PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to report that First Prairie Municipal Bond Fund,
Intermediate Series (incorporated under the name First Prairie Tax Exempt
Bond Fund, Inc.) continued to provide competitive returns during the
semi-annual period ended August 31, 1994. The annualized distribution rate
per share for First Prairie Municipal Bond Fund, Intermediate Series, Class A
shares was 4.43% and for Class B shares was 4.03%.* We are also pleased to
report that all dividends paid from net investment income were exempt from
Federal income tax.**
Effective February 8, 1994, your Fund began operating under the name
First Prairie Municipal Bond Fund, Intermediate Series, which allows the Fund
to invest, without limitation, in municipal securities whose income may be
subject to the Federal Alternative Minimum tax for certain investors. As a
result, the Fund should benefit from additional yield without incurring any
additional risk. To determine whether you may be subject to the Federal
Alternative Minimum Tax and its consequences, you should consult your tax
advisor.
As we reported in the Fund's annual report on February 28, 1994, the Fund
has been in a defensive mode. This was based on our expectation that, due to
the strength of the economic recovery in the U.S. and the possibility of
renewed inflation, interest rates would start moving up at some point during
the year. This analysis was borne out late in 1993 and in the first half of
1994. As of September 1, 1994, we have decided to begin reinvesting our cash
reserves and become more "market weighted" as to average maturity.
Our defensive position has accomplished its objective of helping to
preserve net asset value as market yields increased. We now expect the
current yield of the Fund to increase as cash reserves are reinvested in
longer maturities.
As far as the distribution of investments is concerned, we are at present
overweighting General Obligation Bonds compared to Revenue Bonds. This is
based on the belief that, as the domestic economy improves, G.O.'s will
benefit more than revenue bonds.
Under current conditions, we continue to believe that it is particularly
important to stress high quality in buying municipal issues for the
portfolio. Accordingly, a considerable amount of management effort is being
expended on credit research.
We thank you for your confidence in the Fund and look forward to serving
your future investment needs.
Sincerely,
(T. Scott McCartan Signature)
T. Scott McCartan
Portfolio Manager
First Prairie Funds
September 19, 1994
New York, N.Y.
*Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share at the end of the period in the case of Class A
shares or the net asset value per share at the end of the period in the
case of Class B shares, adjusted for capital gain distributions in the
case of Class A shares.
** Income may be subject to state and local taxes.
PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to report that First Prairie Municipal Bond Fund, Insured
Series (incorporated under the name First Prairie Tax Exempt Bond Fund, Inc.)
continued to provide competitive returns during the semi-annual period ended
August 31, 1994. The annualized distribution rate per share for First Prairie
Municipal Bond Fund, Insured Series, Class A shares was 4.73% and for Class B
shares was 4.40%.* We are also pleased to report that all dividends paid from
net investment income were exempt from Federal income tax.**
Effective February 8, 1994, your Fund began operating under the name
First Prairie Municipal Bond Fund, Insured Series, which allows the Fund to
invest, without limitation, in municipal securities whose income may be
subject to the Federal Alternative Minimum Tax for certain investors. As a
result, the Fund should benefit from additional yield without incurring any
additional risk. To determine whether you may be subject to the Federal
Alternative Minimum Tax and its consequences, you should consult your tax
advisor.
As we reported in the Fund's annual report on February 28, 1994, the Fund
has been in a defensive mode. This was based on our expectation that, due to
the strength of the economic recovery in the U.S. and the possibility of
renewed inflation, interest rates would start moving up at some point during
the year. This analysis was borne out late in 1993 and in the first half of
1994. As of September 1, 1994, we have decided to begin reinvesting our cash
reserves and become more "market weighted" as to average maturity.
Our defensive position has accomplished its objective of helping to
preserve net asset value as market yields increased. We now expect the
current yield of the Fund to increase as cash reserves are reinvested in
longer maturities.
As far as the distribution of investments is concerned, we are at present
overweighting General Obligation Bonds compared to Revenue Bonds. This is
based on the belief that, as the domestic economy improves, G.O.'s will
benefit more than revenue bonds.
Under current conditions, we continue to believe that it is particularly
important to stress high quality in buying municipal issues for the
portfolio. Accordingly, a considerable amount of management effort is being
expended on credit research.
We thank you for your confidence in the Fund and look forward to serving
your future investment needs.
Sincerely,
(T. Scott McCartan Signature Logo)
T. Scott McCartan
Portfolio Manager
First Prairie Funds
September 19, 1994
New York, N.Y.
*Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period, divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the
case of Class B shares, adjusted for capital gain distributions in the
case of Class A shares.
** Income may be subject to state and local taxes.
FIRST PRAIRIE MUNICIPAL BOND FUND, INTERMEDIATE SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS AUGUST 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--100.0% AMOUNT VALUE
------------- -------------
<S> <C> <C>
ALASKA--3.6%
Alaska Student Loan Corp., Student Loan Revenue
5.50%, 7/1/2004 (Insured; AMBAC)........................................ $ 1,000,000 $ 961,730
ARIZONA--1.0%
University of Arizona, University Revenues 6.75%, 6/1/2001.................. 250,000 273,580
CALIFORNIA--8.7%
Fresno, Health Facility Revenue, Refunding (Holy Cross Health System Corp.):
4.875%, 12/1/2001....................................................... 575,000 555,364
5.10%, 12/1/2003........................................................ 635,000 609,606
Santa Clara, COP, American Baptist Homes West (Terraces of Los Gatos Project)
8%, 3/1/2018 (Insured; California Health Facility Construction Loan
Program)
(Prerefunded 3/1/2019) (a)............................................ 1,000,000 1,122,700
COLORADO--5.4%
Denver City and County, Airport System Subordinated Revenue
6.35%, 12/1/1994 (LOC; Sumitomo Trust and Banking Co., Ltd.) (b)........ 500,000 502,955
Denver Metropolitan Major League Baseball Stadium District, Sales Tax
Revenue,
Refunding (Baseball Stadium Project) 4.60%, 10/1/2005 (Insured; FGIC)... 1,000,000 918,980
ILLINOIS--8.8%
Illinois Health Facilities Authority, Improvement Revenue, Refunding:
(Illinois Masonic Medical Center) 4.90%, 10/1/2000...................... 825,000 802,560
(Swedish Covenant) 6.10%, 8/1/2008...................................... 1,000,000 1,001,420
Metropolitan Pier and Exposition Authority, Dedicated State Tax Revenue
6.125%, 6/1/2000........................................................ 500,000 524,960
INDIANA--1.9%
Indiana Bond Bank, Revenue (Revolving Fund Program) 5.80%, 2/1/2002......... 500,000 514,040
MASSACHUSETTS--6.4%
Massachusetts Industrial Finance Agency, Revenue
(Milton Academy) 7.25%,9/1/2019 (Insured; MBIA) (Prerefunded 9/1/1999) (a) 1,500,000 1,681,755
NEVADA--10.6%
State of Nevada:
Capital Improvement 6%, 5/1/2002........................................ 1,000,000 1,051,250
Refunding, Reservoir 5.90%, 4/1/2001.................................... 1,000,000 1,044,780
City of Las Vegas, Refunding 6.20%, 10/1/2001............................... 500,000 528,980
Nevada Housing Division (Single Family Program) 7.20%, 10/1/1998............ 170,000 176,106
FIRST PRAIRIE MUNICIPAL BOND FUND, INTERMEDIATE SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
NORTH DAKOTA--.3%
State of North Dakota, Student Loan Revenue 7.40%, 1/1/1998 (Insured; AMBAC) $ 70,000 $ 75,471
PENNSYLVANIA--8.7%
Commonwealth of Pennsylvania, Refunding 10%, 4/15/1998...................... 1,000,000 1,168,190
Pennsylvania Turnpike Commission, Turnpike Revenue 7.625%, 12/1/2009
(Prerefunded 12/1/1999) (a)............................................. 1,000,000 1,142,700
SOUTH CAROLINA--2.8%
South Carolina Public Service Authority, Revenue (Santee Cooper)
6.625%, 7/1/2031 (Prerefunded 7/1/2002) (a)............................. 660,000 729,551
TENNESSEE--5.0%
Bristol Health and Education Facilities Board, Revenue, Refunding
(Bristol Memorial Hospital) 6.75%, 9/1/2007 (Insured; FGIC)............. 1,200,000 1,311,120
TEXAS--14.9%
Public Finance Authority 8%,10/1/1999...................................... 1,000,000 1,137,450
Brazos River Authority, PCR (Texas Utilities-Electric) 8.25%, 12/1/2016 (Insured; FGIC) 500,000 546,990
Tarrant County Water Control and Improvement, Water Revenue
7.70%, 3/1/2000 (Prerefunded 3/1/1998) (a).............................. 2,000,000 2,188,860
Texas Housing Agency, SFMR 7.35%, 3/1/1998.................................. 50,000 51,374
UTAH--7.7%
Intermountain Power Agency, Special Obligation (5th Crossover)
7%, 7/1/2015 (Insured; FGIC)............................................ 1,775,000 1,910,131
Utah Building Ownership Authority, LR (Department Employment Security
Project)
7.50%, 8/15/2003 (Prerefunded 8/15/1998) (a)............................ 100,000 109,845
Utah Housing Finance Agency, Single Family Mortgage 7.70%, 1/1/1998......... 15,000 15,381
WASHINGTON--5.4%
King County 9%, 12/1/1999................................................... 1,200,000 1,422,120
WISCONSIN--8.8%
State of Wisconsin, Revenue:
7.10%, 5/1/2000 (Prerefunded 5/1/1998) (a).............................. 1,000,000 1,078,830
7%, 5/1/2003............................................................ 1,000,000 1,113,140
Wisconsin Housing and Economic Development Authority, Homeownership Revenue:
7.50%, 9/1/1997......................................................... 50,000 52,004
7.70%, 9/1/1998......................................................... 75,000 78,661
-------------
TOTAL INVESTMENTS (cost $26,329,077)........................................ $26,402,584
=============
FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--98.7% AMOUNT VALUE
------------- -------------
CALIFORNIA--14.2%
Santa Clara County, COP, American Baptist Homes West (Terraces of Los Gatos Project)
8%, 3/1/2018 (Insured; California Health Facility Construction Loan Program)
(Prerefunded 3/1/1998) (a)............................................ $ 1,000,000 $ 1,122,700
COLORADO--4.7%
Adams County, SFMR 8.875%, 8/1/2011 (Prerefunded 8/1/2003) (a).............. 300,000 375,162
DISTRICT OF COLUMBIA--2.8%
District of Columbia 7.25%, 6/1/2002 (Insured; AMBAC) (Prerefunded 6/1/1999) (a) 200,000 223,220
FLORIDA--9.0%
Broward County Educational Facilities Authority, Revenue, Refunding
(Nova Southeastern University Project) 5.875%, 4/1/2007 (Insured; Connie Lee) 400,000 400,396
Jacksonville, Guaranteed Entitlement Revenue, Refunding
5.60%, 10/1/2003 (Insured; AMBAC)....................................... 300,000 310,119
ILLINOIS--29.9%
Chicago, Wastewater Transmission Revenue
6.75%, 11/15/2020 (Insured; FGIC) (Prerefunded 11/15/2000) (a).......... 290,000 321,523
Illinois Health Facilities Authority, Revenue, Refunding:
(Bromenn Healthcare) 6%, 8/15/2005 (Insured; FGIC)...................... 275,000 286,809
(Evangelical Hospitals) 6%, 4/15/2000 (Insured; FGIC)................... 1,000,000 1,037,370
Regional Transportation Authority 8%, 6/1/2003 (Insured; AMBAC)............. 250,000 295,203
Northern Cook County, Solid Waste Agency, Contract Revenue
6.40%, 5/1/2006 (Insured; MBIA)......................................... 400,000 420,772
INDIANA--5.0%
Indiana Health Facility Financing Authority, HR, Refunding (Columbus Regional Hospital)
5.25%, 8/15/2004 (Insured; CGIC)........................................ 400,000 395,412
NEVADA--10.9%
Churchill County Health Care Facilities, Revenue (Western Health Network)
5.80%, 1/1/2006 (Insured; MBIA)......................................... 200,000 199,652
Clark County, Passenger Facility Charge Revenue
(Las Vegas McCarran International Airport) 5.80%, 7/1/2003 (Insured; AMBAC) 300,000 310,446
Henderson Sewer 7.20%, 1/1/2007 (Insured; MBIA)............................. 325,000 352,329
PENNSYLVANIA--12.5%
Philadelphia, Gas Works Revenue:
5%, 8/1/2003 (Insured; FSA)............................................. 315,000 307,465
5.10%, 8/1/2004 (Insured; FSA).......................................... 700,000 681,905
FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF INVESTMENTS (CONTINUED) AUGUST 31, 1994 (UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
RHODE ISLAND--5.6%
Pawtucket 5.25%, 4/15/2000 (Insured; FGIC).................................. $ 240,000 $ 242,894
State of Rhode Island, Construction Capital Development Loan
6%, 5/15/2002 (Insured; FGIC)........................................... 190,000 199,040
TENNESSEE--4.1%
Bristol Health and Educational Facilities Board, Revenue, Refunding
(Bristol Memorial Hospital) 6.75%, 9/1/2007 (Insured; FGIC)............. 300,000 327,780
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $7,698,235)..................... $ 7,810,197
============
SHORT-TERM MUNICIPAL INVESTMENTS--1.3%
IDAHO;
Bonner County, IDC, EDR, VRDN (McFarland Cascade Project)
2.75%, 10/1/2007 (LOC; Seattle First National Bank) (b,c) (cost $100,000) $ 100,000 $ 100,000
============
TOTAL INVESTMENTS--100.0% (cost $7,798,235)................................. $ 7,910,197
============
</TABLE>
<TABLE>
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation IDC Industrial Development Corporation
CGIC Capital Guaranty Insurance Corporation LOC Letter of Credit
COP Certificates of Participation LR Lease Revenue
EDR Economic Development Revenue MBIA Municipal Bond Insurance Association
FGIC Financial Guaranty Insurance Corporation PCR Pollution Control Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
HR Hospital Revenue VRDN Variable Rate Demand Note
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS
PERCENTAGE OF VALUE
--------------------------
STANDARD INTERMEDIATE INSURED
FITCH(D) OR MOODY'S OR & POOR'S SERIES SERIES
- --------- --------- ---------- -------------- --------
<S> <C> <C> <C> <C>
AAA Aaa AAA 48.6% 98.7%
AA Aa AA 33.1 _
A A A 18.3 _
F1 MIG1 & VMIG1 SP1 _ 1.3
-------- --------
100.0% 100.0%
-------- --------
-------- --------
</TABLE>
NOTES TO STATEMENTS OF INVESTMENTS:
(a) Bonds which are prerefunded are collateralized by U.S government
securities which are held in escrow and are used to pay principal and
interest on the tax-exempt issue and to retire the bonds in full at the
earliest refunding date.
(b) Secured by bank letters of credit.
(c) Securities payable on demand. The interest rate, which is subject to
change is based upon bank prime rates or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) At August 31, 1994, 26.5% of the Insured Series' investments are
insured by FGIC.
See notes to financial statements.
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1994 (UNAUDITED)
INTERMEDIATE INSURED
SERIES SERIES
------------- -------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $26,329,077 and $7,798,235, respectively)-see statement......... $26,402,584 $ 7,910,197
Cash.................................................................... 138,760 92,471
Interest receivable..................................................... 579,958 122,832
Receivable for subscriptions to Common Stock............................ 45,000 250
Prepaid expenses........................................................ 31,693 31,244
Due from The Dreyfus Corporation........................................ 56,600 46,771
------------- -------------
27,254,595 8,203,765
------------- -------------
LIABILITIES:
Payable for Common Stock redeemed....................................... 23,166 5,000
Accrued expenses........................................................ 37,744 20,410
------------- -------------
60,910 25,410
------------- -------------
NET ASSETS ...................................................... $27,193,685 $ 8,178,355
============= =============
REPRESENTED BY:
Paid-in capital......................................................... $27,591,848 $ 8,350,184
Accumulated net realized (loss) on investments.......................... (471,670) (283,791)
Accumulated net unrealized appreciation on investments-Note 3........... 73,507 111,962
------------- -------------
NET ASSETS at value......................................................... $27,193,685 $ 8,178,355
============= =============
Shares of Common Stock outstanding:
Class A Shares:
(2.5 billion shares of $.001 par value authorized).................... 2,275,961
=============
(2.5 billion shares of $.001 par value authorized).................... 686,420
============
Class B Shares:
(2.5 billion shares of $.001 par value authorized).................... 9,086
=============
(2.5 billion shares of $.001 par value authorized).................... 166
============
NET ASSET VALUE per share:
Class A Shares:
($27,085,556 / 2,275,961 shares)...................................... $11.90
========
($8,176,380 / 686,420 shares)......................................... $11.91
=======
Class B Shares:
($108,129 / 9,086 shares)............................................. $11.90
========
($1,975 / 166 shares)................................................. $11.92
=======
See notes to financial statements.
</TABLE>
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1994 (UNAUDITED)
INTERMEDIATE INSURED
SERIES SERIES
------------ --------------
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 670,410 $ 216,149
---------- ----------
EXPENSES--Note 1(c):
Investment advisory fee-Note 2(a)..................................... $ 55,495 $ 17,386
Administration fee-Note 2(a).......................................... 27,747 8,693
Shareholder servicing costs-Note 2(b,c)............................... 43,694 18,170
Legal fees............................................................ 23,630 7,162
Auditing fees......................................................... 17,397 5,072
Registration fees..................................................... 14,309 14,009
Prospectus and shareholders' reports-Note 2(b)........................ 9,982 7,460
Custodian fees........................................................ 4,111 2,192
Directors' fees and expenses-Note 2(d)................................ 2,948 915
Distribution fees (Class B Shares)-Note 2(b).......................... 99 5
Miscellaneous......................................................... 3,959 2,661
---------- ----------
203,371 83,725
Less_expense reimbursement from Adviser and
Dreyfus due to undertakings-Note 2(a)............................. 168,588 83,720
---------- ----------
TOTAL EXPENSES.................................................. 34,783 5
---------- ----------
INVESTMENT INCOME--NET.......................................... 635,627 216,144
---------- ----------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments--Note 3.............................. $(533,666) $(277,173)
Net unrealized appreciation (depreciation) on investments............... (137,984) 104,501
---------- ----------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (671,650) (172,672)
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS............. $ (36,023) $ 43,472
========== ==========
See notes to financial statements.
</TABLE>
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF CHANGES IN NET ASSETS
INTERMEDIATE SERIES
-----------------------------------
YEAR ENDED SIX MONTHS ENDED
FEBRUARY 28, AUGUST 31, 1994
1994 (UNAUDITED)
------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 1,394,851 $ 635,627
Net realized gain (loss) on investments................................. 1,275,347 (533,666)
Net unrealized (depreciation) on investments for the period............. (1,243,092) (137,984)
------------ --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 1,427,106 (36,023)
------------ --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares........................................................ (1,394,847) (634,857)
Class B shares........................................................ (4) (770)
------------ --------------
Net realized gain on investments:
Class A shares........................................................ (1,471,722) ___
Class B shares........................................................ ___ ___
------------ --------------
TOTAL DIVIDENDS................................................... (2,866,573) (635,627)
------------ --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 6,634,160 445,301
Class B shares........................................................ 12,000 97,500
Dividends reinvested:
Class A shares........................................................ 1,972,927 409,590
Class B shares........................................................ 4 717
Cost of shares redeemed:
Class A shares........................................................ (6,226,132) (1,924,172)
Class B shares........................................................ ___ (1,960)
------------ --------------
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS. 2,392,959 (973,024)
------------ --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 953,492 (1,644,674)
NET ASSETS:
Beginning of period..................................................... 27,884,867 28,838,359
------------ --------------
End of period........................................................... $28,838,359 $27,193,685
============= =============
SHARES
------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- -----------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
FEBRUARY 28, AUGUST 31,1994 FEBRUARY 28, AUGUST 31, 1994
1994 (UNAUDITED) 1994* (UNAUDITED)
------------- ---------- ---------------- ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 523,996 37,634 980 8,210
Shares issued for dividends reinvested. 158,309 34,535 1 60
Shares redeemed........................ (496,647) (162,092) ___ (165)
------------- ---------- ---------------- ------------
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING.................... 185,658 (89,923) 981 8,105
=========== ======== ==== ========
* From February 8, 1994 (commencement of initial offering) to February 28,
1994.
See notes to financial statements.
</TABLE>
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INSURED SERIES
-----------------------------------
YEAR ENDED SIX MONTHS ENDED
FEBRUARY 28, AUGUST 31, 1994
1994 (UNAUDITED)
------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 497,241 $ 216,144
Net realized gain (loss) on investments................................. 607,250 (277,173)
Net unrealized appreciation (depreciation) on investments for the period (728,931) 104,501
-------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. 375,560 43,472
------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net:
Class A shares........................................................ (497,237) (216,100)
Class B shares........................................................ (4) (44)
------------- -------------
From net realized gain on investments:
Class A shares........................................................ (717,815) ___
Class B shares........................................................ ___ ___
------------- -------------
In excess of net realized gain on investments:
Class A shares........................................................ (6,618) ___
Class B shares........................................................ ___ ___
------------- -------------
TOTAL DIVIDENDS................................................... (1,221,674) (216,144)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 3,586,206 171,406
Class B shares........................................................ 2,000 ___
Dividends reinvested:
Class A shares........................................................ 956,593 166,770
Class B shares........................................................ 4 43
Cost of shares redeemed:
Class A shares........................................................ (5,752,746) (1,223,327)
Class B shares........................................................ ___ ___
------------- -------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS.......... (1,207,943) (885,108)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS.................................. (2,054,057) (1,057,780)
NET ASSETS:
Beginning of period..................................................... 11,290,192 9,236,135
------------- -------------
End of period........................................................... $ 9,236,135 $ 8,178,355
============= ============
SHARES
------------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- -----------------------------------
YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
FEBRUARY 28, AUGUST 31,1994 FEBRUARY 28, AUGUST 31, 1994
1994 (UNAUDITED) 1994* (UNAUDITED)
------------- ---------- ---------------- ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 275,363 14,324 161 ____
Shares issued for dividends reinvested. 75,829 14,092 1 4
Shares redeemed........................ (441,865) (103,123) ___ ___
------------- ---------- ---------------- ------------
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING.................... (90,673) (74,707) 162 4
=========== ======== ==== ========
* From February 8, 1994 (commencement of initial offering) to February 28,
1994.
See notes to financial statements.
</TABLE>
<TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND, INTERMEDIATE SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
CLASS A SHARES CLASS B SHARES
----------------------------------------------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
FISCAL YEAR ENDED FEBRUARY, AUGUST 31, 1994 FEBRUARY 28, AUGUST 31, 1994
-------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED) 1994(1) (UNAUDITED)
------ ------ ------ ------ ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $11.43 $11.65 $11.95 $12.25 $12.79 $12.18 $12.32 $12.18
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net .78 .80 .76 .64 .61 .27 .03 .24
Net realized and
unrealized gain (loss)
on investments .22 .31 .37 .68 .01 (.28) (.14) (.28)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 1.00 1.11 1.13 1.32 .62 (.01) (.11) (.04)
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income_net.... (.78) (.80) (.76) (.64) (.61) (.27) (.03) (.24)
Dividends from net realized
gain on investments -- (.01) (.07) (.14) (.62) -- -- --
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (.78) (.81) (.83) (.78) (1.23) (.27) (.03) (.24)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period. $11.65 $11.95 $12.25 $12.79 $12.18 $11.90 $12.18 $11.90
====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN(2)....... 9.00% 9.94% 9.78% 11.26% 4.94% (.04%)(3) (.93%)(4) (.58%)(3)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets -- -- -- -- .06% .25%(3) .75%(3) .75%(3)
Ratio of net investment
income to average
net assets.... 6.62% 6.76% 6.15% 5.16% 4.78% 4.58%(3) 1.68%(3) 3.87%(3)
Decrease reflected in above
expense ratios due to
undertakings by the
Adviser and Dreyfus
(limited to the expense
limitation provision of
the Investment Advisory
and Administration
Agreements)... 2.75% 2.75% 1.72% 1.31% 1.21% 1.21%(3) 2.25%(3) 1.48%(3)
Portfolio Turnover Rate 46.68% 12.22% 86.91% 63.67% 167.95% 73.25%(4) 167.95% 73.25%(4)
Net Assets, end of period
(000's Omitted) $4,582 $7,251 $18,310 $27,885 $28,826 $27,086 $12 $108
- -------------------------
(1) From February 8, 1994 (commencement of initial offering) to February 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
See notes to financial statements.
</TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND, INSURED SERIES
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
CLASS A SHARES CLASS B SHARES
----------------------------------------------------------------- ------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED
FISCAL YEAR ENDED FEBRUARY, AUGUST 31, 1994 FEBRUARY 28, AUGUST 31, 1994
--------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED) 1994(1) (UNAUDITED)
------ ------ ------ ------ ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $11.82 $11.77 $12.10 $12.49 $13.25 $12.13 $12.37 $12.14
------ ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income_net .81 .81 .76 .70 .63 .30 .03 .26
Net realized and
unrealized gain (loss)
on investments .28 .33 .47 1.01 (.15) (.22) (.23) (.22)
------ ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 1.09 1.14 1.23 1.71 .48 .08 (.20) .04
------ ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income_net.... (.81) (.81) (.76) (.70) (.63) (.30) (.03) (.26)
Dividends from net realized
gain on investments (.33) -- (.08) (.25) (.96) -- -- --
Dividends from excess net
realized gain
on investments -- -- -- -- (.01) -- -- --
------ ------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS (1.14) (.81) (.84) (.95) (1.60) (.30) (.03) (.26)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period. $11.77 $12.10 $12.49 $13.25 $12.13 $11.91 $12.14 $11.92
====== ====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT
RETURN(2)....... 9.39% 10.13% 10.50% 14.37% 3.70% 1.35%(3) (1.64%)(4) .79%(3)
RATIOS/SUPPLEMENTAL
DATA:
Ratio of expenses to
average net assets -- -- -- -- -- -- .50%(3) .50%(3)
Ratio of net investment
income to average
net assets.... 6.60% 6.87% 5.99% 5.49% 4.85% 4.97%(3) 4.10%(3) 4.45%(3)
Decrease reflected in
above expense ratios
due to undertakings by
the Adviser and Dreyfus
(limited to the expense
limitation provision of
the Investment Advisory
and Administration
Agreements)... 2.75% 2.75% 2.75% 1.59% 1.44% 1.93%(3) 2.41%(3) 2.46%(3)
Portfolio Turnover Rate 85.07% 32.40% 66.28% 88.53% 175.06% 109.42%(4) 175.06% 109.42%(4)
Net Assets, end of period
(000's Omitted) $1,192 $2,244 $6,591 $11,290 $9,234 $8,176 $2 $2
- -------------------------
(1) From February 8, 1994 (commencement of initial offering) to February 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
See notes to financial statements.
</TABLE>
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company and operates as a
series company issuing two classes of Common Stock: the Intermediate Series
and the Insured Series. The Fund accounts separately for the assets,
liabilities and operations of each Series. The First National Bank of Chicago
("Adviser") serves as the Fund's investment adviser. The Dreyfus Corporation
("Dreyfus") serves as the Fund's administrator. Dreyfus Service Corporation,
a wholly-owned subsidiary of Dreyfus, acted as the distributor of the Fund's
shares until August 24, 1994. Effective August 24, 1994, Dreyfus became a
direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. ("Premier") was
engaged as the Fund's distributor. Premier, located at One Exchange Place,
Boston, Massachusetts 02109, is a wholly-owned subsidiary of Institutional
Administration Services, Inc., a provider of mutual fund administration
services, the parent company of which is Boston Institutional Group, Inc.
Each Series offers both Class A and Class B shares. Class A shares are
subject to a sales charge imposed at the time of purchase and Class B shares
are subject to a contingent deferred sales charge imposed at the time of
redemption on redemptions made within five years of purchase. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Each Series' investments are valued each
business day by an independent pricing service ("Service") approved by the
Board of Directors. Investments for which quoted bid prices are readily
available and are representative of the bid side of the market in the
judgment of the Service are valued at the mean between the quoted bid prices
(as obtained by the Service from dealers in such securities) and asked prices
(as calculated by the Service based upon its evaluation of the market for
such securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the Service,
based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and, when appropriate, 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.
(C) EXPENSES: Expenses directly attributable to each Series are charged
to that Series' operations; expenses which are applicable to both Series are
allocated between them.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund, with respect
to both Series, to declare dividends daily from investment income-net. Such
dividends are paid monthly. Dividends from net realized capital gain, with
respect to both Series, are normally declared and paid annually, but each
Series may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code. However, to the
extent that a net realized capital gain of either Series can be reduced by
capital loss carryovers, if any, of that Series, such gain will not be
distributed.
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Dividends in excess of net realized gain on investments for financial
statement purposes result primarily from losses from securities transactions
during the year ended February 28, 1994 which are treated for Federal income
tax purposes as arising in fiscal 1995.
(E) FEDERAL INCOME TAXES: It is the policy of each Series to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes. For Federal income tax purposes, each Series is treated as a
single entity for the purpose of determining such qualification.
NOTE 2--INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS
WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an Investment
Advisory Agreement with the Adviser and an Administration Agreement with
Dreyfus are payable monthly based on annual rates of .40 of 1% and .20 of 1%,
respectively, of the average daily value of each Series' net assets. The
agreements further provide that if in any full fiscal year the aggregate
expenses of either Series, excluding interest on borrowings, taxes, brokerage
and extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, that Series may deduct from the payments to be
made to the Adviser and Dreyfus, or the Adviser and Dreyfus will bear their
proportionate share of such excess to the extent required by state law. The
most stringent state expense limitation applicable to the Fund presently
requires reimbursement of expenses in any full fiscal year that such expenses
(exclusive of distribution expenses and certain expenses as described above)
exceed 2 1/2% of the first $30 million, 2% of the next $70 million and 1 1/2%
of the excess over $100 million of the average value of either Series' net
assets in accordance with the California "blue sky" regulations.
With respect to the Intermediate Series, the Adviser and Dreyfus have
currently undertaken to reimburse all fees and expenses in excess of an
annual rate of .25 of 1% (excluding 12b-1 fee) of the Series' average daily
net assets. During the six months ended August 31, 1994, the Adviser and
Dreyfus reimbursed the Series $90,179 and $78,409, respectively. With respect
to the Insured Series, the Adviser and Dreyfus have currently undertaken to
reimburse all fees and expenses (excluding 12b-1 fee). During the six months
ended August 31, 1994, the Adviser and Dreyfus reimbursed the Series $28,253
and $55,467, respectively.
First Chicago Investment Services, Inc., an affiliate of the Adviser,
retained $5,033 and $3,411 during the six months ended August 31, 1994 from
commissions earned on sales of Class A shares of the Intermediate Series and
Insured Series, respectively.
Dreyfus Service Corporation retained $513 and $313 during the six months
ended August 31, 1994 from commissions earned on sales of Class A shares of
the Intermediate Series and Insured Series, respectively.
No amounts were retained by Dreyfus Service Corporation during the period
ended August 31, 1994 from contingent deferred sales charges imposed upon
redemptions of the Fund's Class B Shares for the Intermediate Series and
Insured Series.
FIRST PRAIRIE MUNICIPAL BOND FUND
(incorporated as First Prairie Tax Exempt Bond Fund, Inc.)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(B) Under the Distribution Plan ("Class B Distribution Plan") adopted
pursuant to Rule 12b-1 under the Act, each Series pays the Service Agents
(which may include the Adviser, Dreyfus and Dreyfus Service Corporation) at
an annual rate of .50 of 1% of the value of each Series' Class B shares
average daily net assets, for the costs and expenses in connection with
advertising, marketing and distributing each Series' Class B shares. Each
Series may make payments to one or more Service Agents (a securities dealer,
financial institution, or other industry professional) based on the value of
each Series' Class B shares owned by clients of the Service Agent. During the
six months ended August 31, 1994, $99 and $5 was charged to the Intermediate
Series and the Insured Series pursuant to the Class B Distribution Plan,
respectively.
(C) Under the Shareholder Services Plan, each Series pays the Service
Agents (which may include the Adviser, Dreyfus and Dreyfus Service
Corporation) at an annual rate of .25 of 1% of the value of the Series'
average daily net assets of Class A and Class B shares for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding each Series and providing reports and other information, and
services related to the maintenance of shareholder accounts. For the six
months ended August 31, 1994, $34,634 and $50 were chargeable to the
Intermediate Series Class A and Class B shares, respectively, and $10,864 and
$2 were chargeable ot the Insured Series Class A and Class B shares,
respectively, pursuant to the Shareholder Services Plan, but these amounts
were not paid pursuant to the undertakings in effect (see Note 2(a)).
(D) Certain officers and directors of the Fund are "affiliated persons,"
as defined in the Act, of the Adviser or Dreyfus. Each director who is not an
"affiliated person" receives from the Fund an annual fee of $1,500 and an
attendance fee of $250 per meeting.
NOTE 3--SECURITIES TRANSACTIONS:
The following summarizes the securities transactions by the Fund, which
consisted entirely of long-term and short-term municipal investments, for the
six months ended August 31, 1994:
<TABLE>
PURCHASES SALES
--------------- ---------------
<S> <C> <C>
Intermediate Series............................................... $40,318,526 $43,935,069
Insured Series.................................................... $14,390,686 $15,891,224
</TABLE>
At August 31, 1994, accumulated net unrealized appreciation on
investments was $73,507, consisting of $230,916 gross unrealized appreciation
and $157,409 gross unrealized depreciation for the Intermediate Series.
At August 31, 1994, accumulated net unrealized appreciation on
investments was $111,962, consisting of $136,458 gross unrealized
appreciation and $24,496 gross unrealized depreciation for the Insured
Series.
At August 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
FIRST PRAIRIE
MUNICIPAL BOND FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
Investment Adviser
THE FIRST NATIONAL BANK
OF CHICAGO
Three First National Plaza
Chicago, IL 60670
Administrator
THE DREYFUS CORPORATION
200 Park Avenue
New York, NY 10166
Custodian
THE BANK OF NEW YORK
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. FPMBSA948
FIRST
(First Prairie Logo)
PRAIRIE
MUNICIPAL
BOND FUND
Semi-Annual Report
August 31, 1994
