MuniEnhanced
Fund, Inc.
FUND LOGO
Semi-Annual Report
July 31, 1995
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Robert R. Martin, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Square
Boston, MA 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Square
Boston, MA 02110
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MEN
This report, including the financial information herein, is
transmitted to the shareholders of MuniEnhanced Fund, Inc. for their
information. It is not a prospectus, circular or representation
intended for use in the purchase of shares of the Fund or any
securities mentioned in the report. Past performance results shown
in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock by issuing
Preferred Stock to provide the Common Stock shareholders with a
potentially higher rate of return. Leverage creates risks for Common
Stock shareholders, including the likelihood of greater volatility
of net asset value and market price of shares of the Common Stock,
and the risk that fluctuations in the short-term dividend rates of
the Preferred Stock may affect the yield to Common Stock
shareholders.
<PAGE>
MuniEnhanced
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniEnhanced Fund, Inc.
The Benefits and
Risks of
Leveraging
MuniEnhanced Fund, Inc. utilizes leveraging to seek to enhance the
yield and net asset value of its Common Stock. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Stock, which pays dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and
the value of these portfolio holdings is reflected in the per share
net asset value of the Fund's Common Stock. However, in order to
benefit Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Stock
shareholders. If either of these conditions change, then the risks
of leveraging will begin to outweigh the benefits.
<PAGE>
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pick-up on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value on the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange), may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
TO OUR SHAREHOLDERS
For the six-month period ended July 31, 1995, the Common Stock of
MuniEnhanced Fund, Inc. earned $0.363 per share income dividends,
representing a net annualized yield of 6.28%, based on a month-end
per share net asset value of $11.67. Over the same period, total
investment return on the Fund's Common Stock was +8.10%, based on a
change in per share net asset value from $11.17 to $11.67, and
assuming reinvestment of $0.366 per share income dividends.
For the six-month period ended July 31, 1995, the Fund's Preferred
Stock had an average dividend yield as follows: Series A, 4.24%;
Series B, 3.70%; and Series C, 3.99%.
<PAGE>
The Environment
Thus far in 1995, economic developments have been very positive for
the US stock and bond markets, and most US stock market averages
recently have attained record levels. In contrast, the US dollar has
been persistently weak, especially relative to the yen. Following
the Federal Reserve Board's cut in short-term interest rates in
early July, continued signs of a moderating expansion and well-
contained inflationary pressures could provide further assurance
that the peak in US interest rates is behind us, creating a stronger
foundation for higher stock and bond prices. On the other hand,
indications of reaccelerating growth and increasing inflationary
pressures would likely suggest that higher interest rates are on the
horizon, a negative development for the US financial markets. The
outcome of the current deliberations on reducing the Federal budget
deficit will also play a role in the investment outlook for the US
capital markets.
The Municipal Market
Throughout most of the six months ended July 31, 1995, the tax-
exempt bond market continued the improvement it began at the end of
1994. Amid signs that the strong economic growth seen in the latter
half of 1994 had been severely curtailed by the Federal Reserve
Board's series of interest rate increases, investor confidence rose
and bond yields fell. By early June, long-term, A-rated uninsured
municipal revenue bond yields, as measured by the Bond Buyer Revenue
Bond Index, had declined approximately 85 basis points (0.85%) to
5.94%. Subsequently, investor confidence waned as economic
indicators signaling a potentially resurgent economy were released
in late June and in July. Municipal bond yields rose for the
remainder of the six-month period, ending July at 6.27%. Despite the
increase in yields in July, tax-exempt bond yields are now over 100
basis points lower than their recent highs of November 1994. US
Treasury bonds exhibited a similar pattern of volatility over the
last six months, although the extent of their decline was more
significant. At the end of July 1995, the 30-year US Treasury bond
yielded 6.85%, declining over 130 basis points from their highs of
last November. Municipal bonds have underperformed US Treasury
securities for a number of reasons. The record highs of the US
equity market have continued to attract retail investors seeking
further capital gains. Investor demand has also been diminished in
recent months by the "sticker shock" effect that periodically
affects the municipal bond market. Investors who had become
accustomed to purchasing tax-exempt securities in the 6.50%--7.00%
range six to seven months ago have demonstrated understandable
reluctance to purchase similar securities at current levels. The
strong fundamental structure of the municipal bond market, however,
suggests that such hesitancy may prove costly.
<PAGE>
However, the major reason by far for the tax-exempt market's recent
underperformance has been concerns regarding the implication for
municipal bonds' tax advantage resulting from various proposed tax
law changes (for example, flat tax, value-added tax or national
sales tax) that have reduced investor demand for tax-exempt
products. Such concerns are likely to quickly recede as investors
realize that such, if any, changes are unlikely to be enacted before
late 1996 at the earliest. Long-term investors will also recall 1986
when similar tax proposals were made, municipal bond yields
initially rose, in some instances, to over 100% of taxable yields.
Tax-exempt bond yields quickly declined as investors' fears proved
to be unfounded.
The municipal bond market's strong technical position has diminished
somewhat in recent months. New-issue supply over the last six months
has totaled approximately $71 billion, or a decline of over 20%
compared to the corresponding period in 1994. In recent months,
however, municipalities issued approximately $41 billion in new
securities, which represents only a 6% decline versus the same
period a year earlier. Investor demand has remained muted in recent
months despite significant funds available to investors. By the end
of July investors, both individual and institutional, are expected
to have received as much as $80 billion from tax-exempt bond
maturities, coupon payments and the proceeds of early bond
redemptions. Little new money has entered the municipal market in
recent months, largely in response to the factors mentioned above.
Consequently, much of the technical support the municipal market
enjoyed earlier this year has evaporated, causing municipal bond
yields to decline at a slower rate than their taxable counterparts.
However, the recent relative underperformance of municipal bonds has
made them particularly attractive to long-term investors. Tax-exempt
bonds currently yield well over 90% of US Treasury securities. In
some instances, A-rated, long-term revenue bonds have yielded almost
95% of US Treasury bonds. Analysts usually consider municipal bonds
yielding over 82% of US Treasury securities to be historically
attractive. With inflation-adjusted, "real" after-tax equivalent tax-
exempt yields of over 6.50%, municipal securities appear to
represent considerable value.
Current tax-exempt yield levels appear to be overcompensating for
any proposed changes in tax law that can reasonably be expected to
be enacted. As Congressional hearings on this matter would continue
into 1996, and the revenue losses resultant from such changes become
more apparent, the likelihood of any significant changes to tax
codes and the resultant decline of municipal bonds' inherent tax
advantage should decline. Under such a scenario, tax-exempt bond
yields would quickly decline and currently available municipal bond
yields would return to their normal historic relationship.
<PAGE>
Portfolio Strategy
During the six-month period ended July 31, 1995, we sold many high-
coupon, short-duration bonds which were replaced with lower-coupon,
long-duration bonds without giving up yield for our shareholders. As
the municipal market continued to perform well, we then sold these
bonds at higher levels, replacing them with even higher-performing
bonds. We did this to seek to enhance our shareholders' total return
while balancing the Fund to give an attractive yield. Despite some
volatility in the marketplace, the Fund was able to offer
shareholders an attractive total return for the first six months of
1995.
While the overall supply of municipal bonds remains thin, we
continue to emphasize credit quality in our investments. As detailed
in the Fund's prospectus, the portfolio must have at least 80% of
its holdings covered by insurance guaranteeing the timely payment of
principal at maturity and interest. Of this 80%, we strive to invest
in quality bonds that will outperform the market over time and thus
afford our shareholders as high a level of current tax-exempt income
as possible.
In Conclusion
We appreciate your ongoing interest in MuniEnhanced Fund, Inc., and
we look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
August 29, 1995
<PAGE>
Portfolio
Abbreviations
To simplify the listings of MuniEnhanced Fund, Inc.'s
portfolio holdings in the Schedule of Investments,
we have abbreviated the names of many of the securities
according to the list below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDB Industrial Development Board
IRS Inverse Rate Securities
PCR Pollution Control Revenue Bonds
RAW Revenue Anticipation Warrants
S/F Single-Family
UPDATES Unit Priced Demand Adjustable Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--0.5% AAA Aaa $ 2,500 Huntsville, Alabama, Health Care Authority, Health Care
Facilities Revenue Bonds, Series B, 6.625% due 6/01/2023 (c) $ 2,611
Alaska--1.8% A+ Aa1 3,000 Alaska State Housing Finance Corporation, Revenue Refunding
Bonds (Insured Mortgage Program), First Series, 7.75% due
12/01/2014 3,191
AA- A1 5,000 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Sohio Pipeline), 7.125% due 12/01/2025 5,406
Arizona--1.0% A1+ P1 4,800 Maricopa County, Arizona, Pollution Control Corporation,
PCR, Refunding (Arizona Public Service Co.), VRDN, Series B,
3.85% due 5/01/2029 (a) 4,800
<PAGE>
Arkansas--0.5% AAA Aaa 2,355 Little Rock, Arkansas, School District, Refunding, 5.50%
due 1/01/2020 (d) 2,219
California A1 VMIG1++ 400 California Pollution Control Financing Authority,
--11.2% PCR (Southern California Edison), VRDN, Series A, 4.15%
due 2/28/2008 (a) 400
California State, Public Works Board, Lease Revenue Bonds:
AAA Aaa 2,825 (Department of Justice Building), 5.625% due 5/01/2020 (f) 2,637
AAA Aaa 2,000 (Various University of California Projects), Series A,
6.40% due 12/01/2016 (d) 2,051
A- A1 2,500 (Various University of California Projects), Series B,
6.625% due 12/01/2019 2,573
SP-1 MIG1++ 3,650 California State, RAW, Series C, 5.75% due 4/25/1996 3,701
AAA Aaa 5,000 Central Coast Water Authority, California, Revenue Bonds
(State Water Project Regional Facilities), 6.60% due
10/01/2022 (d) 5,227
AAA Aaa 4,450 Compton, California, Community Redevelopment Agency, Tax
Allocation Refunding Bonds (Walnut Industrial Park),
Series A, 7.50% due 8/01/1999 (d)(h) 5,054
A+ A1 2,500 Contra Costa County, California, COP, 6.50% due 8/01/2019 2,516
AAA Aaa 4,000 East Bay, California, Municipal Utility District, Wastewater
Treatment System Revenue Bonds, 6.375% due 6/01/2021 (d) 4,105
AAA Aaa 2,000 Irvine, California, Unified School District, Special Tax
Community Facilities Bonds (District No. 86-1), Series A,
8.10% due 11/15/2013 (c) 2,257
AAA Aaa 7,500 Los Angeles, California, Department of Water and Power,
Electric Plant Revenue Refunding Bonds (Second Issue),
5.25% due 11/15/2026 (b) 6,585
AAA Aaa 8,235 Los Angeles County, California, Transportation Commission,
Sales Tax Revenue Refunding Bonds, AMT, Series B, 6.50%
due 7/01/2015 (b) 8,639
AAA Aaa 1,500 M-S-R Public Power Agency, California, Revenue Bonds
(San Juan Project), Series E, 6.50% due 7/01/2017 (c) 1,564
AAA Aaa 1,500 Northern California Transmission Revenue Bonds (California-
Oregon Transmission Project), Series A, 6.50% due 5/01/2016 (c) 1,551
AAA Aaa 4,210 San Francisco, California, City and County Airports,
Commission International Airport Revenue Bonds, AMT,
Second-Series, Issue 6, 6.60% due 5/01/2024 (d) 4,455
AAA Aaa 2,000 Santa Clara County, California, Financing Authority,
Lease Revenue Bonds (VMC Facility Replacement Project),
Series A, 6.75% due 11/15/2020 (d) 2,120
<PAGE>
Colorado--2.9% Adams County, Colorado, School District No. 012,
Series A, UT (c)(m):
AAA Aaa 5,000 5.90% due 12/15/2011 1,905
AAA Aaa 3,000 5.95% due 12/15/2012 1,071
NR* Aa 3,600 Colorado, HFA, S/F Project, Senior Series C-1, AMT,
7.65% due 12/01/2025 3,957
AAA Aaa 4,300 Colorado Springs, Colorado, Hospital Revenue Refunding
Bonds, 6% due 12/15/2024 (c) 4,253
AAA Aaa 2,750 Douglas County, Colorado, School District No. 1 (Douglas
and Elbert Counties Improvement Project), Series A,
6.50% due 12/15/2016 (c) 2,918
Connecticut A1+ VMIG1++ 100 Connecticut State Development Authority, PCR, Refunding
--1.2% (Western Massachusetts Electric Co.), VRDN, Series A,
3.65% due 9/01/2028 (a) 100
AA- A1 2,000 Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Nursing Home Program), 7.125%
due 11/01/2024 2,214
AAA Aaa 3,500 Connecticut State Special Tax Obligation Revenue Bonds,
Series B, 6.25% due 10/01/2014 (b) 3,610
Delaware--0.5% AAA Aaa 2,000 Delaware Transportation Service Authority Revenue Bonds,
7% due 7/01/2013 (b) 2,208
Florida--2.5% AAA Aa1 1,450 Florida, HFA, S/F Mortgage, Refunding, AMT, Series B,
6.55% due 7/01/2017 (g) 1,479
A1+ VMIG1++ 10,590 Saint Lucie County, Florida, PCR, Refunding (Florida
Power and Light Co. Project), VRDN, Refunding, 3.85%
due 1/01/2026 (a) 10,590
Georgia--6.7% A1 VMIG1++ 4,200 Burke County, Georgia, Development Authority, PCR
(Georgia Power Company-Plant Vogtle Project), VRDN,
3.85% due 7/01/2024 (a) 4,200
Georgia Municipal Electric Authority, Power Revenue Bonds:
AAA Aaa 10,500 Refunding, Series B, 5.70% due 1/01/2019 (b) 10,093
AAA Aaa 1,500 Refunding, Series Z, 5.50% due 1/01/2020 (c) 1,404
AAA Aaa 7,725 Series EE, 7% due 1/01/2025 (d) 8,809
AAA Aaa 3,500 Metropolitan Atlanta, Rapid Transit Authority, Georgia,
Sales Tax Revenue Bonds, Second Indenture, Series A, 6.90%
due 7/01/2020 (c) 3,815
AAA Aaa 3,000 Municipal Electric Authority of Georgia, Project 1,
Sub-Series A, 6.50% due 1/01/2026 (d) 3,117
AAA Aaa 1,000 Municipal Electric Authority of Georgia, Split Obligation,
Third Crossover, 6.60% due 1/01/2018 (c) 1,089
Hawaii--3.9% AAA Aaa 11,250 Hawaii State Airport System Revenue Bonds, AMT, Second Series,
7.50% due 7/01/2020 (b) 12,390
AAA Aaa 6,070 Hawaii State Department of Budget and Finance, Special
Purpose Mortgage Revenue Bonds (Hawaiian Electric
Company), AMT, Series C, 7.375% due 12/01/2020 (c) 6,683
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Illinois--3.6% AAA Aaa $ 2,240 Cook County, Illinois, Chicago Community College
District No. 508, COP, UT, 8.75% due 1/01/2007 (b) $ 2,886
AAA Aaa 3,000 Illinois Health Facilities Authority Revenue Bonds
(Servantcor Project), Capital Guaranty, Series A,
6.375% due 8/15/2021 3,037
AAA Aaa 9,115 Regional Transportation Authority, Illinois, Series A,
7.20% due 11/01/2020 (d) 10,488
A1+ VMIG1++ 1,300 Southwestern Illinois, Development Authority Solid
Waste Disposal Revenue Bonds (Shell
Oil Co.--Wood River Project), VRDN, AMT, 3.90% due
4/01/2022 (a) 1,300
Indiana--0.6% NR* Aaa 2,770 Indiana State HFA, S/F Mortgage Revenue Bonds (Home
Mortgage Program), AMT, Series B-2, 7.80% due 1/01/2022 (l) 2,933
Iowa--0.7% NR* Aaa 3,260 Iowa Finance Authority, S/F Mortgage Revenue Bonds,
AMT, Series A, 7.90% due 11/01/2022 (l) 3,459
Kansas--1.8% AAA Aaa 5,500 Burlington, Kansas, PCR, Refunding (Kansas Gas and
Electric Company Project), 7% due 6/01/2031 (c) 6,023
AAA Aaa 2,500 Wamego, Kansas, PCR, Refunding (Kansas Gas and Electric
Company Project), 7% due 6/01/2031 (c) 2,751
Kentucky--5.0% AAA VMIG1++ 400 Daviess County, Kentucky, Solid Waste Disposal Facility
Revenue Bonds (Scott Paper Company Project), VRDN, AMT,
Series A, 4% due 5/01/2024 (a) 400
Louisville and Jefferson County, Kentucky, Metropolitan
Sewer District, Revenue Refunding Bonds (c):
AAA Aaa 14,495 5.30% due 5/15/2019 13,268
AAA Aaa 7,235 Series A, 5.50% due 5/15/2021 6,799
AAA Aaa 4,250 Series B, 5.50% due 5/15/2023 3,986
<PAGE>
Louisiana--1.5% NR* VMIG1++ 1,000 Calcasieu Parish Incorporated, Louisiana, IDB, Environmental
Revenue Bonds (CITGO Petroleum Corp. Project), VRDN, AMT,
4.05% due 12/01/2024 (a) 1,000
Louisiana Public Facilities Authority, Revenue Bonds:
AAA Aaa 1,500 (General Health Inc. Project), 6.375% due 11/01/2024 (c) 1,527
AAA Aaa 4,340 Refunding (Jefferson Parish Eastbank Project), 7.70%
due 8/01/2010 (b) 4,880
Maine--0.6% AA- A1 3,000 Maine State Housing Authority, Mortgage Purchase Revenue
Bonds, AMT, Series C-2, 6.875% due 11/15/2023 3,071
Massachusetts AAA Aaa 3,000 Massachusetts Bay Transportation Authority, COP, Series A,
--2.5% 7.65% due 8/01/2000 (f)(h) 3,471
AAA Aaa 4,300 Massachusetts State, HFA, Housing Revenue Refunding Bonds
(Insured Rental), AMT, Series A, 6.75% due 7/01/2028 (d) 4,403
AAA Aaa 2,500 Massachusetts State Port Authority Revenue Bonds, AMT,
Series A, 7.50% due 7/01/2020 (b) 2,754
AAA Aaa 1,500 Massachusetts State, Water Resource Authority, General
Purpose, Revenue Refunding Bonds, Series B, 5.50% due
3/01/2017 (c) 1,403
Michigan--4.3% AAA Aaa 4,985 Eaton Rapids, Michigan, Public Schools (Building),
UT, 5.625% due 5/01/2025 (c) 4,713
AAA Aaa 8,700 Livonia, Michigan, Public Schools District, Crossover
Refunding Bonds, 5.50% due 5/01/2021 (b)(j) 8,111
AAA Aaa 4,500 Michigan State Trunk Line Bonds, Series A, 5.75% due
11/15/2020 (b) 4,315
AAA Aaa 3,000 Monroe County, Michigan, PCR (Collateral--Detroit
Edison Company Project), AMT, Project 1, 7.65% due
9/01/2020 (b) 3,352
Minnesota AA- A1 100 Minneapolis, Minnesota, Community Development Agency,
--0.6% PCR (Collateral--Northern States Power Co. Project),
VRDN, 3.95% due 3/01/2011 (a) 100
AAA Aaa 3,000 Southern Minnesota, Municipal Power Agency, Power Supply
Systems, Revenue Bonds, Series A, 5.75% due 1/01/2018 (c) 2,912
Mississippi NR* P1 100 Jackson County, Mississippi, Port Facility Revenue
--0.7% Refunding Bonds (Chevron USA, Inc. Project), VRDN,
3.85% due 6/01/2023 (a) 100
AAA Aaa 2,000 Mississippi Hospital Equipment and Facilities Authority
Revenue Bonds (Mississippi Baptist Medical Center),
Series A, 7.50% due 5/01/2000 (c)(h) 2,289
NR* P1 1,000 Perry County, Mississippi, PCR, Refunding (Leaf River
Forest Project), VRDN, 3.85% due 3/01/2002 (a) 1,000
<PAGE>
Missouri--0.7% AAA Aaa 3,000 Kansas City, Missouri, Airport Revenue Bonds (General
Improvement Project), Capital Guaranty, Series B, 6.875%
due 9/01/2014 3,254
Montana--0.5% AAA Aaa 2,185 Forsyth, Montana, PCR, Refunding (Puget Sound Power
and Light), AMT, Series B, 7.25% due 8/01/2021 (d) 2,380
Nebraska--2.2% AAA Aaa 11,850 Nebraska Public Power Distribution, Revenue Bonds
(Electric Systems), Series A, 5.25% due 1/01/2022 (c) 10,751
Nevada--1.5% AAA Aaa 5,000 Clark County, Nevada, Passenger Facility Revenue Bonds
(Las Vegas Macarran International Airport), AMT,
Series A, 5.75% due 7/01/2023 (c)(k) 4,610
AAA Aaa 3,000 Washoe County, Nevada, Water Facility Revenue Bonds
(Sierra Pacific Power), AMT, 6.65% due 6/01/2017 (c) 3,153
New Jersey-- New Jersey State Housing and Mortgage Finance Agency
7.6% Revenue Bonds (Home Buyer), AMT (c):
AAA Aaa 3,390 Series B, 7.90% due 10/01/2022 3,627
AAA Aaa 5,905 Series D, 7.70% due 10/01/2029 6,228
AAA Aaa 5,000 Series K, 6.375% due 10/01/2026 5,112
AAA Aaa 25,000 New Jersey State Transportation Trust Fund Authority,
Refunding (Transportation Systems), Series A, 5%
due 6/15/2015 (c) 22,630
New Mexico-- AAA Aaa 2,375 Albuquerque, New Mexico, Airport Revenue Bonds, AMT,
1.0% Series A, 6.60% due 7/01/2016 (d) 2,496
AAA Aaa 2,300 Santa Fe, New Mexico, Revenue Bonds, Series A, 6.30%
due 6/01/2024 (d) 2,342
New York-- AAA Aaa 2,000 Metropolitan Transportation Authority, New York, Service
11.4% Contract Revenue Refunding Bonds (Transportation
Facilities), Series L, 7.50% due 7/01/2017 (d) 2,200
New York City, New York, GO, UT:
BBB+ Baa1 3,235 Series B, 8.25% due 6/01/2002 3,674
BBB+ Baa1 3,000 Series D, 9.50% due 8/01/2002 3,613
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds:
AAA Aaa 12,000 Registered IRS, 5.35% due 6/15/2012 (c)(i) 11,239
AAA VMIG1++ 6,300 VRDN, Series C, 3.90% due 6/15/2023 (a)(b) 6,300
New York State Dormitory Authority Revenue Bonds,
Series A:
BBB+ Baa1 4,450 (Court Facilities Lease), 5.25% due 5/15/2021 3,798
BBB+ Baa1 2,600 Refunding (State University Educational Facilities),
5.875% due 5/15/2017 2,493
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New York New York State Energy Research and Development Authority,
(concluded) PCR, VRDN (a):
NR* P1 $ 9,800 (Niagara Mohawk Power Corp. Project), 3.80% due 12/01/2025 $ 9,800
A1+ NR* 300 (Niagara Mohawk Power Corp. Project), AMT, Series B,
4.40% due 7/01/2027 300
A1+ VMIG1++ 5,100 Refunding (New York Electric & Gas), Series B, 3.80%
due 2/01/2029 5,100
AAA Aaa 4,710 New York State Medical Care Facilities Finance Agency
Revenue Bonds (Saint Francis Hospital Project), Series A,
7.625% due 11/01/2021 (b) 5,237
BBB Baa1 1,500 New York State Urban Development Corporation, State
Facilities Revenue Bonds, 7.50% due 4/01/2020 1,629
North Dakota AAA Aaa 3,000 Bismarck, North Dakota, Hospital Revenue Refunding
--0.7% and Improvement Bonds (Medical Center One, Inc.), 7.50%
due 5/01/2013 (e) 3,303
Ohio--1.1% AAA Aaa 2,500 North Canton, Ohio, City School District, Improvement
Bonds, UT, 6.70% due 12/01/2019 (d) 2,752
AAA Aaa 2,150 Ohio State Air Quality Development Authority, PCR,
Refunding (Ohio--Edison), Series A, 7.45% due 3/01/2016 (b) 2,385
Oklahoma--0.2% AAA Aaa 925 Muskogee County, Oklahoma, Home Financing Authority,
S/F Mortgage Revenue Refunding Bonds, Series A, 7.60%
due 12/01/2010 (b) 988
Pennsylvania AAA Aaa 4,000 Pennsylvania State Higher Educational Assistance
--0.9% Agency, Student Loan Revenue Bonds, AMT, 7.437% due
3/01/2020 (c) 4,243
NR* VMIG1++ 100 Pennsylvania State Higher Educational Facilities
Authority, College and University Revenue Bonds
(Temple University), VRDN, 4.10% due 10/01/2009 (a) 100
<PAGE>
Rhode AAA Aaa 10,000 Rhode Island Depositors Economic Protection Corporation,
Island--2.0% Special Obligation Refunding Bonds, Series A, 5.75%
due 8/01/2019 (f) 9,562
South A1+ VMIG1++ 900 Berkeley County, South Carolina, Pollution Control
Carolina--4.8% Facilities Revenue Refunding Bonds (Amoco Chemical
Co. Project), VRDN, 3.80% due 7/01/2012 (a) 900
AAA Aaa 20,000 South Carolina State Public Service Authority
Revenue Bonds (Santee Cooper), Series D, 6.50%
due 7/01/2002 (d)(h) 22,419
South AAA Aaa 8,000 South Dakota State Health and Educational Facilities
Dakota--1.8% Authority, Revenue Refunding Bonds (McKennan Hospital),
Series A, 7.625% due 7/01/2014 (c) 8,864
Tennessee--1.7% AAA Aaa 2,250 Chattanooga-Hamilton County, Tennessee, Hospital
Authority, Revenue Refunding Bonds (Erlanger
Medical Center), 5.50% due 10/01/2013 (f) 2,129
AAA Aaa 5,450 Mount Juliet, Tennessee, Public Building Authority
Revenue Bonds (Madison Suburban Utility District Loan),
Series B, 7.80% due 2/01/2019 (c) 6,535
Texas--7.2% A1+ VMIG1++ 2,200 Brazos River Authority, Texas, PCR, Collateralized
(Texas Utilities Electric Company), VRDN, AMT, Series C,
4.45% due 6/01/2030 (a) 2,200
AAA Aaa 3,000 Brazos River Authority, Texas, Revenue Refunding
Bonds (Collateral--Houston Light and Power Company
Project), Series C, 8.10% due 5/01/2019 (e) 3,328
A1+ VMIG1++ 1,000 Gulf Coast Waste Disposal Authority, Texas, Solid
Waste Disposal Revenue Refunding Bonds (Amoco Oil
Company Project), VRDN, AMT, 4% due 8/01/2023 (a) 1,000
A1 VMIG1++ 2,500 Harris County, Texas, Industrial Development Corporation,
Solid Waste Disposal Revenue Bonds (Deer Park Limited
Partnership), VRDN, AMT, Series A, 4.05% due 2/01/2023 (a) 2,500
AAA Aaa 6,580 Harris County, Texas, Toll Road Revenue Refunding Bonds,
Senior Lien, 5.30% due 8/15/2013 (d) 6,166
AAA Aaa 5,000 Houston, Texas, Water and Sewer System, Revenue Refunding
Bonds (Junior Lien), Series C, 6.375% due 12/01/2017 (d) 5,121
NR* VMIG1++ 700 Southwest Higher Education Authority Incorporated, Texas,
Revenue Refunding Bonds (Southern Methodist University),
Crossover Series, VRDN, 3.75% due 7/01/2015 (a) 700
AAA Aaa 3,500 Texas State Turnpike Authority, Dallas North Thruway,
Revenue Refunding Bonds, 5% due 1/01/2020 (d) 3,042
AAA Aaa 10,475 Texas Water Resource Finance Authority Revenue Bonds,
7.50% due 8/15/2013 (d) 11,150
<PAGE>
Utah--1.1% AA Aa 5,000 Intermountain Power Agency, Utah, Power Supply Revenue
Bonds, Series B, 7% due 7/01/2021 5,307
Vermont--1.8% AAA Aaa 8,150 Vermont HFA, Home Mortgage Purchase Revenue Bonds,
AMT, Series B, 7.60% due 12/01/2024 (c) 8,689
Virginia--3.5% AAA Aaa 6,000 Loudoun County, Virginia, COP, GO, 6.80% due 3/01/2014 (f) 6,474
AAA Aa2 1,000 Peninsula Ports Authority, Virginia, Revenue Refunding
Bonds (Port Facility--Shell Oil Company Project), UPDATES,
Series A, 3.90% due 12/01/2005 1,000
Virginia State, HDA, Commonwealth Mortgage, AMT:
AAA Aaa 5,000 Series A, Sub-Series A-4, 6.45% due 7/01/2028 (c) 5,038
AA+ Aa 5,000 Series B, Sub-Series B-3, 6.75% due 7/01/2021 5,070
Total Investments (Cost--$501,442)--106.3% 519,229
Liabilities in Excess of Other Assets--(6.3%) (30,564)
--------
Net Assets--100.0% $488,665
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at July 31, 1995.
(b)FGIC Insured.
(c)MBIA Insured.
(d)AMBAC Insured.
(e)BIG Insured.
(f)FSA Insured.
(g)FNMA/GNMA Collateralized.
(h)Prerefunded.
(i)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at July 31, 1995.
(j)Escrow to Maturity.
(k)FHA Insured.
(l)GNMAInsured.
(m)Represents a zero coupon bond; the interest rate shown is the
effective yield at the time of purchase.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of July 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$501,441,863) (Note 1a) $519,229,362
Cash 469,636
Receivables:
Securities sold $ 12,453,993
Interest 6,344,555 18,798,548
------------
Prepaid expenses and other assets 31,820
------------
Total assets 538,529,366
------------
Liabilities: Payables:
Securities purchased 48,995,322
Dividends (Note 1e) 562,768
Investment adviser (Note 2) 208,429 49,766,519
------------
Accrued expenses and other liabilities 97,741
------------
Total liabilities 49,864,260
------------
Net Assets: Net assets $488,665,106
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (6,000 shares of
AMPS* issued and outstanding at $25,000 per share
liquidation preference) $150,000,000
Common Stock, par value $.10 per share (29,007,770 shares
issued and outstanding) $ 2,900,777
Paid-in capital in excess of par 319,102,131
Undistributed investment income--net 3,715,974
Accumulated realized capital losses on investments--net
(Note 6) (3,148,507)
Accumulated distributions in excess of realized capital
gains--net (1,692,768)
Unrealized appreciation on investments--net 17,787,499
------------
Total--Equivalent to $11.67 net asset value per share of
Common Stock (market price--$10.25) 338,665,106
------------
Total capital $488,665,106
============
<PAGE>
<FN>
*Auction Market Preferred Stock.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended July 31, 1995
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 15,178,899
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,214,570
Commission fees (Note 4) 190,501
Transfer agent fees 60,085
Professional fees 41,423
Accounting services (Note 2) 32,658
Printing and shareholder reports 31,655
Directors' fees and expenses 21,104
Listing fees 16,874
Custodian fees 16,831
Pricing fees 8,459
Other 16,438
------------
Total expenses 1,650,598
------------
Investment income--net 13,528,301
------------
Realized & Realized gain on investments--net 1,556,200
Unrealized Change in unrealized appreciation on investments--net 13,021,895
Gain on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 28,106,396
--Net ============
(Notes 1b,
1d & 3):
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: July 31, 1995 Jan. 31, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 13,528,301 $ 27,881,785
Realized gain (loss) on investments--net 1,556,200 (4,704,132)
Change in unrealized appreciation on investments--net 13,021,895 (44,946,070)
------------ ------------
Net increase (decrease) in net assets resulting from operations 28,106,396 (21,768,417)
------------ ------------
Dividends & Investment income--net:
Distributions to Preferred Stock (2,958,300) (4,542,390)
Shareholders Common Stock (10,605,183) (22,948,395)
(Note 1e): Realized gain on investments--net:
Common Stock -- (1,651,828)
In excess of realized gain on investments--net:
Common Stock -- (1,692,768)
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (13,563,483) (30,835,381)
============ ============
Net Assets: Total increase (decrease) in net assets 14,542,913 (52,603,798)
Beginning of period 474,122,193 526,725,991
------------ ------------
End of period* $488,665,106 $474,122,193
============ ============
<FN>
*Undistributed investment income--net $ 3,715,974 $ 3,751,156
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios
have been derived from information provided For the Six
in the financial statements. Months Ended
July 31, For the Year Ended January 31,
Increase (Decrease) in Net Asset Value: 1995+++++ 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 11.17 $ 12.99 $ 12.29 $ 11.96 $ 11.45
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .47 .96 1.01 1.06 1.09
Realized and unrealized gain (loss) on
investments--net .50 (1.71) 1.09 .68 .71
-------- -------- -------- -------- --------
Total from investment operations .97 (.75) 2.10 1.74 1.80
-------- -------- -------- -------- --------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net (.37) (.79) (.85) (.91) (.84)
Realized gain on investments--net -- (.06) (.43) (.35) (.20)
In excess of realized gain on
investments--net -- (.06) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions to
Common Stock shareholders (.37) (.91) (1.28) (1.26) (1.04)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Investment income--net (.10) (.16) (.12) (.15) (.25)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.10) (.16) (.12) (.15) (.25)
-------- -------- -------- -------- --------
Net asset value, end of period $ 11.67 $ 11.17 $ 12.99 $ 12.29 $ 11.96
======== ======== ======== ======== ========
Market price per share, end of period $ 10.25 $ 10.25 $ 13.125 $ 13.25 $ 12.625
======== ======== ======== ======== ========
Total Investment Based on market price per share 3.47%+++ (14.88%) 9.28% 16.27% 21.23%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 8.10%+++ (6.27%) 16.61% 13.84% 14.09%
======== ======== ======== ======== ========
Ratios to Expenses .68%* .69% .68% .69% .70%
Average ======== ======== ======== ======== ========
Net Assets:*** Investment income--net 5.58%* 5.76% 5.54% 6.13% 6.41%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock,
Data: end of period (in thousands) $338,665 $324,122 $376,726 $350,843 $335,268
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $150,000 $150,000 $150,000 $150,000 $150,000
======== ======== ======== ======== ========
Portfolio turnover 54.77% 60.88% 41.61% 34.42% 70.17%
======== ======== ======== ======== ========
<PAGE>
Dividends Per Series A--Investment income--net $ 527 $ 752 $ 597 $ 749 $ 1,135
Share On Series B--Investment income--net 458 764 608 733 1,085
Preferred Stock Series C--Investment income--net 494 755 580 735 1,095
Outstanding:++
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Dividends per share have been adjusted to reflect a four-for-one
stock split.
+++Aggregate total investment return.
+++++Based on average shares outstanding during the period.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniEnhanced Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 as a newly organized, non-
diversified, closed-end management investment company. These
unaudited financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are
of a normal recurring nature. The Fund determines and makes
available for publication the net asset value of its Common Stock
on a weekly basis. The Fund's Common Stock is listed on the New York
Stock Exchange under the symbol MEN. The following is a summary of
significant accounting policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the last available
bid price in the over-the-counter market or on the basis of yield
equivalents as obtained by the Fund's pricing service from one or
more dealers that make markets in the securities. Financial futures
contracts and options thereon, which are traded on exchanges, are
valued at their closing prices as of the close of such exchanges.
Options, which are traded on exchanges, are valued at their last
sale price as of the close of such exchanges or, lacking any sales,
at the last available bid price. Short-term investments with a
remaining maturity of sixty days or less are valued at amortized
cost, which approximates market value. Securities and assets for
which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the
Board of Directors of the Fund.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market reflected the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment
income are declared daily and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates. Distributions in excess
of realized capital gains are due primarily to differing tax
treatments for futures transactions and post-October losses.
NOTES TO FINANCIAL STATEMENTS (concluded)
2. Investment Advisory Agreement and Transactions
with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended July 31, 1995 were $256,485,401 and
$260,900,915, respectively.
Net realized and unrealized gains (losses) as of July 31, 1995 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 3,783,244 $ 17,773,595
Short-term investments 3,450 13,904
Financial futures contracts (2,230,494) --
----------- ------------
Total $ 1,556,200 $ 17,787,499
=========== ============
As of July 31, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $17,787,499, of which $20,419,968 related to
appreciated securities and $2,632,469 related to depreciated
securities. The aggregate cost of investments at July 31, 1995 for
Federal income tax purposes was $501,441,863.
4. Capital Share Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
par value $.10 per share, all of which were initially classified as
Common Stock. The Board of Directors is authorized, however, to
reclassify any unissued shares of capital stock without the approval
of the holders of Common Stock.
For the six months ended July 31, 1995, shares issued and out-
standing remained constant at 29,007,770. At July 31, 1995, total
paid-in-capital amounted to $322,002,908.
<PAGE>
Preferred Stock
The Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend period for each series. The yields in effect at July 31,
1995 were as follows: Series A, 3.86%; Series B, 3.65%; and Series
C, 3.50%.
For the six months ended July 31, 1995, there were 6,000 AMPS shares
authorized, issued, and outstanding with a liquidation preference of
$25,000 per share, plus accumulated and unpaid dividends of $70,001.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated on
the proceeds of each auction. For the six months ended July 31,
1995, MLPF&S, an affiliate of FAM, received $113,092 as commissions.
5. Subsequent Event:
On August 11, 1995, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.060033 per share, payable on August 30, 1995 to shareholders
of record as of Auust 23, 1995.
6. Capital Loss Carryforward:
At January 31, 1995, the Fund had a net capital loss carryforward of
approximately $614,000, all of which expires in 2003. This amount
will be available to offset like amounts of any future taxable
gains.
PER SHARE INFORMATION
<PAGE>
<TABLE>
Per Share
Selected Quarterly
Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized Net Investment
Investment Gains Gains Income Capital
For the Quarter Income (Losses) (Losses) Common Preferred Gains
<S> <C> <C> <C> <C> <C> <C>
August 1, 1993 to October 31, 1993 $.25 $ .11 $ .31 $.22 $.03 --
November 1, 1993 to January 31, 1994 .25 .07 .01 .21 .03 $.43
February 1, 1994 to April 30, 1994 .23 .12 (1.48) .20 .03 --
May 1, 1994 to July 31, 1994 .24 (.13) .25 .20 .04 --
August 1, 1994 to October 31, 1994 .25 .01 (.81) .20 .04 --
November 1, 1994 to January 31, 1995 .24 (.16) .49 .19 .05 .12
February 1, 1995 to April 30, 1995 .23 .03 .30 .19 .05 --
May 1, 1995 to July 31, 1995 .24 .02 .15 .18 .05 --
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
August 1, 1993 to October 31, 1993 $13.56 $12.92 $13.625 $12.75 1,760
November 1, 1993 to January 31, 1994 13.33 12.74 13.375 12.375 2,084
February 1, 1994 to April 30, 1994 12.96 11.26 13.125 10.75 2,600
May 1, 1994 to July 31, 1994 12.05 11.32 11.125 10.50 2,603
August 1, 1994 to October 31, 1994 11.77 10.95 11.00 9.25 4,260
November 1, 1994 to January 31, 1995 11.17 10.28 10.375 8.75 7,462
February 1, 1995 to April 30, 1995 11.82 11.20 11.00 10.375 3,205
May 1, 1995 to July 31, 1995 12.26 11.48 10.875 10.25 3,665
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
