<PAGE>
Letter To Shareholders ACM Municipal Securities Income Fund, Inc.
================================================================================
June 3, 1996
Dear Shareholder:
We're pleased to provide you with an update on municipal market activity and the
investment results for ACM Municipal Securities Income Fund. The following pages
include information that covers the period from November 1, 1995, the beginning
of the fiscal year, through April 30, 1996. During the six months, the Fund has
continued to provide shareholders with high current tax-free income. On a net
asset value basis, the Fund achieved total returns of +11.06% for the twelve
months and +0.85% over the six months ended April 30.
MARKET OVERVIEW
After posting superb performance results in fiscal year 1995, the Municipal
Securities Income Fund continued to perform well during the first half of fiscal
year 1996. A decline in the supply of new tax-exempt bond issues, combined with
ongoing strong demand, helped the municipal sector to do well in comparison to
other fixed-income investments. Also responsible for the relative outperformance
of long-term municipal bonds was a shift in focus from "flat tax" proposals to
other issues in the ongoing public debate over tax reform.
After posting very strong returns through the end of February, municipal bond
prices followed the lead of the Treasury market and slipped in early March. The
decline was due to signs of a strengthening economy as well as diminishing hopes
for further short-term interest rate cuts by the Federal Reserve Board. Despite
generally rising interest rates, municipal bonds performed well due to several
key market factors. The tax reform debate, which had caused municipals to
underperform the market at times during the 1995 market rally, reversed course
in the first quarter of 1996. As we've seen in the past, tax reform debate can
lead institutional investors (who do not typically buy municipal bonds) into the
market, which is what happened in the last several months as tax-exempt yields
began to rise to levels on par with taxable yields. Individual buyers also
returned to the municipal market after a prolonged absence, lured by higher
overall yields and positive developments in the debate over federal tax code
reform.
Tax reform continues to be discussed during this election year. We believe that
while the current tax code may be changed some time in the next several years,
any reform will be incremental in nature and will not drastically alter the tax
benefits associated with municipal bond investing. Furthermore, long-term bond
prices today appear to take into account the enactment of significant tax reform
legislation that would be negative for the municipal market. Should this major
tax reform legislation fail, municipal investors could benefit considerably as
the yield advantage over taxable investments would once again rise. Furthermore,
municipal bond income should remain exempt from state income taxes in the state
of issuance.
The improving U.S. economic performance experienced in the first quarter is
positive for state and local governments and should facilitate the meeting of
budgetary targets for fiscal year 1996. However, going forward, revenue growth
is expected to be modest which will require state and local governments to keep
expenditures under tight control. Fiscal flexibility will probably be further
constrained by voter antipathy toward many types of new tax-based spending. This
mood by tax payers should keep new issue supply at a minimum which will bode
well for market stability and long-term performance.
INVESTMENT STRATEGY
The recent rise in interest rates has once again provided an opportunity to
reposition the Fund to take advantage of long-term trends in the economy and the
municipal bond market. Specifically, we continue to sell older bonds with lower
yields, shorter maturities
<PAGE>
ACM Municipal Securities Income Fund, Inc.
================================================================================
and unfavorable early redemption features in favor of securities which offer
higher tax-free income and better call protections. Our strategy of selling
securities which have appreciated in price because of improvement in the credit
of the issuer and/or market conditions, while looking for undervalued
situations, has proven to be successful again in the first half of 1996.
Consistent with our fundamental investment objective of providing high current
income and high after-tax total returns for the Fund's shareholders, we continue
to be fully invested in long-term tax-exempt bonds.
MARKET OUTLOOK
The good news for municipal bond investors is that inflation is expected to
remain benign despite a recent surge in commodity prices. We expect interest
rates to trade in a narrow range with some potential for volatility related to
the election year. We would view any backup in interest rates as a buying
opportunity for investors. Moreover, we believe that with the population aging,
demographic trends show that the personal savings rate will continue to increase
as will demand for income-generating investment products. This should increase
the demand for municipal bonds and will most likely mean excellent long-term
performance for investors that currently own municipal bonds.
We believe that the long-term bull market for bonds will continue throughout the
remainder of the decade. The current interest rate environment provides
investors with new opportunities to lock in very attractive yields. We believe
that any potential short-term interest rate risk will be offset by the potential
for high current income and long-term capital appreciation. Notwithstanding the
uncertainties of an election year or possible tax reform, we believe that the
Fund should continue to deliver outstanding investment results in 1996.
Thank you for your continued interest and investment in ACM Municipal Securities
Income Fund. We look forward to reporting to you again on market activity and
the Fund's investment results later in the year.
Sincerely,
/s/ John D. Carifa
John D. Carifa
Chairman and President
/s/ Susan P. Keenan
Susan P. Keenan
Senior Vice President
<PAGE>
PORTFOLIO OF INVESTMENTS
April 30, 1996 (unaudited) ACM Municipal Securities Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--98.5%
ARIZONA--1.2%
AAA Yuma IDR
MFHR (Alexandrite
Sands Apt)
AMT FHA Ser '90
7.70%, 12/01/29......... $ 2,660 $ 2,727,803
------------
CALIFORNIA--18.3%
AAA California Hsg Fin Agy
MFHR (Homeownership
Mtg) AMT MBIA
Ser '91A
7.20%, 2/01/26.......... 3,450 3,611,598
Ser '91C
7.00%, 8/01/23.......... 1,475 1,526,359
AA- California Hsg Fin Agy
SFMR (Homeownership
Mtg) AMT
Ser. '91B
7.55%, 8/01/20.......... 940 959,684
Ser. '94H
7.50%, 8/01/25.......... 12,380 12,752,267
N/R Los Angeles County
Comm Fac.
Calabasas Area
Ser '92A
7.70%, 9/01/17.......... 5,750 5,871,325
N/R Novato Comm Facs
Hamilton Field
Ser '95
7.375%, 9/01/25......... 6,300 6,432,363
N/R Orange County
Irvine Coast
(Pelican Hill Proj)
Ser '92A
8.25%, 9/02/18.......... 3,990 4,065,850
A Vacaville
MFHR (Comm Hsg)
Ser '94A
7.85%, 11/01/24......... 4,625 4,802,322
------------
40,021,768
------------
COLORADO--14.7%
BB Denver City & County
Arpt Rev (United Airlines)
AMT Ser '92A
6.875%, 10/01/32........ 32,075 32,224,470
------------
FLORIDA--6.2%
Aaa* Brevard County HFA
SFMR (Homeownership
Mtg)
AMT FHA Ser. '94
6.70%, 9/01/27.......... 5,000 5,085,050
BBB Escambia County
(Champion Int'l Corp.)
PCR Ser '94
6.90%, 8/01/22.......... 2,000 2,100,080
AA- Orlando Util Comm
(Orlando Wtr & Elec)
Ser '93B
7.165%, 10/06/17(a)..... 4,550 4,196,465
Aaa* Pinellas County HFA
SFMR (GNMA
collateralized)
AMT Ser '94A
6.55%, 8/01/27.......... 2,225 2,267,920
------------
13,649,515
------------
HAWAII--2.4%
AAA Hawaii Dept of Budget
& Fin
(Hawaiian Elec Co.)
AMT MBIA Ser '92
6.55%, 12/01/22......... 5,000 5,198,950
------------
ILLINOIS--1.8%
BB+ Chicago Arpt Rev
(American Airlines)
AMT Ser '94
8.20%, 12/01/24......... 3,500 4,011,560
------------
</TABLE>
<PAGE>
Portfolio Of Investments (cont.) ACM Municipal Securities Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Standard Principal
& Poor's Amount
Rating (000) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
MARYLAND--3.6%
AAA Baltimore County
MFHR (Dunfield Proj)
FHA Ser '92A
6.90%, 8/01/28.......... $ 7,500 $ 7,782,675
------------
MASSACHUSETTS--5.8%
A- Mass Health & Ed Fac
Auth Hosp Rev
(Jordan Hospital)
Ser B
6.875%, 10/01/15........ 1,500 1,533,930
Baa1* Mass Health & Ed Fac
Auth Hosp Rev
(Metro West Health)
Ser '92C
6.50%, 11/15/18......... 3,240 3,128,609
AAA Mass Health & Ed Fac
Auth Hosp Rev
(New England Medical
Center)
MBIA Ser. D
6.58%, 7/01/18.......... 3,900 3,336,372
A1* New England Ed Loan
Mktg Student Loan Ref
AMT Ser '93H
6.90%, 11/01/09......... 4,545 4,769,250
------------
12,768,161
------------
MICHIGAN--6.3%
AAA Detroit Sewage Disposal
System Rev
FGIC Ser '93A
7.44%, 7/01/23(a)....... 11,800 10,937,538
AA+ Michigan Hsg Dev Auth
SFMR (Homeownership
Mtg.)
AMT Ser '95B
7.05%, 6/01/26.......... 2,725 2,839,668
------------
13,777,206
------------
MINNESOTA--2.3%
AA+ Minnesota Hsg Fin Agy
SFMR (Homeownership
Mtg)
AMT Ser '89A
7.90%, 7/01/19.......... 2,800 2,941,232
BBB South St. Paul Hosp Rev
(Healtheast Proj)
Ser 94
6.75%, 11/01/09......... 2,120 2,148,578
------------
5,089,810
------------
NEW HAMPSHIRE--2.2%
AAA Keene Housing Dev Corp
MFHR (Central Square)
FHA Ser '90A
7.50%, 2/01/25.......... 4,420 4,772,318
------------
NEW JERSEY--2.3%
A- Union County Util Auth
Solid Waste Rev
AMT Ser '91A
7.15%, 6/15/09.......... 5,000 5,107,250
------------
NEW YORK--13.6%
BBB+ New York City GO
Ser '95B
7.25%, 8/15/19.......... 10,000 10,664,300
Aa* New York City
Hsg Dev Corp
(S. Williamsburg Co-op)
AMT MFHR Ser '90A
7.90%, 2/01/23.......... 3,845 4,037,173
AAA New York Hsg Fin Agy
MFHR (Erie/Monroe Cnty)
AMT AMBAC Ser '89B
7.55%, 11/01/29(a)...... 9,585 10,016,804
AAA New York State Energy
Res & Dev Auth
(Brooklyn Union Gas)
AMT MBIA Ser D
7.489%, 7/08/26......... 6,000 5,127,180
------------
29,845,457
------------
</TABLE>
<PAGE>
ACM Municipal Securities Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Standard Principal
& Poor's Amount
Rating (000) Value
-------------------------------------------------------------------------------
<S> <C> <C>
OHIO--4.0%
Aaa* Kent Ohio MFHR
(Silver Meadows)
AMT GNMA Ser '95
7.15%, 12/20/26......... $ 1,100 $ 1,150,765
AAA Ohio Hsg Fin Agy
SFMR (GNMA
Collateralized)
AMT Ser '95 A-2
6.625%, 3/01/26......... 5,000 5,059,050
A Ohio State Water
Dev Auth
Solid Waste Rev
(North Star) AMT
6.45%, 9/01/20.......... 2,500 2,511,675
------------
8,721,490
------------
PENNSYLVANIA--0.3%
A Pittsburgh Urban Redev
Auth SFMR
(Homeownership Mtg)
AMT Ser '95A
7.15%, 10/01/27......... 635 659,803
------------
RHODE ISLAND--4.7%
AA+ Rhode Island Hsg & Mtg
Fin Corp SFMR
(Homeownership Mtg)
AMT Ser '92-7A
6.75%, 10/01/25......... 10,000 10,302,700
------------
SOUTH CAROLINA--1.9%
AAA Horry County Arpt Rev
(Myrtle Beach Jet Port)
AMT FSA Ser '90
7.30%, 7/01/20.......... $ 4,000 $ 4,270,880
------------
TEXAS--3.9%
BB+ Alliance Airport Auth
(American Airlines)
AMT Ser '90
7.50%, 12/01/29......... 8,000 8,486,640
------------
VIRGINIA--3.0%
BBB+ Peninsula Port Auth
Health Fac
(Mary Immaculate Proj)
Ser '94
7.00%, 8/01/17.......... 2,000 2,060,100
AA+ Virginia Hsg Dev Auth
(Commonwealth Mtg)
AMT SFMR Ser '94G
7.125%, 7/01/22......... 4,350 4,580,159
------------
6,640,259
------------
TOTAL INVESTMENTS--98.5%
(cost $215,049,459) 216,058,715
Other assets less liabilities--1.5% 3,310,893
------------
NET ASSETS--100% $219,369,608
============
</TABLE>
- --------------------------------------------------------------------------------
* Moody's Rating.
(a)Inverse Floater Security--Interest rate is subject to change periodically.
See notes to financial statements.
Glossary of Terms:
AMBAC American Municipal Bond Assurance
Corporation
AMT Alternative Minimum Tax
FGIC Federal Guaranty Insurance Company
FHA Federal Housing Administration
FSA Financial Security Assurance, Inc.
GNMA Government National Mortgage Association
GO General Obligation
HFA Housing Finance Authority
IDR Industrial Development Revenue
MBIA Municipal Bond Investors Assurance
MFHR Mutli-Family Housing Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996 (unaudited) ACM Municipal Securities Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $215,049,459)..... $216,058,715
Cash........................................................ 2,396,170
Interest receivable......................................... 3,676,679
Deferred organization expense and other assets.............. 42,134
------------
Total assets................................................ 222,173,698
------------
LIABILITIES
Payable for investment securities purchased................. 2,618,028
Advisory fee payable........................................ 91,363
Administrative fee payable.................................. 27,409
Accrued expenses and other liabilities...................... 67,290
------------
Total liabilities........................................... 2,804,090
------------
NET ASSETS.................................................... $219,369,608
============
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,
10,563,888 shares issued and outstanding................... 105,639
Additional paid-in capital.................................. 145,599,864
Distributions in excess of net investment income............ (410,517)
Accumulated net realized loss............................... (16,934,634)
Net unrealized appreciation of investments.................. 1,009,256
------------
$219,369,608
============
NET ASSET VALUE PER SHARE OF COMMON STOCK
$129,369,608 ($219,369,608 less Remarketed Preferred
Stock at liquidation value of $90,000,000)
divided by 10,563,888 shares of Common Stock
outstanding................................................ $12.25
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended April 30, 1996 (unaudited) ACM Municipal Securities Income
Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME
Interest..................................... $ 7,009,370
------------
EXPENSES
Advisory fee................................. $ 556,923
Administrative fee........................... 167,077
Auction agent fee............................ 76,195
Custodian.................................... 57,687
Audit and legal.............................. 29,750
Transfer agency.............................. 23,729
Directors' fees.............................. 14,730
Printing..................................... 13,588
Amortization of organization expenses........ 6,006
Miscellaneous................................ 57,439
------------
Total expenses............................... 1,003,124
------------
Net investment income........................ 6,006,246
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments............. 3,474,908
Net change in unrealized appreciation of
investments................................. (6,408,049)
------------
Net loss on investments...................... (2,933,141)
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.... $ 3,073,105
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
April 30, 1996 Year Ended
(unaudited) October 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income....................... $ 6,006,246 $ 12,363,154
Net realized gain (loss) on investments..... 3,474,908 (11,183,658)
Net change in unrealized appreciation
(depreciation) of investments.............. (6,408,049) 22,818,057
------------ ------------
Net increase in net assets from operations.. 3,073,105 23,997,553
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Common Stock............................... (4,739,684) (9,468,675)
Preferred Stock............................ (1,973,897) (3,800,338)
CAPITAL STOCK TRANSACTIONS
Reinvestment of dividends resulting in the
issuance of Common Stock................... 522,097 162,102
------------ ------------
Total increase (decrease)..................... (3,118,379) 10,890,642
NET ASSETS
Beginning of year........................... 222,487,987 211,597,345
------------ ------------
End of period (including undistributed net
investment income of $412,371 at
October 31, 1995).......................... $219,369,608 $222,487,987
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
April 30, 1996 (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.
- --------------------------------------------------------------------------------
NOTE B: Advisory and Administrative Fees
Under the terms of the investment advisory agreement, the Fund pays Alliance
Capital Management L.P. 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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (cont.) ACM Municipal Securities Income
Fund, Inc.
================================================================================
NOTE C: Investment Transactions
Purchases and sales of investment securities aggregated $245,742,794 and
$249,437,910 respectively, for the six months ended April 30, 1996. At April 30,
1996 the cost of investments for Federal income tax purposes was the same as the
cost for financial reporting purposes. Accordingly, gross unrealized
appreciation was $2,164,786 and gross unrealized depreciation was $1,155,530
resulting in net unrealized appreciation of $1,009,256.
- --------------------------------------------------------------------------------
NOTE D: Taxes
For Federal income tax purposes at October 31,
1995, the Fund had a capital loss carryforward of
$20,409,542; of which $9,311,771 expires in 2002 and $11,097,771 expires in
2003.
- --------------------------------------------------------------------------------
NOTE E: Capital Stock
Common Stock
There are 100,000,000 shares of $0.01 par value common stock authorized. Of the
10,563,888 shares outstanding at April 30, 1996, the Adviser owned 7,200 shares.
During the six months ended April 30, 1996 the Fund issued shares in connection
with the Funds dividend reinvestment plan.
Preferred Stock
The Fund has issued and outstanding 1,800 shares of Remarketed 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 3.85% and is effective through May 1, 1996. The
dividend rate on Series B is 3.85% and is effective through May 7, 1996. The
dividend rate on Series C is 4.125% and is effective through June 1996.
- --------------------------------------------------------------------------------
NOTE F: Reclassification of Components of Net Assets
In accordance with Statement of Position 93-2: Determination, Disclosure and
Financial Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a result, the Fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Net investment income, net realized
gains and net assets were not affected by this change.
<PAGE>
FINANCIAL HIGHLLIGHTS 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, 1996 to
(unaudited) 1995 1994 October 31, 1993
-------------- ---- ---- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................... $12.59 $11.57 $14.66 $13.98(d)
------ ------ ------ -----
Income From Investment Operations
- ---------------------------------
Net investment income................................ .57 1.17 1.21 .50
Net realized and unrealized gain (loss) on
investments........................................ (.27) 1.11 (2.96) .74
------ ------ ------ ------
Net increase (decrease) in net asset value
from operations.................................... .30 2.28 (1.75) 1.24
------ ------ ------ ------
Less: Dividends And Distributions
- ---------------------------------
Dividends from net investment income:
Paid to Common Stock shareholders.................. (.45) (.90) (.90) (.30)
Common Stock equivalent of dividends
paid to Preferred Stock shareholders............. (.19) (.36) (.31) (.08)
Distributions from realized capital gains:
Paid to Common Stock shareholders.................. -0- -0- (.11) -0-
Common Stock equivalent of distributions
paid to Preferred Stock shareholders............. -0- -0- (.02) -0-
------ ------ ------ ------
Total dividends and distributions.................... (.64) (1.26) (1.34) (.38)
------ ------ ------ ------
Preferred Stock offering costs and
underwriting discounts............................. -0- -0- -0- (.18)
------ ------ ------ ------
Net asset value, end of period....................... $12.25 $12.59 $11.57 $14.66
------ ------ ------ ------
Market value, end of period.......................... $12.13 $12.00 $10.25 $14.25
====== ====== ====== ======
Total Investment Return
- -----------------------
Total investment return based on: (a)
Market value....................................... 4.72% 26.65% (21.99)% 3.42%
Net asset value.................................... .85% 17.71% (14.41)% 6.39%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (000's omitted)............ $219,370 $222,488 $211,597 $244,069
Ratio of expenses to average net assets (b).......... .91%(c) .84% .77% .81%(c)
Ratio of net investment income to average
net assets (b)..................................... 5.42%(c) 5.77% 5.58% 4.95%(c)
Portfolio turnover rate.............................. 112% 222% 116% 79%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(a) 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.
(b) The expense ratio and net investment income ratio do not reflect the effect
of dividend and distribution payments to Preferred Stock shareholders.
(c) Annualized.
(d) Net of offering costs of $.09.
<PAGE>
ACM Municipal Securities Income Fund, Inc.
================================================================================
BOARD OF DIRECTORS
John D. Carifa, Chairman and President
Ruth Block(1)
David H. Dievler(1)
James R. Greene(1)
Dr. James M. Hester(1)
Hon. James D. Hodgson(1)
Clifford L. Michel(1)
Robert C. White(1)
OFFICERS
Susan P. Keenan, Senior Vice President
David U. 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
SUB-ADMINISTRATOR
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
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
PREFERRED STOCK:
DIVIDEND PAYING AGENT,
TRANSFER AGENT AND REGISTRAR
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
INDEPENDENT AUDITORS
Ernst & Young LLP
787 Seventh Avenue
New York, NY 10019
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.
The accompanying financial statements as of April 30, 1996 were not audited and,
accordingly, no opinion is expressed on them.
- --------------------------------------------------------------------------------
(1) Member of the Audit Committee.
<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
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Semi-Annual
Report
April 30, 1996
[(ALLIANCE Investing without the Mystery) LOGO APPEARS HERE]
ACM Municipal Securities Income Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
[ALLIANCE CAPITAL LOGO APPEARS HERE]
*These registered service marks used under license from the owner,
Alliance Capital Management, L.P.
MSISR
