-------------------
GREENWICH STREET
MUNICIPAL FUND INC.
-------------------
[Graphic omitted]
SEMI-ANNUAL REPORT
November 30, 1996
SMITH BARNEY
------------
A Member of TravelersGroup [Logo]
<PAGE>
Greenwich Street Municipal
Fund Inc.
- --------------------------------------------------------------------------------
November 30, 1996
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the Greenwich
Street Municipal Fund Inc. for the period ended November 30, 1996. Over the
six-month period covered by this report, the Fund distributed dividends totaling
$0.36 per share. The table below details the annualized distribution rates and
six-month total returns based on the Fund's November 30, 1996 net asset value
(NAV) per share and New York Stock Exchange (NYSE) closing price:
Annualized Total
Price Per Share Distribution Rate* Return
--------------- ------------------ ------
$12.42 (NAV) 5.80% 5.08%
$11.50 (NYSE) 6.26% 4.22%
In comparison, closed-end municipal bond funds posted an average total
return of 7.52% based on NAV for the same time period, as reported by Lipper
Analytical Services, Inc. (Lipper is an independent fund tracking organization.)
The Fund's performance trailed that of its peer group because unlike many
closed-end municipal bond funds, the Fund does not use leverage. Leveraged funds
have the potential to generate stronger performance returns during bond market
rallies, but also tend to suffer from greater principal losses during market
declines.
Market and Economic Overview
Throughout 1996, the U.S. economy has continued to enjoy a healthy recovery
which began over six years ago. The unemployment rate has fallen
- ----------
* Assuming monthly dividends at the current rate of $0.06 per share for
twelve months. However, when applicable, the Fund may pay a capital gain
distribution in lieu of an income dividend towards the end of the calendar
year. The current annualized distribution rate based on NAV and NYSE alone
would be 5.31% and 5.74%, respectively, if such were the case.
================================== 1 ======================================
<PAGE>
from around 7.5% in 1992, to just over 5% in 1996. Consumer price inflation has
remained virtually unchanged since the end of 1991, and producer prices still
appear to be declining on a long-term basis. Although there were little signs of
inflation in 1996, the strength of the U.S. economy, particularly during the
first two quarters of 1996, caused inflation fears to rise among many investors
throughout most of the year. In addition, the debate over whether or not the
Federal Reserve Board would raise interest rates continued to linger over the
U.S. bond markets, which added to bond market volatility between April and
September. However, during the third quarter of 1996, U.S. economic growth
moderated and fears of inflation subsided. As a result, the bond market in
general and municipal bonds specifically, responded positively to benign
inflation numbers and moderate economic growth. The election results with the
Republicans maintaining control of Congress were clearly a plus as far as the
bond market was concerned. The elections provided an excellent backdrop for
lower interest rates and the market responded with a powerful post-election
rally.
Fund's Investment Strategy
The Greenwich Street Municipal Fund's main investment thrust during the
reporting period was to concentrate primarily on high grade discount coupon
bonds because they would maximize performance in a lower interest rate
environment. In addition, we have attempted to increase the call protection of
the bonds in the Fund, and at today's attractive spreads, have added a larger
number of insured bonds for increased marketability. Our goal is to provide
shareholders with an attractive level of tax-exempt income consistent with a
good total return, believing that this is the best way to maximize shareholder
value.
As of November 30, 1996, approximately 91% of the Fund's holdings were
rated investment grade (BBB/Baa and higher) by either Standard and Poor's
Corporation or Moody's Investors Service, Inc., with about 52% of the Fund's
assets invested in triple-A bonds, the highest possible rating. (Standard and
Poor's and Moody's are two major credit reporting and bond rating agencies.) The
Fund's largest holdings are concentrated in transportation bonds (17.4%),
general obligation bonds (10.5%), utility bonds (9.9%) and housing bonds (9.0%).
As of November 30, 1996 the average weighted maturity of the Fund was 23.2
years.
================================== 2 ======================================
<PAGE>
Outlook
We believe our current investment strategy of focusing on high grade
discount coupon bonds will enable the Portfolio to be well-positioned going into
the first quarter of 1997. Interest rates should continue to decline, but as the
Spring approaches we will take a fresh look at the level of interest rates, the
rate of U.S. economic growth and the pattern of foreign capital flows into the
U.S., and reassess our position at that time.
In closing, thank you for investing in the Greenwich Street Municipal 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 and Vice President and
Chief Executive Officer Investment Officer
December 24, 1996
================================== 3 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
- ---------------------------------
Municipal Bonds and Notes -- 100%
- ---------------------------------
Alabama -- 0.9%
$2,000,000 AAA Birmingham Baptist Medical Center,
Alabama Special Care Facilities
Authority Revenue, MBIA-Insured,
5.800% due 11/15/16 $2,035,000
200,000 A-1+ McIntosh AL, Industrial Development Board,
PCR, (Ciba-Geigy Corp. Project),
3.600% due 7/1/04(a) 200,000
- ----------------------------------------------------------------------------------
2,235,000
- ----------------------------------------------------------------------------------
Alaska -- 3.6%
Valdez Alaska Marine Terminal Revenue,
(BP Pipelines Inc. Project):
8,000,000 AA Series A, 5.850% due 8/1/25(b) 7,840,000
1,000,000 AA Series B, 5.650% due 12/1/28 978,750
8,818,750
- ----------------------------------------------------------------------------------
California -- 13.3%
2,000,000 AAA California State GO, FGIC-Insured,
5.375% due 6/1/26 1,970,000
California State Public Works Board,
Department of Correction
California Prison, MBIA-Insured:
2,000,000 AAA Series A, 5.375% due 6/1/18 1,962,500
3,000,000 AAA Series B, 5.625% due 11/1/16 3,037,500
3,100,000 SP-1+ California State Revenue Anticipation Notice,
Series C-5, 3.500% due 6/30/97(a) 3,100,000
2,000,000 AAA East Bay California Municipal Utility,
District No. 1, Series E, FGIC-Insured,
5.000% due 4/1/15 1,890,000
3,195,000 AAA Los Angeles, CA Wastewater Systems
Revenue, MBIA-Insured,
5.200% due 11/1/21 3,051,225
1,500,000 AAA Los Angeles County, CA Metropolition
Transportation Authority Revenue,
Sales Tax Revenue, AMBAC-Insured,
5.250% due 7/1/23 1,441,875
2,000,000 AAA Northern California Transmission Revenue,
Series A, MBIA-Insured,
5.250% due 5/1/20 1,927,500
</TABLE>
See Notes to Financial Statements.
================================== 4 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
California -- 13.3% (continued)
San Francisco, CA City and County Sewer
Revenue, FGIC-Insured:
$5,000,000 AAA 5.375% due 10/1/16 $4,906,250
3,000,000 AAA 5.375% due 10/1/22 2,917,500
2,000,000 AAA San Francisco State Building Authority
Lease Revenue, Civic Center,
Complex-A, AMBAC-Insured,
5.250% due 12/1/16 1,955,000
5,000,000 AAA San Jose California Redevelopment Agency,
(Merged Area Redevelopment Project),
MBIA-Insured, 5.000% due 8/1/20 4,681,250
- ----------------------------------------------------------------------------------
32,840,600
- ----------------------------------------------------------------------------------
Colorado -- 4.4%
2,000,000 Baa* Arapahoe County, CO Capital Improvement,
Highway Revenue, Current Series E,
7.000% due 8/31/26 2,217,500
4,000,000 AA Colorado Springs, CO Utilities Revenue,
Series A, 5.125% due 11/15/23 3,825,000
4,950,000 AAA Denver, CO City & County Airport
Revenue, Series D, MBIA-Insured,
5.000% due 11/15/25 4,906,688
- ----------------------------------------------------------------------------------
10,949,188
- ----------------------------------------------------------------------------------
District of Columbia -- 1.6%
District of Columbia Revenue:
2,000,000 AAA Howard University, MBIA-Insured,
5.750% due 10/1/17 2,017,500
2,000,000 AAA The American University, AMBAC-Insured,
5.625% due 10/1/26 1,995,000
- ----------------------------------------------------------------------------------
4,012,500
- ----------------------------------------------------------------------------------
Florida -- 5.9%
1,000,000 AAA Broward County, FL Professional Sports
Facility, (Civic Arena Project), Series A,
MBIA-Insured, 5.625% due 9/1/28 1,005,000
2,000,000 AAA Dade County, FL GO Unlimited Revenue
Bonds, Florida Seaport, 5.125% due 10/1/21 1,925,000
3,000,000 AAA Dade County, FL School Board
CTFS Partnership, AMBAC-Insured,
5.600% due 8/1/26 3,022,500
</TABLE>
See Notes to Financial Statements.
================================== 5 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
Florida -- 5.9% (continued)
$1,000,000 AAA Escambia County, FL School Board,
Certificates, Series 1, MBIA-Insured,
5.500% due 2/1/16 $ 1,008,750
2,450,000 AA- Lakeland, FL Electric & Water Revenue,
Series B, 5.625% due 10/1/19 2,480,625
3,500,000 BBB- Martin County, FL IDR, (Indiantown
Cogeneration Project), 7.875% due
12/15/25(b)(c) 4,025,000
1,000,000 A* Martin County, FL Special Assessment
Revenue, 6.100% due 11/1/15(c) 1,035,000
- ----------------------------------------------------------------------------------
14,501,875
- ----------------------------------------------------------------------------------
Illinois -- 8.5%
Chicago, IL Skyway Toll Bridge Revenue,
MBIA-Insured:
1,595,000 AAA 5.375% due 1/1/10 1,604,965
2,000,000 AAA 5.500% due 1/1/23 1,962,500
5,595,000 AAA Chicago, IL Water Revenue, FGIC-Insured,
5.000% due 11/1/25 5,091,450
Illinois Health Facilities Authority:
7,000,000 AAA Ingalls Health Systems Project,
MBIA-Insured, 6.250% due 5/15/24 7,350,000
2,575,000 AAA Rush Presbyterian Project, St. Lukes
Medical Facility, MBIA-Insured,
5.500% due 11/15/25 2,491,313
1,500,000 AAA Trinity Medical Center, FSA-Insured,
6.000% due 7/1/28 1,539,375
1,000,000 AAA Metropolitan Pier & Exposition Authority,
(McCormick Plan Exposition Project),
Series A, AMBAC-Insured,
5.250% due 6/15/27 963,750
- ----------------------------------------------------------------------------------
21,003,353
- ----------------------------------------------------------------------------------
Indiana -- 1.7%
1,500,000 Aaa* Indiana State HFA, Single-Family
Mortgage Revenue, Series A-1,
6.250% due 7/1/28 1,539,375
2,500,000 AA- Petersburg, IN Industrial PCR,
Indianapolis Power & Light Corp.,
6.625% due 12/1/24 2,728,125
- ----------------------------------------------------------------------------------
4,267,500
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================== 6 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
Maryland -- 4.1%
$ 1,000,000 Aa* Maryland State CDA, Department of
Housing & Community Development,
Series A, 5.875% due 7/1/16 $ 1,006,250
11,000,000 NR Maryland State Energy Financing,
Administration Solid Waste Disposal,
(Hagerstown Revenue Project),
9.000% due 10/15/16(c) 9,130,000
- ----------------------------------------------------------------------------------
10,136,250
- ----------------------------------------------------------------------------------
Massachusetts -- 5.5%
Massachusetts Bay Transportation Authority,
Series B:
2,000,000 AAA FSA-Insured, 5.250% due 3/1/26 1,930,000
4,680,000 A+ 5.875% due 3/1/14 4,837,950
10,000,000 NR Massachusetts State Industrial Financing
Agency Revenue, Massachusetts Recycling
Association, 9.000% due 8/1/16(c) 5,000,000
2,000,000 AAA Massachusetts State Turnpike Authority,
Turnpike Revenue, Series A,
MBIA-Insured, 5.000% due 1/1/20 1,867,500
- ----------------------------------------------------------------------------------
13,635,450
- ----------------------------------------------------------------------------------
Michigan -- 0.9%
2,000,000 NR Midland County, MI EDC, PCR,
Limited Obligation, Series B,
9.500% due 7/23/09(c) 2,192,500
- ----------------------------------------------------------------------------------
Minnesota -- 2.6%
6,400,000 AAA Minnesota State Health & Educational
Facilities Authority, Rental Housing,
Series D, MBIA-Insured,
5.950% due 2/1/18 6,480,000
- ----------------------------------------------------------------------------------
Nevada -- 1.7%
4,000,000 AAA Clark County, NV School District, Series A,
MBIA-Insured, 5.875% due 6/15/14 4,120,000
- ----------------------------------------------------------------------------------
New York -- 15.0%
4,000,000 BBB City University of New York COP,
John Jay College, 5.750% due 8/15/04 4,095,000
2,000,000 AAA New York City, NY Education Construction
Fund Revenue, AMBAC-Insured,
5.500% due 4/1/26 2,002,500
</TABLE>
See Notes to Financial Statements.
================================== 7 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
New York -- 15.0% (continued)
$ 400,000 A-1+ New York City, NY GO, Series B,
3.400% due 8/15/05(a) $ 400,000
New York City, NY Municipal Water Finance
Authority & Sewer System Revenue:
5,000,000 A- Series A, 5.500% due 6/15/23 4,962,500
1,790,000 AAA Series B, MBIA-Insured,
5.375% due 6/15/19 1,754,200
New York State Dormitory Authority:
5,000,000 AAA City University System, 3rd Series,
AMBAC-Insured, 5.375% due 7/1/25 4,937,500
1,000,000 AAA Lease Revenue, Health Facilities
Improvement Program, Series A,
FSA-Insured, 5.500% due 5/15/16 1,007,500
2,000,000 AAA Mount Sinai Medical School, Series A,
MBIA-Insured, 5.000% due 7/1/21 1,855,000
New York State Local Government
Assistance Corp.:
7,000,000 A 5.000% due 4/1/21 6,501,250
4,500,000 A 5.500% due 4/1/23 4,477,500
4,690,000 Aa* New York State Medical Care Facilities
Finance Agency, (Healthcare Project A),
5.850% due 2/15/33 4,713,450
500,000 A+ Triborough Bridge & Tunnel Authority,
NY Revenue, Series A,
5.000% due 1/1/24 466,875
- ----------------------------------------------------------------------------------
37,173,275
- ----------------------------------------------------------------------------------
North Carolina -- 1.6%
2,500,000 AAA New Hanover County, NC Hospital Revenue,
(Regional Medical Center Project),
AMBAC-Insured, 5.750% due 10/1/16 2,565,625
1,300,000 A-1 Wake County, NC Industrial Facilities &
Pollution Control Financing Authority
Revenue, (Carolina Power & Lighting
Project), 3.600% due 3/1/17(a) 1,300,000
3,865,625
- ----------------------------------------------------------------------------------
Oklahoma -- 0.5%
1,250,000 AAA Tulsa, OK Metropolitian Utility Authority,
Utility Revenue, MBIA-Insured,
5.750% due 9/1/25 1,270,313
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================== 8 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
Pennsylvania -- 2.8%
$ 5,000,000 AAA Allegheny County, PA Hospital Development
Authority Revenue, Magee-Womens
Hospital, FGIC-Insured,
5.625% due 10/1/20 $ 5,025,000
1,900,000 AAA Beaver County, PA IDA PCR (Power Co.
Mansfield Project), Series A, AMBAC-
Insured, 5.450% due 9/15/28 1,833,500
- ----------------------------------------------------------------------------------
6,858,500
- ----------------------------------------------------------------------------------
Texas -- 8.6%
2,000,000 AAA Austin, Texas Utilility System Revenue,
MBIA-Insured, 5.600% due 5/15/25 2,005,000
Burleson, TX Independent School
District, PSFG:
725,000 Aaa* 6.750% due 8/1/24 803,844
1,775,000 AAA Pre-Refunded -- Escrowed with U.S.
Government Securities to 8/1/06
Call @ 100, 6.750% due 8/1/24 2,032,375
3,650,000 AAA El Paso, TX Independent School District,
PSFG, 5.900% due 2/15/13 3,796,000
1,250,000 AAA Leander, TX Independent School District,
PSFG, 5.625% due 8/15/17 1,268,750
2,000,000 AAA Texas State Turnpike Authority, Dallas North
Thruway Revenue, President Bush
Turnpike, FGIC-Insured,
5.250% due 1/1/23 1,945,000
9,035,000 AA Texas State Veterans Housing, GO,
Series B-4, 6.700% due 12/1/24(c) 9,362,519
- ----------------------------------------------------------------------------------
21,213,488
- ----------------------------------------------------------------------------------
Utah -- 3.7%
10,000,000 A+ Intermountain Power Agency,
Utah Power Supply Revenue,
Series D, 5.000% due 7/1/21 9,275,000
- ----------------------------------------------------------------------------------
Virginia -- 4.4%
1,665,000 AAA Loudon County, VA Sanitation Authority
Water & Sewer Revenue, FGIC-Insured,
5.250% due 1/1/17 1,627,538
1,250,000 A+ Virginia College Building Authority,
Virginia Educational Facilities Revenue,
(Hampton University Project),
5.750% due 4/1/14 1,260,938
</TABLE>
See Notes to Financial Statements.
================================== 9 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1996 (unaudited)(continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating Security Value
==================================================================================
<C> <C> <S> <C>
Virginia -- 4.4% (continued)
Virginia State Housing Development Authority:
$ 3,760,000 AA+ Series A-1, 6.400% due 7/1/17 $ 3,886,900
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 1,339,656
1,000,000 Baa3* Virginia State Transportation Board,
Transportation Contract Revenue,
Series A, 5.125% due 5/15/21 958,750
- ----------------------------------------------------------------------------------
10,809,501
- ----------------------------------------------------------------------------------
Washington -- 4.9%
3,000,000 Aa* Clark County, WA School District No. 037,
5.900% due 12/1/12 3,112,500
Washington State Public Power
(Nuclear Project No. 3):
5,000,000 AAA MBIA-Insured, 5.600% due 7/1/15(b) 4,975,000
4,250,000 AA Series A, 5.500% due 7/1/18 4,042,813
- ----------------------------------------------------------------------------------
12,130,313
- ----------------------------------------------------------------------------------
West Virginia -- 2.2%
Marion County, WV Community Solid
Waste Disposal Facilities Revenue,
(American Paper Recycling Project):
10,000,000 NR 7.750% due 12/1/11(c) 5,000,000
1,000,000 NR 9.250% due 12/1/11(c) 500,000
- ----------------------------------------------------------------------------------
5,500,000
- ----------------------------------------------------------------------------------
Wisconsin -- 0.8%
2,000,000 AAA Wisconsin State Health & Educational
Facilities Authority Revenue, Aurora
Health Care Obligated, MBIA-Insured,
5.250% due 8/15/23 1,912,500
- ----------------------------------------------------------------------------------
Wyoming -- 0.8%
2,000,000 AA Wyoming Community Development
Authority, Housing Revenue, Series 4,
5.900% due 12/1/14 2,025,000
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(Cost -- $247,008,970**) $247,226,481
==================================================================================
</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 prereference 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
November 30, 1996 (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Standard & Percent of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Aaa AAA 52.2%
Aa AA 19.8
A A 13.3
Baa BBB 4.6
P-1 SP-1 1.2
NR NR 8.9
-----
100.0%
=====
- --------------------------------------------------------------------------------
================================== 11 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings
- --------------------------------------------------------------------------------
All ratings are by Standard & Poor's Ratings Service ("Standard & Poor's"),
except that 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
(unaudited)
- --------------------------------------------------------------------------------
November 30, 1996
================================================================================
ASSETS:
Investments, at value (Cost -- $247,008,970) $247,226,481
Interest receivable 4,560,148
Receivable for securities sold 2,015,946
- --------------------------------------------------------------------------------
Total Assets 253,802,575
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 10,024,467
Dividends payable 584,075
Investment advisory fees payable 179,674
Payable to bank 39,529
Accrued expenses 91,694
- --------------------------------------------------------------------------------
Total Liabilities 10,919,439
- --------------------------------------------------------------------------------
Total Net Assets $242,883,136
================================================================================
NET ASSETS:
Par value of capital shares $ 19,558
Capital paid in excess of par value 234,080,593
Undistributed net investment income 1,140,292
Accumulated net realized gain on security transactions 7,425,182
Net unrealized appreciation of investments 217,511
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $12.42 a share on 19,558,334 shares of
$0.001 par value outstanding; 500,000,000 shares authorized) $242,883,136
================================================================================
See Notes to Financial Statements.
================================== 14 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
(unaudited)
- --------------------------------------------------------------------------------
Six Months
Ended
11/30/96
================================================================================
INVESTMENT INCOME:
Interest $ 7,776,246
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 2) 1,073,963
Shareholder communications 60,000
Audit and legal 30,700
Shareholder and system servicing fees 20,169
Directors' fees 18,645
Registration fees 10,869
Custody 6,249
Pricing service fees 4,874
Other 4,421
- --------------------------------------------------------------------------------
Total Expenses 1,229,890
- --------------------------------------------------------------------------------
Net Investment Income 6,546,356
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 3):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 140,251,244
Cost of securities sold 136,684,618
- --------------------------------------------------------------------------------
Net Realized Gain 3,566,626
- --------------------------------------------------------------------------------
Change in Net Unrealized Appreciation (Depreciation)
of Investments:
Beginning of period (1,125,861)
End of period 217,511
- --------------------------------------------------------------------------------
Increase in Net Unrealized Appreciation 1,343,372
- --------------------------------------------------------------------------------
Net Gain on Investments 4,909,998
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 11,456,354
================================================================================
See Notes to Financial Statements.
================================== 15 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months
Ended Year
11/30/96 Ended
(unaudited) 5/31/96
================================================================================
OPERATIONS:
Net investment income $ 6,546,356 $ 12,860,049
Net realized gain 3,566,626 5,005,387
Increase (decrease) in net unrealized
appreciation 1,343,372 (13,167,657)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations 11,456,354 4,697,779
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 4):
Net investment income (7,041,000) (12,908,597)
Net realized gains -- (4,540,862)
- --------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (7,041,000) (17,449,459)
- --------------------------------------------------------------------------------
Increase (Decrease) in Net Assets 4,415,354 (12,751,680)
NET ASSETS:
Beginning of period 238,467,782 251,219,462
- --------------------------------------------------------------------------------
End of period* $ 242,883,136 $ 238,467,782
================================================================================
* Includes undistributed net investment
income of: $ 1,140,292 $ 1,634,936
================================================================================
See Notes to Financial Statements.
================================== 16 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited)
- --------------------------------------------------------------------------------
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, as
applicable; (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) expenses are charged to the Fund; (g) dividends and distributions
to shareholders are recorded on the ex-dividend date; (h) 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; (i) certain prior years amounts have been restated to reflect
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.
================================== 17 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited) (continued)
- --------------------------------------------------------------------------------
2. 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.
3. Securities Transactions
For the six months ended November 30, 1996, the aggregate cost of purchases
and proceeds from sales of investments (including maturities but excluding
short-term securities) were as follows:
================================================================================
Purchases $146,917,437
- --------------------------------------------------------------------------------
Sales 140,251,244
================================================================================
At November 30, 1996, the aggregate gross unrealized appreciation and
depreciation of investments were as follows:
================================================================================
Gross unrealized appreciation $ 12,544,358)*
Gross unrealized depreciation (12,326,847)*
- --------------------------------------------------------------------------------
Net unrealized appreciation $ 217,511 *
================================================================================
* Substantially the same for Federal income tax purposes.
4. 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.
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
================================== 18 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each period:
1996(1) 1996 1995(2)
================================================================================
Net Asset Value, Beginning of Period $ 12.19 $ 12.84 $ 12.00
- --------------------------------------------------------------------------------
Income From Operations:
Net investment income 0.33 0.66 0.63
Net realized and unrealized gain (loss 0.26 (0.42) 0.77
- --------------------------------------------------------------------------------
Total Income From Operations 0.59 0.24 1.40
- --------------------------------------------------------------------------------
Offering Costs Charged to Paid-In Capital -- -- (0.02)
- --------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.36) (0.66) (0.54)
Net realized gains -- (0.23) --
- --------------------------------------------------------------------------------
Total Distributions (0.36) (0.89) (0.54)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $ 12.42 $ 12.19 $ 12.84
- --------------------------------------------------------------------------------
Total Return, Based on Market Value 4.22%++ (4.10)% 1.65%++
- --------------------------------------------------------------------------------
Total Return, Based on Net Asset Value 5.08%++ 2.39% 12.28%++
- --------------------------------------------------------------------------------
Net Assets, End of Period (000s) $242,883 $238,468 $251,219
- --------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses 1.03%+ 1.06% 1.05%+
Net investment income 5.49+ 5.17 5.63+
- --------------------------------------------------------------------------------
Portfolio Turnover Rate 59% 42% 115%
- --------------------------------------------------------------------------------
Market Value, End of Period $ 11.500 $ 11.375 $ 11.625
================================================================================
(1) For the six months ended November 30, 1996 (unaudited).
(2) For the period from June 24, 1994 (commencement of operations) to May 31,
1995.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
================================== 19 ======================================
<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 0.16 8,809,662 0.46 12,036,166 0.62
=================================================================================================
</TABLE>
* For the period from June 24, 1994 (commencement of operations) to
August 31, 1994.
================================== 20 ======================================
<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 10.125 11.33 0.06 10.47
1/24/95 1/31/95 10.875 11.63 0.06 11.15
2/21/95 2/28/95 11.500 12.19 0.06 11.60
3/24/95 3/31/95 11.500 12.40 0.06 11.49
4/21/95 4/28/95 11.375 12.57 0.06 11.47
5/23/95 5/31/95 11.375 12.72 0.06 11.69
6/27/95 6/30/95 11.375 12.71 0.06 11.62
7/25/95 7/31/95 11.438 12.53 0.06 11.48
8/22/95 8/25/95 11.375 12.86 0.06 11.20
9/26/95 9/29/95 11.500 12.62 0.06 11.58
10/24/95 10/27/95 11.500 12.84 0.06 11.64
11/20/95 11/24/95 11.750 12.95 0.06 11.84
12/26/95+ 12/29/95 12.125 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 11.93
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
================================================================================
* As of record date.
+ Capital gain distribution.
================================== 21 ======================================
<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%
================================================================================
There were no broker non-votes.
================================== 22 ======================================
<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
================================== 23 ======================================
<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 at
market prices shares of its common stock in the open market.
================================== 24 ======================================
<PAGE>
Greenwich Street Municipal
Fund Inc.
Directors
Charles F. Barber
Allan J. Bloostein
Martin Brody
Dwight B. Crane
Robert A. Frankel
William R. Hutchinson
Heath B. McLendon, Chairman
Officers
Heath B. McLendon
Chief Executive Officer
Jessica M. Bibliowicz
President
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
<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.
FD0838 1/97
