File Nos. 33-19655
811-5454
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 12 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 12 [X]
(Check appropriate box or boxes.)
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
____ immediately upon filing pursuant to paragraph (b)
X on May 1, 1997 pursuant to paragraph (b)
____
60 days after filing pursuant to paragraph (a)(i)
____
on (date) pursuant to paragraph (a)(i)
____
75 days after filing pursuant to paragraph (a)(ii)
____
on (date) pursuant to paragraph (a)(ii) of Rule 485
____
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its common
stock under the Securities Act of 1933 pursuant to Section 24(f) of the
Investment Company Act of 1940. Registrant's Rule 24f-2 Notice for the
fiscal year ended December 31, 1996 was filed on February 10, 1997.
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 20
5 Management of the Fund 8
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 20
7 Purchase of Securities Being Offered 9
8 Redemption or Repurchase 14
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-27
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-15
Holders of Securities
16 Investment Advisory and Other B-15
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
Cross-Reference Sheet Pursuant to Rule 495(a) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-24
18 Capital Stock and Other Securities B-27
19 Purchase, Redemption and Pricing B-17, B-19,
of Securities Being Offered B-24
20 Tax Status *
21 Underwriters B-17
22 Calculations of Performance Data B-26
23 Financial Statements B-41
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-9
30 Location of Accounts and Records C-12
31 Management Services C-12
32 Undertakings C-12
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
INSERT STICKER
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PROSPECTUS MAY 1, 1997
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
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DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC. (THE "FUND") IS AN
OPEN-END, NON-DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A
MUNICIPAL BOND FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH
AS HIGH A LEVEL OF CURRENT INCOME EXEMPT FROM FEDERAL AND NEW JERSEY INCOME
TAXES AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL.
THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR FUTURE
REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1997, WHICH MAY
BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS
IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF
ADDITIONAL INFORMATION, MATERIAL INCORPORATED BY REFERENCE, AND OTHER
INFORMATION REGARDING THE FUND. FOR A FREE COPY OF THE STATEMENT OF
ADDITIONAL INFORMATION, WRITE TO THE FUND AT 144 GLENN CURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. THE NET ASSET VALUE OF FUNDS OF THIS TYPE FLUCTUATE FROM TIME TO
TIME.
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TABLE OF CONTENTS
Fee Table......................................... 3
Condensed Financial Information................... 4
Description of the Fund........................... 5
Management of the Fund............................ 8
How to Buy Shares................................. 9
Shareholder Services.............................. 11
How to Redeem Shares.............................. 14
Service Plan...................................... 17
Dividends, Distributions and Taxes................ 17
Performance Information........................... 19
General Information............................... 20
Appendix.......................................... 21
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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[This Page Intentionally Left Blank]
Page 2
<TABLE>
<CAPTION>
FEE TABLE
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Redemption Fee (as a percentage of amount redeemed)*.................................. 1.00%
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees (after fee waiver).................................................... .46%
12b-1 Fees (distribution and servicing)............................................... .25%
Other Expenses........................................................................ .09%
Total Fund Operating Expenses (after fee waiver)...................................... .80%
* Shares held for less than 15 days may be subject to a 1% redemption
fee payable to the Fund. See "How to Redeem Shares."
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $8 $26 $44 $99
</TABLE>
- -------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- -------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Fund and investors, the payment of which
will reduce investors' annual return. Long-term investors could pay more in
12b-1 fees than the economic equivalent of paying a front end sales charge.
The expenses noted above reflect an undertaking by The Dreyfus Corporation, in
effect through the fiscal year ending December 31, 1997, that if Fund
expenses, including the management fee, exceed .80% of the value of the
Fund's average net assets for the fiscal year, The Dreyfus Corporation may
waive its management fee or bear certain other expenses to the extent of such
excess expense. The expenses noted above, without reimbursement, would have
been: Management Fees -- .60% and Total Fund Operating Expenses -- .94%.
Certain Service Agents (as defined below) may charge their clients direct
fees for effecting transactions in Fund shares; such fees are not reflected
in the foregoing table. See "Management of the Fund," "How to Buy Shares,"
"How to Redeem Shares" and "Service Plan."
Page 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987(1) 1988 1989 1990 1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of year $11.50 $11.62 $12.16 $12.36 $12.47 $13.06 $13.17 $14.03 $12.41 $13.53
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net .14 .88 .83 .83 .81 .80 .79 .78 .74 .72
Net realized and unrealized
gain (loss) on investments .12 .54 .24 .11 .63 .31 .88 (1.61) 1.12 (.30)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS .26 1.42 1.07 .94 1.44 1.11 1.67 (.83) 1.86 .42
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment
income-net..... (.14) (.88) (.83) (.83) (.81) (.80) (.79) (.77) (.74) (.72)
Dividends from net realized
gain on investments -- -- (.04) -- (.04) (.20) (.02) -- -- (.23)
Dividends in excess of net
realized gain on investments -- -- -- -- -- -- -- (.02) -- --
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (.14) (.88) (.87) (.83) (.85) (1.00) (.81) (.79) (.74) (.95)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of year.... $11.62 $12.16 $12.36 $12.47 $13.06 $13.17 $14.03 $12.41 $13.53 $13.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 14.73%(2) 12.59% 9.11% 7.94% 11.95% 8.77% 12.97% (6.02%) 15.29% 3.43%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses
to average net assets -- .39% .82% .77% .75% .73% .72% .77% .80% .80%
Ratio of net investment income
to average net assets 8.02%(2) 7.36% 6.77% 6.74% 6.36% 6.06% 5.74% 5.94% 5.67% 5.46%
Decrease reflected in above
expense ratios due to
undertakings by The
Dreyfus Corporation
(limited to the expense
limitation provision of the
management agreement) 1.50%(2) .91% .25% .25% .25% .25% .25% .20% .15% .14%
Portfolio Turnover Rate -- 60.77% 34.96% 25.02% 22.53% 33.58% 6.05% 10.02% 24.37% 31.30%
Net Assets, end of year
(000's omitted) $37,743 $174,788 $256,902 $350,416 $515,706 $614,529 $725,815 $577,525 $653,836 $593,949
(1) From November 6, 1987 (commencement of operations) to December 31, 1987.
(2) Annualized.
</TABLE>
Further information about the Fund's performance is contained in the
Fund's annual report, which may be obtained without charge by writing to the
address or calling the number set forth on the cover page of this Prospectus.
Page 4
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as high a
level of current income exempt from Federal and New Jersey income taxes as is
consistent with the preservation of capital. To accomplish its investment
objective, the Fund invests primarily in the debt securities of the State of
New Jersey, its political subdivisions, authorities and corporations, and
certain other specified securities, the interest from which is, in the
opinion of bond counsel to the issuer, exempt from Federal and New Jersey
income taxes (collectively, "New Jersey Municipal Obligations"). To the
extent acceptable New Jersey Municipal Obligations are at any time
unavailable for investment by the Fund, the Fund may invest temporarily in
other debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal, but not New Jersey, income tax.
The dollar-weighted average maturity of the Fund's portfolio is expected to
exceed ten years. The Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of the Fund's outstanding voting
shares. There can be no assurance that the Fund's investment objective will
be achieved.
MUNICIPAL OBLIGATIONS
Debt securities the interest from which is, in the opinion of bond
counsel to the issuer, exempt from Federal income tax ("Municipal
Obligations") generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development bonds
issued by or on behalf of public authorities. Municipal Obligations are
classified as general obligation bonds, revenue bonds and notes. General
obligation bonds are secured by the issuer's pledge of its faith, credit and
taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Tax exempt
industrial development bonds, in most cases, are revenue bonds that generally
do not carry the pledge of the credit of the issuing municipality, but
generally are guaranteed by the corporate entity on whose behalf they are
issued. Notes are short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond sale,
collection of taxes or receipt of other revenues. Municipal Obligations
include municipal lease/purchase agreements which are similar to installment
purchase contracts for property or equipment issued by municipalities.
Municipal Obligations bear fixed, floating or variable rates of interest,
which are determined in some instances by formulas under which the Municipal
Obligation's interest rate will change directly or inversely to changes in
interest rates or an index, or multiples thereof, in many cases subject to a
maximum and minimum. Certain Municipal Obligations are subject to redemption
at a date earlier than their stated maturity pursuant to call options, which
may be separated from the related Municipal Obligation and purchased and sold
separately.
MANAGEMENT POLICIES
It is a fundamental policy of the Fund that it will invest at least
80% of the value of its net assets (except when maintaining a temporary
defensive position) in Municipal Obligations. At least 65% of the value of
the Fund's net assets (except when maintaining a temporary defensive
position) will be invested in bonds, debentures and other debt instruments.
Generally, at least 65% of the value of the Fund's net assets will be
invested in New Jersey Municipal Obligations and the remainder may be
invested in securities that are not New Jersey Municipal Obligations and
therefore may be subject to New Jersey income tax. See "Investment
Considerations and Risks _ Investing in New Jersey Municipal Obligations"
below, and "Dividends, Distributions and Taxes."
At least 80% of the value of the Fund's net assets must consist of
Municipal Obligations which, in the case of bonds, are rated no lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB
Page 5
by Standard & Poor's Ratings Group ("S&P") or Fitch Investors Service, L.P.
("Fitch"). The Fund may invest up to 20% of the value of its net assets in
Municipal Obligations which, in the case of bonds, are rated lower than Baa
by Moody's and BBB by S&P and Fitch and as low as the lowest rating
assigned by Moody's, S&P or Fitch. The Fund may invest in short-term
Municipal Obligations which are rated in the two highest rating categories
by Moody's, S&P or Fitch. See "Appendix B" in the Statement of Additional
Information. Municipal Obligations rated BBB by S&P or Fitch or Baa by
Moody's are considered investment grade obligations; those rated BBB by S&P
and Fitch are regarded as having an adequate capacity to pay principal and
interest, while those rated Baa by Moody's are considered medium grade
obligations which lack outstanding investment characteristics and have
speculative characteristics. Investments rated Ba or lower by Moody's and
BB or lower by S&P and Fitch ordinarily provide higher yields but involve
greater risk because of their speculative characteristics. The Fund may
invest in Municipal Obligations rated C by Moody's or D by S&P or Fitch,
which is the lowest rating assigned by such rating organizations and
indicates that the Municipal Obligation is in default and interest and/or
repayment of principal is in arrears. See "Investment Considerations and
Risks _ Lower Rated Bonds" below for a further discussion of certain risks.
The Fund also may invest in securities which, while not rated, are
determined by The Dreyfus Corporation to be of comparable quality to the
rated securities in which the Fund may invest; for purposes of the 80%
requirement described above, such unrated securities shall be deemed to
have the rating so determined. The Fund also may invest in Taxable
Investments of the quality described under "Appendix -- Certain Portfolio
Securities -- Taxable Investments."
From time to time, the Fund may invest more than 25% of the value of
its total assets in industrial development bonds which, although issued by
industrial development authorities, may be backed only by the assets and
revenues of the non-governmental users. Interest on Municipal Obligations
(including certain industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986, as amended
(the "Code"), issued after August 7, 1986, while exempt from Federal income
tax, is a preference item for the purpose of the alternative minimum tax.
Where a regulated investment company receives such interest, a proportionate
share of any exempt-interest dividend paid by the investment company may be
treated as such a preference item to shareholders. The Fund may invest
without limitation in such Municipal Obligations if The Dreyfus Corporation
determines that their purchase is consistent with the Fund's investment
objective. See "Investment Considerations and Risks" below.
The Fund's annual portfolio turnover rate is not expected to exceed
100%. The Fund may engage in various investment techniques, such as options
transactions and lending portfolio securities. Use of certain of these
techniques may give rise to taxable income. See "Dividends, Distributions and
Taxes." For a discussion of the investment techniques and their related
risks, see "Investment Considerations and Risks" and "Appendix_Investment
Techniques" below and "Investment Objective and Management Policies--Management
Policies" in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- Even though interest-bearing securities are investments which
promise a stable stream of income, the prices of such securities are
inversely affected by changes in interest rates and, therefore, are subject
to the risk of market price fluctuations. Certain securities that may be
purchased by the Fund, such as those with interest rates that fluctuate
directly or indirectly based on multiples of a stated index, are designed to
be highly sensitive to changes in interest rates and can subject the holders
thereof to extreme reductions of yield and possibly loss of principal. The
values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuing entities. Once the rating
of a portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold the
security. The Fund's net
Page 6
asset value generally will not be stable and should
fluctuate based upon changes in the value of the Fund's portfolio securities.
Securities in which the Fund will invest may earn a higher level of current
income than certain shorter-term or higher quality securities which generally
have greater liquidity, less market risk and less fluctuation in market
value.
INVESTING IN NEW JERSEY MUNICIPAL OBLIGATIONS -- You should consider
carefully the special risks inherent in the Fund's investment in New Jersey
Municipal Obligations. If there should be a default or other financial crisis
relating to the State of New Jersey or an agency or municipality thereof, the
market value and marketability of outstanding New Jersey Municipal
Obligations in the Fund's portfolio and interest income to the Fund could be
adversely affected. Although New Jersey enjoyed a period of economic growth
with unemployment levels below the national average during the mid-1980s, its
economy slowed down well before the onset of the national recession, which,
according to the National Bureau of Economic Research, began in July 1990.
Reflecting the economic downturn, the State's unemployment rate rose from a
low of 3.6% in the first quarter of 1989 to a recessionary peak of 8.5%
during 1992. Since then, the State's unemployment rate fell to an average of
6.4% during 1995 and 6.1% for the four month period from May 1996 through
August 1996. As a result of New Jersey's fiscal weakness, in July 1991, S&P
lowered its rating of the State's general obligation debt from AAA to AA+.
You should obtain and review a copy of the Statement of Additional
Information which more fully sets forth these and other risk factors.
INVESTING IN MUNICIPAL OBLIGATIONS -- The Fund may invest more than 25% of
the value of its total assets in Municipal Obligations which are related in
such a way that an economic, business or political development or change
affecting one such security also would affect the other securities; for
example, securities the interest upon which is paid from revenues of similar
types of projects. As a result, the Fund may be subject to greater risk as
compared to a fund that does not follow this practice.
Certain municipal lease/purchase obligations in which the Fund may
invest may contain "non-appropriation" clauses which provide that the
municipality has no obligation to make lease payments in future years unless
money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease/purchase obligations are secured by the leased
property, disposition of the leased property in the event of foreclosure
might prove difficult. In evaluating the credit quality of a municipal
lease/purchase obligation that is unrated, The Dreyfus Corporation will
consider, on an ongoing basis, a number of factors including the likelihood
that the issuing municipality will discontinue appropriating funding for the
leased property.
Certain provisions in the Code relating to the issuance of Municipal
Obligations may reduce the volume of Municipal Obligations qualifying for
Federal tax exemption. One effect of these provisions could be to increase
the cost of the Municipal Obligations available for purchase by the Fund and
thus reduce available yield. Shareholders should consult their tax advisers
concerning the effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption for
interest on Municipal Obligations may be introduced in the future. If any
such proposal were enacted that would reduce the availability of Municipal
Obligations for investment by the Fund so as to adversely affect Fund
shareholders, the Fund would reevaluate its investment objective and policies
and submit possible changes in the Fund's structure to shareholders for their
consideration. If legislation were enacted that would treat a type of
Municipal Obligation as taxable, the Fund would treat such security as a
permissible Taxable Investment within the applicable limits set forth herein.
ZERO COUPON SECURITIES -- Federal income tax law requires the holder of a
zero coupon security or of certain pay-in-kind bonds to accrue income with
respect to these securities prior to the receipt of cash payments. To
maintain its qualification as a regulated investment company and avoid
liability for Federal income taxes, the Fund may be required to distribute
such income accrued with respect to these securities and may have to dispose
of portfolio securities under disadvantageous circumstances in order to
generate cash to satisfy these distribution requirements.
Page 7
LOWER RATED BONDS _ The Fund may invest up to 20% of the value of its net
assets in higher yielding (and, therefore, higher risk) debt securities such
as those rated Ba by Moody's or BB by S&P or Fitch or as low as the lowest
rating assigned by Moody's, S&P or Fitch (commonly known as junk bonds). They
generally are not meant for short-term investing and may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. The retail secondary market for these bonds may be less liquid
than that of higher rated bonds; adverse conditions could make it difficult
at times for the Fund to sell certain securities or could result in lower
prices than those used in calculating the Fund's net asset value. See
"Appendix _ Certain Portfolio Securities _ Ratings."
USE OF DERIVATIVES -- The Fund may invest in derivatives ("Derivatives").
These are financial instruments which derive their performance, at least in
part, from the performance of an underlying asset, index or interest rate.
The Derivatives the Fund may use include options. While Derivatives can be
used effectively in furtherance of the Fund's investment objective, under
certain market conditions, they can increase the volatility of the Fund's net
asset value, decrease the liquidity of the Fund's portfolio and make more
difficult the accurate pricing of the Fund's portfolio. See "Appendix --
Investment Techniques -- Use of Derivatives" below and "Investment Objective
and Management Policies -- Management Policies -- Derivatives"in the
Statement of Additional Information.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the Fund's
assets that may be invested in the securities of a single issuer is not
limited by the 1940 Act. A "diversified" investment company is required by
the 1940 Act generally, with respect to 75% of its total assets, to invest
not more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of the Fund's assets may be invested in the
obligations of a limited number of issuers, the Fund's portfolio securities
may be more sensitive to changes in the market value of a single issuer.
However, to meet Federal tax requirements, at the close of each quarter the
Fund may not have more than 25% of its total assets invested in any one
issuer and, with respect to 50% of total assets, not more than 5% of its
total assets invested in any one issuer. These limitations do not apply to
U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the size of the
position obtained for or disposed of by the Fund or the price paid or
received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of March 31, 1997, The Dreyfus Corporation managed
or administered approximately $82 billion in assets for approximately 1.7
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Maryland law.
The Fund's primary portfolio manager is Samuel J. Weinstock. He has held that
position since August 31, 1988 and has been employed by The Dreyfus
Corporation since 1987. The Fund's other portfolio managers are identified in
the Statement of Additional Information. The Dreyfus Corporation also
provides research services for the Fund and for other funds advised by The
Dreyfus Corporation through a professional staff of portfolio managers and
securities analysts.
Page 8
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$233 billion in assets as of December 31, 1996, including approximately $86
billion in proprietary mutual fund assets. As of December 31, 1996, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial and administration services, for more than $1.046 trillion in
assets, including approximately $57 billion in mutual fund assets.
Under the terms of the Management Agreement, the Fund has agreed to
pay The Dreyfus Corporation a monthly fee at the annual rate of .60 of 1% of
the value of the Fund's average daily net assets. For the fiscal year ended
December 31, 1996, the Fund paid The Dreyfus Corporation a monthly management
fee at the effective annual rate of .46 of 1% of the value of the Fund's
average daily net assets pursuant to an undertaking by The Dreyfus
Corporation. From time to time, The Dreyfus Corporation may waive receipt of
its fees and/or voluntarily assume certain expenses of the Fund, which would
have the effect of lowering the expense ratio of the Fund and increasing
yield to investors. The Fund will not pay The Dreyfus Corporation at a later
time for any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for the Fund. See "Portfolio Transactions" in the State
ment of Additional Information.
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from its own assets, including past profits but not
including the management fee paid by the Fund. The Fund's distributor may use
part or all of such payments to pay Service Agents in respect of these
services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.
HOW TO BUY SHARES
Fund shares are sold through the Distributor or certain financial
institutions (which may include banks), securities dealers ("Selected
Dealers"), and other industry professionals, such as investment advisers,
accountants and estate planning firms (collectively, "Service Agents") that
have entered into service agreements with the Distributor. Stock certificates
are issued only upon your written request. No certificates are issued for
fractional shares. It is not recommended that the Fund be used as a vehicle
for Keogh, IRA or other qualified plans. The Fund reserves the right to
reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a
client of a Service Agent which maintains an omnibus account in the Fund and
has made an aggregate minimum initial purchase for its
Page 9
customers of $2,500. Subsequent investments must be at least $100. The
initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation,
Board members of a fund advised by The Dreyfus Corporation, including members
of the Fund's Board, or the spouse or minor child of any of the foregoing,
the minimum initial investment is $1,000. For full-time or part-time
employees of The Dreyfus Corporation or any of its affiliates or subsidiaries
who elect to have a portion of their pay directly deposited into their Fund
accounts, the minimum initial investment is $50. The Fund reserves the right
to vary further the initial and subsequent investment minimum requirements at
any time. Fund shares also are offered without regard to the minimum initial
investment requirements through Dreyfus-AUTOMATIC Asset BuilderRegistration
Mark, Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll Savings
Plan pursuant to the Dreyfus Step Program described under "Shareholders
Services." These services enable you to make regularly scheduled investments and
may provide you with a convenient way to invest for long-term financial goals.
You should be aware, however, that periodic investment plans do not guarantee a
profit and will not protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the Dreyfus
TeleTransfer Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105. Neither initial nor
subsequent investments should be made by third party check. Purchase orders
may be delivered in person only to a Dreyfus Financial Center. THESE ORDERS
WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest Dreyfus Financial Center, please
call one of the telephone numbers listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to The Bank of New York, DDA#8900052295/Dreyfus New
Jersey Municipal Bond Fund, Inc., for purchase of Fund shares in your name.
The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing your wire
payment to obtain your Fund account number. Please include your Fund account
number on the Account Application and promptly mail the Account Application
to the Fund, as no redemptions will be permitted until the Account
Application is received. You may obtain further information about remitting
funds in this manner from your bank. All payments should be made in U.S.
dollars and, to avoid fees and delays, should be drawn only on U.S. banks. A
charge will be imposed if any check used for investment in your account does
not clear. Other purchase procedures may be in effect for clients of certain
Service Agents. The Fund makes available to certain large institutions the
ability to issue purchase instructions through compatible computer
facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."
Management understands that some Service Agents may impose certain
conditions on their clients which are different from those described in this
Prospectus, and, to the extent permitted by applicable regulatory
authorities, may charge their clients direct fees for Servicing (as defined
under "Service Plan"). You should consult your Service Agent in this regard.
Page 10
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent. Net asset value per share is determined as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time), on each day the New York Stock Exchange is open for business. Net
asset value per share is computed by dividing the value of the Fund's net
assets (i.e., the value of its assets less liabilities) by the total number
of shares outstanding. The Fund's investments are valued by an independent
pricing service approved by the Fund's Board and are valued at fair value as
determined by the pricing service. The pricing service's procedures are
reviewed under the general supervision of the Fund's Board. For further
information regarding the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Statement of Additional
Information.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Account Application or
have filed a Shareholder Services Form with the Transfer Agent. The proceeds
will be transferred between the bank account designated in one of these
documents and your Fund account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be so
designated. The Fund may modify or terminate this Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES
The services and privileges described under this heading may not be
available to clients of certain Service Agents and some Service Agents may
impose certain conditions on their clients which are different from those
described in this Prospectus. You should consult your Service Agent in this
regard.
FUND EXCHANGES -- You may purchase, in exchange for shares of the Fund,
shares of certain other funds managed or administered by The Dreyfus
Corporation, to the extent such shares are offered for sale in your state of
residence. These funds have different investment objectives which may be of
interest to you. If you desire to use this service, you should consult your
Service Agent or call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use.
To request an exchange, you or your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing or by
telephone. Before any exchange, you must obtain and should review a copy of
the current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling 1-800-645-6561. Except in the case of
personal retirement plans, the shares being exchanged must have a current
value of at least $500; furthermore, when establishing a new account by
exchange, the shares being exchanged must have a value of at least the
minimum initial investment required for the fund into which the exchange is
being made. The ability to issue exchange instructions by telephone is given
to all Fund shareholders automatically, unless you check the applicable "No"
box on the Account Application, indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatories on
the account by calling 1-800-645-6561. If you have established the Telephone
Exchange Privilege, you may telephone exchange instructions (including over
The Dreyfus TouchRegistration Mark automated telephone sys-
Page 11
tem) by calling 1-800-645-6561. If you are calling from overseas, call
516-794-5452. See "How to Redeem Shares _ Procedures." Upon an exchange into
a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividend/capital gain
distribution option (except for Dreyfus Dividend Sweep) selected by the
investor.
The Fund will deduct a redemption fee equal to 1% of the net asset
value of Fund shares exchanged where the exchange is made less than 15 days
after the issuance of such shares. See "How To Redeem Shares." Otherwise,
shares will be exchanged at the next determined net asset value; however, a
sales load may be charged with respect to exchanges into funds sold with a
sales load. If you are exchanging into a fund that charges a sales load, you
may qualify for share prices which do not include the sales load or which
reflect a reduced sales load, if the shares you are exchanging were: (a)
purchased with a sales load, (b) acquired by a previous exchange from shares
purchased with a sales load, or (c) acquired through reinvestment of
dividends or distributions paid with respect to the foregoing categories of
shares. To qualify, at the time of the exchange you must notify the Transfer
Agent or your Service Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders directly
in connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge shareholders a nominal
administrative fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The availability of Fund Exchanges may be
modified or terminated at any time upon notice to shareholders. See
"Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE -- Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Fund, in shares of other funds in the
Dreyfus Family of Funds of which you are a shareholder. The amount you
designate, which can be expressed either in terms of a specific dollar or
share amount ($100 minimum), will be exchanged automatically on the first
and/or fifteenth day of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. See "Shareholder Services" in the Statement of
Additional Information. The right to exercise this Privilege may be modified
or canceled by the Fund or the Transfer Agent. You may modify or cancel your
exercise of this Privilege at any time by mailing written notification to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
The Fund may charge a service fee for the use of this Privilege. No such fee
currently is contemplated. For more information concerning this Privilege and
the funds in the Dreyfus Family of Funds eligible to participate in this
Privilege, or to obtain a Dreyfus Auto-Exchange Authorization Form, please
call toll free 1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-AUTOMATIC Asset
Builder permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
purchase at any time by mailing written notification to the Dreyfus Family of
Funds, P.O. Box 9671,
Page 12
Providence, Rhode Island 02940-9671. The notification will be effective
three business days following receipt. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently
is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- Dreyfus Government Direct
Deposit Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the Federal
government automatically deposited into your Fund account. You may deposit as
much of such payments as you elect. To enroll in Dreyfus Government Direct
Deposit, you must file with the Transfer Agent a completed Direct Deposit
Sign-Up Form for each type of payment that you desire to include in this
Privilege. The appropriate form may be obtained by calling 1-800-645-6561.
Death or legal incapacity will terminate your participation in this
Privilege. You may elect at any time to terminate your participation by
notifying in writing the appropriate Federal agency. Further, the Fund may
terminate your participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN -- Dreyfus Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you may
have part or all of your paycheck transferred to your existing Dreyfus
account electronically through the Automated Clearing House system at each
pay period. To establish a Dreyfus Payroll Savings Plan account, you must
file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
DREYFUS STEP PROGRAM -- Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a
Dreyfus Step Program account, you must supply the necessary information on
the Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time.
DREYFUS DIVIDEND OPTIONS -- Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share price
s which do not include the sales load or which reflect a reduced sales load.
If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends and
capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a fee
for this service.
Page 13
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply to Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund will deduct a redemption fee of 1% of the net asset value of
Fund shares redeemed or exchanged less than 15 days following the issuance of
such shares. The fee will be retained by the Fund and used primarily to
offset the transaction costs that short-term trading imposes on the Fund and
its shareholders. For purposes of calculating the 15-day holding period, the
Fund will employ the "first in, first out" method, which assumes that the
shares redeemed or exchanged are the ones you have held the longest. No
redemption fee will be charged on the redemption or exchange of shares (1)
through the Fund's Check Redemption Privilege, Automatic Withdrawal Plan or
Dreyfus Auto-Exchange Privilege, (2) through accounts that are reflected on
the records of the Transfer Agent as omnibus accounts approved by Dreyfus
Service Corporation, (3) through accounts established by Service Agents
approved by Dreyfus Service Corporation that utilize the National Securities
Clearing Corporation's networking system, or (4) acquired through the
reinvestment of dividends or distributions. The redemption fee may be waived,
modified or terminated at any time. Service Agents may charge their clients a
fee for effecting redemptions of Fund shares. Any certificates representing
Fund shares being redeemed must be submitted with the redemption request. The
value of the shares redeemed may be more or less than their original cost,
depending upon the Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS
TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration
Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER
AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK
CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR DREYFUS-
AUTOMATIC ASSET BUILDER ORDER, WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR
MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK
REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF
EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE
CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET
BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES
WILL NOT
Page 14
APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU
OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES
You may redeem Fund shares by using the regular redemption procedure
through the Transfer Agent, or, if you have checked the appropriate box and
supplied the necessary information on the Account Application or have filed a
Shareholder Services Form with the Transfer Agent, through the Check
Redemption Privilege, the Wire Redemption Privilege, the Telephone Redemption
Privilege or the Dreyfus TeleTransfer Privilege. If you are a client of a
Selected Dealer, you may redeem shares through the Selected Dealer. Other
redemption procedures may be in effect for clients of certain Service Agents.
The Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities. The Fund
reserves the right to refuse any request made by wire or telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests. The Fund may modify or terminate any
redemption privilege at any time or charge a service fee upon notice to
shareholders. No such fee currently is contemplated. Shares for which
certificates have been issued are not eligible for the Check Redemption, Wire
Redemption, Telephone Redemption or Dreyfus TELETRANSFER Privilege.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephone
instructions (including over The Dreyfus TouchRegistration Mark automated
telephone system) from any person representing himself or herself to be you,
or a representative of your Service Agent, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used. During the delay, the Fund's net asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. Redemption requests may be
delivered in person only to a Dreyfus Financial Center. THESE REQUESTS WILL
BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For
the location of the nearest Dreyfus Financial Center, please call one of the
telephone numbers listed under "General Information." Redemption requests
must be signed by each shareholder, including each owner of a joint account,
and each signature must be guaranteed. The Transfer Agent has adopted
standards and procedures pursuant to which signature-guarantees in proper
form generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange Medallion Signature Program, the Securities
Transfer Agents Medallion Program
Page 15
("STAMP") and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE -- You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Potential fluctuations in the net asset
value of Fund shares should be considered in determining the amount of the
check. Redemption Checks should not be used to close your account. Redemption
Checks are free, but the Transfer Agent will impose a fee for stopping
payment of a Redemption Check upon your request or if the Transfer Agent
cannot honor the Redemption Check due to insufficient funds or other valid
reason. You should date your Redemption Checks with the current date when you
write them. Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented before the
date of the check, all postdated Redemption Checks which are dated within six
months of presentment for payment, if they are otherwise in good order. This
Privilege will be terminated immediately, without notice, with respect to any
account which is, or becomes, subject to backup withholding on redemptions
(See "Dividends, Distributions and Taxes"). Any Redemption Check written on
an account which has become subject to backup withholding on redemptions will
not be honored by the Transfer Agent.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day)made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
DREYFUS TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a Selected
Dealer, you may make redemption requests to your Selected Dealer. If the
Selected Dealer transmits the redemption request so that it is received by
the Transfer Agent by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m., New York time), the redemption request will be
effective on that day. If a redemption request is received by the Transfer
Agent after such close of trading, the redemption request will be effective
on the next business day. It is the responsibility of the Selected Dealer to
transmit a request so that it is received in a timely manner. The proceeds of
the redemption are credited to your
Page 16
account with the Selected Dealer. See "How to Buy Shares" for a discussion of
additional conditions or fees that may be imposed upon redemption.
SERVICE PLAN
Under the Service Plan, adopted pursuant to Rule 12b-1 under the 1940
Act, the Fund (a) reimburses the Distributor for payments to certain Service
Agents for distributing the Fund's shares and servicing shareholder accounts
("Servicing") and (b) pays The Dreyfus Corporation, Dreyfus Service
Corporation, a wholly-owned subsidiary of The Dreyfus Corporation, and any
affiliate of either of them (collectively, "Dreyfus") for advertising and
marketing relating to the Fund and for Servicing, at an aggregate annual rate
of .25 of 1% of the value of the Fund's average daily net assets. Each of the
Distributor and Dreyfus may pay one or more Service Agents a fee in respect
of the Fund's shares owned by shareholders with whom the Service Agent has a
Servicing relationship or for whom the Service Agent is the dealer or holder
of record. Each of the Distributor and Dreyfus determine the amount, if any,
to be paid to Service Agents under the Service Plan and the basis on which
such payments are made. The fees payable under the Service Plan are payable
without regard to actual expenses incurred.
The Fund also bears the costs of preparing and printing prospectuses
and statements of additional information used for regulatory purposes and for
distribution to existing shareholders. Under the Service Plan, the Fund bears
(a) the costs of preparing, printing and distributing prospectuses and
statements of additional information used for other purposes, and (b) the
costs associated with implementing and operating the Service Plan (such as
costs of printing and mailing service agreements), the aggregate of such
amounts not to exceed in any fiscal year of the Fund the greater of $100,000
or .005 of 1% of the value of the Fund's average daily net assets for such
fiscal year. Each item for which a payment may be made under the Service Plan
may constitute an expense of distributing Fund shares as the Securities and
Exchange Commission construes such term under Rule 12b-1.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
next business day. Dividends usually are paid on the last business day of
each month, and are automatically reinvested in additional Fund shares at net
asset value or, at your option, paid in cash. If you redeem all shares in
your account at any time during the month, all dividends to which you are
entitled will be paid to you along with the proceeds of the redemption. If
you are an omnibus accountholder and indicate in a partial redemption request
that a portion of any accrued dividends to which such account is entitled
belongs to an underlying accountholder who has redeemed all shares in his or
her account, such portion of the accrued dividends will be paid to you along
with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid once a year, but
the Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner consistent
with the provisions of the 1940 Act. The Fund will not make distributions from
net realized securities gains unless capital loss carryovers, if any, have
been utilized or have expired. You may choose whether to receive
distributions in cash or to reinvest in additional Fund shares at net asset
value. All expenses are accrued daily and deducted before declaration of
dividends to investors.
Management of the Fund believes that the Fund was a "qualified
investment fund" within the meaning of the New Jersey gross income tax for
calendar year 1996. The primary criteria for constituting a "qualified
investment fund" are that (i) the Fund is an investment company registered
with the Securities and Exchange Commission, which for the calendar year in
which the dividends and distributions (if any) are paid, has no investments
other than interest-bearing obligations, obligations issued at a discount,
and cash and cash items, including receivables, and financial options,
futures and forward
Page 17
contracts, or other similar financial instruments relating to interest-bearing
obligations, obligations issued at a discount or bond indexes related thereto
and (ii) at the close of each quarter of the taxable year, the Fund has not
less than 80% of the aggregate principal amount of all of its investments,
excluding financial options, futures and forward contracts, or other similar
financial instruments related to interest-bearing obligations, obligations
issued at a discount or bond indexes related thereto, cash and cash items,
which cash items shall include receivables, in New Jersey Municipal
Obligations, including obligations of Puerto Rico, the Virgin Islands and
other territories and possessions of the United States and certain other
specified securities. Additionally, a qualified investment fund must comply
with certain continuing reporting requirements.
If the Fund qualifies as a qualified investment fund and the Fund
complies with its reporting obligations, (a) dividends and distributions paid
by the Fund to a New Jersey resident individual shareholder will not be
subject to New Jersey gross income tax to the extent that the dividends and
distributions are attributable to income earned by the Fund as interest on or
gain from New Jersey Municipal Obligations, and (b) gain from the sale of
Fund shares by a New Jersey resident individual shareholder will not subject
to the New Jersey gross income tax. Shares of the Fund are not subject to
property taxation by New Jersey or its political subdivisions. To the extent
that you are subject to state and local taxes outside of New Jersey,
dividends and distributions earned by an investment in the Fund and gain from
the sale of shares in the Fund may represent taxable income.
Except for dividends from Taxable Investments, the Fund anticipates
that substantially all dividends from net investment income paid by the Fund
will not be subject to Federal income tax. Dividends derived from Taxable
Investments, together with distributions from any net realized short-term
securities gains and all or a portion of any gains realized from the sale or
other disposition of certain market discount bonds, paid by the Fund are
subject to Federal income tax as ordinary income, whether or not reinvested
in additional Fund shares. No dividend paid by the Fund will qualify for the
dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund
generally are taxable as long-term capital gains for Federal income tax
purposes if you are a citizen or resident of the United States. Dividends and
distributions from gain derived from securities transactions and from the use
of the investment techniques described under "Appendix -- Investment
Techniques" also will be subject to Federal income tax. The Code provides
that the net capital gain of an individual generally will not be subject to
Federal income tax at a rate in excess of 28%. Under the Code, interest on
indebtedness incurred or continued to purchase or carry Fund shares which is
deemed to relate to exempt-interest dividends is not deductible.
Although all or a substantial portion of the dividends paid by the
Fund may be excluded by shareholders of the Fund from their gross income for
Federal income tax purposes, the Fund may purchase specified private activity
bonds, the interest from which may be (i) a preference item for purposes of
the alternative minimum tax or (ii) a factor in determining the extent to
which a shareholder's Social Security benefits are taxable. If the Fund
purchases such securities, the portion of the Fund's dividends related
thereto will not necessarily be tax exempt to an investor who is subject to
the alternative minimum tax and/or tax on Social Security benefits and may
cause an investor to be subject to such taxes.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions from
securities gains, if any, paid during the year. These statements set forth
the dollar amount of income exempt from Federal tax and the dollar amount, if
any, subject to Federal tax. These dollar amounts will vary depending on the
size and length of time of your investment in the Fund. If the Fund pays
dividends derived from taxable income, it intends to designate as taxable the
same percentage of the day's dividends as the actual taxable income earned on
that day bears to total income earned on that day. Thus, the percentage of
the dividend designated as taxable, if any, may vary from day to day.
Page 18
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of taxable dividends,
distributions from net realized securities gains and the proceeds of any
redemption, regardless of the extent to which gain or loss may be realized,
paid to a shareholder if such shareholder fails to certify either that the
TIN furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended December 31, 1996 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a non-deductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance may be calculated on several
bases, including current yield, tax equivalent yield, average annual total
return and/or total return.
Current yield refers to the Fund's annualized net investment income
per share over a 30-day period, expressed as a percentage of the net asset
value per share at the end of the period. For purposes of calculating current
yield, the amount of net investment income per share during that 30-day
period, computed in accordance with regulatory requirements, is compounded by
assuming that it is reinvested at a constant rate over a six-month period. An
identical result is then assumed to have occurred during a second six-month
period which, when added to the result for the first six months, provides an
"annualized" yield for an entire one-year period. Calculations of the Fund's
current yield may reflect absorbed expenses pursuant to any undertaking that
may be in effect. See "Management of the Fund."
Tax equivalent yield is calculated by determining the pre-tax yield
which, after being taxed at a stated rate, would be equivalent to a stated
current yield calculated as described above.
For purposes of advertising, certain calculations of average annual
total return and total return will take into account the performance of
Dreyfus New Jersey Tax Exempt Bond Fund, L.P., the assets and liabilities of
which were transferred to the Fund in exchange for shares of the Fund on
August 31, 1988. See "General Information."
Average annual total return is calculated pursuant to a standardized
formula which assumes that an investment in the Fund was purchased with an
initial payment of $1,000 and that the investment was redeemed at the end of
a stated period of time, after giving effect to the reinvestment of dividends
and distributions during the period. The return is expressed as a percentage
rate which, if applied on a compounded annual basis, would result in the
redeemable value of the investment at the end of the period. Advertisements
of the Fund's performance will include the Fund's average annual total return
Page 19
for one, five and ten year periods, or for shorter time periods depending
upon the length of time the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the income
and principal changes for a specified period and dividing by the net asset
value per share at the beginning of the period. Advertisements may include
the percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return.
Performance will vary from time to time and past results are not
necessarily representative of future results. You should remember that
performance is a function of portfolio management in selecting the type and
quality of portfolio securities and is affected by operating expenses.
Performance information, such as that described above, may not provide a
basis for comparison with other investments or other investment companies
using a different method of calculating performance.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from CDA
Investment Technologies, Inc., Lipper Analytical Services, Inc., Moody's Bond
Survey Bond Index, Lehman Brothers Municipal Bond Index, Morningstar, Inc.
and other industry publications. The Fund's yield generally should be higher
than that of shorter-term funds (which generally fluctuate less in price per
share).
GENERAL INFORMATION
The Fund was incorporated under Maryland law on January 11, 1988, and
commenced operations on August 31, 1988. Before September 14, 1990, the
Fund's name was Dreyfus New Jersey Tax Exempt Bond Fund, Inc. The Fund is
authorized to issue 500 million shares of Common Stock, par value $.001 per
share. Each share has one vote.
On August 31, 1988, all of the assets and liabilities of Dreyfus New
Jersey Tax Exempt Bond Fund, L.P. (the "Partnership") were transferred to the
Fund in exchange for shares of Common Stock of the Fund pursuant to a
proposal approved at a Meeting of Partners of the Partnership held on August
17, 1988.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, pursuant to the Fund's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for the purpose of
removing a Board member from office and the holders of at least 25% of such
shares may require the Fund to hold a special meeting of shareholders for any
other purpose. Fund shareholders may remove a Board member by the affirmative
vote of a majority of the Fund's outstanding voting shares. In addition, the
Fund's Board will call a meeting of shareholders for the purpose of electing
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
confirmations and statements of account.
Shareholder inquiries may be made to your Service Agent or by writing
to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144,
or by calling toll free 1-800-645-6561. In New York City, call
1-718-895-1206; outside the U.S. and Canada, call 516-794-5452.
Page 20
APPENDIX
INVESTMENT TECHNIQUES
BORROWING MONEY -- The Fund is permitted to borrow to the extent permitted
under the 1940 Act, which permits an investment company to borrow in an
amount up to 331/3% of the value of its total assets. The Fund currently
intends to borrow money only for temporary or emergency (not
leveraging)purposes, in an amount up to 15% of the value of its total assets
(including the amount borrowed) valued at the lesser of cost or market, less
liabilities (not including the amount borrowed) at the time the borrowing is
made. While borrowings exceed 5% of the Fund's total assets, the Fund will
not make any additional investments.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to be
entitled to payments in amounts equal to the interest or other distributions
payable on the loaned securities which affords the Fund an opportunity to
earn interest on the amount of the loan and on the loaned securities'
collateral. Loans of portfolio securities may not exceed 331/3% of the value
of the Fund's total assets, and the Fund will receive collateral consisting
of cash, U.S. Government securities or irrevocable letters of credit which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Such loans are terminable by
the Fund at any time upon specified notice. The Fund might experience risk of
loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations and
Risks -- Use of Derivatives." These instruments and certain related risks are
described more specifically under "Investment Objective and Management
Policies -- Management Policies -- Derivatives" in the Statement of
Additional Information.
Derivatives can be volatile and involve various types and degrees
of risk, depending upon the characteristics of the particular Derivative and
the portfolio as a whole. Derivatives permit the Fund to increase or decrease
the level of risk, or change the character of the risk, to which its
portfolio is exposed in much the same way as the Fund can increase or
decrease the level of risk, or change the character of the risk, of its
portfolio by making investments in specific securities.
Derivatives may entail investment exposures that are greater than
their cost would suggest, meaning that a small investment in Derivatives
could have a large potential impact on the Fund's performance.
If the Fund invests in Derivatives at inappropriate times or judges
market conditions incorrectly, such investments may lower the Fund's return
or result in a loss. The Fund also could experience losses if its Derivatives
were poorly correlated with its other investments, or if the Fund were unable
to liquidate its position because of an illiquid secondary market. The market
for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.
The Fund may invest up to 5% of its assets, represented by the
premium paid, in the purchase of call options. When required by the
Securities and Exchange Commission, the Fund will set aside permissible
liquid assets in a segregated account to cover its obligations relating to
its transactions in Derivatives. To maintain this required cover, the Fund
may have to sell portfolio securities at disadvantageous prices or times
since it may not be possible to liquidate a Derivative position at a
reasonable price.
FORWARD COMMITMENTS -- The Fund may purchase Municipal Obligations and other
securities on a forward commitment or when-issued basis, which means that
delivery and payment take place a number of days after the date of the
commitment to purchase. The payment obligation and the interest rate
receivable on a forward commitment or when-issued security are fixed when the
Fund enters into the commitment, but the Fund does not make payment until it
receives delivery from the counterparty. The
Page 21
Fund will commit to purchase such securities only with the intention of
actually acquiring the securities, but the Fund may sell these securities
before the settlement date if it is deemed advisable. A segregated account
of the Fund consisting of permissible liquid assets at least equal at all
times to the amount of the commitments will be established and maintained
at the Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CERTAIN TAX EXEMPT OBLIGATIONS -- The Fund may purchase floating and variable
rate demand notes and bonds, which are tax exempt obligations ordinarily
having stated maturities in excess of one year, but which permit the holder
to demand payment of principal at any time or at specified intervals.
Variable rate demand notes include master demand notes which are obligations
that permit the Fund to invest fluctuating amounts, at varying rates of
interest, pursuant to direct arrangements between the Fund, as lender, and
the borrower. These obligations permit daily changes in the amount borrowed.
Because these obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments generally will be
traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued
interest. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Fund's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Each obligation purchased by the Fund will meet the quality criteria
established for the purchase of Municipal Obligations.
TAX EXEMPT PARTICIPATION INTERESTS -- The Fund may purchase from financial
institutions participation interests in Municipal Obligations (such as
industrial development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in the Municipal
Obligation in the proportion that the Fund's participation interest bears to
the total principal amount of the Municipal Obligation. These instruments may
have fixed, floating or variable rates of interest. If the participation
interest is unrated, it will be backed by an irrevocable letter of credit or
guarantee of a bank that the Fund's Board has determined meets prescribed
quality standards for banks, or the payment obligation otherwise will be
collateralized by U.S. Government securities. For certain participation
interests, the Fund will have the right to demand payment, on not more than
seven days' notice, for all or any part of the Fund's participation interest
in the Municipal Obligation, plus accrued interest. As to these instruments,
the Fund intends to exercise its right to demand payment only upon a default
under the terms of the Municipal Obligation, as needed to provide liquidity
to meet redemptions, or to maintain or improve the quality of its investment
portfolio.
TENDER OPTION BONDS -- The Fund may purchase tender option bonds. A tender
option bond is a Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing interest at a
fixed rate substantially higher than prevailing short-term tax exempt rates,
that has been coupled with the agreement of a third party, such as a bank,
broker-dealer or other financial institution, pursuant to which such
institution grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face value
thereof. As consideration for providing the option, the financial institution
receives periodic fees equal to the difference between the Municipal
Obligation's fixed coupon rate and the rate, as determined by a remarketing
or similar agent at or near the commencement of such period, that would cause
the securities, coupled with the tender option, to trade at par on the date
of such determination. Thus, after payment of this fee, the security holder
effectively holds a demand obligation that bears interest at the prevailing
short-term tax exempt rate. The Dreyfus Corporation, on behalf of the Fund,
will consider on an ongoing basis the creditworthiness of the issuer of the
underlying Municipal Obligation, of any custodian and of the third party
provider of the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a default in
payment of principal or interest on the underlying Municipal Obligation and
for other reasons.
Page 22
CUSTODIAL RECEIPTS -- The Fund may purchase custodial receipts representing
the right to receive certain future principal and interest payments on
Municipal Obligations which underlie the custodial receipts. A number of
different arrangements are possible. In a typical custodial receipt
arrangement, an issuer or a third party owner of Municipal Obligations
deposits such obligations with a custodian in exchange for two classes of
custodial receipts. The two classes have different characteristics, but, in
each case, payments on the two classes are based on payments received on the
underlying Municipal Obligations. One class has the characteristics of a
typical auction rate security, where at specified intervals its interest rate
is adjusted, and ownership changes, based on an auction mechanism. This
class's interest rate generally is expected to be below the coupon rate of
the underlying Municipal Obligations and generally is at a level comparable
to that of a Municipal Obligation of similar quality and having a maturity
equal to the period between interest rate adjustments. The second class bears
interest at a rate that exceeds the interest rate typically borne by a
security of comparable quality and maturity; this rate also is adjusted, but
in this case inversely to changes in the rate of interest of the first class.
In no event will the aggregate interest paid with respect to the two classes
exceed the interest paid by the underlying Municipal Obligations. The value
of the second class and similar securities should be expected to fluctuate
more than the value of a Municipal Obligation of comparable quality and
maturity and their purchase by the Fund should increase the volatility of its
net asset value and, thus, its price per share. These custodial receipts are
sold in private placements. The Fund also may purchase directly from issuers,
and not in a private placement, Municipal Obligations having characteristics
similar to custodial receipts. These securities may be issued as part of a
multi-class offering and the interest rate on certain classes may be subject
to a cap or floor.
STAND-BY COMMITMENTS -- To the extent consistent with the requirements for a
"qualified investment fund" under the New Jersey gross income tax, the Fund
may acquire "stand-by commitments" with respect to Municipal Obligations held
in its portfolio. Under a stand-by commitment, the Fund obligates a broker,
dealer or bank to repurchase, at the Fund's option, specified securities at a
specified price and, in this respect, stand-by commitments are comparable to
put options. The exercise of a stand-by commitment, therefore, is subject to
the ability of the seller to make payment on demand. The Fund will acquire
stand-by commitments solely to facilitate its portfolio liquidity and does
not intend to exercise its rights thereunder for trading purposes. The Fund
may pay for stand-by commitments if such action is deemed necessary, thus
increasing to a degree the cost of the underlying Municipal Obligation and
similarly decreasing such security's yield to investors. Gains realized in
connection with stand-by commitments will be taxable. The Fund also may
acquire call options on specific Municipal Obligations. The Fund generally
would purchase these call options to protect the Fund from the issuer of the
related Municipal Obligation redeeming, or other holder of the call option fro
m calling away, the Municipal Obligation before maturity. The sale by the
Fund of a call option that it owns on a specific Municipal Obligation could
result in the receipt of taxable income by the Fund.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon securities which
are debt securities issued or sold at a discount from their face value which
do not entitle the holder to any periodic payment of interest prior to
maturity or a specified redemption date (or cash payment date). The amount of
the discount varies depending on the time remaining until maturity or cash
payment date, prevailing interest rates, liquidity of the security and
perceived credit quality of the issuer. Zero coupon securities also may take
the form of debt securities that have been stripped of their unmatured
interest coupons, the coupons themselves and receipts or certificates
representing interest in such stripped debt obligations and coupons. The
market prices of zero coupon securities generally are more volatile than the
market prices of securities that pay interest periodically and are likely to
respond to a greater degree to changes in interest rates than non-zero coupon
securities having similar maturities and credit qualities.
Page 23
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of its net
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Fund is subject to a risk that should the Fund desire to sell them when a
ready buyer is not available at a price the Fund deems representative of
their value, the value of the Fund's net assets could be adversely affected.
TAXABLE INVESTMENTS -- From time to time, on a temporary basis other than for
temporary defensive purposes (but not to exceed 20% of the value of the
Fund's net assets) or for temporary defensive purposes, the Fund may invest
in taxable short-term investments ("Taxable Investments") consisting of:
notes of issuers having, at the time of purchase, a quality rating within the
two highest grades of Moody's, S&P or Fitch; obligations of the U.S.
Government, its agencies or instrumentalities; commercial paper rated not
lower than P-2 by Moody's, A-2 by S&P or F-2 by Fitch; certificates of
deposit of U.S. domestic banks, including foreign branches of domestic banks,
with assets of one billion dollars or more; time deposits; bankers'
acceptances and other short-term bank obligations; and repurchase agreements
in respect of any of the foregoing. Dividends paid by the Fund that are
attributable to income earned by the Fund from Taxable Investments will be
taxable to investors. See "Dividends, Distributions and Taxes." Except for
temporary defensive purposes, at no time will more than 20% of the value of
the Fund's net assets be invested in Taxable Investments. When the Fund has
adopted a temporary defensive position, including when acceptable New Jersey
Municipal Obligations are unavailable for investment by the Fund, in excess
of 35% of the Fund's net assets may be invested in securities that are not
exempt from New Jersey personal income taxes. Under normal market conditions,
the Fund anticipates that not more than 5% of the value of its total assets
will be invested in any one category of Taxable Investments. Taxable
Investments are more fully described in the Statement of Additional
Information, to which reference hereby is made.
RATINGS _ Bonds rated Ba by Moody's are judged to have speculative elements;
their future cannot be considered as well assured and often the protection of
interest and principal payments may be very moderate. Bonds rated BB by S&P
are regarded as having predominantly speculative characteristics and, while
such obligations have less near-term vulnerability to default than other
speculative grade debt, they face major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. Bonds
rated BB by Fitch are considered speculative and the payment of principal and
interest may be affected at any time by adverse economic changes. Bonds rated
C by Moody's are regarded as having extremely poor prospects of ever
attaining any real investment standing. Bonds rated D by S&P are in default
and the payment of interest and/or repayment of principal is in arrears.
Bonds rated DDD, DD or D by Fitch are in actual or imminent default, are
extremely speculative and should be valued on the basis of their ultimate
recovery value in liquidation or reorganization of the issuer; DDD represents
the highest potential for recovery of such bonds; and D represents the lowest
potential for recovery. Such bonds, though high yielding, are characterized
by great risk. See "Appendix B" in the Statement of Additional Information
for a general description of Moody's, S&P and Fitch ratings of Municipal
Obligations.
The ratings of Moody's, S&P and Fitch represent their opinions as to
the quality of the Municipal Obligations which they undertake to rate. It
should be emphasized, however, that ratings are relative and subjective and,
although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
bonds. Although these ratings may be an initial criterion for selection of
portfolio investments, The Dreyfus Corporation also will evaluate these
Page 24
securities and the ability of the issuers of such securities to pay interest
and principal. The Fund's ability to achieve its investment objective may be
more dependent on The Dreyfus Corporation's credit analysis than might be the
case for a fund that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 25
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Page 26
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Page 27
New Jersey
Municipal
Bond Fund, Inc.
Prospectus
Registration Mark
Copy Rights 1997 Dreyfus Service Corporation
750p050197
Page 28
_____________________________________________________________________________
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1997
_____________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus New Jersey Municipal Bond Fund, Inc. (the "Fund"), dated May 1, 1997
as it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-2
Management of the Fund B-11
Management Agreement B-15
Purchase of Shares B-17
Service Plan B-18
Redemption of Shares B-19
Shareholder Services B-21
Determination of Net Asset Value B-24
Portfolio Transactions B-24
Dividends, Distributions and Taxes B-25
Performance Information B-26
Information About the Fund B-27
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-27
Appendix A B-29
Appendix B B-32
Financial Statements B-41
Report of Independent Auditors B-52
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the Fund"
and "Appendix."
Portfolio Securities
Municipal Obligations. The average distribution of investments (at
value) in Municipal Obligations (including notes) by ratings for the fiscal
year ended December 31, 1996, computed on a monthly basis, was as follows:
Fitch Investors Moody's Investors Standard & Poor's
Service, L.P. Service, Inc. Ratings Group Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
AAA Aaa AAA 49.0%
AA Aa AA 7.5%
A A A 20.7%
BBB Baa BBB 9.3%
BB Ba BB 2.3%
B B B 1.1%
F-11 MIG11, P-1 SP-11, A-1 .7%
Not Rated Not Rated Not Rated 9.4%2
------
100.0%
======
The term "Municipal Obligations" generally includes debt obligations
issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets and water
and sewer works. Other public purposes for which Municipal Obligations may
be issued include refunding outstanding obligations, obtaining funds for
general operating expenses and lending such funds to other public
institutions and facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds to provide for the construction, equipment, repair or improvement of
privately operated housing facilities, sports facilities, convention or trade
show facilities, airport, mass transit, industrial, port or parking
facilities, air or water pollution control facilities and certain local
facilities for water supply, gas, electricity, or sewage or solid waste
disposal; the interest paid on such obligations may be exempt from Federal
income tax, although current tax laws place
_____________________________
1 Includes tax exempt notes rated in one of the two highest rating
categories by Moody's, S&P or Fitch. These securities, together with
Municipal Obligations rated Baa or better by Moody's or BBB or better by
S&P or Fitch, are taken into account at the time of a purchase for
purposes of determining that the Fund's portfolio meets the 80% minimum
quality standard discussed in the Fund's Prospectus.
2 Included in the Not Rated category are securities comprising 9.4% of the
value of the Fund's market value which, while not rated, have been
determined by the Manager to be of comparable quality to securities in
the following rating categories: A/A (1.5%), Baa/BBB (7.0%) and Ba/BB
(.9%).
substantial limitations on the size of such issues. Such obligations are
considered to be Municipal Obligations if the interest paid thereon qualifies
as exempt from Federal income tax in the opinion of bond counsel to the
issuer. There are, of course, variations in the security of Municipal
Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand obligations are tax exempt obligations
ordinarily having stated maturities in excess of one year, but which permit
the holder to demand payment of principal at any time, or at specified
intervals. The issuer of such obligations ordinarily has a corresponding
right, after a given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a specified
number of days' notice to the holders thereof. The interest rate on a
floating rate demand obligation is based on a known lending rate, such as a
bank's prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand obligation is adjusted
automatically at specified intervals.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a particular
offering, maturity of the obligation and rating of the issue. The imposition
of the Fund's management fee, as well as other operating expenses, including
fees paid under the Service Plan, will have the effect of reducing the yield
to investors.
Municipal lease obligations or installment purchase contract obligations
(collectively, "lease obligations") have special risks not ordinarily
associated with Municipal Obligations. Although lease obligations do not
constitute general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation ordinarily is
backed by the municipality's covenant to budget for, appropriate and make the
payments due under the lease obligation. However, certain lease obligations
contain "non-appropriation" clauses which provide that the municipality has
no obligation to make lease or installment purchase payments in future years
unless money is appropriated for such purpose on a yearly basis. Although
"non-appropriation" lease obligations are secured by the leased property,
disposition of the property in the event of foreclosure might prove
difficult. The staff of the Securities and Exchange Commission currently
considers certain lease obligations to be illiquid. Determination as to the
liquidity of such securities is made in accordance with guidelines
established by the Fund's Board. Pursuant to such guidelines, the Board has
directed the Manager to monitor carefully the Fund's investment in such
securities with particular regard to: (1) the frequency of trades and quotes
for the lease obligation; (2) the number of dealers willing to purchase or
sell the lease obligation and the number of other potential buyers; (3) the
willingness of dealers to undertake to make a market in the lease obligation;
(4) the nature of the marketplace trades including the time needed to dispose
of the lease obligation, the method of soliciting offers and the mechanics of
transfer; and (5) such other factors concerning the trading market for the
lease obligation as the Manager may deem relevant. In addition, in
evaluating the liquidity and credit quality of a lease obligation that is
unrated, the Fund's Board has directed the Manager to consider: (a) whether
the lease can be canceled; (b) what assurance there is that the assets
represented by the lease can be sold; (c) the strength of the lessee's
general credit (e.g., its debt, administrative, economic, and financial
characteristics); (d) the likelihood that the municipality will discontinue
appropriating funding for the leased property because the property is no
longer deemed essential to the operations of the municipality (e.g., the
potential for an "event of nonappropriation"); (e) the legal recourse in the
event of failure to appropriate; and (f) such other factors concerning credit
quality as the Manager may deem relevant. The Fund will not invest more than
15% of the value of its net assets in lease obligations that are illiquid and
in other illiquid securities. See "Investment Restriction No. 11" below.
The Fund will purchase tender option bonds only when it is satisfied
that the custodial and tender option arrangements, including the fee payment
arrangements, will not adversely affect the tax exempt status of the
underlying Municipal Obligations and that payment of any tender fees will not
have the effect of creating taxable income for the Fund. Based on the tender
option bond agreement, the Fund expects to be able to value the tender option
bond at par; however, the value of the instrument will be monitored to assure
that it is valued at fair value.
Ratings of Municipal Obligations. Subsequent to its purchase by the
Fund, an issue of rated Municipal Obligations may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
Neither event will require the sale of such Municipal Obligations by the
Fund, but the Manager will consider such event in determining whether the
Fund should continue to hold the Municipal Obligations. To the extent that
the ratings given by Moody's, S&P or Fitch for Municipal Obligations may
change as a result of changes in such organizations or their rating systems,
the Fund will attempt to use comparable ratings as standards for its
investments in accordance with the investment policies contained in the
Fund's Prospectus and this Statement of Additional Information. The ratings
of Moody's, S&P and Fitch represent their opinions as to the quality of the
Municipal Obligations which they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and are not absolute
standards of quality. Although these ratings may be an initial criterion for
selection of portfolio investments, the Manager also will evaluate these
securities.
Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased by
the Fund pursuant to Rule 144A under the Securities Act of 1933, as amended,
the Fund intends to treat such securities as liquid securities in accordance
with procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant to
Rule 144A will develop, the Fund's Board has directed the Manager to monitor
carefully the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other
relevant information. To the extent that for a period of time qualified
institutional buyers cease purchasing restricted securities pursuant to Rule
144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in the Fund's portfolio during such
period.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the U.S. Treasury;
others by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit
of the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest rates may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will always
do so, since it is not so obligated by law.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in excess
of one billion dollars. Time deposits which may be held by the Fund will not
benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation of
a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity. Other short-term bank obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
In a repurchase agreement, the Fund buys, and the seller agrees to
repurchase, a security at a mutually agreed upon time and price (usually
within seven days). The repurchase agreement thereby determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. The Fund's
custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements only with domestic banks with total assets in excess of
$1 billion, or primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect to securities of the type in which the
Fund may invest, and will require that additional securities be deposited
with it if the value of the securities purchased should decrease below resale
price. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of the underlying
securities.
Management Policies
Derivatives. The Fund may invest in Derivatives for a variety of
reasons, including to hedge certain market risks, to provide a substitute for
purchasing or selling particular securities or to increase potential income
gain. Derivatives may provide a cheaper, quicker or more specifically
focused way for a Fund to invest than "traditional" securities would.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of counterparties
to over-the-counter Derivatives in the same manner as it would review the
credit quality of a security to be purchased by the Fund. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the other
party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.
Options--In General. The Fund may purchase call options with respect to
Municipal Obligations. A call option gives the purchaser of the option the
right to buy, and obligates the writer to sell, the underlying security or
securities at the exercise price at any time during the option period, or at
a specific date.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may cease
to exist for a variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow, or other unforeseen events, at
times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading rotations,
restrictions on certain types of orders or trading halts or suspensions in
one or more options. There can be no assurance that similar events, or
events that may otherwise interfere with the timely execution of customers'
orders, will not recur. In such event, it might not be possible to effect
closing transactions in particular options.
Successful use by the Fund of options will be subject to the Manager's
ability to predict correctly movements in interest rates. To the extent the
Manager's predictions are incorrect, the Fund may incur losses.
Future Developments. The Fund may take advantage of opportunities in
the area of options and any other Derivatives which are not presently
contemplated for use by the Fund or which are not currently available but
which may be developed, to the extent such opportunities are both consistent
with the Portfolio's investment objective and legally permissible for the
Fund. Before entering into such transactions or making any such investment
the Fund will provide appropriate disclosure in its Prospectus or Statement
of Additional Information.
Lending Portfolio Securities. In connection with its securities lending
transactions, the Fund may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a part
of the interest earned from the investment of collateral received from
securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must be
able to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any interest or other distributions payable
on the loaned securities, and any increase in market value; and (5) the Fund
may pay only reasonable custodian fees in connection with the loan.
Forward Commitments. Municipal Obligations and other securities
purchased on a forward commitment or when-issued basis are subject to changes
in value (generally changing in the same way, i.e., appreciating when
interest rates decline and depreciating when interest rates rise) based upon
the public's perception of the creditworthiness of the issuer and changes,
real or anticipated, in the level of interest rates. Securities purchased on
a when-issued basis may expose a Fund to risks because they may experience
such fluctuations prior to their actual delivery. Purchasing securities on a
when-issued basis can involve the additional risk that the yield available in
the market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a when-issued
basis when a Fund is fully or almost fully invested may result in greater
potential fluctuation in the value of the Fund's net assets and its net asset
value per share.
Investment Considerations and Risks
Investing in New Jersey Municipal Obligations. Investors should
consider carefully the special risks inherent in the Fund's investment in New
Jersey Municipal Obligations. If there should be a default or other
financial crisis relating to the State of New Jersey or an agency or
municipality thereof, the market value and marketability of outstanding New
Jersey Municipal Obligations in the Fund's portfolio and interest income to
the Fund could be adversely affected. These risks result from the financial
condition of the State of New Jersey. Although New Jersey enjoyed a period
of economic growth with unemployment levels below the national average during
the mid-1980s, its economy slowed down well before the onset of the national
recession, which, according to the National Bureau of Economic Research,
began in July 1990. Reflecting the economic downturn, the State's
unemployment rate rose from a low of 3.6% in the first quarter of 1989 to a
recessionary peak of 8.5% during 1992. Since then, the State's unemployment
rate fell to an average of 6.4% during 1995 and 6.1% for the four month
period from May 1996 to August 1996. As a result of New Jersey's recent
fiscal weakness, in July 1991, S&P lowered its rating of the State's general
obligation debt from AAA to AA+. Investors should review "Appendix A" which
sets forth these and other risk factors.
Lower Rated Bonds. The Fund is permitted to invest in securities rated
Ba by Moody's or BB by S&P or Fitch and as low as the lowest rating assigned
by Moody's, S&P or Fitch. Such bonds, though higher yielding, are
characterized by risk. See "Description of the Fund--Investment
Considerations and Risks--Lower Rated Bonds" in the Prospectus for a
discussion of certain risks and "Appendix B" for a general description of
Moody's, S&P and Fitch ratings of Municipal Obligations. Although ratings
may be useful in evaluating the safety of interest and principal payments,
they do not evaluate the market value risk of these bonds. The Fund will
rely on the Manager's judgment, analysis and experience in evaluating the
creditworthiness of an issuer.
Investors should be aware that the market values of many of these bonds
tend to be more sensitive to economic conditions than are higher rated
securities and will fluctuate over time. These bonds generally are
considered by S&P, Moody's and Fitch to be predominantly speculative with
respect to capacity to pay interest and repay principal in accordance with
the terms of the obligation and generally will involve more credit risk than
securities in the higher rating categories.
Because there is no established retail secondary market for many of
these securities, the Fund anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally is
not as liquid as the secondary market for higher rated securities. The lack
of a liquid secondary market may have an adverse impact on market price and
yield and the Fund's ability to dispose of particular issues when necessary
to meet the Fund's liquidity needs or in response to a specific economic
event such as a deterioration in the creditworthiness of the issuer. The
lack of a liquid secondary market for certain securities also may make it
more difficult for the Fund to obtain accurate market quotations for purposes
of valuing the Fund's portfolio and calculating its net asset value. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of these securities. In such
cases, judgment may play a greater role in valuation because less reliable,
objective data may be available.
These bonds may be particularly susceptible to economic downturns. It
is likely that an economic recession could severely disrupt the market for
such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.
The Fund may acquire these bonds during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
The credit risk factors pertaining to lower rated securities also apply
to lower rated zero coupon bonds, in which the Fund may invest up to 5% of
its total assets. Such zero coupon bonds carry an additional risk in that,
unlike bonds which pay interest throughout the period to maturity, the Fund
will realize no cash until the cash payment date unless a portion of such
securities are sold and, if the issuer defaults, the Fund may obtain no
return at all on its investment. See "Dividends, Distributions and Taxes."
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 7 as
fundamental policies, which cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. Investment
restrictions numbered 8 through 12 are not fundamental policies and may be
changed by vote of a majority of the Fund's Board members at any time. The
Fund may not:
1. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S. Government,
its agencies or instrumentalities.
2. Borrow money, except to the extent permitted under the 1940 Act
(which currently limits borrowing to no more than 33-1/3% of the value of the
Fund's total assets). For purposes of this investment restriction, the entry
into options, forward contracts, futures contracts, including those relating
to indices, and options on futures contracts or indices shall not constitute
borrowing.
3. Purchase or sell real estate, commodities or commodity contracts,
or oil and gas interests, but this shall not prevent the Fund from investing
in Municipal Obligations secured by real estate or interests therein, or
prevent the Fund from purchasing and selling options, forward contracts,
futures contracts, including those relating to indices, and options on
futures contracts or indices.
4. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available, and except to the extent the Fund may
be deemed an underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements; however, the Fund may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value
of its total assets. Any loans of portfolio securities will be made
according to guidelines established by the Securities and Exchange Commission
and the Fund's Board.
6. Issue any senior security (as such term is defined in Section 18(f)
of the 1940 Act), except to the extent that the activities permitted in
Investment Restrictions numbered 2, 3 and 10 may be deemed to give rise to a
senior security.
7. Sell securities short or purchase securities on margin, but the
Fund may make margin deposits in connection with transactions in options,
forward contracts, futures contracts, including those relating to indices,
and options on futures contracts or indices.
8. Purchase securities other than Municipal Obligations and Taxable
Investments and those arising out of transactions in futures and options or
as otherwise provided in the Fund's Prospectus.
9. Invest in securities of other investment companies, except to the
extent permitted under the 1940 Act.
10. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection with the
purchase of securities on a when-issued or delayed-delivery basis and
collateral and initial or variation margin arrangements with respect to
options, forward contracts, futures contracts, including those related to
indices, and options on futures contracts or indices.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid (which
securities could include participation interests (including municipal
lease/purchase agreements) that are not subject to the demand feature
described in the Fund's Prospectus, and floating and variable rate demand
obligations as to which the Fund cannot exercise the demand feature described
in the Fund's Prospectus on less than seven days' notice and as to which
there is no secondary market) if, in the aggregate, more than 15% of its net
assets would be so invested.
12. Invest in companies for the purpose of exercising control.
For purposes of Investment Restriction No. 1, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together as
an "industry." If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below. Each Board member who is deemed to be an "interested person" of
the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Fund
JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He also is
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads and buttons, Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware, and Staffing Resources,
Inc. For more than five years prior to January 1995, he was President,
a director and, until August 1994, Chief Operating Officer of the
Manager and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until August
24, 1994, the Fund's distributor. From August 1994 to December 31,
1994, he was a director of Mellon Bank Corporation. He is 53 years old
and his address is 200 Park Avenue, New York, New York 10166.
GORDON J. DAVIS, Board Member. Since October 1994, senior partner with the
law firm of LeBoeuf, Lamb, Greene & MacRae. From 1983 to September
1994, Mr. Davis was a senior partner with the law firm of Lord Day &
Lord, Barrett Smith. From 1978 to 1983, he was Commissioner of Parks
and Recreation for the City of New York. He also is a Director of
Consolidated Edison, a utility company, and Phoenix Home Life Insurance
Company and a member of various other corporate and not-for-profit
boards. He is 55 years old and his address is 241 Central Park West, New
York, New York 10024.
*DAVID P. FELDMAN, Board Member. Mr. Feldman is a trustee of Corporate
Property Investors, a real estate investment company, and a director of
several mutual funds in the 59 Wall Street Mutual Funds Group, and of
the Jeffrey Company, a private investment company. Mr. Feldman was
employed by AT&T Investment Management Corporation from July 1961 to his
retirement in April 1997, most recently serving as Chairman and Chief
Executive Officer. He is 57 years old and his address is c/o AT&T, One
Oak Way, Berkeley Heights, New Jersey 07922.
LYNN MARTIN, Board Member. Professor, J.L. Kellogg Graduate School of
Management, Northwestern University. During the Spring Semester 1993,
she was a Visiting Fellow at the Institute of Politics, Kennedy School
of Government, Harvard University. She also is an advisor to the
international accounting firm of Deloitte & Touche, LLP and chair of its
Council for the Advancement of Women. From January 1991 through January
1993, Ms. Martin served as Secretary of the United States Department of
Labor. From 1981 to 1991, she served in the United States House of
Representatives as a Congresswoman from the State of Illinois. She also
is a Director of Harcourt General, Inc., Ameritech, Ryder System, Inc.,
The Proctor & Gamble Co., a consumer company, and TRW, Inc., an
aerospace and automotive equipment company. She is 57 years old and her
address is c/o Deloitte & Touche, LLP, Two Prudential Plaza, 180 N.
Stetson Avenue, Chicago, Illinois 60601.
EUGENE McCARTHY, Board Member Emeritus. Writer and columnist; former Senator
from Minnesota from 1958 to 1970. He is 81 years old and his address is
271 Hawlin Road, Woodville, Virginia 22749.
DANIEL ROSE, Board Member. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and
management firm. In July 1994, Mr. Rose received a Presidential
appointment to serve as a Director of the Baltic-American Enterprise
Fund, which will make equity investments and loans, and provide
technical business assistance to new business concerns in the Baltic
states. He also is Chairman of the Housing Committee of the Real Estate
Board of New York, Inc., and a trustee of Corporate Property Investors,
a real estate investment company. He is 67 years old and his address is
c/o Rose Associates, Inc., 200 Madison Avenue, New York, New York 10016.
*PHILIP L. TOIA, Board Member. Retired. Mr. Toia was employed by The
Dreyfus Corporation from August 1986 through January 1997, most
recently serving as Vice Chairman, Administration and Operations. He is
64 years old and his address is c/o Ms. Amy Letteney, 42 White Birch
Road, New Canaan, Connecticut 06840.
SANDER VANOCUR, Board Member. Since January 1992, Mr. Vanocur has been
President of Old Owl Communications, a full-service communications firm.
From May 1995 to June 1996, he was a Professional in Residence at the
Freedom Forum in Arlington, VA, from January 1994 to May 1995, he
served as Visiting Professional Scholar at the Freedom Forum Amendment
Center at Vanderbilt University. From November 1989 to November 1995,
he was a director of the Damon Runyon-Walter Winchell Cancer Research
Fund. From June 1986 to December 1991, he was a Senior Correspondent of
ABC News and, from October 1986 to December 1991, he was Anchor of the
ABC News program "Business World," a weekly business program on the ABC
television network. Mr. Vanocur joined ABC News in 1997. He is 69
years old and his address is 2928 P Street, N.W., Washington, DC 20007.
ANNE WEXLER, Board Member. Chairman of the Wexler Group, consultants
specializing in government relations and public affairs. She also is a
director of Alumax, Comcast Corporation, The New England Electric
System, NOVA Corporation and a member of the board of the Carter Center
of Emory University, the Council of Foreign Relations, the National Park
Foundation, Visiting Committee of the John F. Kennedy School of
Government at Harvard University and the Economic Club of Washington.
She is 67 years old and her address is c/o The Wexler Group, 1317 F
Street, Suite 600, N.W., Washington, DC 20004.
REX WILDER, Board Member. Financial Consultant. He is 76 years old and his
address is 290 Riverside Drive, New York, New York 10025.
For so long as the Fund's plan described in the section captioned
"Service Plan" remains in effect, the Board members of the Fund who are not
"interested persons" of the Fund, as defined in the 1940 Act, will be
selected and nominated by the Board members who are not "interested persons"
of the Fund.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund and by all other funds in
the Dreyfus Family of Funds for which such person is a Board member (the
number of which is set forth in parenthesis next to each Board member's total
compensation) for the year ended December 31, 1996 were as follows:
Total Compensation
Aggregate from Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund* Board Members
Gordon J. Davis $4,000 $ 88,536 (25)
Joseph S. DiMartino $5,000 $517,075 (92)
David P. Feldman $3,750 $122,257 (27)
Lynn Martin $3,750 $ 41,666 (11)
Eugene McCarthy+ $2,305 $ 29,041 (11)
Daniel Rose $4,000 $ 84,593 (21)
Philip L. Toia++ $ 0 $ 0
Sander Vanocur $3,750 $ 77,093 (21)
Anne Wesxler $4,000 $ 62,034 (16)
Rex Wilder $4,000 $ 42,666 (11)
_________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $3,031 for all Board members as a group.
+ Board member Emeritus since March 29, 1996.
++ Board member as of February 3, 1997.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
He is 32 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor since September 1995 and an officer of
other investment companies advised or administered by the Manager. She
is 27 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed as
an Associate Examiner at the National Association of Securities
Dealers, Inc. He is 27 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data
Investor Services Group. From 1989 to 1994, he was Vice President,
Assistant Treasurer and Tax Director -- Mutual Funds at The Boston
Company, Inc. He is 41 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by the Manager.
From December 1989 through November 1996, he was employed with GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as Director of the GE Investment Services. He is 35 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on April 1, 1997.
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board or (ii) vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of the
Fund, provided that in either event the continuance also is approved by a
majority of the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Agreement was
approved by shareholders on August 3, 1994, and was last approved by the
Fund's Board, including a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of any party to the
Agreement, at a meeting held on July 8, 1996. The Agreement is terminable
without penalty, on 60 days' notice, by the Fund's Board or by vote of the
holders of a majority of the Fund's outstanding voting shares, or, upon not
less than 90 days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash,
Vice Chairman--Distribution and a director; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; Mark N. Jacobs, Vice President,
General Counsel and Secretary; Patrice M. Kozlowski, Vice President--
Corporate Communications; Mary Beth Leibig, Vice President--Human Resources;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Andrew S. Wasser,
Vice President--Information Systems; Elvira Oslapas, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides the
Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The Fund's portfolio managers are A. Paul
Disdier, Karen M. Hand, Stephen C. Kris, Richard J. Moynihan, Jill C.
Shaffro, Samuel J. Weinstock and Monica S. Wieboldt. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the Fund
and for other funds advised by the Manager. All purchases and sales are
reported for the Board members' review at the meeting subsequent to such
transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include: taxes, interest, loan commitment fees, interest
and distributions paid on securities sold short, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of custodians, transfer and
dividend disbursing agents' fees, certain insurance premiums, industry
association fees, outside auditing and legal expenses, costs of maintaining
corporate existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation, telephone
and personnel expenses), costs of shareholders' reports and corporate
meetings and any extraordinary expenses. Pursuant to the Fund's Service
Plan, the Fund bears expenses for advertising, marketing and distributing the
Fund's shares and servicing shareholder accounts, and also bears the cost of
preparing and printing prospectuses and statements of additional information
and costs associated with implementing and operating such plan. See "Service
Plan."
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .60 of 1% of the
value of the Fund's average daily net assets. The management fees payable
for the fiscal years ended December 31, 1994, 1995 and 1996 amounted to
$3,852,037, $3,708,451 and $3,662,218, respectively. The fee for fiscal
years 1994, 1995 and 1996 was reduced by $136,103, $907,858 and $842,935,
respectively, pursuant to undertakings by the Manager, resulting in a net fee
paid of $3,715,934 in 1994, $2,800,593 in 1995 and $2,819,283 in 1996.
The Manager has agreed that if in any fiscal year the aggregate expenses
of the Fund, exclusive of taxes, brokerage, interest on borrowings and (with
the prior written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed 1 1/2% of the
value of the Fund's average net assets for the fiscal year, the Fund may
deduct from the payment to be made to the Manager under the Agreement, or the
Manager will bear, such excess expense. Such deduction or payment, if any,
will be estimated daily, and reconciled and effected or paid, as the case may
be, on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement dated August 24, 1994. The
Distributor also acts as distributor for the other funds in the Dreyfus
Family of Funds and for certain other investment companies. In some states,
certain financial institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 P.M., New York
time, on any business day that Dreyfus Transfer, Inc., the Fund's transfer
and dividend disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange are open for business will be credited to the shareholder's Fund
account on the next bank business day following such purchase order.
Purchase orders made after 4:00 P.M., New York time, on any business day the
Transfer Agent and the New York Stock Exchange are open for business, or
orders made on Saturday, Sunday or any Fund holiday (e.g., when the New York
Stock Exchange is not open for business), will be credited to the
shareholder's Fund account on the second bank business day following such
purchase order. To qualify to use the Dreyfus TeleTransfer Privilege, the
initial payment for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See "Redemption of
Shares--Dreyfus TeleTransfer Privilege."
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SERVICE PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Service Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the 1940 Act provides, among other things, that an
investment company may bear expenses of distributing its shares only pursuant
to a plan adopted in accordance with the Rule. The Fund's Board has adopted
such a plan (the "Plan"), pursuant to which the Fund (a) reimburses the
Distributor for payments to certain financial institutions (which may include
banks), securities dealers and other financial industry professionals
(collectively, "Service Agents") for distributing the Fund's shares and for
servicing shareholder accounts ("Servicing") and (b) pays the Manager and
Dreyfus Service Corporation and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the Fund
and Servicing. The Fund's Board believes that there is a reasonable
likelihood that the Plan will benefit the Fund and its shareholders.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Fund's Board for its review. In addition, the Plan provides that it may not
be amended to increase materially the costs which the Fund may bear for
distribution pursuant to the Plan without shareholder approval and that other
material amendments of the Plan must be approved by the Fund's Board, and by
the Board members who are not "interested persons" (as defined in the 1940
Act) of the Fund or the Manager and have no direct or indirect financial
interest in the operation of the Plan or in the related service agreements,
by vote cast in person at a meeting called for the purpose of considering
such amendments. The Plan and the related service agreements are subject to
annual approval by such vote of the Board members cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was approved by
shareholders on August 3, 1994 and was last approved by the Fund's Board at a
meeting held on July 8, 1996. The Plan may be terminated at any time by vote
of the holders of a majority of the Board members who are not "interested
persons" and have no direct or indirect financial interest in the operation
of the Plan or in any of the related service agreements or by vote of a
majority of the Fund's shares. Any service agreement may be terminated
without penalty, at any time, by such vote of the Board members or, upon not
more than 60 days' written notice to the Service Agent, by vote of the
holders of a majority of the Fund's shares, or, upon 15 days' notice, by the
Distributor. Each service agreement will terminate automatically in the event
of its assignment (as defined in the 1940 Act).
Under the Plan, for the fiscal year ended December 31, 1996, the total
amount payable by the Fund was $1,527,513 of which (a) $53,444 was reimbursed
to the Distributor for payments made to Service Agents for distributing Fund
shares and Servicing, (b) $1,472,480 was payable to Dreyfus for advertising
and marketing shares and Servicing and (c) $1,589 was payable for printing
the Fund's prospectus and statement of additional information, as well as
implementing and operating the Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
The Fund will deduct a redemption fee equal to 1% of the net asset value
of Fund shares redeemed (including redemptions through the use of the Fund
Exchanges service) less than 15 days following the issuance of such shares.
The redemption fee will be deducted from the redemption proceeds and retained
by the Fund.
No redemption fee will be charged on the redemption or exchange of
shares (1) through the Fund's Check Redemption Privilege, Automatic
Withdrawal Plan, or Dreyfus Auto-Exchange Privilege, (2) through accounts
that are reflected on the records of the Transfer Agent as omnibus accounts
approved by Dreyfus Service Corporation, (3) through accounts established by
Service Agents approved by Dreyfus Service Corporation that utilize the
National Securities Clearing Corporation's networking system, or (4) acquired
through the reinvestment of dividends or capital gains distributions. The
redemption fee may be waived, modified or terminated at any time.
Check Redemption Privilege. An investor may indicate on the Account
Application, Shareholder Services Form or by later written request that the
Fund provide Redemption Checks ("Checks") drawn on the investor's Fund
account. Checks will be sent only to the registered owner(s) of the account
and only to the address of record. The Account Application, Shareholder
Services Form or later written request must be manually signed by the
registered owner(s). Checks may be made payable to the order of any person
in an amount of $500 or more. When a Check is presented to the Transfer
Agent for payment, the Transfer Agent, as the investor's agent, will cause
the Fund to redeem a sufficient number of full and fractional shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although election of
this Privilege creates only a shareholder-transfer agent relationship with
the Transfer Agent.
If the amount of the Check is greater than the value of the shares in an
investor's account, the Check will be returned marked insufficient funds.
Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent acting on the
investor's behalf, and reasonably believed by the Transfer Agent to be
genuine. Ordinarily, the Fund will initiate payment for shares redeemed
pursuant to this Privilege on the next business day after receipt by the
Transfer Agent of a redemption request in proper form. Redemption proceeds
($1,000 minimum) will be transferred by Federal Reserve wire only to the
commercial bank account specified by the investor on the Account Application
or Shareholder Services Form, or to a correspondent bank if the investor's
bank is not a member of the Federal Reserve System. Fees ordinarily are
imposed by such bank and borne by the investor. Immediate notification by
the correspondent bank to the investor's bank is necessary to avoid a delay
in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have also selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion
Signature Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the value of the Fund's
net assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In the
case of requests for redemption in excess of such amount, the Fund's Board
reserves the right to make payments in whole or in part in securities (which
may include non-marketable securities) or other assets in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's portfolio is
valued. If the recipient sold such securities, brokerage charges might be
incurred.
Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. A 1% redemption fee will be charged upon an exchange of
Fund shares when the exchange occurs less than 15 days following the issuance
of such shares. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load, and additional shares acquired through reinvestment
of dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, an investor, or the investor's Service Agent
acting on his behalf, must give exchange instructions to the Transfer Agent
in writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touch automated
telephone system) from any person representing himself or herself to be the
investor or a representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among the
funds in the Dreyfus Family of Funds. To exchange shares held in personal
retirement plans, the shares exchanged must have a current value of at least
$100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This Privilege is available
only for existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Fund Exchanges."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor will
be notified if his account falls below the amount designated to be exchanged
under this Privilege. In this case, an investor's account will fall to zero
unless additional investments are made in excess of the designated amount
prior to the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made only among those accounts.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Dreyfus Auto Exchange Privilege may be modified or terminated at any time
upon notice to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the Dreyfus
Family of Funds of which the investor is a shareholder. Shares of other
funds purchased pursuant to this privilege will be purchased on the basis of
relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which does not charge
a sales load may be invested in shares of other funds sold with a
sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a sales
load may be invested in shares of other funds sold with a sales
load (referred to herein as "Offered Shares"), provided that, if
the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any
reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed
upon redemption of such shares.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. The Fund's investments are valued by
an independent pricing service (the "Service") approved by the Fund's Board.
When, in the judgment of the Service, quoted bid prices for investments are
readily available and are representative of the bid side of the market, these
investments are valued at the mean between the quoted bid prices (as obtained
by the Service from dealers in such securities) and asked prices (as
calculated by the Service based upon its evaluation of the market for such
securities). Other investments (which constitute a majority of the portfolio
securities) are carried at fair value as determined by the Service, based on
methods which include consideration of: yields or prices of municipal bonds
of comparable quality, coupon, maturity and type; indications as to values
from dealers; and general market conditions. The Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. The Service's procedures are reviewed by the Fund's officers
under the general supervision of the Fund's Board. Expenses and fees,
including the management fee (reduced by the expense limitation, if any) and
fees pursuant to the Service Plan, are accrued daily and are taken into
account for the purpose of determining the net asset value of Fund shares.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily are
purchased directly from the issuer or from an underwriter; other purchases
and sales usually are placed with those dealers from which it appears that
the best price or execution will be obtained. Usually no brokerage
commissions, as such, are paid by the Fund for such purchases and sales,
although the price paid usually includes an undisclosed compensation to the
dealer acting as agent. The prices paid to underwriters of newly-issued
securities usually include a concession paid by the issuer to the
underwriter, and purchases of after-market securities from dealers ordinarily
are executed at a price between the bid and asked price. No brokerage
commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds it
advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by the
Manager in advising the Fund. Although it is not possible to place a dollar
value on these services, it is the opinion of the Manager that the receipt
and study of such services should not reduce the overall expenses of its
research department.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
The Internal Revenue Code of 1986, as amended (the "Code"), provides
that if a shareholder has not held his Fund shares for more than six months
(or such shorter period as the Internal Revenue Service may prescribe by
regulation) and has received an exempt-interest dividend with respect to such
shares, any loss incurred on the sale of such shares will be disallowed to
the extent of the exempt-interest dividend received. In addition, any
dividend or distribution paid shortly after an investor's purchase may have
the effect of reducing the net asset value of his shares below the cost of
his investment. Such a distribution would be a return on investment in an
economic sense although taxable as stated in "Dividends, Distributions and
Taxes" in the Prospectus.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gains
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Code.
Investment by the Fund in securities issued at a discount or providing
for deferred interest or for payment of interest in the form of additional
obligations could, under special tax rules, affect the amount, timing and
character of distributions to shareholders. For example, the Fund could be
required to take into account annually a portion of the discount (or deemed
discount) at which such securities were issued and to distribute such portion
in order to maintain its qualification as a regulated investment company. In
such case, the Fund may have to dispose of securities which it might
otherwise have continued to hold in order to generate cash to satisfy these
distribution requirements.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
The Fund's current yield for the 30-day period ended December 31, 1996
was 4.97%, which reflects the waiver of a portion of the management fee. See
"Management of the Fund" in the Prospectus. Had a portion of the management
fee not been waived, the Fund's current yield for the same period would have
been 4.82%. Current yield is computed pursuant to a formula which operates
as follows: The amount of the Fund's expenses accrued for the 30-day period
(net of reimbursements) is subtracted from the amount of the dividends and
interest earned (computed in accordance with regulatory requirements) by the
Fund during the period. That result is then divided by the product of: (a)
the average daily number of shares outstanding during the period that were
entitled to receive dividends, and (b) the net asset value per share on the
last day of the period less any undistributed earned income per share
reasonably expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th power, after
which 1 is subtracted. The current yield is then arrived at by multiplying
the result by 2.
Based upon a combined 1996 Federal and State of New Jersey personal
income tax rate of 43.45%, the Fund's tax equivalent yield for the 30-day
period ended December 31, 1996 was 8.79%, which reflects the waiver of a
portion of the management fee. See "Management of the Fund" in the
Prospectus. Had a portion of the management fee not been waived, the Fund's
tax equivalent yield for the same period would have been 8.52%. Tax
equivalent yield is computed by dividing that portion of the current yield
(calculated as described above) which is tax exempt by 1 minus a stated tax
rate and adding the quotient to that portion, if any, of the yield of the
Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of the
highest Federal and New Jersey State marginal personal income tax rates
presently in effect. For Federal income tax purposes, a 39.60% tax rate has
been used. For New Jersey income tax purposes, a 6.65% tax rate has been
used. The tax equivalent yield figure, however, does not include the
potential effect of any local (including, but not limited to, county,
district or city) taxes, including applicable surcharges. In addition, there
may be pending legislation which could affect such stated tax rates or
yields. Each investor should consult its tax adviser, and consider its own
factual circumstances and applicable tax laws, in order to ascertain the
relevant tax equivalent yield.
The Fund's average annual total return for the 1, 5 and 9.153 year
periods ended December 31, 1996 was 3.43%, 6.61% and 8.39%, respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number of
years in the period) and subtracting 1 from the result.
The Fund's total return for the period November 6, 1987 (commencement of
operations) to December 31, 1996 was 109.05%. Total return is calculated by
subtracting the amount of the Fund's net asset value per share at the
beginning of a stated period from the net asset value per share at the end of
the period (after giving effect to the reinvestment of dividends and
distributions during the period), and dividing the result by the net asset
value per share at the beginning of the period.
From time to time, the Fund may use hypothetical equivalent yields or
charts in its advertising. These hypothetical yields or charts will be used
for illustrative purposes only and not as representative of the Fund's past
or future performance. Advertising materials for the Fund also may refer to
or discuss then-current or past economic conditions, developments and/or
events, and actual or proposed tax legislation. Advertising materials for
the Fund may also refer to statistical or other information concerning trends
relating to investment companies, as compiled by industry associations such
as the Investment Company Institute, and may refer to Morningstar ratings and
related analyses supporting the rating. In addition, advertising materials
for the Fund may include biographical information relating to its portfolio
managers and may refer to, or include commentary by a portfolio manager
relating to investment strategy, asset growth, current or past business,
political, economic or financial conditions and other matters of general
interest to investors.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund
shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-of-
pocket expenses. For the fiscal year ended December 31, 1996, the Fund paid
the Transfer Agent $211, 435. The Bank of New York, 90 Washington Street,
New York, New York 10286, is the Fund's custodian.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York 10038-
4982, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares
being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
RISK FACTORS -- INVESTING IN NEW JERSEY MUNICIPAL OBLIGATIONS.
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn from
official statements relating to securities offerings of the State of New
Jersey and various local agencies available as of the date of this Statement
of Additional Information. While the Fund has not independently verified
this information, it has no reason to believe that such information is not
correct in all material respects.
New Jersey's economic base is diversified, consisting of a variety of
manufacturing, construction and service industries, supplemented by rural
areas with selective commercial agriculture. New Jersey's principal
manufacturing industries produce chemicals, pharmaceutical, electrical
equipment and instruments, machinery, printing and food products. Other
economic activities include services, wholesale and retail trade, insurance,
tourism, petroleum refining and truck farming.
While New Jersey's economy continued to expand during the late 1980s,
the level of growth slowed considerably after 1987. By the beginning of the
national recession in July 1990 (according to the National Bureau of Economic
Research), construction activity had already been declining in New Jersey for
nearly two years, growth had tapered off markedly in the service sectors and
the long-term downward trend of factory employment had accelerated, partly
because of a leveling off of industrial demand nationally. The onset of
recession caused an acceleration of New Jersey's job losses in construction
and manufacturing, as well as an employment downturn in such previously
growing sectors as wholesale trade, retail trade, finance, utilities and
trucking and warehousing. The net effect was a decline in the State's total
nonfarm wage and salary employment from a peak of 3,689,800 in 1989 to a low
of 3,458,000 in 1992. This loss has been followed by an employment gain of
200,700 from May 1992 to August 1996, a recovery of 77% of the jobs lost
during the recession. In July 1991, S&P lowered the State's general
obligation bond rating from AAA to AA+.
Reflecting the downturn, the rate of unemployment in the State rose from
a low of 3.6% during the first quarter of 1989 to a recessionary peak of 8.5%
during 1992. Since then, the unemployment rate fell to an average of 6.4% in
1995 and 6.1% for the four month period from May 1996 through August 1996.
Despite an increase reported in December 1995, the annualized unemployment
rate remained 6.4% for the fourth quarter of 1995.
The revised estimate as shown in the Governor's Fiscal Year 1997 Budget
Message forecasts Sales and Use Tax collections for Fiscal Year 1996 as
$4.254 billion, a 2.9% increase from Fiscal Year 1995 revenue. The Fiscal
Year 1997 estimate of $4.325 billion, is a 1.7% increase from the Fiscal Year
1996 estimate.
The revised estimate as shown in the Governor's Fiscal Year 1997 Budget
Message forecasts Gross Income Tax collections for Fiscal Year 1996 of $4.713
billion, a 3.8% increase from Fiscal Year 1995 revenue. Included in the
Fiscal Year 1995 revenue is a 5% reduction of personal income tax rates
effective January 1, 1994 and a further 10% reduction of personal income tax
rates effective January 1, 1995 (on joint income under $80,000). The
estimate for fiscal year 1997 as shown in the Governor's Fiscal Year 1997
Budget Message of $4.510 billion, is a 4.3% decrease from the Fiscal Year
1996 estimate. Included in the Fiscal Year 1996 forecast is the 10%
reduction of personal income tax rates effective January 1, 1995 and a
further 15% reduction of personal income tax rates effective January 1, 1996
(on joint incomes under $80,000).
The revised estimate as shown in the Governor's Fiscal Year 1997 Budget
Message forecasts Corporation Business Tax collections for Fiscal Year 1996
of $1.238 billion, a 14.0% increase from Fiscal Year 1995 revenue. Included
in the Corporation Business Tax forecast is a reduction in the Corporation
Business Tax rate from 9.375% to 9.0% of net New Jersey income. The Fiscal
Year 1997 forecast as shown in the Governor's Fiscal 1997 Budget Message of
$1.155 billion, represents a 6.7% decrease from the Fiscal Year 1996
estimate.
The revised estimate as shown in the Governor's Fiscal Year 1997 Budget
Message forecasts Other Miscellaneous Taxes Fees and Revenues collections
for Fiscal Year 1996 as $1.498 billion, an increase from fiscal year 1995
revenue.
The Fiscal Year 1996 revised estimates include an estimate of $351
million which the state realized from a Tax Amnesty Program.
Should revenues be less than the amount anticipated in the budget for a
fiscal year, the Governor may, pursuant to statutory authority, prevent any
expenditure under any appropriation. There are additional means by which the
Governor may ensure that the State is operated efficiently and does not incur
a deficit. No supplemental appropriation may be enacted after adoption of an
appropriations act except where there are sufficient revenues on hand or
anticipated, as certified by the Governor, to meet such appropriation. In
the past when actual revenues have been less than the amount anticipated in
the budget, the Governor has exercised her plenary powers leading to, among
other actions, implementation of a hiring freeze for all State departments
and the discontinuation of programs for which appropriations were budgeted
but not yet spent.
The State appropriated approximately $16.189 billion and $15.978 billion
for Fiscal 1996 and 1997, respectively. Of the $15.978 billion appropriated
in Fiscal Year 1997 from the General Fund, the Property Tax Relief Fund, the
Casino Control Fund, the Casino Revenue Fund and Gubernatorial Elections
Fund, $6.384 billion (39.9%) is appropriated for State aid to local
governments, $3.749 billion (23.5%) is appropriated for grants-in-aid
(payments to individuals or public or private agencies for benefits to which
a recipient is entitled by law or for the provision of service on behalf of
the State), $5.045 billion (31.6%) for Direct State services, $446.9 million
(2.8%) for debt service on State general obligation bonds and $352.6 million
(2.2%) for capital construction.
Should tax revenues be less than the amount anticipated in the Budget
for a fiscal year, the Governor may, pursuant to statutory authority, prevent
any expenditure under any appropriation. The appropriations for Fiscal Year
1996 and for Fiscal Year 1997 reflect the amounts contained in the Governor's
Fiscal Year 1997 Budget Message.
The State has made appropriations for principal and interest payments
for general obligation bonds for fiscal years 1993 through 1996 in the
amounts of $444.3 million, $119.9 million, $103.6 million and $466.3 million,
respectively. The Governor's Fiscal Year 1997 Budget Message for Fiscal Year
1997 includes an appropriation in the amount of $446.9 million for principal
and interest payments for general obligation bonds.
APPENDIX B
Description of S&P's, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable, and will include:
(1) likelihood of default-capacity and willingness of the obligor as to the
timely payment of interest and repayment of principal in accordance with the
terms of the obligation; (2) nature and provisions of the obligation; and (3)
protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small degree.
A
Principal and interest payments on bonds in this category are regarded
as safe. This rating describes the third strongest capacity for payment of
debt service. It differs from the two higher ratings because:
General Obligation Bonds -- There is some weakness in the local economic
base, in debt burden, in the balance between revenues and expenditures, or in
quality of management. Under certain adverse circumstances, any one such
weakness might impair the ability of the issuer to meet debt obligations at
some future date.
Revenue Bonds -- Debt service coverage is good, but not exceptional.
Stability of the pledged revenues could show some variations because of
increased competition or economic influences on revenues. Basic security
provisions, while satisfactory, are less stringent. Management performance
appears adequate.
BBB
Of the investment grade, this is the lowest.
General Obligation Bonds -- Under certain adverse conditions, several of
the above factors could contribute to a lesser capacity for payment of debt
service. The difference between "A" and "BBB" rating is that the latter
shows more than one fundamental weakness, or one very substantial fundamental
weakness, whereas the former shows only one deficiency among the factors
considered.
Revenue Bonds -- Debt coverage is only fair. Stability of the pledged
revenues could show substantial variations, with the revenue flow possibly
being subject to erosion over time. Basic security provisions are no more
than adequate. Management performance could be stronger.
BB, B, CCC, CC, C
Debt rated BB, B, CCC, CC and C is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal. BB indicates the least degree of speculation and C the
highest degree of speculation. While such debt will likely have some quality
and protective characteristics, these are outweighed by large uncertainties
or major risk exposures to adverse conditions.
BB
Debt rated BB has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B
Debt rated B has a greater vulnerability to default but presently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Debt rated CCC has a current identifiable vulnerability to default, and
is dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC rating.
C
The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating.
D
Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus sign to show relative standing within the
major ratings categories.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to possess
overwhelming safety characteristics are given a plus (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory capacity to
pay principal and interest.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the likelihood
of timely payment of debt having an original maturity of no more than 365
days.
A
Issues assigned an A rating are regarded as having the greatest capacity
for timely payment. Issues in this category are delineated with the numbers
1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation
of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C
Bonds which are rated C are the lowest rated class of bonds, and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Generally, Moody's provides either a generic rating or a rating with a
numerical modifier of 1 for bonds in each of the generic rating categories
Aa, A, Baa, Ba and B. Moody's also provides numerical modifiers of 2 and 3
in each of these categories for bond issues in the health care, higher
education and other not-for-profit sectors; the modifier 1 indicates that the
issue ranks in the higher end of its generic rating category; the modifier 2
indicates that the issue is in the mid-range of the generic category; and the
modifier 3 indicates that the issue is in the low end of the generic
category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade (MIG). Such ratings recognize the
difference between short-term credit risk and long-term risk. Factors
affecting the liquidity of the borrower and short-term cyclical elements are
critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends for example, may be less important over
the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand feature
is not rated, as NR. Short-term ratings on issues with demand features are
differentiated by the use of the VMIG symbol to reflect such characteristics
as payment upon periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be alert to
the fact that the source of payment may be limited to the external liquidity
with no or limited legal recourse to the issuer in the event the demand is
not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when Moody's
assigns a MIG or VMIG rating, all categories define an investment grade
situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample
although not so large as in the preceding group.
MIG 3/VMIG 3
This designation denotes favorable quality. All security elements are
accounted for but there is lacking the undeniable strength of the preceding
grades. Liquidity and cash flow protection may be narrow and market access
for refinancing is likely to be less well established.
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly regarded
as required of an investment security is present and although not distinctly
or predominantly speculative, there is specific risk.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment
of short-term promissory obligations, and ordinarily will be evidenced by
leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate
reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to meet
the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the highest
credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonable
foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
A
Bonds rated A are considered to be investment grade and of high credit
quality. The obligor's ability to pay interest and repay principal is
considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.
BBB
Bonds rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic
conditions and circumstances, however, are more likely to have an adverse
impact on these bonds and, therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment grade is higher
than for bonds with higher ratings.
BB
Bonds rated BB are considered speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service requirements.
B
Bonds rated B are considered highly speculative. While bonds in this
class are currently meeting debt service requirements, the profitability of
continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.
CCC
Bonds rated CCC have certain identifiable characteristics, which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.
CC
Bonds rated CC are minimally protected. Default payment of interest
and/or principal seems probable over time.
C
Bonds rated C are in imminent default in payment of interest or
principal.
DDD, DD and D
Bonds rated DDD, DD and D are in actual or imminent default of interest
and/or principal payments. Such bonds are extremely speculative and should
be valued on the basis of their ultimate recovery value in liquidation or
reorganization of the obligor. DDD represents the lowest potential for
recovery on these bonds and D represents the lowest potential for recovery.
Plus (+) and minus (-) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category. Plus and minus
signs, however, are not used in the AAA category covering 13-36 months or the
DDD, DD, or D categories.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and
investment notes.
Although the credit analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis than bond ratings on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-
1+.
F-2
Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1996
Principal
Long-Term Municipal Investments_100.0% Amount Value
______ ______
<S> <C> <C>
New Jersey_78.6%
Atlantic County Utilities Authority, Solid Waste System Revenue:
7%, 3/1/2008.............................................................. $ 4,250,000 $ 4,276,010
7.125%, 3/1/2016.......................................................... 6,650,000 6,676,001
Brick Township Municipal Utilities Authority, Water and Sewer Revenue,
Refunding
5%, 12/1/2016 (Insured; FGIC)............................................. 4,950,000 4,689,729
City of Camden:
Zero Coupon, 2/15/2010 (Insured; FSA)..................................... 2,500,000 1,255,225
Zero Coupon, 2/15/2012 (Insured; FSA)..................................... 4,585,000 2,051,925
Camden County Municipal Utilities Authority, Sewer Revenue:
8.25%, 12/1/2017 (Prerefunded 12/1/1997) (Insured; FGIC) (a).............. 3,450,000 3,661,485
Refunding 5.125%, 7/15/2017 (Insured; FGIC)............................... 15,000,000 14,392,650
Camden County Pollution Control Financing Authority, Solid Waste Disposal and
Resource Recovery System Revenue 7.50%, 12/1/2010......................... 13,000,000 13,035,490
Delaware River and Bay Authority, Highway Toll Revenue 5.25%, 1/1/2026 (Insured; FGIC) 19,200,000 18,494,784
Delaware River Port Authority, Highway Toll Revenue 5.50%, 1/1/2026 (Insured; FGIC) 13,020,000 12,843,579
East Orange:
Zero Coupon, 8/1/2010 (Insured; FSA)...................................... 4,240,000 2,077,939
Zero Coupon, 8/1/2011 (Insured; FSA)...................................... 2,500,000 1,141,275
Essex County Improvement Authority, Lease Revenue
7%, 12/1/2020 (Prerefunded 12/1/2000) (Insured; AMBAC) (a)................ 4,000,000 4,453,800
Evesham Township Board of Education, COP, Lease Purchase Agreement
6.875%, 9/1/2011 (Insured; FGIC).......................................... 3,050,000 3,380,040
Gloucester County Utilities Authority, Sewer Revenue, Refunding
5.45%, 1/1/2024 (Insured; MBIA)........................................... 2,000,000 1,981,860
Gloucester Township Municipal Utilities Authority, Sewer Revenue, Refunding
5.65%, 3/1/2018 (Insured; AMBAC).......................................... 2,530,000 2,607,393
Howell Township, Refunding 6.80%, 1/1/2014 (Insured; FGIC).................. 5,000,000 5,498,800
Hudson County Improvement Authority:
Facility Lease Revenue 7.969%, 12/1/2025 (Insured; FGIC) (b,c)............ 13,835,000 14,561,337
MFHR (Conduit Financing - Observer Park Project) 6.90%, 6/1/2022 (Insured; FNMA) 4,190,000 4,384,751
Jersey City:
Zero Coupon, 5/15/2010 (Insured; FSA)..................................... 4,745,000 2,351,337
5.375%, 10/1/2013......................................................... 1,000,000 986,880
5.25%, 10/1/2016.......................................................... 3,080,000 3,007,589
Refunding:
6%, 10/1/2008 (Insured; AMBAC).......................................... 2,490,000 2,707,850
6%, 10/1/2009 (Insured; AMBAC).......................................... 1,890,000 2,046,927
Keansburg Board of Education, COP 8%, 11/1/2014 (Prerefunded 11/1/1999) (a). 5,000,000 5,578,900
Manchester Township Board of Education, COP
7.20%, 12/15/2009 (Prerefunded 12/15/1998) (Insured; MBIA) (a)............ 4,175,000 4,507,497
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
______ ______
New Jersey (continued)
Mercer County Improvement Authority, Solid Waste Revenue, Refunding
(Resource Recovery Project):
6.80%, 4/1/2005......................................................... $ 4,730,000 $ 4,615,960
6.70%, 4/1/2013 (Insured; FGIC)......................................... 11,000,000 11,012,210
Monmouth County Improvement Authority, Revenue (Asbury Park Project)
7.375%, 12/1/2009 (Prerefunded 12/1/1999) (a)............................. 3,000,000 3,301,020
New Brunswick Parking Authority, Revenue, Refunding
7.125%, 9/1/2015 (Prerefunded 9/1/1999) (Insured; FGIC) (a)............... 2,000,000 2,175,520
State of New Jersey, Refunding 6%, 7/15/2010................................ 7,400,000 8,026,410
New Jersey Building Authority, Building Revenue, Refunding 5%, 6/15/2015.... 3,000,000 2,792,850
New Jersey Economic Development Authority, Revenue:
(Clara Maas Health System Project) 5%, 7/1/2025 (Insured; FSA)............ 4,975,000 4,595,557
(Community Mental Health Loan Program) 8.50%, 7/1/2017.................... 7,360,000 7,939,674
District Heating and Cooling
(Trigen - Trenton District Energy Co. L.P. Project):
6.10%, 12/1/2004...................................................... 3,375,000 3,521,407
6.20%, 12/1/2007...................................................... 2,725,000 2,791,708
Economic Development:
(American Airlines Inc. Project) 7.10%, 11/1/2031....................... 2,855,000 3,062,130
Refunding:
(Stolt Terminals Inc. Project) 10.50%, 1/15/2018...................... 9,440,000 10,234,376
(Tevco Inc. Project) 8.125%, 10/1/2009 (LOC; Credit Lyonnais) (d)..... 2,500,000 2,680,625
First Mortgage (The Evergreens) 9.25%, 10/1/2022.......................... 5,000,000 5,637,550
Refunding:
(Morris Hall / Saint Lawrence Inc. Project):
5.50%, 4/1/2016 (LOC; Corestates Bank) (d)............................ 1,000,000 977,280
5.50%, 4/1/2027 (LOC; Corestates Bank) (d)............................ 3,500,000 3,357,935
Waste Paper Recycling (Marcal Paper Mills Inc. Project):
6.25%, 2/1/2009......................................................... 6,605,000 6,761,605
8.50%, 2/1/2010......................................................... 5,850,000 6,636,065
Water Facilities:
(American Water Co. Inc. Project) 6.50%, 4/1/2022 (Insured; FGIC)....... 19,000,000 20,261,220
(Elizabeth Water Co. Project) 6.70%, 8/1/2021........................... 3,965,000 4,164,796
New Jersey Educational Facilities Authority, Revenue, Refunding:
(Seton Hall University Project):
5.625%, 7/1/2019 (Insured; MBIA)........................................ 4,125,000 4,114,564
6.85%, 7/1/2019 (Insured; BIGI)......................................... 9,050,000 9,701,781
7%, 7/1/2021............................................................ 3,500,000 3,698,625
New Jersey Health Care Facilities Financing Authority, Revenue:
(Kennedy Memorial Hospital University Medical Center) 6%, 7/1/2020........ 4,115,000 4,021,343
(Kimball Medical Center) 8%, 7/1/2013..................................... 13,000,000 13,719,810
(Palisades Medical Center):
7.50%, 7/1/2006......................................................... 2,150,000 2,230,023
7.60%, 7/1/2021......................................................... 2,350,000 2,446,186
(Raritan Bay Medical Center) 7.25%, 7/1/2014.............................. 13,000,000 13,717,990
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
______ ______
New Jersey (continued)
New Jersey Health Care Facilities Financing Authority, Revenue (continued):
Refunding (Saint Josephs Hospital and Medical Center):
5.75%, 7/1/2016 (Insured; Connie Lee)................................... $ 1,800,000 $ 1,823,436
6%, 7/1/2026 (Insured; Connie Lee)...................................... 1,000,000 1,028,030
New Jersey Housing and Mortgage Finance Agency, Revenue:
Multi-Family Housing, Refunding (Presidential Plaza at Newport Project)
7%, 5/1/2030 (Insured; FHA)............................................. 5,000,000 5,336,000
Rental Housing 6.75%, 11/1/2022........................................... 9,310,000 9,595,910
New Jersey Transit Corp., Lease Purchase Agreement, COP (Raymond Plaza East
Inc.)
6.50%, 10/1/2016 (Insured; FSA)........................................... 3,945,000 4,343,287
New Jersey Transportation Trust Fund Authority, Refunding (Transportation
System):
6.50%, 6/15/2011 (Insured; MBIA).......................................... 11,000,000 12,434,290
7%, 6/15/2012 (Insured; MBIA)............................................. 6,000,000 7,063,380
5%, 6/15/2015 (Insured; MBIA)............................................. 15,000,000 14,178,450
New Jersey Turnpike Authority, Turnpike Revenue, Refunding
6.50%, 1/1/2016 (Insured; MBIA)........................................... 14,665,000 16,595,061
North Hudson Sewer Authority, Sewer Revenue 5.125%, 8/1/2022 (Insured; FGIC) 2,900,000 2,753,376
North Jersey District Water Supply Commission, Sewer Revenue (Wanaque South
Project)
6%, 7/1/2019 (Insured; MBIA).............................................. 2,000,000 2,145,700
Ocean County Pollution Control Financing Authority, PCR, Refunding (Ciba
Geigy Corp. Project)
6%, 5/1/2020.............................................................. 11,700,000 12,062,232
Passaic County Utilities Authority, Solid Waste System Revenue 7%, 11/15/2007 1,500,000 1,471,620
Port Authority of New York and New Jersey:
(Delta Airlines Inc. Project) 6.95%, 6/1/2008............................. 7,200,000 7,624,008
Special Obligation Revenue (Continental-Eastern LaGuardia Project)
9.125%, 12/1/2015....................................................... 6,500,000 7,359,495
Salem County Industrial Pollution Control Financing Authority, PCR
(Public Service Electric and Gas Co.) 5.45%, 2/1/2032 (Insured; MBIA)..... 4,250,000 4,036,947
Union County Utilities Authority, Solid Waste Revenue:
7.10%, 6/15/2006.......................................................... 1,625,000 1,667,364
7.15%, 6/15/2009.......................................................... 2,750,000 2,821,583
7.20%, 6/15/2014.......................................................... 10,000,000 10,167,400
University of Medicine and Dentistry 7.20%, 12/1/2019 (Prerefunded 12/1/1999) (a) 5,710,000 6,274,034
Western Monmouth Utilities Authority, Sewer Revenue, Refunding
5.60%, 2/1/2014 (Insured; AMBAC).......................................... 2,190,000 2,224,120
West New York Municipal Utilities Authority, Sewer Revenue, Refunding
7.30%, 12/15/2017 (Prerefunded 12/15/2000) (Insured; FGIC) (a)............ 6,250,000 7,032,062
West Windsor-Plainsboro Regional School District:
5.50%, 12/1/2015 (Insured; FGIC).......................................... 2,700,000 2,709,747
5.50%, 12/1/2016 (Insured; FGIC).......................................... 2,700,000 2,707,560
5.50%, 12/1/2017 (Insured; FGIC).......................................... 2,700,000 2,703,159
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
______ ______
New Jersey (continued)
West Windsor-Plainsboro Regional School District (continued):
5.50%, 12/1/2018 (Insured; FGIC).......................................... $ 2,700,000 $ 2,694,735
5.50%, 12/1/2019 (Insured; FGIC).......................................... 2,700,000 2,694,627
5.50%, 12/1/2020 (Insured; FGIC).......................................... 2,700,000 2,690,955
U.S. Related_21.4%
Commonwealth of Puerto Rico:
5.65%, 7/1/2015 (Insured; MBIA)........................................... 2,000,000 2,071,120
7.30%, 7/1/2020 (Prerefunded 7/1/2000) (a)................................ 10,850,000 12,150,156
5.40%, 7/1/2025........................................................... 21,300,000 20,361,522
Public Improvement 6.80%, 7/1/2021 (Prerefunded 7/1/2002) (a)............. 5,400,000 6,106,320
Refunding 5.375%, 7/1/2022 (Insured; MBIA)................................ 10,975,000 10,721,916
Puerto Rico Aqueduct and Sewer Authority, Revenue, Refunding 5%, 7/1/2019... 10,325,000 9,457,803
Puerto Rico Electric Power Authority, Power Revenue, Refunding 5.50%, 7/1/2025 5,000,000 4,802,150
Puerto Rico Highway and Transportation Authority, Highway Revenue:
6.208%, 7/1/2007 (b)...................................................... 11,100,000 11,211,000
5.923%, 7/1/2009 (b)...................................................... 2,950,000 2,913,125
7.75%, 7/1/2016 (Prerefunded 7/1/2000) (a)................................ 3,460,000 3,924,886
6.625%, Series S, 7/1/2018 (Prerefunded 7/1/2002) (a)..................... 13,000,000 14,593,670
6.625%, Series T, 7/1/2018 (Prerefunded 7/1/2002) (a)..................... 2,040,000 2,290,084
5%, 7/1/2022.............................................................. 2,500,000 2,233,900
5.50%, 7/1/2026........................................................... 3,500,000 3,388,455
5%, 7/1/2036.............................................................. 8,000,000 7,187,280
5.50%, 7/1/2036........................................................... 3,000,000 2,922,240
Puerto Rico Ports Authority, Special Facilities Revenue (American Airlines
Inc. Project)
6.25%, 6/1/2026 (Guaranteed; AMR Corp.)................................... 3,000,000 3,076,110
Puerto Rico Public Building Authority, Guaranteed Public Education and Health
Facilities
Refunding 5.75%, 7/1/2015 (Guaranteed; Commonwealth of Puerto Rico)....... 2,500,000 2,484,525
University of Puerto Rico, University Revenues 5.25%, 6/1/2025 (Insured; MBIA) 5,100,000 4,935,321
_______
TOTAL INVESTMENTS
(cost $567,372,362)....................................................... $593,917,424
=======
</TABLE>
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
BIGI Bond Investors Guaranty Insurance LOC Letter of Credit
COP Certificate of Participation 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
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
______ _______ ________________ __________________
<S> <C> <C> <C>
AAA Aaa AAA 55.1%
AA Aa AA 4.3
A A A 19.5
BBB Baa BBB 9.1
BB Ba BB 1.8
B B B 1.2
Not Rated (f) Not Rated (f) Not Rated (f) 9.0
___
100.0%
===
</TABLE>
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Inverse floater security_the interest rate is subject to change
periodically.
(c) Security exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At December 31, 1996, this security amounted to
$14,561,337 or 2.5% of net assets.
(d) Secured by letter of credit.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
(f) 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.
(g) At December 31, 1996, the Fund had $150,333,795 (25.3% 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>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
Cost Value
______ ______
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $567,372,362 $593,917,424
Interest receivable........................ 11,539,907
Prepaid expenses........................... 24,619
______
605,481,950
______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 352,799
Due to Distributor......................... 6,893
Cash overdraft due to Custodian............ 10,959,338
Payable for Common Stock redeemed.......... 84,019
Accrued expenses........................... 129,779
______
11,532,828
______
NET ASSETS.................................................................. $593,949,122
======
REPRESENTED BY: Paid-in capital............................ $566,200,226
Accumulated net realized gain (loss) on investments 1,203,834
Accumulated net unrealized appreciation (depreciation)
....................... on investments_Note 3 26,545,062
______
NET ASSETS.................................................................. $593,949,122
======
SHARES OUTSTANDING
(500 MILLION SHARES OF $.001 PAR VALUE COMMON STOCK AUTHORIZED)............. 45,675,957
NET ASSET VALUE, offering and redemption price per share_Note 2(d).......... $13.00
===
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1996
INVESTMENT INCOME
INCOME Interest Income............................ $ 38,202,705
EXPENSES: Management fee_Note 2(a)................... $ 3,662,218
Shareholder servicing costs_Note 2(b)...... 1,850,322
Professional fees.......................... 57,339
Custodian fees............................. 56,906
Directors' fees and expenses_Note 2(c)..... 40,218
Prospectus and shareholders' reports_Note 2(b) 15,060
Registration fees.......................... 5,189
Miscellaneous.............................. 38,640
______
Total Expenses....................... 5,725,892
Less_reduction in management fee due to
undertaking_Note 2(a).................. (842,935)
______
Net Expenses......................... 4,882,957
______
INVESTMENT INCOME_NET....................................................... 33,319,748
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $ 9,376,479
Net unrealized appreciation (depreciation) on investments (22,801,500)
______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... (13,425,021)
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 19,894,727
======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, 1996 December 31, 1995
__________________ __________________
<S> <C> <C>
OPERATIONS:
Investment income_net............................................ $ 33,319,748 $ 35,059,403
Net realized gain (loss) on investments.......................... 9,376,479 4,018,796
Net unrealized appreciation (depreciation) on investments........ (22,801,500) 49,285,419
_______ _______
Net Increase (Decrease) in Net Assets Resulting from Operations 19,894,727 88,363,618
_______ _______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net............................................ (33,505,718) (34,967,410)
Net realized gain on investments................................. (10,462,166) (187,311)
_______ _______
Total Dividends................................................ (43,967,884) (35,154,721)
_______ _______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.................................... 602,957,562 345,417,332
Dividends reinvested............................................. 33,582,759 26,626,785
Cost of shares redeemed.......................................... (672,354,345) (348,941,494)
_______ _______
Increase (Decrease) in Net Assets from Capital Stock Transactions (35,814,024) 23,102,623
_______ _______
Total Increase (Decrease) in Net Assets.................... (59,887,181) 76,311,520
NET ASSETS:
Beginning of Period.............................................. 653,836,303 577,524,783
_______ _______
End of Period.................................................... $ 593,949,122 $ 653,836,303
======= =======
UNDISTRIBUTED INVESTMENT INCOME_NET.................................. ___ $ 185,970
_______ _______
Shares Shares
_______ _______
CAPITAL SHARE TRANSACTIONS:
Shares sold...................................................... 46,189,858 26,279,832
Shares issued for dividends reinvested........................... 2,568,077 2,027,922
Shares redeemed.................................................. (51,413,282) (26,516,887)
_______ _______
Net Increase (Decrease) in Shares Outstanding.................. (2,655,347) 1,790,867
======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 4 of the Fund's Prospectus
dated May 1, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus New Jersey Municipal Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company. The Fund's investment objective is to
provide investors with as high a level of current income exempt from Federal
and New Jersey income taxes as is consistent with the preservation of
capital. The Dreyfus Corporation ("Manager") serves as the Fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. Premier
Mutual Fund Services, Inc. (the "Distributor") acts as the distributor of the
Fund's shares, which are sold to the public without a sales load.
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: The Fund's investments are valued each business
day by an independent pricing service ("Service") approved by the Fund's
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 original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations
held by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends from investment income-net on each business day. Such dividends are
paid monthly. Dividends from net realized capital gain are normally declared
and paid annually, but the Fund may make distributions on a more frequent
basis to comply with the distribution requirements of the Internal Revenue
Code. To the extent that net realized capital gain can be offset by capital
loss carryovers, 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 Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .60 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses, exclusive of
taxes, brokerage, interest on borrowings and extraordinary expenses, exceed 11
\2 % of the value of the Fund's average net assets for any full fiscal year,
the Fund may deduct from payments to be made to the Manager, or the Manager
will bear such excess expense. The Manager has
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
undertaken from January 1, 1996 through December 31, 1997 to reduce the
management fee paid by, or reimburse such excess expenses of the Fund, to the
extent that the Fund's aggregate annual expenses (exclusive of certain
expenses as described above) exceed an annual rate of .80 of 1% of the value
of the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertaking, amounted to $842,935 during the period ended
December 31, 1996.
The undertaking may be extended, modified or terminated by the Manager,
provided that the resulting expense reimbursement would not be less than the
amount required pursuant to the Agreement.
(B) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1
under the Act, the Fund (a) reimburses the Distributor for payments to
certain Service Agents (a securities dealer, financial institution or other
industry professional) for distributing the Fund's shares and servicing
shareholder accounts ("Servicing") and (b) pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate of
either of them (collectively, "Dreyfus") for advertising and marketing
relating to the Fund and for Servicing at an aggregate annual rate of .25 of
1% of the value of the Fund's average daily net assets. Both the Distributor
and Dreyfus may pay Service Agents a fee in respect of the Fund's shares
owned by shareholders with whom the Service Agent has a Servicing
relationship or for whom the Service Agent is the dealer or holder of record.
Both the Distributor and Dreyfus determine the amounts to be paid to Service
Agents to which they will make payments and the basis on which such payments
are made. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with implementing
and operating the Plan, not to exceed the greater of $100,000 or .005 of 1%
of the Fund's average daily net assets for any full year. During the period
ended December 31, 1996, $1,527,513 was charged to the Fund pursuant to the
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. Such
compensation amounted to $211,435 during the period ended December 31, 1996.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $2,500 and an attendance fee of $250
per meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
(d) A 1% redemption fee is charged on certain redemptions of Fund shares
(including redemptions through use of the Exchange Privilege) where the
shares being redeemed were issued subsequent to a specified effective date
and the redemption or exchange occurs within a fifteen day period following
the date of issuance.
NOTE 3_SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $187,986,464 and $204,846,401, respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $26,545,062, consisting of $28,595,741 gross unrealized
appreciation and $2,050,679 gross unrealized depreciation.
At December 31, 1996, 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).
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus New Jersey Municipal Bond Fund, Inc., including the statement of
investments, as of December 31, 1996, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1996 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus New Jersey Municipal Bond Fund, Inc. at December 31,
1996, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
[ERNST & YOUNG LLP signature logo]
New York, New York
January 29, 1997
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
PART C. OTHER INFORMATION
_________________________
Item 24. Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information for the period from
November 6, 1987 (commencement of operations) to December
31, 1987 and for each of the nine years in the period
ended December 31, 1996.
Included in Part B of the Registration Statement:
Statement of Investments--December 31, 1996.
Statement of Assets and
Liabilities--December 31, 1996.
Statement of Operations--year ended December 31, 1996.
Statement of Changes in Net Assets--for the years ended
December 31, 1995 and 1996.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
January 29, 1997.
Schedules No. I through VII and other financial statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ ______________________________________________________
(b) Exhibits:
(1)(a) Articles of Incorporation is incorporated by reference to Exhibit
(1)(a) of Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A, filed on April 22, 1996.
(1)(b) Articles of Amendment is incorporated by reference to Exhibit
(1)(b) of Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A, filed on April 22, 1996.
(2) By-Laws, as amended, is incorporated by reference to Exhibit (2) of
Post-Effective Amendment No. 10 to the Registration Statement on
Form N-1A, filed on April 22, 1996.
(4) Specimen certificate for the Registrant's securities is
incorporated by reference to Exhibit (4) of the Registration
Statement on Form N-1A, filed on January 16, 1988.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 8 to the Registration Statement on
Form N-1A, filed on March 1, 1995.
(6)(a) Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A, filed on March 1, 1995.
(6)(b) Forms of Service Agreement are incorporated by reference to Exhibit
(6)(b) of Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A, filed on March 1, 1995.
(8)(a) Amended and Restated Custody Agreement is incorporated by reference
to Exhibit (8)(a) of Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A, filed on April 22, 1996.
(8)(b) Sub-Custodian Agreements is incorporated by reference to Exhibit
(8)(b) of Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A, filed on April 22, 1996.
(10) Opinion and Consent of Counsel is incorporated by reference to
Exhibit (10) of Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A, filed on April 22, 1996.
(11) Consent of Independent Auditors.
(15) Service Plan is incorporated by reference to Exhibit (15) of Post-
Effective Amendment No. 8 to the Registration Statement on Form N-
1A, filed on March 1, 1995.
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A filed on March 25, 1994.
(17) Financial Data Schedule.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
Other Exhibits
______________
(a) Powers of Attorney and officers.
(b) Certificate of Secretary is incorporated by reference to
Other Exhibit (b) of Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A, filed on March 1,
1995.
Item 25. Persons Controlled by or under Common Control with Registrant.
_______ ______________________________________________________________
Not Applicable
Item 26. Number of Holders of Securities.
_______ ________________________________
(1) (2)
Number of Record
Title of Class Holders as of April 1, 1997
______________ _____________________________
Common Stock 12,385
(Par value $.001)
Item 27. Indemnification
_______ _______________
Reference is made to Article SEVENTH of the Registrant's Articles of
Incorporation filed herewith and to Section 2-418 of the Maryland
General Corporation Law. The application of these provisions is
limited by Article VIII of the Registrant's By-Laws filed herewith,
and by the following undertaking set forth in the rules promulgated
by the Securities and Exchange Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in such
Act and will be governed by the final adjudication of such issue.
Distribution Agreement is incorporated by reference to Exhibit
(6)(a) of Post-Effective Amendment No. 8 to the Registration
Statement on Form N-1A, filed on March 1, 1995.
Item 28. Business and Other Connections of Investment Adviser.
_______ ____________________________________________________
The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists
primarily of providing investment management services as the
investment adviser, manager and distributor for sponsored investment
companies registered under the Investment Company Act of 1940 and as
an investment adviser to institutional and individual accounts.
Dreyfus also serves as sub-investment adviser to and/or
administrator of other investment companies. Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus, is a registered
broker-dealer. Dreyfus Management, Inc., another wholly-owned
subsidiary, provides investment management services to various
pension plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund+++;
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
World Balanced Fund++++;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund+++;
World Balanced Fund++++;
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
+++ The address of the business so indicated is 69, Route 'd'Esch,
L-1470 Luxembourg.
++++ The address of the business so indicated is 69, Route 'd'Esch,
L-2953 Luxembourg.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus Premier California Municipal Bond Fund
63) Dreyfus Premier Equity Funds, Inc.
64) Dreyfus Premier Global Investing, Inc.
65) Dreyfus Premier GNMA Fund
66) Dreyfus Premier Growth Fund, Inc.
67) Dreyfus Premier Insured Municipal Bond Fund
68) Dreyfus Premier Municipal Bond Fund
69) Dreyfus Premier New York Municipal Bond Fund
70) Dreyfus Premier State Municipal Bond Fund
71) Dreyfus Premier Value Fund
72) Dreyfus S&P 500 Index Fund
73) Dreyfus Short-Intermediate Government Fund
74) Dreyfus Short-Intermediate Municipal Bond Fund
75) The Dreyfus Socially Responsible Growth Fund, Inc.
76) Dreyfus Stock Index Fund, Inc.
77) Dreyfus Tax Exempt Cash Management
78) The Dreyfus Third Century Fund, Inc.
79) Dreyfus Treasury Cash Management
80) Dreyfus Treasury Prime Cash Management
81) Dreyfus Variable Investment Fund
82) Dreyfus Worldwide Dollar Money Market Fund, Inc.
83) General California Municipal Bond Fund, Inc.
84) General California Municipal Money Market Fund
85) General Government Securities Money Market Fund, Inc.
86) General Money Market Fund, Inc.
87) General Municipal Bond Fund, Inc.
88) General Municipal Money Market Fund, Inc.
89) General New York Municipal Bond Fund, Inc.
90) General New York Municipal Money Market Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Keeley++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
________________________________
+ Principal business address is One Exchange Place, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements of effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 18th day of April, 1997.
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
BY: /s/Marie E. Connolly*
---------------------------------
Marie E. Connolly, PRESIDENT AND TREASURER
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
Signatures Title Date
___________________________ ______________________________ ___________
/s/Marie E. Connolly* President and Treasurer (Principal 04/18/97
- ----------------------------- Executive, Financial and Accounting
Marie E. Connolly Officer)
/s/Joseph S. DiMartino* Chairman of the Board 04/18/97
- -----------------------------
Joseph S. DiMartino
/s/Gordon J. Davis* Director 04/18/97
- -----------------------------
Gordon J. Davis
/s/David P. Feldman* Director 04/18/97
- -----------------------------
David P. Feldman
/s/Lynn Martin* Director 04/18/97
- -----------------------------
Lynn Martin
/s/Daniel Rose* Director 04/18/97
- -----------------------------
Daniel Rose
/s/Philip L. Toia* Director 04/18/97
- -----------------------------
Philip L. Toia
/s/Anne Wexler* Director 04/18/97
- -----------------------------
Anne Wexler
/s/Sander Vanocur* Director 04/18/97
- -----------------------------
Sander Vanocur
/s/Rex Wilder* Director 04/18/97
- -----------------------------
Rex Wilder
*BY: /s/Elizabeth A. Keeley
-----------------------------
Elizabeth A. Keeley,
Attorney-in-Fact
DREYFUS NEW JERSEY MUNICIPAL BOND FUND, INC.
Post-Effective Amendment No. 12 to the
Registration Statement on Form N-1A under
the Securities Act of 1933 and
the Investment Company Act of 1940
EXHIBITS
INDEX TO EXHIBITS
(11) Consent of Independent Auditors
(17) Financial Data Schedule
Other Exhibits
(a) Powers of Attorney
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated January 29, 1997 in this Registration Statement (Form N-1A 33-19655)
of Dreyfus New Jersey Municipal Bond Fund, Inc.
ERNST & YOUNG LLP
New York, New York
April 21, 1997
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<SHARES-COMMON-STOCK> 45676
<SHARES-COMMON-PRIOR> 48331
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1204
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 26545
<NET-ASSETS> 593949
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 38203
<OTHER-INCOME> 0
<EXPENSES-NET> 4883
<NET-INVESTMENT-INCOME> 33320
<REALIZED-GAINS-CURRENT> 9377
<APPREC-INCREASE-CURRENT> (22802)
<NET-CHANGE-FROM-OPS> 19895
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (33506)
<DISTRIBUTIONS-OF-GAINS> (10462)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 46190
<NUMBER-OF-SHARES-REDEEMED> (51413)
<SHARES-REINVESTED> 2568
<NET-CHANGE-IN-ASSETS> (59887)
<ACCUMULATED-NII-PRIOR> 186
<ACCUMULATED-GAINS-PRIOR> 2290
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3662
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5726
<AVERAGE-NET-ASSETS> 610370
<PER-SHARE-NAV-BEGIN> 13.53
<PER-SHARE-NII> .72
<PER-SHARE-GAIN-APPREC> (.30)
<PER-SHARE-DIVIDEND> (.72)
<PER-SHARE-DISTRIBUTIONS> (.23)
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 13.00
<EXPENSE-RATIO> .008
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
OTHER EXHIBITS (a)
POWER OF ATTORNEY
The undersigned hereby constitute and appoint Elizabeth A. Bachman,
Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E. Pelletier,
and each of them, with full power to act without the other, his or her true
and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her, and in his or her name, place and stead, in
any and all capacities (until revoked in writing) to sign any and all
amendments to the Registration Statement of each Fund enumerated on Exhibit A
hereto (including post-effective amendments and amendments thereto), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
________________________________________ October 14, 1996
Gordon J. Davis
________________________________________ October 14, 1996
Joseph S. DiMartino
________________________________________ October 14, 1996
David P. Feldman
________________________________________ October 14, 1996
Lynn Martin
________________________________________ October 14, 1996
Daniel Rose
________________________________________ October 14, 1996
Sander Vanocur
________________________________________ October 14, 1996
Anne Wexler
________________________________________ October 14, 1996
Rex Wilder
EXHIBIT A
Dreyfus Global Growth Fund
Premier Global Investing, Inc.
Premier Strategic Growth Fund
Dreyfus BASIC GNMA Fund
Dreyfus 100% U.S. Treasury Short Term Fund
Dreyfus 100% U.S. Treasury Intermediate Term Fund
Dreyfus 100% U.S. Treasury Long Term Fund
Dreyfus 100% U.S. Treasury Money Market Fund
Dreyfus Florida Municipal Money Market Fund
Dreyfus Florida Intermediate Municipal Bond Fund
Dreyfus New Jersey Municipal Bond Fund, Inc.
Dreyfus New York Insured Tax Exempt Bond Fund
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Elizabeth A. Keeley,
Marie E. Connolly, Richard W. Ingram, Mark A. Karpe and John E. Pelletier,
and each of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him, and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to the
Registration Statement of Dreyfus Global Growth Fund, Dreyfus Premier Global
Investing, Inc., Dreyfus BASIC GNMA Fund, Dreyfus 100% U.S. Treasury Short
Term Fund, Dreyfus 100% U.S. Treasury Intermediate Term Fund, Dreyfus 100%
U.S. Treasury Long Term Fund, Dreyfus 100% U.S. Treasury Money Market Fund,
Dreyfus Florida Municipal Money Market Fund, Dreyfus Florida Intermediate
Municipal Bond Fund, Dreyfus New Jersey Municipal Bond Fund, Inc. and Dreyfus
New York Insured Tax Exempt Bond Fund (including post-effective amendments
and amendments thereto), and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
________________________________________ April 11, 1997
Philip L. Toia
