-------------------
GREENWICH STREET
MUNICIPAL FUND INC.
-------------------
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[GRAPHIC OMITTED]
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ANNUAL REPORT
May 31, 1999
<PAGE>
Greenwich Street Municipal
Fund Inc.
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May 31, 1999
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We are pleased to present the annual report for the Greenwich Street
Municipal Fund Inc. ("Fund") for the year ended May 31, 1999. During the past
year, the Fund distributed income dividends totaling $0.57 per share. The table
below details the annualized distribution rates and twelve-month total returns
based on the Fund's May 31, 1999 net asset value ("NAV") per share and its
American Stock Exchange ("AMEX") closing price.
Price Annualized Twelve-Month
Per Share Distribution Rate* Total Return
--------- ------------------ ------------
$11.43 (NAV) 4.93% 2.37%
$10.00 (NYSE) 5.64% 1.07%
In comparison, the Fund's Lipper Inc. peer group average had a total
return on NAV of a negative 6.41% over the same period. (Lipper is a major
fund-tracking organization.)
Municipal Bond Market Update
Through May 1999, the municipal bond market was less volatile compared to
U.S. Treasuries. In our opinion, municipal bonds, which are relatively
inexpensive, currently offer significant downside protection. In addition, new
issuance of municipal bonds has slowed down from 1998 levels. With inflation
relatively low, conditions are still favorable for municipal bonds.
- ----------
* This distribution assumes a current monthly income dividend rate of $0.047
per share for twelve months.
================================= 1 ==================================
<PAGE>
In April, the Consumer Price Index ("CPI") increased 0.7% -- its largest
monthly increase in nine years. With global economic growth picking up,
inflationary fears surfaced. The Federal Reserve Board ("Fed") raised short-term
rates 0.25% on June 30, 1999 and yields in the bond market went up.
Looking forward and as we near the end of the millennium and the onset of
Y2K, we believe that fixed-income securities in the U.S. should experience solid
demand. That in turn should provide a positive environment for municipal bonds
for the remainder of 1999. We are positioning ourselves for modestly lower rates
over the next six months, and if there is no repeat of a higher CPI number, we
stand an excellent chance of seeing a modest decline in rates as we move toward
the fall.
Investment Strategy
The Fund seeks as high a level of current income exempt from Federal
income tax as is consistent with preservation of principal.
Our investment strategy for the Fund is to maximize our dividend yield. In
our view, the municipal bond market has provided us with excellent opportunities
during the reporting period. Since interest rates have risen, we have been able
to invest our excess cash at higher yields. In addition, we have also been
focusing on adding high-grade bonds to the Fund's portfolio. (Currently the
credit spread between AAA-rated and BBB-rated bonds are near their narrowest
spread levels ever.)
At these narrow spread levels, we do not think it makes sense to buy
low-grade bonds and assume additional credit risk. Because our interest-rate
forecast remains positive, we believe our current investment strategy should
allow us to maximize dividend yields going forward.
During the reporting period, we have pared down our exposure to paper
recycling facilities. Our goal will be to eliminate our holdings in that area
completely before 2000. As noted above, spreads between high-grade credits and
lower ones have never been more narrower. We will upgrade the portfolio at every
opportunity until these spreads widen out to more historic norms.
================================= 2 ==================================
<PAGE>
During the past year, the Fund focused on hospital bonds (21.1%), general
obligation bonds (16.5%) and utilities (11.8%) because we believe they offered
good relative values. At the end of May, the Fund's weighted average maturity
was approximately 20.6 years. In addition, as of May 31, 1999, roughly 92% of
the Fund's holdings were rated investment grade by either Standard & Poor's
Ratings Service or Moody's Investors Service, Inc., with approximately 54% of
the Fund invested in AAA bonds, the highest rating.
In closing, thank you for investing in the Greenwich Street Municipals
Fund Inc. We look forward to continuing to help you pursue your financial goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
July 7, 1999
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Special Shareholder Notice
On June 2, 1999, the Board of Directors of the Greenwich Street Municipals
Fund Inc. approved a proposed merger of the Greenwich Street Municipals Fund
with the Smith Barney Managed Municipals Fund Inc., an open-end mutual fund. The
proposed merger will be submitted for approval by shareholders. Following such
approval, shareholders of the Greenwich Street Municipals Fund will receive
Class A shares in the Smith Barney Managed Municipals Fund with a value equal to
the net asset value of their shares in the Greenwich Street Municipals Fund.
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================================= 3 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
- -----------------------------------
MUNICIPAL BONDS AND NOTES -- 100.0%
- -----------------------------------
Alaska -- 0.1%
$ 100,000 A-1+ Valdez, AK Marine Terminal Revenue,
(Exxon Pipeline Co. Project), Series 85,
3.350% due 10/1/25(b) $ 100,000
- ----------------------------------------------------------------------------------
California -- 10.1%
3,000,000 Baa3* California Educational Facilities Authority
Revenue, (Pooled College & University
Projects), Series A, 5.625% due 7/1/23 2,973,750
California Health Facilities Finance Authority
Revenue, Kaiser Permanente:
2,000,000 AAA Series A, FSA-Insured,
5.500% due 6/1/22 2,077,500
2,000,000 A Series B, 5.250% due 10/1/13 2,012,500
1,000,000 AAA California State Public Works Board Lease
Revenue, Department of Corrections,
Series A, AMBAC-Insured,
5.250% due 1/1/21 1,005,000
1,980,000 AAA California State University, Headquarters
Building Authority, Series B,
MBIA-Insured, 5.125% due 9/1/17 1,977,525
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 8,604,638
1,380,000 AAA Los Angeles County, CA Public Works
Financing Authority Revenue, Lease
Revenue, (Multiple Capital Facilities
Project), Series A, AMBAC-Insured,
5.125% due 6/1/17 1,380,000
1,000,000 AAA Rancho Cucamonga, CA Redevelopment
Agency Tax Allocation, (Rancho
Redevelopment Project), MBIA-Insured,
5.250% due 9/1/26 1,003,750
2,000,000 AAA San Diego County, CA COP, North
County Regional Center Expansion,
AMBAC-Insured, 5.250% due 11/15/19 2,020,000
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23,054,663
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</TABLE>
See Notes to Financial Statements.
================================= 4 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
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(c) $ 2,347,500
2,000,000 A Colorado Health Facilities Authority
Revenue, Kaiser Permanente, Series B,
5.350% due 8/1/15 2,012,500
2,000,000 AAA E-470 Public Highway Authority Revenue,
Series A, MBIA-Insured,
5.000% due 9/1/15 1,982,500
- ----------------------------------------------------------------------------------
6,342,500
- ----------------------------------------------------------------------------------
Connecticut -- 0.4%
1,000,000 Baa3* Mashantucket Western Pequot Tribe,
CT Special Revenue, Series A,
5.500% due 9/1/28 977,500
- ----------------------------------------------------------------------------------
Florida -- 4.8%
1,000,000 AAA Broward County, FL Airport System Revenue,
Passenger Facility, Series H-2,
AMBAC-Insured, 4.750% due 10/1/23 928,750
2,000,000 AAA Dade County, FL GO, Unlimited Revenue
Bonds, Florida Seaport, MBIA-Insured,
5.125% due 10/1/21 1,960,000
1,000,000 AAA Florida State Turnpike Authority Revenue,
Department of Transportation, Series A,
FGIC-Insured, 5.000% due 7/1/16 990,000
3,500,000 BBB- Martin County, FL IDR, (Indiantown
Cogeneration Project), Series A,
7.875% due 12/15/25(c)(d) 3,657,500
1,000,000 A2* Martin County, FL Special Assessment
Revenue, 6.100% due 11/1/15 1,068,750
2,500,000 AAA Orange County, FL Tourist Development
Tax Revenue, AMBAC-Insured, Series A,
4.750% due 10/1/24 2,315,625
- ----------------------------------------------------------------------------------
10,920,625
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Georgia -- 0.4%
1,000,000 A3* Private Colleges & Universities Authority,
GA (Mercer University Project), Series A,
5.375% due 10/1/29 982,500
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================= 5 ==================================
<PAGE>
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Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Hawaii -- 2.0%
$ 2,000,000 A Hawaii State Department of Budget &
Finance, Special Purpose Revenue, Kaiser
Permanente, Series A, 5.100% due 3/1/14 $ 1,952,500
2,540,000 AAA Hawaii State GO, Series CP, FGIC-Insured,
5.000% due 10/1/16 2,498,725
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4,451,225
- ----------------------------------------------------------------------------------
Illinois -- 5.1%
Illinois Health Facilities Authority,
MBIA-Insured:
7,000,000 AAA Ingalls Health Systems Project,
6.250% due 5/15/24 7,507,500
1,000,000 Aaa* Memorial Health Systems,
5.250% due 10/1/18 991,250
3,000,000 AAA Illinois State GO, FGIC-Insured,
5.250% due 12/1/20 2,985,000
- ----------------------------------------------------------------------------------
11,483,750
- ----------------------------------------------------------------------------------
Indiana -- 2.1%
2,000,000 AAA Avon, IN Community School Building Corp.,
First Mortgage, AMBAC-Insured,
5.250% due 1/1/22 1,985,000
2,500,000 Aa2* Petersburg, IN Industrial PCR,
Indianapolis Power & Light Corp.,
6.625% due 12/1/24 2,793,750
- ----------------------------------------------------------------------------------
4,778,750
- ----------------------------------------------------------------------------------
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 11/1/22 767,269
- ----------------------------------------------------------------------------------
Louisiana -- 1.8%
2,000,000 AAA Louisiana Local Government Environment
Facilities Community Development
Authority Revenue, Capital Projects &
Equipment Acquisition, AMBAC-Insured,
4.500% due 12/1/18 1,835,000
2,250,000 AAA Terrebonne Parish, LA Hospital Service
District 1, (Terrebonne Medical
Center Project), AMBAC-Insured,
5.375% due 4/1/23 2,264,063
- ----------------------------------------------------------------------------------
4,099,063
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================= 6 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Maryland -- 1.1%
$ 11,000,000 NR Maryland State Energy & Financing
Administration, Solid Waste Disposal
Revenue, (Hagerstown Recycling Project),
9.000% due 10/15/16(e) $ 2,420,000
- ----------------------------------------------------------------------------------
Massachusetts -- 5.0%
2,000,000 AAA Massachusetts Bay Transportation Authority,
Series B, FSA-Insured, 5.250% due 3/1/26 1,987,500
1,850,000 AAA Massachusetts State Health & Educational
Facilities Revenue, Northeastern
University, Series G, MBIA-Insured,
5.000% due 10/1/16 1,822,250
1,000,000 AAA Massachusetts State HFA, Series B,
MBIA-Insured, 5.300% due 12/1/17 1,008,750
3,339,446 NR Massachusetts State Industrial Financing
Agency Revenue, Solid Waste Disposal
Revenue, Sr. Lien, (Paper Co. Project),
8.500% due 11/1/12 3,272,657
1,500,000 AAA Massachusetts State Turnpike Authority,
AMBAC-Insured, Series A,
4.750% due 1/1/34 1,359,375
Massachusetts State Water Resource
Authority, MBIA-Insured:
510,000 AAA 5.250% due 12/1/20 508,088
490,000 AAA Pre-Refunded -- Escrowed with U.S.
government securities to 12/1/04
Call @ 102,
5.250% due 12/1/20 525,525
1,000,000 AAA Series B, 5.000% due 12/1/25 955,000
- ----------------------------------------------------------------------------------
11,439,145
- ----------------------------------------------------------------------------------
Michigan -- 4.2%
6,000,000 NR Michigan Strategic Fund Resource Recovery,
Limited Obligation Revenue,
Central Wayne Energy, Series A,
7.000% due 7/1/27(d) 6,015,000
2,000,000 NR Midland County, MI EDC, PCR,
Limited Obligation, Series B,
9.500% due 7/23/09(c)(d) 2,126,080
1,500,000 AAA Standish-Sterling, MI Community Schools,
GO, FGIC-Insured, 5.100% due 5/1/18 1,477,500
- ----------------------------------------------------------------------------------
9,618,580
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</TABLE>
See Notes to Financial Statements.
================================= 7 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Minnesota -- 0.2%
$ 500,000 A3* Minnesota State Higher Education Facilities
Authority Revenue, St. Johns University,
Series 4-L, 5.350% due 10/1/17 $ 497,500
- ----------------------------------------------------------------------------------
Missouri -- 1.1%
1,000,000 AAA Fenton, MO COP, (Capital Improvement
Projects), MBIA-Insured,
5.125% due 9/1/17 995,000
1,500,000 AAA Kansas City, MO Municipal Assistance
Corp. Refunding, MBIA-Insured,
5.000% due 4/15/20 1,464,375
- ----------------------------------------------------------------------------------
2,459,375
- ----------------------------------------------------------------------------------
New Jersey -- 0.4%
1,000,000 AAA Middlesex County, NJ COP, MBIA-Insured,
5.200% due 6/15/18 1,003,750
- ----------------------------------------------------------------------------------
New York -- 7.5%
2,000,000 A- Long Island Power Authority, Electric
Systems Revenue, 5.500% due 12/1/29 2,025,000
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 1,807,900
2,000,000 AA New York City Transitional Finance
Authority Revenue, Future Tax Secured,
Series A, 5.000% due 8/15/17 1,955,000
New York State Dormitory Authority Revenue:
1,000,000 AAA City University System, Series A,
FGIC-Insured, 5.000% due 7/1/16 986,250
1,000,000 AAA Lease Revenue, Health Facilities
Improvement Program, Series A,
FSA-Insured, 5.500% due 5/15/16 1,031,250
1,500,000 AAA Mental Health Services Facilities
Improvement, Series D, FSA-Insured,
5.125% due 8/15/17 1,483,125
3,000,000 AAA Montefiore Medical Center, AMBAC/
FHA-Insured, 5.250% due 2/1/15 3,041,250
2,580,000 BBB+ New York State Thruway Authority Service
Contract Revenue, Local Highway &
Bridge, 6.000% due 4/1/11 2,802,525
2,000,000 Aa3* New York State Triborough Bridge &
Tunnel Authority Revenue, Series A,
5.000% due 1/1/24 1,922,500
- ----------------------------------------------------------------------------------
17,054,800
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================= 8 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Ohio -- 1.8%
$ 4,000,000 AAA Cuyahoga County, OH Hospital Revenue,
Metrohealth Systems, Series A,
MBIA-Insured, 5.125% due 2/15/16 $ 4,000,000
- ----------------------------------------------------------------------------------
Pennsylvania -- 4.7%
1,000,000 AAA Altoona, PA City Authority, Water Revenue
Refunding, FGIC-Insured,
5.000% due 11/1/19 971,250
1,900,000 AAA Beaver County, PA IDA, FSA-Insured,
5.450% due 9/15/28 1,942,750
1,865,000 Aaa* Cranberry Township, PA Municipal Water &
Sewer Revenue, MBIA-Insured,
5.000% due 12/1/17 1,834,694
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 1,507,500
2,580,000 AAA North Wales, PA Water Authority,
FGIC-Insured, 5.000% due 11/1/15 2,570,325
2,000,000 AA Saint Mary Hospital Authority, Bucks County,
Catholic Healthcare, 5.000% due 12/1/18 1,915,000
- ----------------------------------------------------------------------------------
10,741,519
- ----------------------------------------------------------------------------------
Puerto Rico -- 0.6%
1,250,000 AAA Puerto Rico Commonwealth Infrastructure
Financing Authority, Series A,
AMBAC-Insured, 5.000% due 7/1/16 1,251,563
- ----------------------------------------------------------------------------------
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 2,005,000
- ----------------------------------------------------------------------------------
Tennessee -- 0.4%
1,000,000 AA Metropolitan Government Nashville &
Davidson County, TN Electric
Revenue, Series A, 5.125% due 5/15/15 1,001,250
- ----------------------------------------------------------------------------------
Texas -- 24.7%
6,000,000 AAA Aledo, TX ISD, GO, PSFG,
5.000% due 2/15/29 5,707,500
2,000,000 Aaa* Azle, TX ISD, Series C, PSFG, FGIC-Insured,
5.000% due 2/15/22 1,935,000
</TABLE>
See Notes to Financial Statements.
================================= 9 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Texas -- 24.7% (continued)
$ 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 $ 3,930,000
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 2,020,000
Brazos River Authority, PCR:
1,000,000 AAA Houston Industrial Income Project,
Series A, 5.125% due 5/1/19 982,500
2,000,000 Baa1* Utilities Electric Co., Series C,
5.550% due 6/1/30(d) 1,907,500
Burleson, TX ISD, PSFG:
725,000 Aaa* 6.750% due 8/1/24 815,625
1,775,000 NR Pre-Refunded -- Escrowed with U.S.
government securities to 8/1/06
Call @ 100, 6.750% due 8/1/24(f) 2,036,813
El Paso, TX ISD, GO, PSFG:
3,570,000 AAA Pre-Refunded -- Escrowed with U.S.
government securities to 2/15/04
Call @ 100, 5.900% due 2/15/13 3,842,213
80,000 AAA Unrefunded Balance, 5.900% due 2/15/13 84,800
1,610,000 AA- Fort Worth, TX Higher Education Finance
Corp., Texas Christian University,
5.000% due 3/15/15 1,587,863
2,000,000 AA Harris County, TX Health Facilities
Development Corp., (Texas Childrens
Hospital Project), 5.250% due 10/1/29 1,942,500
2,000,000 AA Harris County, TX Health Facilities
Development Revenue, School Health
Care Systems, Series B, 5.750% due 7/1/27 2,070,000
2,500,000 AA Harris County, TX Toll Road, Sub-Lien,
5.125% due 8/15/17 2,484,375
5,000,000 AA- Houston, TX, GO, Series A,
5.000% due 3/1/14 5,000,000
1,000,000 AAA Houston, TX ISD GO, Series A, PSFG,
4.750% due 2/15/22 930,000
1,000,000 AAA Manor, TX ISD, GO, PSFG,
5.000% due 8/1/17 972,500
2,500,000 AAA Nueces River Authority, Water Supply,
FSA-Insured, 5.500% due 3/1/27 2,581,250
</TABLE>
See Notes to Financial Statements.
================================= 10 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
Texas -- 24.7% (continued)
$ 9,035,000 AA Texas State Veterans Housing, GO,
Series B-4, 6.700% due 12/1/24(d) $ 9,531,925
Texas Water Development Board Revenue,
State Revolving Fund, Sr. Lien, Series B:
1,200,000 AAA 5.000% due 7/15/14 1,198,500
3,110,000 AAA 5.000% due 7/15/16 3,051,688
1,520,000 AAA West Texas Municipal Power Agency,
MBIA-Insured, 5.000% due 2/15/17 1,482,000
- ----------------------------------------------------------------------------------
56,094,552
- ----------------------------------------------------------------------------------
Utah -- 3.6%
8,400,000 A+ Intermountain Power Agency, Power Supply
Revenue, Series D, 5.000% due 7/1/21 8,074,500
- ----------------------------------------------------------------------------------
Virgin Islands -- 1.8%
4,000,000 BBB- Virgin Islands Public Finance Authority,
Series A, 5.500% due 10/1/22 4,015,000
- ----------------------------------------------------------------------------------
Virginia -- 4.1%
1,250,000 A+ Virginia College Building Authority,
Educational Facilities Revenue, (Hampton
University Project), 5.750% due 4/1/14 1,317,188
Virginia State Housing Development Authority,
Commonwealth Mortgage:
3,720,000 AA+ Series A, Sub-Series A-1,
6.400% due 7/1/17 3,924,600
1,500,000 AA+ Series C, Sub-Series C-1,
5.100% due 7/1/14 1,488,750
Series D:
1,145,000 AA+ Sub-Series D-1, 6.400% due 7/1/17 1,216,557
1,315,000 AA+ Sub-Series D-3, 5.800% due 7/1/10 1,370,888
- ----------------------------------------------------------------------------------
9,317,983
- ----------------------------------------------------------------------------------
Washington -- 3.3%
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 2,185,350
Washington State Public Power Supply System:
1,000,000 AAA Series A, (Nuclear Project No. 2),
FSA-Insured, 5.125% due 7/1/11 1,027,500
4,250,000 Aa1* Series B, (Nuclear Project No. 3),
5.500% due 7/1/18 4,252,890
- ----------------------------------------------------------------------------------
7,465,740
- ----------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
================================= 11 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
May 31, 1999 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Face
Amount Rating(a) Security Value
==================================================================================
<S> <C> <C> <C>
West Virginia -- 1.2%
Marion County, WV Community Solid
Waste Disposal Facilities Revenue,
Adirondack Recycling:
$ 4,832,730 NR Series A, 8.000% due 12/1/25 $ 2,416,365
653,688 NR Series B, 10.000% due 12/1/25 326,844
- ----------------------------------------------------------------------------------
2,743,209
- ----------------------------------------------------------------------------------
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 2,002,500
1,000,000 AAA The Medical College Wisconsin Inc.
Project, 5.400% due 12/1/16 1,015,000
- ----------------------------------------------------------------------------------
3,017,500
- ----------------------------------------------------------------------------------
Wyoming -- 2.2%
2,000,000 AA Wyoming Community Development
Authority Housing Revenue, Series 4,
5.900% due 12/1/14 2,075,000
2,920,000 AA Wyoming Community Development Authority,
Series 1, 5.450% due 12/1/29 2,923,650
- ----------------------------------------------------------------------------------
4,998,650
- ----------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(COST -- $230,442,570**) $227,177,461
==================================================================================
</TABLE>
(a) All ratings are by Standard & Poor's Ratings Service, except those
identified by an asterisk (*) are rated by Moody's Investors Service, Inc.
(b) Variable rate obligation payable at par is on demand at any time on no
more than seven days notice.
(c) Security is segregated by Custodian for open purchase commitment.
(d) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(e) Security is in default.
(f) Pre-Refunded bonds escrowed with U.S. government securities and bonds
escrowed to maturity with U.S. government securities are considered by the
Manager to be triple-A rated even if the issuer has not applied for new
ratings.
** Aggregate cost for Federal income tax purposes is substantially the same.
See pages 14 and 15 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
================================= 12 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Summary of Investments by Combined Ratings
May 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Standard & Percent of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Aaa AAA 54.0%
Aa AA 21.7
A A 8.8
Baa BBB 7.2
P-1 A-1 0.1
NR NR 8.2
-----
100.0%
=====
- --------------------------------------------------------------------------------
================================= 13 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Bond Ratings
(unaudited)
- --------------------------------------------------------------------------------
The definitions of the applicable rating symbols are set forth below:
Standard & Poor's Ratings 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.
================================= 14 ==================================
<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
================================= 15 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
May 31, 1999
================================================================================
ASSETS:
Investments, at value (Cost -- $230,442,570) $ 227,177,461
Cash 35,191
Interest receivable 3,627,449
- --------------------------------------------------------------------------------
Total Assets 230,840,101
- --------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased 2,928,587
Dividends payable 394,851
Investment advisory fees payable 51,814
Accrued expenses 135,099
- --------------------------------------------------------------------------------
Total Liabilities 3,510,351
- --------------------------------------------------------------------------------
Total Net Assets $ 227,329,750
================================================================================
NET ASSETS:
Par value of capital shares $ 19,882
Capital paid in excess of par value 237,104,616
Overdistributed net investment income (413,120)
Accumulated net realized loss from security transactions
and futures contracts (6,116,519)
Net unrealized depreciation of investments (3,265,109)
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $11.43 a share on 19,882,045 shares of
$0.001 par value outstanding; 500,000,000 shares authorized) $ 227,329,750
================================================================================
See Notes to Financial Statements.
================================= 16 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
- --------------------------------------------------------------------------------
Year
Ended
5/31/99
================================================================================
INVESTMENT INCOME:
Interest $ 12,212,023
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 2,103,816
Shareholder communications 77,552
Listing fees 49,070
Audit and legal 42,472
Shareholder and system servicing fees 40,748
Directors' fees 37,141
Pricing service fees 13,231
Custody 7,101
Other 10,965
- --------------------------------------------------------------------------------
Total Expenses 2,382,096
Less: Investment advisory fee waiver (Note 3) (1,075,563)
- --------------------------------------------------------------------------------
Net Expenses 1,306,533
- --------------------------------------------------------------------------------
Net Investment Income 10,905,490
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FUTURES CONTRACTS (NOTES 4 AND 7):
Realized Loss From:
Security transactions (excluding short-term securities) (5,317,043)
Futures contracts (107,750)
- --------------------------------------------------------------------------------
Net Realized Loss (5,424,793)
- --------------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments:
Beginning of year (2,350,122)
End of year (3,265,109)
- --------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (914,987)
- --------------------------------------------------------------------------------
Net Loss on Investments and Futures Contracts (6,339,780)
- --------------------------------------------------------------------------------
Increase in Net Assets From Operations $ 4,565,710
================================================================================
See Notes to Financial Statements.
================================= 17 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Year
Ended Ended
5/31/99 5/31/98
=====================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 10,905,490 $ 9,947,837
Net realized gain (loss) (5,424,793) 3,104,107
Increase (decrease) in net
unrealized (depreciation) (914,987) 9,774,667
- -------------------------------------------------------------------------------------
Increase in Net Assets From Operations 4,565,710 22,826,611
- -------------------------------------------------------------------------------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM (NOTE 2):
Net investment income (10,840,152) (11,946,605)
In excess of net investment income (552,267) (69,250)
Net realized gains -- (7,113,504)
- -------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (11,392,419) (19,129,359)
- -------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 6):
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 (Decrease) in Net Assets (6,826,709) 6,242,136
NET ASSETS:
Beginning of year 234,156,459 227,914,323
- -------------------------------------------------------------------------------------
End of year* $ 227,329,750 $ 234,156,459
=====================================================================================
* Includes overdistributed net investment income of: $ (413,120) $ (477,355)
=====================================================================================
</TABLE>
See Notes to Financial Statements.
================================= 18 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Greenwich Street Municipal Fund Inc. ("Fund"), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified, closed-end management investment company.
The significant accounting policies consistently followed by the Fund are:
(a) security transactions are accounted for on trade date; (b) securities are
valued at the mean between bid and ask prices provided by an independent pricing
service that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities; (c) securities maturing within 60 days are
valued at cost plus accreted discount, or minus amortized premium, which
approximates value; (d) gains or losses on the sale of securities are calculated
by using the specific identification method; (e) interest income, adjusted for
amortization of premium and accretion of original issue discount, is recorded on
the accrual basis; market discount is recognized upon the disposition of the
security; (f) dividends and distributions to shareholders are recorded on the
ex-dividend date; (g) the Fund intends to comply with the applicable provisions
of the Internal Revenue Code of 1986, as amended, pertaining to regulated
investment companies and to make distributions of taxable income sufficient to
relieve it from substantially all Federal income and excise taxes; (h) the
character of income and gains to be distributed are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. At May 31, 1999, 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 amounting to $552,267 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.
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.
================================= 19 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(continued)
- --------------------------------------------------------------------------------
3. Investment Advisory Agreement and Other Transactions
SSBC Fund Management Inc. ("SSBC"), a subsidiary of Salomon Smith Barney
Holdings Inc. ("SSBH"), acts as investment adviser to the Fund. The Fund pays
SSBC 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 year
ended May 31, 1999, SSBC waived investment advisory fees of $1,075,563.
All officers and one Director of the Fund are employees of Salomon Smith
Barney Inc., another subsidiary of SSBH.
4. Investments
For the year ended May 31, 1999, the aggregate cost of purchases and
proceeds from sales of investments (including maturities but excluding
short-term securities) were as follows:
- --------------------------------------------------------------------------------
Purchases $ 54,322,262
- --------------------------------------------------------------------------------
Sales 59,954,263
- --------------------------------------------------------------------------------
At May 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
- --------------------------------------------------------------------------------
Gross unrealized appreciation $ 8,616,172
Gross unrealized depreciation (11,881,281)
- --------------------------------------------------------------------------------
Net unrealized depreciation $ (3,265,109)
- --------------------------------------------------------------------------------
5. Capital Loss Carryforward
At May 31, 1999, the Fund had, for Federal income tax purposes,
approximately $36,000 of unused capital loss carryforwards available to offset
future capital gains expiring in 2007. To the extent that these carryforward
losses are used to offset capital gains, it is possible that the gains so offset
will not be distributed.
================================= 20 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(continued)
- --------------------------------------------------------------------------------
6. Capital Shares
Capital stock transactions were as follows:
Year Ended Year Ended
May 31, 1999 May 31, 1998
-------------------- --------------------
Shares Amount Shares Amount
================================================================================
Shares issued on reinvestment -- -- 217,191 $2,544,884
================================================================================
7. Futures Contracts
Initial 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 May 31, 1999, the Fund had no open futures contracts.
================================= 21 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31:
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995(1)
================================================================================================
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $ 11.78 $ 11.59 $ 12.19 $ 12.84 $ 12.00
- ------------------------------------------------------------------------------------------------
Income (Loss) From Operations:
Net investment income (2) 0.55 0.50 0.66 0.66 0.63
Net realized and unrealized
gain (loss) (0.33) 0.66 (0.26) (0.42) 0.77
- ------------------------------------------------------------------------------------------------
Total Income From Operations 0.22 1.16 0.40 0.24 1.40
- ------------------------------------------------------------------------------------------------
Offering Costs Charged to
Paid-in Capital -- -- -- -- (0.02)
- ------------------------------------------------------------------------------------------------
Less Distributions From:
Net investment income (0.54) (0.60) (0.66) (0.66) (0.54)
In excess of net investment
income (0.03) (0.01) -- -- --
Net realized gains -- (0.36) (0.34) (0.23) --
- ------------------------------------------------------------------------------------------------
Total Distributions (0.57) (0.97) (1.00) (0.89) (0.54)
- ------------------------------------------------------------------------------------------------
Net Asset Value,
End of Year $ 11.43 $ 11.78 $ 11.59 $ 12.19 $ 12.84
- ------------------------------------------------------------------------------------------------
Total Return, Based on
Market Value (3) 1.07% (0.20)% 8.97% 5.52% 1.65%++
- ------------------------------------------------------------------------------------------------
Total Return, Based on
Net Asset Value (3) 2.37% 10.53% 3.61% 2.40% 12.28%++
- ------------------------------------------------------------------------------------------------
Net Assets,
End of Year (millions) $ 227 $ 234 $ 228 $ 238 $ 251
- ------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (2) 0.56% 1.00% 1.03% 1.06% 1.05%+
Net investment income 4.65 4.25 5.57 5.17 5.63+
- ------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 24% 85% 115% 42% 115%
- ------------------------------------------------------------------------------------------------
Market Value, End of Year $ 10.000 $ 10.438 $ 11.375 $ 11.375 $ 11.625
================================================================================================
</TABLE>
(1) For the period from June 24, 1994 (commencement of operations) to May 31,
1995.
(2) The investment adviser waived a part of its fees for the year ended May
31, 1999. If such fees were not waived, the per share decrease on the net
investment income would have been $0.05. In addition, the annualized ratio
of expenses to average net assets would have been 1.01%.
(3) 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.
================================= 22 ==================================
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
Greenwich Street Municipal Fund Inc.:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of the Greenwich Street Municipal Fund
Inc. ("Fund") as of May 31, 1999, and the related statement of operations for
the year then ended, the statements of changes in net assets for each of the
years in the four-year period then ended and financial highlights for each of
the years in the three-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
period from June 24, 1994 (commencement of operations) to May 31, 1995 were
audited by other auditors whose report thereon, dated July 12, 1995, expressed
an unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1999 by correspondence with the custodian. As to securities purchased but
not yet received, we performed other appropriate auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Greenwich Street Municipal Fund Inc. as of May 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended and financial highlights for each of
the years in the four-year period then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
New York, New York
July 15, 1999
================================= 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>
8/31/97 $ 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
2/28/99 3,081,418 0.15 2,863,145 0.14 (1,617,908) (0.08) 1,245,237 0.06
5/31/99 2,888,036 0.14 2,615,694 0.14 (6,353,931) (0.34) (3,738,237) (0.20)
====================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
Tax Information
(unaudited)
- --------------------------------------------------------------------------------
For Federal tax purposes the Fund hereby designates for the fiscal year
ended May 31, 1999:
o 100.00% of the dividends paid by the Fund from net investment income
as tax-exempt for regular Federal income tax purposes.
================================= 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
================================================================================
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 10.68
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 10.688 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 10.938 11.85 0.048 11.15
12/21/98 12/24/98 11.063 11.82 0.048 10.94
1/26/99 1/29/99 10.750 11.86 0.048 10.81
2/23/99 2/26/99 10.688 11.82 0.048 10.76
3/23/99 3/26/99 10.750 11.71 0.048 10.65
4/27/99 4/30/99 10.250 11.65 0.048 10.40
5/25/99 5/28/99 9.938 11.47 0.048 10.40
================================================================================
* 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, Inc.,
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
Paul A. Brook
Controller
Christina T. Sydor
Secretary
Investment Adviser
SSBC Fund 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
================================= 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.
FD0988 7/99
