<PAGE>
Letter To Shareholders ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
May 30, 1995
Dear Shareholder:
ACM Municipal Securities Income Fund's fiscal half year ending April 30 saw a
dramatic rebound from the tumultuous markets of 1994. While municipal bond
portfolios generally underperformed other sectors of the fixed income markets
during 1994, this group has had by far the most dramatic recovery in 1995. The
rebound in bond prices is primarily a result of the economy showing signs of
slowing in response to higher short-term interest rates and confirmation that
despite the continuing economic expansion, price inflation remains subdued.
Favorable technical conditions in the municipal market have also contributed to
the rally along with declining new issue supply from state and local debt
issuers and improved demand from investors.
MARKET OVERVIEW
Your Fund's fiscal year 1995 began in November amid negative trends in the
municipal market that had prevailed since early 1994 when the Federal Reserve
began to increase short-term interest rates. An imbalance between buyers and
sellers was exacerbated when municipal bond dealers, in an effort to prevent
further losses in a disappointing year for trading profits, cut back their
bidding for securities in the secondary market. This caused prices to drop
precipitously, which accelerated redemptions by frustrated mutual fund
investors. As a result, yields increased by approximately 1.00%, from 6.50% in
late September to 7.50% by late November on triple-A rated 30-year municipal
bonds. This translated into an approximate 11.30% decline in the price of a
typical long municipal issue.
The market began its turnaround in early December as bargain hunters, including
many non-traditional municipal investors such as tax-exempt pension funds and
hedge funds, began purchasing undervalued state and local government debt at
yields ranging from 90-95% of comparable maturity U.S. Treasury bonds. The rally
continued in January with the return of individual investors and mutual funds
reinvesting proceeds from bond calls, bond maturities and interest payments.
January 1, 1995, was a record-breaking date for municipal bonds either maturing
or being called for early redemption. January 1995 also saw a decline in terms
of new issuance of over 60% compared with the same period in 1994. This sharp
reduction in the supply of municipal securities available in the marketplace
continued to positively impact prices throughout the remainder of the Fund's
fiscal second quarter ending in April 1995.
INVESTMENT STRATEGY
As we said to you in our last letter, we believe that the dramatic rise in
municipal bond yields during 1994 represented excellent value for long-term tax-
exempt investors and one of the best buying opportunities for municipal
investors in recent years. Therefore, our focus in managing your Fund throughout
the period was to take advantage of weak bond prices by selling off older,
higher coupon bonds which we expect to be called for early redemption over the
next few years. We replaced these call-vulnerable positions with new issue
current coupon bonds having a minimum of ten years' call protection. This
repositioning has allowed us to lock in higher current income and it led to
excellent performance results for the Fund during the first quarter of 1995.
The Orange County, California bankruptcy protection filing early last December
has caused increased investor focus on the credit quality of state and local
government debt issuers. The highly fragmented nature of the municipal market
and the difficulty that bond rating services have tracking both new and existing
issues makes credit analysis a crucial part of municipal bond investing.
Nevertheless, we do not expect the Orange County bankruptcy filing to start a
trend among municipal issuers. On the contrary, the events in Orange County
should lead to better disclosure and mandatory updating of financial statements
by local government issuers which is a major long-term benefit for the entire
marketplace, which includes both issuers and investors.
1
<PAGE>
ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
OUTLOOK
After a tremendous rebound in the first quarter, we anticipate that municipal
bonds will continue to perform well throughout the rest of calendar year 1995.
Any weakness in prices should represent an opportunity to purchase undervalued
bonds, given the continuing favorable market technicals of low new-issue volume
and continued investor interest in the tax-exempt market. Fundamental trends in
the economy should also favor municipal bonds, with short-term interest rates
stabilizing and inflation remaining low. Price volatility such as that
experienced in late 1994 should also decline significantly, a trend which has
historically been beneficial for municipal bond returns. Municipals also offer
good relative value on an after-tax basis relative to other fixed income
sectors, which would indicate further potential for price appreciation relative
to taxable bonds.
The prospect that tax reforms could diminish the after-tax yield advantage of
municipal bonds could cause some price volatility relative to other fixed income
investments. However, the longer-term probability of such legislation being
enacted appears to be extremely low. We will seek to take advantage of
opportunities to add value to ACM Municipal Securities Income Fund in the second
half of the year, and to preserve the gains made year to date.
INVESTMENT RESULTS
For the six months ended April 30, 1995, ACM Municipal Securities Income Fund
achieved a total return of +6.89% on a net asset value basis. In the same
period, your Fund paid monthly dividends of $.075 per share. Since we last
reported to you in November, the Fund has continued to provide high current
tax-free income and taxable equivalent yields.
Thank you for your interest and investment in ACM Municipal Securities Income
Fund. We look forward to updating you on its progress in the coming months.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Susan P. Keenan
Susan P. Keenan
Senior Vice President
2
<PAGE>
Portfolio Of Investments
April 30, 1995 (unaudited) ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATING (000) VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS--101.5%
ALASKA--1.5%
A+ Alaska Hsg Fin Corp
Ser '93 I SFMR (GNMA
Collateralized)
5.90%, 12/01/33.................. $ 3,600 $ 3,334,500
------------
ARIZONA--5.0%
AAA Maricopa County AMT
IDR (Citizens Utilities)
6.20%, 5/01/30................... 8,300 8,102,875
AAA Yuma MFHR
Alexandrite Sands Apt
AMT Ser '90 FHA
7.70%, 12/01/29.................. 2,530 2,612,225
------------
10,715,100
------------
CALIFORNIA--22.3%
A+ California GO Veterans Hsg
AMT Ser '95
6.40%, 2/01/20................... 10,000 9,812,500
AA- California Hsg Fin Agy
SFMR (Homeownership
Mtg) AMT Ser '91B
7.55%, 8/01/20................... 1,100 1,150,875
AAA California Hsg Fin Agy
MFHR (Homeownership
Mtg) AMT Ser '91A
MBIA 7.20%, 2/01/26.............. 3,450 3,575,062
Ser '91C MBIA
7.00%, 8/01/23................... 1,475 1,521,093
A California Poll Ctl
Fin Auth
PCR (Pacific
Gas & Electric)
AMT Ser '92B
6.35%, 6/01/09................... 10,000 10,187,500
A+ California Poll Ctl
Fin Auth Res Rec
(Waste Mgmt, Inc.)
AMT Ser '91A
7.15%, 2/01/11................... 7,000 7,420,000
AAA Fremont FHA
MFHR (Regency Square
Apts) AMT Ser '86A
7.75%, 11/01/28.................. 1,500 1,588,125
AA- Long Beach AMT
Harbor Rev Ser '89A
7.25%, 5/15/19................... $12,000 $ 12,555,000
------------
47,810,155
------------
COLORADO--9.9%
Baa* Denver City & Cnty AMT
Airport Rev
8.50%, 11/15/07,
Ser '90A......................... 9,000 9,787,500
7.75%, 11/15/21,
Ser '91D......................... 11,000 11,398,750
------------
21,186,250
------------
GEORGIA--1.7%
AA- Atlanta AMT
Geo Smith Domed Stadium
Ser '90
7.875%, 7/01/20.................. 3,500 3,740,625
------------
ILLINOIS--4.2%
AAA Chicago AMT MBIA
Airport Rev (O'Hare Int'l)
Ser '93B
6.75%, 1/01/18................... 5,020 5,220,800
Baa2* Chicago Airport Rev
(American Airlines)
Ser '94
8.20%, 12/01/24.................. 3,500 3,863,125
------------
9,083,925
------------
INDIANA--2.7%
AAA Indianapolis AMT MBIA
Port Airport & Marina
5.875%, 1/01/13.................. 6,000 5,775,000
------------
LOUISIANA--1.6%
BBB St Charles Parish
Solid Waste
(Louisiana Pwr & Light)
AMT Ser '93A
6.20%, 5/01/23................... 3,650 3,389,939
------------
MASSACHUSETTS--3.0%
A- Mass Health & Ed Fac Auth
Hosp Rev (Jordan Hospital)
Ser B
6.875%, 10/01/15................. 1,355 1,365,162
</TABLE>
3
<PAGE>
Portfolio Of Investments (cont.) ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATING (000) VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
A1* New England Ed Loan Mktg
Student Loan Ref
AMT Ser '93H
6.90%, 11/01/09.................. $ 4,670 $ 4,996,900
------------
6,362,062
------------
MICHIGAN--2.2%
AAA Grand Ledge GO MBIA
School District Ser '94
7.875%, 5/01/11.................. 1,500 1,751,250
AA+ Michigan Hsg Dev Auth
SFMR (Mtg Rev)
AMT Ser '95B
7.05%, 6/01/26................... 2,940 3,028,200
------------
4,779,450
------------
NEBRASKA--4.9%
A* Nebraska Higher Ed
Student Loan Rev
AMT Ser '93B
6.00%, 6/01/28................... 11,100 10,420,125
------------
NEW HAMPSHIRE--2.3%
AAA Keene Housing Dev Corp
MFHR (Central Square)
FHA Ser '90A
7.50%, 2/01/25................... 4,460 4,861,400
------------
NEW JERSEY--1.3%
BBB+ Camden Cnty PCR
Solid Waste Res Rec
AMT Ser '91B
7.50%, 12/01/09.................. 2,750 2,677,812
------------
NEW YORK--15.8%
A+ Albany County IDR
(Spectapark Assoc)
AMT Ser '89A
7.60%, 12/01/09.................. 3,425 3,600,531
AA Hempstead AMT IDR
(1990 Nassau Dist. Energy)
7.75%, 9/15/15................... 9,000 9,337,500
A- New York GO
Ser '92C
7.00%, 8/01/16................... $ 2,500 $ 2,537,500
A New York Ind Dev Auth
(Terminal One L)
AMT Ser '94
6.125%, 1/01/24.................. 1,500 1,417,500
BBB NYS Environ Fac Auth IDR
(Occidental Petroleum)
AMT Ser '93A
5.70%, 9/01/28................... 7,450 6,379,062
Aa* NYS Mtg Agy
SFMR (Homeowner Mtg)
AMT Ser 30C-1
5.85%, 10/01/25.................. 5,150 4,705,812
Aa* NYS Mtg Agy
SFMR (Homeowner Mtg)
AMT Ser 30C-2
5.80%, 10/01/25.................. 6,500 5,906,875
------------
33,884,780
------------
OHIO--2.4%
AAA Ohio Hsg Fin Agy AMT
SFMR (GNMA Collateralized)
Ser '95 A-2
6.625%, 3/01/26.................. 5,000 5,137,500
------------
PENNSYLVANIA--2.3%
AAA Pennsylvania Higher Ed
Student Loan Rev Ser '88D
AMBAC AMT
6.05%, 1/01/19................... 5,065 4,944,707
------------
SOUTH CAROLINA--2.0%
AAA Horry Cnty Airport Rev
(Myrtle Beach Jet Port)
Ser '90 FSA
7.30%, 7/01/20................... 4,000 4,260,000
------------
TEXAS--6.2%
A* Central Texas Higher Ed Auth
Student Loan Rev Sub
AMT Ser '93B
5.50%, 12/01/05.................. 6,805 6,473,258
</TABLE>
4
<PAGE>
ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD & PRINCIPAL
POOR'S AMOUNT
RATING (000) VALUE
- --------------------------------------------------------------------------------
<C> <S> <C> <C>
A* Panhandle Plain
Student Loan Sub Lien
Ser '93E AMT
5.55%, 3/01/05................... $ 7,000 $ 6,728,750
------------
13,202,008
------------
VIRGINIA--5.3%
A+ Fairfax Cty Econ Dev Auth
Res Rec (Ogden Martin
System) Ser '88A AMT
7.75%, 2/01/11................... 5,910 6,368,025
AA+ Virginia Hsg Dev Auth
SFMR (Commonwealth Mtg)
Ser G AMT
7.125%, 7/01/22.................. 4,760 4,962,300
------------
11,330,325
------------
WASHINGTON--4.9%
BBB Pilchuck Dev Pub Corp
(BF Goodrich)
Ser '93 AMT
6.00%, 8/01/23................... 12,000 10,575,000
------------
Total Long-Term Bonds
(cost $213,606,104).............. 217,470,663
------------
SHORT-TERM
INVESTMENT--0.6%
A-1+ Gulf Coast AMT VRDN
Solid Waste
(Citgo Petro Corp)
5.10%, 4/01/26
(cost $1,200,000)................ $ 1,200 $ 1,200,000
------------
TOTAL INVESTMENTS--102.1%
(cost $214,806,104).............. 218,670,663
Other assets less liabilities--(2.1%) (4,477,045)
------------
NET ASSETS--100%................. $214,193,618
============
</TABLE>
- --------------------------------------------------------------------------------
* Moody's Rating
See notes to financial statements.
Glossary of Terms
AMBAC American Municipal Bond Assurance Corporation
AMT Alternative Minimum Tax (Subject to)
FHA Federal Housing Administration
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Note
5
<PAGE>
Statement Of Assets And Liabilities
April 30, 1995 (unaudited) ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value (cost $214,806,104)................................................. $218,670,663
Cash................................................................................................... 385,206
Interest receivable.................................................................................... 4,595,724
Receivable for investment securities sold.............................................................. 1,202,863
Deferred organization expense and other assets......................................................... 107,968
------------
Total assets........................................................................................... 224,962,424
------------
LIABILITIES
Payable for investment securities purchased............................................................ 9,760,808
Dividend payable....................................................................................... 789,194
Advisory fee payable................................................................................... 90,158
Accrued organization expenses.......................................................................... 33,117
Administrative fee payable............................................................................. 27,048
Accrued expenses and other liabilities................................................................. 68,481
------------
Total liabilities...................................................................................... 10,768,806
------------
NET ASSETS................................................................................................ $214,193,618
============
COMPOSITION OF NET ASSETS
Preferred Stock:
$.01 par value per share; 1,800 shares Preferred Stock authorized, issued and outstanding at $50,000
per share liquidation preference..................................................................... $ 90,000,000
Common Stock:
$.01 par value per share; 100,000,000 shares authorized, 10,522,367 shares issued and outstanding.... 105,224
Additional paid-in capital............................................................................. 145,078,183
Undistributed net investment income.................................................................... 242,459
Accumulated net realized loss.......................................................................... (25,096,807)
------------
Net unrealized appreciation of investments............................................................. 3,864,559
------------
$214,193,618
============
NET ASSET VALUE PER SHARE OF COMMON STOCK--$124,193,618
($214,193,618 less Preferred Stock at liquidation value of $90,000,000) divided by 10,522,367 shares
of Common Stock outstanding.......................................................................... $11.80
======
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
6
<PAGE>
Statement Of Operations
Six Months Ended
April 30, 1995 (unaudited) ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest.................................................. $ 7,154,705
------------
EXPENSES
Advisory fee.............................................. $525,557
Administrative fee........................................ 157,668
Audit and legal........................................... 34,523
Transfer agency........................................... 27,519
Printing.................................................. 19,097
Directors' fees........................................... 13,000
Custodian................................................. 12,746
Amortization of organization expenses..................... 6,000
Miscellaneous............................................. 70,764
--------
Total expenses............................................ 866,874
------------
Net investment income..................................... 6,287,831
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments.......................... (15,755,370)
Net change in unrealized depreciation of investments...... 19,265,311
------------
Net gain on investments................................... 3,509,941
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS................... $ 9,797,772
============
</TABLE>
Statement Of Changes In Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, 1995 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1994
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income........................................................ $ 6,287,831 $ 12,775,974
Net realized loss on investments............................................. (15,755,370) (9,341,169)
Net change in unrealized depreciation of investments......................... 19,265,311 (21,751,583)
------------ ------------
Net increase (decrease) in net assets from operations........................ 9,797,772 (18,316,778)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Common Stock.............................................................. (5,522,918) (9,456,480)
Preferred Stock........................................................... (1,840,684) (3,281,255)
Net realized gains on investments
Common Stock.............................................................. -0- (1,190,465)
Preferred Stock........................................................... -0- (226,704)
CAPITAL STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of common stock.......... 162,103 -0-
------------ ------------
Total increase (decrease).................................................... 2,596,273 (32,471,682)
------------ ------------
NET ASSETS
Beginning of year............................................................ 211,597,345 244,069,027
------------ ------------
End of period (including undistributed net investment income of $242,459
and $1,318,230, respectively)............................................. $214,193,618 $211,597,345
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
7
<PAGE>
Notes To Financial Statements
April 30, 1995 (unaudited) ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
NOTE A: Significant Accounting Policies
ACM Municipal Securities Income Fund, Inc. (the "Fund"), was incorporated in the
state of Maryland on February 11, 1993 and is registered under the Investment
Company Act of 1940 as a diversified, closed-end management investment company.
The following is a summary of significant accounting policies followed by the
Fund.
1. Security Valuation
The Fund values municipal securities at fair value based on prices provided by a
recognized pricing service which uses information with respect to transactions
in bonds, quotations from bond dealers, market transactions in comparable
securities and various relationships between securities in determining values.
If market quotations are not readily available from such pricing service, a
municipal security is valued by appraisal at its fair value as determined in
good faith by the Fund's Adviser under procedures established by the Fund's
Board of Directors. Short-term securities which mature in 60 days or less are
valued at amortized cost, which approximates market value.
2. Organization Expenses
Approximately $60,000 has been deferred and is being amortized on a straight-
line basis through May, 1998.
3. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute all of its
investment company taxable income and net realized gains, if applicable, to
shareholders. Therefore, no provisions for federal income or excise taxes are
required.
4. Investment Income and Security Transactions
Interest income is accrued daily. Security transactions are accounted for on the
date the securities are purchased or sold. Security gains and losses are
determined on the identified cost basis. The Fund amortizes premiums and
accretes discounts as adjustments to interest income.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles.
- --------------------------------------------------------------------------------
NOTE B: Advisory and Administrative Fees
Under the terms of the investment advisory agreement, the Fund pays the Adviser
an advisory fee equal to an annualized rate of .50 of 1% of the average weekly
net assets of the Fund during the month.
Under the terms of the Administration Agreement, the Fund pays the Administrator
an administration fee equal to an annualized rate of .15 of 1% of the average
weekly net assets of the Fund during the month. The Administrator has engaged
Prudential Mutual Fund Management, Inc. (the "Sub-Administrator") to act as Sub-
Administrator. The Administrator, out of its own assets, will pay the Sub-
Administrator a monthly fee equal to an annualized rate of .10 of 1% of the
Fund's average weekly net assets. The Sub-Administrator prepares financial and
regulatory reports for the Fund and provides other clerical services.
- --------------------------------------------------------------------------------
NOTE C: Investment Transactions
Purchases and sales of investment securities aggregated $321,598,088 and
$313,757,891 respectively, for the six-months ended April 30, 1995. At April 30,
1995 the cost of investments for Federal income tax purposes was the same as the
cost for financial reporting purposes. Accordingly, gross unrealized
appreciation was $5,174,595 and gross unrealized depreciation was $1,310,036
resulting in net unrealized appreciation of $3,864,559.
8
<PAGE>
ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
NOTE D: Taxes
For Federal income tax purposes at October 31, 1994, the Fund had a capital loss
carry forward of $9,341,169 which expires in 2002.
- --------------------------------------------------------------------------------
NOTE E: Capital Stock
Common Stock
There are 100,000,000 shares of $0.01 par value common stock authorized. Of the
10,522,367 shares outstanding at April 30, 1995, the Adviser owned 7,200 shares.
During the six months ended April 30, 1995 the Fund issued 15,167 shares in
connection with the Fund's dividend reinvestment plan.
Preferred Stock
The Fund has issued and outstanding 1,800 shares of preferred stock, consisting
of 600 shares each of Series A, Series B and Series C, with a liquidation value
of $50,000 per share.
The dividend rate on Series A is 4.98% and is effective through January 1996.
The dividend rate on Series B is 3.90% and is effective through June 1995. The
dividend rate on Series C is 4.125% and is effective through June 1996.
- --------------------------------------------------------------------------------
NOTE F: Quarterly Results of Operations
<TABLE>
<CAPTION>
Net Increase
Net Realized (Decrease) in
and Unrealized Net Assets
Net Investment Gain (Loss) Resulting From Market Price
Income on Investments Operations on NYSE
------------------ ------------------- ------------------- -------------------
Total Per Total Per Total Per
Quarter Ended (000) Share (000) Share (000) Share High Low
- ------------- ------- ----- -------- ------ -------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
April 30, 1995........... $ 3,068 $0.29 $ 4,248 $ 0.40 $ 7,316 $ 0.69 $11.750 $11.250
January 31,1995.......... 3,220 0.31 (738) (0.07) 2,482 0.24 $11.375 $10.125
------- ----- -------- ------ -------- ------
$ 6,288 $0.60 $ 3,510 $ 0.33 $ 9,798 $ 0.93
======= ===== ======== ====== ======== ======
October 31, 1994......... $ 3,265 $0.31 $(12,819) $(1.22) $ (9,554) $(0.91) $11.875 $10.000
July 31, 1994............ 3,230 0.31 765 0.08 3,995 0.39 $12.250 $11.375
April 30, 1994........... 3,131 0.29 (20,759) (1.98) (17,628) (1.69) $14.000 $11.875
January 31, 1994......... 3,150 0.30 1,720 0.16 4,870 0.46 $14.125 $13.000
------- ----- -------- ------ -------- ------
$12,776 $1.21 $(31,093) $(2.96) $(18,317) $(1.75)
======= ===== ======== ====== ======== ======
October 31, 1993......... $ 3,009 $0.28 $ 5,316 $ 0.51 $ 8,325 $ 0.79 $14.375 $13.750
July 31,1993*............ 2,281 0.22 2,452 0.23 4,733 0.45 $15.000 $13.500
------- ----- -------- ------ -------- ------
$ 5,290 $0.50 $ 7,768 $ 0.74 $ 13,058 $ 1.24
======= ===== ======== ====== ======== ======
</TABLE>
- --------------------------------------------------------------------------------
*From April 23, 1993 (commencement of operations).
9
<PAGE>
Financial Highlights ACM Municipal Securities Income Fund, Inc.
- --------------------------------------------------------------------------------
Selected Data For a Share of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Six Months
Ended April 23, 1993*
April 30, 1995 Year Ended to
(unaudited) October 31, 1994 October 31, 1993
-------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of period................................. $11.57 $14.66 $13.98(a)
------ ------ ------
Income From Investment Operations
- ---------------------------------
Net investment income................................................ .60 1.21 .50
Net realized and unrealized gain (loss) on investments............... .33 (2.96) .74
------ ------ ------
Net increase (decrease) in net asset value from operations........... .93 (1.75) 1.24
------ ------ ------
Less: Dividends And Distributions
- ---------------------------------
Dividends from net investment income:
Paid to Common Stock shareholders................................. (.53) (.90) (.30)
Common Stock equivalent of dividends paid to
Preferred Stock shareholders................................... (.17) (.31) (.08)
Distributions from realized capital gains:
Paid to Common Stock shareholders................................. -0- (.11) -0-
Common Stock equivalent of distributions
paid to Preferred Stock shareholders........................... -0- (.02) -0-
------ ------ ------
Total dividends and distributions.................................... (.70) (1.34) (.38)
------ ------ ------
Preferred Stock offering costs and underwriting discounts............ -0- -0- (.18)
------ ------ ------
Net asset value, end of period....................................... $11.80 $11.57 $14.66
------ ------ ------
Market value, end of period.......................................... $11.50 $10.25 $14.25
====== ====== ======
Total Investment Return
- -----------------------
Total investment return based on: (b)
Market value...................................................... 17.61% (21.99)% 3.42%
Net asset value................................................... 6.89% (14.41)% 6.39%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (000's omitted)............................ $214,194 $211,597 $244,069
Ratio of expenses to average net assets (d).......................... .83%(c) .77% .81%(c)
Ratio of net investment income to average net assets (d)............. 6.03%(c) 5.58% 4.95%(c)
Portfolio turnover rate.............................................. 148% 116% 79%
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(a) Net of offering costs of $.09.
(b) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day of
the period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Generally, total investment return based
on net asset value will be higher than total investment return based on
market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in years where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods. Total investment return calculated for
a period of less than one year is not annualized.
(c) Annualized.
(d) The expense ratio and net investment income ratio do not reflect the
effect of dividend and distribution payments to Preferred Stock
shareholders.
10
<PAGE>
ACM Municipal Securities Income Fund, Inc.
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Board Of Directors
John D. Carifa, Chairman and President
Ruth Block
David H. Dievler
James R. Greene
Dr. James M. Hester
Hon. James D. Hodgson
Clifford L. Michel
Robert C. White
Officers
Susan P. Keenan, Senior Vice President
David M. Dowden, Vice President
William E. Oliver, Vice President
Edmund P. Bergen, Jr., Secretary
Mark D. Gersten, Treasurer & Chief Financial Officer
Joseph J. Mantineo, Controller
ADMINISTRATOR
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, NY 10105
PREFERRED STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
SUB-ADMINISTRATOR
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
COMMON STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
CUSTODIAN
The Bank of New York
48 Wall Street
New York, NY 10286
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its Common Stock in the open market.
This report, including the financial statements herein, is transmitted to the
Shareholders of ACM Municipal Securities Income Fund, Inc. for their
information. This is not a prospectus, circular or representation intended for
use in the purchase of shares of the Fund or any securities mentioned in this
report.
11
<PAGE>
ACM MUNICIPAL SECURITIES INCOME FUND, INC.
Summary of General Information
THE FUND
ACM Municipal Securities Income Fund, Inc. is a closed-end management investment
company designed to obtain the highest level of current tax exempt income,
consistent with what the Fund's investment adviser considers to be prudent
investment risk, that is available from a portfolio of high-quality municipal
debt securities.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the New York Stock
Exchange Composite Transaction Section of newspapers each day, under the
designation "ACMMSI". The Fund's NYSE trading symbol is "AMU". Weekly
comparative net asset value (NAV) and market price information about the Fund is
published each Monday in the Wall Street Journal and each Saturday in The New
York Times and Barron's and other newspapers in a table called "Closed-End Bond
Funds." Additional information about the Fund is available by calling
1-800-247-4154.
DIVIDEND REINVESTMENT PLAN
A Dividend Reinvestment Plan provides automatic reinvestment of dividends and
capital gains in additional Fund shares. For a copy of the Plan Brochure, please
write to the Plan Agent, State Street Bank & Trust Company P.O. Box 8200,
Boston, MA 02266-8200 or call 1-800-426-5523.
ACM MUNICIPAL SECURITIES INCOME FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
[LOGO OF ALLIANCE CAPITAL APPEARS HERE]
/(R)/ These registered service marks used under license from the owner,
Alliance Capital Management, L.P.
MSISR
ACM
- --------------------------------------------------------------------------------
Municipal
- --------------------------------------------------------------------------------
Securities
- --------------------------------------------------------------------------------
Income Fund
- --------------------------------------------------------------------------------
Semi-Annual
Report
April 30, 1995
[LOGO OF ALLIANCE MUTUAL
FUNDS APPEARS HERE]
