DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
JANUARY 20, 1994
(As Revised February 14, 1994)
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Connecticut Municipal Money Market Fund, Inc. (the "Fund"),
dated January 20, 1994, as it may be revised from time to time. To obtain
a copy of the Fund's Prospectus, please write to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or call toll free
1-800-645-6561.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . .B-7
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . .B-10
Shareholder Services Plan . . . . . . . . . . . . . . . . . . . . . .B-12
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . .B-12
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . .B-14
Shareholder Services. . . . . . . . . . . . . . . . . . . . . . . . .B-16
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . .B-18
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . .B-19
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . .B-19
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . .B-21
Information About the Fund. . . . . . . . . . . . . . . . . . . . . .B-21
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . . .B-22
Appendix A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-23
Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-26
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .B-30
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . .B-36
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Description
of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended September 30, 1993,
computed on a monthly basis, was as follows:
Fitch Investors Moody's Standard & Poor's
Service, Inc. Investors Service, Corporation Percentage
("Fitch") or Inc. ("Moody's") or ("S&P") of Value
F-1+/F-1 VMIG 1/MIG 1, P-1 SP-1+/SP-1, A-1+/A-1 71.3%
F-2 VMIG 2/MIG 2, P-2 SP-2, A-2 1.6%
AAA/AA Aaa/Aa AAA/AA 19.3%
Not Rated Not Rated Not Rated 7.8%
100.0%
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses and
lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or on
behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, industrial, port or parking facilities, air or water
pollution control facilities and certain local facilities for water supply,
gas, electricity, or sewage or solid waste disposal; the interest paid on
such obligations may be exempt from Federal income tax, although current
tax laws place substantial limitations on the size of such issues. Such
obligations are considered to be Municipal Obligations if the interest paid
thereon qualifies as exempt from Federal income tax in the opinion of bond
counsel to the issuer. There are, of course, variations in the security of
Municipal Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal at any time, or at
specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligations plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending rate,
such as a bank's prime rate, and is adjusted automatically each time such
rate is adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation, and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation. However,
certain lease obligations contain "non-appropriation" clauses which provide
that the municipality has no obligation to make lease or installment
purchase payments in future years unless money is appropriated for such
purpose on a yearly basis. Although "non-appropriation" lease obligations
are secured by the leased property, disposition of the property in the
event of foreclosure might prove difficult. The Fund will seek to minimize
these risks by investing only in those lease obligations that (1) are rated
in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (or one
rating organization if the lease obligation was rated only by one such
organization) or (2) if unrated, are purchased principally from the issuer
or domestic banks or other responsible third parties, in each case only if
the seller shall have entered into an agreement with the Fund providing
that the seller or other responsible third party will either remarket or
repurchase the lease obligation within a short period after demand by the
Fund. The staff of the Securities and Exchange Commission currently
considers certain lease obligations to be illiquid. Accordingly, not more
that 10% of the value of the Fund's net assets will be invested in lease
obligations that are illiquid and in other illiquid securities. See
"Investment Restriction No. 6" below.
The Fund will not purchase tender option bonds unless (a) the demand
feature applicable thereto is exercisable by the Fund within 13 months of
the date of such purchase upon no more than 30 days' notice and thereafter
exercisable by the Fund no less frequently than annually upon no more than
30 days' notice and (b) at the time of such purchase, the Manager
reasonably expects (i) based upon its assessment of current and historical
interest trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment and (ii) that the circumstances
which might entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender opportunity.
At the time of each tender opportunity, the Fund will exercise the tender
option with respect to any tender option bonds unless the Manager
reasonably expects, (x) based upon its assessment of current and historical
interest rate trends, that prevailing short-term tax exempt rates will not
exceed the stated interest rate on the underlying Municipal Obligations at
the time of the next tender fee adjustment, and (y) that the circumstances
which might entitle the grantor of a tender option to terminate the tender
option would not occur prior to the time of the next tender opportunity.
The Fund will exercise the tender feature with respect to the tender option
bonds, or otherwise dispose of the tender option bonds, prior to the time
the tender option is scheduled to expire pursuant to the terms of the
agreement under which the tender option is granted. The Fund otherwise
will comply with the provisions of Rule 2a-7 in connection with the
purchase of tender option bonds, including, without limitation, the
requisite determination by the Board of Directors that the tender option
bonds in question meet the quality standards described in Rule 2a-7, which,
in the case of a tender option bond subject to a conditional demand
feature, would include a determination that the security has received both
the required short-term and long-term quality rating or is determined to be
of comparable quality. In the event of a default of the Municipal
Obligation underlying a tender option bond, or the termination of the
tender option agreement, the Fund would look to the maturity date of the
underlying security for purposes of compliance with Rule 2a-7 and, if its
remaining maturity was greater than 13 months, the Fund would sell the
security as soon as would be practicable. The Fund will purchase tender
option bonds only when it is satisfied that the custodial and tender option
arrangements, including the fee payment arrangements, will not adversely
affect the tax exempt status of the underlying Municipal Obligations and
that payment of any tender fees will not have the effect of creating
taxable income for the Fund. Based on the tender option bond agreement,
the Fund expects to be able to value the tender option bond at par;
however, the value of the instrument will be monitored to assure that it is
valued at fair value.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated in
the highest rating category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent the ratings given by Moody's, S&P or Fitch for Municipal
Obligations may change as a result of changes in such organizations or
their rating systems, the Fund will attempt to use comparable ratings as
standards for its investments in accordance with the investment policies
contained in the Fund's Prospectus and this Statement of Additional
Information. The ratings of Moody's, S&P and Fitch represent their
opinions as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.
Although these ratings may be an initial criterion for selection of
portfolio investments, the Manager also will evaluate these securities and
the creditworthiness of the issuers of such securities.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of
the U.S. Treasury; others, such as those of the Federal Home Loan Banks, by
the right of the issuer to borrow from the U.S. Treasury; others, such as
those issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates
of interest. Interest rates may fluctuate based on generally recognized
reference rates or the relationship of rates. While the U.S. Government
provides financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so,
since it is not so obligated by law. The Fund will invest in such
securities only when it is satisfied that the credit risk with respect to
the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Investments in time deposits generally are limited to London branches of
domestic banks that have total assets in excess of one billion dollars.
Time deposits which may be held by the Fund will not benefit from insurance
from the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank obligations
may include uninsured, direct obligations bearing fixed, floating or
variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price usually
not more than one week after its purchase. The Fund's custodian or sub-
custodian will have custody of, and will hold in a segregated account,
securities acquired by the Fund under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange
Commission to be loans by the Fund. In an attempt to reduce the risk of
incurring a loss on a repurchase agreement, the Fund will enter into
repurchase agreements only with domestic banks with total assets in excess
of one billion dollars or primary government securities dealers reporting
to the Federal Reserve Bank of New York, with respect to securities of the
type in which the Fund may invest, and will require that additional
securities be deposited with it if the value of the securities purchased
should decrease below resale price. The Manager will monitor on an ongoing
basis the value of the collateral to assure that it always equals or
exceeds the repurchase price. Certain costs may be incurred by the Fund in
connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
Risk Factors--Investing in Connecticut Municipal Obligations.
Investors should consider carefully the special risks inherent in the
Fund's investment in Connecticut Municipal Obligations. Connecticut's
economy relies in part on activities that may be adversely affected by
cyclical change, and recent declines in defense spending have had an impact
on unemployment levels. Although the State recorded General Fund surpluses
in its fiscal years 1985 through 1987, Connecticut reported deficits from
its General Fund operations for the fiscal years 1988 through 1991.
Together with the deficit carried forward from the State's 1990 fiscal
year, the total General Fund deficit for the 1991 fiscal year was $965.7
million. The total deficit was funded by the issuance of General
Obligation Economic Recovery Notes. The Comptroller's annual reports for
the fiscal years ended June 30, 1992 and 1993 reflected General Fund
operating surpluses of $110 million and $113.5 million, respectively. The
Comptroller estimated the General Fund operating surplus for fiscal year
1994 to $52.7 million. The Comptroller's monthly report for the period
ended November 30, 1993 estimated that on a GAAP basis the cumulative
deficit was $470.9 million for fiscal 1993-94. S&P, Moody's and Fitch
currently rate Connecticut's bonds AA-, Aa and AA+, respectively.
Investment Restrictions. The Fund has adopted the following
restrictions as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the Fund's outstanding
voting shares. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the value of the
Fund's total assets, the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to secure borrowings for temporary or emergency purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of Municipal
Obligations directly from an issuer for its own portfolio to take advantage
of the lower purchase price available.
6. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid
(which securities could include participation interests (including
municipal lease/purchase agreements) that are not subject to the demand
feature described in the Fund's Prospectus and floating and variable rate
demand obligations as to which the Fund cannot exercise the demand feature
described in the Fund's Prospectus on less than seven days' notice and as
to which there is no secondary market) if, in the aggregate, more than 10%
of its net assets would be so invested.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests,
but this shall not prevent the Fund from investing in Municipal Obligations
secured by real estate or interests therein.
8. Make loans to others except through the purchase of qualified debt
obligations and the entry into repurchase agreements referred to above and
in the Fund's Prospectus.
9. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no such
limitation on the purchase of Municipal Obligations and, for temporary
defensive purposes, obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
For purposes of Investment Restriction No. 9, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time of
investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors and Officers of the Fund
DAVID W. BURKE, Director. Since October 1990, Vice President and Chief
Administrative Officer of the Manager. During the period 1977-1990,
Mr. Burke was involved in the management of national television news,
as Vice-President and Executive Vice President of ABC News, and
subsequently as President of CBS News.
SAMUEL CHASE, Director. Since 1982, President of Samuel Chase & Company,
Ltd., an economic consulting firm. From 1983 to 1989, Chairman of
Chase, Brown & Blaxall, Inc., an economic consulting firm. His
address is 4410 Massachusetts Avenue, N.W., Suite 408, Washington,
D.C. 20016.
JONI EVANS, Director. Senior Vice President of the William Morris Agency.
From September 1987 to May 1993, Executive Vice President of Random
House, Inc., and from January 1991, to May 1993, President and
Publisher of Turtle Bay Books; from January 1987 to December 1990,
Publisher of Random House Adult Trade Division; and from 1985 to 1987,
President of Simon & Schuster-Trade Division. Her address is 1350
Avenue of the Americas, New York, New York 10019.
*LAWRENCE M. GREENE, Director. Legal Consultant to and a director of the
Manager, Executive Vice President and a director of the Distributor
and an officer, director or trustee of other investment companies
advised or administered by the Manager. His address is 200 Park
Avenue, New York, New York 10166.
ARNOLD S. HIATT, Director. Chairman of The Stride Rite Foundation. From
1969 to June 1992, Chairman of the Board, President or Chief Executive
Officer of The Stride Rite Corporation, a multi-divisional footwear
manufacturing and retailing company. Mr. Hiatt is also a director of
The Cabot Corporation. His address is 400 Atlantic Avenue, Boston,
Massachusetts 02110.
DAVID J. MAHONEY, Director. President of David Mahoney Ventures since
1983. From 1968 to 1983, he was Chairman and Chief Executive Officer
of Norton Simon Inc., a producer of consumer products and services.
Mr. Mahoney is also a director of National Health Laboratories Inc.
and a director and member of the Executive Committee of NYNEX
Corporation. His address is 745 Fifth Avenue, Suite 700, New York,
New York 10151.
*RICHARD J. MOYNIHAN, Director, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
BURTON N. WALLACK, Director. President and co-owner of Wallack Management
Company, a real estate management company managing real estate in the
New York City area. His address is 18 East 64th Street, Suite 3D, New
York, New York 10031.
Each of the "non-interested" Directors is also a director of Dreyfus
BASIC Municipal Money Market Fund, Inc., Dreyfus California Tax Exempt Bond
Fund, Inc., Dreyfus GNMA Fund, Inc., Dreyfus Intermediate Municipal Bond
Fund, Inc., Dreyfus Michigan Municipal Money Market Fund, Inc., Dreyfus New
Jersey Municipal Money Market Fund, Inc., Dreyfus New York Tax Exempt Bond
Fund, Inc. and Dreyfus Ohio Municipal Money Market Fund, Inc. and a trustee
of Dreyfus Massachusetts Municipal Money Market Fund, Dreyfus Massachusetts
Tax Exempt Bond Fund, Dreyfus New York Tax Exempt Intermediate Bond Fund,
Dreyfus New York Tax Exempt Money Market Fund and Dreyfus Pennsylvania
Municipal Money Market Fund.
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Directors of the Fund
who are not "interested persons" of the Fund, as defined in the Act, will
be selected and nominated by the Directors who are not "interested persons"
of the Fund.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totalled $5,358 for the fiscal year ended September 30,
1993 for all such Directors as a group.
Officers of the Fund Not Listed Above
A. PAUL DISDIER, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
JILL C. SHAFFRO, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer or director
of other investment companies advised or administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
PAUL T. MOLLOY, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised or administered by the Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel
of the Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's Common Stock outstanding on December 29, 1993.
The following persons are also officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Elie M. Genadry, Vice President--Institutional Sales; Peter A.
Santoriello, Vice President; Robert H. Schmidt, Vice President; Kirk V.
Stumpp, Vice President--New Product Development; Philip L. Toia, Vice
President; Katherine C. Wickham, Assistant Vice President; Maurice
Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Abigail Q.
McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated May 23, 1990 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Directors who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval. The
Agreement was approved by shareholders at a shareholders' meeting held on
September 12, 1991, and was last approved by the Fund's Board of Directors,
including a majority of the Directors who are not "interested persons" of
any party to the Agreement, at a meeting held on March 31, 1993. The
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board of Directors or by vote of the holders of a majority of the Fund's
shares, or, on not less than 90 days' notice, by the Manager. The
Agreement will terminate automatically in the event of its assignment (as
defined in the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions
and provides the Fund with Investment Officers who are authorized by the
Board of Directors to execute purchases and sales of securities. The
Fund's Investment Officers are Richard J. Moynihan, A. Paul Disdier, Karen
M. Hand, Stephen C. Kris, Jill C. Shaffro, L. Lawrence Troutman, Samuel J.
Weinstock and Monica S. Wieboldt. The Manager also maintains a research
department with a professional staff of portfolio managers and securities
analysts who provide research services for the Fund as well as for other
funds advised by the Manager. All purchases and sales are reported for the
Directors' review at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: organizational costs, taxes, interest,
brokerage fees and commissions, if any, fees of Directors who are not
officers, directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange Commission fees,
state Blue Sky qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
maintaining corporate existence, costs of independent pricing services,
costs attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports and
corporate meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and for
distribution to existing shareholders, and any extraordinary expenses.
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services. The
Manager also may make such advertising and promotional expenditures, using
its own resources, as it from time to time deems appropriate.
As compensation for its services, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .50 of 1% of the
value of the Fund's average daily net assets. All fees and expenses are
accrued daily and deducted before the declaration of dividends to
shareholders. For the fiscal years ended September 30, 1991, 1992 and
1993, no management fee was paid by the Fund pursuant to undertakings by
the Manager.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed the expense limitation of any state having jurisdiction over the
Fund, the Fund may deduct from the payment to be made to the Manager under
the Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be
estimated daily, and reconciled and effected or paid, as the case may be,
on a monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services Plan."
The Fund as adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses the Distributor for certain allocated expenses
of providing personal services and/or maintaining shareholder accounts.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Directors for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the operation
of the Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual approval by
such vote of the Directors cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable at any time by vote
of a majority of the Directors who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Plan.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund
may attempt to notify the investor upon receipt of checks drawn on banks
that are not members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer of a
securities dealer ("Selected Dealer") and his order to purchase Fund shares
is paid for other than in Federal Funds, the Selected Dealer, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with sufficient Federal Funds or cash balance in his
brokerage account with a Selected Dealer will become effective on the day
that the order, including Federal Funds, is received by the Transfer Agent.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 a.m. and 4:00 p.m., New York time, on
any business day that the Transfer Agent and the New York Stock Exchange
are open. Such purchases will be credited to the shareholder's Fund
account on the next bank business day. To qualify to use the Dreyfus
TeleTransfer Privilege, the initial payment for purchase of Fund shares
must be drawn on, and redemption proceeds paid to, the same bank and
account as are designated on the Account Application or Optional Services
Form on file. If the proceeds of a particular redemption are to be wired
to an account at any other bank, the request must be in writing and
signature-guaranteed. See "Redemption of Fund Shares--Dreyfus TeleTransfer
Privilege."
Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers which may charge a nominal
transaction fee for such services. Some dealers will place the Fund's
shares in an account with their firm. Dealers also may require that the
customer invest more than the $1,000 minimum investment; the customer not
take physical delivery of stock certificates; the customer not request
redemption checks to be issued in the customer's name; fractional shares
not be purchased; monthly income distributions be taken in cash; or other
conditions.
There is no sales or service charge by the Fund or the Distributor,
although investment dealers, banks and other institutions may make
reasonable charges to investors for their services. The services provided
and the applicable fees are established by each dealer or other institution
acting independently of the Fund. The Fund has been given to understand
that these fees may be charged for customer services including, but not
limited to, same-day investment of client funds; same-day access to client
funds; advice to customers about the status of their accounts, yield
currently being paid or income earned to date; provision of periodic
account statements showing security and money market positions; other
services available from the dealer, bank or other institution; and
assistance with inquiries related to their investment. Any such fees will
be deducted from the investor's account monthly and on smaller accounts
could constitute a substantial portion of the distribution. Small,
inactive, long-term accounts involving monthly service charges may not be
in the best interest of investors. Investors should be aware that they may
purchase shares of the Fund directly from the Fund without imposition of
any maintenance or service charges, other than those already described
herein.
Reopening an Account. An investor may reopen an account with a
minimum investment of $100 without filing a new Account Application during
the calendar year the account is closed or during the following calendar
year, provided the information on the old Account Application is still
applicable.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Account Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although election of
this Privilege creates only a shareholder-transfer agent relationship with
the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
an investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the same business day if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds will be transferred
by Federal Reserve wire only to the commercial bank account specified by
the investor on the Account Application or Optional Services Form prior to
Noon on such day; otherwise the Fund will initiate payment on the next
business day. Redemption proceeds, if wired, must be in the amount of
$1,000 or more and will be wired to the investor's account at the bank of
record designated in the investor's file at the Transfer Agent, if the
investor's bank is a member of the Federal Reserve System, or to a
correspondent bank if the investor's bank is not a member. Fees ordinarily
are imposed by such bank and usually are borne by the investor. Immediate
notification by the correspondent bank to the investor's bank is necessary
to avoid a delay in crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if
they have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York
Stock Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP") and the Stock Exchanges Medallion Program.
Guarantees must be signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors,
administrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call the telephone number listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In this event, the
securities would be valued in the same manner as the portfolio of the Fund
is valued. If the recipient sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities and
Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Shareholder
Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the
applicable sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their
account number.
To use this Privilege, an investor must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. Telephone
exchanges may be made only if the appropriate "YES" box has been checked on
the Account Application or a separate signed Optional Services Form is on
file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on telephonic, telegraphic or written
exchange instructions from any person representing himself or herself to be
the investor, and reasonably believed by the Transfer Agent to be genuine.
Telephone exchanges may be subject to limitations as to the amount involved
or the number of telephone exchanges permitted. Shares issued in
certificate form are not eligible for telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the
fund being exchanged must have a value of at least the minimum initial
investment required for the fund into which the exchange is being made.
For Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value
of at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange permits an
investor to purchase, in exchange for shares of the Fund, shares of another
fund in the Dreyfus Family of Funds. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value as described above under "Exchange Privilege." Enrollment in
or modification or cancellation of this Privilege is effective three
business days following notification by the investor. An investor will be
notified if his account falls below the amount designated to be exchanged
under this Privilege. In this case, the investor's account will fall to
zero unless additional investments are made in excess of the designated
amount prior to the next Auto-Exchange transaction. Shares held under IRA
and other retirement plans are eligible for this Privilege. Exchanges of
IRA shares may be made between IRA accounts and from regular accounts to
IRA accounts, but not from IRA accounts to regular accounts. With respect
to all other retirement accounts, exchanges may be made only among those
accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Optional Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege or Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice to
shareholders.
Dreyfus Dividend Sweep Privilege. Dreyfus Dividend Sweep Privilege
allows investors to invest on the payment date their dividends or dividends
and capital gain distributions, if any, paid by the Fund in shares of
another fund in the Dreyfus Family of Funds of which the investor is a
shareholder. Shares of other funds purchased pursuant to this Privilege
will be purchased on the basis of relative net asset value per share as
follows:
A. Dividend and distributions paid by the fund may be
invested without imposition of a sales load in shares
of other funds that are offered without a sales load.
B. Dividends and distributions paid by a fund which does
not charge a sales load may be invested in shares of
other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon
redemption of such shares.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends
and distributions, the investor's shares will be reduced and eventually may
be depleted. An Automatic Withdrawal Plan may be established by completing
the appropriate application available from the Distributor. There is a
service charge of $.50 for each withdrawal check. Automatic Withdrawal may
be terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which certificates have been issued may not be redeemed through
the Automatic Withdrawal Plan.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost, which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Directors has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of sales and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board of Directors, at such
intervals as it deems appropriate, to determine whether the Fund's net
asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review are obtained from an
independent pricing service (the "Service") approved by the Board of
Directors. The Service values the Fund's investments based on methods
which include consideration of: yields or prices of municipal bonds of
comparable quality, coupon, maturity and type; indications of values from
dealers; and general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Directors. If
such deviation exceeds 1/2 of 1%, the Board of Directors will consider what
action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, it has agreed
to take such corrective action as it regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or establishing a net asset value per
share by using available market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of the gain
realized from the disposition of certain market discount bonds will be
treated as ordinary income under Section 1276 of the Code.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended September 30, 1993, the Fund's yield
was 2.56% and effective yield was 2.59%. These yield figures reflect the
waiver of the management fee, without which the Fund's yield and effective
yield for the seven-day period ended September 30, 1993 would have been
2.06% and 2.08%, respectively. See "Management of the Fund" in the
Prospectus. Yield is computed in accordance with a standardized method
which involves determining the net change in the value of a hypothetical
pre-existing Fund account having a balance of one share at the beginning of
a seven calendar day period for which yield is to be quoted, dividing the
net change by the value of the account at the beginning of the period to
obtain the base period return, and annualizing the results (i.e.,
multiplying the base period return by 365/7). The net change in the value
of the account reflects the value of additional shares purchased with div-
idends declared on the original share and any such additional shares and
fees that may be charged to shareholder accounts, in proportion to the
length of the base period and the Fund's average account size, but does not
include realized gains and losses or unrealized appreciation and
depreciation. Effective yield is computed by adding 1 to the base period
return (calculated as described above), raising that sum to a power equal
to 365 divided by 7, and subtracting 1 from the result.
Based upon a combined 1993 Federal and Connecticut state tax rate of
42.32%, which reflects the Federal deduction for the Connecticut tax, the
Fund's tax equivalent yield for the seven-day period ended September 30,
1993 was 4.44%. Without the management fee waiver then in effect, the
Fund's tax equivalent yield for the seven-day period ended September 30,
1993 would have been 3.57%. See "Management of the Fund" in the
Prospectus. Tax equivalent yield is computed by dividing that portion of
the yield or effective yield (calculated as described above) which is tax
exempt by 1 minus a stated tax rate and adding the quotient to that
portion, if any, of the yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of the
highest Federal and State of Connecticut marginal personal income tax rates
in effect during 1993. For Federal income tax purposes, a 39.60% tax rate
has been used. For Connecticut income tax purposes, a 4.5% tax rate on
individuals, trusts and estates has been used. The tax equivalent figure,
however, does not include the potential effect of any local (including, but
not limited to, county, district or city) taxes, including applicable
surcharges. In addition, there may be pending legislation which could
affect such stated tax rates or yields. Each investor should consult its
tax adviser, and consider its own factual circumstances and applicable tax
laws, in order to ascertain the relevant tax equivalent yield.
Yields will fluctuate and are not necessarily representative of future
results. Investors should remember that yield is a function of the type
and quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in the Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent yields
or charts in its advertising. These hypothetical yields or charts will be
used for illustrative purposes only and not as being representative of the
Fund's past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, including those relating to or arising from actual or proposed tax
legislation. From time to time, advertising materials for the Fund also
may refer to statistical or other information concerning trends relating to
investment companies, as compiled by industry associations such as the
Investment Company Institute.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to parties
acting as either principal or agent. Newly-issued securities ordinarily
are purchased directly from the issuer or from an underwriter; other
purchases and sales usually are placed with those dealers from which it
appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchase and
sales, although the price paid usually includes an undisclosed compensation
to the dealer acting as agent. The prices paid to underwriters of newly-
issued securities usually include a concession paid by the issuer to the
underwriter, and purchases of after-market securities from dealers
ordinarily are executed at a price between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's Investment
Officers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and non-
assessable. Fund shares are of one class and have equal rights as to
dividends and in liquidation. Shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Fund will send annual and semi-annual financial statements to all
its shareholders.
On December 29, 1993, Olsen & Co., Corporate Actions 040503, P.O. Box
4044, Boston, Massachusetts 02211, beneficially owned 9.8% of the Fund's
shares.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor the Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
portfolio securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York 10004-
2696, as counsel for the Fund, has rendered its opinion as to certain legal
matters regarding the due authorization and valid issuance of the shares of
Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX A
RISK FACTORS -- INVESTING IN CONNECTICUT MUNICIPAL OBLIGATIONS
The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn
from official statements relating to securities offerings of the State
available as of the date of this Statement of Additional Information.
While the Fund has not independently verified such information, it has no
reason to believe that such information is not correct in all material
respects.
Connecticut's economy is diverse, with manufacturing, services and
trade accounting for approximately 70% of total non-agricultural
employment. The State's manufacturing industry is diversified, but from
1970 to 1992 manufacturing employment declined 30.8%, while non-
manufacturing employment increased 60.8%, particularly in the service,
trade and finance categories, resulting in an increase of 27% in total
growth in non-agricultural sectors. Defense-related business plays an
important role in the Connecticut economy, and economic activity has been
affected by the volume of defense contracts awarded to Connecticut firms.
In the past ten years, Connecticut ranked from sixth to eleventh among all
states in total defense contract awards, receiving 2.8% of all such
contracts in 1992. In recent years the Federal government has reduced the
amount of defense-related spending and the largest defense-related
employers in the State have announced substantial labor force reductions.
The effect of such future reductions on the Connecticut economy suggests
that the defense sector is not as promising as it once was.
Connecticut has a high level of personal income. According to Bureau
of Economic Analysis figures, personal income of State residents for
calendar year 1992 was $89.0 billion, a 5.2% increase over the previous
year. Total personal income in the State increased 29.6% from 1987 to
1992 and 11.1% from 1989 to 1992, compared with national increases of
35.4% and 17.5%, respectively. According to U.S. Department of Commerce
projections, the State is expected to continue to rank among the highest
in state per capital income. As of November 1993, the estimated rate of
unemployment (on a seasonably adjusted basis) in the State was 6.3%.
While the State's General Fund ended fiscal 1984-85, 1985-86 and
1986-87 with operating surpluses of approximately $365.5 million, $250.1
million and $365.2 million, respectively, the State recorded operating
deficits of $115.6 million, $28 million, $259.5 million and $808.5 million
for fiscal 1987-88, 1988-89, 1989-90 and 1990-91, respectively. Together
with the deficit carried forward from fiscal 1989-90, the total deficit
for the fiscal year 1990-91 was $965.7 million. The total deficit amount
was funded by the issuance of General Obligation Economic Recovery Notes.
The Comptroller's annual report for the fiscal year ended June 30, 1992
reflected a General Fund operating surplus of $110.2 million, which
surplus was used to retire $110.1 million of the States's Economic
Recovery Notes. The Comptroller's annual report for the fiscal year ended
June 30, 1993 reflected a General Fund operating surplus of $113.5
million. The unappropriated surplus in the General Fund is deemed to be
appropriated for debt service for the fiscal year ending June 30, 1994.
Since 1988, the Comptroller's annual report has reported results on
the basis of both the modified cash basis required by State law and the
modified accrual basis used for GAAP financial reporting. The
Comptroller's monthly report for the period ended November 30, 1993 stated
that on a GAAP basis the cumulative deficit is $470.9 million for fiscal
1993-94. The modified cash basis of accounting used for statutory
financial reporting and the modified accrual basis used for GAAP financial
reporting are different and, as a result, often produce varying financial
results, primarily because of differences in the recognition of revenues
and expenditures.
The budget adopted by the General Assembly for fiscal 1993-94
projected General Fund expenditures of $7.69 billion and estimated General
Fund revenues of $7.695 billion. For fiscal 1994-95, the adopted budget
anticipates General Fund expenditures of $8.116 billion and General Fund
revenues of 8.117 billion.
The State finances its operations primarily through the General Fund.
All tax and most non-tax revenues of the State, except for motor fuels
taxes and other transportation related taxes, fees and revenues, are paid
into, and substantially all expenditures pursuant to legislative
appropriations are made out of, the General Fund. The State derives over
70% of its revenues from taxes. Miscellaneous fees, receipts, transfers
and Federal grants account for most of the other State revenue. The Sales
and Use Taxes, the corporation business tax and the recently enacted broad
based personal income tax are the major revenue raising taxes.
On November 3, 1992, Connecticut voters approved a constitutional
amendment which requires a balanced budget for each year and imposes a cap
on the growth of expenditures. The General Assembly is required by the
constitutional amendment to adopt by three-fifths vote certain spending
cap definitions. The statutory spending cap limits the growth of
expenditures to either (1) the rolling five-year average annual growth in
personal income, or (2) the increase in the consumer price index for urban
consumers during the preceding twelve-month period, whichever is greater.
Expenditures for the payment of bonds, notes and other evidences of
indebtedness are excluded from the constitutional and statutory
definitions of general budget expenditures. To preclude shifting
expenditures out of the General Fund to other funds, the spending cap
applies to all appropriated funds combined. For fiscal 1993-94 and for
fiscal 1994-95, permitted growth in capped expenditures is 5.82% and
4.49%, respectively. The adoption Budget for fiscal 1993-94 and 1994-95
is approximately $58 million and $24 million, respectively, below the
spending cap.
The State has no constitutional or other organic limit on its power
to issue obligations or incur indebtedness other than that it may only
borrow for public purposes. There are no reported court decisions
relating to State bonded indebtedness other than two cases validating the
legislative determination of the public purpose for improving employment
opportunities and related activities. The State Constitution has never
contained provisions requiring submission of the questions of incurring
indebtedness to a public referendum. Therefore, the authorization and
issuance of State debt, including the purpose, amount and nature thereof,
the method and manner of the incurrence of such debt, the maturity and
terms of repayment thereof, and other related matters are statutory.
The State has established a program of temporary note issuances to
cover periodic cash flow requirements. The maximum volume of cash flow
borrowing is determined based upon the State's actual cash needs on a
daily basis. The State, as of April 17, 1990, commenced a program
permitting the issuance of up to $539 million of General Obligation
Temporary Notes (the "April 1990 Program"). Under the April 1990 Program,
the State may issue notes during a five-year period concluding in April of
1995. Additionally, a separate $200 million temporary note program
commenced as of April 30, 1991 and concluded on October 31, 1991. There
are currently no notes outstanding under either program.
The General Assembly has empowered, pursuant to bond acts in effect,
the State Bond Commission to authorize general obligation bonds in the
amount of $9,392,375,363. As of January 1, 1994, the State Bond
Commission has authorized $7,545,471,616 in such bonds and the balance of
$1,846,903,747 was available for authorization. From such total
authorizations of $7,545,471,616, bonds in the aggregate of
$6,477,041,771.44 have been issued and the balance of $1,068,429,844.56
remained authorized but unissued as of January 1, 1994.
General obligation bonds issued by Connecticut municipalities are
payable primarily from ad valorem taxes on property subject to taxation by
the municipality. Certain Connecticut municipalities have experienced
severe fiscal difficulties and have reported operating and accumulated
deficits in recent years. The most notable of these is the City of
Bridgeport.
S&P, Moody's and Fitch rated Connecticut's Municipal Bonds AA-, Aa
and AA+, respectively.
APPENDIX B
Description of certain S&P, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
The AA rating may be modified by the addition of a plus (+) or minus (-)
sign to show relative standing within the category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+)
designation.
Commercial Paper Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation. Capacity for timely payment on
issues with an A-2 designation is strong. However, the relative degree of
safety is not as high as for issues designated A-1.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to show relative standing within the rating category.
The modifier 1 indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns a MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity. Issuers rated Prime-2 (P-2)
have a strong ability for repayment of senior short-term debt obligations.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues carrying this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Rating. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS SEPTEMBER 30, 1993
TAX EXEMPT INVESTMENTS-100.0%
PRINCIPAL
CONNECTICUT-95.4% AMOUNT VALUE
------------- -------------
State of Connecticut:
GO:
<S> <C> <C>
Economic Recovery Notes:
6%, Series A, 12/15/93............................................. $ 300,000 $ 302,277
5.25%, Series A, 6/15/94........................................... 1,450,000 1,477,544
VRDN 3.10% (SBPA: Canadian Imperial Bank of Commerce, Industrial
Bank of Japan and National Westminster Bank) (a)............... 12,000,000 12,000,000
Notes 3.75%, Series B, 11/15/93........................................ 250,000 250,452
Refunding, Revenue Bond 3%, Series A, 11/15/93......................... 4,000,000 4,003,641
Special Tax Obligation Revenue, VRDN (Transportation Infrastructure-1)
3.10% (LOC; Industrial Bank of Japan) (a,b)............................ 11,200,000 11,200,000
Connecticut Development Authority, VRDN:
Health Care Revenue (Corp. for Independent Living Project)
3.15% (LOC; Credit Commerciale de France) (a,b)........................ 13,000,000 13,000,000
Industrial Development (Martin-Brower Co. Project)
2.80% (LOC; Chemical Bank)(a,b)........................................ 1,215,000 1,215,000
PCR:
(Connecticut Power and Light Co. Project):
3% (LOC; Union Bank of Switzerland) (a,b).......................... 3,000,000 3,000,000
3.10%, Series C (LOC; Long-Term Credit Bank of Japan) (a,b)........ 800,000 800,000
3.25%, Series B (LOC; Westpac Banking Corp.) (a,b)................. 8,200,000 8,200,000
3.70% (LOC; Long-Term Credit Bank of Japan) (a,b).................. 6,700,000 6,700,000
(Western Massachusetts Electric Co.):
3.10% (LOC; Long-Term Credit Bank of Japan) (a,b).................. 8,200,000 8,200,000
3.10%, Series B (LOC; Westpac Banking Corp.) (a,b)................. 10,400,000 10,400,000
Solid Waste Revenue:
(Exeter Energy Project) 3.10% (LOC; Sanwa Bank) (a,b).................. 8,600,000 8,600,000
(Rand/Whitney Project) 2.95% (LOC; Chase Manhattan Bank) (a,b)......... 8,500,000 8,500,000
Connecticut Health and Educational Facilities Authority, Revenue, VRDN:
(Charlotte Hungerford Hospital) 3.20% (LOC; Mitsubishi Bank) (a,b)......... 800,000 800,000
(Kent School) 2.80% (LOC; Barclays Bank) (a,b)............................. 3,900,000 3,900,000
Connecticut Special Assessment Unemployment Compensation Advance Fund, Revenue, VRDN
(Connecticut Unemployment) 2.95% (LOC: Mitsubishi Bank and Industrial
Bank of Japan) (a,b)....................................................... 10,000,000 10,000,000
Town of Darien, BAN 2.05%, 11/19/93............................................ 1,650,000 1,650,105
Town of Derby, BAN 2.33%, 7/22/94.............................................. 2,850,000 2,849,927
City of East Hartford, GO, BAN 2.18%, 12/15/93................................. 3,662,000 3,662,214
Town of Enfield, BAN 2.15%, 12/30/93........................................... 1,000,000 1,000,118
Town of Fairfield, Sewer Assessment Notes 2.23%, 6/10/94....................... 2,050,000 2,050,000
City of Hartford, GO, BAN 2.23%, 6/15/94....................................... 5,600,000 5,599,862
Hartford Redevelopment Agency, MFHR, Refunding, VRDN (Underwood Tower Project)
3.35% (Insured; FSA and SBPA; Sumitomo Trust and Banking) (a).............. 15,300,000 15,300,000
Town of Manchester, BAN:
2.22%, 7/15/94............................................................. 4,323,000 4,323,647
6.30%, 9/15/94............................................................. 260,000 269,519
Town of Milford, BAN 2.13%, 2/17/94............................................ 2,492,000 2,492,731
Town of Montville, BAN 2.11%, 3/10/94.......................................... 2,480,000 2,480,098
City of New Britain, BAN 2.32%, 2/9/94......................................... 8,541,000 8,541,562
Town of New Milford, BAN 2.12%, 2/18/94........................................ 2,855,000 2,855,204
Orange County, TAN 2.10%, 10/12/93............................................. 4,200,000 4,200,120
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1993
TAX EXEMPT INVESTMENTS (CONTINUED)
PRINCIPAL
CONNECTICUT (CONTINUED) AMOUNT VALUE
------------- -------------
<S> <C> <C>
City of Stamford, BAN:
2.11%, 7/19/94............................................................. $ 2,250,000 $ 2,239,593
2.17%, 7/19/94............................................................. 5,000,000 5,000,759
City of West Haven, BAN 2.23%, 3/15/94 (Guaranteed by; State of Connecticut) 3,090,000 3,090,411
Town of Westport, BAN 2.11%, 6/15/94........................................... 6,210,000 6,210,830
Township of Windsor, BAN 2.37%, 7/19/94........................................ 2,000,000 2,000,304
U.S. RELATED-4.6%
Commonwealth of Puerto Rico:
Government Development Bank, Refunding, VRDN
2.75% (LOC: Credit Suisse and Sumitomo Bank) (a,b)..................... 2,000,000 2,000,000
TRAN 3%, 7/29/94........................................................... 5,000,000 5,012,128
Puerto Rico Electric Power Authority, Electric Revenue Bonds, Refunding
3.60%, 7/1/94 (Insured; FSA)............................................... 2,000,000 2,017,616
-------------
TOTAL INVESTMENTS (cost $197,393,672).......................................... $197,395,662
=============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <S> <S> <S>
BAN Bond Anticipation Notes PCR Pollution Control Revenue
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreeement
GO General Obligation TAN Tax Anticipation Notes
LOC Letter of Credit TRAN Tax and Revenue Anticipation Notes
MFHR Multi-Family Housing Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
<S> <S> <S> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 63.4%
F2 VMIG2/MIG2, P2 SP2, A2 3.4
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 20.5
Not Rated (f) Not Rated (f) Not Rated (f) 12.7
-----
100.0%
=====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) 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.
(b) Secured by letters of credit. At September 30, 1993, 45.46% of the Fund's
net assets are backed by letters of credit issued by domestic banks and
foreign banks.
(c) Fitch currently provides creditworthiness information for a limited amount
of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's,
respectively, have been determined by the Fund's Board of Directors to be
of comparable quality to those rated securities in which the Fund may
invest.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES SEPTEMBER 30, 1993
ASSETS:
<S> <C>
Investments in securities, at value
(cost $197,393,672)-see statement...................................... $ 197,395,662
Cash....................................................................... 14,060,454
Interest receivable........................................................ 774,306
Prepaid expenses........................................................... 29,007
Due from The Dreyfus Corporation........................................... 104,122
-------------
$ 212,363,551
LIABILITIES;
Accrued expenses and other liabilities..................................... 75,634
-------------
NET ASSETS..................................................................... $ 212,287,917
=============
REPRESENTED BY:
Paid-in capital............................................................ $ 212,338,192
Accumulated net realized (loss) on investments............................. (52,265)
Accumulated gross unrealized appreciation on investments................... 1,990
-------------
NET ASSETS at value applicable to 212,338,192 shares outstanding
(1 billion shares of $.001 par value Common Stock authorized).............. $ 212,287,917
=============
NET ASSET VALUE, offering and redemption price per share
($212,287,917 / 212,338,192 shares)........................................ $1.00
=====
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS YEAR ENDED SEPTEMBER 30, 1993
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 5,395,839
EXPENSES:
Management fee-Note 2(a)............................................... $ 1,117,485
Shareholder servicing costs-Note 2(b).................................. 245,552
Auditing fees.......................................................... 30,866
Custodian fees......................................................... 24,709
Prospectus and shareholders' reports................................... 24,319
Legal fees............................................................. 16,534
Directors' fees-Note 2(c).............................................. 5,358
Registration fees...................................................... 1,883
Miscellaneous.......................................................... 17,889
-------------
1,484,595
Less-expense reimbursement from Manager due to
undertakings-Note 2(a)............................................. 1,221,607
-------------
TOTAL EXPENSES................................................. 262,988
-------------
INVESTMENT INCOME-NET.......................................... 5,132,851
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS-Note 1(b):
Net realized (loss) on investments......................................... $ (52,103)
Net unrealized (depreciation) on investments............................... (6,424)
-------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS.............. (58,527)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 5,074,324
=============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30,
-------------------------------
1992 1993
------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income-net...................................................... $ 6,613,323 $ 5,132,851
Net realized gain (loss) on investments.................................... 38,911 (52,103)
Net unrealized appreciation (depreciation) on investments for the year..... 3,558 (6,424)
------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 6,655,792 5,074,324
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net...................................................... (6,613,323) (5,132,851)
Net realized gain on investments........................................... -- (36,943)
------------- -------------
TOTAL DIVIDENDS........................................................ (6,613,323) (5,169,794)
------------- -------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.............................................. 284,534,899 307,575,621
Dividends reinvested....................................................... 6,335,997 4,977,777
Cost of shares redeemed.................................................... (271,234,804) (307,149,788)
------------- -------------
INCREASE IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS................. 19,636,092 5,403,610
------------- -------------
TOTAL INCREASE IN NET ASSETS....................................... 19,678,561 5,308,140
NET ASSETS:
Beginning of year.......................................................... 187,301,216 206,979,777
------------- -------------
End of year................................................................ $ 206,979,777 $ 212,287,917
============= =============
See notes to financial statements.
</TABLE>
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Prospectus dated January 20,
1994.
See notes to financial statements.
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET 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 non-diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the Fund's
shares, which are sold to the public without a sales charge. The Distributor is
a wholly-owned subsidiary of The Dreyfus Corporation ("Manager").
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00; the Fund has adopted certain investment, portfolio valuation and
dividend and distribution policies to enable it to do so.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and, when appropriate, discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code. 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.
(D) 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 provisions available to certain investment
companies, as defined in applicable sections of the Internal Revenue Code, and
to make distributions of income and net realized capital gain sufficient to
relieve it from all, or substantially all, Federal income taxes.
At September 30, 1993, 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).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .50 of 1% of the average daily
value of the Fund's net assets and is payable monthly. The Agreement provides
for an expense reimbursement from the Manager should the Fund's aggregate
expenses, exclusive of taxes, interest on borrowings, brokerage and
extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund for any full fiscal year.
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
However, the Manager has undertaken from October 1, 1992 through
December 31, 1993, or until such time as the net assets of the Fund exceed
$275 million, regardless of whether they remain at that level, to waive receipt
of the management fee payable to it by the Fund. In addition, the Manager may
voluntarily assume all or part of the other expenses of the Fund, provided that
the resulting expense reimbursement would not be less than the amount required
pursuant to the Agreement. The expense reimbursement, pursuant to the
undertaking, amounted to $1,221,607 for the year ended September 30, 1993.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
the Distributor an amount not to exceed an annual rate of .25 of 1% of the
value of the Fund's average daily net assets for servicing shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts. During the year ended September 30, 1993,
the Fund was charged an aggregate of $87,177 pursuant to the Shareholder
Services Plan.
(C) Certain officers and directors of the Fund are "affiliated persons," as
defined in the Act, of the Manager and/or the Distributor. Each director who is
not an "affiliated person" receives an annual fee of $1,000.
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET FUND, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Connecticut Municipal Money Market Fund, Inc., including the statement
of investments, as of September 30, 1993, 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
September 30, 1993 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Dreyfus Connecticut Municipal Money Market Fund, Inc. at September 30, 1993,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
Ernst & Young
New York, New York
November 4, 1993
DREYFUS CONNECTICUT MUNICIPAL MONEY MARKET 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 the fiscal year ended
September 30, 1993 as "exempt-interest dividends" (not subject to regular
Federal and, for individuals who are Connecticut residents, Connecticut
personal income taxes).
