...............................................
GREENWICH STREET
MUNICIPAL FUND INC.
...............................................
[GRAPHIC OMITTED]
SEMI-ANNUAL REPORT
November 30, 1998
<PAGE>
Greenwich Street Municipal
Fund Inc.
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November 30, 1998
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Dear Shareholder:
We are pleased to provide the semi-annual report for the Greenwich Street
Municipal Fund Inc. ("Fund") for the period ended November 30, 1998. During the
reporting period, the Fund distributed income dividends totaling $0.29 per
share. The table below shows the annualized distribution rate based on the
Fund's November 30, 1998 net asset value ("NAV") per share and its New York
Stock Exchange ("NYSE") closing price.
Price Annualized Six-Month
Per Share Distribution Rate* Total Return
--------- ------------------ ------------
$11.85 (NAV) 4.86% 3.28%
$10.875 (NYSE) 5.29% 6.97%
In comparison, closed-end municipal bond funds posted an average total
return of 3.89% on NAV for the same time period, as reported by Lipper Inc.
(Lipper is a major fund-tracking organization.)
Municipal Bond Market Update
In general, the bond market has had quite a full plate to deal with for
the past several months. The tremendous economic weakness in Asia combined with
a hint of deflation, default on sovereign Russian debt, the debacle of a large
hedge fund and, finally, three very swift drops in short-term rates from the
Federal Reserve Board ("Fed") gave bond managers more than enough events to
ponder.
- ----------
* This distribution assumes a current monthly income dividends rate of
$0.048 per share for twelve months.
===================================== 1 ======================================
<PAGE>
Municipal bonds generally were less volatile than U.S. Treasuries with
record new issue volume coming into the marketplace. This heavy supply caused
tax-exempt bonds to lag U.S. Treasuries in the rally but has created unusual
relative values in municipal bonds versus taxable bonds. As of November 30,
1998, the yields at which long-term municipal bonds were trading were, on
average, 99% of the yield for comparable U.S. government bonds. In many years of
experience in the financial markets, this is only the second time we have seen
such high attractive relative values for municipal bonds. At today's yield
spreads, municipal bonds make sense for investors in almost any tax bracket. And
while interest rates are as low as they have been in 30 years, so too is
inflation. In our view, these conditions should be with us for the foreseeable
future, providing a benign backdrop for bonds.
Investment Strategy
During the reporting period, the municipal bond market put very little
premium on risk. Intermediate- and long-term municipal bonds yielded nearly the
same, and the spreads between high-quality issuers and less economically stable
ones were at all-time narrow levels. Our investment strategy during the period
was quite simple: buy high-quality municipal bonds with maturities a bit shorter
and stay there until the interest-rate environment changes. In times of economic
uncertainty, if we are going to err with respect to our investment strategy, we
think that it should be on the side of prudence and conservatism.
The Fund focused on hospital bonds (19.5%), general obligation bonds
(16.0%) and utility bonds (12.4%) because we believe they offered good relative
values during the reporting period. At the end of November, the Fund's weighted
average maturity was approximately 21 years. In addition, as of November 30,
1998, approximately 90% of the Fund's holdings were rated investment grade by
either Standard & Poor's Ratings Group or Moody's Investors Services Inc., with
just over 54% of the Portfolio invested in AAA bonds, the highest rating.
Municipal Bond Market Outlook
Over the next few months, we believe that interest rates should go down a
bit more. Moreover, we expect a gradual rise in rates later on in 1999 from the
level set early in the year. And, if interest rates do gradually rise, we
believe our current investment strategy should result in less volatility while
still offering our shareholders great relative values.
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<PAGE>
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 Vice President and
Investment Officer
December 14, 1998
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<PAGE>
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Take Advantage of the Fund's Dividend Reinvestment Plan!
Did you know that Fund investors who reinvest their dividends are taking
advantage of one of the most effective wealth-building tools available today?
Systematic investments put time to work for you through the strength of
compounding.
As an investor in the Fund, you can participate in its Dividend Reinvestment
Plan ("Plan"), a convenient, simple and efficient way to reinvest your dividends
and capital gains, if any, in additional shares of the Fund. Below is a short
summary of how the Plan works.
Plan Summary
If you are a Plan participant who has not elected to receive your dividends in
the form of a cash payment, then your dividend and capital gain distributions
will be reinvested automatically in additional shares of the Fund.
The number of common stock shares in the Fund you will receive in lieu of a cash
dividend is determined in the following manner. If the market price of the
common stock is equal to or exceeds the net asset value per share ("NAV") on the
determination date, you will be issued shares by the Fund at a price reflecting
the NAV, or 95% of the market price, whichever is greater.
If the market price is less than the NAV at the time of valuation (the close of
business on the determination date), or if the Fund declares a dividend or
capital gains distribution payable only in cash, the Plan Agent (First Data
Investors Services Group Inc.) will buy common stock for your account in the
open market.
If the Plan Agent begins to purchase additional shares in the open market and
the market price of the shares subsequently rises above the previously
determined NAV before the purchases are completed, the Plan Agent will attempt
to terminate purchases and have the Fund issue the remaining dividend or
distribution in shares at the greater of the previously determined NAV or 95% of
the market price. In that case, the number of Fund shares you receive 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.
Restated Plan Adopted
A more complete description of the current Plan appears in the section of this
report beginning on page 26. The descriptions herein are based on a restated
version of the Plan, which was recently adopted to reflect current practices of
the Plan Agent and for the purpose of standardizing the terms among all
closed-end mutual funds managed by Mutual Management Corp.
To find out more detailed information about the Plan and about how you can
participate, please call First Data Investors Services Group Inc. at (800)
331-1710.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited)
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Face
Amount Rating(a) Security Value
================================================================================
- ---------------------------------
Municipal Bonds and Notes -- 100%
- ---------------------------------
California-9.3%
$3,000,000 Baa3* California Educational Facilities Authority
Revenue, (Pooled College & University
Projects), Series A, 5.625% due 7/1/23 $ 3,138,750
2,000,000 AAA California Health Facilities Finance
Authority Revenue, Kaiser Permanente,
Series A, FSA-Insured, 5.500% due 6/1/22 2,132,500
1,000,000 AAA California State Public Works Board Lease
Revenue, Department of Corrections,
Series A, AMBAC-Insured,
5.250% due 1/1/21 1,021,250
1,980,000 AAA California State University, Headquarters
Building Authority, Series B,
MBIA-Insured, 5.125% due 9/1/17 2,019,600
8,530,000 AAA Los Angeles County, CA Metropolitan
Transportation Authority Revenue, Sales
Tax Revenue, Series A, MBIA-Insured,
5.250% due 7/1/19 8,753,912
1,380,000 AAA Los Angeles County, CA Public Works
Financing Authority Revenue, Series A,
Lease Revenue, (Multiple Capital
Facilities Project), AMBAC-Insured,
5.125% due 6/1/17 1,402,425
1,000,000 AAA Rancho Cucamonga, CA Redevelopment
Agency Tax Allocation, (Rancho
Redevelopment Project), MBIA-Insured,
5.250% due 9/1/26 1,022,500
2,000,000 AAA San Diego County, CA COP, North
County Regional Center Expansion,
AMBAC-Insured, 5.250% due 11/15/19 2,055,000
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21,545,937
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Colorado-2.8%
2,000,000 Aaa* Arapahoe County, CO Capital Improvement,
Highway Revenue, Current Series E,
(Pre-Refunded--Escrowed with U.S.
government securities to 8/31/05
Call @ 103), 7.000% due 8/31/26 (b) 2,405,000
2,000,000 A Colorado Health Facilities Authority
Revenue, Series B, 5.350% due 8/1/15 2,052,500
See Notes to Financial Statements.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited) (continued)
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Face
Amount Rating(a) Security Value
================================================================================
Colorado-2.8% (continued)
$2,000,000 AAA E-470 Public Highway Authority
Revenue, Series A, MBIA-Insured,
5.000% due 9/1/15 $ 2,017,500
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6,475,000
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Florida-4.8%
1,000,000 AAA Bay County, FL Water System Revenue,
MBIA-Insured, 5.125% due 9/1/22 1,012,500
2,000,000 AAA Dade County, FL GO, Unlimited
Revenue Bonds, Florida Seaport,
MBIA-Insured, 5.125% due 10/1/21 2,020,000
1,000,000 AAA Florida State Turnpike Authority Revenue,
Department of Transportation, Series A,
FGIC-Insured, 5.000% due 7/1/16 1,012,500
3,500,000 BBB- Martin County, FL IDR, (Indiantown
Cogeneration Project), Series A,
7.875% due 12/15/25 (b)(c) 4,029,375
1,000,000 A2* Martin County, FL Special Assessment
Revenue, 6.100% due 11/1/15 1,091,250
2,000,000 AAA Tampa, FL Revenue Health System,
Catholic Health, Series A-1,
MBIA-Insured, 4.875% due 11/15/18 1,975,000
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11,140,625
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Hawaii-1.1%
2,540,000 AAA Hawaii State GO, Series CP, FGIC-Insured,
5.000% due 10/1/16 2,555,875
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Illinois-5.0%
Illinois Health Facilities Authority,
MBIA-Insured:
7,000,000 AAA Ingalls Health Systems Project,
6.250% due 5/15/24 7,612,500
1,000,000 Aaa* Memorial Health Systems,
5.250% due 10/1/18 1,023,750
3,000,000 AAA Illinois State GO, FGIC-Insured,
5.250% due 12/1/20 3,037,500
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11,673,750
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Indiana-2.1%
2,000,000 AAA Avon, IN Community School Building Corp.,
First Mortgage, AMBAC-Insured,
5.250% due 1/1/22 2,047,500
See Notes to Financial Statements.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited) (continued)
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Face
Amount Rating(a) Security Value
================================================================================
Indiana-2.1% (continued)
$ 2,500,000 Aa2* Petersburg, IN Industrial PCR,
Indianapolis Power & Light Corp.,
6.625% due 12/1/24 $ 2,828,125
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4,875,625
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Iowa-0.3%
755,000 AAA Iowa Finance Authority, Multi-Family
Housing Revenue Refunding, (Forest
Glen Apartments Project), Series A,
FNMA-Collateralized, 5.600% due 11/1/22 779,537
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Louisiana-1.1%
2,500,000 AAA Terrebonne Parish, LA Hospital Service
District 1, (Terrebonne Medical
Center Project), AMBAC-Insured,
5.375% due 4/1/23 2,581,250
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Maryland-1.5%
11,000,000 NR Maryland State Energy & Financing
Administration, Solid Waste Disposal
Revenue, (Hagerstown Recycling Project),
9.000% due 10/15/16 (c)(e) 3,410,000
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Massachusetts-5.0%
2,000,000 AAA Massachusetts Bay Transportation Authority,
Series B, FSA-Insured, 5.250% due 3/1/26 2,025,000
1,850,000 AAA Massachusetts State Health & Educational
Facilities Revenue, Northeastern University,
Series G, MBIA-Insured, 5.000% due 10/1/16 1,863,875
1,000,000 AAA Massachusetts State Housing Finance
Agency, Series B, MBIA-Insured,
5.300% due 12/1/17 1,016,250
10,000,000 NR Massachusetts State Industrial Financing
Agency, Solid Waste Disposal Revenue,
Massachusetts Recycling Association,
Series A, 9.000% due 8/1/16 (c)(e) 3,750,000
Massachusetts State Water Resource
Authority, MBIA-Insured:
2,000,000 AAA Series B, 5.000% due 12/1/25 1,982,500
1,000,000 AAA Series C, 5.250% due 12/1/20 1,016,250
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11,653,875
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See Notes to Financial Statements.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited)(continued)
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Face
Amount Rating(a) Security Value
================================================================================
Michigan-5.9%
$4,000,000 AA+ Michigan Municipal Bond Authority
Revenue, State Revolving Fund,
5.125% due 10/1/20 $ 4,025,000
6,000,000 NR Michigan Strategic Fund Resource
Recovery, Limited Obligation Revenue,
Central Wayne Energy, Series A,
7.000% due 7/1/27(c) 6,075,000
2,000,000 NR Midland County, MI EDC, PCR,
Limited Obligation, Series B,
9.500% due 7/23/09(b)(c) 2,162,500
1,500,000 AAA Standish-Sterling MI Community Schools,
FGIC-Insured, 5.100% due 5/1/18 1,511,250
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13,773,750
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Minnesota-0.2%
500,000 A3* Minnesota State Higher Education Facilities
Authority Revenue, St. Johns University,
Series Four-L, 5.350% due 10/1/17 507,500
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Missouri-1.1%
1,000,000 AAA Fenton, MO COP, (Capital Improvement
Projects), MBIA-Insured,
5.125% due 9/1/17 1,015,000
1,500,000 AAA Kansas City, MO Municipal Assistance
Refunding, MBIA-Insured,
5.000% due 4/15/20 1,498,125
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2,513,125
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New Jersey-0.4%
1,000,000 AAA Middlesex County, NJ COP, MBIA-Insured,
5.200% due 6/15/18 1,028,750
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New York-8.8%
2,000,000 A- Long Island Power Authority, NY Electric
Systems Revenue, 5.500% due 12/1/29 2,062,500
1,790,000 AAA New York City, NY Municipal Water Finance
Authority, Water & Sewer Systems
Revenue, Series B, MBIA-Insured,
5.375% due 6/15/19 1,836,988
2,000,000 AA New York City Transitional Finance Authority
Revenue, Future Tax Secured, Series A,
5.000% due 8/15/17 2,007,500
See Notes to Financial Statements.
===================================== 8 ======================================
<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited)(continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
New York-8.8% (continued)
New York State Dormitory Authority Revenue:
$1,000,000 AAA City University System, Series A,
FGIC-Insured, 5.000% due 7/1/16 $ 1,008,750
1,000,000 AAA Lease Revenue, Health Facilities
Improvement Program, Series A,
FSA-Insured, 5.500% due 5/15/16 1,060,000
1,500,000 AAA Mental Health Services Facilities
Improvement, Series D, FSA-Insured,
5.125% due 8/15/17 1,518,750
3,000,000 AAA Montefiore Medical Center, AMBAC/
FHA-Insured, 5.250% due 2/1/15 3,093,750
3,000,000 AAA State University Educational Facilities,
Series A, MBIA-Insured, 5.000%
due 5/15/18 3,015,000
2,580,000 BBB+ New York State Thruway Authority Service
Contract Revenue, Local Highway &
Bridge, 6.000% due 4/1/11 2,838,000
2,000,000 Aa3* New York State Triborough Bridge &
Tunnel Authority Revenue, Series A,
5.000% due 1/1/24 2,000,000
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20,441,238
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North Carolina-0.4%
1,000,000 AA- North Carolina Medical Care Community
Hospital Revenue, Pitt County Memorial
Hospital, Series A, 5.000% due 12/1/18 987,500
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Ohio-1.8%
4,000,000 AAA Cuyahoga County, OH Hospital Revenue,
Metrohealth Systems, Series A,
MBIA-Insured, 5.125% due 2/15/16 4,080,000
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Pennsylvania-5.0%
2,500,000 AAA Altoona, PA City Authority, Water
Revenue Refunding, FGIC-Insured,
5.000% due 11/1/19 2,500,000
1,900,000 AAA Beaver County, PA IDA, FSA-Insured,
5.450% due 9/15/28 1,971,250
1,865,000 Aaa* Cranberry Township, PA Municipal
Water & Sewer Revenue, MBIA-Insured,
5.000% due 12/1/17 1,871,994
See Notes to Financial Statements.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited)(continued)
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Face
Amount Rating(a) Security Value
================================================================================
Pennsylvania-5.0% (continued)
$1,500,000 AAA Montgomery County, PA Health Care,
Holy Redeemer Health, Higher Education
& Health Authority Revenue, Series A,
AMBAC-Insured, 5.250% due 10/1/17 $ 1,535,625
2,580,000 AAA North Wales, PA Water Authority,
FGIC-Insured, 5.000% due 11/1/15 2,605,800
1,000,000 AAA Pittsburgh, PA Water & Sewer Authority,
Series C, FSA-Insured, 5.000% due 9/1/17 1,006,250
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11,490,919
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Puerto Rico-0.6%
1,250,000 AAA Puerto Rico Commonwealth Infrastructure
Financing Authority, Series A,
AMBAC-Insured, 5.000% due 7/1/16 1,268,750
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South Carolina-0.9%
2,000,000 AAA Lexington County, SC Health Services
District Inc., Hospital Revenue,
Refunding & Improvement, FSA-Insured,
5.250% due 11/1/17 2,055,000
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Tennessee-0.4%
1,000,000 AA Metropolitan Government Nashville &
Davidson County, Tennessee Electric
Revenue, Series A, 5.125% due 5/15/15 1,018,750
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Texas-22.0%
2,000,000 Aaa* Azle, TX ISD, Series C, PSFG,
FGIC-Insured, 5.000% due 2/15/22 1,995,000
4,000,000 AAA Bexar County, TX Health Facilities
Development Corp. Revenue, Baptist
Health Systems, Series A, MBIA-Insured,
5.250% due 11/15/27 4,060,000
2,000,000 AAA Brazos County, TX Health Facilities
Development Corp., Franciscan Services
Corp. Revenue, Series A, MBIA-Insured,
5.375% due 1/1/17 2,067,500
Brazos River Authority, PCR:
1,000,000 AAA Houston Industrial Income Project,
Series A, 5.125% due 5/1/19 1,008,750
See Notes to Financial Statements.
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<PAGE>
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Schedule of Investments
November 30, 1998 (unaudited)(continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Texas-22.0% (continued)
$2,000,000 BBB Utilities Electric Co., Series C,
5.550% due 6/1/30 $ 1,962,500
Burleson, TX ISD, PSFG:
725,000 Aaa* 6.750% due 8/1/24 821,062
1,775,000 NR Pre-Refunded--Escrowed with U.S.
government securities to 8/1/06
Call @ 100, 6.750% due 8/1/24 2,087,844
2,000,000 AAA Del Valle, TX ISD, PSFG,
5.000% due 2/1/18 2,005,000
3,650,000 AAA El Paso, TX ISD, PSFG,
5.900% due 2/15/13 3,910,062
1,610,000 AA- Fort Worth, TX Higher Education Finance
Corp., Texas Christian University,
5.000% due 3/15/15 1,624,087
200,000 VMIG 1* Guadalupe Blanco River Authority, TX PCR,
(Central Power & Light Co. Project),
3.250% due 11/1/15(d) 200,000
2,000,000 AA Harris County, TX Health Facilities
Development Revenue, School Health Care
Systems, Series B, 5.750% due 7/1/27 2,110,000
2,500,000 AA Harris County, TX Toll Road, Sub-Lien,
5.125% due 8/15/17 2,540,625
5,000,000 AA- Houston, TX GO, Series A,
5.000% due 3/1/14 5,087,500
400,000 VMIG 1* Lubbock, TX Health Facilities Development,
St. Joseph Health System, 3.300%
due 7/1/13(d) 400,000
1,000,000 AAA Manor, TX ISD, PSFG, 5.000% due 8/1/17 1,005,000
2,500,000 AAA Nueces River Authority, Texas Water Supply,
FSA-Insured, 5.500% due 3/1/27 2,637,500
9,035,000 AA Texas State Veterans Housing GO, Series B-4,
6.700% due 12/1/24(c) 9,678,744
Texas Water Development Board Revenue,
State Revolving Fund, Senior Lien, Series B:
1,200,000 AAA 5.000% due 7/15/14 1,216,500
3,110,000 AAA 5.000% due 7/15/16 3,121,663
1,520,000 AAA West Texas Municipal Power Agency,
MBIA-Insured, 5.000% due 2/15/17 1,520,000
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51,059,337
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See Notes to Financial Statements.
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<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1998 (unaudited)(continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Utah-4.2%
Intermountain Power Agency, UT Power
Supply Revenue:
$1,500,000 AAA Series A, MBIA-Insured,
5.250% due 7/1/15 $ 1,543,125
8,400,000 A+ Series D, 5.000% due 7/1/21 8,284,500
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9,827,625
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Virgin Islands-1.7%
4,000,000 BBB- Virgin Islands Public Finance Authority,
Series A, 5.500% due 10/1/22 4,050,000
- --------------------------------------------------------------------------------
Virginia-4.3%
1,250,000 A+ Virginia College Building Authority, VA
Educational Facilities Revenue, (Hampton
University Project), 5.750% due 4/1/14 1,332,813
Virginia State Housing Development Authority,
Commonwealth Mortgage:
3,720,000 AA+ Series A, Sub-Series A-1,
6.400% due 7/1/17 3,961,800
1,500,000 AA+ Series C, Sub-Series C-1,
5.100% due 7/1/14 1,509,375
Series D:
1,585,000 AA+ Sub-Series D-1, 6.400% due 7/1/17 1,701,894
1,315,000 AA+ Sub-Series D-3, 5.800% due 7/1/10 1,390,613
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9,896,495
- --------------------------------------------------------------------------------
Washington-3.7%
2,040,000 Aaa* Skagit County, WA Public Hospital
District No. 001 Revenue Refunding,
Affiliated Health Services, FSA-Insured,
5.750% due 12/1/11 2,233,800
1,000,000 Aaa* Washington State Health Care Facilities
Authority Revenue, Children's Hospital &
Regional Medical Center, FSA-Insured,
5.000% due 10/1/18 992,500
Washington State Public Power Supply System:
1,000,000 AAA Series A, (Nuclear Project No. 2),
FSA-Insured, 5.125% due 7/1/11(f) 1,041,250
4,250,000 Aa1* Series B, (Nuclear Project No. 3),
5.500% due 7/1/18 4,265,640
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8,533,190
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See Notes to Financial Statements.
===================================== 12 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
November 30, 1998 (unaudited)(continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
West Virginia-2.1%
Marion County, WV Community Solid Waste
Disposal Facilities Revenue, Adirondack
Recycling:
$4,646,855 NR Series A, 8.000% due 12/1/25 (c) $ 4,182,170
653,688 NR Series B, 10.000% due 12/1/25 (c) 588,319
- --------------------------------------------------------------------------------
4,770,489
- --------------------------------------------------------------------------------
Wisconsin-1.3%
Wisconsin State Health & Educational
Facilities Authority Revenue,
MBIA-Insured:
2,000,000 AAA Aurora Health Care Inc.,
5.250% due 8/15/17 2,040,000
1,000,000 AAA The Medical College Wisconsin Inc.
Project, 5.400% due 12/1/16 1,042,500
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3,082,500
- --------------------------------------------------------------------------------
Wyoming-2.2%
2,000,000 AA Wyoming Community Development Authority Housing
Revenue, Series 4, 5.900% due 12/1/14 2,112,500
2,920,000 AA Wyoming Community Development Authority,
Series 1, 5.450% due 12/1/29 2,963,800
- --------------------------------------------------------------------------------
5,076,300
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TOTAL INVESTMENTS--100%
(COST--$233,463,554**) $232,152,692
================================================================================
(a) All ratings are by Standard & Poor's Rating service, except those
identified by an asterisk (*) are rated by Moody's Investors Service Inc.
(b) Security is 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.
(d) Variable rate municipal bonds are payable upon not more than seven
business days notice.
(e) Security is in default.
(f) Security segregated by custodian for futures contracts commitments.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 15 and 16 for definition of ratings
and certain security descriptions.
See Notes to Financial Statements.
===================================== 13 =====================================
<PAGE>
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Summary of Investments by Combined Ratings
November 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Standard & Percent of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Aaa AAA 54.3%
Aa AA 22.3
A A 6.6
Baa BBB 6.9
NR NR 9.6
VMIG 1 A-1 0.3
-----
100.0%
=====
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===================================== 14 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings
(unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Rating Service ("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
to a debt obligation. 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 Investors Service Inc. ("Moody's") -- Numerical modifiers 1, 2, and 3
may be applied to each generic rating from "Aa" to "Baa," where 1 is the highest
and 3 the lowest 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 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 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 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.
===================================== 15 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Short-Term Securities Ratings
(unaudited)
- --------------------------------------------------------------------------------
SP-1 -- Standard & Poor's highest rating indicating very strong or strong
capacity to pay principal and interest; those issues determined to
possess overwhelming safety characteristics are denoted with a plus
(+) sign.
A-1 -- Standard & Poor's highest commercial paper and variable-rate demand
obligation (VRDO) rating indicating that the degree of safety
regarding timely payment is either overwhelming or very strong; those
issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign.
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
(unaudited)
- --------------------------------------------------------------------------------
ABAG -- Association of Bay Area Governments
AIG -- American International Guaranty
AMBAC -- AMBAC Indemnity 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
VAN -- Veterans Administration
VRDD -- Variable Rate Daily Demand
VRWE -- Variable Rate Wednesday Demand
===================================== 16 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
(unaudited)
- --------------------------------------------------------------------------------
November 30, 1998
================================================================================
ASSETS:
Investments, at value (Cost-- $233,463,554) $232,152,692
Interest receivable 4,104,825
- --------------------------------------------------------------------------------
Total Assets 236,257,517
- --------------------------------------------------------------------------------
LIABILITIES:
Dividends payable 390,530
Payable to broker-margin variation 125,000
Investment advisory fees payable 58,611
Payable to bank 44,959
Accrued expenses 89,634
- --------------------------------------------------------------------------------
Total Liabilities 708,734
- --------------------------------------------------------------------------------
Total Net Assets $235,548,783
================================================================================
NET ASSETS:
Par value of capital shares $ 19,882
Capital paid in excess of par value 237,656,883
Overdistributed net investment income (717,090)
Accumulated net realized gain on security transactions 6,220
Net unrealized depreciation of investments and futures
contracts (1,417,112)
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $11.85 per share on 19,882,045 shares of
$0.001 par value outstanding; 500,000,000 shares authorized) $235,548,783
================================================================================
See Notes to Financial Statements.
===================================== 17 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
(unaudited)
- --------------------------------------------------------------------------------
Six Months
Ended
11/30/98
================================================================================
INVESTMENT INCOME:
Interest $ 6,242,569
- --------------------------------------------------------------------------------
Expenses:
Investment advisory fees (Note 3) 1,072,927
Directors' fees 27,645
Shareholder communications 20,350
Shareholder and system servicing fees 18,607
Listing fees 13,371
Audit and legal 13,273
Pricing service fees 6,897
Custody 2,195
Other 6,049
- --------------------------------------------------------------------------------
Total Expenses 1,181,314
Less: Investment advisory fee waiver (365,396)
- --------------------------------------------------------------------------------
Net Expenses 815,918
- --------------------------------------------------------------------------------
Net Investment Income 5,426,651
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 4):
Realized Gain From Security Transactions
(excluding short-term securities):
Proceeds from sales 25,190,030
Cost of securities sold 24,490,981
- --------------------------------------------------------------------------------
Net Realized Gain 699,049
- --------------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments:
Beginning of period (2,350,122)
End of period (1,417,112)
- --------------------------------------------------------------------------------
Decrease in Net Unrealized Depreciation 933,010
- --------------------------------------------------------------------------------
Net Gain on Investments 1,632,059
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 7,058,710
================================================================================
See Notes to Financial Statements.
===================================== 18 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year
11/30/98 Ended
(unaudited) 5/31/98
============================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 5,426,651 $ 9,947,837
Net realized gain 699,049 3,104,107
Decrease in net unrealized depreciation 933,010 9,774,667
- --------------------------------------------------------------------------------------------
Increase in Net Assets From Operations 7,058,710 22,826,611
- --------------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 2):
Net investment income (5,666,386) (11,946,605)
In excess of net investment income -- (69,250)
Net realized gains -- (7,113,504)
- --------------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (5,666,386) (19,129,359)
- --------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net asset value of shares issued
for reinvestment of dividends -- 2,544,884
- --------------------------------------------------------------------------------------------
Increase in Net Assets From
Fund Share Transactions -- 2,544,884
- --------------------------------------------------------------------------------------------
Increase in Net Assets 1,392,324 6,242,136
NET ASSETS:
Beginning of period 234,156,459 227,914,323
- --------------------------------------------------------------------------------------------
End of period* $ 235,548,783 $ 234,156,459
============================================================================================
* Includes overdistributed net investment income of: $ (717,090) $ (477,355)
============================================================================================
</TABLE>
See Notes to Financial Statements.
===================================== 19 =====================================
<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, 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, 1998, reclassifications were made to the Fund's capital
accounts to reflect permanent book/tax differences and income and gains
available for distributions under income tax regulations. Accordingly, a portion
of overdistributed net investment income and accumulated net realized loss
amounting to $69,250 and $117,095, respectively, was reclassified to paid-in
capital. Net investment income, net realized gains and net assets were not
affected by this change; and (i) 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.
===================================== 20 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited) (continued)
- --------------------------------------------------------------------------------
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.
Capital gain distributions, if any, are taxable to shareholders, and are
declared and paid at least annually.
3. Investment Advisory Agreement and Other Transactions
Mutual Management Corp. ("MMC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), acts as investment adviser to the Fund. The Fund pays
MMC 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. For the six
months ended November 30, 1998, MMC waived investment advisory fees of $365,396.
All officers and one Director of the Fund are employees of Salomon Smith
Barney Inc., another subsidiary of SSBH.
4. Securities Transactions
For the six months ended November 30, 1998, the aggregate cost of
purchases and proceeds from sales of investments (including maturities but
excluding short-term securities) were as follows:
================================================================================
Purchases $16,045,669
- --------------------------------------------------------------------------------
Sales 25,190,030
================================================================================
At November 30, 1998, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $(13,232,221
Gross unrealized depreciation (14,543,083)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (1,310,862)
================================================================================
===================================== 21 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited) (continued)
- --------------------------------------------------------------------------------
5. Capital Shares
Capital stock transactions were as follows:
Six Months Ended Year Ended
November 30, 1998 May 31, 1998
----------------- ---------------------
Shares Amount Shares Amount
================================================================================
Shares issued on reinvestment -- -- 217,191 $2,544,884
================================================================================
6. Futures Contracts
Iniital margin deposits made upon entering into futures contracts are
recognized as assets. Securities equal to the initial margin amount are
segregated by the custodian in the name of the broker. Additional securities are
also segregated up to the current market value of the futures contracts. During
the period the futures contract is open, changes in the value of the contract
are recognized as unrealized gains or losses by "marking -to-market" on a daily
basis to reflect the market value of the contract at the end of each day's
trading. Variation margin payments are receved or made and recognized as assets
due from or liabilities due to broker, depending upon whether unrealized gains
or losses are incurred. When the contract is closed, the Fund records a realized
gain or loss equal to the difference between the proceeds from (or cost of) the
closing transactions and the Fund's basis in the contract.
The fund enters into such contracts to hedge a portion of of its
portfolio. The Fund bears the market risk that arises from changes in the value
of the financial instruments and securities indices (futures contracts).
At November 30, 1998, the Fund had the following open futures contracts:
<TABLE>
<CAPTION>
Expiration # of Basic Market Unrealized
Month/Year Contracts Value Value Loss
==============================================================================================
<S> <C> <C> <C> <C> <C>
Future contracts to sell:
Municipal Bond Index 12/98 100 $12,878,125 $12,984,375 $(106,250)
==============================================================================================
</TABLE>
===================================== 22 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31,
except where noted:
<TABLE>
<CAPTION>
1998(1) 1998 1997 1996 1995(2)
=======================================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 11.78 $ 11.59 $ 12.19 $ 12.84 $ 12.00
- -----------------------------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income(3) 0.27 0.50 0.66 0.66 0.63
Net realized and unrealized
gain (loss) 0.09 0.66 (0.26) (0.42) 0.77
- -----------------------------------------------------------------------------------------------------------------------
Total Income From Operations 0.36 1.16 0.40 0.24 1.40
- -----------------------------------------------------------------------------------------------------------------------
Offering Costs Charged to
Paid-In Capital -- -- -- -- (0.02)
- -----------------------------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.29) (0.60) (0.66) (0.66) (0.54)
In excess of net investment income -- (0.01) -- -- --
Net realized gains -- (0.36) (0.34) (0.23) --
- -----------------------------------------------------------------------------------------------------------------------
Total Distributions (0.29) (0.97) (1.00) (0.89) (0.54)
- -----------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 11.85 $ 11.78 $ 11.59 $ 12.19 $ 12.84
- -----------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Market Value* 6.97%++ (0.20)% 8.97% 5.52% 1.65%++
- -----------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Net Asset Value* 3.28%++ 10.53% 3.61% 2.40% 12.28%++
- -----------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000s) $235,549 $234,156 $227,914 $238,468 $251,219
- -----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.69%+ 1.00% 1.03% 1.06% 1.05%+
Net investment income 4.60+ 4.25 5.57 5.17 5.63+
- -----------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 7% 85% 115% 42% 115%
- -----------------------------------------------------------------------------------------------------------------------
Market Value, End of Period $ 10.875 $ 10.438 $ 11.375 $ 11.375 $ 11.625
=======================================================================================================================
</TABLE>
(1) For the six months ended November 30, 1998 (unaudited).
(2) For the period from June 24, 1994 (commencement of operations) to May 31,
1995.
(3) The investment adviser waived a part of its fees for the six months ended
November 30, 1998. If such fees were not waived the per share decrease on
the net investment income and the annualized ratio of expenses to average
net assets would have been $0.02 and 1.00%, respectively.
* The total return calculation assumes that 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.
===================================== 23 =====================================
<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>
8/31/96 $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
8/31/97 3,149,970 0.16 2,546,539 0.13 3,996,871 0.20 6,543,410 0.33
11/30/97 3,008,049 0.15 2,431,992 0.12 4,698,522 0.24 7,130,514 0.36
2/28/98 3,051,177 0.15 2,469,512 0.13 3,841,082 0.19 6,310,594 0.32
5/31/98 3,083,519 0.16 2,499,794 0.12 342,299 0.03 2,842,093 0.15
8/31/98 3,174,059 0.16 2,568,214 0.13 1,887,145 0.09 4,455,359 0.22
11/30/98 3,068,510 0.15 2,858,437 0.14 (255,086) (0.00) 2,603,351 0.14
=============================================================================================================
</TABLE>
===================================== 24 =====================================
<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
================================================================================
1/28/97 1/31/97 $11.563 $11.65 $0.060 $11.53
2/25/97 2/28/97 11.750 11.80 0.060 11.66
3/24/97 3/27/97 11.250 11.40 0.060 11.40
4/22/97 4/25/97 11.250 11.30 0.060 11.29
5/27/97 5/30/97 11.250 11.51 0.060 11.49
6/24/97 6/27/97 11.625 11.74 0.060 11.74
7/22/97 7/25/97 11.875 11.98 0.060 11.90
8/26/97 8/29/97 11.563 11.70 0.060 11.65
9/23/97 9/26/97 11.625 11.86 0.056 11.56
10/28/97 10/31/97 11.063 11.86 0.056 11.29
11/24/97 11/28/97 11.250 11.90 0.056 11.45
12/22/97+ 12/26/97 11.188 11.78 0.360 11.57
1/27/98 1/30/98 11.688 11.79 0.056 11.77
2/24/98 2/27/98 11.688 11.78 0.056 11.78
3/24/98 3/27/98 10.875 11.76 0.049 10.87
4/21/98 4/24/98 10.563 11.64 0.049 10.55
5/26/98 5/29/98 10.438 11.75 0.049 10.55
6/23/98 6/26/98 10.688 11.76 0.049 10.69
7/28/98 7/31/98 10.313 11.72 0.046 10.26
8/25/98 8/28/98 10.188 11.81 0.046 10.40
9/22/98 9/25/98 10.563 11.87 0.048 10.86
10/27/98 10/30/98 10.625 11.86 0.048 10.86
11/24/98 11/27/98 10.875 11.85 0.048 11.15
================================================================================
* As of record date.
+ Capital gain distribution.
===================================== 25 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Dividend Reinvestment Plan
(unaudited)
- --------------------------------------------------------------------------------
Under the Fund's Dividend Reinvestment Plan ("Plan"), a shareholder whose
shares of common stock are registered in his own name will have all
distributions from the fund reinvested automatically by First Data Investor
Services Group Inc. ("First Data") as purchasing 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 shares under the
Plan, unless the service is not provided by the broker or nominee or the
shareholder elects to receive distributions in cash. Investors who own common
stock registered in street name should consult their broker-dealers for details
regarding reinvestment. All distributions to shareholders who do not participate
in the Plan will be paid by check mailed directly to the record holder by or
under the direction of First Data as dividend paying agent.
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. When the
market price of the common stock is equal to or exceeds the net asset value per
share of the common stock on the determination date (generally, the record date
for the distribution), Plan participants will be issued shares of common stock
by the Fund at a price equal to the greater of net asset value determined as
described below under "Net Asset Value" or 95% of the market price of the common
stock.
If the market price of the common stock is less than the net asset value
of the common stock at the time of valuation (which is the close of business on
the determination date), or if the Fund declares a dividend or capital gains
distribution payable only in cash, First Data will buy common stock in the open
market, on the stock exchange or elsewhere, for the participants' accounts. If
following the commencement of the purchases and before First Data has completed
its purchases, the market price exceeds the net asset value of the common stock
as of the valuation time, First Data will attempt to terminate purchases in the
open market and cause the Fund to issue the remaining portion of the dividend or
distribution in shares at a price equal to the greater of (a) net asset value as
of the valuation time or (b) 95% of the then current market price. In this case,
the number of shares received by a Plan 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. To the extent First Data is
unable to stop open market purchases and cause the fund to issue the remaining
shares, the average per share purchase price paid by First Data may exceed the
net asset value of the common stock as of the valuation time, resulting in the
acquisition of fewer shares than if the dividend or capital gains distribution
had been paid in
===================================== 26 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Dividend Reinvestment Plan
(unaudited) (continued)
- --------------------------------------------------------------------------------
common stock issued by the Fund at such net asset value. First Data will begin
to purchase common stock on the open market as soon as practicable after the
determination date for the dividend or capital gains distribution, but in no
event shall such purchases continue later than 30 days after the payment date
for such dividend or distribution, or the record date for a succeeding dividend
or distribution, except when necessary to comply with applicable provisions of
the federal securities laws.
First Data maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in each account, including information
needed by a shareholder for personal and tax records. The automatic reinvestment
of dividends and capital gains distributions will not relieve Plan participants
of any income tax that may be payable on the dividends or capital gains
distributions. Common stock in the account of each Plan participant will be held
by First Data in uncertificated form in the name of the Plan participant.
Plan participants are subject to no charge for reinvesting dividends and
capital gains distribution under the Plan. First Data's fees for handling the
reinvestment of dividends and capital gains distributions will be paid by the
Fund. No brokerage charges apply with respect to shares of common stock issued
directly by the Fund under the Plan. Each Plan participant will, however, bear a
proportionate share of any brokerage commissions actually incurred with respect
to any open market purchases made under the Plan.
Experience under the Plan may indicate that changes to it are desirable.
The fund reserves the right to amend or terminate the Plan as applied to any
dividend or capital gains distribution paid subsequent to written notice of the
change sent to participants at least 30 days before the record date for the
dividend or capital gains distribution. The Plan also may be amended or
terminated by First Data, with the fund's prior written consent, on at least 30
days' written notice to Plan participants. All correspondence concerning the
Plan should be directed by mail to First Data Investor Services Group, P.O. Box
8030, Boston, Massachusetts 02266-8030 or by telephone at 1-800-451-2010.
- --------------------------------------------------------------------------------
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.
===================================== 27 =====================================
<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
President and
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
Mutual Management Corp.
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
===================================== 28 =====================================
<PAGE>
This report is intended only for the shareholders
of Greenwich Street Municipal Fund Inc.
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 1/99
