PRESIDENT'S LETTER
Dear Shareholder:
As the fiscal year closed on November 30, 1993, each share of
Dreyfus Strategic Municipal Bond Fund, Inc. had a net asset value of $9.93,
compared to $9.78 on November 30, 1992. At the year's close, the shares
were trading on the New York Stock Exchange at a price of $10.25, the
same price as a year ago. During the twelve month period, a total
disbursement of $.714 per share was paid, comprised of approximately
$.038 from capital gains, and approximately $.676 from interest income.
That total income disbursement represents a distribution rate of 6.57%
per share, based upon the closing market price on November 30, 1993,
adjusted for capital gain distributions. All of the interest income paid to
you was exempt from Federal income tax.*
The municipal market's performance during the fiscal year was
laudable: volatility was restrained; price performance was reasonably
good; and interest rates, while generally lower than experienced during
1992, were rewarding when viewed from an historical perspective. All in
all, fiscal 1993 can be summed up as a good year for the municipal
markets. Newly issued municipal bonds will have established a new record
total by the time calendar 1993 ends, and yet no discernible downward
price pressure resulted, which attested to the strength of the demand
which exists for municipals. To the extent that several of the key reasons
for the demand persist (slow or mediocre economic growth; the Federal
Reserve Board's low interest rate bias; the advantageous returns provided
by municipals vis-a-vis taxable securities; and a relatively low rate of
inflation), we currently expect to see a continuation of, or even growth in,
individuals' desires to own municipal securities. We are aware of the
lofty level to which the market has climbed, however, and that does give
us a reason to be particularly cautious as we move toward 1994.
If we were to be given one wish for the new year, we would hope to
have the economy stabilize on a positive track, so that the nation's
municipalities and their associated entities which issue municipal
securities could find themselves on firmer financial terrain. When the
economy lags and business does not thrive, an effect is felt in the coffers
of municipalities, and in many cases fiscal stress results, which in turn
may have an adverse effect on the creditworthiness of the issuer. We have
experienced several instances where that has happened, and the end result
may be a reduction in, or loss of, the interest the issuer is able to pay, or
a lower market valuation for the security, or both. The point is that
countrywide, the longer it takes for economic recovery, the more likely it
is that municipalities will experience some financial stress. Moderate
improvement in our economy would be good for most municipalities, and
we think that is ahead in 1994.
Interest rates should be expected to move upward in 1994 as our
own business climate improves, and we think that rates will be modestly
higher a year from now. That may be especially true if many foreign
countries find their economies turning more positive as 1994 unfolds. The
supply of newly issued securities should be far less than in 1993, yet we
believe demand should be at least as good. We look forward to serving your
investment needs.
Very truly yours,
(Richard J.Moynihan Signature Logo)
Richard J. Moynihan
President
December 22, 1993
New York, N.Y.
*Some income may be subject to the Federal alternative minimum tax for
certain investors. Capital gains are subject to Federal, State and local
taxes.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
SELECTED INFORMATION NOVEMBER 30, 1993 (UNAUDITED)
Market Price per share November 30, 1993..................... $10 1/4
Shares Outstanding November 30, 1993......................... 45,078,859
New York Stock Exchange Ticker Symbol........................ DSM
<TABLE>
MARKET PRICE (NEW YORK STOCK EXCHANGE)
FISCAL YEAR ENDED NOVEMBER 30, 1993
---------------------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
FEBRUARY 28, 1993 MAY 31, 1993 AUGUST 31, 1993 NOVEMBER 30, 1993
----------------- ------------ --------------- -----------------
<S> <C> <C> <C> <C>
High $10 3/4 $ 10 7/8 $ 10 7/8 $10 3/4
Low 10 1/4 10 10 1/4 10
Close 10 3/4 10 3/8 10 3/4 10 1/4
</TABLE>
<TABLE>
<S> <C>
PERCENTAGE GAIN (LOSS) based on change in Market Price*
November 22, 1989 (commencement of operations) through November 30, 1993................ 35.79%
December 1, 1992 through November 30, 1993.............................................. 7.37
March 1, 1993 through November 30, 1993................................................. 0.54
June 1, 1993 through November 30, 1993.................................................. 2.35
September 1, 1993 through November 30, 1993............................................. (2.96)
</TABLE>
<TABLE>
<S> <C> <C>
NET ASSET VALUE PER SHARE
November 22, 1989 (commencement of operations)................ $ 9.32
November 30, 1992............................................. 9.78
February 28, 1993............................................. 10.06
May 31, 1993.................................................. 10.04
August 31, 1993............................................... 10.17
November 30, 1993............................................. 9.93
PERCENTAGE GAIN (LOSS) based on change in Net Asset Value*
November 22, 1989 (commencement of operations) through November 30, 1993............ 41.15%
December 1, 1992 through November 30, 1993.......................................... 9.02
March 1, 1993 through November 30, 1993............................................. 4.08
June 1, 1993 through November 30, 1993.............................................. 2.46
September 1, 1993 through November 30, 1993......................................... (0.62)
_____________
</TABLE>
*With dividends reinvested.
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1993
MUNICIPAL BONDS-97.5% PRINCIPAL
AMOUNT VALUE
------------ ------------
<S> <C> <C>
ARKANSAS-.5%
Saline County, Hospital Improvement Revenue, Refunding 7.875%, 9/1/2019....................... $ 2,000,000 $ 2,234,140
CALIFORNIA-1.2%
San Marcos Public Facilities Authority, Public Improvement Revenue, Civic Center-Series A
6.20%, 8/1/2022....................................................................... 5,300,000 5,286,114
COLORADO-4.2%
Colorado Health Facilities Authority, Revenue (American Housing Foundation 1 Project)
10.25%, Series A, 12/1/2020........................................................... 6,000,000 6,548,460
Denver City and County, Airport Revenue 8.50%, Series A, 11/15/2023........................... 10,000,000 11,512,800
DISTRICT OF COLUMBIA-2.4%
Metropolitan Airports Authority, Special Facility Revenue (Caterair International Corp.)
10.125%, 9/1/2011..................................................................... 9,360,000 9,995,450
FLORIDA-6.0%
Florida Board Education, Capital Outlay 9.777%, 6/1/2019 (a,b)................................ 15,000,000 17,418,750
Lake County Resource Recovery, IDR, Refunding (NRG/Recovery Group Project)
5.95%, 10/1/2013...................................................................... 1,750,000 1,738,100
Leon County Educational Facilities Authority, COP (Southgate Residence Hall Project)
9%, 9/1/2014 (c)...................................................................... 5,000,000 3,500,000
North Miami Health Facilities Authority, Health Facility Revenue (Hallmark Homes Project)
10.50%, Series A, 8/1/2020 (d)........................................................ 4,245,894 551,966
Walton County Industrial Development Authority, IDR
(Lakeview Estates Limited Partnership Project) 10.50%, 1/1/2017 (c)................... 3,145,000 2,358,750
GEORGIA-3.3%
Private Colleges and Universities Facilities Authority, Revenue, Refunding
(Clark Atlanta University Project) 8.25%, 1/1/2015.................................... 11,000,000 11,863,940
Savannah Hospital Authority, Improvement Revenue, Refunding (Chandler Hospital)
7%, 1/1/2023.......................................................................... 2,000,000 2,136,700
ILLINOIS-8.8%
Chicago O'Hare International Airport, Special Facility Revenue
(United Airlines Inc. Project):
8.20%, Series C, 5/1/2018..................................................... 7,605,000 8,422,614
8.40%, Series A, 5/1/2018..................................................... 6,915,000 7,673,783
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition) 8.50%, 9/1/2010............. 5,000,000 5,352,850
Illinois Health Facilities Authority, Revenue (Ravenswood Hospital Medical Center)
8.25%, Series B, 11/1/2010............................................................ 14,000,000 15,871,100
KENTUCKY-1.1%
Morgantown Health Care Facility, Revenue (Southern Health Care System Project)
10.50%, Series A, 3/1/2020............................................................ 4,335,000 4,672,306
LOUISIANA-.9%
Louisiana Public Facilities Authority, School Health Care System Revenue (Sisters of Charity of the
Incarnate Word Project) 9.375%, 1/1/2015 (Prerefunded 1/1/1995) (e)................... 2,000,000 2,174,760
Parish of West Feliciana, PCR (Gulf States Utility Co. Project) 10.625%, Series A, 5/1/2014... 1,480,000 1,627,467
MARYLAND-2.1%
Maryland Industrial Development Financing Authority, Economic Development Revenue
(Medical Waste Associates Limited Partnership):
8.625%, 11/15/1999............................................................ 1,900,000 1,425,000
8.75%, 11/15/2010............................................................. 10,185,000 7,638,750
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
MASSACHUSETTS-8.9%
Massachusetts Health & Educational Facilities Authority, Revenue
8.979%, 7/1/2025 (Insured; AMBAC) (a)................................................. $ 3,250,000 $ 3,489,688
Massachusetts Housing Finance Agency, Resource Housing Revenue:
8.50%, Series B, 8/1/2020............................................................. 10,310,000 10,983,552
8.40%, Series A, 8/1/2021............................................................. 6,860,000 7,152,648
Massachusetts Industrial Finance Agency, Revenue (Sturdy Memorial Hospital) 7.90%, 6/1/2009... 5,430,000 6,042,558
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt Project) 10%, 3/1/2026 7,000,000 7,842,520
Pittsfield, SWDR (Vicon Recovery Association) 7.95%, 11/1/2004................................ 2,390,000 2,559,164
MINNESOTA-1.1%
Washington County Housing and Redevelopment Authority, Governmental Housing Revenue
(Woodland Park Apartments Project) 9.75%, Series A, 5/1/2020.......................... 5,035,000 4,783,250
MISSISSIPPI-2.9%
Claiborne County, PCR (Middle South Energy, Inc. Project) 9.875%, 12/1/2014................... 10,000,000 12,119,700
MISSOURI-2.5%
Jackson County Industrial Development Authority, Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020........................................ 6,735,000 7,368,494
Missouri Health and Educational Facilities Authority, Health Facilities Revenue
(Lake of Ozarks General Hospital, Inc. Project) 7.875%, 2/1/2006...................... 2,875,000 3,123,803
NEBRASKA-.5%
Nebraska Investment Finance Authority, SFMR 8.125%, 8/15/2038 (Insured; MBIA)................. 2,115,000 2,238,410
NEW JERSEY-1.3%
New Jersey Economic Development Authority, First Mortgage Gross Revenue (The Evergreens)
9.25%, 10/1/2022...................................................................... 5,000,000 5,341,600
NEW MEXICO-1.2%
New Mexico Mortgage Finance Authority, Single Family Mortgage 7.80%, Series A, 3/1/2021....... 4,965,000 5,215,186
NEW YORK-8.4%
New York City, GO:
8.40%, Series F, 11/15/2006........................................................... 5,000,000 6,097,750
8.40%, Series F, 11/15/2007........................................................... 6,000,000 7,317,300
8%, Series A, 8/15/2018............................................................... 1,500,000 1,778,445
New York City Industrial Development Agency, Civil Facility Revenue
(YMCA of Greater New York Project) 8%, 8/1/2016....................................... 3,000,000 3,341,970
New York State Dormitory Authority, Judicial Facilities Lease Revenue (Suffolk County Issue)
9.50%, Series A, 4/15/2014............................................................ 6,000,000 7,021,740
New York State Mortgage Agency, Revenue 8.10%, Series E, 10/1/2017............................ 9,795,000 10,381,035
NORTH CAROLINA-1.6%
Halifax County Industrial Facilities and Pollution Control Financing Authority,
SWDR (Champion International Project) 8.15%, 11/1/2019................................ 1,000,000 1,126,580
Haywood County Industrial Facilities and Pollution Control Financing Authority,
SWDR (Champion International Project) 8.10%, 11/1/2009................................ 5,000,000 5,609,850
OKLAHOMA-.2%
Canadian County Home Finance Authority, SFMR (GNMA Mortgage Securities Program)
8%, 9/1/2022.......................................................................... 715,000 766,366
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
PENNSYLVANIA-7.6%
Langhorne Manor Borough Higher Education and Health Authority, Revenue (Woods Schools)
8.75%, 11/15/2014 (Prerefunded 11/15/1999) (e)........................................ $ 6,000,000 $ 7,494,060
Lehigh County General Purpose Authority, Revenue (Wiley House) 8.75%, 11/1/2014............... 11,000,000 11,873,620
Montgomery County Higher Education and Health Authority, Revenue:
(Northwestern Corp.) 8.50%, Series A, 6/1/2016........................................ 4,390,000 4,784,749
(Retirement Community-G.D.L. Farms) 9.50%, 1/1/2020................................... 5,500,000 6,019,915
Pennsylvania Housing Finance Agency, Multi-Family Development Revenue 8.25%, 12/15/2019....... 1,945,000 2,072,495
RHODE ISLAND-2.0%
Rhode Island Health and Educational Building Corp., Hospital Financing Revenue
(Landmark Medical Center) 8.125%, 7/1/2019............................................ 7,520,000 8,674,320
TENNESSEE-1.6%
Maury County Health and Educational Facilities Board, Health Care Facilities Revenue
(Southern Health Care Heritage) 10.50%, Series E, 3/1/2020............................ 6,320,000 6,821,176
TEXAS-13.6%
Georgetown Hospital Authority, First Mortgage Improvement Revenue, Refunding
8.625%, 7/1/2015...................................................................... 7,255,000 7,876,681
Harris County Health Facilities Corp., School Health Care System Revenue (Sisters of Charity of the
Incarnate Word Project) 9.375%, 1/1/2015 (Prerefunded 1/1/1995) (e)................... 3,000,000 3,260,460
Lone Star Airport Improvement Authority, Revenue (American Airlines Inc. Project)
9.125%, 12/1/2015..................................................................... 3,000,000 3,271,170
Mesquite Health Facilities Development Corp., Revenue (Christian Care Centers, Inc.)
9.375%, Series A, 3/1/2020............................................................ 11,540,000 12,643,109
Metro Health Facilities Development Corp., HR, Refunding
(Wilson N. Jones Memorial Hospital Project) 7.875%, 1/1/2014.......................... 2,760,000 3,042,569
Texas Department of Housing and Community Affairs, Home Mortgage Revenue, Refunding
10.88%, Series C, 7/2/2024 (a)........................................................ 6,850,000 7,971,688
Texas Health Facilities Development Corp., HR (All Saints Episcopal Hospital)
7.80%, 8/15/2021 (Prerefunded 8/15/1999) (e).......................................... 3,000,000 3,527,610
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation):
8.625%, 9/1/2001...................................................................... 3,295,000 3,586,739
8.875%, 9/1/2011...................................................................... 6,000,000 6,617,340
Tyler Health Facilities Development Corp., HR (East Texas Medical Center
Regional Health Care System) 6.75%, Series A, 11/1/2025............................... 5,850,000 5,921,370
UTAH-6.0%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration Project)
9.25%, 7/1/2018....................................................................... 10,000,000 10,981,900
Intermountain Power Agency, Power Supply Revenue, Refunding 9.375%, Series G, 7/1/2018........ 13,000,000 14,333,410
VERMONT-.6%
Vermont Housing Finance Agency, Home Mortgage Purchase 8.10%, Series B, 6/1/2022.............. 2,450,000 2,560,250
VIRGINIA-4.4%
Fairfax County Water Authority, Revenue 8.738%, 4/1/2029 (a,b)................................ 4,000,000 3,975,000
Henrico County, IDR (Bon Secours Hospital) 9.09%, 8/23/2027 (a)............................... 7,500,000 8,100,000
Virginia Housing Development Authority, MFHR
9.428%, Series 5, 5/1/2018 (a,b)...................................................... 6,000,000 6,817,500
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1993
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
------------ ------------
WISCONSIN-2.6%
Wisconsin Housing and Economic Development Authority, Home Ownership Revenue
9.765%, Series A, 7/1/2025 (a,b)...................................................... $ 10,600,000 $ 10,971,000
------------
TOTAL MUNICIPAL BONDS
(cost $390,140,854)................................................................... $414,903,540
============
SHORT-TERM MUNICIPAL INVESTMENTS-2.5%
ARIZONA-.1%
Apache Industrial Development Authority, IDR, VRDN
(Tuscon Electric - 83B) 2.45% (LOC; The Bank of New York) (f)......................... $ 400,000 $ 400,000
KENTUCKY-.8%
Walton County, IDR, VRDN (Clarion Manufacturing Co. of America)
3.55% (LOC; Kyowa Saitama Bank Ltd.) (f).............................................. 3,500,000 3,500,000
TEXAS-1.6%
Texas Department of Housing and Community Affairs, Home Mortgage Revenue, Refunding
2.60% (g)............................................................................. 6,850,000 6,850,000
------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $10,750,000).................................................................... $ 10,750,000
============
TOTAL INVESTMENTS-100.0%
(cost $400,890,854)................................................................... $425,653,540
============
</TABLE>
SUMMARY OF ABBREVIATIONS
AMBAC American Municipal
Bond Assurance Corporation MBIA Municipal Bond
Insurance Association
COP Certificate of Participation MFHR Multi Family Housing Revenue
GNMA Government National
Mortgage Association PCR Pollution Control Revenue
GO General Obligation SFMR Single Family Mortgage Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (H) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 9.9%
AA Aa AA 13.1
A A A 6.7
BBB Baa BBB 25.8
F1 MIG1 A-1 .1
Not Rated (i) Not Rated (i) Not Rated (i) 44.4
------
100.0%
======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater security - the interest rate is subject to change at
next reset date.
(b) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At November
30, 1993, these securities amounted to $39,182,250 or 8.8% of net assets.
(c) Non-accrual status.
(d) Non-income producing security; interest payment in default.
(e) Bonds which are prerefunded are collateralized by U.S. Government
Securities which are held in escrow and are used to pay principal
and interest on the tax-exempt issue and to retire the bonds in full
at the earliest refunding date.
(f) Security payable on demand, secured by bank letters of credit. The
interest rate, which is subject to change, is based upon bank prime
rates or an index of market interest rates.
(g) Inverse floater security - the interest rate is subject to change at
next auction date.
(h) Fitch currently provides creditworthiness information for a limited
amount of investments.
(i) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's, have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may invest.
(j) At November 30, 1993, the Fund had $126,300,303 (28.2% of net
assets) invested in securities whose payment of principal and
interest is dependent upon revenues generated from health care projects.
See notes to financial statements.
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1993
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $400,890,854)-see statement....................................................... $425,653,540
Cash........................................................................................ 420,814
Receivable for investment securities sold................................................... 12,480,625
Interest receivable......................................................................... 9,535,723
Prepaid expenses............................................................................ 42,694
------------
448,133,396
LIABILITIES:
Due to The Dreyfus Corporation.............................................................. $ 183,995
Due to The Boston Company Advisors, Inc. and affiliates..................................... 92,597
Accrued expenses and other liabilities...................................................... 165,910 442,502
------------ ------------
NET ASSETS.................................................................................... $447,690,894
============
REPRESENTED BY:
Paid-in capital............................................................................. $421,942,400
Accumulated undistributed investment income-net............................................. 3,895,981
Accumulated net realized (loss) on investments.............................................. (2,910,173)
Accumulated net unrealized appreciation on investments-Note 3............................... 24,762,686
------------
NET ASSETS at value applicable to 45,078,859 shares outstanding
(110 million shares of $.001 par value Common Stock authorized)............................. $447,690,894
============
NET ASSET VALUE, per share
($447,690,894 / 45,078,859 shares).................................................... $9.93
=====
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1993
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME............................................................................ $ 35,094,231
EXPENSES:
Investment advisory fee-Note 2(a)........................................................ $ 2,221,870
Administration fee-Note 2(a)............................................................. 1,110,935
Shareholders' reports.................................................................... 154,017
Professional fees........................................................................ 109,764
Shareholder servicing costs-Note 2(a).................................................... 55,522
Registration fees........................................................................ 40,215
Directors' fees and expenses-Note 2(b)................................................... 26,722
Custodian fees-Note 2(a)................................................................. 1,218
Miscellaneous............................................................................ 42,057
-----------
TOTAL EXPENSES................................................................... 3,762,320
------------
INVESTMENT INCOME-NET............................................................ 31,331,911
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3................................................ $(2,910,228)
Net unrealized appreciation on investments............................................... 9,758,683
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS.................................. 6,848,455
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................................... $ 38,180,366
============
</TABLE>
See notes to financial statements.
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30,
------------------------------
1992 1993
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income-net...................................................................... $ 30,072,473 $ 31,331,911
Net realized gain (loss) on investments.................................................... 2,358,273 (2,910,228)
Net unrealized appreciation on investments for the year.................................... 5,725,740 9,758,683
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................................... 38,156,486 38,180,366
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net...................................................................... (30,795,524) (30,040,730)
Net realized gain on investments........................................................... -- (1,681,516)
------------ ------------
TOTAL DIVIDENDS......................................................................... (30,795,524) (31,722,246)
------------ ------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested....................................................................... 13,149,542 12,408,740
------------ ------------
TOTAL INCREASE IN NET ASSETS............................................................ 20,510,504 18,866,860
NET ASSETS:
Beginning of year.......................................................................... 408,313,530 428,824,034
------------ ------------
End of year (including undistributed investment income-net:
$2,604,800 in 1992 and $3,895,981 in 1993).............................................. $428,824,034 $447,690,894
============ ============
SHARES SHARES
------------ ------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED......................... 1,353,186 1,240,283
============ ============
See notes to financial statements.
</TABLE>
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Common Stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from information provided in the financial
statements and market price data for the Fund's shares.
YEAR ENDED NOVEMBER 30,
PER SHARE DATA: ----------------------------------------------------
1989(1) 1990 1991 1992 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year................................ $ 9.32(2) $ 9.32 $ 9.44 $ 9.61 $ 9.78
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net............................................. -- .69 .69 .70 .70
Net realized and unrealized gain on investments................... -- .02 .19 .18 .17
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS.......................... -- .71 .88 .88 .87
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income-net.............................. -- (.59) (.71) (.71) (.68)
Dividends from net realized gain on investments................... -- -- -- -- (.04)
------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS....................................... -- (.59) (.71) (.71) (.72)
------- ------- ------- ------- -------
Net asset value, end of year...................................... $ 9.32 $ 9.44 $ 9.61 $ 9.78 $ 9.93
======= ======= ======= ======= =======
Market value, end of year......................................... $10.1/8 $ 9.1/2 $ 9.7/8 $10.1/4 $10.1/4
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 1.25%(3) (.13%) 12.02% 11.65% 7.37%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................... -- .56% .88% .84% .85%
Ratio of net investment income to average net assets.............. -- 7.49% 7.27% 7.16% 7.05%
Decrease reflected in above expense ratios due to voluntary
reduction in expenses..................................... -- .27% -- -- --
Portfolio Turnover Rate........................................... -- 16.51% 22.41% 8.58% 13.87%
Net Assets, end of year (000's Omitted)........................... $326,391 $389,342 $408,314 $428,824 $447,691
___________________________
(1) From November 22, 1989 (commencement of operations) to November
30, 1989.
(2) Net of offering costs charged to paid-in capital.
(3) Not annualized.
</TABLE>
See notes to financial statements.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified closed-end management investment company. The
Dreyfus Corporation ("Adviser") serves as the Fund's investment adviser.
The Boston Company Advisors, Inc. ("Administrator") serves as the Fund's
administrator. Boston Safe Deposit and Trust Company ("Custodian") acts
as the Fund's custodian. As of May 21, 1993, the Administrator and
Custodian are indirect wholly-owned subsidiaries of Mellon Bank
Corporation ("Mellon"). The Shareholder Services Group, Inc.,
("TSSG"), a subsidiary of First Data Corporation ("FDC"), serves as the
Fund's transfer agent, dividend-paying agent, registrar and plan agent. A
majority of the outstanding shares of FDC are currently held by American
Express Company ("American Express"). Prior to May 21, 1993, the
Administrator and Custodian were indirect wholly-owned subsidiaries of
Shearson Lehman Brothers, Inc., which in turn is a wholly-owned
subsidiary of Shearson Lehman Brothers Holdings, Inc. ("Holdings"). All of
the issued and outstanding common stock (representing 92% of the voting
stock) of Holdings is held by American Express.
(A) PORTFOLIO VALUATION: Investments in municipal debt securities
(excluding options and financial futures on municipal and U.S. treasury
securities) are valued on the last business day of each week and month by
an independent pricing service ("Service") approved by the Board of
Directors. Investments for which quoted bid prices in the judgment of the
Service are readily available and are representative of the bid side of the
market are valued at the mean between the quoted bid prices (as obtained
by the Service from dealers in such securities) and asked prices (as
calculated by the Service based upon its evaluation of the market for such
securities). Other investments (which constitute a majority of the
portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices
of municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions.
Options and financial futures on municipal securities are valued at the
last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities
market on the last business day of each week and month. Investments not
listed on an exchange or the national securities market, or securities for
which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available. Securities for which there are no
such valuations are valued at fair value as determined in good faith under
the direction of the Board of Directors.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Interest income, adjusted for amortization of premiums and when
appropriate, discounts on investments, is earned from settlement date and
recognized on the accrual basis. Securities purchased or sold on a when-
issued or delayed-delivery basis may be settled a month or more after the
trade date.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-
dividend date. Dividends from investment income-net are declared and
paid monthly. Dividends from net realized capital gain are declared and
paid at least annually. 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.
For shareholders who elect to receive their distributions in
additional shares of the Fund, in lieu of cash, such
distributions will be reinvested at the lower of the market price or net
asset value per share (but not less than 95% of the market price) as
defined in the dividend reinvestment plan.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On November 30, 1993, the Board of Directors declared a cash dividend
of $.0595 per share from investment income-net, payable on December 29, 1993
to shareholders of record as of the close of business on December 14, 1993.
<TABLE>
(D) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
NET INCREASE
TOTAL NET NET REALIZED & IN NET ASSETS
INVESTMENT INVESTMENT UNREALIZED GAIN RESULTING FROM
INCOME INCOME (LOSS) ON INVESTMENTS OPERATIONS
--------------- --------------- -------------------- ---------------
(000's) PER (000's) PER (000's) PER (000's) PER
QUARTER ENDED OMITTED SHARE OMITTED SHARE OMITTED SHARE OMITTED SHARE
- ------------- --------------- --------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
February 29, 1992............ $ 8,268 $ 0.20 $ 7,393 $ 0.18 $ 1,487 $ 0.03 $ 8,880 $ 0.21
May 31, 1992................. 8,374 0.19 7,477 0.17 4,232 0.10 11,709 0.27
August 31, 1992.............. 8,479 0.19 7,549 0.17 6,103 0.14 13,652 0.31
November 30, 1992............ 8,497 0.20 7,653 0.18 (3,738) (0.09) 3,915 0.09
------- ------ ------- ------ ------- ------- ------- ------
Total................ $33,618 $ 0.78 $30,072 $ 0.70 $ 8,084 $ 0.18 $38,156 $ 0.88
======= ====== ======= ====== ======= ======= ======= ======
February 28, 1993............ $ 8,592 $ 0.19 $ 7,671 $ 0.17 $12,305 $ 0.29 $19,976 $ 0.46
May 31,1993.................. 8,901 0.20 7,982 0.18 (968) (0.02) 7,014 0.16
August 31, 1993.............. 8,993 0.20 7,993 0.18 6,130 0.14 14,123 0.32
November 30, 1993............ 8,608 0.19 7,686 0.17 (10,619) (0.24) (2,933) (0.07)
------- ------ ------- ------ ------- ------- ------- ------
Total................ $35,094 $ 0.78 $31,332 $ 0.70 $ 6,848 $ 0.17 $38,180 $ 0.87
======= ====== ======= ====== ======= ======= ======= ======
</TABLE>
(E) 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 provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from all, or substantially all, Federal income
taxes.
NOTE 2-INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) The fee payable by the Fund, pursuant to the provisions of an
Investment Advisory Agreement with the Adviser is payable monthly
based on an annual rate of .50 of 1% of the average weekly value of the
Fund's net assets. The fee payable by the Fund, pursuant to the provisions
of an Administration Agreement with the Administrator is payable
monthly based on an annual rate of .25 of 1% of the average weekly value
of the Fund's net assets.
During the year ended November 30, 1993, the Fund was charged
$55,522 by TSSG for certain shareholder
servicing charges and $1,218 by the Custodian for certain custody charges.
(B) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of the Adviser. Each director who is not an
"affiliated person" receives an annual fee of $2,500 and an attendance fee
of $500 per meeting.
(C) On December 5, 1993, the Adviser entered into an Agreement and
Plan of Merger providing for the merger of the Adviser with a subsidiary
of Mellon Bank Corporation ("Mellon").
Upon closing of the merger, it is planned that the Adviser will retain
its New York headquarters and will be a separate subsidiary within the
Mellon organization. It is expected that the Adviser's management team
and mutual fund managers will remain in place, and the Dreyfus mutual
funds will be operated in the same manner as they are currently.
Following the merger, the Adviser will be either a direct or indirect
subsidiary of Mellon, whose principal banking subsidiary is Mellon Bank,
N.A. Closing of this merger is subject to a number of contingencies,
including the receipt of certain regulatory approvals and the approvals of
the stockholders of the Adviser and of Mellon. The merger is expected to
occur in mid-1994, but could occur significantly later.
Because the merger will constitute an "assignment" of the Fund's
Investment Advisory Agreement with the Adviser under the Investment
Company Act of 1940, and thus a termination of such Agreement, the
Adviser will seek prior approval from the Fund's Board and shareholders.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
Purchases and sales of securities amounted to $127,054,888, and
$125,314,888, respectively, for the year ended November 30, 1993, and
consisted entirely of municipal bonds and short-term municipal
investments.
At November 30, 1993, accumulated net unrealized appreciation on
investments was $24,762,686, consisting of $34,049,324 gross
unrealized appreciation and $9,286,638 gross unrealized depreciation.
At November 30, 1993, 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 STRATEGIC MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
We have audited the accompanying statement of assets and
liabilities of Dreyfus Strategic Municipal Bond Fund, Inc., including the
statement of investments, as of November 30, 1993, 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 November 30, 1993 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 Strategic Municipal Bond Fund, Inc. at November 30,
1993, 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
New York, New York
January 10, 1994
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the
following designations regarding its fiscal year ended November 30, 1993:
_ All the dividends paid from investment income-net are
"exempt-interest dividends" (not generally subject to regular Federal
income tax).
_ The portion of the $.0595 per share paid by the Fund on
December 29, 1992 representing a long-term capital gain distribution
is $.00987 per share.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends and
capital gain distributions paid for the 1993 calendar year on Form 1099-
DIV which will be mailed by January 31, 1994.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
DIVIDEND REINVESTMENT PLAN (UNAUDITED)
The Fund generally distributes net investment income monthly. From
and after any issuance of Preferred Stock, monthly distributions to the
holders of the Common Stock (the "Common Shareholders") will consist of
all net investment income of the Fund remaining after the payment of
dividends on such Preferred Stock. Any net realized short-term capital
gains and any net realized long-term capital gains will be distributed at
least annually.
Net realized short- or long-term capital gains, if any, will be
distributed to Common Shareholders at least once a year to the extent not
necessary to pay dividends on or meet the liquidation preference of shares
of any Preferred Stock. While there are any shares of Preferred Stock
outstanding, the Fund may not declare any cash dividend or other
distribution on its Common Stock, unless at the time of such declaration,
(i) all accrued Preferred Stock dividends have been paid and (ii) the net
asset value of the Fund's portfolio (determined after deducting the amount
of such dividend or other distribution) is at least 200% of the liquidation
value of the outstanding Preferred Stock (expected to equal the original
purchase price per share plus any accrued and unpaid
dividends thereon). This limitation on the Fund's ability to make
distributions on its Common Stock could under certain circumstances
impair the ability of the Fund to maintain its qualification for taxation as
a regulated investment company.
Under the Fund's Dividend Reinvestment Plan (the "Plan"), a Common
Shareholder who has Fund shares registered in his own name will have all
dividends and distributions reinvested automatically by The Shareholder
Services Group, Inc., as Plan agent (the "Agent"), in additional shares of
the Fund's Common Stock at the lower of prevailing market price or net
asset value (but not less than 95% of market value at the time of valuation)
unless such shareholder elects to receive cash as provided below. If
market price is equal to or exceeds net asset value, shares will be issued
at net asset value. If net asset value exceeds market price or if a dividend
or other distribution payable only in cash is declared, the Agent, as agent
for the Plan participants, will buy shares of the Fund's Common Stock in
the open market. A Plan participant is not relieved of any income tax that
may be payable on such dividends or distributions.
A Common Shareholder who owns Fund shares registered in the name
of his broker/dealer or other nominee (i.e., in "street name") may not
participate in the Plan, but may elect to have cash dividends and
distributions reinvested by his broker/dealer or other nominee in
additional shares of the Fund if such service is provided by the
broker/dealer or other nominee; otherwise such dividends and
distributions will be treated like any other cash dividend or distribution.
A Common Shareholder who has Fund shares registered in his name
may elect to withdraw from the Plan at any time for a $5.00 fee and
thereby elect to receive cash in lieu of shares of the Fund. Changes in
elections must be by direct mail to The Shareholder Services Group, Inc.,
Attention: Closed-End Funds, Post Office Box 1376, Boston,
Massachusetts 02104-1376, or by telephone at 1-800-331-1710, and
should include the shareholder's name and address as they appear on the
Agent's records. Elections received by the Agent will be effective only if
received prior to the record date for any distribution.
The Agent maintains all shareholder accounts in the Plan and
furnishes written confirmations of all transactions in the account. Shares
in the account of each Plan participant will be held by the Agent in non-
certificated form in the name of the participant, and each such
participant's proxy will include those shares purchased pursuant to the
Plan.
The Fund pays the Agent's fee for reinvestment of dividends and
distributions, Plan participants pay a pro rata share of brokerage
commissions incurred with respect to the Agent's open market purchases
in connection with the reinvestment of dividends or distributions.
The Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice
of the change sent to Plan participants at least 90 days before the record
date for such dividend or distribution. The Plan also may be amended or
terminated by the Agent on at least 90 days' written notice to Plan
participants.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
CERTAIN MANAGEMENT POLICY INFORMATION (UNAUDITED)
The Fund's futures transactions must constitute bona fide hedging or
other permissible transactions pursuant to regulations promulgated by the
Commodity Futures Trading Commission. Generally, the Fund may not
engage in such transactions if the sum of the amount of initial margin
deposits and premiums paid for unexpired commodity options, other than
for bona fide hedging transactions, would exceed 5% of the liquidation
value of the Fund's assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into.
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. If the interest rate on the first class exceeds
the coupon rate of the underlying Municipal Obligations, its interest rate
will exceed the rate paid on the second class. In no event will the
aggregate interest paid with respect to the two classes exceed the
interest paid by the underlying Municipal Obligation. 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.
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, Inc.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
DIRECTORS
Hodding Carter III
Richard C. Leone
Hans C. Mautner
Richard J. Moynihan
Robert B. Rivel
Donald B. Smiley
John E. Zuccotti
OFFICERS
President and
Investment Officer
Richard J. Moynihan
Vice President-Financial
Jeffrey N. Nachman
Vice President
Mark N. Jacobs
Treasurer
John J. Pyburn
Secretary
Daniel C. Maclean III
Assistant Secretary
Christine Pavalos
Controller
Jean Farley
Vice Presidents and
Investment Officers:
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Jill C. Shaffro
L. Lawrence Troutman
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
The Dreyfus Corporation
ADMINISTRATOR
The Boston Company Advisors, Inc.
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Stroock & Stroock & Lavan
TRANSFER AGENT, DIVIDEND-PAYING
AGENT, REGISTRAR AND PLAN AGENT
The Shareholder
Services Group, Inc.
STOCK EXCHANGE LISTING
NYSE Symbol:DSM
INITIAL SEC EFFECTIVE DATE
11/22/89
The Net Asset Value appears in the
following publications: Barron's,
Closed-End Bond Funds section under the heading "Municipal Bond Funds"
every Monday; Wall Street Journal, Mutual Funds section under the
heading "Closed-End Bond Funds" every Monday; New York Times, Business
section under the heading "Closed-End Bond Funds" every Monday.
_________________________________________________________________________
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of
its common stock in the open market when it can do so at prices below the
then current net asset value per share.
_________________________________________________________________________
(Dreyfus Lion Logo)
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
ADMINISTRATOR
The Boston Company
Advisors, Inc.
One Boston Place
Boston, MA 02108
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, MA 02108
TRANSFER AGENT, DIVIDEND-PAYING
AGENT, REGISTRAR AND PLAN AGENT
The Shareholder
Services Group, Inc.
Exchange Place
Boston, MA 02109
Printed In
U.S.A 852AR1193
