DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Strategic
Municipal Bond Fund, Inc. For its annual reporting period ended November 30,
1995, your Fund's net asset value rose 10.60% to $9.60 per share. Income
dividends exempt from Federal personal income taxes of $.642 per share were
paid, which amounts to a tax-free distribution rate per share of 6.94%, based
on the closing market price of $9.25.*
THE ECONOMY
Modest economic growth and low inflation have spurred a dramatic,
year-long rally in the bond market. The Federal Reserve Board's recent
reduction of the Federal Funds rate confirms what investors had already
suspected: that inflation, at least for the near future, appears to be under
control. Now questions abound regarding the duration of the economic recovery
and the possibility of recession.
The economic recovery of the mid-1990s has been productivity-driven.
Corporations implemented extraordinary cost control measures that, while
dramatically improving bottom line earnings, now contribute to the slow rate
of employment growth. Job creation is a significant factor that affects
consumer spending and is a major component of economic activity. New job
creation, currently running at the slowest pace of the post-World War II era,
is worrisome. Indeed, wages and salaries grew at under 3% over the past year,
barely keeping pace with inflation. Still, surveys indicate that consumers
remain optimistic, despite evidence that their spending is being affected by
the slow growth in disposable income. Recent reports on retail sales confirm
this reticence in spending. A consumer-led weakening of the economy could
lead to further Federal Reserve easing of monetary policy.
It was concern about lagging economic growth that prompted the Federal
Reserve to ease the Federal Funds rate twice in 1995, first in July and then
again in December. The housing market and new home construction were helped
earlier in 1995 by low interest rates, though recently both have exhibited
signs of weakness. Business capital spending, another engine of economic
growth, has been solid. Exports remain another bright area of the economy.
Because of the new competitiveness of American businesses abroad, the U.S.
trade deficit continues to shrink. Through September, the trade deficit with
Japan narrowed for the sixth consecutive month. Exports, while a relatively
small component of overall economic activity in this country, provide an
important support for the job market. If U.S. products lose competitiveness
in world markets, foreign orders may go elsewhere and jobs could be lost
here.
MARKET ENVIRONMENT
Municipal bonds have enjoyed a dramatic bull market for the past 12
months. Current business sluggishness may result in further Fed easing next
year, particularly if the Clinton Administration and Congress can arrive at a
meaningful budget agreement. We believe a balanced Federal budget, if
realized, could be beneficial to the bond market since it could mean a
reduction in the issuance of government securities. A similar supply scenario
exists in the municipal bond market. The redemption of existing municipal
bonds has outpaced the rate of new issuance for two years, and is expected to
recur in 1996.
Overall, we remain confident in our optimistic view of the municipal bond
market. Yet we are also mindful of the stimulative effect of easing monetary
policy. Therefore we are watchful for any signs of a revival of inflationary
pressures.
THE PORTFOLIO
During the Fund's fiscal year, which ended November 30, 1995, we
continued to invest in accordance with the Fund's investment objective and
management policies, seeking high current income that is exempt from Federal
income tax. That, in combination with the capital appreciation of the Fund's
portfolio securities, produced the results cited in the first paragraph. The
municipal bond market enjoyed a very good 1995, with price appreciation that
more than offset 1994's less fortunate results. We continue to monitor the
portfolio's holdings carefully in our efforts to seek a high current income
stream, but we are aware that, as time passes, more of the bonds will be
called and we will be reinvesting the proceeds at lower rates than those that
prevail on the current holdings.
In general, we are optimistic about the municipal bond market in 1996.
The technical picture appears positive as we look forward: the supply of
newly issued municipal bonds may not exceed that of 1995, so after taking
into account maturities, redemptions, calls and refundings, the outstanding
supply may actually be reduced, which could help support prices, presuming
demand remains stable or increases.
The high level of volatility exhibited by the market in recent years
underscores, for us, the need to maintain a disciplined and long-term focus.
Solid market performance thus far in 1995 has rewarded the patient investor.
The Fund's investment objective - to maximize current income exempt from
Federal income taxes to the extent believed by the Adviser to be consistent
with preservation of capital - continues to guide our portfolio management
decisions.
Included in this report is a series of detailed statements about your
Fund's holdings and financial condition. We hope they are informative. Please
know that we appreciate greatly your continued confidence in the Fund and in
The Dreyfus Corporation.
Very truly yours,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
December 21, 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.
SELECTED INFORMATION NOVEMBER 30, 1995 (UNAUDITED)
Market Price per share November 30, 1995........................... $9 1\4
Shares Outstanding November 30, 1995................................ 45,745,449
New York Stock Exchange Ticker Symbol............................... DSM
MARKET PRICE (NEW YORK STOCK EXCHANGE)
FISCAL YEAR ENDED NOVEMBER 30, 1995
________________________________________________________________________________________________
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
FEBRUARY 28, 1995 MAY 31, 1995 AUGUST 31, 1995 NOVEMBER 30, 1995
__________ ________ _________ ___________
<S> <C> <C> <C> <C>
High $9 1\4 $9 3\8 $9 3\8 $9 1\4
Low 8 1\8 9 8 5\8 8 5\8
Close 9 1\8 9 3\8 8 7\8 9 1\4
PERCENTAGE GAIN based on change in Market Price*
November 22, 1989 (commencement of operations) through November 30, 1995.............. 42.29%
December 1, 1990 through November 30, 1995............................................ 40.72
December 1, 1994 through November 30, 1995............................................ 15.12
March 1, 1995 through November 30, 1995............................................... 6.79
June 1, 1995 through November 30, 1995................................................ 2.12
September 1, 1995 through November 30, 1995........................................... 6.03
NET ASSET VALUE PER SHARE
November 22, 1989(commencement of operations)........... $9.32
November 30, 1994....................................... 8.68
February 28, 1995....................................... 9.19
May 31, 1995............................................ 9.45
August 31, 1995......................................... 9.42
November 30, 1995....................................... 9.60
PERCENTAGE GAIN based on change in Net Asset Value*
November 22, 1989 (commencement of operations) through November 30, 1995.............. 58.45%
December 1, 1990 through November 30, 1995............................................ 46.97
December 1, 1994 through November 30, 1995............................................ 18.71
March 1, 1995 through November 30, 1995............................................... 10.04
June 1, 1995 through November 30, 1995................................................ 5.14
September 1, 1995 through November 30, 1995........................................... 3.67
*With dividends reinvested.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS NOVEMBER 30, 1995
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 $ 2,285,260
CALIFORNIA-.9%
Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
6.50%, 1/1/2032......................................................... 1,000,000 1,024,940
San Marcos Public Facilities Authority, Revenue, Refunding, Public
Improvement
(Civic Center-Mission Boulevard Project) 6.20%, 8/1/2022................ 3,000,000 2,966,880
COLORADO-4.1%
Colorado Health Facilities Authority, Revenue
(American Housing Foundation 1 Inc. Project) 10.25%, 12/1/2020.......... 5,900,000 6,430,410
City and County of Denver, Airport Revenue 8.50%, 11/15/2023................ 10,000,000 11,474,200
DISTRICT OF COLUMBIA-2.2%
Metropolitan Washington Airports Authority, Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011........................ 8,920,000 9,469,026
FLORIDA-6.2%
Florida Board of Education, Capital Outlay 8.50%, 6/1/2019 (a,b)............ 15,000,000 16,912,500
North Miami Health Facilities Authority, Health Facilities Revenue
(Hallmark Homes Project) 10.50%, 8/1/2020 (c)........................... 3,985,193 119,555
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015...................................................... 5,000,000 5,122,200
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022....................................................... 5,000,000 5,131,300
GEORGIA-2.8%
Private Colleges and Universities Facilities Authority, Revenue,
Refunding (Clark Atlanta University Project) 8.25%, 1/1/2015............ 11,000,000 12,423,840
ILLINOIS-11.3%
Chicago O'Hare International Airport, Special Facilities Revenue
(United Airlines Inc. Project):
8.20%, 5/1/2018....................................................... 7,360,000 8,108,438
8.40%, 5/1/2018....................................................... 6,715,000 7,397,043
Illinois Development Finance Authority, Revenue
(Community Rehabilitation Providers Facility Acquisition) 8.50%, 9/1/2010 5,000,000 5,361,650
Illinois Health Facilities Authority, Revenue
(Ravenswood Hospital Medical Center Project) 8.25%, 11/1/2010........... 13,000,000 14,043,381
Robbins, RRR (Robbins Resource Recovery Partners):
9.25%, 10/15/2014....................................................... 10,500,000 11,411,715
9.25%, 10/15/2016....................................................... 3,000,000 3,260,490
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
INDIANA-3.1%
Burns Harbor Industrial Solid Waste Disposal Facilities, Revenue
(Bethlehem Steel Corp. Project) 8%, 4/1/2024............................ $ 6,000,000 $ 6,488,340
Indianapolis Airport, Special Facilities Revenue
(United Airlines Inc. Project) 6.50%, 11/15/2031........................ 7,000,000 7,063,420
KENTUCKY-1.1%
Morgantown Health Care Facility, Revenue (Southern Health Care System
Project)
10.50%, 3/1/2020........................................................ 4,265,000 4,605,475
LOUISIANA-4.6%
Lake Charles Harbor and Terminal, District Port Facilities Revenue,
Refunding (Trunkline LNG Co. Project) 7.75%, 8/15/2022.................. 15,000,000 17,100,900
Parish of De Soto, Environmental Improvement Revenue,
Refunding (International Paper Co. Project) 6.55%, 4/1/2019............. 2,900,000 2,994,540
MARYLAND-2.2%
Baltimore County, PCR,
Refunding (Bethlehem Steel Corp. Project) 7.50%, 6/1/2015............... 5,000,000 5,252,050
Maryland Industrial Development Financing Authority, EDR,
(Medical Waste Associates Limited Partnership) 8.75%, 11/15/2010........ 4,465,000 4,465,000
MASSACHUSETTS-5.2%
Massachusetts Health and Educational Facilities Authority, Revenue
(Beth Israel Hospital Issue) 8.32%, 7/1/2025 (Insured; AMBAC)(a)........ 3,250,000 3,384,063
Massachusetts Housing Finance Agency, Residential Housing Revenue:
8.50%, 8/1/2020......................................................... 60,000 62,881
8.40%, 8/1/2021......................................................... 3,415,000 3,653,913
Massachusetts Industrial Finance Agency, Revenue (Sturdy Memorial Hospital)
7.90%, 6/1/2009......................................................... 5,150,000 5,606,908
Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt
Project)
10%, 3/1/2026........................................................... 7,000,000 7,903,700
Pittsfield, SWDR (Vicon Recovery Associates Project) 7.95%, 11/1/2004....... 2,090,000 2,183,883
MICHIGAN-1.5%
Michigan Hospital Finance Authority, HR,
Refunding (Genesys Health System Obligated Group) 8.125%, 10/1/2021..... 5,000,000 5,516,850
Michigan Strategic Fund, SWDR, Refunding (Genesee Power Station Project)
7.50%, 1/1/2021......................................................... 1,000,000 1,027,650
MINNESOTA-1.1%
Washington County Housing and Redevelopment Authority,
Governmental Housing Revenue (Woodland Park Apartments) 9.75%, 5/1/2020. 5,035,000 4,783,250
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
MISSISSIPPI-2.6%
Claiborne County, PCR (Middle South Energy Inc.) 9.875%, 12/1/2014.......... $ 10,000,000 $ 11,493,000
MISSOURI-2.3%
Jackson County Industrial Development Authority, Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020.......................... 6,735,000 7,380,482
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 2,959,525
NEBRASKA-.3%
Nebraska Investment Finance Authority, SFMR 8.125%, 8/15/2038 (Insured; MBIA) 1,275,000 1,356,103
NEW JERSEY-1.3%
New Jersey Economic Development Authority, First Mortgage Revenue
(The Evergreens) 9.25%, 10/1/2022....................................... 5,000,000 5,506,800
NEW MEXICO-.9%
New Mexico Mortgage Finance Authority, SFMR 7.80%, 3/1/2021................. 3,635,000 3,826,892
NEW YORK-5.1%
New York City:
5.625%, 8/1/2013........................................................ 1,000,000 967,320
8%, 8/15/2018........................................................... 15,000 17,206
8%, 8/15/2018 (Prerefunded 8/15/2001) (d)............................... 1,485,000 1,771,991
New York City Industrial Development Agency, Civic Facility Revenue
(YMCA of Greater New York Project) 8%, 8/1/2016......................... 3,000,000 3,244,470
New York State Dormitory Authority, Revenue,
Judicial Facility Lease (Suffolk County Issue) 9.50%, 4/15/2014......... 6,000,000 7,001,400
New York State Mortgage Agency, Revenue 8.10%, 10/1/2017.................... 8,495,000 9,141,130
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 1,094,670
Haywood County Industrial Facilities and Pollution Control Financing
Authority, SWDR
(Champion International Project) 8.10%, 11/1/2009....................... 5,000,000 5,457,350
PENNSYLVANIA-7.5%
Langhorne Manor Borough Higher Education and Health Authority, Revenue
(Woods Schools) 8.75%, 11/15/2014 (Prerefunded 11/15/1999)(d)........... 6,000,000 7,097,820
Lehigh County General Purpose Authority, Revenue (Wiley House)
8.75%, 11/1/2014........................................................ 11,000,000 11,507,870
Montgomery County Higher Education and Health Authority, Revenue:
(Northwestern Corp.) 8.50%, 6/1/2016.................................... 4,390,000 4,657,878
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
PENNSYLVANIA (CONTINUED)
Montgomery County Higher Education and Health Authority, Revenue (continued):
(Retirement Community-G.D.L. Farms)
9.50%, 1/1/2020 (Prerefunded 1/1/2000) (d)............................ $ 5,500,000 $ 6,622,275
Pennsylvania Economic Development Financing Authority, RRR
(Northampton Generating) 6.60%, 1/1/2019................................ 2,500,000 2,488,075
Pennsylvania Housing Finance Agency, Multi-Family Development Revenue
8.25%, 12/15/2019....................................................... 307,000 323,854
RHODE ISLAND-2.0%
Rhode Island Health and Educational Building Corp., Revenue,
Refunding, Hospital Financing (Landmark Medical Center)
8.125%, 7/1/2019 (Prerefunded 7/1/1999)(d)............................ 7,520,000 8,642,435
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 7,061,068
TEXAS-13.5%
Georgetown Hospital Authority, HR, Refunding, Improvement and First Mortgage
8.625%, 7/1/2015........................................................ 7,005,000 7,698,425
Lone Star Airport Improvement Authority, Facilities Revenue
(American Airlines Inc. Project) 9.125%, 12/1/2015 (Prerefunded 12/29/95) (d) 3,000,000 3,072,720
Mesquite Health Facilities Development Corp., Revenue (Christian Care Centers
Inc.)
9.375%, 3/1/2020........................................................ 11,540,000 12,478,317
Metro Health Facilities Development Corp., HR,
Refunding (Wilson N. Jones Memorial Hospital Project)
7.875%, 1/1/2014 (Prerefunded 1/1/1997) (d)........................... 2,760,000 2,938,434
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue, Refunding 6.90%, 7/2/2024 (a)..... 13,700,000 14,878,337
Texas Health Facilities Development Corp., HR (All Saints Episcopal
Hospitals)
7.80%, 8/15/2021 (Prerefunded 8/15/1999)(d)............................. 3,000,000 3,394,050
Texas Public Property Finance Corp., Revenue (Mental Health and Retardation Project):
8.625%, 9/1/2001........................................................ 2,100,000 2,352,630
8.875%, 9/1/2011 (Prerefunded 9/1/2001)(d) ............................. 5,100,000 6,308,802
Tyler Health Facilities Development Corp., HR, Refunding
(East Texas Medical Center Regional Health Care System Project)
6.75%, 11/1/2025...................................................... 5,850,000 5,866,322
UTAH-2.5%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018..... 10,000,000 11,023,100
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
_______ _______
VERMONT-.6%
Vermont Housing Finance Agency, Home Mortgage Purchase 8.10%, 6/1/2022...... $ 2,450,000 $ 2,586,784
VIRGINIA-5.7%
Fairfax County Water Authority, Revenue 6.997%, 4/1/2029 (a,b).............. 4,000,000 3,985,000
Henrico County Industrial Development Authority, Revenue
(Bon Secours Health Care System Project) 7.651%, 8/23/2027 (a).......... 7,500,000 8,409,375
Virginia Housing Development Authority, MFHR
7.05%, 5/1/2018......................................................... 12,000,000 12,741,120
WASHINGTON-1.3%
Pilchuck Development Public Corp., Special Facilities Airport Revenue
(Tramco Inc. Project) 6%, 8/1/2023...................................... 5,920,000 5,577,646
WISCONSIN-2.5%
Wisconsin Housing and Economic Development Authority, Homeownership Revenue
8.707%, 7/1/2025 (a,b).................................................. 10,600,000 10,971,000
WYOMING-1.0%
Sweetwater County, SWDR (FMC Corp. Project):
7%, 6/1/2024............................................................ 2,200,000 2,311,848
6.90%, 9/1/2024......................................................... 2,000,000 2,090,860
_______
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $411,261,793)..................................................... $433,340,035
=======
SHORT-TERM MUNICIPAL INVESTMENTS-1.0%
FLORIDA-.7%
Florida Board of Education, Capital Outlay
3.93%, (a,b)............................................................ $ 3,000,000 $ 3,000,000
LOUISIANA-.3%
Louisiana Offshore Terminal Authority, Deepwater Port Revenue
Refunding, VRDN (Loop Inc.-First Stage)
3.70% (LOC; Union Bank of Switzerland) (e,f).......................... 1,200,000 1,200,000
_______
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,200,000)....................................................... $ 4,200,000
=======
TOTAL INVESTMENTS-100.0%
(cost $415,461,793)..................................................... $437,540,035
=======
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
SUMMARY OF ABBREVIATIONS
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
EDR Economic Development Revenue 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
MBIA Municipal Bond Investors Assurance VRDN Variable Rate Demand Notes
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (G) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
_____ _____ __________ ____________
<S> <C> <C>
AAA Aaa AAA 10.7%
AA Aa AA 13.9
A A A 2.3
BBB Baa BBB 30.2
F1 MIG1/P1 SP1/A1 .3
Not Rated(h) Not Rated(h) Not Rated(h) 42.6
____
100.0%
====
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,
1995, these securities amounted to $34,868,500 or 7.9% 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 Investment Adviser to be of
comparable quality to those rated securities in which the Fund may
invest.
(i) At November 30, 1995, the Fund had $139,627,990 (31.8% 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>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $415,461,793)-see statement..................................... $437,540,035
Cash.................................................................... 34,517
Interest receivable..................................................... 8,584,067
Prepaid expenses........................................................ 23,658
_______
446,182,277
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 268,556
Payable for investment securities purchased............................. 6,511,039
Accrued expenses........................................................ 210,430 6,990,025
______ ______
NET ASSETS ................................................................ $439,192,252
=======
REPRESENTED BY:
Paid-in capital......................................................... $428,345,451
Accumulated undistributed investment income-net......................... 3,897,079
Accumulated net realized capital losses and distributions in excess of
net realized gain on investments-Note 1(c)............................ (15,128,520)
Accumulated net unrealized appreciation on investments-Note 3........... 22,078,242
_______
NET ASSETS at value applicable to 45,745,449 shares outstanding
(110 million shares of $.001 par value Common Stock authorized)......... $439,192,252
=======
NET ASSET VALUE, per share
($439,192,252 / 45,745,449 shares)...................................... $9.60
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $33,704,637
EXPENSES:
Investment advisory fee-Note 2(a)..................................... $ 2,118,437
Administration fee-Note 2(a).......................................... 1,059,218
Professional fees..................................................... 170,653
Shareholders' reports................................................. 68,841
Registration fees..................................................... 41,188
Directors' fees and expenses-Note 2(b)................................ 40,226
Shareholder servicing costs-Note 2(a)................................. 30,696
Miscellaneous......................................................... 26,059
______
TOTAL EXPENSES.................................................... 3,555,318
______
INVESTMENT INCOME-NET............................................. 30,149,319
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized (loss) on investments-Note 3............................... $ (9,312,230)
Net unrealized appreciation on investments.............................. 50,574,314
______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 41,262,084
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $71,411,403
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30,
________________________________
1994 1995
_______ _______
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 29,631,659 $ 30,149,319
Net realized gain (loss) on investments................................. 85,181 (9,312,230)
Net unrealized appreciation (depreciation) on investments for the year.. (53,258,758) 50,574,314
_______ _______
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... (23,541,918) 71,411,403
_______ _______
DIVIDENDS TO SHAREHOLDERS:
From investment income-net.............................................. (30,426,060) (29,353,820)
In excess of net realized gain on investments........................... (2,991,298) __
_______ _______
TOTAL DIVIDENDS....................................................... (33,417,358) (29,353,820)
_______ _______
CAPITAL STOCK TRANSACTIONS;
Dividends reinvested-Note 1(c).......................................... 5,584,002 819,049
_______ _______
TOTAL INCREASE (DECREASE) IN NET ASSETS............................... (51,375,274) 42,876,632
NET ASSETS:
Beginning of year....................................................... 447,690,894 396,315,620
_______ _______
End of year (including undistributed investment income-net:
$3,101,580 in 1994 and $3,897,079 in 1995)............................ $396,315,620 $439,192,252
======= =======
SHARES SHARES
_______ _______
CAPITAL SHARE TRANSACTIONS;
INCREASE IN SHARES OUTSTANDING AS A RESULT OF DIVIDENDS REINVESTED...... 576,387 90,204
======= =======
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: 1991 1992 1993 1994 1995
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 9.44 $ 9.61 $ 9.78 $ 9.93 $ 8.68
____ ____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net........................ .69 .70 .70 .65 .66
Net realized and unrealized gain (loss)
on investments............................. .19 .18 .17 (1.16) .90
____ ____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS........... .88 .88 .87 (.51) 1.56
____ ____ ____ ____ ____
DISTRIBUTIONS:
Dividends from investment income-net......... (.71) (.71) (.68) (.67) (.64)
Dividends from net realized gain on investments _ _ (.04) _ _
Dividends in excess of net realized gain
on investments............................. _ _ _ (.07) _
____ ____ ____ ____ ____
TOTAL DISTRIBUTIONS........................ (.71) (.71) (.72) (.74) (.64)
____ ____ ____ ____ ____
Net asset value, end of year................. $ 9.61 $ 9.78 $ 9.93 $ 8.68 $ 9.60
==== ==== ==== ==== ====
Market value, end of year.................... $ 9 9\8 $ 10 1\4 $ 10 1\4 $ 8 5\8 $ 9 1\4
____ ____ ____ ____ ____
____ ____ ____ ____ ____
TOTAL INVESTMENT RETURN*......................... 12.02% 11.65% 7.37% (8.97%) 15.12%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .88% .84% .85% .86% .84%
Ratio of net investment income to average net assets 7.27% 7.16% 7.05% 6.94% 7.12%
Portfolio Turnover Rate...................... 22.41% 8.58% 13.87% 10.96% 13.19%
Net Assets, end of year (000's Omitted)...... $408,314 $428,824 $447,691 $396,316 $439,192
* 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 ("Dreyfus") serves as the Fund's investment adviser and
administrator. Prior to November 1, 1995, The Boston Company Advisors, Inc.
served as the Fund's administrator. Boston Safe Deposit and Trust Company
("Custodian") acts as the Fund's custodian. The Custodian is an indirect
wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). Dreyfus is a
direct subsidiary of Mellon Bank, N.A. Effective November 1, 1995, The
Shareholder Services Group, Inc. changed its name to First Data Investor
Services Group, Inc., which is a subsidiary of First Data Corporation ("FDC")
and serves as the Fund's transfer agent, dividend-paying agent, registrar and
plan agent.
(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.
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 November 29, 1995, the Board of Directors declared a cash dividend of
$.052 per share from investment income-net, payable on December 28, 1995 to
shareholders of record as of the close of business on December 13, 1995.
<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 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, 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
August 31, 1995............... 8,328 0.18 7,411 0.16 (1,648) (0.03) 5,763 0.13
November 30, 1995.............. 8,292 0.18 7,435 0.16 7,744 0.17 15,179 0.33
____ ____ ___ ___ _____ ____ _____ ___
Total...................... $33,705 $ 0.74 $30,149 $ 0.66 $ 41,262 $ 0.90 $ 71,411 $ 1.56
==== ==== ==== ==== ==== ==== ==== ====
</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
$15,129,000 available for Federal income tax purposes to be applied against
future net securities profits realized subsequent to November 30, 1995. If
not applied, $5,816,000 of the carryover expires in fiscal 2002 and
$9,313,000 expires in fiscal 2003.
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 Dreyfus, 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 Dreyfus, is payable monthly based on an annual
rate of .25 of 1% of the average weekly value of the Fund's net assets.
Prior to November 1, 1995, the Fund paid The Boston Company advisors an
administration fee of $969,700. From November 1, 1995 through November 30,
1995, the Fund paid Dreyfus an administration fee of $89,518.
(B) Prior to February 1, 1995, certain officers of the Fund were
"affiliated persons", as defined in the Act, of Dreyfus and/or Dreyfus
Service Corporation.
Each director who is not an "affiliated person", as defined in the Act,
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.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the year ended November 30, 1995
amounted to $54,579,340 and $60,590,019, respectively.
At November 30, 1995, accumulated net unrealized appreciation on
investments was $22,078,242, consisting of $33,450,063 gross unrealized
appreciation and $11,371,821 gross unrealized depreciation.
At November 30, 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.
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, 1995, 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, 1995 by correspondence with the custodian
and brokers. 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, 1995,
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 and Young LLP signature logo]
New York, New York
January 11, 1996
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 First Data
Investor Services Group, Inc., as Plan agent (the "Agent"), in additional
shares of the Fund's Common Stock at the lower of the prevailing market price
or net asset value (but not less than 95% of market value at the time of
valuation) unless such shareholder elects to receive cash as provided below.
If market price is equal to or exceeds net asset value, shares will be issued
at net asset value. If net asset value exceeds market price or if a dividend
or other distribution payable only in cash is declared, the Agent, as agent
for the Plan participants, will buy shares of the Fund's Common Stock in the
open market. A Plan participant is not relieved of any income tax that may be
payable on such dividends or distributions.
A Common Shareholder who owns Fund shares registered in the name of his
broker/dealer or other nominee (i.e., in "street name") may not participate
in the Plan, but may elect to have cash dividends and distributions
reinvested by his broker/dealer or other nominee in additional shares of the
Fund if such service is provided by the broker/dealer or other nominee;
otherwise such dividends and distributions will be treated like any other
cash dividend or distribution.
A Common Shareholder who has Fund shares registered in his name may elect
to withdraw from the Plan at any time for a $5.00 fee and thereby elect to
receive cash in lieu of shares of the Fund. Changes in elections must be by
direct mail to First Data Investor 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.
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
DIVIDEND REINVESTMENT PLAN (UNAUDITED) (CONTINUED)
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.
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended
November 30, 1995 as "exempt-interest dividends" (not generally subject to
regular Federal income tax).
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 1995 calendar year
on Form 1099-DIV which will be mailed by January 31, 1996.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
PROXY RESULTS (UNAUDITED)
During the fiscal year ended November 30, 1995, stockholders voted on the
following proposals presented at the annual stockholders' meeting held on
March 31, 1995. The description of each proposal and the number of shares
voted are as follows:
SHARES
________________________________
FOR AUTHORITY WITHHELD
___________ ____________
<S> <C> <C>
1.TO ELECT ONE CLASS I AND TWO CLASS II DIRECTORS:*
CLASS I
Joseph S. DiMartino......................................... 39,000,116.791 645,493.288
CLASS II
Ehud Houminer............................................... 38,997,469.942 648,140.137
Robin A. Smith.............................................. 39,047,937.154 597,672.925
</TABLE>
<TABLE>
<CAPTION>
SHARES
____________________________________________________________
FOR AGAINST ABSTAINED
__________ ________ ________
<S> <C> <C> <C>
2.TO RATIFY THE SELECTION OF ERNST & YOUNG LLP
AS INDEPENDENT AUDITORS OF THE FUND................ 38,663,149.725 200,768.843 781,690.511
* Terms of these Class I and Class II Directors expire in 1997 and 1998,
respectively. Richard C. Leone and Hodding Carter, III,
also are Class I Directors whose terms expire in 1997, and David W. Burke,
Hans C. Mautner and John E. Zuccotti are Class III Directors whose terms
expire in 1996.
</TABLE>
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
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
AND ADMINISTRATOR
The Dreyfus Corporation
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Stroock & Stroock & Lavan
TRANSFER AGENT,
DIVIDEND PAYING AGENT,
REGISTRAR AND PLAN AGENT
First Data Investor 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,
Money and Business section under the
heading "Closed-End Bond Funds-National Municipal Bond Fund"
every Sunday.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that the Fund may purchase shares of its
common stock in the open market when it can do so at prices below the then
current net asset value per share.
(Dreyfus Lion "d" Logo)
DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER AND ADMINISTRATOR
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02108
TRANSFER AGENT,
DIVIDEND-PAYING AGENT,
REGISTRAR AND PLAN AGENT
First Data Investor Services Group, Inc.
One Exchange Place
Boston, MA 02109
Printed in U.S.A. 852AR9511
(Dreyfus Logo)
Strategic
Municipal
Bond Fund, Inc.
Annual Report
November 30, 1995
