LETTER TO SHAREHOLDERS
Dear Shareholder:
As your Fund ended its semi-annual reporting period on May 31, 1994, its
net asset value per share was $9.27 and the shares closed at $9.50 on the New
York Stock Exchange. These numbers are down from the closing levels reported
to you at fiscal year-end on November 30, 1993, when the per share net asset
value was $9.93 and the market price was $10.25. During this six-month
period, a total disbursement of $.405357 per share was paid, comprising
$.066357 in capital gains and $.339 in interest income. The interest income
disbursement is equivalent to an annualized distribution rate of 7.09% per
share, based on the closing market price of $9.50 on May 31, 1994, adjusted
for capital gain distributions.
MARKET OUTLOOK
The fixed-income markets have experienced a great deal of volatility
since our last letter to you. Bond prices have worked irregularly lower since
then, reflecting (1) the markets' fears that our national economy could
overheat, with a concomitant surge in the rate of inflation (which would work
to the detriment of long-term bonds); and (2) the Federal Reserve Board's
four increases in the Federal Funds rate since February of this year (leading
many to believe that higher long-term rates would be the wave of the future).
At Dreyfus, we currently do not find the economy robust enough to fan the
flames of inflation any time soon. From a long-term bond perspective, we are
largely comforted by the Fed's moves, which we think should help ensure that
long-term rates will not move inordinately higher. If the economy appears to
be getting ahead of itself, we believe the Fed is likely to act again.
However, to the extent that this year's rate increases stymie
inflation-inducing economic growth, the bond markets should find themselves
on a more solid footing. For the near future, nervousness and uncertainty
abound, so volatility will continue to be a market factor with which we will
have to contend.
The demand for municipal bonds continues to be strong, but currently it
is muted to some extent for the reasons noted above. New issue supply in 1994
was projected to be less than in 1993 and that expectation is being borne
out: at the end of May, the year-to-date new issue market had produced about
$73 billion in bonds, some 38% less than a year earlier. We continue to think
that this year's supply and demand picture in the municipal market should
continue to support the market value of municipal bonds.
We continue to manage the Fund with your income goals very much in mind.
We appreciate your investing with Dreyfus. You may rest assured that we are
working in the Fund's best interest at all times.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
President
June 16, 1994
New York, N.Y.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS MAY 31,1994 (UNAUDITED)
PRINCIPAL
MUNICIPAL BONDS--99.3% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
ARKANSAS--.5%
Saline County, HR, Refunding, Improvement 7.875%, 9/1/2019.................. $ 2,000,000 $ 2,100,820
CALIFORNIA--.7%
San Marcos Public Facilities Authority, Revenue, Refunding, Public Improvement
(Civic Center) 6.20%, 8/1/2022.......................................... 3,000,000 2,748,210
COLORADO--4.1%
Colorado Health Facilities Authority, Revenue (American Housing Foundation 1 Inc. Project)
10.25%, 12/1/2020....................................................... 6,000,000 6,425,820
City and County of Denver, Airport Revenue 8.50%, 11/15/2023................ 10,000,000 10,607,300
DISTRICT OF COLUMBIA--2.3%
Metropolitan Washington Airports Authority, Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011........................ 9,260,000 9,685,681
FLORIDA--6.6%
Florida Board of Education, Capital Outlay 9.04%, 6/1/2019 (a,b)............ 15,000,000 15,300,000
Leon County Educational Facilities Authority, COP (Southgate Residence Hall Project):
3.75%, 12/1/1995 ....................................................... 247,560 246,275
9%, 9/1/2014 (c)........................................................ 5,000,000 3,500,000
North Miami Health Facilities Authority, Health Facilities Revenue (Hallmark Homes Project)
10.50%, 8/1/2020 (d).................................................... 4,245,894 509,507
Palm Beach County, Solid Waste IDR (Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015........................................................ 6,700,000 6,289,893
Walton County Industrial Development Authority, IDR
(Lakeview Estates Limited Partnership Project) 10.50%, 1/1/2017 (d)..... 3,145,000 1,572,500
GEORGIA--3.3%
Private Colleges and Universities Facilities Authority, Revenue, Refunding
(Clark Atlanta University Project) 8.25%, 1/1/2015...................... 11,000,000 11,419,980
Savannah Hospital Authority, Revenue, Refunding, Improvement (Candler Hospital)
7%, 1/1/2023............................................................ 2,000,000 2,024,640
ILLINOIS--8.7%
Chicago O'Hare International Airport, Special Facilities Revenue
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 7,485,000 7,964,714
8.40%, 5/1/2018....................................................... 6,820,000 7,254,434
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition) 8.50%, 9/1/2010 5,000,000 5,427,550
Illinois Health Facilities Authority, Revenue (Ravenswood Hospital Medical Center Project)
8.25%, 11/1/2010........................................................ 14,000,000 15,235,080
KENTUCKY--1.1%
Morgantown Health Care Facility, Revenue (Southern Health Care System Project)
10.50%, 3/1/2020........................................................ 4,300,000 4,579,930
LOUISIANA--2.7%
Louisiana Public Facilities Authority:
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 2,106,460
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31,1994 (UNAUDITED)
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
-------------- --------------
LOUISIANA (CONTINUED)
Lousiana Public Facilities Authority (continued):
HR, Refunding
(Saint Francis Medical Center Project)
7.06% 7/1/2014 (Insured; FSA) (a)..................................... $ 10,600,000 $ 7,544,444
Parish of West Feliciana, PCR (Gulf States Utility Co. Project)
10.625%, 5/1/2014 (LOC; Bankers Trust) (f).............................. 1,480,000 1,579,796
MARYLAND--.8%
Maryland Industrial Development Financing Authority, Economic Development Revenue
(Medical Waste Associates Limited Partnership):
8.625%, 11/15/1999 (d)................................................ 1,900,000 513,000
8.75%, 11/15/2010 (d)................................................. 10,185,000 2,749,950
MASSACHUSETTS--8.9%
Massachusetts Health and Educational Facilities Authority, Revenue (Beth Israel Hospital Issue)
8.623%, 7/1/2025 (Insured; AMBAC) (a)................................... 3,250,000 3,059,063
Massachusetts Housing Finance Agency, Residential Housing Revenue:
8.50%, 8/1/2020......................................................... 10,310,000 10,810,757
8.40%, 8/1/2021......................................................... 6,860,000 7,135,223
Massachusetts Industrial Finance Agency, Revenue (Sturdy Memorial Hospital)
7.90%, 6/1/2009......................................................... 5,430,000 5,750,967
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt Project)
10%, 3/1/2026........................................................... 7,000,000 7,630,000
Pittsfield, SWDR (Vicon Recovery Associates Project) 7.95%, 11/1/2004....... 2,390,000 2,455,773
MICHIGAN--.5%
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 2,000,000 1,977,840
MINNESOTA--1.1%
Washington County Housing and Redevelopment Authority, Governmental Housing Revenue
(Woodland Park Apartments) 9.75%, 5/1/2020.............................. 5,035,000 4,531,500
MISSISSIPPI--2.8%
Claiborne County, PCR (Middle South Energy Inc.) 9.875%, 12/1/2014.......... 10,000,000 11,585,500
MISSOURI--2.5%
Jackson County Industrial Development Authority, Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020.......................... 6,735,000 7,284,374
Missouri Health and Educational Facilities Authority, Health Facilities Revenue
(Lake of the Ozarks General Hospital Inc. Project) 7.875%, 2/1/2006..... 2,875,000 3,011,678
NEBRASKA--.4%
Nebraska Investment Finance Authority, SFMR 8.125%, 8/15/2038 (Insured; MBIA) 1,665,000 1,737,328
NEW JERSEY--1.3%
New Jersey Economic Development Authority, First Mortgage Revenue (The Evergreens)
9.25%, 10/1/2022........................................................ 5,000,000 5,264,450
NEW MEXICO--1.1%
New Mexico Mortgage Finance Authority, SFMR 7.80%, 3/1/2021................. 4,475,000 4,623,033
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31,1994 (UNAUDITED)
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEW YORK--8.7%
New York City, GO:
8.40%, 11/15/2006....................................................... $ 5,000,000 $ 5,814,400
8.40%, 11/15/2007....................................................... 6,000,000 6,977,280
5.625%, 8/1/2013........................................................ 2,000,000 1,808,480
8%, 8/15/2018........................................................... 1,500,000 1,703,520
New York City Industrial Development Agency, Civic Facilities Revenue
(YMCA of Greater New York Project) 8%, 8/1/2016......................... 3,000,000 3,226,800
New York State Dormitory Authority, Judicial Facilities Lease Revenue (Suffolk County Issue)
9.50%, 4/15/2014........................................................ 6,000,000 7,021,980
New York State Mortgage Agency, Revenue 8.10%, 10/1/2017.................... 8,890,000 9,174,836
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 1,080,470
Haywood County Industrial Facilities and Pollution Control Financing Authority, SWDR
(Champion International Project) 8.10%, 11/1/2009....................... 5,000,000 5,388,850
PENNSYLVANIA--9.3%
Langhorne Manor Borough Higher Education and Health Authority, Revenue (Woods Schools)
8.75%, 11/15/2014 (Prerefunded 11/15/1999) (e).......................... 6,000,000 7,170,120
Lehigh County General Purpose Authority, Revenue (Wiley House) 8.75%, 11/1/2014 11,000,000 10,780,000
Montgomery County Higher Education and Health Authority, Revenue:
(Northwestern Corp.) 8.50%, 6/1/2016.................................... 4,390,000 4,712,621
(Retirement Community-G.D.L. Farms) 9.50%, 1/1/2020 (Prerefunded 1/1/2000) (e) 5,500,000 6,738,050
Pennsylvania Economic Development Financing Authority, RRR
(Northhampton Generating Project) 6.60%, 1/1/2019....................... 8,000,000 7,496,560
Pennsylvania Housing Finance Agency, Multi-Family Development Revenue
8.25%, 12/15/2019....................................................... 1,288,000 1,315,061
RHODE ISLAND--2.1%
Rhode Island Health and Educational Building Corp., Hospital Financing Revenue
(Landmark Medical Center) 8.125%, 7/1/2019 (Prerefunded 7/1/1999) (e)... 7,520,000 8,731,622
TENNESSEE--1.6%
Maury County Health and Educational Facilities Board, Health Care Facilities Revenue
(Southern Health Care-Heritage) 10.50%, 3/1/2020........................ 6,270,000 6,689,839
TEXAS--13.6%
Georgetown Hospital Authority, HR, Refunding, Improvement and First Mortgage
8.625%, 7/1/2015........................................................ 7,255,000 7,796,731
Harris County Health Facilities Development Corp., 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 3,158,790
Lone Star Airport Improvement Authority, Facilities Revenue (American Airlines Inc. Project)
9.125%, 12/1/2015....................................................... 3,000,000 3,200,430
Mesquite Health Facilities Development Corp., Revenue (Christian Care Centers Inc.)
9.375%, 3/1/2020........................................................ 11,540,000 12,506,244
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED)
MAY 31,1994 (UNAUDITED)
PRINCIPAL
MUNICIPAL BONDS (CONTINUED) AMOUNT VALUE
-------------- --------------
TEXAS (CONTINUED)
Metro Health Facilities Development Corp., HR (Wilson N. Jones Memorial Hospital Project)
7.875%, 1/1/2014 (Prerefunded 1/1/1997) (e)............................. $ 2,760,000 $ 3,026,699
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue, Refunding 10.32%, 7/2/2024 (a).... 6,850,000 6,875,688
Texas Health Facilities Development Corp., HR (All Saints Episcopal Hospitals)
7.80%, 8/15/2021 (Prerefunded 8/15/1999) (e)............................ 3,000,000 3,406,230
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation Project):
8.625%, 9/1/2001........................................................ 3,295,000 3,547,430
8.875%, 9/1/2011 (Prerefunded 9/1/2001) (e) ............................ 6,000,000 7,358,580
Tyler Health Facilities Development Corp., HR, Refunding (East Texas Medical Center
Regional Health Care System Project) 6.75%, 11/1/2025................... 5,850,000 5,516,374
UTAH--6.0%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration)
9.25%, 7/1/2018......................................................... 10,000,000 10,795,400
Intermountain Power Agency, Power Supply Revenue, Refunding 9.375%, 7/1/2018 13,000,000 13,938,470
VERMONT--.6%
Vermont Housing Finance Agency, Home Mortgage Purchase 8.10%, 6/1/2022...... 2,450,000 2,532,957
VIRGINIA--4.0%
Fairfax County Water Authority, Revenue 7.797%, 4/1/2029 (a,b).............. 4,000,000 3,380,000
Henrico County Industrial Development Authority, Revenue
(Bon Secours Health Care System Project) 8.31%, 8/23/2027 (a)........... 7,500,000 6,740,625
Virginia Housing Development Authority, MFHR
10.32%, 5/1/2018 (a,b).................................................. 6,000,000 6,285,000
WISCONSIN--2.4%
Wisconsin Housing and Economic Development Authority, Home Ownership Revenue
9.49%, 7/1/2025 (a,b)................................................... 10,600,000 9,752,000
--------------
TOTAL MUNICIPAL BONDS (cost $411,876,652)................................... $409,891,607
==============
SHORT-TERM MUNICIPAL INVESTMENT--.7%
FLORIDA;
Florida Board of Education, Capital Outlay
3.30% (a,b)
(cost $3,000,000)....................................................... $ 3,000,000 $ 3,000,000
--------------
TOTAL INVESTMENTS--100.0%
(cost $414,876,652)..................................................... $412,891,607
==============
</TABLE>
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Insurance Association
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GO General Obligation RRR Resources Recovery Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- --------- -------------------- -----------------------
<S> <C> <C> <C>
AAA Aaa AAA 10.0%
AA Aa AA 16.2
A A A 7.2
BBB Baa BBB 26.6
Not Rated(h) Not Rated(h) Not Rated(h) 40.0
--------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Residual interest security - the interest rate is subject to change
periodically.
(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 May 31,
1994, these securities amounted to $37,717,000 or 9.0% 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) Secured by letters of credit.
(g) Fitch currently provides creditworthiness information for a limited
number of investments.
(h) 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.
(i) At May 31, 1994, the Fund had $132,498,576 (31.4% of net assets)
invested in securities whose payment of principal and interest is
dependent upon revenues generated from health care projects.
See independent accountants' review report and notes to financial statements.
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $414,876,652)-see statement..................................... $412,891,607
Interest receivable..................................................... 9,279,383
Prepaid expenses........................................................ 57,953
--------------
422,228,943
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 178,098
Due to The Boston Company Advisors, Inc. and affiliates................. 89,049
Due to Custodian........................................................ 489,376
Accrued expenses and other liabilities.................................. 172,147 928,670
------------- --------------
NET ASSETS ................................................................ $421,300,273
==============
REPRESENTED BY:
Paid-in capital......................................................... $425,811,309
Accumulated undistributed investment income-net......................... 3,394,677
Accumulated net realized capital losses and distributions in excess of net
realized gain on investments-Note 1(c)................................ (5,920,668)
Accumulated net unrealized (depreciation) on investments-Note 3......... (1,985,045)
--------------
NET ASSETS at value applicable to 45,470,421 outstanding shares of
Common Stock, equivalent to $9.27 per share
(110 million shares of $.001 par value authorized)...................... $421,300,273
==============
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 16,691,137
EXPENSES:
Investment advisory fee--Note 2(a).................................... $ 1,084,100
Administration fee-Note 2(a).......................................... 542,050
Professional fees..................................................... 67,103
Shareholders' reports................................................. 48,861
Shareholder servicing costs-Note 2(a)................................. 30,439
Registration fees..................................................... 23,035
Directors' fees and expenses-Note 2(b)................................ 13,163
Custodian fees-Note 2(a).............................................. 504
Miscellaneous......................................................... 8,072
-------------
TOTAL EXPENSES.................................................. 1,817,327
--------------
INVESTMENT INCOME--NET.......................................... 14,873,810
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments--Note 3.............................. $ (19,197)
Net unrealized (depreciation) on investments............................ (26,747,731)
-------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (26,766,928)
--------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (11,893,118)
==============
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
NOVEMBER 30, MAY 31, 1994
1993 (UNAUDITED)
--------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 31,331,911 $ 14,873,810
Net realized (loss) on investments................................... (2,910,228) (19,197)
Net unrealized appreciation (depreciation) on investments for the period 9,758,683 (26,747,731)
-------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... 38,180,366 (11,893,118)
-------------- ---------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net.......................................... (30,040,730) (15,375,114)
From net realized gain on investments................................ (1,681,516) __
In excess of net realized gain on investments........................ __ (2,991,298)
-------------- ---------------
TOTAL DIVIDENDS.................................................... (31,722,246) (18,366,412)
-------------- ---------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested................................................. 12,408,740 3,868,909
-------------- ---------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................ 18,866,860 (26,390,621)
NET ASSETS:
Beginning of period.................................................. 428,824,034 447,690,894
-------------- ---------------
End of period (including undistributed investment income-net:
$3,895,981 in 1993 and $3,394,677 in 1994)......................... $447,690,894 $421,300,273
============== ===============
SHARES SHARES
-------------- ---------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED... 1,240,283 391,562
============== ===============
See independent accountants' review report and 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 period indicated. This
information has been derived from the financial statements and market price
data for the Fund's shares.
YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED
---------------------------------------------------------- MAY 31, 1994
PER SHARE DATA: 1989(1) 1990 1991 1992 1993 (UNAUDITED)
------- ------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.32(2) $ 9.32 $ 9.44 $ 9.61 $ 9.78 $ 9.93
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net.............. -- .69 .69 .70 .70 .33
Net realized and unrealized gain (loss)
on investments.................... -- .02 .19 .18 .17 (.58)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS.. -- .71 .88 .88 .87 (.25)
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income--net -- (.59) (.71) (.71) (.68) (.34)
Dividends from net realized gain
on investments.................... -- -- -- -- (.04) --
Dividends in excess of net realized gain
on investments.................... -- -- -- -- -- (.07)
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS............... -- (.59) (.71) (.71) (.72) (.41)
------- ------- ------- ------- ------- -------
Net asset value, end of period...... $ 9.32 $ 9.44 $ 9.61 $ 9.78 $ 9.93 $ 9.27
======= ======= ======= ======= ======= =======
Market value, end of period......... $10 1/8 $ 9 1/2 $ 9 7/8 $10 1/4 $10 1/4 $ 9 1/2
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN (3) 1.25%(4) (.13%) 12.02% 11.65% 7.37% (6.78%)(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets -- .56% .88% .84% .85% .84%(5)
Ratio of net investment income to
average net assets................ -- 7.49% 7.27% 7.16% 7.05% 6.86%(5)
Decrease reflected in above expense ratios
due to voluntary reduction in expenses -- .27% -- -- -- --
Portfolio Turnover Rate............. -- 16.51% 22.41% 8.58% 13.87% 1.83%(4)
Net Assets, end of period (000's Omitted) $326,391 $389,342 $408,314 $428,824 $447,691 $421,300
- -------------------------------
(1) From November 22, 1989 (commencement of operations) to November 30, 1989.
(2) Net of offering costs charged to paid-in capital.
(3) Calculated based on market value.
(4) Not annualized.
(5) Annualized.
</TABLE>
See independent accountants' review report and notes to financial statements.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a 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. 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").
(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 are readily available and are
representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the
Service from dealers in such securities) and asked prices (as calculated by
the Service based upon its evaluation of the market for such securities).
Other investments (which constitute a majority of the portfolio securities)
are carried at fair value as determined by the Service, based on methods
which include consideration of: yields or prices of municipal securities of
comparable quality, coupon, maturity and type; indications as to values from
dealers; and general market conditions. Options and financial futures on
municipal 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, if any, 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.
Dividends in excess of net realized gains on investments for financial
statement purposes result primarily from losses from security transactions
during the year ended November 30, 1993 which are treated for Federal income
tax purposes as arising in fiscal 1994.
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) based on the record date's respective price. If the
net asset value per share on the record date is lower than the market price
per share, shares will be issued to such shareholders at the record date's
net asset value on the payable date of the distribution. If the net asset
value per share is less than
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
95% of the market value, shares will be issued by the Fund at 95% of the
market value. If the market price is lower than the net asset value per share
on the record date, TSSG will purchase Fund shares in the open market
commencing on the payable date, and reinvest those shares accordingly. As a
result of purchasing Fund shares in the open market, Fund shares outstanding
will not be affected by this form of reinvestment.
On May 31, 1994, the Board of Directors declared a cash dividend of $.055
per share from investment income-net, payable on June 28, 1994 to
shareholders of record as of the close of business on June 14, 1994.
(D) QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
NET INCREASE
NET REALIZED & (DECREASE)
UNREALIZED IN NET ASSETS
TOTAL INVESTMENT NET INVESTMENT GAIN (LOSS) RESULTING FROM
INCOME INCOME 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 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
======== ===== ======== ===== ======== ===== ======== =====
February 28, 1994................. $ 8,321 $0.18 $ 7,395 $0.16 $(11,032)$(0.24) $( 3,637) $(0.08)
May 31, 1994...................... 8,370 0.18 7,479 0.17 (15,735) (0.34) (8,256) (0.17)
-------- ----- -------- ----- -------- ----- -------- -----
Total......................... $16,691 $0.36 $14,874 $0.33 $(26,767)$(0.58) $(11,893) $(0.25)
======== ===== ======== ===== ======== ===== ======== =====
</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 applicable provisions
of the Internal Revenue Code, and to make distributions of income and net
realized capital gain sufficient to relieve it from substantially all Federal
income 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 six months ended May 31, 1994, the Fund was charged $30,439 by
TSSG for certain shareholder servicing charges and $504 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 (the "Merger Agreement") providing for the merger of the Adviser
with a subsidiary of Mellon Bank Corporation ("Mellon").
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Following the merger, it is planned that the Adviser will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a number
of contingencies, including receipt of certain regulatory approvals and
approvals of the stockholders of the Adviser and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
As a result of regulatory requirements and the terms of the Merger
Agreement, the Adviser will seek various approvals from the Fund's
shareholders before completion of the merger. Proxy materials, approved by
the Fund's Board, recently have been mailed to Fund shareholders.
NOTE 3--SECURITIES TRANSACTIONS:
Purchases and sales of securities amounted to $68,089,061 and
$54,018,110, respectively, for the six months ended May 31, 1994 and
consisted entirely of municipal bonds and short-term municipal investments.
At May 31, 1994, accumulated net unrealized depreciation on investments
was $1,985,045, consisting of $22,155,594 gross unrealized appreciation and
$24,140,639 gross unrealized depreciation.
At May 31, 1994, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
REVIEW REPORT OF ERNST & YOUNG, INDEPENDENT ACCOUNTANTS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
We have reviewed the accompanying statement of assets and liabilities of
Dreyfus Strategic Municipal Bond Fund, Inc., including the statement of
investments, as of May 31, 1994, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
May 31, 1994. These financial statements and financial highlights are the
responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
November 30, 1993 and financial highlights for each of the five years in the
period ended November 30, 1993 and in our report dated January 10, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young Signature Logo)
New York, New York
July 12, 1994
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
DIRECTORS
David W. Burke
Hodding Carter III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Richard J. Moynihan
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) or 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 `D' 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.
853SA945
(Dreyfus "D" Logo)
Strategic
Municipal Bond Fund, Inc.
Semi-Annual
Report
May 31, 1994
(Dreyfus Lion Logo)
