999 Class A, Class B and Class C
shares were charged $243,214, $74,407, and $1,183, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $69,457 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$66,697,733 and $71,126,208 respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$10,350,822, consisting of $3,056,983 gross unrealized appreciation and
$13,407,805 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
NOTES
For More Information
Dreyfus 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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 058/620SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Texas Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Texas Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Texas Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Douglas Gaylor.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund, Texas
Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Douglas Gaylor, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Texas Series perform during
the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.94% total return; its Class B shares provided a -6.22% total
return; and its Class C shares provided a -6.30% total return.(1) In comparison,
the Lipper Texas Municipal Debt Funds category average provided a -6.03% total
return(2) for the same period.
We attribute the fund's negative absolute returns over the past six months to a
declining municipal bond market and a rising interest rate environment. The
modest relative outperformance of the fund's Class A shares compared to its
benchmark is primarily the result of our security selection strategy, which was
designed to help position the fund to take advantage of attractive values
created by the municipal bond market's decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Texas tax-exempt income as is
practical from a diversified portfolio of long-term municipal bonds without
undue risk. To achieve this objective, we employ two primary strategies. First,
for between one-half and three quarters of the total fund, we look for bonds
that potentially can provide consistently high current yields. We also try to
ensure that we select bonds that are most likely to obtain attractive prices if
and when we decide to sell them in the secondary market.
Second, for the remainder of the fund, we try to look for bonds that we believe
have the potential to offer attractive total returns. We typically look for
bonds that are selling at a discount to face value because they may be
temporarily out-of-favor among investors. Our belief is that these bonds' prices
will rise as they return to favor over time.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was adversely affected by rising interest rates. When the reporting
period began on May 1, 1999, investors were concerned that continued economic
strength might rekindle long-dormant inflationary pressures. In fact, in an
attempt to forestall a potential reacceleration of inflation, the Federal
Reserve Board raised short-term interest rates twice during the summer of 1999.
As interest rates rose, taxable fixed-income investments such as corporate bonds
became more attractive to institutional investors such as hedge funds and
insurance companies. Accordingly, many of these investors sold large numbers of
municipal bonds into the secondary market, putting pressure on prices.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Texas issuers -- are currently
offering tax-exempt yields that compare very favorably with taxable yields after
adjusting for taxes.
What is the fund's current strategy?
After the recent municipal bond market declines, we have focused primarily on
positioning the fund to take advantage of what we anticipate to be an ensuing
market recovery. This is consistent with our long-term perspective, in which we
measure our success over a full interest rate cycle. In preparation for the
second "leg" of that cycle in a recovering market, which had not yet
materialized as of October 31, we have focused on tax-exempt securities selling
at deep discounts to their face values. Many of these bonds, in our opinion,
have been punished more severely than circumstances warrant, and we believe that
they should recover strongly when investors once again recognize their true
values.
As a result of this strategy, the fund' s average duration has lengthened
naturally. While this has made the fund more vulnerable to the adverse effects
of higher interest rates over the short term, we believe that it also positions
us to participate more strongly in the market's recovery if interest rates
moderate over the longer term.
November 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-TEXAS
RESIDENTS. SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE. RETURN
FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY THE DREYFUS
CORPORATION PURSUANT TO AN UNDERTAKING IN EFFECT THAT MAY BE EXTENDED,
TERMINATED OR MODIFIED AT ANY TIME. HAD THESE EXPENSES NOT BEEN ABSORBED, THE
FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.2% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TEXAS--96.0%
Aledo Independent School District, Unlimited Tax School Building
(Permanent School Fund Guaranteed)
Zero Coupon, 2/15/2014 1,225,000 529,114
Brazos Higher Education Authority Inc., Student Loan Revenue
6.80%, 12/1/2004 700,000 745,227
Clear Creek Independent School District (Permanent School
Fund Guaranteed)
4.25%, 2/1/2013 1,475,000 1,270,978
Coastal Water Authority, Water Conveyance System
6.25%, 12/15/2017 (Insured; AMBAC) 5,885,000 5,945,557
Dallas-Fort Worth Regional Airport, Joint Revenue
6.625%, 11/1/2021 (Insured; FGIC) 1,250,000 1,294,087
Denison Hospital Authority, HR
(Texoma Medical Center Project) 6.125%, 8/15/2017 750,000 672,150
Eanes Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2017 1,400,000 1,151,738
El Paso Housing Authority, Multi-Family Revenue
(Section 8 Projects) 6.25%, 12/1/2009 2,510,000 2,567,429
Grape Creek-Pulliam Independent School District
Public Facility Corp., School Facility LR
7.25%, 5/15/2021 2,200,000 2,352,108
Grapevine-Colleyville Independent School District, Unlimited
Tax School Building (Permanent School Fund Guaranteed):
Zero Coupon, 8/15/2017 2,590,000 879,901
Zero Coupon, 8/15/2018 2,390,000 759,996
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project):
7.25%, 4/1/2017 (Prerefunded 4/1/2002) 440,000 (a) 474,773
7.25%, 4/1/2017 560,000 584,651
Houston:
Airport System Special Facilities Revenue
(Automated People Mover Project)
5.375%, 7/15/2009 (Insured; FSA) 2,000,000 2,001,080
Public Improvement 4.75%, 3/1/2016 1,160,000 999,908
Houston Independent School District (Permanent School
Fund Guaranteed):
Zero Coupon, 8/15/2015 3,000,000 1,155,990
4.75%, 2/15/2022 2,500,000 2,084,775
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED):
Irving Independent School District (Permanent School Fund
Guaranteed):
Zero Coupon, 2/15/2010 1,985,000 1,128,691
Zero Coupon, 2/15/2016 1,000,000 375,050
Katy Independent School District, Limited Tax Refunding and
School Building
(Permanent School Fund Guaranteed) 4.75%, 2/15/2021 1,295,000 1,081,921
La Porte Independent School District
(Permanent School Fund Guaranteed)
4.50%, 2/15/2017 1,000,000 825,270
Lakeway Municipal Utility District
Zero Coupon, 9/1/2013 (Insured; FGIC) 1,850,000 831,834
Leon County, PCR (Nucor Corp. Project) 7.375%, 8/1/2009 750,000 795,607
Lower Colorado River Authority, Revenue, Junior Lein
4.50%, 1/1/2017 (Insured; FSA) 2,560,000 2,192,256
North Texas Higher Education Authority, Inc.,
Student Loan Revenue
7.25%, 4/1/2003 (Insured; AMBAC) 1,000,000 1,031,720
Port of Bay City Authority, Matagorda County Revenue
(Hoechst Celanese Corp. Project) 6.50%, 5/1/2026 3,500,000 3,516,975
Round Rock Independent School District
(Permanent School Fund Guaranteed)
4.50%, 8/1/2016 1,950,000 1,627,957
Texas:
(Veterans Housing Assistance) 6.80%, 12/1/2023 2,145,000 2,235,734
(Water Development) 5%, 8/1/2020 750,000 654,743
Texas Department Housing and Community Affairs, MFHR
(Harbors and Plumtree) 6.35%, 7/1/2016 1,300,000 1,322,373
Texas Higher Education Coordinating Board,
College Student Loan Revenue
7.30%, 10/1/2003 395,000 419,328
Texas National Research Laboratory Commission Financing
Corp., LR
(Superconducting Super Collider) 6.95%, 12/1/2012 700,000 783,944
Texas Public Finance Authority, Building Revenue
(State Preservation Board Project):
4.50%, 2/1/2018 (Insured; AMBAC) 2,805,000 2,307,954
4.50%, 2/1/2019 (Insured; AMBAC) 2,165,000 1,768,069
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED):
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation)
8.875%, 9/1/2011 (Prerefunded 9/1/2001) 455,000 (a) 498,571
Texas Water Development Board, Revenue,
State Revolving Fund
4.75%, 7/15/2020 1,695,000 1,425,156
Tomball Hospital Authority, Revenue 6%, 7/1/2013 5,000,000 4,695,600
Tomball Independent School District
(Permanent School Fund Guaranteed) 4.75%, 2/15/2020 2,515,000 2,118,711
Tyler Health Facility Development Corp., HR
(East Texas Medical Center Regional Health)
6.625%, 11/1/2011 1,605,000 1,445,848
University of Texas (Financing System) University Revenues
3.75%, 8/15/2018 5,000,000 3,591,250
Victoria, Utility System Revenue 4.75%, 12/1/2022 1,105,000 918,487
Waxahachie Community Development Corp., Sales Tax Revenue:
Zero Coupon, 8/1/2020 (Insured; MBIA) 1,430,000 392,278
Zero Coupon, 8/1/2023 (Insured; MBIA) 1,000,000 226,500
West Side Calhoun County Navigation District, SWDR
(Union Carbide Chemical and Plastics) 8.20%, 3/15/2021 500,000 525,170
U.S. RELATED--1.2%
Puerto Rico (Public Improvement) 4.50%, 7/1/2023
(Insured; FSA) 1,000,000 813,240
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $68,212,475) 97.2% 65,019,699
CASH AND RECEIVABLES (NET) 2.8% 1,863,953
NET ASSETS 100.0% 66,883,652
Summary of Abbreviations
AMBAC American Municipal Bond Assurance MBIA Municipal Bond Investors Assurance
Corporation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Rvenue SWDR Solid Waste Disposal Revenue
LR Lease Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 62.3
AA Aa AA 7.2
A A A 13.2
BBB Baa BBB 14.3
B B B 2.2
Not Rated(b) Not Rated(b) Not Rated(b) .8
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 68,212,475 65,019,699
Receivable for investment securities sold 1,460,484
Interest receivable 1,195,789
Prepaid expenses 17,613
67,693,585
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 16,675
Due to Distributor 19,495
Cash overdraft due to Custodian 702,641
Payable for shares of Beneficial Interest redeemed 57,588
Accrued expenses 13,534
809,933
- --------------------------------------------------------------------------------
NET ASSETS ($) 66,883,652
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 69,154,851
Accumulated net realized gain (loss) on investments 921,577
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,192,776)
- --------------------------------------------------------------------------------
NET ASSETS ($) 66,883,652
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets 55,418,894 10,768,127 696,631
Shares Outstanding 2,824,912 549,034 35,529
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 19.62 19.61 19.61
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,071,819
EXPENSES:
Management fee--Note 3(a) 201,517
Shareholder servicing costs--Note 3(c) 109,104
Distribution fees--Note 3(b) 37,272
Registration fees 21,182
Professional fees 14,376
Prospectus and shareholders' reports 6,614
Custodian fees 4,145
Trustees' fees and expenses--Note 3(d) 515
Loan commitment fees--Note 2 144
Miscellaneous 6,061
TOTAL EXPENSES 400,930
Less--reduction in management fee due to undertaking--Note 3(a) (52,223)
NET EXPENSES 348,707
INVESTMENT INCOME--NET 1,723,112
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 325,781
Net unrealized appreciation (depreciation) on investments (6,569,090)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (6,243,309)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,520,197)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,723,112 3,580,223
Net realized gain (loss) on investments 325,781 1,655,520
Net unrealized appreciation (depreciation)
on investments (6,569,090) (902,285)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,520,197) 4,333,458
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,411,961) (2,750,126)
Class B shares (296,813) (815,258)
Class C shares (14,338) (14,839)
Net realized gain on investments:
Class A shares -- (1,392,005)
Class B shares -- (491,551)
Class C shares -- (9,650)
TOTAL DIVIDENDS (1,723,112) (5,473,429)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 4,437,375 6,902,174
Class B shares 694,451 3,131,814
Class C shares 207,158 472,618
Dividends reinvested:
Class A shares 633,972 2,017,842
Class B shares 184,005 874,269
Class C shares 10,700 10,434
Cost of shares redeemed:
Class A shares (5,159,443) (7,312,717)
Class B shares (5,966,368) (7,146,330)
Class C shares (82,401) (115,404)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (5,040,551) (1,165,300)
TOTAL INCREASE (DECREASE) IN NET ASSETS (11,283,860) (2,305,271)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 78,167,512 80,472,783
END OF PERIOD 66,883,652 78,167,512
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 215,245 318,580
Shares issued for dividends reinvested 31,100 92,816
Shares redeemed (252,728) (335,978)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,383) 75,418
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 32,869 143,855
Shares issued for dividends reinvested 8,995 40,204
Shares redeemed (289,846) (330,498)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (247,982) (146,439)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 9,927 21,872
Shares issued for dividends reinvested 526 482
Shares redeemed (3,961) (5,370)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 6,492 16,984
(A) DURING THE PERIOD ENDED OCTOBER 31, 1999, 177,905 CLASS B SHARES
REPRESENTING $3,662,692 WERE AUTOMATICALLY CONVERTED TO 177,929 CLASS A SHARES.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
-----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 21.37 21.68 20.99 20.84 20.69 20.41
Investment Operations:
Investment income--net .50 1.00 1.08 1.17 1.20 1.22
Net realized and unrealized gain
(loss) on investments (1.75) .21 .99 .41 .45 .28
Total from Investment Operations (1.25) 1.21 2.07 1.58 1.65 1.50
Distributions:
Dividends from investment
income--net (.50) (1.00) (1.08) (1.17) (1.20) (1.22)
Dividends from net realized gain
on investments -- (.52) (.30) (.26) (.30) --
Total Distributions (.50) (1.52) (1.38) (1.43) (1.50) (1.22)
Net asset value, end of period 19.62 21.37 21.68 20.99 20.84 20.69
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (11.78)(b) 5.66 10.03 7.74 8.06 7.63
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .85(b) .85 .72 .37 .37 .37
Ratio of net investment income
to average net assets 4.81(b) 4.59 4.96 5.54 5.64 6.01
Decrease reflected in above
expense ratios due to
undertakings by the Manager .14(b) .07 .18 .55 .55 .55
Portfolio Turnover Rate 21.17(c) 49.67 27.18 61.22 49.24 38.68
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 55,419 60,516 59,758 60,849 62,864 68,103
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 21.37 21.68 20.98 20.84 20.69 20.41
Investment Operations:
Investment income--net .44 .89 .97 1.06 1.09 1.10
Net realized and unrealized gain
(loss) on investments (1.76) .21 1.00 .40 .45 .28
Total from Investment Operations (1.32) 1.10 1.97 1.46 1.54 1.38
Distributions:
Dividends from investment
income--net (.44) (.89) (.97) (1.06) (1.09) (1.10)
Dividends from net realized gain
on investments -- (.52) (.30) (.26) (.30) --
Total Distributions (.44) (1.41) (1.27) (1.32) (1.39) (1.10)
Net asset value, end of period 19.61 21.37 21.68 20.98 20.84 20.69
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (12.34)(b) 5.13 9.53 7.15 7.51 7.05
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.35(b) 1.35 1.23 .88 .88 .89
Ratio of net investment income
to average net assets 4.29(b) 4.09 4.44 5.03 5.13 5.46
Decrease reflected in above
expense ratios due to
undertakings by the Manager .15(b) .08 .18 .55 .55 .55
Portfolio Turnover Rate 21.17(c) 49.67 27.18 61.22 49.24 38.68
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 10,768 17,031 20,454 17,396 17,461 16,818
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 21.36 21.67 20.97 20.83 20.78
Investment Operations:
Investment income--net .42 .83 .91 .99 .73
Net realized and unrealized gain (loss)
on investments (1.75) .21 1.00 .40 .35
Total from Investment Operations (1.33) 1.04 1.91 1.39 1.08
Distributions:
Dividends from investment income--net (.42) (.83) (.91) (.99) (.73)
Dividends from net realized gain
on investments -- (.52) (.30) (.26) (.30)
Total Distributions (.42) (1.35) (1.21) (1.25) (1.03)
Net asset value, end of period 19.61 21.36 21.67 20.97 20.83
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (12.50)(c) 4.86 9.24 6.79 7.29(c)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.60(c) 1.60 1.52 1.19 1.18(c)
Ratio of net investment income to
average net assets 4.02(c) 3.79 4.10 4.57 4.77(c)
Decrease reflected in above expense ratios
due to undertakings by the Manager .15(c) .11 .15 .54 .58(c)
Portfolio Turnover Rate 21.17(d) 49.67 27.18 61.22 49.24
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 697 620 261 129 1
(A) FROM AUGUST 15, 1995 (COMMENCEMENT OF INITIAL OFFERING) TO APRIL 30, 1996.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Texas Series (the "fund"). The
fund' s investment objective is to maximize current income exempt from Federal
and, where applicable, from State income taxes, without undue risk. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are val
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
ued 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. Under the terms of the custody
agreement, the fund received net earnings credits of $1,202 during the period
ended October 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
October 31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager has undertaken from May 1,
1999 to October 31, 1999 to reduce the management fee paid by the fund, to the
extent that the fund's aggregate expenses, excluding 12b-1 distribution fees,
taxes, brokerage, commitment fees, interest on borrowings and extraordinary The
Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
expenses, exceed an annual rate of .85 of 1% of the value of the fund's average
daily net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $52,223 during the period ended October 31, 1999.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $34,597 and $2,675, respectively, pursuant to the
Plan.
(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of the average daily
net assets for the provision of certain services. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
The Distributor may make payments to Service Agents (a securities dealer,
financial institution or other industry professional) in respect of these
services. The Distributor determines the amounts to be paid to Service Agents.
During the period ended October 31, 1999, Class A, Class B and Class C shares
were charged $73,408, $17,298 and $892, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $12,655 pursuant to the transfer
agency agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999 amounted to
$14,978,580 and $19,659,141, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$3,192,776, consisting of $805,602 gross unrealized appreciation and $3,998,378
gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, Texas
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 061/621SA9910
================================================================================
Dreyfus Premier
State Municipal
Bond Fund,
Virginia Series
SEMIANNUAL REPORT October 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
14 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier
State Municipal Bond Fund,
Virginia Series
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier State
Municipal Bond Fund, Virginia Series, covering the six-month period from May 1,
1999 through October 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Samuel Weinstock.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates twice during the summer of 1999, effectively offsetting most of last
fall' s interest-rate cuts. Higher interest rates led to some erosion of
municipal bond prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier State Municipal Bond Fund,
Virginia Series.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
November 15, 1999
DISCUSSION OF FUND PERFORMANCE
Samuel Weinstock, Portfolio Manager
How did Dreyfus Premier State Municipal Bond Fund, Virginia Series perform
during the period?
For the six-month period ended October 31, 1999, the fund's Class A shares
provided a -5.28% total return; its Class B shares provided a -5.58% total
return; and its Class C shares provided a -5.64% return.(1 )In comparison, the
Lipper Virginia Municipal Debt Funds category average provided a -4.66% total
return(2) for the same period.
We attribute the fund's negative absolute performance to a declining bond market
and rising interest rates. The fund's relative underperformance compared to its
benchmark is primarily a result of a relatively small Virginia bond market,
where the recent scarcity of new issuance limited our investment choices.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and Virginia tax-exempt income as
is practical from a diversified portfolio of municipal bonds without undue risk.
To achieve this objective, we employ four primary strategies. First, we strive
to identify the maturity range that we believe will provide the most favorable
returns over the next two years. Second, we evaluate issuers' credit quality to
find bonds that we believe provide high yields at an attractive price. Third, we
look for bonds with attractively high interest payments, even if they sell at a
premium to face value. Fourth, we assess individual bonds' early redemption
features, focusing on those that cannot be redeemed soon by their issuers.
Typically, the bonds we select for the fund will have several of these
qualities.
We also use computer models to evaluate the likely performance of bonds under
various market scenarios, including a .25% rise or .50% decline in interest
rates. When we find securities that we believe will provide participation when
the market rises and some protection against market declines, we tend to hold
them for the long term.
The Fund
DISCUSSION OF FUND PERFORMANCE (continued)
What other factors influenced the fund's performance?
The fund and the municipal bond marketplace were adversely affected by rising
interest rates. When the reporting period began on May 1, 1999, investors were
concerned that continued economic strength might rekindle long-dormant
inflationary pressures. In fact, in an attempt to forestall a potential
reacceleration of inflation, the Federal Reserve Board raised short-term
interest rates twice during the summer of 1999. This change in monetary policy
caused municipal bond prices to fall.
In addition, strong economic conditions have contributed to the nation's first
federal budget surplus in many years. While the government has had less need to
issue U.S. Treasury securities, demand has remained high from domestic and
overseas investors. This imbalance between supply and demand has recently
constrained the rise of taxable bond yields relative to tax-exempt bonds. As a
result, municipal bonds -- including those from Virginia issuers -- are
currently offering tax-exempt yields that compare very favorably with taxable
yields after adjusting for taxes.
What is the fund's current strategy?
In a rising interest-rate environment, we have focused primarily on maintaining
the fund's average duration within the neutral range. Because a fund's duration
naturally extends as interest rates rise and some bonds' prices fall below
levels at which issuers might redeem them early, bond funds tend to become more
sensitive to the adverse short-term effects of higher interest rates.
Accordingly, during the period we sold some of our longer maturity bonds,
including those priced at discounts to face value. We also sold bonds that were
in danger of falling below the prices at which corporations and other
institutional investors remain eligible for municipal bonds' tax advantages.
Although the supply of new Virginia bonds has been very limited, we have
attempted to reinvest the proceeds from the above-mentioned sales into
tax-exempt bonds that we believed would remain highly liquid in a declining
market. Accordingly, whenever possible we reduced our holdings of bonds from
Puerto Rico issuers in favor of Virginia obligations. We also took steps to
upgrade the fund by using high quality bonds to replace pre-refunded bonds as
well as bonds that were near their redemption dates. Typically, these new
purchases were available at face value or modest premiums, and had maturities of
seven years or less. Because of uncertainties in the pre-refunded bond market
sector, these new purchases often gave us an opportunity to enhance the fund's
income stream.
November 15, 1999
(1) Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares, or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares. Had these
charges been reflected, returns would have been lower. Past performance is no
guarantee of future results. Share price, yield and investment return fluctuate
such that upon redemption fund shares may be worth more or less than their
original cost. Income may be subject to state and local taxes for non-Virginia
residents. Some income may be subject to the Federal Alternative Minimum Tax
(AMT) for certain investors. Capital gains, if any, are fully taxable.
(2) Source: Lipper Analytical Services, Inc.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
October 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--95.1% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIRGINIA--67.2%
Alexandria Redevelopment and Housing Authority,
Multi-Family Housing Mortgage Revenue
(Buckingham Village Apartments)
6.125%, 7/1/2021 3,000,000 2,964,240
Beford County Industrial Development Authority,
IDR, (Nekossa Packaging Corp. Project)
5.60%, 12/1/2025 4,500,000 3,898,215
Chesapeake Bay Bridge and Tunnel Commission District,
Revenue, General Resolution 5.50%, 7/1/2025
(Insured; MBIA) 2,500,000 2,379,475
Chesapeake Toll Road, Expressway Revenue
5.625%, 7/15/2019 1,250,000 1,176,175
Dinwiddie County Industrial Development Authority, LR
(Dinwiddie County School Facilities Project) 6%, 2/1/2018 500,000 481,445
Dulles Town Center Community Development Authority,
Special Assessment Tax (Dulles Town Center Project)
6.25%, 3/1/2026 3,000,000 2,842,530
Fairfax County Park Authority, Park Facilities Revenue
6.625%, 7/15/2020 2,665,000 2,738,394
Fairfax County Redevelopment and Housing Authority, MFHR
(Paul Spring Retirement Center):
5.90%, 6/15/2017 (Insured; FHA) 200,000 199,984
6%, 12/15/2028 (Insured; FHA) 600,000 599,952
Fairfax County Water Authority, Water Revenue
7.769%, 4/1/2029 2,000,000 (a,b) 1,965,580
Hampton Redevelopment and Housing Authority,
First Mortgage Revenue (Olde Hampton Hotel
Associates Project) 6.50%, 7/1/2016 2,640,000 2,495,882
Harrisonburg Redevelopment and Housing Authority,
Lease Purchase Revenue 4.20%, 3/1/2004 1,900,000 1,842,202
Industrial Development Authority of the City of Hopewell,
Health Care Facility Revenue:
(Colonial Heights Convalescent Center Project)
5.60%, 10/1/2003 205,000 203,329
(Forest Hill Convalescent Center Project):
6%, 10/1/2006 (Prerefunded 10/1/2002) 260,000 (c) 279,053
6.15%, 10/1/2007 (Prerefunded 10/1/2002) 280,000 (c) 301,655
6.25%, 10/1/2008 (Prerefunded 10/1/2002) 115,000 (c) 124,206
(Westport Convalescent Center Project):
5.90%, 10/1/2005 315,000 313,016
6.15%, 10/1/2007 175,000 174,372
6.25%, 10/1/2008 410,000 408,950
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA (CONTINUED)
Industrial Development Authority of Giles County,
Exempt Facility Revenue (Hoechst Celanese Corp. Project)
5.95%, 12/1/2025 3,000,000 2,765,610
Industrial Development Authority of the County of Henrico,
SWDR (Browning-Ferris Industries of
South Atlantic, Inc. Project) 5.45%, 1/1/2014 3,500,000 3,026,835
Industrial Development Authority of the County of
Prince William, Revenue:
Hospital Facility (Potomac Hospital Corp. of Prince William)
6.85%, 10/1/2025 (Prerefunded 10/1/2005) 1,000,000 (c) 1,123,340
(Potomac Place) 6.25%, 12/20/2027 700,000 727,510
Residential Care Facility (First Mortgage-Westminster
Lake Ridge) 6.625%, 1/1/2026 3,500,000 3,425,135
Industrial Development Authority of the City of Winchester,
Residential Care Facility First Mortgage Revenue
(Westminster - Canterbury) 5.75%, 1/1/2027 2,750,000 2,407,845
Industrial Development Authority of the Town of West Point,
SWDR (Chesapeake Corp. Project) 6.375%, 3/1/2019 2,500,000 2,418,925
Isle Wight County Industrial Development Authority,
Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 6.10%, 5/1/2027 3,500,000 3,415,755
Prince William County Park Authority, Revenue
6.875%, 10/15/2016 (Prerefunded 10/15/2004) 3,000,000 (c) 3,328,410
Richmond Metropolitan Authority, Expressway Revenue
5.25%, 7/15/2017 (Insured; FGIC) 3,100,000 2,894,656
Staunton Industrial Development Authority,
Educational Facilities Revenue (Mary Baldwin College)
6.75%, 11/1/2021 3,145,000 3,253,408
University of Virginia, University Revenue 5.75%, 5/1/2021 2,325,000 2,237,650
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA) 2,000,000 1,805,440
Virginia Beach Development Authority, Revenue:
Industrial Development Mortgage
(Ramada Oceanside Resort) 8%, 8/1/2010 310,000 327,180
Nursing Home (Sentara Life Care Corp.)
7.75%, 11/1/2021 1,000,000 1,065,720
Virginia Housing Development Authority,
Commonwealth Mortgage:
6.60%, 7/1/2020 1,075,000 1,092,426
5.50%, 1/1/2022 4,375,000 4,077,894
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED--27.9%
Commonwealth of Puerto Rico (Public Improvement):
6%, 7/1/2015 2,000,000 2,083,620
6.80%, 7/1/2021 (Prerefunded 7/1/2002) 1,000,000 (c) 1,080,030
6%, 7/1/2026 (Prerefunded 7/1/2007) 1,500,000 (c) 1,638,510
Guam Airport Authority, Revenue 6.70%, 10/1/2023 2,000,000 2,096,660
Puerto Rico Electric Power Authority, Power Revenue:
5%, 7/1/2012 (Insured; MBIA) 50,000 48,467
6.23%, 7/1/2012 3,000,000 (a,b) 2,810,760
Puerto Rico Highway and Transportation Authority,
Highway Revenue:
5.50%, 7/1/2013 (Insured; MBIA) 10,000 10,033
7.319%, 7/1/2013 2,290,000 (a) 2,304,931
6.625%, 7/1/2018 (Prerefunded 7/1/2002) 2,000,000 (c) 2,151,520
5.50%, 7/1/2026 875,000 834,383
Puerto Rico Industrial, Tourist, Educational,
Medical and Environmental Control
Facilities Financing Authority, Higher Education Revenue
(Ana G. Mendez University System Project)
5.375%, 2/1/2019 1,500,000 1,364,190
Puerto Rico Ports Authority, Special Facilities Revenue
(American Airlines) 6.25%, 6/1/2026 3,000,000 3,014,430
Virgin Islands Public Finance Authority, Revenue,
Matching Fund Loan Notes
7.25%, 10/1/2018 (Prerefunded 10/1/2002) 4,000,000 (c) 4,408,120
Virgin Islands Territory (Hugo Insurance Claims Fund Program)
7.75%, 10/1/2006 (Prerefunded 10/1/2001) 1,160,000 (c) 1,234,170
Virgin Islands Water and Power Authority, Electric System
7.40%, 7/1/2011 (Prerefunded 7/1/2001) 1,780,000 (c) 1,887,245
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $94,162,501) 91,749,463
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--2.3%
- ------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA
Roanoke Industrial Development Authority,
HR (Roanoke Memorial Hospitals)
VRDN 3.60% (cost $2,200,000) 2,200,000 (d) 2,200,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $96,362,501) 97.4% 93,949,463
CASH AND RECEIVABLES (NET) 2.6% 2,469,002
NET ASSETS 100.0% 96,418,465
Summary of Abbreviations
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Administration Insurance Corporation
HR Hospital Revenue MFHR Multi-Family Housing Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 25.9
AA Aa AA 13.1
A A A 6.1
BBB Baa BBB 27.0
BB Ba BB 3.2
F1 MIG1/P1 SP1/A1 2.3
Not Rated(e) Not Rated(e) Not Rated(e) 22.4
100.0
(a) Inverse floater security -- the interest rate is subject to change periodically.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October 31,
1999, these securities amounted to $4,776,340 or 5.0% of net assets.
(c) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(d) Securities payable on demand. Variable interest rate--subject to periodic
change.
(e) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the fund may invest.
See notes to financial statements.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 96,362,501 93,949,463
Cash 251,866
Interest receivable 1,740,541
Receivable for investment securities sold 678,758
Receivable for shares of Beneficial Interest subscribed 4,955
Prepaid expenses 13,493
96,639,076
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 45,548
Due to Distributor 33,172
Payable for shares of Beneficial Interest redeemed 116,900
Accrued expenses 24,991
220,611
- --------------------------------------------------------------------------------
NET ASSETS ($) 96,418,465
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 99,231,938
Accumulated net realized gain (loss) on investments (400,435)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,413,038)
- --------------------------------------------------------------------------------
NET ASSETS ($) 96,418,465
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets ($) 68,896,102 24,680,030 2,842,333
Shares Outstanding 4,309,181 1,543,949 177,878
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 15.99 15.99 15.98
See notes to financial statements.
</TABLE>
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,079,767
EXPENSES:
Management fee--Note 3(a) 285,390
Shareholder servicing costs--Note 3(c) 162,715
Distribution fees--Note 3(b) 85,084
Registration fees 18,243
Professional fees 11,467
Prospectus and shareholders' reports 10,759
Custodian fees 5,464
Trustees' fees and expenses--Note 3(d) 720
Loan commitment fees--Note 2 201
Miscellaneous 7,356
TOTAL EXPENSES 587,399
INVESTMENT INCOME--NET 2,492,368
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (417,556)
Net unrealized appreciation (depreciation) on investments (7,738,287)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (8,155,843)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (5,663,475)
See notes to financial statements.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,492,368 5,023,622
Net realized gain (loss) on investments (417,556) 1,384,592
Net unrealized appreciation (depreciation)
on investments (7,738,287) (350,457)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (5,663,475) 6,057,757
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (1,774,428) (3,225,645)
Class B shares (650,086) (1,688,611)
Class C shares (67,854) (109,376)
Net realized gain on investments:
Class A shares -- (884,913)
Class B shares -- (533,711)
Class C shares -- (37,805)
TOTAL DIVIDENDS (2,492,368) (6,480,051)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 9,233,337 12,134,539
Class B shares 1,257,295 4,716,025
Class C shares 316,351 1,520,409
Dividends reinvested:
Class A shares 896,702 2,193,747
Class B shares 326,705 1,198,045
Class C shares 14,599 21,422
Cost of shares redeemed:
Class A shares (7,221,178) (7,521,104)
Class B shares (9,534,319) (10,983,245)
Class C shares (427,469) (326,419)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (5,137,977) 2,953,419
TOTAL INCREASE (DECREASE) IN NET ASSETS (13,293,820) 2,531,125
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 109,712,285 107,181,160
END OF PERIOD 96,418,465 109,712,285
See notes to financial statements.
Six Months Ended
October 31, 1999 Year Ended
(Unaudited) April 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A(A)
Shares sold 549,809 694,996
Shares issued for dividends reinvested 54,093 125,125
Shares redeemed (432,467) (429,470)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 171,435 390,651
- --------------------------------------------------------------------------------
CLASS B(A)
Shares sold 74,783 269,387
Shares issued for dividends reinvested 19,685 68,334
Shares redeemed (567,877) (629,062)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (473,409) (291,341)
- --------------------------------------------------------------------------------
CLASS C
Shares sold 18,791 86,730
Shares issued for dividends reinvested 881 1,224
Shares redeemed (26,101) (18,602)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (6,429) 69,352
(a) During the period ended October 31, 1999, 372,373 Class B shares
representing $6,256,860 were automatically converted to 372,423 Class A shares.
See notes to financial statements.
The Fund
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
October 31, 1999 Year Ended April 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 17.31 17.37 16.61 16.27 16.03 16.02
Investment Operations:
Investment income--net .42 .85 .88 .94 .93 .94
Net realized and unrealized gain
(loss) on investments (1.32) .17 .76 .34 .24 .04
Total from Investment Operations (.90) 1.02 1.64 1.28 1.17 .98
Distributions:
Dividends from investment
income--net (.42) (.85) (.88) (.94) (.93) (.94)
Dividends from net realized gain
on investments -- (.23) (.00)(a) -- -- --
Dividends in excess of net realized
gain on investments -- -- -- -- -- (.03)
Total Distributions (.42) (1.08) (.88) (.94) (.93 (.97)
Net asset value, end of period 15.99 17.31 17.37 16.61 16.27 16.03
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (10.47)(c) 5.98 10.05 8.02 7.32 6.39
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .97(c) .92 .75 .39 .50 .39
Ratio of net investment income
to average net assets 4.97(c) 4.83 5.10 5.67 5.58 5.93
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- .14 .55 .55 .55
Portfolio Turnover Rate 11.95(d) 30.19 21.25 45.29 50.06 21.60
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 68,896 71,612 65,086 61,099 61,149 62,428
(a) Amount represents less than $.01 per share.
(b) Exclusive of sales charge.
(c) Annualized.
(d) Not annualized.
See notes to financial statements.
Six Months Ended
October 31, 1999 Year Ended April 30,
------------------------------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 17.31 17.37 16.60 16.27 16.03 16.02
Investment Operations:
Investment income--net .37 .76 .79 .86 .84 .85
Net realized and unrealized gain
(loss) on investments (1.32) .17 .77 .33 .24 .04
Total from Investment Operations (.95) .93 1.56 1.19 1.08 .89
Distributions:
Dividends from investment
income--net (.37) (.76) (.79) (.86) (.84) (.85)
Dividends from net realized gain
on investments -- (.23) (.00)(a) -- -- --
Dividends in excess of net realized
gain on investments -- -- -- -- -- (.03)
Total Distributions (.37) (.99) (.79) (.86) (.84 (.88)
Net asset value, end of period 15.99 17.31 17.37 16.60 16.27 16.03
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(B) (11.07)(c) 5.44 9.56 7.41 6.77 5.83
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.48(c) 1.43 1.26 .90 1.01 .90
Ratio of net investment income
to average net assets 4.45(c) 4.32 4.58 5.15 5.06 5.40
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- .14 .55 .55 .55
Portfolio Turnover Rate 11.95(d) 30.19 21.25 45.29 50.06 21.60
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 24,680 34,912 40,100 35,787 33,120 28,813
(a) Amount represents less than $.01 per share.
(b) Exclusive of sales charge.
(c) Annualized.
(d) Not annualized.
The Fund
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended
October 31, 1999 Year Ended April 30,
--------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value, beginning of period 17.30 17.36 16.60 16.26 16.17
Investment Operations:
Investment income--net .35 .72 .75 .81 .57
Net realized and unrealized gain (loss)
on investments (1.32) .17 .76 .34 .09
Total from Investment Operations (.97) .89 1.51 1.15 .66
Distributions:
Dividends from investment income--net (.35) (.72) (.75) (.81) (.57)
Dividends from net realized gain
on investments -- (.23) (.00)(b) -- --
Total Distributions (.35) (.95) (.75) (.81) (.57)
Net asset value, end of period 15.98 17.30 17.36 16.60 16.26
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(C) (11.19)(d) 5.19 9.22 7.18 5.64(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.70(d) 1.66 1.54 1.17 1.21(d)
Ratio of net investment income to
average net assets 4.24(d) 4.06 4.24 4.83 4.55(d)
Decrease reflected in above expense ratios
due to undertakings by the Manager -- -- .11 .54 .52(d)
Portfolio Turnover Rate 11.95(e) 30.19 21.25 45.29 50.06
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 2,842 3,188 1,996 674 166
(a) From August 15, 1995 (commencement of initial offering) to April 30, 1996.
(b) Amount represents less than $.01 per share.
(c) Exclusive of sales charge.
(d) Annualized.
(e) Not annualized.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier State Municipal Bond Fund (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified
open-end management investment company, and operates as a series company
currently offering thirteen series including the Virginia Series (the "fund").
The fund' s investment objective is to maximize current income exempt from
Federal and, where applicable, from State income taxes, without undue risk. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned
subsidiary of Mellon Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of $.001 par
value shares in the following classes of shares: 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
(" CDSC") imposed on Class B share redemptions made within six years of purchase
(five years for shareholders beneficially owning Class B shares on November 30,
1996) and Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase. Other differences between the classes
include the services offered to and the expenses borne by each Class and certain
voting rights.
The Trust 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 fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumption. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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. Under the terms of the custody
agreement, the fund receives net earnings credits based on available cash
balances left on deposit.
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 of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During period ended October
31, 1999, the fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .55 of 1% of the value of the fund's average
daily net assets and is payable monthly. The Manager had undertaken from May 1,
1999 to October 31, 1999 to reduce the management fee paid by the fund, to the
extent that the fund' s aggregate expenses, exclusive of taxes, brokerage
commission, interest on borrowings, Distribution Plan fees, commitment fees and
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
extraordinary expenses, exceed an annual rate of 1% of the value of the fund's
average daily net assets.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$3,977 during the period ended October 31, 1999, from commissions earned on
sales of the fund's shares.
(B) Under the Distribution Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, Class B and Class C shares pay the Distributor for distributing
their shares at an annual rate of .50 of 1% of the value of the average daily
net assets of Class B shares and .75 of 1% of the value of the average daily net
assets of Class C shares. During the period ended October 31, 1999, Class B and
Class C shares were charged $73,080 and $12,004, respectively, pursuant to the
Plan.
(C) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay
the Distributor at an annual rate of .25 of 1% of the value of their average
daily net assets for the provision of certain services. The services provided
may include personal services relating to shareholder accounts, such as
answering shareholder inquiries regarding the fund and providing reports and
other information, and services related to the maintenance of shareholder
accounts. The Distributor may make payments to Service Agents (a securities
dealer, financial institution or other industry professional) in respect of
these services. The Distributor determines the amounts to be paid to Service
Agents. During the period ended October 31, 1999, Class A, Class B and Class C
shares were charged $89,181, $36,540 and $4,001, respectively, pursuant to the
Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended October 31, 1999, the fund was charged $23,078 pursuant to the transfer
agency agreement.
(D) Each trustee who is not an "affiliated person" as defined in the Act
receives from the Trust an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended October 31, 1999, amounted to
$12,101,976 and $21,251,714, respectively.
At October 31, 1999, accumulated net unrealized depreciation on investments was
$2,413,038, consisting of $1,920,604 gross unrealized appreciation and
$4,333,642 gross unrealized depreciation.
At October 31, 1999, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
Dreyfus Premier State Municipal Bond Fund, Virginia
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
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call your financial representative or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 1999 Dreyfus Service Corporation 066/625SA9910
