LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Strategic Municipal Bond Fund, Inc. closed its fiscal year on
November 30, 1994, with a net asset value of $8.68 per share and a New York
Stock Exchange price of $8.625 per share. A year ago, those prices were $9.93
and $10.25, respectively. During fiscal 1994, a total disbursement of
approximately $.74 was paid, which included capital gains of approximately
$.07 per share.
INTEREST RATES AND THE FIXED-INCOME MARKETS
In our letter to you a year ago, we praised the municipal market's
performance during 1993, and summed it up as a good year. As we all know,
1994 has been disappointing for fixed income investors. Rising interest rates
caused a relentless deterioration in the value of longer term securities. The
Federal Reserve Board raised the Federal Funds rate six times, from 3% to
5.5%. To have thought this possible a year ago would have required a real
stretch of the imagination, but it happened and it has had a very sobering
effect on the fixed-income markets. Unfortunately, the bonds held in your
Fund's portfolio suffered along with the bond market in general. The Fed's
actions may ultimately be seen as constructive for the long-term fixed-income
markets, but until its actions are reflected in a diminution of the rate of
economic growth, it hurts! Meanwhile, we believe it is reasonable to expect
another rate hike from the Fed early in 1995.
PORTFOLIO COMPOSITION
The Fund's portfolio is composed of relatively high-coupon securities,
which makes it difficult to increase income by selling bonds currently held
and purchasing others. When we do have an opportunity to do so, we avail
ourselves of it. The position in municipal derivatives (approximately 10.7%
of the Fund's total net assets), while not helping to sustain the Fund's
value in 1994's interest rate environment, does tend to enhance the income
side of the equation. With any decline in interest rates, we could expect an
upward reevaluation of the asset values as well.
MUNICIPAL BOND SUPPLY
The supply of newly issued long-term municipal bonds during 1994 lagged
1993's figure by a substantial margin. Through November, 1994's figure was
$151.2 billion, compared to 1993's $265.6 billion. This lesser amount has
served to add liquidity to the marketplace, and to provide some price
support. At this point, it does not appear as if the dollar value of new
issues in 1995 will be any greater than 1994's figure.
We appreciate your investment in Dreyfus Strategic Municipal Bond Fund,
Inc., and we look forward to working with you in 1995 and beyond.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
December 22, 1994
New York, N.Y.
<TABLE>
<CAPTION>
<S> <C>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
SELECTED INFORMATION NOVEMBER 30, 1994 (UNAUDITED)
Market Price per share November 30, 1994........................ $ 8 5/8
Shares Outstanding November 30, 1994............................ 45,655,246
New York Stock Exchange Ticker Symbol........................... DSM
</TABLE>
<TABLE>
<CAPTION>
MARKET PRICE (NEW YORK STOCK EXCHANGE)
FISCAL YEAR ENDED NOVEMBER 30, 1994
----------------------------------------------------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
FEBRUARY 28, 1994 MAY 31, 1994 AUGUST 31, 1994 NOVEMBER 30, 1994
--------------------- ----------------- ------------------ ----------------------
<S> <C> <C> <C> <C>
High $10 5/8 $9 5/8 $9 1/2 $9
Low 9.3/4 8.7/8 8.7/8 7.5/8
Close 9.7/8 9.1/2 9.1/8 8.5/8
PERCENTAGE GAIN (LOSS) based on change in Market Price*
November 22, 1989 (commencement of operations) through November 30, 1994.............. 23.61%
December 1, 1993 through November 30, 1994............................................ (8.97)
March 1, 1994 through November 30, 1994............................................... (7.78)
June 1, 1994 through November 30, 1994................................................ (5.79)
September 1, 1994 through November 30, 1994........................................... (2.99)
NET ASSET VALUE PER SHARE
November 22, 1989 (commencement of operations).......... $ 9.32
November 30, 1993....................................... 9.93
February 28, 1994....................................... 9.64
May 31, 1994............................................ 9.27
August 31, 1994......................................... 9.28
November 30, 1994....................................... 8.68
PERCENTAGE GAIN (LOSS) based on change in Net Asset Value*
November 22, 1989 (commencement of operations) through November 30, 1994.............. 33.47%
December 1, 1993 through November 30, 1994............................................ (5.44)
March 1, 1994 through November 30, 1994............................................... (4.92)
June 1, 1994 through November 30, 1994................................................ (2.84)
September 1, 1994 through November 30, 1994........................................... (4.66)
- -------------
* With dividends reinvested.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS--99.0% AMOUNT VALUE
------------- -------------
<S> <C> <C>
ARKANSAS--.5%
Saline County, HR, Refunding, Improvement 7.875%, 9/1/2019.................. $ 2,000,000 $ 2,015,700
CALIFORNIA--.7%
San Marcos Public Facilities Authority, Revenue, Refunding, Public
Improvement
(Civic Center) 6.20%, 8/1/2022.......................................... 3,000,000 2,550,450
COLORADO--4.2%
Colorado Health Facilities Authority, Revenue (American Housing Foundation 1
Inc. Project)
10.25%, 12/1/2020....................................................... 6,000,000 6,155,400
City and County of Denver, Airport Revenue 8.50%, 11/15/2023................ 10,000,000 10,119,900
DISTRICT OF COLUMBIA--2.4%
Metropolitan Washington Airports Authority, Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011........................ 9,160,000 9,180,702
FLORIDA--6.7%
Florida Board of Education, Capital Outlay 8.484%, 6/1/2019 (a,b)........... 15,000,000 13,068,750
Leon County Educational Facilities Authority, COP (Southgate Residence Hall
Project):
3.75%, 12/1/1995 (c).................................................... 247,560 49,512
9%, 9/1/2014 (c,d)...................................................... 5,000,000 1,000,000
North Miami Health Facilities Authority, Health Facilities Revenue (Hallmark
Homes Project)
10.50%, 8/1/2020 (d).................................................... 3,905,829 195,291
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015...................................................... 6,700,000 5,930,639
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022....................................................... 5,000,000 4,436,650
Walton County Industrial Development Authority, IDR
(Lakeview Estates Limited Partnership Project) 10.50%, 1/1/2017 (d)..... 3,145,000 1,258,000
GEORGIA--2.8%
Private Colleges and Universities Facilities Authority, Revenue,
Refunding (Clark Atlanta University Project) 8.25%, 1/1/2015............ 11,000,000 11,081,070
ILLINOIS--12.0%
Chicago O'Hare International Airport, Special Facilities Revenue
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 7,485,000 7,609,775
8.40%, 5/1/2018....................................................... 6,820,000 6,932,598
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition) 8.50%, 9/1/2010 5,000,000 5,038,250
Illinois Health Facilities Authority, Revenue (Ravenswood Hospital Medical
Center Project)
8.25%, 11/1/2010........................................................ 13,500,000 13,867,875
Robbins, RRR (Resources Recovery Partners):
9.25%, 10/15/2014....................................................... 10,000,000 10,178,200
9.25%, 10/15/2016....................................................... 3,000,000 3,053,460
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
KENTUCKY--1.1%
Morgantown Health Care Facility, Revenue (Southern Health Care System
Project)
10.50%, 3/1/2020........................................................ $ 4,300,000 $ 4,416,530
LOUISIANA--6.4%
Lake Charles Harbor and Terminal, District Port Facilities Revenue,
Refunding (Trunkline LNG Co. Project) 7.75%, 8/15/2022.................. 15,000,000 15,171,150
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 2,049,600
HR, Refunding
(Saint Francis Medical Center Project)
5.715%, 7/1/2014 (Insured; FSA) (a). ................................. 10,600,000 6,182,450
Parish of West Feliciana, PCR (Gulf States Utility Co. Project)
10.625%, 5/1/2014 (LOC; Bankers Trust) (f).............................. 1,480,000 1,537,439
MARYLAND--2.5%
Baltimore County, PCR, Refunding (Bethlehem Steel Corp. Project)
7.50%, 6/1/2015......................................................... 5,000,000 4,750,050
Maryland Industrial Development Financing Authority, EDR:
(Medical Waste Associates Limited Partnership):
8.625%, 11/15/1999 (d)................................................ 1,900,000 798,000
8.75%, 11/15/2010 (d)................................................. 10,185,000 4,277,700
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 2,360,312
Massachusetts Housing Finance Agency, Residential Housing Revenue:
8.50%, 8/1/2020......................................................... 60,000 62,269
8.40%, 8/1/2021......................................................... 3,415,000 3,576,632
Massachusetts Industrial Finance Agency, Revenue (Sturdy Memorial Hospital)
7.90%, 6/1/2009......................................................... 5,430,000 5,490,219
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt
Project)
10%, 3/1/2026........................................................... 7,000,000 7,477,260
Pittsfield, SWDR (Vicon Recovery Associates Project) 7.95%, 11/1/2004....... 2,245,000 2,211,617
MICHIGAN--.5%
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 2,000,000 1,814,420
MINNESOTA--1.0%
Washington County Housing and Redevelopment Authority,
Governmental Housing Revenue (Woodland Park Apartments) 9.75%, 5/1/2020. 5,035,000 3,876,950
MISSISSIPPI--2.9%
Claiborne County, PCR (Middle South Energy Inc.) 9.875%, 12/1/2014.......... 10,000,000 11,227,600
MISSOURI--2.6%
Jackson County Industrial Development Authority, Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020.......................... 6,735,000 7,045,079
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
MISSOURI (CONTINUED)
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 $ 2,909,385
NEBRASKA--.4%
Nebraska Investment Finance Authority, SFMR 8.125%, 8/15/2038 (Insured; MBIA). 1,470,000 1,516,570
NEW JERSEY--1.3%
New Jersey Economic Development Authority, First Mortgage Revenue (The
Evergreens)
9.25%, 10/1/2022........................................................ 5,000,000 5,034,050
NEW MEXICO--1.1%
New Mexico Mortgage Finance Authority, SFMR 7.80%, 3/1/2021................. 4,120,000 4,168,616
NEW YORK--5.5%
New York City, GO:
5.625%, 8/1/2013........................................................ 1,000,000 814,840
8%, 8/15/2018........................................................... 1,500,000 1,695,552
New York City Industrial Development Agency, Civic Facilities Revenue
(YMCA of Greater New York Project) 8%, 8/1/2016......................... 3,000,000 3,051,870
New York State Dormitory Authority, Judicial Facilities Lease Revenue (Suffolk County Issue)
9.50%, 4/15/2014........................................................ 6,000,000 7,001,340
New York State Mortgage Agency, Revenue 8.10%, 10/1/2017.................... 8,495,000 8,835,055
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 1,037,760
Haywood County Industrial Facilities and Pollution Control Financing
Authority, SWDR
(Champion International Project) 8.10%, 11/1/2009....................... 5,000,000 5,156,450
PENNSYLVANIA--7.9%
Langhorne Manor Borough Higher Education and Health Authority, Revenue
(Woods Schools) 8.75%, 11/15/2014 (Prerefunded 11/15/1999)(e)........... 6,000,000 6,892,380
Lehigh County General Purpose Authority, Revenue (Wiley House) 8.75%, 11/1/2014 11,000,000 10,395,000
Montgomery County Higher Education and Health Authority, Revenue:
(Northwestern Corp.) 8.50%, 6/1/2016.................................... 4,390,000 4,351,500
(Retirement Community-G.D.L. Farms) 9.50%, 1/1/2020 (Prerefunded 1/1/2000)(e) 5,500,000 6,467,010
Pennsylvania Economic Development Financing Authority, RRR
(Northhampton Generating Project) 6.60%, 1/1/2019....................... 2,500,000 2,099,425
Pennsylvania Housing Finance Agency, Multi-Family Development Revenue
8.25%, 12/15/2019....................................................... 314,000 315,438
RHODE ISLAND--2.2%
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 8,386,755
TENNESSEE--1.7%
Maury County Health and Educational Facilities Board, Health Care Facilities Revenue
(Southern Health Care-Heritage) 10.50%, 3/1/2020........................ 6,270,000 6,452,896
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
TEXAS--13.5%
Georgetown Hospital Authority, HR, Refunding, Improvement and First Mortgage
8.625%, 7/1/2015........................................................ $ 7,135,000 $ 7,377,376
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 3,074,340
Lone Star Airport Improvement Authority, Facilities Revenue (American
Airlines Inc. Project)
9.125%, 12/1/2015....................................................... 3,000,000 3,116,400
Mesquite Health Facilities Development Corp., Revenue (Christian Care Centers
Inc.)
9.375%, 3/1/2020........................................................ 11,540,000 12,040,721
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 2,955,270
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue, Refunding 9.207%, 7/2/2024 (a).... 6,850,000 5,779,688
Texas Health Facilities Development Corp., HR (All Saints Episcopal
Hospitals)
7.80%, 8/15/2021 (Prerefunded 8/15/1999)(e)............................. 3,000,000 3,286,950
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation
Project):
8.625%, 9/1/2001........................................................ 2,725,000 2,920,273
8.875%, 9/1/2011 (Prerefunded 9/1/2001)(e) ............................. 6,000,000 7,029,480
Tyler Health Facilities Development Corp., HR, Refunding (East Texas Medical
Center
Regional Health Care System Project) 6.75%, 11/1/2025................... 5,850,000 4,943,835
UTAH--6.1%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration)
9.25%, 7/1/2018......................................................... 10,000,000 10,245,100
Intermountain Power Agency, Power Supply Revenue, Refunding 9.375%, 7/1/2018 13,000,000 13,607,100
VERMONT--.6%
Vermont Housing Finance Agency, Home Mortgage Purchase 8.10%, 6/1/2022...... 2,450,000 2,477,611
VIRGINIA--3.4%
Fairfax County Water Authority, Revenue 7.64%, 4/1/2029 (a,b)............... 4,000,000 2,615,000
Henrico County Industrial Development Authority, Revenue
(Bon Secours Health Care System Project) 7.778%, 8/23/2027 (a).......... 7,500,000 5,090,625
Virginia Housing Development Authority, MFHR
10.272%, 5/1/2018 (a,b)................................................. 6,000,000 5,535,000
WISCONSIN--2.0%
Wisconsin Housing and Economic Development Authority, Home Ownership Revenue
8.344%, 7/1/2025 (a,b).................................................. 10,600,000 7,724,750
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $412,944,982)..................................................... $384,448,910
=============
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1994
PRINCIPAL
SHORT-TERM MUNICIPAL INVESTMENTS--1.0% AMOUNT VALUE
------------- -------------
ARIZONA--.1%
Apache County Industrial Development Authority, IDR, VRDN
(Tucson Electric Power-Springerville Project) 3.60%, (LOC; Bank of New York) (f,g) $ 250,000 $ 250,000
FLORIDA--.7%
Florida Board of Education, Capital Outlay
3.82% (a,b)............................................................. 3,000,000 3,000,000
MICHIGAN--.1%
Michigan Strategic Fund, LOR, VRDN (Coil Center Corp. Project)
4.50% (LOC; Tokai Bank) (f,g)........................................... 300,000 300,000
WASHINGTON--.1%
Pilchuck Development Public Corp., Revenue, VRDN (Kohkoku USA Project)
4% (LOC; Fuji Bank) (f,g)............................................... 350,000 350,000
-------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $3,900,000)....................................................... $ 3,900,000
==============
TOTAL INVESTMENTS--100.0%
(cost $416,844,982)..................................................... $388,348,910
==============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOR Limited Obligation Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue 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 VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH(H) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- --------- -------------------- ----------------------
<S> <C> <S> <C>
AAA Aaa AAA 9.2%
AA Aa AA 15.5
A A A 2.4
BBB Baa BBB 27.7
Not Rated (i) Not Rated (i) Not Rated (i) 45.2
--------
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 November 30,
1994, these securities amounted to $31,943,500 or 8.1% of net assets.
(c) The valuation of this security has been determined in good faith
under the direction of the Board of Directors.
(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 municipal issue and to retire the bonds in full at the
earliest refunding date.
(f) Secured by letters of credit.
(g) 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.
(h) Fitch currently provides creditworthiness information for a limited
number 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, 1994 the Fund had $121,522,278 (30.7% 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>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $416,844,982)--see statement.................................... $388,348,910
Interest receivable..................................................... 9,101,415
Prepaid expenses........................................................ 33,792
-------------
397,484,117
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $162,800
Due to The Boston Company Advisors, Inc. and affiliates................. 81,400
Due to Custodian........................................................ 670,933
Accrued expenses and other liabilities.................................. 253,364 1,168,497
---------- ------------
NET ASSETS ................................................................ $396,315,620
==============
REPRESENTED BY:
Paid-in capital......................................................... $427,526,402
Accumulated undistributed investment income_net......................... 3,101,580
Accumulated net realized capital losses and distributions in excess of
net realized gain on investments_Note 1(c)............................ (5,816,290)
Accumulated net unrealized (depreciation) on investments_Note 3......... (28,496,072)
-------------
NET ASSETS at value applicable to 45,655,246 shares outstanding
(110 million shares of $.001 par value Common Stock authorized)......... $396,315,620
==============
NET ASSET VALUE, per share
($396,315,620 / 45,655,246 shares)...................................... $8.68
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $ 33,312,130
EXPENSES:
Investment advisory fee--Note 2(a).................................... $ 2,124,235
Administration fee_Note 2(a).......................................... 1,062,718
Shareholders' reports................................................. 158,101
Professional fees..................................................... 132,660
Shareholder servicing costs_Note 2(a)................................. 57,248
Custodian fees_Note 2(a).............................................. 53,039
Registration fees..................................................... 45,581
Directors' fees and expenses_Note 2(b)................................ 26,939
Miscellaneous......................................................... 19,950
------------
TOTAL EXPENSES.................................................... 3,680,471
------------
INVESTMENT INCOME--NET............................................ 29,631,659
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain on investments--Note 3................................ $ 85,181
Net unrealized (depreciation) on investments............................ (53,258,758)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (53,173,577)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $(23,541,918)
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30,
----------------------------------
1993 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................. $ 31,331,911 $ 29,631,659
Net realized gain (loss) on investments................................. (2,910,228) 85,181
Net unrealized appreciation (depreciation) on investments for the year.. 9,758,683 (53,258,758)
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 38,180,366 (23,541,918)
-------------- --------------
DIVIDENDS TO SHAREHOLDERS:
From investment income--net............................................. (30,040,730) (30,426,060)
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) (33,417,358)
-------------- --------------
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested--Note 1(c)......................................... 12,408,740 5,584,002
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... 18,866,860 (51,375,274)
NET ASSETS:
Beginning of year....................................................... 428,824,034 447,690,894
-------------- --------------
End of year (including undistributed investment income_net:
$3,895,981 in 1993 and $3,101,580 in 1994)............................ $447,690,894 $396,315,620
============== ==============
SHARES SHARES
-------------- --------------
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED...... 1,240,283 576,387
============== ==============
See 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 year indicated. This information
has been derived from the financial statements and market price data for the
Fund's shares.
YEAR ENDED NOVEMBER 30,
------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year.............. $ 9.32 $ 9.44 $ 9.61 $ 9.78 $ 9.93
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income--net.......................... .69 .69 .70 .70 .65
Net realized and unrealized gain (loss) on investments .02 .19 .18 .17 (1.16)
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS.............. .71 .88 .88 .87 (.51)
------- ------- ------- ------- -------
DISTRIBUTIONS:
Dividends from investment income_net............ (.59) (.71) (.71) (.68) (.67)
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)
------- ------- ------- ------- -------
Net asset value, end of year.................... $ 9.44 $ 9.61 $ 9.78 $ 9.93 $ 8.68
======== ======== ======= ======= ========
Market value, end of year....................... $ 9 1/2 $ 9 7/8 $10 1/4 $10 1/4 $ 8 5/8
======== ======== ======= ======= ========
TOTAL INVESTMENT RETURN * (.13%) 12.02% 11.65% 7.37% (8.97%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... .56% .88% .84% .85% .86%
Ratio of net investment income to average net assets 7.49% 7.27% 7.16% 7.05% 6.94%
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%
Net Assets, end of year (000's Omitted)......... $389,342 $408,314 $428,824 $447,691 $396,316
- ----------------------------
* Calculated based on market value.
See notes to financial statements.
</TABLE>
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. The Administrator and Custodian are indirect wholly-owned
subsidiaries of Mellon Bank Corporation ("Mellon "). Effective August 24,
1994, the Adviser became 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 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) as defined in the dividend reinvestment plan.
On October 28, 1994, the Board of Directors declared a cash dividend of
$.055 per share from investment income-net, payable on November 28, 1994 to
shareholders of record as of the close of business on November 11, 1994.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
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, 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)
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)
======== ===== ======= ===== ======== ====== ======== ======
</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 year ended November 30, 1994, the Fund was charged $57,248 by
TSSG for certain shareholder servicing charges and $53,039 by the Custodian
for certain custody charges.
(B) Prior to August 24, 1994, certain officers and directors of the Fund
were "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.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities
amounted to $164,705,410 and $148,027,647, respectively, for the year ended
November 30, 1994 and consisted entirely of long-term and short-term
municipal investments.
At November 30, 1994, accumulated net unrealized depreciation on
investments was $28,496,072, consisting of $10,564,950 gross unrealized
appreciation and $39,061,022 gross unrealized depreciation.
At November 30, 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).
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
REPORT OF ERNST & YOUNG LLP, 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, 1994, 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, 1994 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, 1994,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
(Ernst & Young LLP Signature Logo)
New York, New York
December 30, 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 ie
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)
On August 4, 1994, the Fund's shareholders voted to change certain of the
Fund's fundamental policies and investment restrictions to permit the Fund to
borrow money to the extent permitted under the Investment Company Act of
1940, as amended. However, the Fund currently anticipates to borrow money
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While such borrowings
exceed 5% of the Fund's assets, the Fund would not make any additional
investments.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended November 30, 1994:
all the dividends paid from investment income-net are
"exempt-interest dividends" (not generally subject to regular Federal
income tax), and
the portion of the $.125857 per share paid by the Fund on
December 29, 1993 representing a long-term capital gain distribution
is $.051040 per share.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1994 calendar year
on Form 1099-DIV which will be mailed by January 31, 1995.
OFFICERS AND DIRECTORS
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
200 Park Avenue
New York, NY 10166
DIRECTORS
David W. Burke
Hodding Carter III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
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:
Joseph P. Darcy
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 Shareholders
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 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
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.
852AR9411
(Dreyfus Logo)
Strategic
Municipal Bond Fund, Inc.
Annual Report
November 30, 1994
