-----------------------------------------------
GREENWICH STREET
MUNICIPAL FUND INC.
-----------------------------------------------
[GRAPHIC OMITTED]
ANNUAL REPORT
May 31, 1997
<PAGE>
Greenwich Street Municipal
Fund Inc.
================================================================================
May 31, 1997
================================================================================
Dear Shareholder:
We are pleased to provide the annual report for the Greenwich Street
Municipal Fund Inc. ("Fund") for the year ended May 31, 1997. During the past
year, the Fund distributed income dividends totaling $0.66 per share and a
capital gain of $0.34 per share. The table below shows the annualized
distribution rates and twelve-month total returns based on the Fund's May 31,
1997 net asset value (NAV) per share and its New York Stock Exchange (NYSE)
closing price:
Price Annualized Twelve-Month
Per Share Distribution Rate* Total Return
------------- ----------------- ------------
$11.59 (NAV) 6.21% 3.61%
$11.375 (NYSE) 6.33% 8.97%
In comparison, closed-end municipal bond funds posted an average total
return based on NAV of 9.25% for the same time period, as reported by Lipper
Analytical Services, Inc. (Lipper Analytical Services, Inc. is a major fund
tracking organization.) The Fund's underperformance on NAV was primarily due to
the drop in value of certain pulp recycling facility bonds held in the Fund's
portfolio. The decline in value of these bonds was caused by the decline in the
market price of pulp.
Market Update and Portfolio Strategy
For the past several months ending in May, the bond market experienced a
significant correction in prices. This correction was a reaction not only to the
Federal Reserve's ("Fed") minor tightening of short-term interest rates but more
so to the conservative stance taken by the Fed Chairman, Alan Greenspan. Given a
benign inflationary outlook and
- ----------
* This distribution assumes monthly dividends at the current rate of $0.06
per share for twelve months.
==================================== 1 =====================================
<PAGE>
moderating economic data, we felt this indicated a less robust economy in the
second quarter. We believe that long-term interest rates were quite cheap. In
our view, these factors have led us to a very positive outlook for long-term
interest rates and the municipal bond market through the summer.
The Fed has declined to push the federal funds rate higher at both the May
and July meetings. (The federal funds rate is the interest rate banks charge
each other for overnight loans and an indicator of the direction of interest
rates.) Despite impressive growth in jobs, the producer price index (PPI) and
consumer price index (CPI) have been benign. Second quarter growth has also been
much more moderate than the two previous quarters. Therefore, the Fed's response
has been, in our opinion, appropriate and should be positive for the bond
market.
Municipal Market Update
Our basic goal during the recent bond market correction has been to
position the Fund in high-grade bonds with long call protection and somewhat
lower coupons. This strategy should not only upgrade the credit quality and
liquidity of the portfolio but give us a better chance to participate in the
price appreciation that we think this market will experience from today's
levels.
Fund's Investment Strategy
During the past quarter, the Fund focused on water and sewer bonds (14.0%
of the Portfolio), utility bonds (11.3% of the Portfolio) and hospital bonds
(11.1% of the Portfolio) because we believe they offered good relative values.
At the end of May, the Fund's weighted average maturity was approximately 25.1
years. In addition, as of May 31, 1997, approximately 92.5% of the Fund's
holdings were rated investment grade by either Standard & Poor's Corporation or
Moody's Investors Services Inc., with 56.0% of the Fund invested in AAA bonds,
the highest possible rating. (Standard & Poor's and Moody's are two major credit
reporting and bond rating agencies.)
Municipal Bond Market Outlook
Throughout 1997, the municipal bond market has outperformed its taxable
counterpart significantly. This is due simply to an ongoing imbalance in the
supply and demand for municipal bonds. For the past several years, supply has
been quite moderate, averaging about $170 billion per year. Conversely, demand
has been very strong, due to the significant amount of bond calls
==================================== 2 =====================================
<PAGE>
that have reduced the amount of municipal debt outstanding by approximately $200
billion during the last three years. Since we do not foresee any dramatic
changes in this relationship, we expect municipal debt to continue to show
strong performance relative to taxable debt.
In closing, thank you for investing in the Greenwich Street Municipals
Fund Inc. We look forward to continuing to help you achieve your financial
goals.
Sincerely,
/s/Heath B. McLendon /s/Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
June 9, 1997
- ------------------------------------ 3 -------------------------------------
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
=================================
Municipal Bonds and Notes -- 100%
=================================
Alabama -- 1.8%
$ 700,000 VMIG 1* Columbia, AL IDB, PCR, (Alabama
Power Company Project),
Series E, 4.150% due 10/1/22(a) $ 700,000
3,750,000 AAA Jefferson County, AL Sewer Revenue,
Series A, FGIC-Insured,
5.375% due 2/1/27 3,590,625
- ----------------------------------------------------------------------------------------------
4,290,625
- ----------------------------------------------------------------------------------------------
Alaska -- 3.0%
Valdez, Alaska Marine Terminal Revenue,
BP Pipelines Inc. Project:
6,000,000 AA Series A, 5.850% due 8/1/25 (b) 5,902,500
1,000,000 AA Series C, 5.650% due 12/1/28 967,500
- ----------------------------------------------------------------------------------------------
6,870,000
- ----------------------------------------------------------------------------------------------
California -- 16.2%
Anaheim, CA Public Finance Authority Lease
Revenue, Public Improvements, Series A,
FSA-Insured:
2,500,000 AAA 5.000% due 9/1/27 2,284,375
4,500,000 AAA 5.000% due 3/1/37 4,044,375
1,500,000 AAA California State Department of Water Reserve,
(Central Valley Project Revenue), Series Q,
MBIA-Insured, 5.375% due 12/1/27 1,453,125
2,000,000 AAA California State GO, FGIC-Insured,
5.375% due 6/1/26 1,937,500
California State Public Works Board Lease
Revenue:
1,000,000 AAA AMBAC-Insured, Department
of Corrections, Series A,
5.250% due 1/1/21 950,000
Series B:
1,000,000 AAA Various California State University
Projects, 5.375% due 12/1/19 972,500
2,000,000 AAA Various Community College Projects,
5.625% due 3/1/16 2,005,000
2,695,000 AAA Los Angeles, CA Wastewater Systems Revenue,
MBIA-Insured, 5.200% due 11/1/21 2,506,350
</TABLE>
See Notes to Financial Statements.
==================================== 4 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
California -- 16.2% (continued)
Los Angeles County, CA Metropolitan
Transportation Authority Revenue,
Sales Tax Revenue:
AMBAC-Insured:
$ 3,000,000 AAA 5.250% due 7/1/23 $ 2,801,250
3,400,000 AAA 5.000% due 7/1/25 3,094,000
8,530,000 AAA MBIA-Insured, 5.250% due 7/1/19 8,167,475
1,000,000 AAA Rancho Cucamonga, CA Redevelopment
Agency Tax Allocation, (Rancho
Redevelopment Project), MBIA-Insured,
5.250% due 9/1/26 943,750
2,000,000 AAA San Diego County, CA COP, North County
Regional Center Expansion,
AMBAC-Insured, 5.250% due 11/15/19 1,912,500
5,000,000 AAA San Jose, CA Redevelopment Agency,
(Merged Area Redevelopment Project),
MBIA-Insured, 5.000% due 8/1/20 4,556,250
- ----------------------------------------------------------------------------------------------
37,628,450
- ----------------------------------------------------------------------------------------------
Colorado -- 5.4%
2,000,000 Baa* Arapahoe County, CO Capital Improvement,
Highway Revenue, Current Series E,
7.000% due 8/31/26 2,157,500
7,545,000 AA Colorado Springs, CO Utilities Revenue,
Series A, 5.125% due 11/15/23 7,054,575
3,440,000 AAA Denver, CO City & County Airport
Revenue, MBIA-Insured, Series A,
5.500% due 11/15/25 3,328,200
- ----------------------------------------------------------------------------------------------
12,540,275
- ----------------------------------------------------------------------------------------------
District of Columbia -- 2.2%
5,250,000 AAA District of Columbia Revenue, The
American University, AMBAC-Insured,
5.625% due 10/1/26 5,118,750
- ----------------------------------------------------------------------------------------------
Florida -- 9.7%
2,000,000 AAA Dade County, FL GO Unlimited Revenue
Bonds, Florida Seaport, MBIA-Insured,
5.125% due 10/1/21 1,872,500
7,000,000 AAA Dade County, FL Water & Sewer Systems
Revenue, FGIC-Insured,
5.250% due 10/1/26 6,650,000
</TABLE>
See Notes to Financial Statements.
==================================== 5 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
Florida -- 9.7% (continued)
Florida State Board of Education Capital
Outlay:
$ 1,000,000 AA Public Education, Series A,
5.250% due 6/1/22 $ 943,750
1,500,000 AA Refunded Public Education, Series D,
5.200% due 6/1/23 1,404,375
3,500,000 BBB- Martin County, FL IDR, (Indiantown
Cogeneration Project),
7.875% due 12/15/25 (b)(c) 3,937,500
1,000,000 A* Martin County, FL Special Assessment
Revenue, 6.100% due 11/1/15 1,023,750
7,000,000 AAA Orange County, FL School Board
COP, Series A, MBIA-Insured,
5.375% due 8/1/22 6,728,750
- ----------------------------------------------------------------------------------------------
22,560,625
- ----------------------------------------------------------------------------------------------
Georgia -- 0.6%
1,300,000 VMIG 1* Burke County, GA Development Authority,
PCR, Georgia Power Co.,
4.000% due 4/1/32 (a) 1,300,000
- ----------------------------------------------------------------------------------------------
Illinois -- 6.6%
2,440,000 AAA Chicago, IL Skyway Toll Bridge Revenue,
MBIA-Insured, 5.500% due 1/1/23 2,354,600
5,595,000 AAA Chicago, IL Water Revenue, FGIC-Insured,
5.000% due 11/1/25 5,014,519
7,000,000 AAA Illinois Health Facilities Authority, Ingalls
Health Systems Project, MBIA-Insured,
6.250% due 5/15/24 7,210,000
1,000,000 AAA Illinois Metropolitan Pier & Exposition
Authority, (McCormick Plan Exposition
Project), Series A, AMBAC-Insured,
5.250% due 6/15/27 937,500
- ----------------------------------------------------------------------------------------------
15,516,619
- ----------------------------------------------------------------------------------------------
Indiana -- 1.2%
2,500,000 AA- Petersburg, IN Industrial PCR, Indianapolis
Power & Light Corp., 6.625% due 12/1/24 2,706,250
- ----------------------------------------------------------------------------------------------
Kentucky -- 1.0%
2,500,000 AAA Louisville & Jefferson County KY,
Metro Sewer & Drain Systems, Series A,
MBIA-Insured, 5.250% due 5/15/27 2,356,250
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
==================================== 6 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
Maryland -- 1.5%
$11,000,000 NR Maryland State Energy Financing
Administration, Solid Waste Disposal,
(Hagerstown Revenue Project),
9.000% due 10/15/16 (b)(c) $ 3,630,000
- ----------------------------------------------------------------------------------------------
Massachusetts -- 3.6%
Massachusetts Bay Transportation Authority,
Series B:
1,500,000 AAA AMBAC-Insured, 5.375% due 3/1/20 1,453,125
2,000,000 AAA FSA-Insured, 5.250% due 3/1/26 1,895,000
10,000,000 NR Massachusetts State Industrial Financing
Agency Revenue, Solid Waste Disposal
Revenue, Massachusetts Recycling
Association, Series A,
9.000% due 8/1/16 (b)(c) 4,000,000
1,000,000 AAA Massachusetts State Water Reserve
Authority, Series C, MBIA-Insured,
5.250% due 12/1/20 936,250
- ----------------------------------------------------------------------------------------------
8,284,375
- ----------------------------------------------------------------------------------------------
Michigan -- 2.4%
1,500,000 AAA Michigan State Hospital Finance Authority
Revenue, St. John's Hospital & Medical
Center, AMBAC-Insured,
5.250% due 5/15/26 1,393,125
2,000,000 NR Midland County, MI EDC, PCR,
Limited Obligation, Series B,
9.500% due 7/23/09 (c) 2,187,500
2,000,000 AAA Pinckney, MI Community Schools,
FGIC-Insured, 5.500% due 5/1/27 1,940,000
- ----------------------------------------------------------------------------------------------
5,520,625
- ----------------------------------------------------------------------------------------------
New York -- 12.9%
1,790,000 AAA New York City, NY Municipal Water
Finance Authority, Water & Sewer
Systems Revenue, MBIA-Insured, Series B,
5.375% due 6/15/19 1,725,113
New York State Dormitory Authority Revenue:
2,000,000 AAA Barnard College, AMBAC-Insured,
5.250% due 7/1/26 1,882,500
5,000,000 AAA City University System, 3rd Series,
AMBAC-Insured, 5.375% due 7/1/25 4,768,750
</TABLE>
See Notes to Financial Statements.
==================================== 7 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
New York -- 12.9% (continued)
$ 1,000,000 AAA Lease Revenue, Health Facilities
Improvement Program, Series A,
FSA-Insured, 5.500% due 5/15/16 $ 991,250
3,000,000 AAA Montefiore Medical Center, AMBAC/
FHA-Insured, 5.250% due 2/1/15 2,887,500
2,000,000 AAA Mount Sinai Medical School, Series A,
MBIA-Insured, 5.000% due 7/1/21 1,815,000
New York State Local Government
Assistance Corp.:
7,000,000 A Series C, 5.000% due 4/1/21 6,308,750
2,000,000 A Series D, 5.000% due 4/1/23 1,795,000
New York State Medical Care Facilities
Finance Agency:
1,000,000 AAA FGIC-Insured, 5.250% due 2/15/19 941,250
4,690,000 Aa2* Healthcare Project, Series A,
5.850% due 2/15/33 4,684,138
2,500,000 AA New York State Triborough Bridge & Tunnel
Authority, NY Revenue, Series A,
5.000% due 1/1/24 2,275,000
- ----------------------------------------------------------------------------------------------
30,074,251
- ----------------------------------------------------------------------------------------------
Ohio -- 0.4%
1,000,000 AAA Lorrain County, OH Hospital Revenue,
Catholic Healthcare Partners,
MBIA-Insured, 5.500% due 9/1/27 973,750
- ----------------------------------------------------------------------------------------------
Pennsylvania -- 1.2%
1,900,000 AAA Beaver County, PA IDA, PCR, (Power Co.
Mansfield Project), Series A,
AMBAC-Insured, 5.450% due 9/15/28 1,788,375
1,000,000 AAA Northeastern, PA Hospital & Education
Authority Health Care Revenue, Wyoming
Valley Health Care, Series A,
AMBAC-Insured, 5.250% due 1/1/26 935,000
- ----------------------------------------------------------------------------------------------
2,723,375
- ----------------------------------------------------------------------------------------------
Texas -- 13.9%
Burleson, TX ISD, PSFG:
725,000 AAA 6.750% due 8/1/24 789,344
1,775,000 AAA Pre-Refunded -- Escrowed with U.S.
Government Securities to 8/1/06
Call @ 100, 6.750% due 8/1/24 2,010,188
</TABLE>
See Notes to Financial Statements.
==================================== 8 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
Texas -- 13.9% (continued)
$ 3,650,000 AAA El Paso, TX ISD, PSFG, 5.900% due 2/15/13 $ 3,754,933
2,000,000 AA Harris County, TX Health Facilities
Development Revenue, School Healthcare
System, Series B, 5.750% due 7/1/27 1,975,000
Houston, TX Water & Sewer Systems
Revenue, FGIC-Insured:
2,000,000 AAA Series A, 5.375% due 12/1/27 1,920,000
2,000,000 AAA Series C, 5.375% due 12/1/27 1,920,000
1,250,000 AAA Leander, TX ISD, PSFG,
5.625% due 8/15/17 1,253,125
2,500,000 AAA Nueces River Authority, Texas Water Supply,
FSA-Insured, 5.500% due 3/1/27 2,434,375
3,000,000 AA San Antonio, TX Electric & Gas,
5.500% due 2/1/20 2,947,500
3,000,000 AAA Texas State Turnpike Authority,
Dallas North Thruway Revenue,
President Bush Turnpike, FGIC-Insured,
5.250% due 1/1/23 2,853,750
9,035,000 AA Texas State Veterans Housing, GO,
Series B-4, 6.700% due 12/1/24 (c) 9,418,988
1,000,000 AA Texas State Water Development,
5.250% due 8/1/28 932,500
- ----------------------------------------------------------------------------------------------
32,209,703
- ----------------------------------------------------------------------------------------------
Utah -- 4.7%
12,000,000 A+ Intermountain Power Agency, Utah Power
Supply Revenue, Series D,
5.000% due 7/1/21 10,890,000
- ----------------------------------------------------------------------------------------------
Virginia -- 5.0%
Virginia College Building Authority, VA
Educational Facilities Revenue:
1,250,000 A+ Hampton University Project,
5.750% due 4/1/14 1,245,313
3,425,000 AA 21st Century College Program,
5.200% due 8/1/12 3,369,344
Virginia State Housing Development Authority:
3,760,000 AA+ Series A-1, 6.400% due 7/1/17 3,882,200
1,675,000 AA+ Series D-1, 6.400% due 7/1/17 1,735,719
1,315,000 AA+ Series D-3, 5.800% due 7/1/10 1,331,438
- ----------------------------------------------------------------------------------------------
11,564,014
- ----------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
==================================== 9 =====================================
<PAGE>
================================================================================
Schedule of Investments
May 31, 1997 (continued)
================================================================================
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==============================================================================================
<S> <C> <C> <C>
Washington -- 2.2%
$ 6,285,000 AAA Chelan County, WA Public Utilities
District 1 Columbia River Rock, Capital
Appreciation, MBIA-Insured,
zero coupon due 6/1/24 $ 1,319,850
4,250,000 Aa1* Washington State Public Power Supply
System, Series B, Nuclear Project No. 3,
5.500% due 7/1/18 3,989,688
- ----------------------------------------------------------------------------------------------
5,309,538
- ----------------------------------------------------------------------------------------------
West Virginia -- 2.4%
Marion County, WV Community Solid
Waste Disposal Facilities Revenue,
(American Paper Recycling Project):
10,000,000 NR 7.750% due 12/1/11 (b)(c) 5,000,000
1,000,000 NR 9.250% due 12/1/11 (b)(c) 500,000
- ----------------------------------------------------------------------------------------------
5,500,000
- ----------------------------------------------------------------------------------------------
Wisconsin -- 1.2%
Wisconsin State Health & Educational
Facilities Authority Revenue,
MBIA-Insured:
2,000,000 AAA Aurora Health Care Obligated,
5.250% due 8/15/23 1,872,500
1,000,000 AAA The Medical College Wisconsin, Inc.
Project, 5.400% due 12/1/16 953,750
- ----------------------------------------------------------------------------------------------
2,826,250
- ----------------------------------------------------------------------------------------------
Wyoming -- 0.9%
2,000,000 AA Wyoming Community Development
Authority Housing Revenue, Series 4,
5.900% due 12/1/14 2,015,000
- ----------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(COST -- $244,533,514**) $232,408,725
==============================================================================================
</TABLE>
(a) Variable rate municipal bonds and notes are payable on one business day's
notice.
(b) Security segregated by custodian for open purchase commitments.
(c) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 12 and 13 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
==================================== 10 ====================================
<PAGE>
================================================================================
Summary of Investments by Combined Ratings
May 31, 1997 (unaudited)
================================================================================
================================================================================
Standard & Percent of
Moody's and/or Poor's Total Investments
================================================================================
Aaa AAA 56.0%
Aa AA 24.8
A A 9.1
Baa BBB 2.6
VMIG 1 SP-1 0.9
NR NR 6.6
-----
100.0%
=====
================================================================================
==================================== 11 ====================================
<PAGE>
================================================================================
Bond Ratings
================================================================================
All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except those identified by an asterisk (*) are rated by Moody's Investors
Service, Inc. ("Moody's"). The definitions of the applicable rating symbols are
set forth below:
Standard & Poor's -- Ratings from "AA" to "BBB" may be modified by the addition
of a plus (+) or a 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 differ 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 debt in this category than in higher
rated categories.
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 rating within its
generic category.
Aaa -- Bonds that are 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 that are 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 that are 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 that are 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 Standard & Poor's or Moody's.
==================================== 12 ====================================
<PAGE>
================================================================================
Short-Term Securities Ratings
================================================================================
SP-1 -- Standard & Poor's highest rate rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
VMIG 1 -- Moody's highest rating for issues having 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
================================================================================
ABAG -- Association of Bay Area Governors
AIG -- American International Guaranty
AMBAC -- American Municipal Bond Assurance Corporation
BAN -- Bond Anticipation Notes
BIG -- Bond Investors Guaranty
CDA -- Community Development Administration
CGIC -- Capital Guaranty Insurance Company
CHFCLI -- California Health Facility Construction Loan Insurance
COP -- Certificate of Participation
EDA -- Economic Development Authority
EDC -- Economic Development Corporation
ETM -- Escrowed to Maturity
FAIRS -- Floating Adjustable Interest Rate Securities
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRTC -- Floating Rate Trust Certificates
FSA -- Federal Savings Association
GIC -- Guaranteed Investment Contract
GNMA -- Government National Mortgage Association
GO -- General Obligation
HDC -- Housing Development Corporation
HFA -- Housing Finance Authority
IDA -- Industrial Development Agency
IDB -- Industrial Development Board
IDR -- Industrial Development Revenue
INFLOS -- Inverse Floaters
ISD -- Independent School District
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corporation
MVRICS -- Municipal Variable Rate Inverse Coupon Security
PCR -- Pollution Control Revenue
PSFG -- Permanent School Fund Guaranty
RAN -- Revenue Anticipation Notes
RIBS -- Residual Interest Bonds
RITES -- Residual Interest Tax-Exempt Securities
SYCC -- Structured Yield Curve Certificate
TAN -- Tax Anticipation Notes
TECP -- Tax Exempt Commercial Paper
TOB -- Tender Option Bonds
TRAN -- Tax and Revenue Anticipation Notes
VA -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
==================================== 13 ====================================
<PAGE>
================================================================================
Statement of Assets and Liabilities
================================================================================
May 31, 1997
================================================================================
ASSETS:
Investments, at value (Cost-- $244,533,514) $ 232,408,725
Cash 32,478
Interest receivable 4,530,174
Total Assets 236,971,377
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 8,150,714
Dividends payable 600,428
Investment advisory fees payable 175,543
Accrued expenses 130,369
Total Liabilities 9,057,054
- --------------------------------------------------------------------------------
Total Net Assets $ 227,914,323
================================================================================
NET ASSETS:
Par value of capital shares $ 19,665
Capital paid in excess of par value 235,298,561
Undistributed net investment income 1,521,413
Accumulated net realized gain from security transactions 3,199,473
Net unrealized depreciation of investments (12,124,789)
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $11.59 a share on 19,664,854 shares of
$0.001 par value outstanding; 500,000,000 shares authorized) $ 227,914,323
================================================================================
See Notes to Financial Statements.
==================================== 14 ====================================
<PAGE>
================================================================================
Statement of Operations
================================================================================
Year
Ended
5/31/97
================================================================================
INVESTMENT INCOME:
Interest $ 15,414,168
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 2,102,363
Shareholder communications 119,673
Audit and legal 61,232
Shareholder and system servicing fees 39,124
Directors' fees 35,600
Listing fees 18,482
Custody 12,465
Pricing service fees 10,018
Other 6,000
- --------------------------------------------------------------------------------
Total Expenses 2,404,957
- --------------------------------------------------------------------------------
Net Investment Income 13,009,211
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 4):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 268,582,856
Cost of securities sold 262,792,102
- --------------------------------------------------------------------------------
Net Realized Gain 5,790,754
- --------------------------------------------------------------------------------
Change in Net Unrealized Depreciation
of Investments:
Beginning of year (1,125,861)
End of year (12,124,789)
- --------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (10,998,928)
- --------------------------------------------------------------------------------
Net Loss on Investments (5,208,174)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 7,801,037
================================================================================
See Notes to Financial Statements.
==================================== 15 ====================================
<PAGE>
================================================================================
Statements of Changes in Net Assets
================================================================================
Year Year
Ended Ended
5/31/97 5/31/96
================================================================================
OPERATIONS:
Net investment income $ 13,009,211 $ 12,860,049
Net realized gain 5,790,754 5,005,387
Increase in net unrealized depreciation (10,998,928) (13,167,657)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 7,801,037 4,697,779
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 2):
Net investment income (12,922,738) (12,908,597)
Net realized gains (6,649,833) (4,540,862)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (19,572,571) (17,449,459)
- --------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net asset value of shares issued
for reinvestment of dividends 1,218,075 --
- --------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions 1,218,075 --
- --------------------------------------------------------------------------------
Decrease in Net Assets (10,553,459) (12,751,680)
NET ASSETS:
Beginning of year 238,467,782 251,219,462
- --------------------------------------------------------------------------------
End of year* $ 227,914,323 $ 238,467,782
================================================================================
* Includes undistributed net
investment income of: $ 1,521,413 $ 1,634,936
================================================================================
See Notes to Financial Statements.
==================================== 16 ====================================
<PAGE>
================================================================================
Notes to Financial Statements
================================================================================
1. Significant Accounting Policies
Greenwich Street Municipal Fund Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company.
The significant accounting policies consistently followed by the Fund are:
(a) security transactions are accounted for on trade date; (b) securities are
valued at the mean between bid and ask prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) gains or losses on the sale of securities are calculated
by using the specific identification method; (e) interest income, adjusted for
amortization of premium and accretion of original issue discount, is recorded on
the accrual basis; market discount is recognized upon the disposition of the
security; (f) dividends and distributions to shareholders are recorded on the
ex-dividend date; (g) the Fund intends to comply with the applicable provisions
of the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; (h) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At May 31, 1997, reclassifications were made to the Portfolio's
capital accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations; (i) certain prior
years amounts have been restated to reflect the current year's presentation. Net
investment income, realized gains, and net assets were not affected by this
change; and (j) estimates and assumptions are required to be made regarding
assets, liabilities and changes in net assets resulting from operations when
financial statements are prepared. Changes in the economic environment,
financial markets and any other parameters used in determining these estimates
could cause actual results to differ.
2. Dividends, Exempt-Interest Dividends and Other Distributions
The Fund intends to satisfy conditions that will enable interest from
municipal securities, which is exempt from regular Federal income tax and from
designated state income taxes, to retain such tax-exempt status when distributed
to the shareholders of the Fund.
==================================== 17 ====================================
<PAGE>
================================================================================
Notes to Financial Statements
(continued)
================================================================================
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
3. Investment Advisory Agreement and Other Transactions
Smith Barney Mutual Funds Management Inc. ("SBMFM"), a subsidiary of Smith
Barney Holdings Inc. ("SBH"), through its Greenwich Street Advisors division,
acts as investment adviser to the Fund. The Fund pays SBMFM an advisory fee
calculated at an annual rate of 0.90% of the Fund's average daily net assets.
This fee is calculated daily and paid monthly.
All officers and one Director of the Fund are employees of Smith Barney
Inc.
4. Securities Transactions
For the year ended May 31, 1997, the aggregate cost of purchases and
proceeds from sales of investments (including maturities but excluding
short-term securities) were as follows:
================================================================================
Purchases $273,385,970
- --------------------------------------------------------------------------------
Sales 268,582,856
================================================================================
At May 31, 1997, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $ 6,815,567
Gross unrealized depreciation (18,940,356)
- --------------------------------------------------------------------------------
Net unrealized depreciation $(12,124,789)
================================================================================
5. Capital Shares
During the year ended May 31, 1997, capital stock transactions were as
follows:
Shares Amount
================================================================================
Shares issued on reinvestment 106,520 $1,218,075
================================================================================
==================================== 18 ====================================
<PAGE>
================================================================================
Financial Highlights
================================================================================
For a share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
1997 1996 1995(1)
=====================================================================================
<S> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.19 $ 12.84 $ 12.00
- -------------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.66 0.66 0.63
Net realized and unrealized gain (loss) (0.26) (0.42) 0.77
- -------------------------------------------------------------------------------------
Total Income From Operations 0.40 0.24 1.40
- -------------------------------------------------------------------------------------
Offering Costs Charged to Paid-In Capital -- -- (0.02)
- -------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.66) (0.66) (0.54)
Net realized gains (0.34) (0.23) --
- -------------------------------------------------------------------------------------
Total Distributions (1.00) (0.89) (0.54)
- -------------------------------------------------------------------------------------
Net Asset Value, End of Year $ 11.59 $ 12.19 $ 12.84
- -------------------------------------------------------------------------------------
Total Return, Based on Market Value 8.97% 5.52% 1.65%++
- -------------------------------------------------------------------------------------
Total Return, Based on Net Asset Value* 3.61% 2.40% 12.28%++
- -------------------------------------------------------------------------------------
Net Assets, End of Year (000s) $ 227,914 $ 238,468 $ 251,219
- -------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.03% 1.06% 1.05%+
Net investment income 5.57 5.17 5.63
- -------------------------------------------------------------------------------------
Portfolio Turnover Rate 115% 42% 115%
- -------------------------------------------------------------------------------------
Market Value, End of Year $ 11.375 $ 11.375 $ 11.625
=====================================================================================
</TABLE>
(1) For the period from June 24, 1994 (commencement of operations) to May 31,
1995.
* The total return assumes the purchase and redemption of shares using the
Fund's net asset value rather than the market value. Dividends are
reinvested in accordance with the Fund's dividend reinvestment plan.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
==================================== 19 ====================================
<PAGE>
================================================================================
Independent Auditors' Report
================================================================================
The Shareholders and Board of Directors of
Greenwich Street Municipal Fund Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of the Greenwich Street Municipal Fund
Inc. as of May 31, 1997, the related statement of operations for the year then
ended and the statements of changes in net assets and financial highlights for
each of the years in the two-year period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
period from June 24, 1994 (commencement of operations) to May 31, 1995 were
audited by other auditors whose report thereon, dated July 12, 1995, expressed
an unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1997 by correspondence with the custodian. As to securities purchased but
not received, we performed other appropriate auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Greenwich Street Municipal Fund Inc. as of May 31, 1997, the results of its
operations for the year then ended and the changes in its net assets and
financial highlights for each of the years in the two-year period then ended, in
conformity with generally accepted accounting principles.
/s/KPMG Peat Marwick LLP
New York, New York
July 14, 1997
==================================== 20 ====================================
<PAGE>
================================================================================
Quarterly Results of Operations
(unaudited)
================================================================================
<TABLE>
<CAPTION>
Net Realized Net Increase
and Unrealized (Decrease) in
Investment Net Investment Gain (Loss) on Net Assets From
Income Income Investments Operations
- ---------------------------------------------------------------------------------------------------------
Quarter Per Per Per Per
Ended Total Share Total Share Total Share Total Share
=========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
8/31/94* $ 2,522,206 $0.13 $ 2,049,342 $0.11 $ 4,076,999 $0.20 $ 6,126,341 $0.31
11/30/94 3,946,853 0.20 3,334,708 0.17 (22,644,150) (1.16) (19,309,442) (0.99)
2/28/95 3,990,277 0.20 3,363,082 0.17 24,095,398 1.23 27,458,480 1.40
5/31/95 4,061,565 0.21 3,497,852 0.18 9,687,147 0.50 13,184,999 0.68
8/31/95 3,871,127 0.20 3,186,132 0.16 (3,092,160) (0.16) 93,972 0.01
11/30/95 3,890,364 0.20 3,202,189 0.16 8,514,682 0.44 11,716,871 0.60
2/29/96 3,877,668 0.20 3,181,364 0.16 (2,239,170) (0.11) 942,194 0.04
5/31/96 3,852,531 0.19 3,290,364 0.18 (11,345,622) (0.59) (8,055,258) (0.41)
8/31/96 3,940,034 0.20 3,319,852 0.17 (3,899,664) (0.20) (579,812) (0.03)
11/30/96 3,836,212 0.20 3,226,504 0.17 8,809,662 0.45 12,036,166 0.62
2/28/97 3,780,875 0.19 3,189,232 0.16 (7,930,720) (0.40) (4,741,488) (0.24)
5/31/97 3,857,047 0.19 3,273,623 0.16 (2,187,452) (0.11) 1,086,171 0.05
=========================================================================================================
</TABLE>
* For the period from June 24, 1994 (commencement of operations) to August
31, 1994.
==================================== 21 ====================================
<PAGE>
Financial Data
(unaudited)
For a share of capital stock outstanding throughout each period:
NYSE Dividend
Record Payable Closing Net Asset Dividend Reinvestment
Date Date Price* Value* Paid Price
================================================================================
9/23/94 9/30/94 $11.250 $ 11.93 $ 0.06 $ 11.50
10/24/94 10/31/94 11.125 11.63 0.06 10.91
11/22/94 11/30/94 10.375 10.81 0.06 10.57
12/22/94 12/30/94 10.250 11.33 0.06 10.47
1/24/95 1/31/95 10.938 11.63 0.06 10.81
2/21/95 2/28/95 11.500 12.19 0.06 11.11
3/24/95 3/31/95 11.375 12.40 0.06 11.38
4/21/95 4/28/95 11.438 12.57 0.06 11.47
5/23/95 5/31/95 11.438 12.72 0.06 11.69
6/23/95 6/30/95 11.375 12.71 0.06 11.62
7/25/95 7/28/95 11.563 12.53 0.06 11.48
8/22/95 8/25/95 11.375 12.86 0.06 11.52
9/26/95 9/29/95 11.500 12.62 0.06 11.20
10/24/95 10/27/95 11.500 12.84 0.06 11.58
11/20/95 11/24/95 11.750 12.95 0.06 11.64
12/26/95+ 12/29/95 11.875 12.99 0.23 12.10
1/23/96 1/26/96 11.875 12.92 0.06 12.12
2/20/96 2/23/96 12.000 12.86 0.06 12.30
3/26/96 3/29/96 11.375 12.55 0.06 11.54
4/23/96 4/26/96 11.438 12.32 0.06 11.42
5/28/96 5/31/96 11.375 12.35 0.06 11.43
6/25/96 6/28/96 11.250 12.10 0.06 11.54
7/23/96 7/26/96 11.375 12.06 0.06 11.58
8/27/96 8/30/96 11.625 12.10 0.06 11.70
9/24/96 9/27/96 11.688 12.08 0.06 11.71
10/22/96 10/25/96 11.688 12.18 0.06 11.75
11/25/96 11/29/96 11.625 12.35 0.06 11.59
12/23/96+ 12/27/96 11.250 11.99 0.34 11.56
1/28/97 1/31/97 11.563 11.65 0.06 11.53
2/25/97 2/28/97 11.750 11.80 0.06 11.66
3/24/97 3/27/97 11.250 11.40 0.06 11.40
4/22/97 4/25/97 11.250 11.30 0.06 11.29
5/27/97 5/30/97 11.250 11.51 0.06 11.49
================================================================================
* As of record date.
+ Capital gain distribution.
==================================== 22 ====================================
<PAGE>
================================================================================
Additional Shareholder Information
(unaudited)
================================================================================
On September 12, 1996, the annual meeting of the shareholders of the Fund
was held for the purpose of voting on the following matters:
1. To approve or disapprove for the Fund, the election of Charles F.
Barber, Allan J. Bloostein, Martin Brody, Dwight B. Crane, Robert A.
Frankel, William R. Hutchinson and Heath B. McLendon as Directors;
and
2. To approve or disapprove the selection of KPMG Peat Marwick LLP as
the independent auditors for the current fiscal year of the Fund.
The results of the vote on Proposal 1 were as follows:
% of Voted % of
Directors Voted For Shares Voted Against Shares Voted
================================================================================
Charles F. Barber 18,930,436.630 98.790% 231,841.658 1.210%
Allan J. Bloostein 18,984,028.060 99.070 178,250.236 0.930
Martin Brody 18,952,481.010 98.905 209,797.284 1.095
Dwight B. Crane 18,981,520.060 99.057 180,758.236 0.943
Robert A. Frankel 18,983,925.060 99.069 178,353.240 0.931
William R. Hutchinson 18,964,589.420 98.968 197,688.877 1.032
Heath B. McLendon 18,982,160.060 99.060 180,118.236 0.940
================================================================================
The results of the vote on Proposal 2 were as follows:
% of Votes % of Votes % of
Votes For Shares Votes Against Shares Votes Abstained Shares Voted
================================================================================
18,909,894.930 98.683% 63,320.112 0.330% 189,063.248 0.987%
================================================================================
==================================== 23 ====================================
<PAGE>
================================================================================
Dividend Reinvestment Plan
(unaudited)
================================================================================
Under the Fund's Dividend Reinvestment Plan (the "Plan"), a shareholder
whose Common Stock is registered in his own name will have all distributions
reinvested automatically by First Data Investor Services Group, Inc. ("First
Data") as agent under the Plan, unless the shareholder elects to receive cash.
Distributions with respect to shares registered in the name of a broker-dealer
or other nominee (that is, in "street name") will be reinvested by the broker or
nominee in additional Common Stock under the Plan, but only if the service is
provided by the broker or nominee, and the broker or nominee makes an election
on behalf of the shareholder to participate in the Plan. Distributions with
respect to Common Stock registered in the name of Smith Barney will
automatically be reinvested by Smith Barney in additional shares under the Plan
unless the shareholder elects to receive distributions in cash. A shareholder
who holds Common Stock registered in the name of a broker or other nominee may
not be able to transfer the Common Stock to another broker or nominee and
continue to participate in the Plan. Investors who own Common Stock registered
in street name should consult their broker or nominee for details regarding
reinvestment.
The number of shares of Common Stock distributed to participants in the
Plan in lieu of a cash dividend is determined in the following manner. Whenever
the market price of the Fund's Common Stock is equal to or exceeds the net asset
value per share, participants will be issued shares of Common Stock valued at
the greater (i) net asset value per share or (ii) 95% of the then current market
price. If the net asset value per share of Common Stock at the time of valuation
exceeds the market price of the Common Stock, First Data will buy shares of the
Fund's Common Stock on the open market, on the New York Stock Exchange, Inc. or
elsewhere, as soon as practicable after the record date of the dividend or
distribution, until it has expended for such purchases all of the cash that
would otherwise be payable to the participants.
First Data may commence purchasing shares beginning on the record date for
the dividend or distribution. The number of purchased shares that will then be
credited to the participants' accounts will be based on the average per share
purchase price of the shares so purchased, including brokerage commissions. If
First Data commences purchases in the open market and the market price of the
shares subsequently exceeds net asset value before the completion of the
purchases, First Data will attempt to terminate purchases in the open market and
cause the Fund to issue the remaining dividend or distribution in shares at net
asset value per share. In
==================================== 24 ====================================
<PAGE>
================================================================================
Dividend Reinvestment Plan
(unaudited) (continued)
================================================================================
this case, the number of shares of Common Stock received by the participant will
be based on the weighted average of prices paid for shares purchased in the open
market and the price at which the Fund issues the remaining shares.
Plan participants are not subject to any charge for reinvesting dividends
or capital gains distributions. Each Plan participant will, however, bear a
proportionate share of brokerage commissions incurred with respect to First
Data's open market purchases of shares of Common Stock in connection with
reinvestment of dividends or capital gains distributions.
A participant in the Plan will be treated for Federal income tax purposes
as having received, on the dividend payment date, a dividend or distribution in
an amount equal to the cash that the participant could have received instead of
shares of Common Stock.
A shareholder may terminate participation in the Plan at any time by
notifying First Data in writing. A termination will be effective immediately if
notice is received by First Data not less than 10 days before any dividend or
distribution record date. Otherwise, the termination will be effective, and only
with respect to any subsequent dividends or distributions, on the first trading
day after the dividend or distribution has been credited to the participant's
account in additional shares of Common Stock of the Fund. Upon termination
according to a participant's instructions, First Data will either (a) issue
certificates for the whole shares credited to a Plan account and a check
representing any fractional shares or (b) sell the shares in the market. There
will be $5.00 fee assessed for liquidation service, plus brokerage commissions,
and First Data is authorized to sell a sufficient number of a participant's
shares to cover such amounts.
Information concerning the Plan may be obtained from First Data at (800)
331-1710.
================================================================================
Additional Information
(unaudited)
================================================================================
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase
shares of its common stock in the open market.
==================================== 25 ====================================
<PAGE>
================================================================================
Tax Information
(unaudited)
================================================================================
For Federal tax purposes the Fund hereby designates for the fiscal year
ended May 31, 1997:
o long-term capital gain distributions paid of $4,302,833
o 100.00% of the dividends paid by the Fund from net investment income
as tax-exempt for regular Federal income tax purposes.
==================================== 26 ====================================
<PAGE>
Greenwich Street Municipal
Fund Inc.
Directors
Allan J. Bloostein
Martin Brody
Dwight B. Crane
Robert A. Frankel
William R. Hutchinson
Heath B. McLendon, Chairman
Charles F. Barber, Emeritus
Officers
Heath B. McLendon
Chief Executive Officer
Lewis E. Daidone
Senior Vice President
and Treasurer
Joseph P. Deane
Vice President and
Investment Officer
David Fare
Investment Officer
Thomas M. Reynolds
Controller
Christina T. Sydor
Secretary
Investment Adviser
Smith Barney Mutual Funds
Management Inc.
388 Greenwich Street
New York, New York 10013
Transfer Agent
First Data Investor Services
Group, Inc.
P.O. Box 1376
Boston, Massachusetts 02104
Custodian
PNC Bank, N.A.
17th and Chestnut Streets
Philadelphia, Pennsylvania 19103
==================================== 27 ====================================
<PAGE>
This report is to the shareholders of
Greenwich Street Municipal Fund Inc.
for their information. It is not a Prospectus,
circular or representation intended for use in the
purchase or sale of the Fund or any
securities mentioned in the report.
FD0988 7/97
