MUNICIPAL PARTNERS FUND INC.
August 10, 1998
To Our Shareholders:
We are pleased to provide this semi-annual report to the shareholders of
Municipal Partners Fund Inc. ("Fund") for the six months ended June 30, 1998.
During the first half of 1998, bond prices fluctuated as the focus of the market
shifted between domestic economic growth and international concerns. Overall,
fixed-income prices increased and the Fund achieved a 2.72% return in net asset
value during the first six months of 1998 (assuming the reinvestment of monthly
dividends in additional shares of the Fund). On June 30, 1998, the Fund had a
closing net asset value and market price per share of $14.85 and $13.4375,
respectively. During the first six months ended June 30, 1998, the Fund
continued to pay common stock shareholders a monthly income dividend of $0.0665
per share.
Early in the year, global investors focused on the turmoil in Asia and flocked
to U.S. Treasuries as a safe-haven. Treasury yields fell as demand for these
securities increased. In February, the Asian crisis had quieted, and the market
shifted its attention to the strong domestic economy. There were concerns that
the strong economy and a tight labor market would result in an increase in
inflation. Consequently, bonds reversed course and yields rose due to these
fears.
Municipal bonds posted positive returns during the first half of 1998, yet
failed to keep pace with advances in Treasuries. State and local governments
took advantage of relatively low nominal interest rates by issuing more than
$146 billion of debt. Municipal new issue volume for the first half of 1998 is
51% higher than the similar period last year. The abundance of new issue supply
has caused municipals to be relatively undervalued versus Treasuries. Strong
demand from property and casualty insurance companies, corporations and mutual
funds helped absorb the supply.
On June 30, 1998, the Fund's long-term holdings consisted of 48 issues
throughout 25 different states with an average double-A quality rating. The
industry sector weightings are well diversified, with the greatest emphasis in
healthcare, housing and industrial development bonds.
We appreciate your continued support of the Fund and encourage you to call
888-777-0102 with any questions or comments.
Cordially,
/s/ William D. Cvengros /s/ Heath B. McLendon
William D. Cvengros Heath B. McLendon
Co-Chairman of the Board Co-Chairman of the Board
/s/ Marybeth Whyte
Marybeth Whyte
Executive Vice President
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Investments (unaudited)
June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Moody's/S&P
(000) Long-Term Investments -- 144.1% Credit Rating Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama -- 4.0%
$2,145 Alabama Special Care Facilities Financing Authority Revenue
(Daughter of Charity-St. Vincents), 5.00% due 11/1/25............. Aa2/AA+ $ 2,052,486
1,225 Courtland, AL IDB Solid Waste Disposal Revenue (Champion
International Corporation Project), Series A, 7.00% due 11/1/22... Baa1/BBB 1,344,155
-----------
3,396,641
2,000 West Covina, CA COP (Queen of the Valley Hospital), 6.50% due
due 8/15/14, Pre-Refunded 8/15/04................................. A2/NR 2,271,240
-----------
Colorado -- 3.8%
3,000 Colorado Health Facilities Authority Hospital Revenue (Rocky Mountain
Adventist Healthcare Project), 6.625% due 2/1/22.................. Baa2/BBB 3,226,050
-----------
Connecticut -- 1.2%
1,000 Connecticut State Health & Educational Facilities Authority Revenue
(Windham Community Memorial Hospital), Series C, 6.00% due 7/1/20. Baa3/BBB- 1,039,890
-----------
Georgia -- 4.4%
315 Fulton County, GA Housing Authority Single-Family Mortgage,
6.60% due 3/1/28.................................................. NR/AAA 331,291
1,000 Fulton County, GA School District Refunding GO, 5.25% due 1/1/14.... Aa2/AA 1,046,580
2,250 Georgia Municipal Electric Authority Power Revenue, Series Z,
FGIC-Insured, 5.50% due 1/1/20.................................... Aaa/AAA 2,384,932
-----------
3,762,803
Illinois -- 7.5%
1,165 Illinois Health Facilities Authority Revenue (Highland Park Hospital
Project), Series A, MBIA-Insured, 5.50% due 10/1/08............... Aaa/AAA 1,238,092
1,500 Illinois Health Facilities Authority Revenue Refunding (Lutheran General
Health System), Series C, 7.00% due 4/1/14........................ A1/A+ 1,827,930
3,000 Illinois State Sales Tax Revenue, Series V, 6.375% due 6/15/20...... Aa2/AAA 3,338,670
-----------
6,404,692
1,000 Kansas State Development Finance Authority Revenue (Sisters of Charity,
Leavenworth), MBIA-Insured, 5.25% due 12/1/10..................... Aaa/AAA 1,044,780
-----------
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 2
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Investments (unaudited) (continued)
June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Moody's/S&P
(000) Long-Term Investments (continued) Credit Rating Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maine -- 3.2%
Maine State Housing Authority Mortgage Purchase:
$ 2,090 Series A-2, 6.65% due 11/15/25.................................... Aa2/AA $ 2,219,141
525 Series A-4, 6.375% due 11/15/12................................... Aa2/AA 550,667
-----------
2,769,808
-----------
Maryland -- 4.8%
3,750 Northeast Maryland Waste Disposal Authority, Solid Waste Revenue
(Montgomery County Resource Recovery, Ogden Martin Systems
Project A), MBIA-Insured, 6.30% due 7/1/16........................ Aaa/AAA 4,062,300
-----------
Massachusetts -- 4.1%
3,255 Massachusetts State Special Obligation Revenue,
Series A, 5.50% due 6/1/13........................................ Aa3/AA 3,495,609
-----------
Minnesota -- 4.1%
3,355 Minnesota State Housing Finance Agency Single-Family Mortgage,
Series H, 6.50% due 1/1/26........................................ Aa2/AA+ 3,532,613
-----------
Montana -- 2.5%
2,000 Montana State Board Housing Single-Family Program, Series A-2,
6.05% due 12/1/12................................................. Aa2/AA+ 2,105,720
-----------
Nevada -- 8.6%
1,350 Clark County, NV Passenger Facility Revenue (Macarran International
Airport), MBIA-Insured, 5.75% due 7/1/23.......................... Aaa/AAA 1,413,706
Nevada Housing Division, Single-Family Program, Series B-2:
4,355 6.40% due 10/1/25................................................. Aa2/NR 4,571,225
1,300 6.95% due 10/1/26................................................. Aa/NR 1,389,479
-----------
7,374,410
-----------
New Hampshire -- 0.7%
600 New Hampshire State HFA, Single-Family Residential, Series A,
6.80% due 7/1/15.................................................. Aa/A+ 637,344
-----------
New Jersey -- 13.6%
5,150 New Jersey EDA, PCR (Public Service Electric and Gas Co. Project),
MBIA-Insured, 6.40% due 5/1/32.................................... Aaa/AAA 5,601,500
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 3
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Investments (unaudited) (continued)
June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Moody's/S&P
(000) Long-Term Investments (continued) Credit Rating Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New Jersey -- 13.6% (concluded)
$1,000 New Jersey EDA,Revenue Refunding (Trenton Office Complex),
FSA-Insured, 5.25% due 6/15/12.................................... Aaa/AAA $ 1,050,580
4,450 New Jersey EDA, Water Facilities Revenue (New Jersey American Water
Co., Inc. Project), FGIC-Insured, 6.875% due 11/1/34.............. Aaa/AAA 5,017,464
-----------
11,669,544
-----------
New York -- 10.4%
Long Island Power Authority, NY Electric Systems Revenue, Series A:
1,500 AMBAC-Insured, 5.50% due 12/1/11.................................. Aaa/AAA 1,616,820
1,500 FSA-Insured, 5.50% due 12/1/12.................................... Aaa/AAA 1,614,795
1,500 New York State Dormitory Authority Revenue (FHA Hospital New York
Presbyterian), AMBAC-Insured, 5.50% due 2/1/11.................... Aaa/AAA 1,598,265
950 Port Authority of New York and New Jersey Construction,
Ninety-Sixth Series, FGIC-Insured, 6.60% due 10/1/23.............. Aaa/AAA 1,050,025
2,850 Triborough Bridge & Tunnel Authority, NY General Purpose Revenue,
Series Y, 5.50% due 1/1/17........................................ Aa3/A+ 3,031,374
-----------
8,911,279
-----------
Ohio -- 11.6%
2,000 Miami County, OH Hospital Facilities Revenue Refunding & Improvement
(Upper Valley Medical Center), 6.25% due 5/15/13.................. Baa2/BBB 2,127,860
7,200 Ohio State Water Development Authority Solid Waste Disposal Revenue
(Cargill Inc.), 6.30% due 9/1/20.................................. Aa3/AA- 7,817,688
-----------
9,945,548
-----------
Pennsylvania -- 7.7%
6,095 Monroeville, PA Hospital Authority Hospital Revenue (Forbes Health
System), 7.00% due 10/1/13........................................ Baa1/A- 6,598,812
-----------
Rhode Island -- 3.9%
3,115 Rhode Island Housing & Mortgage Finance Corporation, Homeownership
Opportunity, Series 7B, 6.80% due 10/1/25......................... Aa2/AA+ 3,304,703
-----------
South Dakota -- 6.2%
4,955 South Dakota Housing Development Authority, Homeowner Mortgage,
Series D, 6.85% due 5/1/26........................................ Aa1/AAA 5,276,579
-----------
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 4
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Investments (unaudited) (continued)
June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Moody's/S&P
(000) Long-Term Investments (concluded) Credit Rating Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tennessee -- 4.4%
$3,400 The IDB of Humphreys County, TN (E.I. duPont de Nemours and Company
Project), 6.70% due 5/1/24........................................ Aa3/AA- $ 3,751,050
-----------
Texas -- 18.9%
3,130 Bell County, TX Health Facilities Development Corp. Revenue Refunding
& Improvement (Cook Childrens Hospital), FSA-Insured,
5.00% due 12/1/17................................................. Aaa/AAA 3,046,429
6,000 Lower Neches Valley Authority, TX Industrial Development Corporation
(Mobil Oil Refining Corporate Project), 6.40% due 3/1/30.......... Aa2/AA 6,550,080
3,000 Richardson, TX Hospital Authority Hospital Revenue Refunding and
Improvement (Richardson Medical Center), 6.75% due 12/1/23........ Baa3/BBB- 3,253,530
320 Texas State Veterans Housing Assistance, 6.80% due 12/1/23.......... Aa2/AA 343,862
2,750 West Side Calhoun County, TX Navigation District Solid Waste Disposal
Revenue (Union Carbide Chemicals), 6.40% due 5/1/23............... Baa2/BBB 2,917,475
-----------
16,111,376
-----------
Virginia -- 5.2%
2,000 Giles County, VA IDA Revenue (Hoechst Celanese Project),
5.95% due 12/1/25................................................. A2/A+ 2,112,780
805 Richmond, VA Metropolitan Authority Expressway Revenue Refunding,
FGIC-Insured, 5.25% due 7/15/10................................... Aaa/AAA 852,181
500 Richmond, VA Metropolitan Authority Expressway Revenue Refunding,
FGIC-Insured, 5.25% due 7/15/12................................... Aaa/AAA 525,395
955 Virginia State Housing Development Authority, Commonwealth Mortgage,
Subseries B-5, 6.30% due 1/1/27................................... Aa1/AA+ 991,309
-----------
4,481,665
-----------
Washington -- 6.2%
3,500 Washington State GO, Series C, 5.50% due 7/1/16..................... Aa1/AA+ 3,727,640
1,460 Washington State Housing Finance Commission, Single-Family Mortgage
Revenue Refunding, 6.15% due 1/1/26............................... NR/AAA 1,579,344
-----------
5,306,984
-----------
West Virginia -- 3.2%
2,445 West Virginia State Water Development Authority, Loan Program II,
Series A, 7.00% due 11/1/31, Pre-Refunded 11/1/01................. NR/A- 2,707,329
-----------
Total Long-Term Investments (Cost -- $116,111,629).................. 123,188,769
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 5
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Investments (unaudited) (concluded)
June 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Moody's/S&P
(000) Short-Term Investments -- 4.2% Credit Rating Value
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nevada -- 0.8%
$ 700 Clark County, NV IDR, VRDD, 4.10% due 11/1/21....................... VMIG 1/A-1+ $ 700,000
------------
North Carolina -- 2.2%
300 North Carolina Medical Care Community Health Care Facilities Revenue
(The Givens Estates Inc. Project), VRDD, 4.05% due 12/1/26........ VMIG 1/NR 300,000
1,600 North Carolina Medical Care Community Hospital Revenue (Lexington
Memorial Hospital Project), VRDD, 4.05% due 4/1/10................ VMIG 1/NR 1,600,000
------------
1,900,000
------------
Virginia -- 1.2%
700 King George County, VA IDA Exempt Facilities Revenue (Birchwood Power
Partners Project A), VRDD, 4.15% due 10/1/24...................... NR/A-1+ 700,000
300 Roanoke, VA IDA Hospital Revenue (Carilion Health System Project B),
VRDD, 4.05% due 7/1/27............................................ VMIG 1/A-1+ 300,000
------------
1,000,000
-----------
Total Short-Term Investments (Cost -- $3,600,000).................... 3,600,000
------------
Total Investments-- 148.3% (Cost -- $119,711,629)................... 126,788,769
------------
Liabilities in Excess of Other Assets -- (1.5%)...................... (1,272,445)
------------
Total Net Assets -- 146.8%........................................... 125,516,324
------------
Par value of 800 shares of preferred stock at $50,000 per share
(Note 4)--(46.8%)................................................. (40,000,000)
------------
Net Assets Applicable to Common Stock -- 100%
(equivalent to $14.85 per share on 5,757,094
common shares outstanding)........................................ $ 85,516,324
============
<FN>
- -----------------
See pages 7 and 8 for definition of ratings and certain security descriptions.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 6
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Bond Ratings (unaudited)
Moody's -- Numerical modifiers 1, 2 and 3 may be applied to each generic rating
from "Aa" to "Baa," where 1 is the highest and 3 the lowest ranking within its
generic category.
Aaa - Bonds 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 rated "Aa" are judged to be of high quality by all standards.
Together with the "Aaa" group they comprise what are generally 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.
A - Bonds rated "A" possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment some time in the
future.
Baa - Bonds rated "Baa" are considered as medium grade obligations, i.e., 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. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.
Standard & Poor's -- Ratings from "AA" to "BB" may be modified by the addition
of a plus (+) or minus (-) sign to show relative standings within the major
rating categories.
AAA - Bonds rated "AAA" have the highest rating assigned by Standard &Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Bonds rated "AA" have a very strong capacity to pay interest and repay
principal and differs from the highest rated issue only in a small
degree.
A - Bonds rated "A" have a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than debt
in higher rated categories.
BBB - Bonds rated "BBB" are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they 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 bonds in this category than in higher
rated categories.
BB - Bonds rated "BB" have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which
could lead to inadequate capacity to meet timely interest and
principal payments.
NR - Indicates that the bond is not rated by Moody's or Standard & Poor's
as indicated.
Page 7
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Short-Term Securities Ratings (unaudited)
SP-1 - Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined
to possess overwhelming safety characteristics are denoted with a
plus (+) sign.
A-1 - Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating 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.
VMIG 1 - Moody's highest rating for issues having a demand feature - VRDO.
P-1 - Moody's highest rating for commercial paper and for VRDO prior to
the advent of the VMIG 1 rating.
Security Descriptions (unaudited)
<TABLE>
<S> <C> <C> <C>
ABAG - Association of Bay Area Governors GO - General Obligation Bonds
AIG - American International Guaranty HDC - Housing Development Corporation
AMBAC - American Municipal Bond Assurance HFA - Housing Finance Authority
Corporation IDA - Industrial Development Authority
BAN - Bond Anticipation Notes IDB - Industrial Development Board
BIG - Bond Investors Guaranty IDR - Industrial Development Revenue
CGIC - Capital Guaranty Insurance Company INFLOS - Inverse Floaters
CHFCLI - California Health Facility ISD - Independent School District
Construction Loan Insurance LEVRRS - Leveraged Reverse Rate Securities
CONNIE LOC - Letter of Credit
LEE - College Construction Loan Association MBIA - Municipal Bond Investors Assurance
COP - Certificate of Participation Corporation
EDA - Economic Development Authority MVRICS - Municipal Variable Rate Inverse
EDR - Economic Development Revenue Coupon Security
ETM - Escrowed To Maturity PCR - Pollution Control Revenue
FGIC - Financial Guaranty Insurance Company PSFG - Permanent School Fund Guaranty
FHA - Federal Housing Administration RAN - Revenue Anticipation Notes
FHLMC - Federal Home Loan Mortgage RIBS - Residual Interest Bonds
Corporation RITES - Residual Interest Tax-Exempt Securities
FLAIRS - Floating Adjustable Interest Rate SYCC - Structured Yield Curve Certificate
Securities TAN - Tax Anticipation Notes
FNMA - Federal National Mortgage Association TECP - Tax Exempt Commercial Paper
FRTC - Floating Rate Trust Certificates TOB - Tender Option Bonds
FSA - Financial Security Assurance TRAN - Tax and Revenue Anticipation Notes
GIC - Guaranteed Investment Contract VA - Veterans Administration
GNMA - Government National Mortgage VRDD - Variable Rate Daily Demand
Association VRWE - Variable Rate Wednesday Demand
</TABLE>
Page 8
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Assets and Liabilities (unaudited)
June 30, 1998
<TABLE>
Assets
<S> <C>
Investments, at value (Cost -- $119,711,629)......................................... $126,788,769
Cash ................................................................................ 50,180
Interest receivable ................................................................. 1,847,075
Receivable for securities sold ...................................................... 1,059,770
Prepaid expenses..................................................................... 33,314
------------
Total assets............................................................. 129,779,108
------------
Liabilities
Payable for securities purchased..................................................... 4,124,235
Management fee payable (Note 2)...................................................... 61,920
Accrued expenses..................................................................... 76,629
------------
Total liabilities........................................................ 4,262,784
------------
Total net assets......................................................... $125,516,324
============
Net Assets
Preferred Stock (Note 4)............................................................. $ 40,000,000
------------
Common Stock ($0.001 par value, 100,000,000 shares authorized;
5,757,094 shares outstanding)...................................................... 5,757
Additional paid-in capital........................................................... 79,673,514
Undistributed net investment income.................................................. 320,530
Accumulated realized loss on investments............................................. (1,560,617)
Net unrealized appreciation on investments........................................... 7,077,140
------------
Net assets applicable to common stock ................................... 85,516,324
------------
Total net assets......................................................... $125,516,324
============
Net asset value per share of common stock ($85,516,324 / 5,757,094 shares outstanding) $14.85
======
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 9
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Operations (unaudited)
For the Six Months Ended June 30, 1998
<TABLE>
Investment Income
<S> <C> <C>
Income
Interest (reduced by net premium amortization of $66,264)......................... $3,534,015
Operating Expenses
Management fee (Note 2).............................................$373,168
Auction agent fee................................................... 53,854
Audit and tax services.............................................. 36,140
Legal............................................................... 19,836
Printing............................................................ 14,666
Directors' fees and expenses (Note 2)............................... 14,102
Transfer agent...................................................... 10,791
Custodian........................................................... 9,951
Listing fee......................................................... 8,018
Shareholder annual meeting.......................................... 4,959
Amortization of deferred organization expenses (Note 1)............. 1,050
Other............................................................... 9,295
--------
Total operating expenses......................................................... 555,830
----------
Net investment income................................................................. 2,978,185
----------
Net Realized and Unrealized Gain (Loss)
Net realized gain on investments...................................................... 740,265
Change in net unrealized appreciation on investments.................................. (636,316)
----------
Net realized gain and change in net unrealized appreciation on investments............ 103,949
----------
Net Increase in Net Assets from Operations............................................ $3,082,134
==========
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 10
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
June 30, 1998 December 31,
(unaudited) 1997
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income................................................. $ 2,978,185 $ 6,128,607
Net realized gain on investments...................................... 740,265 911,206
Change in net unrealized appreciation on investments.................. (636,316) 4,003,941
------------ ------------
Net increase in net assets from operations............................ 3,082,134 11,043,754
------------ ------------
Dividends
To common shareholders from net investment income..................... (2,297,081) (4,594,161)
To preferred shareholders from net investment income.................. (754,600) (1,516,642)
------------ ------------
(3,051,681) (6,110,803)
------------ ------------
Total increase in net assets.......................................... 30,453 4,932,951
Net Assets
Beginning of period................................................... 125,485,871 120,552,920
------------ ------------
End of period (includes undistributed net investment income of
$320,530 and $394,026, respectively)............................. $125,516,324 $125,485,871
============ ============
</TABLE>
Statement of Cash Flows (unaudited)
For the Six Months Ended June 30, 1998
<TABLE>
Cash Flows from Operating Activities:
<S> <C>
Proceeds from sales of portfolio securities........................................ $ 23,446,777
Purchases of portfolio securities.................................................. (20,794,289)
Net purchases of short-term securities............................................. (2,600,000)
------------
52,488
Net investment income.............................................................. 2,978,185
Amortization of net premium on investments......................................... 66,264
Amortization of organization expenses.............................................. 1,050
Net change in receivables/payables related to operations........................... (33,023)
-----------
Net cash provided by operating activities...................................... 3,064,964
-----------
Cash Flows used by Financing Activities:
Common stock dividends paid........................................................ (2,297,081)
Preferred stock dividends paid..................................................... (754,600)
-----------
Net cash used by financing activities.......................................... (3,051,681)
-----------
Net increase in cash.................................................................... 13,283
Cash at beginning of period............................................................. 36,897
-----------
Cash at end of period................................................................... $ 50,180
===========
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements.
Page 11
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (unaudited)
Note 1. Significant Accounting Policies
Municipal Partners Fund Inc. ("Fund") was incorporated in Maryland on November
24, 1992 and is registered as a diversified, closed-end, management investment
company under the Investment Company Act of 1940, as amended. The Board of
Directors authorized 100 million shares of $0.001 par value common stock.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in accordance with GAAP requires management
to make estimates and assumptions that effect the reported amounts and
disclosures in the financial statements. Actual amounts could differ from those
estimates.
SECURITIES VALUATION. Tax-exempt securities are valued by independent pricing
services which use prices provided by market-makers or estimates of market
values obtained from yield data relating to instruments or securities with
similar characteristics. Short-term investments having a maturity of 60 days or
less are valued at amortized cost which approximates market value. Securities
for which reliable quotations are not readily available are valued at fair value
as determined in good faith by, or under procedures established by, the Board of
Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Realized gains and losses on sales of securities are
calculated on the identified cost basis. Interest income is accrued on a daily
basis. The Fund amortizes premiums and accretes discounts on securities
purchased using the effective interest method.
FEDERAL INCOME TAXES. The Fund has complied and intends to continue to comply
with the requirements of the Internal Revenue Code of 1986, as amended,
applicable to regulated investment companies, and to distribute all of its
income and capital gains, if any, to its shareholders. Therefore, no federal
income tax or excise tax provision is required.
DIVIDENDS AND DISTRIBUTIONS. The Fund declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Long-term
capital gains, if any, in excess of loss carryovers (See Note 3) are expected to
be distributed annually. Dividends and distributions to common shareholders are
recorded on the ex-dividend date. Dividends and distributions to preferred
shareholders are accrued on a weekly basis and are determined as described in 5.
The amount of dividends and distributions from net investment income and net
realized gains are determined in accordance with federal income tax regulations,
which may differ from GAAP.
Page 12
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (unaudited) (continued)
UNAMORTIZED ORGANIZATION EXPENSES. Organization expenses amounting to $89,271
were incurred in connection with the organization of the Fund. These costs have
been deferred and are being amortized ratably over a five-year period from
commencement of operations.
CASH FLOW INFORMATION. The Fund invests in securities and distributes dividends
from net investment income and net realized gains from investment transactions.
These activities are reported in the Statement of Changes in Net Assets.
Additional information on cash receipts and cash payments is presented in the
Statement of Cash Flows. Accounting practices that do not affect reporting
activities on a cash
basis include carrying investments at value and amortizing premium or accreting
discount on debt obligations.
Note 2. Management and Advisory Fees and Other Transactions
The Fund has entered into a management agreement with Value Advisors LLC
("Investment Manager"), a subsidiary of PIMCO Advisors L.P. ("PIMCO"), pursuant
to which the Investment Manager, among other things, supervises the Fund's
investment program and monitors the performance of the Fund's service providers.
The agreement with the Investment Manager was approved by shareholders at a
special meeting held on October 14, 1997, and has been in effect since the
closing of the sale of the Investment Manager by Oppenheimer Group Inc. to
PIMCO, which occurred on November 4, 1997. The Investment Manager was the
transferee of the investment management responsibilities for the Fund which were
previously provided by Advantage Advisers, Inc.
The Investment Manager and the Fund entered into an investment advisory and
administration agreement with the Salomon Brothers Asset Management Inc
("Investment Adviser"), an indirect wholly-owned subsidiary of Travelers Group
Inc. ("Travelers"), pursuant to which the Investment Adviser provides investment
advisory and administrative services to the Fund. The Investment Adviser is
responsible on a day-to-day basis for the management of the Fund's portfolio in
accordance with the Fund's investment objectives and policies and for making
decisions to buy, sell, or hold particular securities and is responsible for
day-to-day administration of the Fund. The Investment Adviser has delegated
certain administrative services to Mutual Management Corp. ("MMC"), an affiliate
of the Investment Adviser, pursuant to a Sub-Administration Agreement between
the Investment Adviser and MMC. The investment advisory and administration
agreement with the Investment Adviser was most recently approved by shareholders
at a special meeting held on January 15, 1998. Approval of such agreement was
necessary due to the merger of Salomon Inc, which had been the ultimate parent
company of the Investment Adviser, with and into Salomon Smith Barney Holdings
Inc., a subsidiary of Travelers, which occurred on November 28, 1997. On such
date, Travelers became the ultimate parent company of the Investment Adviser.
Page 13
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (unaudited) (continued)
The Fund pays the Investment Manager a monthly fee at an annual rate of 0.60% of
the Fund's average weekly net assets for its services, and the Investment
Manager pays the Investment Adviser a monthly fee at an annual rate of 0.36% of
the Fund's average weekly net assets for its services. For purposes of
calculating the fees, the liquidation value of any outstanding preferred stock
of the Fund is not deducted in determining the Fund's average weekly net assets.
Certain officers and/or directors of the Fund are also officers and/or directors
of the Investment Manager or the Investment Adviser.
At June 30, 1998, the Investment Adviser owned 4,275 shares of the Fund.
The Fund pays each Director not affiliated with the Investment Manager or the
Investment Adviser a fee of $5,000 per year, $700 for attendance at each board
and audit committee meeting and reimbursement for travel and out-of-pocket
expenses for each board and committee meeting attended.
Note 3. Portfolio Activity
Purchases and sales of investment securities, other than short-term investments
for the six months ended June 30, 1998, aggregated $24,918,524 and $24,506,547,
respectively. At December 31, 1997, the Fund had a net capital loss carryover of
approximately $2,300,000 of which $1,544,000 will be available through December
31, 2002, $704,000 will be available through December 31, 2003 and $52,000 will
be available through December 31, 2004 to offset future capital gains to the
extent provided by federal income tax regulations. In addition, as permitted
under Federal income tax regulations, the Fund has elected to defer $1,240 of
Post-October net capital losses to the next taxable year.
The federal income tax cost basis of the Fund's investments at June 30, 1998 was
substantially the same as the cost basis for financial reporting. Gross
unrealized appreciation and depreciation amounted to $7,108,012 and $30,872,
respectively, resulting in net unrealized appreciation for federal income tax
purposes of $7,077,140.
Note 4. Preferred Stock
On April 2, 1993, the Fund closed its public offering of 800 shares of $0.001
par value Auction Rate Preferred Stock ("Preferred Shares") at an offering price
of $50,000 per share. The Preferred Shares have a liquidation preference of
$50,000 per share plus an amount equal to accumulated but unpaid dividends
(whether or not earned or declared) and, subject to certain restrictions, are
redeemable in whole or in part.
Page 14
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (unaudited) (continued)
Dividend rates generally reset every 28 days and are determined by auction
procedures. The dividend rates on the Preferred Shares during the six months
ended June 30, 1998 ranged from 3.67% to 3.85%. The weighted average dividend
rate for the six months ended June 30, 1998 was 3.752%. The Board of Directors
designated the dividend period commencing April 21, 1998 as a Special Rate
Period. Pursuant to this Special Rate Period, the dividend rate set by the
auction held on April 20, 1998 remained in effect through July 20, 1998. The
dividend rate for this Special Rate Period was 3.85%. The Board of Directors
designated the dividend period commencing July 21, 1998 as a Special Rate
Period. Pursuant to this Special Rate Period, the dividend rate set by the
auction held on July 20, 1998 remains in effect through October 19, 1998 when
the regular auction procedure resumes, subject to the Fund's ability to
designate any subsequent dividend period as a Special Rate Period. The dividend
rate for this Special Rate Period is 3.67%.
The Fund is subject to certain restrictions relating to the Preferred Shares.
The Fund may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Shares would be less than 200%. The Preferred Shares are also subject
to mandatory redemption at $50,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Fund as set forth in its
Articles Supplementary are not satisfied.
The Preferred Shares, which are entitled to one vote per share, generally vote
with the common shares but vote separately as a class to elect two directors
and on certain matters affecting the rights of the Preferred Shares.
Note 5. Concentration of Credit Risk
Since the Fund invests a portion of its assets in issuers located in a single
state, it may be affected by economic and political developments in a specific
state or region. Certain debt obligations held by the Fund are entitled to the
benefit of insurance, standby letters of credit or other guarantees of banks or
other financial institutions.
Note 6. Common Stock Dividends Subsequent to June 30, 1998
On July 1 and August 3, 1998, the Board of Directors of the Fund declared a
common share dividend from net investment income, each in the amount of
$0.0665 per share, payable on July 31 and August 28, 1998 to shareholders of
record on July 21 and August 18, 1998, respectively.
Page 15
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Notes to Financial Statements (unaudited) (concluded)
Note 7. Bylaw Amendment
The Board of Directors of the Fund recently reviewed and approved various
amendments to the Fund's bylaws. For example, the bylaws provisions relating to
timely notice for proposals to be brought before an annual meeting of
stockholders (other than a proposal under Rule 14a-8 of the Securities Exchange
Act of 1934 to be included in the Fund's proxy statement) have been amended. As
amended, a stockholder's notice must be delivered to the Fund not less than 60
days nor more than 90 days prior to the first anniversary of the preceding
year's annual meeting. An exception applies in the event the date of the annual
meeting is substantially advanced or delayed from the anniversary date. The
Board believes that the amended timely notice provisions will provide greater
certainty to stockholders because previously, timely notice keyed off the date
of the current year's meeting or the date public disclosure of the current
year's meeting is made. In addition, the provisions provide that any business to
be brought before a special meeting of stockholders must be specified in the
notice of meeting or otherwise properly brought before the meeting by or at the
direction of the Board of Directors. Finally, upon recommendation of the Fund's
Maryland counsel, other changes to certain bylaw provisions were made to conform
to the bylaw provisions of more recently organized Maryland companies.
Page 16
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Financial Highlights
Data for a share of common stock outstanding throughout each period:
<TABLE>
<CAPTION>
1998(1) 1997 1996 1995 1994 1993(2)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period... $ 14.85 $ 13.99 $ 14.19 $ 11.55 $ 14.59 $ 14.10
-------- ------- ------- ------- ------- -------
Net investment income.................. 0.52 1.06 1.08 1.10 1.10 0.87
Net realized gain (loss) and change in net
unrealized appreciation (depreciation) on
investments......................... 0.02 0.86 (0.24) 2.63 (3.04) 0.73
-------- ------- ------- ------- ------- -------
Total from investment operations....... 0.54 1.92 0.84 3.73 (1.94) 1.60
-------- ------- ------- ------- ------- -------
Less distributions
Dividends to common shareholders from
net investment income............. (0.40) (0.80) (0.79) (0.80) (0.89) (0.71)
Dividends to preferred shareholders from
net investment income............. (0.14) (0.26) (0.25) (0.29) (0.21) (0.14)
-------- ------- ------- ------- ------- -------
Total distributions.................... (0.54) (1.06) (1.04) (1.09) (1.10) (0.85)
-------- ------- ------- ------- ------- -------
Offering costs on issuance of common and
preferred shares.................... -- -- -- -- -- (0.26)
-------- ------- ------- ------- ------- -------
Net asset value, end of period......... $ 14.85 $ 14.85 $ 13.99 $ 14.19 $ 11.55 $ 14.59
======== ======= ======= ======= ======= =======
Per share market value, end of period.. $13.4375 $ 13.50 $ 11.75 $11.625 $ 9.875 $ 13.75
======== ======= ======= ======= ======= =======
Total investment return based on market
price per share (3)................. 2.53%++ 22.31% 7.99% 26.18% (22.57%) 2.31%#
Ratios to average net assets of common
shareholders (4):
Operating expenses.................. 1.31%+ 1.34% 1.40% 1.43% 1.49% 1.30%+
Net investment income............... 7.04%+ 7.47% 7.84% 8.41% 8.67% 6.57%+
Net assets of common shareholders,
end of period (000)................. $85,516 $85,486 $80,553 $81,698 $66,469 $84,009
Preferred stock outstanding,
end of period (000)................. $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Portfolio turnover rate................ 20% 27% 27% 35% 17% 100%
<FN>
- -------------------------------------------------------------------------------
(1) For the six months ended June 30, 1998 (unaudited).
(2) For the period from commencement of investment operations on January 29,
1993 through December 31, 1993.
(3) For purposes of this calculation, dividends on common shares are assumed to
be reinvested at prices obtained under the Fund's dividend reinvestment plan
and the broker commission paid to purchase or sell a share is excluded.
(4) Ratios calculated on the basis of income and expenses relative to the
average net assets of common shares, and excludes the effect of dividend
payments to preferred shareholders.
# Return calculated based on beginning of period price of $14.10 (initial
offering price of $15.00 less underwriting discount of $.90) and end of
period market value of $13.75 per share. This calculation is not annualized.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
</FN>
</TABLE>
Page 17
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Selected Quarterly Financial Information (unaudited)
Summary of quarterly results of operations:
<TABLE>
<CAPTION>
Net Realized Gain
(Loss) &Change
in Net Unrealized
Net Investment Appreciation
Income (Depreciation)
----------------- -------------------
Quarter Ended* Total Per Share Total Per Share
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
March 31, 1996............................................... $1,561 $0.27 $(3,781) $(0.65)
June 30, 1996................................................ 1,551 0.27 (424) (0.08)
September 30, 1996........................................... 1,546 0.27 1,656 0.29
December 31, 1996............................................ 1,551 0.27 1,204 0.20
March 31, 1997............................................... 1,544 0.27 (1,587) (0.27)
June 30, 1997................................................ 1,535 0.27 2,442 0.42
September 30, 1997........................................... 1,531 0.26 2,071 0.36
December 31, 1997............................................ 1,519 0.26 1,989 0.35
March 31, 1998............................................... 1,515 0.26 (198) (0.03)
June 30, 1998................................................ 1,463 0.26 302 0.05
<FN>
- -------------------------------------------------------------------------------
*Totals expressed in thousands of dollars except per share amounts.
</FN>
</TABLE>
Page 18
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Other Information (unaudited)
Pursuant to certain rules of the Securities and Exchange Commission, the
following additional disclosure is provided.
Pursuant to the Fund's Dividend Reinvestment Plan ("Plan"), holders of Common
Stock whose shares of Common Stock are registered in their own names will be
deemed to have elected to have all distributions automatically reinvested by
State Street Bank and Trust Company ("Plan Agent") in Fund shares pursuant to
the Plan, unless they elect to receive distributions in cash. Holders of Common
Stock who elect to receive distributions in cash will receive all distributions
in cash by check in dollars mailed directly to the holder by the Plan Agent as
dividend-paying agent. Holders of Common Stock who do not wish to have
distributions automatically reinvested should notify the Plan Agent at the
address below. Distributions with respect to Common Stock registered in the name
of a bank, broker-dealer or other nominee (i.e., in "street name") will be
reinvested under the Plan unless the service is not provided by the bank,
broker-dealer or other nominee or the holder elects to receive dividends and
distributions in cash. Investors who own shares registered in the name of a
bank, broker-dealer or other nominee should consult with such nominee as to
participation in the Plan through such nominee, and may be required to have
their shares registered in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the holders of Common Stock in administering
the Plan. After the Fund declares a dividend on the Common Stock or determines
to make a capital gain distribution, the Plan Agent will, as agent for the
participants, receive the cash payment and use it to buy the Fund's Common Stock
in the open market, on the New York Stock Exchange or elsewhere, for the
participants' accounts. The Fund will not issue any new shares of Common Stock
in connection with the Plan.
Participants have the option of making additional cash payments to the Plan
Agent, monthly, in a minimum amount of $250, for investment in the Fund's Common
Stock. The Plan Agent will use all such funds received from participants to
purchase shares of Common Stock in the open market on or about the first
business day of each month. To avoid unnecessary cash accumulations, and also to
allow ample time for receipt and processing by the Plan Agent, it is suggested
that participants send in voluntary cash payments to be received by the Plan
Agent approximately ten days before an applicable purchase date specified above.
A participant may withdraw a voluntary cash payment by written notice, if the
notice is received by the Plan Agent not less than 48 hours before such payment
is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by shareholders for personal and tax records. Shares of Common Stock in
the account of each Plan participant will be held by the Plan Agent in the name
of the participant, and each shareholder's proxy will include those shares
purchased pursuant to the Plan.
Page 19
<PAGE>
Other Information (unaudited) (concluded)
In the case of holders of Common Stock, such as banks, broker-dealers or other
nominees, who hold shares for others who are beneficial owners, the Plan Agent
will administer the Plan on the basis of the number of shares of Common Stock
certified from time to time by the holders as representing the total amount
registered in such holders' names and held for the account of beneficial owners
that have not elected to receive distributions in cash.
There is no charge to participants for reinvesting dividends or capital
gains distributions or voluntary cash payments. The Plan Agent's fees for the
reinvestment of dividends and capital gains distributions and voluntary cash
payments will be paid by the Fund. However, each participant will pay a pro rata
share of brokerage commissions incurred with respect to the Plan Agent's open
market purchases in connection with the reinvestment of dividends and
distributions and voluntary cash payments made by the participant. The receipt
of dividends and distributions under the Plan will not relieve participants of
any income tax which may be payable on such dividends or distributions.
Participants may terminate their accounts under the Plan by notifying the Plan
Agent in writing. Such termination will be effective immediately if notice in
writing is received by the Plan Agent not less than ten days prior to any
dividend or distribution record date. Upon termination, the Plan Agent will send
the participant a certificate for the full shares held in the account and a cash
adjustment for any fractional shares or, upon written instruction from the
participant, the Plan Agent will sell part or all of the participant's shares
and remit the proceeds to the participant, less a $2.50 fee plus brokerage
commission for the transaction.
Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to notice of the termination sent to all participants in the
Plan at least 30 days before the record date for the dividend or distribution.
The Plan also may be amended by the Fund or the Plan Agent upon at least 30
days' written notice to participants in the Plan.
All correspondence concerning the Plan should be directed to the Plan Agent,
P.O. Box 8209, Boston, Massachusetts 02266-8209.
Page 20
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Additional Shareholder Information (unaudited)
On January 15, 1998, a Special Meeting of the Fund's stockholders was held for
the purpose of voting on the following matters:
1. The approval of a new investment advisory and administration agreement
among Value Advisors LLC, Salomon Brothers Asset Management Inc and
the Fund;
2. The election of William D. Cvengros as a Director of the Fund.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
% of Shares % of Shares Votes % of Shares
Votes For Voted Votes Against Voted Abstained Abstained
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4,949,621.196 97.3% 36,533.347 0.7% 99,281.649 2.0%
- --------------------------------------------------------------------------------------------------------
</TABLE>
The results of the vote on Proposal 2 were as follows:
<TABLE>
<CAPTION>
% of Shares Votes % of Shares
Name of Director Votes For Voted Against Voted
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
William D. Cvengros 4,991,733.369 98.2% 93,702.823 1.8%
- --------------------------------------------------------------------------------------------------------
</TABLE>
---------------
On April 7, 1998, the Annual Meeting of the Fund's Stockholders was held for
the purpose of voting on the following matters:
1. The election of Heath B. McLendon and Dr. Riordan Roett as Directors of
the Fund; and
2. The ratification of the selection of Pricewaterhouse Coopers LLP as the
Fund's independent auditors for the fiscal year ending December 31, 1998.
The results of the vote on Proposal 1 were as follows:
<TABLE>
<CAPTION>
Preferred
Preferred % of Shares Votes % of Shares
Name of Directors Votes For Voted Against Voted
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Heath B. McLendon 708 100.0% 0 0.0%
Dr. Riordan Roett 708 100.0% 0 0.0%
- ------------------------------------------------------------------------------------------------------
</TABLE>
The results of the vote on Proposal 2 were as follows:
<TABLE>
<CAPTION>
% of Shares % of Shares Votes % of Shares
Votes For Voted Votes Against Voted Abstained Abstained
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
4,906,402.552 98.9% 13,260.782 0.2% 40,939.285 0.8%
- --------------------------------------------------------------------------------------------------------
</TABLE>
Page 21
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Directors
CHARLES F. BARBER
Consultant; formerly Chairman,
ASARCO Incorporated
WILLIAM D. CVENGROS
Co-Chairman of the Board;
Chief Executive Officer and
President of Value Advisors LLC and
Chief Executive Officer and
President of PIMCO Advisors L.P.
HEATH B. MCLENDON
Co-Chairman of the Board;
Managing Director, Smith Barney Inc.
President and Director, Mutual
Management Corp. and Travelers
Investment Adviser, Inc.,
Chairman, Smith Barney Strategy
Advisors Inc.
RIORDAN ROETT
Professor and Director, Latin American
Studies Program, Paul H. Nitze
School of Advanced International Studies,
Johns Hopkins University
ROBERT L. ROSEN
General Partner,
R.L.R. Partners
Officers
WILLIAM D. CVENGROS
Co-Chairman of the Board
HEATH B. MCLENDON
Co-Chairman of the Board
STEPHEN J. TREADWAY
President
LEWIS E. DAIDONE
Executive Vice President and Treasurer
NEWTON B. SCHOTT
Executive Vice President
MARYBETH WHYTE
Executive Vice President
ALAN M. MANDEL
Controller
ANTHONY PACE
Assistant Controller
NOEL B. DAUGHERTY
Secretary
Municipal Partners Fund Inc.
7 World Trade Center
New York, New York 10048
Telephone 1-888-777-0102
INVESTMENT ADVISER
Salomon Brothers Asset Management Inc
7 World Trade Center
New York, New York 10048
INVESTMENT MANAGER
Value Advisors LLC
800 Newport Center Drive
Suite 100
Newport Beach, California 92660
AUCTION AGENT
Bankers Trust Company
4 Albany Street
New York, New York 10006
CUSTODIAN
PNC Bank N.A.
200 Stevens Drive
Lester, PA 19113
DIVIDEND DISBURSING AND TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
NEW YORK STOCK EXCHANGE SYMBOL
MNP
Page 22
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Municipal Partners
Fund Inc.
Semi-Annual Report
JUNE 30, 1998
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
BULK RATE
U.S. POSTAGE
PAID
S. HACKENSACK, NJ
PERMIT No. 750
