Dreyfus
Strategic Municipal
Bond Fund, Inc.
ANNUAL REPORT November 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Selected Information
7 Statement of Investments
16 Statement of Assets and Liabilities
17 Statement of Operations
18 Statement of Changes in Net Assets
19 Financial Highlights
20 Notes to Financial Statements
25 Report of Independent Auditors
26 Important Tax Information
27 Dividend Reinvestment Plan
29 Proxy Results
33 Officers and Directors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Strategic Municipal Bond Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Strategic Municipal
Bond Fund, Inc., covering the 12-month period from December 1, 1998 through
November 30, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, Paul Disdier.
The past year has been challenging for municipal bond investors. Soon after 1999
began, evidence emerged that the U.S. economy was growing more strongly than
many analysts expected. Concerns that inflationary pressures might re-emerge in
a strong economy caused the Federal Reserve Board to raise short-term interest
rates three times during the summer and fall of 1999. Higher interest rates
generally led to erosion of municipal bond prices, especially toward the end of
the reporting period.
Municipal bonds were also generally adversely affected by supply-and-demand
considerations. Recently, however, these technical influences have caused the
yields of tax-exempt bonds to rise to very attractive levels compared to the
after-tax yields of taxable bonds of comparable maturity and credit quality.
This is especially true for investors in the higher federal income tax brackets
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Strategic Municipal Bond Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
December 15, 1999
DISCUSSION OF FUND PERFORMANCE
Paul Disdier, Portfolio Manager
How did Dreyfus Strategic Municipal Bond Fund, Inc. perform?
The fund provided a total return of -3.90 for the 12-month reporting period
ended November 30, 1999.(1) The fund produced income dividends of $0.5819 per
share, which is equal to a distribution rate of 7.57% over the same period.(2)
We attribute the fund' s absolute returns over the past year to a declining
municipal bond market and a rising interest-rate environment. In addition,
performance was affected by our security selection strategy, which emphasizes
federally tax-exempt income. In rising interest-rate environments such as the
one that prevailed throughout most of the reporting period, prices of high
income-producing bonds that are the core of the fund's holdings tend to decline
less than bonds with lower income yields. Conversely, when interest rates
decline, prices of high income bonds tend to appreciate less than their lower
yielding counterparts.
What is the fund's investment approach?
The fund seeks high current income exempt from federal income taxes by investing
in long-term, tax-exempt municipal bonds.
In so doing, we look for bonds that we believe can provide high current income.
We strive to find such opportunities through analyses of individual bonds'
structures. Within the context of our bond structure analysis, we pay
particularly close attention to each bond' s maturity and early redemption
features.
Over time, many of the fund's older higher yielding bonds have matured or were
redeemed by their issuers. We have generally attempted to replace those bonds
with new securities that offered then current higher than average income
payments. We have also sought to upgrade the fund with newly issued bonds that,
in our opinion, have better structural or income characteristics than existing
holdings. When such opportunities arise, we usually sell bonds that are close to
redemption or maturity. In The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
addition, we conduct credit analysis of our holdings in an attempt to avoid
potential defaults on interest and principal payments.
What other factors influenced the portfolio's performance?
The portfolio's performance was adversely affected by rising interest rates and
a fall-off in demand from institutional investors over the past year.
When the reporting period began on December 1, 1998, investors generally were
concerned about the potentially adverse economic effects of the global currency
and credit crisis. In response, the Federal Reserve Board reduced short-term
interest rates in the fall of 1998 in an attempt to stimulate global economic
growth. Its strategy apparently was effective, because overseas economies began
to recover early in 1999, and the growth of the U.S. economy was stronger than
most analysts expected. Municipal bond yields and prices stabilized in this
environment.
In the second and third quarters of 1999, however, strong economic growth in
both domestic and overseas markets raised concerns among fixed-income investors
that inflationary pressures might re-emerge. In response, the Federal Reserve
Board increased short-term interest rates three times during the summer and fall
of 1999 in an attempt to forestall inflationary pressures. This change in
monetary policy caused prices of most bonds to fall.
Municipal bond prices fell faster than prices of taxable U.S. Treasury
securities, however, because of supply-and-demand influences. For a variety of
reasons, institutional investors such as insurance companies and mutual funds
participated less in the tax-exempt market over the past year, which reduced
overall demand and drove municipal bond yields higher. As a result, at the end
of the reporting period, we believe that municipal bonds were offering
tax-exempt yields that compared very favorably with taxable yields after
adjusting for taxes.
What is the portfolio's current strategy?
Because some of our long-term holdings have been redeemed early by their issuers
in a lower interest-rate environment, the fund has experienced some erosion of
its dividend and income stream. We recently
took steps designed to help support the fund's income stream and improve the
portfolio' s credit quality and call protection through the issuance of auction
preferred shares, which were offered to the public in September 1999.
The proceeds from the sale of preferred shares have been invested in additional
municipal bonds as, in our view, attractive investment opportunities arose.
Generally, the rate at which preferred shareholders are paid is determined
periodically through an auction process. Any remaining income (after expenses)
from the portfolio' s municipal bonds purchased with the auction preferred
proceeds and otherwise would be available to the fund, including for any common
stock dividends as determined by the fund's board of directors.
Otherwise, we have generally attempted to upgrade the portfolio whenever
opportunities to acquire bonds that meet our income and quality criteria have
presented themselves. For example, to replace existing holdings that have been
called over the past year, we have tried to capture higher prevailing yields
from newly issued securities as interest rates have risen. This strategy is
designed to seek relatively high current yields, and to potentially enable the
fund to participate in capital appreciation if interest rates fall from their
present levels.
December 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
BASED UPON NET ASSET VALUE PER SHARE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) DISTRIBUTION RATE PER SHARE IS BASED UPON DIVIDENDS PER SHARE PAID FROM NET
INVESTMENT INCOME DURING THE PERIOD, DIVIDED BY THE NET ASSET VALUE PER SHARE AT
THE END OF THE PERIOD.
The Fund
SELECTED INFORMATION
November 30, 1999 (Unaudited)
Market Price per share November 30, 1999 $711_16
Common Shares Outstanding November 30, 1999 47,783,925
New York Stock Exchange Ticker Symbol DSM
<TABLE>
<CAPTION>
MARKET PRICE (NEW YORK STOCK EXCHANGE)
Fiscal Year Ended November 30,1999
-----------------------------------------------------------------
QUARTER QUARTER QUARTER QUARTER
ENDED ENDED ENDED ENDED
FEBRUARY 28, 1999 MAY 31, 1999 AUGUST 31, 1999 NOVEMBER 30, 1999
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
High $10 1_4 $9 11_16 $9 1_16 $8 1_8
Low 8 13_16 9 8 1_16 7 1_2
Close 9 1_2 9 1_8 8 1_8 7 11_16
PERCENTAGE GAIN (LOSS) based on change in Market Price*
</TABLE>
<TABLE>
<CAPTION>
November 22, 1989 (commencement of operations)
<S> <C> <C>
through November 30, 1999 54.02%
December 1, 1989 through November 30, 1999 52.12
December 1, 1994 through November 30, 1999 24.60
December 1, 1998 through November 30, 1999 (19.36)
March 1, 1999 through November 30, 1999 (14.92)
June 1, 1999 through November 30, 1999 (12.82)
September 1, 1999 through November 30, 1999 (3.69)
NET ASSET VALUE PER SHARE
November 22, 1989 (commencement of operations) $9.32
November 30, 1998 9.52
February 28, 1999 9.44
May 31, 1999 9.28
August 31, 1999 8.91
November 30, 1999 8.56
PERCENTAGE GAIN (LOSS) based on change in Net Asset Value*
November 22, 1989 (commencement of operations)
through November 30, 1999 84.02%
December 1, 1989 through November 30, 1999 84.02
December 1, 1994 through November 30, 1999 37.86
December 1, 1998 through November 30, 1999 ( 3.90)
March 1, 1999 through November 30, 1999 ( 4.66)
June 1, 1999 through November 30, 1999 ( 4.55)
September 1, 1999 through November 30, 1999 ( 2.21)
*WITH DIVIDENDS REINVESTED.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
November 30, 1999
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.7% Amount ($) Value ($)
- ---------------------------------------------------------------------------------0--------------------------------------------
ALABAMA--2.3%
Alabama Industrial Development Authority, SWDR
<S> <C> <C>
(Pine City Fiber Co.) 6.45%, 12/1/2023 3,000,000 2,897,190
Jefferson County, Sewer Revenue
5.75%, 2/1/2038 (Insured; FGIC) 11,000,000 10,517,430
ALASKA--4.4%
Alaska Housing Finance Corporation,
6.05%, 6/1/2039 (Insured; MBIA) 12,185,000 12,010,267
Valdez Marine Terminal, Revenue:
(BP Pipeline, Inc. Project) 5.50%, 10/1/2028 7,750,000 7,020,880
(Mobile Alaska Pipeline) 5.75%, 11/1/2028 7,500,000 7,044,525
ARIZONA--1.2%
Apache County Industrial Development Authority, PCR
(Tucson Electric Power Co. Project) 5.85%, 3/1/2028 8,000,000 7,000,800
CALIFORNIA--2.1%
California Statewide Communities Development Authority, COP
(The Internext Group) 5.375%, 4/1/2030 5,000,000 4,278,850
Los Angeles Department of Water and Power,
Waterworks Revenue
6.10%, 10/15/2039 (Insured FGIC) 8,000,000 8,116,800
COLORADO--.7%
Colorado Health Facilities Authority, Revenue
(American Housing Foundation 1, Inc. Project)
10.25%, 12/1/2020 5,600,000 (a) 3,880,632
CONNECTICUT--1.4%
Connecticut Development Authority, PCR
(Connecticut Light and Power) 5.95%, 9/1/2028 5,000,000 4,494,650
Connecticut Housing Finance Authority,
Housing Mortgage Finance Program 6%, 11/15/2027 4,000,000 3,962,400
DELAWARE--1.0%
Delaware Health Facilities Authority, Revenue
(Beebe Medical Center Project) 6.80%, 6/1/2024 5,905,000 6,125,729
DISTRICT OF COLUMBIA--1.2%
Metropolitan Washington Airports Authority,
Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011 7,220,000 7,267,002
FLORIDA--6.5%
Florida Board of Education, Capital Outlay 8.651%, 6/1/2019 15,000,000 (c,d) 16,152,000
Florida Housing Finance Corporation, Housing Revenue
(Seminole Ridge Apartments) 6%, 4/1/2041 (Insured; GNMA) 6,415,000 6,224,025
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------0------------------------------------------
FLORIDA (CONTINUED)
Lee County Industrial Development Authority,
Health Care Facilities Revenue
(Shell Point Village Project) 5.50%, 11/15/2029 1,500,000 1,246,095
Orange County Health Facilities Authority, Revenue
(Orlando Regional Healthcare System) 6%, 10/1/2026 3,500,000 3,388,700
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project)
6.70%, 2/15/2015 5,000,000 (a) 3,062,000
(Osceola Power Limited Partnership Project)
6.95%, 1/1/2022 5,000,000 (a) 3,012,000
South Lake County Hospital District, Revenue
(South Lake Hospital, Inc.) 5.80%, 10/1/2034 6,000,000 5,501,880
GEORGIA--2.7%
Burke County Development Authority, PCR
(Georgia Power Co. Plant Vogtle) 5.45%, 5/1/2034 5,000,000 4,426,450
Private Colleges and Universities Facilities Authority, Revenue
(Clark Atlanta University Project)
8.25%, 1/1/2015 (Prerefunded 1/1/2003) 9,950,000 (b) 11,402,402
ILLINOIS--6.6%
Chicago-O'Hare International Airport, Special Facility Revenue
(Delta Airlines Project) 6.45%, 5/1/2018 2,790,000 2,792,762
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facilities
Acquisition Program):
8.50%, 9/1/2010 1,710,000 1,763,335
8.50%, 9/1/2010 (Prerefunded 9/1/2000) 3,290,000 (b) 3,456,342
6.05%, 7/1/2019 5,290,000 4,961,332
HR (Adventist Health Systems / Sunbelt) 5.50%, 11/15/2029 4,175,000 3,528,585
Illinois Health Facilities Authority, Revenue:
(OSF Healthcare Systems) 6.25%, 11/15/2029 12,000,000 11,706,240
(Ravenswood Hospital Medical Center Project)
8.25%, 11/1/2010 10,499,999 10,734,149
INDIANA--1.8%
Burns Harbor Industrial Solid Waste Disposal Facilities, Revenue
(Bethlehem Steel Corp. Project) 8%, 4/1/2024 6,000,000 6,294,060
Indianapolis Airport Authority, Revenue 8.697%, 11/15/2031 4,375,000 (c,d) 4,173,400
KENTUCKY--1.5%
Kenton County Airport Board, Airport Revenue
(Special Facilities--Delta Airlines Project) 6.125%, 2/1/2022 5,000,000 4,778,050
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------0-----------------------------------------------
KENTUCKY (CONTINUED)
Morgantown Health Care Facility, Revenue
(Southern Health Care System Project)
10.50%, 3/1/2020 (Prerefunded 3/1/2000) 4,045,000 (b) 4,188,476
LOUISIANA--6.3%
Lake Charles Harbor and Terminal,
District Port Facilities Revenue
(Trunkline LNG Co. Project) 7.75%, 8/15/2022 15,000,000 16,388,550
New Orleans. Public Improvement
5.875%, 11/1/2029 (Insured; FSA) 9,890,000 9,631,475
Parish of De Soto, Environmental Improvement Revenue
(International Paper Co. Project) 6.55%, 4/1/2019 2,900,000 2,934,191
West Feliciana Parish, PCR:
(Entergy Gulf States) 6.60%, 9/1/2028 4,000,000 3,846,880
(Gulf States) 5.80%, 12/1/2015 5,000,000 4,562,300
MARYLAND--1.4%
Baltimore County, PCR (Bethlehem Steel Corp. Project)
7.50%, 6/1/2015 5,000,000 5,170,900
Maryland Industrial Development Financing Authority, EDR
(Medical Waste Associates Limited Partnership)
8.75%, 11/15/2010 4,135,000 (a) 3,245,975
MASSACHUSETTS--2.7%
Massachusetts Health and
Educational Facilities Authority, Revenue
(Beth Israel Hospital) 8.491%, 7/1/2025 (Insured; AMBAC) 3,250,000 (c) 3,172,813
Massachusetts Industrial Finance Agency, Revenue
(Sturdy Memorial Hospital)
7.90%, 6/1/2009 4,180,000 4,275,471
Massachusetts Port Authority, Special Project Revenue
(Harborside Hyatt) 10%, 3/1/2026 7,000,000 7,428,400
Pittsfield, SWDR (Vicon Recovery Associates Project)
7.95%, 11/1/2004 1,340,000 1,360,046
MICHIGAN--1.7%
Michigan Hospital Finance Authority, HR
(Genesys Health System Obligated Group)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (b) 5,918,700
Michigan Strategic Fund, SWDR
(Genesee Power Station Project) 7.50%, 1/1/2021 4,000,000 4,174,480
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ----------------------------------------------------------------------------------------------------------------------------------
MINNESOTA--.7%
Minnesota Housing Finance Agency, Single Family Mortgage
5.65%, 7/1/2031 4,800,000 4,339,824
MISSISSIPPI--1.2%
Mississippi Business Finance Corporation, PCR
(Systems Energy Resources, Inc. Project) 5.875%, 4/1/2022 8,000,000 7,096,720
MISSOURI--1.2%
Jackson County Industrial Development Authority,
Health Facilities Revenue
(Carondelet Health Corp. Project) 9%, 7/1/2020 6,735,000 6,880,139
MONTANA--.6%
Montana Housing Board, Single Family Mortgage
5.75%, 6/1/2030 3,680,000 3,463,947
NEBRASKA--.8%
Nebraska Investment Finance Authority, SFHR
5.70%, 9/1/2029 5,000,000 4,700,400
NEW HAMPSHIRE--.9%
New Hampshire Business Finance Authority, PCR
(Public Service Co.) 6%, 5/1/2021 6,000,000 5,462,220
NEW JERSEY--1.9%
New Jersey Economic Development Authority:
First Mortgage Revenue
(The Evergreens) 9.25%, 10/1/2022 5,000,000 5,701,450
Special Facilities Revenue
(Continental Airlines, Inc. Project) 6.40%, 9/15/2023 7,000,000 6,747,020
NEW YORK--4.0%
Nassau Health Care Corporation, Health System Revenue
5.75%, 8/1/2029 (Insured; FSA) 6,500,000 6,288,555
New York City 8%, 8/15/2018 (Prerefunded 8/15/2001) 1,485,000 (b) 1,596,538
New York City Industrial Development Agency,
Civic Facility Revenue
(YMCA of Greater New York Project)
8%, 8/1/2016 (Prerefunded 8/1/2001) 3,000,000 (b) 3,223,740
New York City Municipal Water Finance Authority,
Water & Sewer Systems Revenue
5.75%, 6/15/2031 (Insured; FGIC) 8,125,000 7,847,531
New York State Dormitory Authority, Revenue,
Judicial Facility Lease (Suffolk County) 9.50%, 4/15/2014 605,000 699,053
Tsasc, Inc. 6.375%, 7/15/2039 4,500,000 4,414,230
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------0------------------------------------------------
NORTH CAROLINA--1.4%
Halifax County Industrial Facilities and
Pollution Control Financing
Authority, SWDR (Champion International Project)
8.15%, 11/1/2019 1,000,000 1,020,000
Haywood County Industrial Facilities and
Pollution Control Financing
Authority, SWDR (Champion International Project)
8.10%, 11/1/2009 4,820,000 4,916,400
North Carolina Eastern Municipal Power Agency,
Power Systems Revenue 6.70%, 1/1/2019 2,500,000 2,521,200
OHIO--1.6%
Cuyahoga County, HR (Metrohealth Systems Project)
6.15%, 2/15/2029 10,000,000 9,741,100
OKLAHOMA--1.5%
Oklahoma Development Finance Authority, Revenue
(St. John Health System) 6%, 2/15/2029 9,000,000 8,955,990
PENNSYLVANIA--4.9%
Allegheny County Port Authority,
Special Transportation Revenue
6.125%, 3/1/2029 (Insured; MBIA) 5,000,000 5,060,150
Beaver County Industrial Development Authority, PCR
(Cleveland Electric Project) 7.625%, 5/1/2025 8,800,000 9,453,400
Montgomery County Higher Education and
Health Authority, Revenue:
(Northwestern Corp.) 8.50%, 6/1/2016 4,390,000 4,574,995
(Retirement Community-G.D.L. Farms)
9.50%, 1/1/2020 (Prerefunded 1/1/2000) 5,500,000 (b) 5,634,365
Pennsylvania Economic Development Financing Authority, RRR
(Northhampton Generating Project) 6.60%, 1/1/2019 4,200,000 4,199,664
Pennsylvania Housing Finance Agency,
Multi-Family Development Revenue
8.25%, 12/15/2019 295,000 304,307
RHODE ISLAND--1.0%
Rhode Island Health & Educational Building Corporation
Higher Educational Facilities (University of Rhode Island)
5.875%, 9/15/2029 (Insured; MBIA) 5,910,000 5,739,615
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------0-------------------------------------------------
SOUTH CAROLINA--1.2%
Piedmont Municipal Power Agency, Electric Revenue
5.25%, 1/1/2021 3,000,000 2,513,820
Medical Facilities, Hospital Facilities Revenue 6%, 7/1/2019 5,000,000 4,802,400
TENNESSEE--3.2%
Maury County Health and Educational Facilities Board, Health
Care Facilities Revenue, (Southern Health Care-Heritage)
10.50%, 3/1/2020 (Prerefunded 3/1/2000) 5,950,000 (b) 6,161,047
Memphis Center City Revenue Finance Corp.
Sports Facility Revenue
(Memphis Redbirds) 6.50%, 9/1/2028 6,000,000 5,652,420
Tennessee Housing Development Agency
(Homeowner Program) 6%, 1/1/2028 7,160,000 7,073,364
TEXAS--8.0%
Houston Airport System, Special Facilities Revenue,
Airport Improvement (Continental Airlines)
6.125%, 7/15/2017 2,875,000 2,686,946
Mesquite Health Facilities Development Corp., Revenue
(Christian Care Centers, Inc.)
9.375%, 3/1/2020 (Prerefunded 3/1/2000) 11,540,000 (b) 12,031,489
Springhill Courtland Heights Public Facility Corp. MFHR
5.85%, 12/1/2028 6,030,000 5,506,717
Texas (Veterans Housing Assistance Program)
6.10%, 6/1/2031 8,510,000 8,358,097
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue 9.46%, 7/2/2024 6,850,000 (c) 7,492,188
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation Project):
8.625%, 9/1/2001 650,000 680,973
8.875%, 9/1/2011 (Prerefunded 9/1/2001) 5,100,000 (a,c) 5,565,426
Tyler Health Facilities Development Corp., HR
(East Texas Medical Center Regional
Health Care System Project)
6.75%, 11/1/2025 5,850,000 5,032,521
UTAH--2.9%
Carbon County, SWDR (Sunnyside Cogeneration):
7.10%, 8/15/2023 5,070,000 5,054,841
Zero Coupon 8/15/2024 1,545,000 256,254
Tooele County, Hazardous Waste Treatment Revenue
(Union Pacific Project)
5.70%, 11/1/2026 5,000,000 4,411,000
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ---------------------------------------------------------------------------------0-------------------------------------------------
UTAH (CONTINUED)
Utah Housing Finance Agency, Single Family Mortgage
6%, 1/1/2031 7,810,000 7,590,070
VIRGINIA--4.1%
Fairfax County Water Authority, Revenue 7.579%, 4/1/2029 4,000,000 (c,d) 3,961,720
Henrico County Industrial Development Authority, Revenue
(Bon Secours Health Care System Project)
7.832%, 8/23/2027 7,500,000 (c) 7,678,125
Virginia Housing Development Authority, MFHR
7.05%, 5/1/2018 12,000,000 12,645,360
WASHINGTON--1.6%
Washington Higher Education Facilities Authority, Revenue
(Whitman College Project) 5.875%, 10/1/2029 10,000,000 9,527,000
WISCONSIN--5.6%
Wisconsin Health and Educational Facilities Authority, Revenue
(Aurora Health Care, Inc.) 5.60%, 2/15/2029 10,800,000 9,169,200
Wisconsin Housing and Economic Development Authority
Homeownership Revenue:
8.449%, 7/1/2025 10,600,000 (c,d) 10,964,852
6.25%, 9/1/2027 13,300,000 13,437,921
WYOMING--1.6%
Sweetwater County, SWDR (FMC Corp. Project):
7%, 6/1/2024 2,200,000 2,251,744
6.90%, 9/1/2024 2,000,000 2,037,440
Wyoming Student Loan Corporation, Student Loan Revenue
6.25%, 6/1/2029 5,000,000 4,989,950
U.S. RELATED--2.3%
Puerto Rico;
Puerto Rico Commonwealth Highway and
Transportation Authority
Transportation Revenue 5%, 7/1/2038 (Insured; MBIA) 16,000,000 13,699,840
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $601,425,773) 581,334,897
SHORT-TERM MUNICIPAL INVESTMENTS--.7%
- -----------------------------------------------------------------------------------------------------------------------------------
ALABAMA--.1%
Mcintosh Environmental Improvement Revenue, VRDN
(CIBC Specialist) 3.85% 500,000 (e) 500,000
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
DELAWARE--.1%
Delaware Economic Development Authority, Revenue, VRDN
(Delmarva Power and Light Company Project) 3.85% 300,000 (e) 300,000
MICHIGAN--.4%
Midland County Economic Development Corporation
Economic Development Limited Obligation Revenue, VRDN
(Dow Chemical Company Project) 3.90% 3,400,000 (e) 3,400,000
TEXAS--.1%
Brazo River Authority, PCR, VRDN
(Texas Utilities Electric Company) 3.90% (Insured; MBIA) 100,000 (e) 100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $4,300,000) 4,300,000
TOTAL INVESTMENTS (cost $605,725,773) 98.4% 585,634,897
CASH AND RECEIVABLES (NET) 1.6% 9,323,593
NET ASSETS 100.0% 594,958,490
</TABLE>
Statement of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FGIC Financial Guaranty
Insurance Company
FSA Financial Security Assurance
GNMA Government National
Mortgage Association
HR Hospital Revenue
IDR Industrial Development Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFHR Single Family Housing Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 24.4
AA Aa AA 21.6
A A A 13.9
BBB Baa BBB 14.8
BB Ba BB 5.4
B B B 2.1
F-1+, F-1 VMIG1, MIG1, P1 SP1, A1 .7
Not Rated (f) Not Rated (f) Not Rated (f) 17.1
100.0
</TABLE>
(A) NON-INCOME PRODUCING SECURITY, INTEREST PAYMENTS IN DEFAULT.
(B) 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.
(C) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(D) SECURITIES 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, 1999,
THESE SECURITIES AMOUNTED TO $48,951,812 OR 8.2% OF NET ASSETS.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
(G) AT NOVEMBER 30, 1999, THE FUND HAD $158,202,752 (26.6 % OF NET ASSETS)
INVESTED IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND INTEREST IS DEPENDENT UPON
REVENUES GENERATED FROM HEALTH CARE PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 605,725,773 585,634,897
Interest receivable 10,484,327
Prepaid expenses 12,449
596,131,673
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 368,312
Cash overdraft due to Custodian 243,176
Dividends payable to preferred shareholders 218,099
Accrued expenses and other liabilities 343,596
1,173,183
- -------------------------------------------------------------------------------
NET ASSETS ($) 594,958,490
- -------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Auction Preferred Stock, Series A, B and C, par value $.001 per share
(7,440 total shares issued and outstanding at
$25,000 per share liquidation preference)--Note 1 186,000,000
Common Stock, par value, $.001 per share (47,783,925 shares
issued and outstanding) 47,784
Paid-in capital 445,779,246
Accumulated undistributed investment income--net 1,867,769
Accumulated net realized gain (loss) on investments (18,645,433)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (20,090,876)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 408,958,490
NET ASSETS ($) 594,958,490
- -------------------------------------------------------------------------------
SHARES OUTSTANDING
(110 million shares of $.001 par value Common Stock authorized) 47,783,925
NET ASSET VALUE PER COMMON STOCK, offering and redemption price per share ($)
8.56
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended November 30, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
Interest Income 32,787,710
EXPENSES:
Management fee--Note 3(a) 2,351,697
Administration fee-Note 3(a) 1,175,848
Commission fees--Note 1 88,244
Professional fees 85,970
Shareholders' reports 80,497
Directors' fees and expenses--Note 3(b) 51,322
Registration fees 42,334
Shareholder servicing costs 34,805
Custodian fees 2,616
Miscellaneous 21,175
TOTAL EXPENSES 3,934,508
INVESTMENT INCOME--NET 28,853,202
- -------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (4,834,127)
Net unrealized appreciation (depreciation) on investments (39,136,429)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (43,970,556)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (15,117,354)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended November 30,
---------------------------------
1999 1998
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 28,853,202 28,262,772
Net realized gain (loss) on investments (4,834,127) 306,745
Net unrealized appreciation (depreciation)
on investments (39,136,429) 2,076,465
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (15,117,354) 30,645,982
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net
Common Stock (27,789,863) (29,319,019)
Preferred Stock (1,147,008) --
TOTAL DIVIDENDS (28,936,871) (29,319,019)
- -------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Proceeds from issuance of Preferred Stock 186,000,000 --
Dividends reinvested--Note 1(c) 1,179,838 6,413,712
Offering costs charged to paid-in capital resulting
from issuance of Preferred Stock (2,060,000) --
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS 185,119,838 6,413,712
TOTAL INCREASE (DECREASE) IN NET ASSETS 141,065,613 7,740,675
- -------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 453,892,877 446,152,202
END OF PERIOD 594,958,490 453,892,877
Undistributed investment income--net 1,867,769 1,951,438
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (COMMON SHARES):
INCREASE IN COMMON SHARES OUTSTANDING AS A
RESULT OF DIVIDENDS REINVESTED 124,560 664,058
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements and market price data for the fund's shares.
Year Ended November 30,
-------------------------------------------------
1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period 9.52 9.49 9.54 9.60 8.68
Investment Operations:
Investment income--net .58 .60 .62 .64 .66
Net realized and unrealized
gain (loss) on investments (.90) .05 (.01) (.08) .90
Total from Investment Operations (.32) .65 .61 .56 1.56
Distributions:
Dividends from investment income--net:
Common Stock (.58) (.62) (.66) (.62) (.64)
Preferred Stock (.02) -- -- -- --
Total Distributions (.60) (.62) (.66) (.62) (.64)
Capital Stock transactions--net effect
of Preferred Stock offering (.04) -- -- -- --
Net asset value, end of period 8.56 9.52 9.49 9.54 9.60
Market value, end of period 7 11_16 10 3_16 10 5_8 9 3_4 9 1_4
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(A) (19.36) 2.23 16.60 12.61 15.12
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets
applicable to Common Stock .90(b) .81 .81 .82 .84
Ratio of net investment income to average
net assets applicable to Common Stock 6.63(b) 6.26 6.55 6.82 7.12
Portfolio Turnover Rate 32.58 6.33 2.95 13.47 13.19
Net Assets, net of Preferred Stock,
end of period ($ x 1,000) 408,958 453,893 446,152 440,681 439,192
Preferred Stock outstanding,
end of period ($ x 1,000) 186,000 -- -- -- --
Asset coverage of Preferred Stock,
end of period (%) 320 -- -- -- --
(A) CALCULATED BASED ON MARKET VALUE.
</TABLE>
(B) DOES NOT REFLECT THE EFFECT OF DIVIDENDS TO PREFERRED STOCK SHAREHOLDERS.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Strategic Municipal Bond Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
closed-end management investment company. The fund's investment objective is to
maximize current income exempt from Federal income tax to the extent believed by
the fund's investment adviser to be consistent with the preservation of capital.
The Dreyfus Corporation ("Dreyfus") serves as the fund's investment adviser and
administrator. Dreyfus is a direct subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Financial Corporation ("Mellon"). Boston Safe
Deposit and Trust Company (the "Custodian") acts as the fund's custodian. The
Custodian is a wholly-owned subsidiary of Mellon. First Data Investor Services
Group, Inc. ("FDIS"), a subsidiary of First Data Corporation ("FDC"), serves as
the fund' s transfer agent, dividend-paying agent, registrar and plan agent.
In connection with the offering of Auction Preferred Stock ("APS"), the
Board of Directors on September 22, 1999 reclassified 7,440 shares of unissued
capital stock as APS. The fund issued 2,480 shares of each of Series A, Series B
and Series C APS, with a liquidation preference of $25,000 per share (plus an
amount equal to accumulated but unpaid dividends upon liquidation). The initial
dividend rate on the APS was 3.47% per annum for each series. Subsequent
dividend rates will be determined pursuant to periodic auctions. Banker' s Trust
Company, as Auction Agent, receives a fee from the fund for its services in
connection with such auctions. The fund also compensates broker-dealers
generally at an annual rate of .25% of the purchase price of the shares of APS
placed by the broker-dealer in an auction.
The fund is subject to certain restrictions relating to the APS. Failure to
comply with these restrictions could preclude the fund from declaring any
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of APS at liquidation value.
The holders of the APS, voting as a separate class, have the right to elect at
least two directors. The holders of the APS will vote as a separate class on
certain other matters, as required by law. The fund has designated Robin A.
Pringle and John E. Zuccotti to represent holders of APS on the fund's Board of
Directors.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles and may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(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.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 OF COMMON STOCK (" COMMON SHAREHOLDER(S)"):
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, it is the policy
of the fund not to distribute such gain.
For common 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 30, 1999, the Board of Directors declared a cash dividend to Common
Shareholders of $.0467 per share from investment income-net, payable on December
28, 1999 to Common Shareholders of record as of the close of business on
December 14, 1999.
(D) DIVIDENDS TO APS SHAREHOLDERS: For APS, dividends are currently reset every
28 days. The dividend rates for the period ended November 30, 1999 were 3.47%
for Series A payable on December 14, 1999, 3.45% for Series B payable on
December 16, 1999 and 3.50% for Series C payable on December 20, 1999.
(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 of 1986, as amended, 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 $17,775,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 1999. This
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. If not applied, $4,499,000 of the carryover expires in fiscal 2002,
$9,312,000 expires in fiscal 2003 and $3,964,000 expires in fiscal 2008.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. During the period ended November 30, 1999, the fund did not
borrow under the line of credit.
NOTE 3--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 value of the fund's average weekly net assets. The fund also
has an Administration Agreement with Dreyfus, Custody Agreement with the
Custodian and a Transfer Agency and Registrar Agreement with FDIS. The fund pays
in the aggregate for administration, custody and transfer agency services a
monthly fee based on an annual rate of .25 of 1% of the value of the fund's
average weekly net assets; out-of pocket transfer agency and custody expenses
are paid separately by the fund.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended November 30, 1999, amounted to
$325,985,494 and $153,109,878, respectively.
At November 30, 1999, accumulated net unrealized depreciation on investments was
$20,090,876, consisting of $11,381,194 gross unrealized appreciation and
$31,472,070 gross unrealized depreciation.
At November 30, 1999, 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).
REPORT OF 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, 1999, 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 and financial highlights. Our procedures included verification by
examination of securities held by the custodian as of November 30, 1999 and
confirmation of securities not held by the custodian by correspondence with
others. 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, 1999, 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.
New York, New York
January 5, 2000
The Fund
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby designates all the dividends
paid from investment income-net during the fiscal year ended November 30, 1999
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 and capital gain
distributions paid for the 1999 calendar year on Form 1099-DIV which will be
mailed by January 31, 2000.
DIVIDEND REINVESTMENT PLAN (Unaudited)
Under the fund's Dividend Reinvestment Plan (the "Plan"), a Common Shareholder
who has fund shares registered in his 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 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 Common 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 fund shares
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 First Data Investor Services Group, Inc., Attention: Closed-End Funds,
Post Office Box 8030, Boston, Massachusetts 02266, 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 Common 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
The Fund
DIVIDEND REINVESTMENT PLAN (Unaudited) (CONTINUED)
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.
<TABLE>
<CAPTION>
PROXY RESULTS (Unaudited)
During the fiscal year ended November 30, 1999, shareholders of common stock
voted on the following proposals presented at the annual shareholders' meeting
held on May 14, 1999. The descriptions of each proposal and the number of shares
voted are as follows:
Shares
-------------------------------------
For Authority Withheld
--------------------------------------------
To elect three Class III Directors:((+))
<S> <C> <C>
David W. Burke 36,319,611 554,252
Hans C. Mautner 36,300,901 572,962
John E. Zuccotti 36,281,765 592,098
</TABLE>
<TABLE>
<CAPTION>
Shares
---------------------------------------------------------------------------------
For Against Abstained
---------------------------------------------------------------------------------
To ratify the selection of
Ernst & Young LLP
as independent auditors
<S> <C> <C> <C>
of the fund 36,416,333 127,677 329,852
((+)) THE TERMS OF THESE CLASS III DIRECTORS EXPIRE IN 2002.
The Fund
</TABLE>
NOTES
NOTES
OFFICERS AND DIRECTORS
Dreyfus Strategic Municipal Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino, Chairman
David W. Burke
Hodding Carter, III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Robin A. Pringle*
John E. Zuccotti*
* DESIGNATED DIRECTORS FOR AUCTION PREFERRED STOCK
OFFICERS
President and Treasurer
Marie E. Connolly
Vice President and Secretary
Margaret W. Chambers
Vice President and Assistant Treasurer
John P. Covino
Vice President and Assistant Treasurer
Mary A. Nelson
Vice President and Assistant Treasurer
George A. Rio
Vice President and Assistant Treasurer
Joseph F. Tower
Vice President, Assistant Treasurer
and Assistant Secretary
Frederick C. Dey
Vice President, Assistant Treasurer
and Assistant Secretary
Stephanie Pierce
Vice President and Assistant Secretary
Douglas C. Conroy
Vice President and Assistant Secretary
Karen Jacoppo-Wood
Vice President and Assistant Secretary
Christopher J. Kelly
Vice President and Assistant Secretary
Kathleen K. Morrisey
OFFICERS (CONTINUED)
Vice President and Assistant Secretary
Elba Vasquez
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
Douglas Gaylor
Joseph Irace
Colleen Meehan
Richard J. Moynihan
W. Michael Petty
Jill C. Shaffro
Scott Sprauer
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER
AND ADMINISTRATOR
The Dreyfus Corporation
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Stroock & Stroock & Lavan LLP
TRANSFER AGENT, DIVIDEND-PAYING AGENT, REGISTRAR AND PLAN AGENT
First Data Investor Services Group, Inc.
(Common Stock)
Banker's Trust (Auction Preferred Stock)
AUCTION AGENT
Banker's Trust (Auction Preferred Stock)
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.
The Fund
For More Information
Dreyfus Strategic Municipal
Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
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.
(Common Stock)
One Exchange Place
Boston, MA 02109
(c) 2000 Dreyfus Service Corporation 852AR9911
