MUNICIPAL PARTNERS FUND INC.
July 22, 1999
To Our Shareholders:
We are pleased to provide this semi-annual report for the Municipal Partners
Fund Inc. ("Fund") as of June 30, 1999. Included are market commentary, a
schedule of the Fund's investments as of June 30, 1999 and financial statements
for the six months ended June 30, 1999. The Fund distributed income dividends to
common shareholders totaling $0.40 per share during the period. The table below
shows the annualized distribution rate and the six-month total return based on
the Fund's June 30, 1999 net asset value ("NAV") per share and its New York
Stock Exchange ("NYSE") closing price.
Price Annualized Six-Month
Per Share Distribution Rate* Total Return
--------- ---------------- ------------
$14.17 (NAV) 5.63% (2.41)%
$13.0625 (NYSE) 6.11% (4.78)%
During the first half of 1999, a strong domestic economy, rising oil prices and
reviving economic activity overseas combined to force interest rates up across
the U.S. Treasury yield curve. U.S. economic growth continued at a robust pace
during the first half of the year as evidenced by the 4.3% and 2.3% annualized
Gross Domestic Product ("GDP") growth rates for the first and second quarter,
respectively. Domestic labor markets remained extremely tight, with the
unemployment rate near a 29-year low. Collectively, the aforementioned
heightened obstinate worries about the prospect for higher inflation in the
near-term. The Federal Reserve Board ("Fed") tempered some of those concerns
when it increased its short-term lending rate by 25 basis points to 5.00% at the
conclusion of its mid-year Federal Open Market Committee meeting. The Fed also
cited that "conflicting forces in the economy" led it to adopt a neutral stance
concerning its near-term policy action, therefore dropping its previous
tightening bias. However, the Fed has signaled its willingness to raise rates if
there are any signs of inflationary pressures. Inflation -- as measured by the
Consumer Price Index ("CPI") -- was relatively well behaved during the first
half of the year. Productivity gains and moderate global demand were credited
with keeping inflation at a tepid rate.
Municipal bond performance, although negative during the first six months of the
year, outpaced most taxable fixed-income asset classes. Positive fundamentals,
decreased supply and generous municipal yields compared to U.S. Treasuries,
influenced the municipal market favorably. State and local governments issued
approximately $115 billion of debt during 1999, about 23% shy of the same period
last year. New project funding continues to outpace refunding issues. The need
for municipal new project funding comes from the demands of a growing economy
along with general disrepair of municipal infrastructures from decades past.
Burgeoning tax receipts are helping to improve the financial standing of many
municipal authorities. Evidence of this improvement is the soaring number of
rating upgrades for many municipal authorities from both Moody's Investors
Service, Inc. and Standard & Poor's Ratings Service, two major credit rating
organizations.
- ------------
* This distribution assumes a current monthly income dividend rate of $0.0665
per share for twelve months.
<PAGE>
MUNICIPAL PARTNERS FUND INC.
INVESTMENT STRATEGY AND PORTFOLIO CHANGES
We are managing our exposure to the healthcare sector in favor of transportation
and education bonds and selectively would add to positions in the utility
sector. At June 30, 1999, the Fund consisted of 53 issues throughout 27
different states. The Fund had an average effective maturity of 9.9 years and an
average duration of 6.6 years. The average credit quality of the Fund's
portfolio is at a strong double-A. The portfolio is well diversified with the
greatest industry sector weightings in housing, industrial development and
tax-backed debt.
MARKET OUTLOOK
We expect the U.S. economy should remain stable for the remainder of the year as
low unemployment and strong consumer confidence will support demand for goods.
Additionally, the Fed has engineered a good balance of strong economic growth,
low inflation and favorable interest rates. While we are generally optimistic
about the prospects for the municipal bond market, challenges remain.
Traditionally, the demand for municipal bonds has come from three main sources:
property and casualty insurance companies, retail investors and mutual funds.
Yet, non-traditional buyers became another important source of market demand
last year because municipal yields were very attractive versus taxable
securities. In the first half of 1999, some sources of demand for municipal
bonds faded as institutional investors gravitated toward taxable fixed-income
spread products. Net demand for municipal securities from property and casualty
and mutual funds is in a trough.
In a continuing effort to provide timely information concerning the Fund,
shareholders may call our toll free number at 1-888-777-0102, Monday through
Friday from 8:00 am to 6:00 pm EST for the Fund's net asset value, market price
and other information regarding the Fund's portfolio holdings and allocations.
All of us at Salomon Brothers Asset Management Inc appreciate the confidence you
have demonstrated in the past and hope to continue to serve you in future years.
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/ Robert E. Amodeo
Robert E. Amodeo
Executive Vice President
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SCHEDULE OF INVESTMENTS (unaudited)
June 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) Security VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM INVESTMENTS -- 97.6%
ALABAMA -- 1.1%
$1,225,000 BBB Courtland, AL IDB Solid Waste Disposal Revenue
(Champion International Corp. Project), Series A,
7.000% due 11/1/22....................................... $ 1,320,293
------------
CALIFORNIA -- 1.9%
2,000,000 A2* West Covina, CA COP (Queen of the Valley Hospital),
6.500% due 8/15/14, Pre-Refunded 8/15/04................. 2,228,580
------------
CONNECTICUT -- 0.8%
1,000,000 BBB- Connecticut State Health & Educational Facilities Authority
Revenue (Windham Community Memorial Hospital),
Series C, 6.000% due 7/1/20.............................. 996,450
------------
GEORGIA -- 2.2%
315,000 AAA Fulton County, GA Housing Authority Single-Family
Mortgage, 6.600% due 3/1/28.............................. 328,806
2,250,000 AAA Georgia Municipal Electric Authority Power Revenue,
Series Z, FGIC-Insured, 5.500% due 1/1/20................ 2,293,290
------------
2,622,096
------------
ILLINOIS -- 6.8%
2,000,000 AAA Cook County, ILGOPublic Improvement, Series A, FGIC-Insured,
5.250% due 11/15/14...................................... 1,981,160
Illinois Health Facilities Authority Revenue:
1,165,000 AAA Highland Park Hospital Project, Series A, MBIA-Insured,
5.500% due 10/1/08..................................... 1,200,672
1,500,000 A+ Refunding, Lutheran General Health System, Series C,
7.000% due 4/1/14...................................... 1,742,010
3,000,000 AAA Illinois State Sales Tax Revenue, Series V, 6.375% due 6/15/20 3,254,910
------------
8,178,752
------------
KANSAS -- 0.8%
1,000,000 AAA Kansas State Development Finance Authority Revenue
(Sisters of Charity, Leavenworth), MBIA-Insured,
5.250% due 12/1/10....................................... 1,009,970
------------
MAINE -- 2.3%
Maine State Housing Authority Mortgage Purchase:
2,090,000 AA Series A-2, 6.650% due 11/15/25.......................... 2,196,820
525,000 AA Series A-4, 6.375% due 11/15/12.......................... 545,139
------------
2,741,959
------------
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
PAGE 3
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SCHEDULE OF INVESTMENTS (unaudited) (continued)
June 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) Security VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MARYLAND -- 3.3%
$3,750,000 AAA Northeast Maryland Waste Disposal Authority, Solid Waste Revenue
(Montgomery County Resource Recovery, Ogden Martin Systems
Project A), MBIA-Insured, 6.300% due 7/1/16.................... $ 3,994,875
------------
MASSACHUSETTS -- 1.5%
1,755,000 AA Massachusetts State Special Obligation Revenue, Series A,
5.500% due 6/1/13.............................................. 1,815,425
------------
MICHIGAN -- 2.1%
1,000,000 AAA Detroit, MICity School District Refunding, Series C, FGIC-Insured,
5.250% due 5/1/16.............................................. 997,710
1,545,000 AAA Jenison, MIPublic Schools Refunding, FGIC-Insured,
5.250% due 5/1/16.............................................. 1,546,591
------------
2,544,301
------------
MINNESOTA -- 2.8%
3,240,000 AA+ Minnesota State Housing Finance Agency Single-Family Mortgage,
Series H, 6.500% due 1/1/26.................................... 3,376,469
------------
MONTANA -- 1.7%
2,000,000 AA+ Montana State Board Housing Single-Family Program, Series A-2,
6.050% due 12/1/12............................................. 2,087,380
------------
NEVADA -- 6.0%
1,350,000 AAA Clark County, NV Passenger Facility Revenue (Macarran International
Airport), MBIA-Insured, 5.750% due 7/1/23...................... 1,372,478
Nevada Housing Division, Single-Family Program, Series B-2:
4,355,000 Aa2* 6.400% due 10/1/25............................................. 4,528,373
1,235,000 Aa 6.950% due 10/1/26............................................. 1,306,222
------------
7,207,073
------------
NEW HAMPSHIRE -- 0.5%
545,000 Aa3* New Hampshire State HFA, Single-Family Residential, Series A,
6.800% due 7/1/15.............................................. 572,975
------------
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
PAGE 4
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SCHEDULE OF INVESTMENTS (unaudited) (continued)
June 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) Security VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW JERSEY -- 9.6%
New Jersey EDA:
$5,150,000 AAA PCR (Public Service Electric and Gas Co. Project), MBIA-Insured,
6.400% due 5/1/32............................................. $ 5,546,241
1,000,000 AAA Revenue Refunding (Trenton Office Complex), FSA-Insured,
5.250% due 6/15/12............................................ 1,013,120
4,450,000 AAA Water Facilities Revenue (New Jersey American Water Co., Inc.
Project), FGIC-Insured, 6.875% due 11/1/34.................... 4,895,757
------------
11,455,118
------------
NEW YORK -- 6.8%
Long Island Power Authority, NYElectric Systems Revenue:
1,250,000 AAA MBIA-Insured, 5.125% due 4/1/12................................. 1,238,938
1,500,000 AAA Series A, FSA-Insured, 5.500% due 12/1/12....................... 1,545,945
1,100,000 AAA New York State Thruway Authority Highway and Bridge Toll Revenue,
Series B, FGIC-Insured, 5.375% due 4/1/11....................... 1,123,474
950,000 AAA Port Authority of New York and New Jersey Construction,
Ninety-Sixth Series, FGIC-Insured, 6.600% due 10/1/23........... 1,027,606
3,100,000 Aa3* Triborough Bridge & Tunnel Authority, NY General Purpose Revenue,
Series Y, 5.500% due 1/1/17..................................... 3,195,202
------------
8,131,165
------------
OHIO -- 10.3%
2,000,000 BBB Miami County, OH Hospital Facilities Revenue Refunding
& Improvement (Upper Valley Medical Center),
6.250% due 5/15/13.............................................. 2,060,180
2,630,000 AAA Ohio State Turnpike Revenue Refunding, Series A, FGIC-Insured,
5.500% due 2/15/16.............................................. 2,713,976
7,200,000 A+ Ohio State Water Development Authority Solid Waste
Disposal Revenue (Cargill Inc.), 6.300% due 9/1/20.............. 7,502,184
------------
12,276,340
------------
PENNSYLVANIA -- 2.6%
3,000,000 AAA Delaware Valley, PA Regional Finance Authority Local
Government Revenue, Series A, AMBAC-Insured,
5.500% due 8/1/28............................................... 3,070,320
------------
RHODE ISLAND -- 2.8%
3,115,000 AA+ Rhode Island Housing & Mortgage Finance Corp., Homeownership
Opportunity, Series 7B, 6.800% due 10/1/25...................... 3,285,827
------------
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
PAGE 5
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SCHEDULE OF INVESTMENTS (unaudited) (continued)
June 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) Security VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SOUTH CAROLINA -- 1.6%
$2,000,000 AAA Charleston County, SCRevenue (Care Alliance Health Services),
Series A, FSA-Insured, 5.125% due 8/15/15................... $ 1,949,560
------------
SOUTH DAKOTA -- 4.4%
4,955,000 AAA South Dakota Housing Development Authority, Homeowner Mortgage,
Series D, 6.850% due 5/1/26................................. 5,208,696
------------
TENNESSEE -- 3.1%
3,400,000 AA- The IDB of Humphreys County, TN Solid Waste Disposal Revenue
(E.I. du Pont de Nemours and Co. Project), 6.700% due 5/1/24 3,669,857
------------
TEXAS -- 12.4%
2,035,000 AA- Houston, TX Refunding and Public Improvement, Series A,
5.250% due 3/1/11........................................... 2,051,728
6,000,000 AA Lower Neches Valley Authority, TX Industrial Development Corp.
Sewerage Facilities Revenue (Mobil Oil Refining Corp. Project),
6.400% due 3/1/30........................................... 6,411,301
Richardson, TXHospital Authority Hospital Revenue Refunding
& Improvement (Richardson Medical Center):
1,840,000 BBB+ 6.750% due 12/1/23........................................ 1,986,611
1,160,000 BBB+ 6.750% due 12/1/23, Pre-Refunded 12/1/03.................. 1,279,596
255,000 AA Texas State Veterans Housing Assistance, 6.800% due 12/1/23... 270,917
2,750,000 BBB West Side Calhoun County, TX Navigation District Solid Waste
Disposal Revenue (Union Carbide Chemicals),
6.400% due 5/1/23........................................... 2,842,098
------------
14,842,251
------------
VIRGINIA -- 2.5%
2,000,000 A+ Giles County, VA IDA Revenue (Hoechst Celanese Project),
5.950% due 12/1/25.......................................... 2,025,620
955,000 AA+ Virginia State Housing Development Authority, Commonwealth
Mortgage, Sub-Series B-5, 6.300% due 1/1/27................. 982,428
------------
3,008,048
------------
WASHINGTON -- 4.2%
3,500,000 AA+ Washington State GO, Series C, 5.500% due 7/1/16.............. 3,605,559
1,335,000 AAA Washington State Housing Finance Commission, Single-Family
Mortgage Revenue Refunding, Series D-1, 6.150% due 1/1/26... 1,428,836
------------
5,034,395
------------
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
PAGE 6
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SCHEDULE OF INVESTMENTS (unaudited) (continued)
June 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT RATING(A) Security VALUE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WEST VIRGINIA -- 2.2%
$2,445,000 A- West Virginia State Water Development Authority, Loan Program II,
Series A, 7.000% due 11/1/31, Pre-Refunded 11/1/01............ $ 2,643,998
------------
WISCONSIN -- 1.3%
1,470,000 AA Wisconsin State Refunding GO, Series 1, 5.500% due 11/1/12...... 1,526,285
------------
Total Long-Term Investments (Cost -- $113,337,739).............. 116,798,458
------------
SHORT-TERM INVESTMENTS -- 2.4%
MICHIGAN -- 0.1%
100,000 A-1+ University of Michigan, University Hospital Revenue Refunding,
Series A-2, VRDD, 3.450% due 12/1/24.......................... 100,000
------------
NEVADA -- 0.1%
100,000 A-1+ Clark County, NV IDR (Cogeneration Project), VRDD,
3.550% due 11/1/21............................................ 100,000
------------
VIRGINIA -- 2.2%
2,650,000 A-1+ King George County, VA IDA Exempt Facility Revenue
(Birchwood Power Partners), Series A, VRDD,
3.700% due 10/1/24............................................ 2,650,000
------------
TOTAL SHORT-TERM INVESTMENTS (Cost -- $2,850,000)............... 2,850,000
------------
TOTAL INVESTMENTS -- 100% (Cost -- $116,187,739**).............. $119,648,458
============
<FN>
- ------------
(a) All ratings are by Standard & Poor's Ratings Service, except those which are
identified by an asterisk (*) are rated by Moody's Investors Service, Inc.
** Aggregate cost for Federal income tax purposes is substantially the same.
</FN>
See pages 8 and 9 for definition of ratings and certain security descriptions.
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
PAGE 7
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
LONG-TERM SECURITIES RATINGS (unaudited)
Standard & Poor's Ratings Service ("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.
Moody's Investors Service, Inc. ("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.
NR -Indicates that the bond is not rated by Moody's or Standard & Poor's as
indicated.
PAGE 8
<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.
VMIG1 -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
FGIC - Financial Guaranty Insurance Company PCR - Pollution Control Revenue
FHA - Federal Housing Administration PSFG - Permanent School Fund Guaranty
FHLMC - Federal Home Loan Mortgage RAN - Revenue Anticipation Notes
Corporation RIBS - Residual Interest Bonds
FLAIRS - Floating Adjustable Interest Rate RITES - Residual Interest Tax-Exempt Securities
Securities SYCC - Structured Yield Curve Certificate
FNMA - Federal National Mortgage Association TAN - Tax Anticipation Notes
FRTC - Floating Rate Trust Certificates TECP - Tax Exempt Commercial Paper
FSA - Financial Security Assurance TOB - Tender Option Bonds
GIC - Guaranteed Investment Contract TRAN - Tax and Revenue Anticipation Notes
GNMA - Government National Mortgage VA - Veterans Administration
Association VRDD - Variable Rate Daily Demand
VRWE - Variable Rate Wednesday Demand
PAGE 9
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
STATEMENT OF ASSETS AND LIABILITIES (unaudited)
June 30, 1999
<TABLE>
ASSETS:
<S> <C>
Investments, at value (Cost-- $116,187,739)...................................... $119,648,458
Cash............................................................................. 47,806
Interest receivable.............................................................. 1,831,570
Receivable for securities sold................................................... 165,000
Prepaid expenses................................................................. 24,646
------------
TOTAL ASSETS..................................................................... 121,717,480
------------
LIABILITIES:
Management fee payable........................................................... 60,300
Accrued expenses................................................................. 77,987
------------
TOTAL LIABILITIES................................................................ 138,287
------------
TOTAL NET ASSETS...................................................................... $121,579,193
============
NET ASSETS:
Preferred stock (Note 5)......................................................... $ 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.............................................. 199,126
Accumulated net realized loss on investments..................................... (1,759,923)
Net unrealized appreciation on investments....................................... 3,460,719
------------
Net Assets Applicable to Common Stock............................................ 81,579,193
------------
TOTAL NET ASSETS...................................................................... $121,579,193
============
NET ASSET VALUE PER SHARE OF COMMON STOCK ($81,579,193 / 5,757,094
shares outstanding)................................................................. $14.17
======
- ---------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
PAGE 10
<PAGE>
MUNICIPAL PARTNERS FUND INC.
STATEMENT OF OPERATIONS (unaudited)
For the Six Months Ended June 30, 1999
<TABLE>
INVESTMENT INCOME:
<S> <C>
Interest............................................................................. $ 3,437,027
-----------
EXPENSES:
Management fee (Note 2).............................................................. 371,303
Auction agent fees................................................................... 54,709
Shareholder communications........................................................... 29,015
Audit and tax services............................................................... 28,047
Directors' fees and expenses (Note 2)................................................ 11,894
Legal................................................................................ 11,476
Listing fee.......................................................................... 8,018
Transfer agent....................................................................... 7,439
Custodian............................................................................ 2,768
Other................................................................................ 8,020
-----------
TOTAL EXPENSES....................................................................... 532,689
-----------
NET INVESTMENT INCOME..................................................................... 2,904,338
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales............................................................... 28,559,366
Cost of securities sold........................................................... 28,513,168
-----------
NET REALIZED GAIN.................................................................... 46,198
-----------
Change in Net Unrealized Appreciation of Investments:
Beginning of period............................................................... 7,762,903
End of period..................................................................... 3,460,719
-----------
DECREASE IN NET UNREALIZED APPRECIATION.............................................. (4,302,184)
-----------
NET LOSS ON INVESTMENTS................................................................... (4,255,986)
-----------
DECREASE IN NET ASSETS FROM OPERATIONS.................................................... $(1,351,648)
===========
- --------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
PAGE 11
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1999 (unaudited)
and the Year Ended December 31, 1998
<TABLE>
<CAPTION>
1999 1998
- ----------------------------------------------------------------------------------------------------------
OPERATIONS:
<S> <C> <C>
Net investment income................................................ $ 2,904,338 $ 5,982,095
Net realized gain.................................................... 46,198 494,761
Increase (decrease) in net unrealized appreciation................... (4,302,184) 49,447
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS.................... (1,351,648) 6,526,303
------------ ------------
DIVIDENDS PAID FROM NET INVESTMENT INCOME TO:
Common shareholders.................................................. (2,297,081) (4,594,162)
Preferred shareholders............................................... (677,123) (1,512,967)
------------ ------------
DECREASE IN NET ASSETS FROM DIVIDENDS................................ (2,974,204) (6,107,129)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS......................................... (4,325,852) 419,174
NET ASSETS:
Beginning of Period.................................................. 125,905,045 125,485,871
------------ ------------
END OF PERIOD*....................................................... $121,579,193 $125,905,045
============ ============
* Includes undistributed net investment income of:........................ $199,126 $268,992
======== ========
</TABLE>
Statement of Cash Flows (unaudited)
For the Six Months Ended June 30, 1999
<TABLE>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
<S> <C>
Proceeds from sales of portfolio securities........................................ $ 28,444,385
Purchases of portfolio securities.................................................. (28,480,729)
Net purchases of short-term securities............................................. (50,000)
------------
(86,344)
Net investment income.............................................................. 2,904,338
Amortization of net premium on investments......................................... 44,498
Net change in receivables/payables related to operations........................... 71,735
------------
NET CASH PROVIDED BY OPERATING ACTIVITIES.......................................... 2,934,227
------------
CASH FLOWS USED BY FINANCING ACTIVITIES:
Common stock dividends paid........................................................ (2,297,081)
Preferred stock dividends paid..................................................... (677,123)
------------
NET CASH USED BY FINANCING ACTIVITIES.............................................. (2,974,204)
------------
NET DECREASE IN CASH.................................................................... (39,977)
Cash, Beginning of Period............................................................... 87,783
------------
CASH, END OF PERIOD..................................................................... $ 47,806
============
- ----------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
PAGE 12
<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
Fund's primary investment objective is to seek a high level of current income
which is exempt from regular federal income taxes, consistent with the
preservation of capital. As a secondary investment objective, the Fund intends
to enhance portfolio value by purchasing tax exempt securities that, in the
opinion of Salomon Brothers Asset Management Inc ("Investment Adviser"), may
appreciate in value relative to other similar obligations in the marketplace.
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 Generally Accepted
Accounting Principles ("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 4) 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 13
<PAGE>
MUNICIPAL PARTNERS FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
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 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 Investment Adviser, a wholly-owned subsidiary
of Salomon Brothers Holding Co. Inc., which in turn is wholly owned by Salomon
Smith Barney Holdings Inc. ("SSBH"), 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 SSBC Fund Management
Inc. ("SSBC"), formerly known as Mutual Management Corp., an affiliate of the
Investment Adviser, pursuant to a Sub-Administration Agreement between the
Investment Adviser and SSBC.
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, 1999, the Investment Adviser owned 4,275 shares of the Fund.
PAGE 14
<PAGE>
MUNICIPAL PARTNERS FUND INC.
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
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. INVESTMENTS
During the six months ended June 30, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities, but excluding
short-term securities) were as follows:
Purchases.......................................................... $28,480,729
===========
Sales.............................................................. $28,559,366
===========
At June 30, 1999, the aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
Gross unrealized appreciation...................................... $ 4,422,131
Gross unrealized depreciation...................................... (961,412)
-----------
Net unrealized appreciation........................................ $ 3,460,719
===========
NOTE 4. CAPITAL LOSS CARRYFORWARDS
At December 31, 1998, the Fund had a net capital loss carryover of approximately
$1,805,000 of which $1,049,000 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.
NOTE 5. 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 15
<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, 1999 ranged from 3.30% to 3.72%. The weighted average dividend
rate for the six months ended June 30, 1999 was 3.367%. The Board of Directors
designated the dividend period commencing April 20, 1999 as a Special Rate
Period. Pursuant to this Special Rate Period, the dividend rate set by the
auction held on April 19, 1999 remained in effect through July 19, 1999. The
dividend rate for this Special Rate Period was 3.30%.
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 6. 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 7. EVENTS SUBSEQUENT TO JUNE 30, 1999
COMMON STOCK DIVIDENDS. On July 1 and August 2, 1999, 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 30 and August 27, 1999 to
shareholders of record on July 13 and August 17, 1999, respectively.
PREFERRED STOCK DIVIDENDS. The Board of Directors designated the dividend period
commencing July 20, 1999 as a Special Rate Period. Pursuant to this Special Rate
Period, the dividend rate set by the auction held on July 19, 1999 remains in
effect through October 18, 1999 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 3.50%.
PAGE 16
<PAGE>
MUNICIPAL PARTNERS FUND INC.
FINANCIAL HIGHLIGHTS
Data for a share of common stock outstanding throughout each year ended December
31, except where noted:
<TABLE>
<CAPTION>
1999(1) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....... $ 14.92 $ 14.85 $ 13.99 $14.19 $ 11.55 $14.59
-------- ------- -------- ------ ------- ------
INCOME (LOSS) FROM OPERATIONS:
Net investment income................... 0.51 1.04 1.06 1.08 1.10 1.10
Net realized and unrealized gain (loss). (0.74) 0.09 0.86 (0.24) 2.63 (3.04)
-------- ------- -------- ------ ------- ------
Total Income (Loss) From Operations........ (0.23) 1.13 1.92 0.84 3.73 (1.94)
-------- ------- -------- ------ ------- ------
LESS DIVIDENDS PAID FROM
NET INVESTMENT INCOME TO:
Common shareholders..................... (0.40) (0.80) (0.80) (0.79) (0.80) (0.89)
Preferred shareholders.................. (0.12) (0.26) (0.26) (0.25) (0.29) (0.21)
-------- ------- -------- ------ ------- ------
Total Dividends From Net Inv1estment Income. (0.52) (1.06) (1.06) (1.04) (1.09) (1.10)
-------- ------- -------- ------ ------- ------
NET ASSET VALUE, END OF PERIOD............. $ 14.17 $ 14.92 $ 14.85 $13.99 $ 14.19 $11.55
======== ======= ======== ====== ======= ======
MARKET VALUE, END OF PERIOD................ $13.0625 $14.125 $ 13.50 $11.75 $11.625 $9.875
======== ======= ======== ====== ======= ======
TOTAL RETURN, BASED ON MARKET PRICE (2).... (4.78)%++ 10.89% 22.31% 7.99% 26.18% (22.57)%
======== ======= ======== ====== ======= ======
RATIOS TO AVERAGE NET ASSETS OF
COMMON SHAREHOLDERS (3):
Operating expenses...................... 1.27%+ 1.28% 1.34% 1.40% 1.43% 1.49%
Net investment income................... 6.91%+ 6.99% 7.47% 7.84% 8.41% 8.67%
NET ASSETS OF COMMON SHAREHOLDERS,
END OF PERIOD (000S).................... $81,579 $85,905 $85,486 $80,553 $81,698 $66,469
PREFERRED STOCK OUTSTANDING,
END OF PERIOD (000S).................... $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
PORTFOLIO TURNOVER RATE.................... 24% 32% 27% 27% 35% 17%
<FN>
- ----------------------------------------------------------------------------------------------------------
(1) For the six months ended June 30, 1999 (unaudited).
(2) 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.
(3) 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.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
</FN>
PAGE 17
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
SELECTED QUARTERLY FINANCIAL INFORMATION (unaudited)
Summary of quarterly results of operations:
<TABLE>
<CAPTION>
NET REALIZED &
NET INVESTMENT UNREALIZED
INCOME GAIN (LOSS)
------------------- ---------------------
QUARTER ENDED* TOTAL PER SHARE TOTAL PER SHARE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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
September 30, 1998........................................... 1,513 0.26 1,494 0.26
December 31, 1998............................................ 1,491 0.26 (1,054) (0.19)
March 31, 1999............................................... 1,449 0.25 (793) (0.14)
June 30, 1999................................................ 1,455 0.26 (3,463) (0.60)
- -----------------------------------------------------------------------------------------------------------
*Totals expressed in thousands of dollars except per share amounts.
</TABLE>
PAGE 18
<PAGE>
MUNICIPAL PARTNERS FUND INC.
Additional Shareholder Information (unaudited)
On April 15, 1999, 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 Charles F. Barber as Directors of
the Fund; and
2. The ratification of the selection of Pricewaterhouse Coopers LLP as the
Fund's independent accountants for the fiscal year ending December 31,
1999.
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%
Charles F. Barber 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 98.9% 13,261 0.3% 40,939 0.8%
- -------------------------------------------------------------------------------------------------------
PAGE 19
</TABLE>
<PAGE>
MUNICIPAL PARTNERS FUND INC.
OTHER INFORMATION (unaudited)
Year 2000. The investment management services provided to the Fund by the
Investment Adviser depend in large part on the smooth functioning of its
computer systems. Many computer software systems in use today cannot recognize
the year 2000, but revert to 1900 or some other date, due to the manner in which
the dates were encoded or calculated. The capability of these systems to
recognize the year 2000 could have a negative impact on the Investment Adviser's
provision of investment advisory services, including handling of securities
trades, pricing and account services. The Investment Adviser has advised the
Fund that it has been reviewing all of their computer systems and actively
working on necessary changes to its systems to prepare for the year 2000 and
expects that given the extensive testing which it is undertaking, its systems
will be year 2000 compliant before such date. In addition, the Investment
Adviser has been advised by certain of the Fund's service providers that they
are also in the process of modifying their systems with the same goal. There
can, however, be no assurance that the Investment Adviser or any other service
provider will be successful in achieving year 2000 compliance, or that
interaction with other non-complying computer systems will not impair services
to the Fund at that time.
PAGE 20
<PAGE>
MUNICIPAL PARTNERS FUND INC.
DIVIDEND REINVESTMENT PLAN (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 YorkStock 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 21
<PAGE>
MUNICIPAL PARTNERS FUND INC.
DIVIDEND REINVESTMENT PLAN (unaudited) (continued)
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 toState Street Bank
and Trust Company, P.O. Box 8209, Boston, Massachusetts 02266-8209.
PAGE 22
<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, SSBC Fund
Management Inc. and Travelers
Investment Adviser, 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
ROBERT E. AMODEO
Executive Vice President
NEWTON B. SCHOTT
Executive Vice President
ANTHONY PACE
Controller
CHRISTINA T. SYDOR
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
MUNICIPAL PARTNERS
FUND INC.
SEMI-ANNUAL REPORT
JUNE 30, 1999
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
MNPSEMI 6/99
