LETTER TO SHAREHOLDERS
Dear Shareholder:
Since last writing to you in December 1994, considerable improvement has
been seen in the portfolio's net asset value per share, and the market price
per share as well. At the close of the semi-annual reporting period on May
31, 1995, the per share net asset value and market price were $9.45 and
$9.375, respectively. During the six-month period, income dividends of $.33
per share were paid, amounting to an annualized distribution rate per share
of 7.04%, based on the closing New York Stock Exchange price of $9.375 per
share. We are pleased to report that all income dividends paid were exempt
from Federal personal income taxes.*
The fixed income market recovered in the last six months, after hitting a
low point for calendar year 1994 in the last quarter of that year. The price
improvement in the market centered around what was seen as a slowing economy,
which we believe should result in a lessening of the need for further
interest rate increases by the Federal Reserve Board. Municipal bond prices
continued to be supported by economic data which suggest the economy is
slowing even further. Also helping to sustain price levels was the lack of
new issuance in the first five months of 1995. Only 65% as much new money was
raised in the municipal bond new-issue market as was raised in the same
period of 1994. While the outstanding supply diminished, demand remained
constant, and that was beneficial for prices.
The Dreyfus Strategic Municipal Bond Fund's portfolio contains many
relatively high coupon bonds, and we must expect that where they can do so,
the issuers of those obligations will be anxious to retire them as soon as it
is financially feasible. By means of sinking-fund or other redemption
provisions contained in the bonds' indentures, some of the portfolio's
holdings have been taken, and we believe others will be redeemed in the
future. We recently reduced the dividend, principally due to the lower interest
rates on the securities purchased with reinvestment income and with the
principal payments on, and sales of, portfolio securities. However, we
believe the Fund's yield will still be competitive with yields of comparable
alternative investments, particularly when viewed on an after-tax basis.
Based on the absence of strong inflationary pressures in the economy, and
the previously mentioned decline in new issuance in the face of steady demand
for municipal bonds, we expect that 1995 will be a good year for the
municipal market. As always, we expect to be surprised every once in a while,
but based on what we can see at this point we are optimistic in our outlook.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
June 15, 1995
New York, N.Y.
* Some income may be subject to the Federal Alternative Minimum Tax (AMT)
for certain shareholders.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1995
(UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-98.8% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
ARKANSAS-.5%
Saline County, HR, Refunding, Improvement 7.875%, 9/1/2019.................. $ 2,000,000 $ 2,113,300
CALIFORNIA-.7%
San Marcos Public Facilities Authority, Revenue, Refunding, Public
Improvement
(Civic Center) 6.20%, 8/1/2022.......................................... 3,000,000 2,870,850
COLORADO-4.1%
Colorado Health Facilities Authority, Revenue
(American Housing Foundation 1 Inc. Project) 10.25%, 12/1/2020.......... 5,900,000 6,356,837
City and County of Denver, Airport Revenue 8.50%, 11/15/2023................ 10,000,000 11,238,300
DISTRICT OF COLUMBIA-2.2%
Metropolitan Washington Airports Authority, Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011........................ 9,020,000 9,492,468
FLORIDA-6.2%
Florida Board of Education, Capital Outlay 7.937%, 6/1/2019 (a,b)........... 15,000,000 16,443,750
North Miami Health Facilities Authority, Health Facilities Revenue
(Hallmark Homes Project) 10.50%, 8/1/2020 (c)........................... 3,905,829 117,175
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015...................................................... 5,000,000 4,945,450
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022....................................................... 5,000,000 5,015,350
GEORGIA-2.9%
Private Colleges and Universities Facilities Authority, Revenue,
Refunding (Clark Atlanta University Project) 8.25%, 1/1/2015............ 11,000,000 12,200,210
ILLINOIS-11.8%
Chicago O'Hare International Airport, Special Facilities Revenue
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 7,360,000 7,984,422
8.40%, 5/1/2018....................................................... 6,715,000 7,264,824
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition) 8.50%, 9/1/2010 5,000,000 5,303,000
Illinois Health Facilities Authority, Revenue (Ravenswood Hospital Medical
Center Project)
8.25%, 11/1/2010........................................................ 13,500,000 14,476,050
Robbins, RRR (Resources Recovery Partners):
9.25%, 10/15/2014....................................................... 10,500,000 11,562,810
9.25%, 10/15/2016....................................................... 3,000,000 3,303,660
KENTUCKY-1.1%
Morgantown Health Care Facility, Revenue (Southern Health Care System
Project)
10.50%, 3/1/2020........................................................ 4,265,000 4,564,531
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
(UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
LOUISIANA-5.9%
Lake Charles Harbor and Terminal, District Port Facilities Revenue,
Refunding (Trunkline LNG Co. Project) 7.75%, 8/15/2022.................. $ 15,000,000 $ 16,622,400
Louisiana Public Facilities Authority, HR., Refunding
(Saint Francis Medical Center Project) 5.475% 7/1/2014 (Insured; FSA) (a) 10,600,000 8,622,888
MARYLAND-2.3%
Baltimore County, PCR, Refunding (Bethlehem Steel Corp. Project)
7.50%, 6/1/2015......................................................... 5,000,000 5,166,300
Maryland Industrial Development Financing Authority, EDR,
(Medical Waste Associates Limited Partnership) 8.75%, 11/15/2010........ 4,555,000 4,555,000
MASSACHUSETTS-5.4%
Massachusetts Health and Educational Facilities Authority, Revenue
(Beth Israel Hospital Issue) 7.863%, 7/1/2025 (Insured; AMBAC) (a)...... 3,250,000 3,306,875
Massachusetts Housing Finance Agency, Residential Housing Revenue:
8.50%, 8/1/2020......................................................... 60,000 63,387
8.40%, 8/1/2021......................................................... 3,415,000 3,649,235
Massachusetts Industrial Finance Agency, Revenue (Sturdy Memorial Hospital)
7.90%, 6/1/2009......................................................... 5,430,000 5,756,397
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt
Project)
10%, 3/1/2026........................................................... 7,000,000 7,757,120
Pittsfield, SWDR (Vicon Recovery Associates Project) 7.95%, 11/1/2004....... 2,245,000 2,324,136
MICHIGAN-1.8%
Michigan Hospital Finance Authority, HR,
Refunding (Genesys Health System Obligated Group) 8.125%, 10/1/2021..... 5,000,000 5,411,450
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 2,000,000 2,014,300
MINNESOTA-.9%
Washington County Housing and Redevelopment Authority,
Governmental Housing Revenue (Woodland Park Apartments) 9.75%, 5/1/2020. 5,035,000 3,876,950
MISSISSIPPI-2.7%
Claiborne County, PCR (Middle South Energy Inc.) 9.875%, 12/1/2014.......... 10,000,000 11,627,400
MISSOURI-2.4%
Jackson County Industrial Development Authority, Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020.......................... 6,735,000 7,317,106
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 2,961,681
NEBRASKA-.3%
Nebraska Investment Finance Authority, SFMR 8.125%, 8/15/2038 (Insured; MBIA) 1,345,000 1,430,636
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
(UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEW JERSEY-1.3%
New Jersey Economic Development Authority, First Mortgage Revenue (The
Evergreens)
9.25%, 10/1/2022........................................................ $ 5,000,000 $ 5,330,050
NEW MEXICO-1.0%
New Mexico Mortgage Finance Authority, SFMR 7.80%, 3/1/2021................. 3,900,000 4,103,346
NEW YORK-5.2%
New York City, GO:
5.625%, 8/1/2013........................................................ 1,000,000 937,750
8%, 8/15/2018........................................................... 15,000 16,863
8%, 8/15/2018 (Prerefunded 8/15/2001) (d)............................... 1,485,000 1,781,629
New York City Industrial Development Agency, Civic Facilities Revenue
(YMCA of Greater New York Project) 8%, 8/1/2016......................... 3,000,000 3,216,600
New York State Dormitory Authority, Judicial Facilities Lease Revenue
(Suffolk County Issue) 9.50%, 4/15/2014................................. 6,000,000 7,046,760
New York State Mortgage Agency, Revenue 8.10%, 10/1/2017.................... 8,495,000 9,132,890
NORTH CAROLINA-1.5%
Halifax County Industrial Facilities and Pollution Control Financing
Authority, SWDR
(Champion International Project) 8.15%, 11/1/2019....................... 1,000,000 1,080,660
Haywood County Industrial Facilities and Pollution Control Financing Authority,
SWDR (Champion International Project) 8.10%, 11/1/2009.................. 5,000,000 5,411,900
PENNSYLVANIA-7.6%
Langhorne Manor Borough Higher Education and Health Authority, Revenue
(Woods Schools) 8.75%, 11/15/2014 (Prerefunded 11/15/1999) (d).......... 6,000,000 7,125,420
Lehigh County General Purpose Authority, Revenue (Wiley House) 8.75%, 11/1/2014 11,000,000 11,230,120
Montgomery County Higher Education and Health Authority, Revenue:
(Northwestern Corp.) 8.50%, 6/1/2016.................................... 4,390,000 4,599,008
(Retirement Community-G.D.L. Farms)
9.50%, 1/1/2020 (Prerefunded 1/1/2000) (d)............................ 5,500,000 6,655,550
Pennsylvania Economic Development Financing Authority, RRR
(Northhampton Generating Project) 6.60%, 1/1/2019....................... 2,500,000 2,376,850
Pennsylvania Housing Finance Agency, Multi-Family Development Revenue
8.25%, 12/15/2019....................................................... 311,000 324,955
RHODE ISLAND-2.0%
Rhode Island Health and Educational Building Corp., Hospital Financing
Revenue
(Landmark Medical Center) 8.125%, 7/1/2019 (Prerefunded 7/1/1999) (d)... 7,520,000 8,666,725
TENNESSEE-1.6%
Maury County Health and Educational Facilities Board, Health Care Facilities
Revenue
(Southern Health Care-Heritage) 10.50%, 3/1/2020........................ 6,220,000 6,666,783
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
(UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
TEXAS-12.4%
Georgetown Hospital Authority, HR, Refunding, Improvement and First Mortgage
8.625%, 7/1/2015........................................................ $ 7,135,000 $ 7,655,570
Lone Star Airport Improvement Authority, Facilities Revenue
(American Airlines Inc. Project) 9.125%, 12/1/2015...................... 3,000,000 3,126,960
Mesquite Health Facilities Development Corp., Revenue (Christian Care Centers
Inc.)
9.375%, 3/1/2020........................................................ 11,540,000 12,364,302
Metro Health Facilities Development Corp., HR
(Wilson N. Jones Memorial Hospital Project)
7.875%, 1/1/2014 (Prerefunded 1/1/1997) (d)............................. 2,760,000 2,963,992
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue, Refunding 9.167%, 7/2/2024 (a).... 6,850,000 7,911,750
Texas Health Facilities Development Corp., HR (All Saints Episcopal
Hospitals)
7.80%, 8/15/2021 (Prerefunded 8/15/1999) (d)............................ 3,000,000 3,412,530
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation
Project):
8.625%, 9/1/2001........................................................ 2,725,000 3,085,245
8.875%, 9/1/2011 (Prerefunded 9/1/2001) (d)............................. 5,100,000 6,307,833
Tyler Health Facilities Development Corp., HR, Refunding
(East Texas Medical Center Regional Health Care System Project) 6.75%, 11/1/2025 5,850,000 5,616,702
UTAH-5.7%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration)
9.25%, 7/1/2018......................................................... 10,000,000 10,929,900
Intermountain Power Agency, Power Supply Revenue, Refunding 9.375%, 7/1/2018 13,000,000 13,305,370
VERMONT-.6%
Vermont Housing Finance Agency, Home Mortgage Purchase 8.10%, 6/1/2022...... 2,450,000 2,559,540
VIRGINIA-4.3%
Fairfax County Water Authority, Revenue 6.747%, 4/1/2029 (a,b).............. 4,000,000 3,835,000
Henrico County Industrial Development Authority, Revenue
(Bon Secours Health Care System Project) 7.284%, 8/23/2027 (a).......... 7,500,000 7,865,625
Virginia Housing Development Authority, MFHR
8.348%, 5/1/2018 (a,b).................................................. 6,000,000 6,630,000
WASHINGTON-1.3%
Pilchuck Development Public Corp., Special Facilities Airport Revenue
(Tramco Inc. Project) 6%, 8/1/2023...................................... 5,920,000 5,390,515
WISCONSIN-2.6%
Wisconsin Housing and Economic Development Authority, Home Ownership Revenue
8.147%, 7/1/2025 (a,b).................................................. 10,600,000 10,904,750
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1995
(UNAUDITED)
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
WYOMING-.5%
Sweetwater County, SWDR (FMC Corp. Project)
7%, 6/1/2024............................................................ $ 2,200,000 $ 2,269,783
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $406,232,268)..................................................... $419,555,474
=============
SHORT-TERM MUNICIPAL INVESTMENTS-1.2%
FLORIDA-.7%
Florida Board of Education, Capital Outlay
4.356% (a,b)............................................................ $ 3,000,000 $ 3,000,000
OREGON-.1%
Oregon Economic Development Revenue, VRDN (JAE Oregon Inc. Project)
4.575% (LOC; Bank of Tokyo) (e,f)....................................... 100,000 100,000
PENNSYLVANIA-.1%
Bucks County Industrial Development Authority, Revenue, VRDN (Oxford Falls
Plaza)
4.40% (f)............................................................... 100,000 100,000
WASHINGTON-.3%
Washington Public Power Supply Systems, Revenue (Nuclear Project Number 1)
5.40% (a)............................................................... 1,800,000 1,800,000
-------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $5,000,000)....................................................... $ 5,000,000
-------------
TOTAL INVESTMENTS-100.0%
(cost $411,232,268)..................................................... $424,555,474
=============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FSA Financial Security Assurance MFHR Multi-Family Housing Revenue
GO General Obligation PCR Pollution Control Revenue
HR Hospital Revenue RRR Resources Recovery Revenue
IDR Industrial Development Revenue SFMR Single Family Mortgage Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
-------- -------- ------------------ --------------------
<S> <C> <S> <C>
AAA Aaa AAA 11.3 %
AA Aa AA 16.3
A A A 2.1
BBB Baa BBB 28.0
F1 MIG1 A1 .1
Not Rated (h) Not Rated (h) Not Rated (h) 42.2
-------
100.0%
=======
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Inverse floater 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,
1995, these securities amounted to $40,813,500 or 9.44% of net assets.
(c) Non-income producing security; interest payment in default.
(d) Bonds which are prerefunded are collateralized by U.S. Government
Securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(e) Secured by letters of credit.
(f) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(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, 1995, the Fund had $147,497,205 (34.1% 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>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1995 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $411,232,268)-see statement..................................... $424,555,474
Interest receivable..................................................... 9,147,728
Prepaid expenses........................................................ 47,815
-------------
433,751,017
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 180,901
Due to Boston Company Advisors, Inc. and affiliates..................... 52,194
Dividend payable........................................................ 809,184
Accrued expenses........................................................ 186,595 1,228,874
-------------- -------------
NET ASSETS ................................................................ $432,522,143
=============
REPRESENTED BY:
Paid-in capital......................................................... $428,345,451
Accumulated undistributed investment income-net......................... 3,322,891
Accumulated net realized capital losses on investments-Note 1(c)........ (12,469,405)
Accumulated net unrealized appreciation on investments-Note 3........... 13,323,206
-------------
NET ASSETS at value applicable to 45,745,449 outstanding shares of
Common Stock, equivalent to $9.45 per share
(110 million shares of $.001 par value authorized)...................... $432,522,143
=============
STATEMENT OF OPERATIONS SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 17,085,314
EXPENSES:
Investment advisory fee-Note 2(a)..................................... $ 1,035,808
Administration fee-Note 2(a).......................................... 517,904
Professional fees..................................................... 105,374
Custodian fees-Note 2(a).............................................. 41,948
Registration fees..................................................... 20,771
Directors' fees and expenses-Note 2(b)................................ 20,614
Shareholders' reports................................................. 15,295
Shareholder servicing costs-Note 2(a)................................. 8,471
Miscellaneous......................................................... 16,702
-----------
TOTAL EXPENSES.................................................. 1,782,887
-------------
INVESTMENT INCOME-NET........................................... 15,302,427
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (6,653,115)
Net unrealized appreciation on investments.............................. 41,819,277
---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 35,166,162
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 50,468,589
-------------
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
NOVEMBER 30, MAY 31, 1995
1994 (UNAUDITED)
--------------- -------------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 29,631,659 $ 15,302,427
Net realized gain (loss) on investments.............................. 85,181 (6,653,115)
Net unrealized appreciation (depreciation) on investments for the period (53,258,758) 41,819,277
--------------- -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... (23,541,918) 50,468,589
--------------- -------------------
DIVIDENDS TO SHAREHOLDERS:
From investment income-net........................................... (30,426,060) (15,081,115)
From net realized gain on investments................................ --- ---
In excess of net realized gain on investments........................ (2,991,298) ---
--------------- -------------------
TOTAL DIVIDENDS.................................................... (33,417,358) (15,081,115)
--------------- -------------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested-Note 1(c)....................................... 5,584,002 819,049
--------------- -------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................ (51,375,274) 36,206,523
NET ASSETS:
Beginning of period.................................................. 447,690,894 396,315,620
--------------- -------------------
End of period (including undistributed investment income-net:
$3,101,580 in 1994 and $3,322,891 in 1995)......................... $396,315,620 $432,522,143
=============== ===================
SHARES SHARES
--------------- -------------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED... 576,387 90,203
=============== ===================
See independent accountants' review report and notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
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.
SIX MONTHS ENDED
YEAR ENDED NOVEMBER 30, MAY 31, 1995
-------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED)
-------- -------- -------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $9.32 $9.44 $9.61 $9.78 $9.93 $8.68
-------- -------- -------- -------- --------- -----------
INVESTMENT OPERATIONS:
Investment income-net.................. .69 .69 .70 .70 .65 .34
Net realized and unrealized gain (loss)
on investments....................... .02 .19 .18 .17 (1.16) .76
-------- -------- -------- -------- --------- -----------
TOTAL FROM INVESTMENT OPERATIONS..... .71 .88 .88 .87 (.51) 1.10
-------- -------- -------- -------- --------- -----------
DISTRIBUTIONS:
Dividends from investment income-net... (.59) (.71) (.71) (.68) (.67) (.33)
Dividends from net realized gain
on investments....................... -- -- -- (.04) -- --
Dividends in excess of net realized gain
on investments....................... -- -- -- -- (.07) --
-------- -------- -------- -------- --------- -----------
TOTAL DISTRIBUTIONS.................. (.59) (.71) (.71) (.72) (.74) (.33)
-------- -------- -------- -------- --------- -----------
Net asset value, end of period......... $9.44 $9.61 $9.78 $9.93 $8.68 $9.45
======== ======== ======== ======== ========= ===========
Market value, end of period............ $9 1/2 $9 7/8 $10 1/4 $10 1/4 $8 5/8 $9 3/8
======== ======== ======== ======== ========= ===========
TOTAL INVESTMENT RETURN(1)................. (.13%) 12.02% 11.65% 7.37% (8.97%) 25.53%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .56% .88% .84% .85% .86% .86%(2)
Ratio of net investment income to
average net assets................... 7.49% 7.27% 7.16% 7.05% 6.94% 7.39%(2)
Decrease reflected in above expense ratios
due to voluntary reduction in expenses .27% -- -- -- -- --
Portfolio Turnover Rate................ 16.51% 22.41% 8.58% 13.87% 10.96% 2.96%(3)
Net Assets, end of period (000's Omitted) $389,342 $408,314 $428,824 $447,691 $396,316 $432,522
(1) Calculated based on market value.
(2) Annualized.
(3) Not annualized.
See independent accountants' review report and notes to financial statements.
</TABLE>
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 Adviser is a direct
subsidiary of Mellon Bank, N.A. 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 and U.S. Treasury 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.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
(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 normally 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 investment 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
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
share on the record date is lower then 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 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 30, 1995, the Board of Directors declared a cash dividend of $.055
per share from investment income-net, payable on June 27, 1995 to
shareholders of record as of the close of business on June 13, 1995.
(D) QUARTERLY RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
NET INCREASE
NET REALIZED & (DECREASE)
UNREALIZED GAIN IN NET ASSETS
TOTAL INVESTMENT NET INVESTMENT (LOSS) ON RESULTING FROM
INCOME INCOME 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, 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)
August 31, 1994................ 8,579 0.19 7,682 0.17 696 0.01 8,378 0.18
November 30, 1994.............. 8,042 0.18 7,076 0.15 (27,103) (0.59) (20,027) (0.44)
--------- ------- --------- ------ --------- ------- --------- -------
Total...................... $ 33,312 $ 0.73 $ 29,632 $ 0.65 $(53,174) $(1.16) $(23,542) $(0.51)
========== ====== ========= ====== ========= ======= ========= =======
February 28, 1995.............. $ 8,429 $ 0.19 $ 7,563 $ 0.17 $ 23,313 $ 0.51 $ 30,876 $ 0.68
May 31, 1995................... 8,656 0.19 7,740 0.17 11,853 0.25 19,593 0.42
--------- ------- --------- ------ --------- ------- --------- -------
Total...................... $ 17,085 $ 0.38 $ 15,303 $ 0.34 $ 35,166 $ 0.76 $ 50,469 $ 1.10
========== ====== ========= ====== ========= ======= ========= =======
</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 and excise taxes.
The Fund has an unused capital loss carryover of approximately $5,816,000
available for Federal income tax purposes to be applied against future net
securities profits realized subsequent to
November 30, 1994. If not applied, the carryover expires in fiscal 2002.
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, 1995, the Fund was charged $8,471 by
TSSG for certain
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
shareholder servicing charges and $41,948 by the Custodian for certain
custody charges.
(B) Prior to February 1, 1995, certain officers of the Fund were
"affiliated persons," as defined in the Act, of the Adviser and/or Dreyfus
Service Corporation.
Each director who is not an "affiliated person", receives an annual fee
of $2,500 and an attendance fee of $500 per meeting. The Chairman of the
Board receives an additional 25% of such compensation and the Director
Emeritus receives 50% of such compensation.
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $36,157,849 and $48,859,171, respectively, for the six months
ended May 31, 1995 and consisted entirely of long-term and short-term
municipal investments.
At May 31, 1995, accumulated net unrealized appreciation on investments
was $13,323,206, consisting of $28,189,571 gross unrealized appreciation and
$14,866,365 gross unrealized depreciation.
At May 31, 1995, 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.
REVIEW REPORT OF ERNST & YOUNG LLP, 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, 1995, and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
May 31, 1995. 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, 1994 and financial highlights for each of the five years in the
period ended November 30, 1994 and in our report dated December 30, 1994, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
(Ernst & Young LLP Signature Logo)
New York, New York
July 7, 1995
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino, Chairman of the Board
David W. Burke
Hodding Carter, III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Robin A. Smith
John E. Zuccotti
OFFICERS
President and Treasurer
Marie E. Connolly
Vice President and Secretary
John E. Pelletier
Vice President and Assistant Treasurer
Frederick C. Dey
Vice President and Assistant Secretary
Eric B. Fischman
Assistant Treasurer
John J. Pyburn
Assistant Treasurer
Joseph F. Tower, III
Assistant Secretary
Paul D. Furcinito
Assistant Secretary
Ruth Leibert
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
Karen M. Hand
Stephen C. Kris
Richard J. Moynihan
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 Logo)
STRATEGIC MUNICIPAL BOND FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
ADMINISTRATOR
The Boston Company
Advisers, 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.
One Exchange Place
Boston, MA 02109
Printed in U.S.A. 853SA955
Strategic Municipal
Bond Fund, Inc.
Semi-Annual
Report
May 31, 1995
(Dreyfus Logo)
