SMITH BARNEY MUNICIPAL FUND, INC.
Supplement dated October 31, 1997
to Prospectus dated April 30, 1997
The following information supersedes the information set
forth in the Prospectus in the first paragraph under "Investment
Objectives and Management Policies--General."
The Fund's investment objective is to provide
shareholders a high level of current income exempt from
ordinary Federal income tax consistent with prudent
investing. Under normal market conditions, the Fund will
invest at least two thirds of its total assets in municipal
securities rated in the category A or better by S&P or by
Moody's or have an equivalent rating by any nationally
recognized statistical rating organization (or, if not so
rated, which are, in the opinion of the Investment Manager
applying standards established by the Fund's Board of
Directors, of comparable credit quality to those so rated)
at the time of investment. Under normal market conditions,
the Fund will also invest only in municipal securities rated
investment grade at the time of investment. Investment grade
securities are securities that are rated BBB or higher by
S&P or Baa or higher by Moody's or that have equivalent
ratings by any nationally recognized statistical rating
organization (or, if not so rated, which are, in the opinion
of the Investment Manager applying standards established by
the Fund's Board of Directors, of comparable credit quality
to those so rated). The Fund will not invest in any
municipal securities that are rated lower than BBB by S&P or
Baa by Moody's. Securities rated BBB by S&P are regarded by
S&P as having an adequate capacity to pay interest and repay
principal; whereas such securities normally exhibit adequate
protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in
this category than in higher rated categories. Securities
rated Baa by Moody's are considered by Moody's as medium
grade obligations; they are neither highly protected nor
poorly secured; interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time; they lack
outstanding investment characteristics and in fact have
speculative characteristics as well. The Fund may be more
dependent upon the Investment Manager's investment analysis
of unrated municipal securities than is the case with
respect to rated municipal securities. See "Investment
Objective and Management Policies--Risk Factors and Special
Considerations" and Appendix A. The Fund's policy is to
invest at least 80% of its total assets in municipal
securities with remaining maturities of less than fifteen
years.
FD 01346
