- --------------------------------------------------------------------------------
--------------------
GREENWICH STREET
MUNICIPAL FUND INC.
--------------------
[GRAPHIC OMITTED]
QUARTERLY REPORT
August 31, 1999
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<PAGE>
Greenwich Street Municipal
Fund Inc.
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August 31, 1999
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Dear Shareholder:
We are pleased to provide the first quarter report for the Greenwich
Street Municipal Fund Inc. ("Fund") for the three months ended August 31, 1999.
During the past three months, the Fund distributed income dividends totaling
$0.14 per share. The table below shows the annualized distribution rate and
three-month total return based on the Fund's August 31, 1999 net asset value
("NAV") per share and its New York Stock Exchange ("NYSE") closing price:
Price Annualized Three-Month
Per Share Distribution Rate* Total Return
--------- ------------------ ------------
$10.79 (NAV) 5.23% (4.33)%
$10.438 (NYSE) 5.40% 5.79%
In comparison, closed-end municipal bond funds posted an average total
return of a negative 2.32% for the same time period, as reported by Lipper, Inc.
(Lipper is a major fund-tracking organization.)
Special Shareholder Notice
We intend to submit a proposal for shareholder approval in the first
calendar quarter of the year 2000, whereby the Smith Barney Managed Municipals
Fund Inc., an open-end investment company, would acquire all or substantially
all of the assets and liabilities of the Fund. If the proposal is approved by
shareholders, we plan to move forward with the transaction in
- ----------
* This distribution assumes a current monthly income dividend rate of $0.047
per share for twelve months.
===================================== 1 ======================================
<PAGE>
the first calendar quarter of 2000. Pursuant to this proposal, the Fund will be
liquidated and you will become a shareholder of the Smith Barney Managed
Municipals Fund Inc. Each shareholder will receive shares of the Smith Barney
Managed Municipals Fund Inc. equivalent to the aggregate net asset value of your
investment in the Greenwich Street Municipals Fund Inc. at the time of the
transaction.
Municipal Bond Market Update
We believe that the municipal bond market is approaching a temporary
bottom. The Federal Reserve Board ("Fed") has implemented two monetary policy
adjustments -- a 25 basis point increase in June and a 25 basis point increase
in August -- and those actions should be through for the foreseeable future. We
believe that fixed income markets are returning to `normal' in the aftermath of
forced liquidations by major hedge funds and negatively impacted global markets
in late 1998. In our opinion, long U.S. Treasury yields are quite attractive and
municipal bonds are trading at roughly 95%-96% of governments. This comparison
helps to substantiate the fact that municipal securities are trading at low
valuations relative to governments since, under normal market conditions,
municipal securities have historically yielded roughly 85% of similar maturity
Treasuries.
As a result of last year's crisis (and ensuing credit crunch), the spread
between the yields on municipal securities and Treasuries widened. The robust
state of the U.S. economy contributed to the second highest municipal securities
issuance volume in history in 1998. The ability of the market to absorb such
high volume indicates the steady demand for tax-exempt investments and reflects
overall investor confidence.
The recent upward pressure on municipal yields appears to result largely
from two factors: 1) the lack of demand for municipal bonds by the traditional
institutional sectors that have supported the municipal market; and 2)
additional pressures resulting from the pre-Y2K avalanche of issues in the
taxable market, which has attracted institutional investors who would otherwise
buy municipals.
Yields have rebounded sharply, up nearly 3/4 of 1% since the beginning of
1999. The slope of the municipal yield curve has remained extremely steep, with
20-year municipals yielding roughly 120 basis points more than 1-year paper (The
yield curve measures the difference between short- and long-term rates). In the
U.S. Treasury market, the difference between 1-year and 30-year bond yields is
only 80 basis points.
===================================== 2 ======================================
<PAGE>
Investment Strategy
As of August 31, 1999, 94.6% of the Fund's holdings were rated investment
grade** by either Standard & Poor's Ratings Group or Moody's Investors Services
Inc., with 55.0% of the Fund invested in AAA bonds, the highest possible rating.
We maintain a positive outlook on municipal securities. Additionally, we
believe that buying bonds with relatively longer maturities (20 to 30 years),
and lower coupons, (5% and a bit lower), will enable us to be more aggressively
positioned for what should be a drop in long term interest rates later this
year.
Until recently, our investment strategy had been focused primarily on
buying high grade, short maturity bonds in anticipation of the ensuing increase
in interest rates. Currently, with recent interest rate increases behind us, we
are aggressive buyers of longer, high-grade discount bonds. We believe that
investor sentiment has weakened and the market has taken on a negative
psychology.
Municipal Bond Market Outlook
Our outlook for the municipal bond market is optimistic. We think that the
actions of the Fed were preemptively conservative. Inflation should remain in
check, at least in the near-term. A possible easing of economic activity as a
result of Y2K ramifications could prove positive for fixed income markets.
Looking ahead, we believe that the U.S. economy should remain strong in
the coming months with muted inflationary pressures. Recent economic conditions
have created opportunities for municipal securities to catch up with Treasuries,
and we continue to see good value at the long end of the market.
With long-term municipal bond yields in the 5.75% range and inflation
under control, "real," inflation-adjusted yields on longer intermediate and
long-term municipals are quite attractive. Following the Fed's August 24, 1999
short-term interest rate increase of 0.25%, we do not anticipate further
- ----------
** Investment-grade bonds are those rated Aaa, Aa, A and Baa by Moody's
Investors Service, Inc. or AAA, AA, A and BBB by Standard & Poor's Ratings
Services, or that have an equivalent rating by any nationally recognized
statistical rating organization, or determined by the manager to be of
equivalent quality.
===================================== 3 ======================================
<PAGE>
policy change for the remainder of 1999 amid optimism that the Fed has acted
sufficiently to curb inflationary pressures. As always, we will be monitoring
these events closely.
In closing, thank you for investing in the Greenwich Street Municipals
Fund Inc. We look forward to continuing to help you achieve your financial
goals.
Sincerely,
/s/ Heath B. McLendon /s/ Joseph P. Deane
Heath B. McLendon Joseph P. Deane
Chairman Vice President and
Investment Officer
September 23, 1999
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<PAGE>
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Schedule of Investments
August 31, 1999 (unaudited)
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Face
Amount Rating(a) Security Value
================================================================================
- -----------------------------------
MUNICIPAL BONDS AND NOTES -- 100.0%
- -----------------------------------
California -- 8.8%
$3,000,000 Baa3* California Educational Facilities Authority
Revenue, (Pooled College & University
Projects), Series A, 5.625% due 7/1/23 $ 2,835,000
2,000,000 A California Health Facilities Finance
Authority Revenue, Kaiser Permanente,
Series B, 5.250% due 10/1/13 1,922,500
1,000,000 AAA California State Public Works Board Lease
Revenue, Department of Corrections,
Series A, AMBAC-Insured,
5.250% due 1/1/21 953,750
1,980,000 AAA California State University, Headquarters
Building Authority, Series B, MBIA-Insured,
5.125% due 9/1/17 1,903,275
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 8,210,125
1,000,000 AAA Rancho Cucamonga, CA Redevelopment
Agency Tax Allocation, (Rancho
Redevelopment Project),
MBIA-Insured, 5.250% due 9/1/26 936,250
2,000,000 AAA San Diego County, CA COP, North County
Regional Center Expansion, AMBAC-Insured,
5.250% due 11/15/19 1,925,000
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18,685,900
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Colorado -- 3.9%
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 2,287,500
4,000,000 A Colorado Health Facilities Authority
Revenue, Kaiser Permanente, Series B,
5.350% due 8/1/15 3,810,000
1,000,000 AA Catholic Health Initiatives,
5.000% due 12/1/28 852,500
See Notes to Financial Statements.
===================================== 5 ======================================
<PAGE>
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Schedule of Investments
August 31, 1999 (unaudited) (continued)
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Face
Amount Rating(a) Security Value
================================================================================
Colorado -- 3.9% (continued)
$1,500,000 AAA E-470 Public Highway Authority
Revenue, Series A, MBIA-Insured,
5.000% due 9/1/15 $ 1,415,625
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8,365,625
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Connecticut -- 0.4%
1,000,000 Baa3* Mashantucket Western Pequot Tribe,
Connecticut Special Revenue, Series A,
5.500% due 9/1/28 913,750
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Florida -- 6.6%
1,000,000 AAA Broward County, FL Airport System Revenue,
Passenger Facility, Series H-2, AMBAC-
Insured, 4.750% due 10/1/23 860,000
2,000,000 AAA Dade County, FL GO, Unlimited Revenue Bonds,
Florida Seaport, MBIA-Insured, 5.125%
due 10/1/21 1,855,000
1,000,000 AAA Florida State Turnpike Authority Revenue,
Department of Transportation, Series A,
FGIC-Insured, 5.000% due 7/1/16 951,250
3,500,000 BBB- Martin County, FL IDR, (Indiantown
Cogeneration Project), Series A,
7.875% due 12/15/25(b) 3,600,625
1,000,000 A* Martin County, FL Special Assessment
Revenue, 6.100% due 11/1/15 1,037,500
1,240,000 AAA Miami-Dade, FL Sports Franchise,
4.750% due 10/1/30 1,050,900
2,500,000 AAA Orange County, FL Tourist Development
Tax Revenue, AMBAC-Insured, Series A, 4.750%
due 10/1/24 2,143,750
3,000,000 AAA Tallahassee, FL Energy System Revenue,
4.750% due 10/1/26 2,565,000
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14,064,025
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Georgia -- 1.1%
1,500,000 AAA Atlanta, GA Water & Wastewater Revenue,
5.000% due 11/1/29 1,335,000
1,000,000 A3* Private Colleges & University Authority,
(Mercer University Project), Series A,
5.375% due 10/1/29 918,750
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2,253,750
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See Notes to Financial Statements.
===================================== 6 ======================================
<PAGE>
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Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
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 $ 1,865,000
2,540,000 AAA Hawaii State GO, Series CP, FGIC-Insured,
5.000% due 10/1/16 2,374,900
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4,239,900
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Illinois -- 5.2%
Illinois Health Facilities Authority,
MBIA-Insured:
7,000,000 AAA Ingalls Health Systems Project,
6.250% due 5/15/24 7,262,500
1,000,000 Aaa* Memorial Health Systems,
5.250% due 10/1/18 943,750
3,000,000 AAA Illinois State GO, FGIC-Insured,
5.250% due 12/1/20 2,842,500
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11,048,750
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Indiana -- 2.2%
2,000,000 AAA Avon, IN Community School Building Corp.,
First Mortgage, AMBAC-Insured,
5.250% due 1/1/22 1,865,000
2,500,000 Aa2* Petersburg, IN Industrial PCR, Indianapolis
Power & Light Corp., 6.625% due 12/1/24 2,725,000
- --------------------------------------------------------------------------------
4,590,000
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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 11/1/22 733,294
- --------------------------------------------------------------------------------
Louisiana -- 0.8%
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 1,700,000
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Maryland -- 2.1%
11,000,000 NR Maryland State Energy & Financing
Administration, Solid Waste Disposal
Revenue, (Hagerstown Recycling Project),
9.000% due 10/15/16(c) 2,420,000
See Notes to Financial Statements.
===================================== 7 ======================================
<PAGE>
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Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Maryland -- 2.1% (continued)
$2,500,000 A Maryland State Health & Educational
Facilities Authority Revenue, Loyola
College Issue, 5.000% due 10/1/39 $ 2,140,625
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4,560,625
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Massachusetts -- 4.4%
2,000,000 AAA Massachusetts Bay Transportation Authority,
Series B, FSA-Insured, 5.250% due 3/1/26 1,872,500
1,000,000 Aaa* Massachusetts State College Building
Authority Revenue, Series 1,
5.375% due 5/1/39 928,750
1,000,000 AAA Massachusetts State HFA, Series B,
MBIA-Insured, 5.300% due 12/1/17 968,750
Massachusetts State Turnpike Authority:
1,500,000 AAA AMBAC-Insured, Series A,
4.750% due 1/1/34 1,233,750
2,500,000 Aaa* Metropolitan Highway System, Series A,
5.000% due 1/1/39 2,171,875
Massachusetts State Water Resource
Authority, MBIA-Insured:
1,000,000 AAA Series A, 4.750% due 2/1/26 842,500
1,000,000 AAA Series B, 5.000% due 12/1/25 888,750
510,000 AAA 5.250% due 12/1/20 484,500
- --------------------------------------------------------------------------------
9,391,375
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Michigan -- 3.7%
6,000,000 NR Michigan Strategic Fund Resource Recovery,
Limited Obligation Revenue, Central
Wayne Energy, Series A,
7.000% due 7/1/27(b) 5,782,500
2,000,000 NR Midland County, MI EDC, PCR, Limited
Obligation, Series B,
9.500% due 7/23/09(b) 2,103,620
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7,886,120
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Minnesota -- 0.2%
500,000 A3* Minnesota State Higher Education Facilities
Authority Revenue, St. Johns University,
Series 4-L, 5.350% due 10/1/17 470,625
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Missouri -- 0.4%
1,000,000 AAA Fenton, MO COP, (Capital Improvement
Projects), MBIA-Insured,
5.125% due 9/1/17 945,000
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See Notes to Financial Statements.
===================================== 8 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
New York -- 6.8%
$2,000,000 A- Long Island Power Authority, Electric
Systems Revenue, 5.500% due 12/1/29 $ 1,915,000
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 1,745,250
New York State Dormitory Authority
Revenue:
1,000,000 AAA City University System, Series A,
FGIC-Insured, 5.000% due 7/1/16 938,750
1,000,000 AAA Lease Revenue, Health Facilities
Improvement Program, Series A,
FSA-Insured, 5.500% due 5/15/16 998,750
1,500,000 AAA Mental Health Services Facilities
Improvement, Series D, FSA-Insured,
5.125% due 8/15/17 1,408,125
3,000,000 AAA Montefiore Medical Center, AMBAC/
FHA-Insured, 5.250% due 2/1/15 2,932,500
2,580,000 BBB+ New York State Thruway Authority Service
Contract Revenue, Local Highway &
Bridge, 6.000% due 4/1/11 2,705,775
2,000,000 Aa3* New York State Triborough Bridge &
Tunnel Authority Revenue, Series A,
5.000% due 1/1/24 1,797,500
- --------------------------------------------------------------------------------
14,441,650
- --------------------------------------------------------------------------------
Ohio -- 3.3%
4,000,000 AAA Cuyahoga County, OH Hospital Revenue,
Metrohealth Systems, Series A, MBIA-
Insured, 5.125% due 2/15/16 3,815,000
1,000,000 AAA Cuyahoga County, OH Hospital Revenue,
University Hospital Health Inc.,
5.500% due 1/15/30 963,750
2,500,000 AAA Lukas County, OH Hospital Revenue,
Promedia Healthcare Group,
5.375% due 11/15/29 2,375,000
- --------------------------------------------------------------------------------
7,153,750
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
===================================== 9 ======================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Pennsylvania -- 2.4%
$1,900,000 AAA Beaver County, PA IDA, FSA-Insured,
5.450% due 9/15/28 $ 1,900,000
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 1,434,375
2,000,000 AA Saint Mary Hospital Authority,
Bucks County, Catholic Healthcare,
5.000% due 12/1/18 1,785,000
- --------------------------------------------------------------------------------
5,119,375
- --------------------------------------------------------------------------------
South Carolina -- 3.6%
2,000,000 AAA Lexington County, SC Health Services
District Inc., Hospital Revenue,
Refunding & Improvement, FSA-Insured,
5.250% due 11/1/17 1,915,000
6,000,000 Aaa* South Carolina Transit Infrastructure,
Series A, 5.250% due 10/1/21 5,685,000
- --------------------------------------------------------------------------------
7,600,000
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Texas -- 25.9%
6,000,000 AAA Aledo, TX ISD, GO, PSFG,
5.000% due 2/15/29 5,347,500
2,000,000 Aaa* Azle, TX ISD, Series C, PSFG, FGIC-Insured,
5.000% due 2/15/22 1,805,000
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 3,705,000
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 1,937,500
Brazos River Authority, PCR:
1,000,000 AAA Houston Industrial Income Project,
Series A, 5.125% due 5/1/19 927,500
2,000,000 Baa1* Utilities Electric Co., Series C,
5.550% due 6/1/30 1,777,500
Burleson, TX ISD, PSFG:
1,775,000 NR Pre-Refunded -- Escrowed with U.S.
government securities to 8/1/06
Call @ 100, 6.750% due 8/1/24(d) 1,988,000
725,000 Aaa* 6.750% due 8/1/24 784,813
See Notes to Financial Statements.
===================================== 10 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Texas -- 25.9% (continued)
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 $ 3,770,813
80,000 AAA Unrefunded Balance, 5.900% due
2/15/13 81,900
1,610,000 AA- Fort Worth, TX Higher Education
Finance Corp., Texas Christian University,
5.000% due 3/15/15 1,513,400
1,670,000 Aaa* Frisco, TX ISD, 5.375 due 8/15/19 1,613,638
2,000,000 AA Harris County, TX Health Facilities
Development Revenue, School Health
Care Systems, Series B, 5.750% due 7/1/27 2,020,000
2,500,000 AA Harris County, TX Toll Road, Sub-Lien,
5.125% due 8/15/17 2,371,875
2,000,000 AA Harris County, TX Health Facilities
Development Corp. (Texas Childrens
Hospital Project), 5.250% due 10/1/29 1,802,500
1,000,000 AAA Houston, TX ISD, GO, Series A, PSFG,
4.750% due 2/15/22 861,250
5,000,000 AA- Houston, TX GO, Series A,
5.000% due 3/1/14 4,768,750
1,000,000 AAA Manor, TX ISD, GO, PSFG,
5.000% due 8/1/17 926,250
2,500,000 AAA Nueces River Authority, Water Supply,
FSA-Insured, 5.500% due 3/1/27 2,421,875
9,035,000 AA Texas State Veterans Housing, GO,
Series B-4, 6.700% due 12/1/24 9,385,106
Texas Water Development Board Revenue,
State Revolving Fund, Senior Lien,
Series B:
1,200,000 AAA 5.000% due 7/15/14 1,146,000
3,110,000 AAA 5.000% due 7/15/16 2,923,400
1,520,000 AAA West Texas Municipal Power Agency,
MBIA-Insured, 5.000% due 2/15/17 1,400,300
- --------------------------------------------------------------------------------
55,279,870
- --------------------------------------------------------------------------------
Utah -- 3.6%
8,400,000 A+ Intermountain Power Agency, Power Supply
Revenue, Series D, 5.000% due 7/1/21 7,633,500
- --------------------------------------------------------------------------------
Virgin Islands -- 1.8%
4,000,000 BBB- Virgin Islands Public Finance Authority,
Series A, 5.500% due 10/1/22 3,800,000
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
===================================== 11 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Virginia -- 3.6%
$1,250,000 A+ Virginia College Building Authority,
Educational Facilities Revenue,
(Hampton University Project),
5.750% due 4/1/14 $ 1,285,938
Virginia State Housing Development
Authority, Commonwealth Mortgage:
3,710,000 AA+ Series A, Sub-Series A-1, 6.400%
due 7/1/17 3,867,675
Series D:
1,135,000 AA+ Sub-Series D-1, 6.400% due 7/1/17 1,186,075
1,315,000 AA+ Sub-Series D-3, 5.800% due 7/1/10 1,339,656
- --------------------------------------------------------------------------------
7,679,344
- --------------------------------------------------------------------------------
Washington -- 2.9%
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 2,108,850
4,250,000 Aa1* Washington State Public Power Supply
System, Series B, (Nuclear Project No. 3),
5.500% due 7/1/18 4,053,436
- --------------------------------------------------------------------------------
6,162,286
- --------------------------------------------------------------------------------
Wisconsin -- 1.8%
Wisconsin State Health & Educational
Facilities Authority Revenue,
MBIA-Insured:
2,000,000 AAA Aurora Health Care Inc.:
5.250% due 8/15/17 1,907,500
1,000,000 A 5.700% due 5/15/20 936,250
1,000,000 AAA The Medical College Wisconsin Inc.
Project, 5.400% due 12/1/16 977,500
- --------------------------------------------------------------------------------
3,821,250
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
===================================== 12 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Schedule of Investments
August 31, 1999 (unaudited) (continued)
- --------------------------------------------------------------------------------
Face
Amount Rating(a) Security Value
================================================================================
Wyoming -- 2.2%
$2,000,000 AA Wyoming Community Development
Authority Housing Revenue, Series 4,
5.900% due 12/1/14 $ 2,027,500
2,920,000 AA Wyoming Community Development
Authority, Series 1, 5.450% due 12/1/29 2,777,650
- --------------------------------------------------------------------------------
4,805,150
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100%
(COST -- $223,751,047**) $213,344,914
================================================================================
(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) Income from this issue is considered a preference item for purposes of
calculating the alternative minimum tax.
(c) Security is in default.
(d) 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 15 and 16 for definition of ratings and certain security
descriptions.
See Notes to Financial Statements.
===================================== 13 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Summary of Investments by Combined Ratings
August 31, 1999 (unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Standard & Percent of
Moody's and/or Poor's Total Investments
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Aaa AAA 55.0%
Aa AA 21.5
A A 10.7
Baa BBB 7.4
NR NR 5.4
-----
100.0%
=====
- --------------------------------------------------------------------------------
===================================== 14 =====================================
<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.
===================================== 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 VMIGE1 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)
- --------------------------------------------------------------------------------
August 31, 1999
================================================================================
ASSETS:
Investments, at value (Cost -- $223,751,047) $213,344,914
Receivable for securities sold 20,263
Interest receivable 2,820,142
- --------------------------------------------------------------------------------
Total Assets 216,185,319
- --------------------------------------------------------------------------------
LIABILITIES:
Payable to bank 1,093,547
Dividends payable 308,806
Investment advisory fees payable 55,511
Accrued expenses 146,709
- --------------------------------------------------------------------------------
Total Liabilities 1,604,573
- --------------------------------------------------------------------------------
Total Net Assets $214,580,746
================================================================================
NET ASSETS:
Par value of capital shares $ 19,882
Capital paid in excess of par value 237,104,616
Overdistributed net investment income (135,367)
Accumulated net realized loss from security transactions (12,002,252)
Net unrealized depreciation of investments (10,406,133)
- --------------------------------------------------------------------------------
Total Net Assets
(Equivalent to $10.79 a share on 19,882,045 shares of
$0.001 par value outstanding; 500,000,000 shares authorized) $214,580,746
================================================================================
See Notes to Financial Statements.
===================================== 17 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations
(unaudited)
- --------------------------------------------------------------------------------
Three Months
Ended
8/31/99
================================================================================
INVESTMENT INCOME:
Interest $ 3,313,658
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees (Note 3) 514,214
Shareholder communications 16,331
Audit and legal 13,743
Registration fees 12,642
Shareholder and system servicing fees 10,343
Directors' fees 10,006
Pricing service fees 3,508
Custody 2,686
Other 3,299
- --------------------------------------------------------------------------------
Total Expenses 586,772
Less: Investment advisory fee waiver (Note 3) (354,236)
- --------------------------------------------------------------------------------
Net Expenses 232,536
- --------------------------------------------------------------------------------
Net Investment Income 3,081,122
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS (NOTE 4):
Realized Loss From Security Transactions
(excluding short-term securities):
Proceeds from sales 27,131,371
Cost of securities sold 33,017,104
- --------------------------------------------------------------------------------
Net Realized Loss (5,885,733)
- --------------------------------------------------------------------------------
Change in Net Unrealized Depreciation of Investments:
Beginning of period (3,265,109)
End of period (10,406,133)
- --------------------------------------------------------------------------------
Increase in Net Unrealized Depreciation (7,141,024)
- --------------------------------------------------------------------------------
Net Loss on Investments (13,026,757)
- --------------------------------------------------------------------------------
Decrease in Net Assets From Operations $ (9,945,635)
================================================================================
See Notes to Financial Statements.
===================================== 18 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months
Ended Year
8/31/99 Ended
(unaudited) 5/31/99
======================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 3,081,122 $ 10,905,490
Net realized loss (5,885,733) (5,424,793)
Increase in net unrealized depreciation (7,141,024) (914,987)
- --------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations (9,945,635) 4,565,710
- --------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,803,369) (10,840,152)
In excess of net investment income -- (552,267)
- --------------------------------------------------------------------------------------
Decrease in Net Assets From
Distributions to Shareholders (2,803,369) (11,392,419)
- --------------------------------------------------------------------------------------
Decrease in Net Assets (12,749,004) (6,826,709)
NET ASSETS:
Beginning of period 227,329,750 234,156,459
- --------------------------------------------------------------------------------------
End of period* $ 214,580,746 $ 227,329,750
======================================================================================
* Includes overdistributed net investment income of: $(135,367) $(413,120)
======================================================================================
</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, 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.
===================================== 20 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited) (continued)
- --------------------------------------------------------------------------------
3. Investment Advisory Agreement and Other Transactions
SSB Citi Fund Management LLC ("SSBC"), formerly known as SSBC Fund
Management Inc., 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 three months ended August
31, 1999, SSBC waived investment advisory fees of $354,236.
All officers and one Director of the Fund are employees of Salomon Smith
Barney Inc., another subsidiary of SSBH.
4. Investments
For the three months ended August 31, 1999, the aggregate cost of
purchases and proceeds from sales of investments (including maturities but
excluding short-term securities) were as follows:
================================================================================
Purchases $ 26,406,304
- --------------------------------------------------------------------------------
Sales 27,131,371
================================================================================
At August 31, 1999, the aggregate gross unrealized appreciation and
depreciation of investments for Federal income tax purposes were substantially
as follows:
================================================================================
Gross unrealized appreciation $ 3,779,692
Gross unrealized depreciation (14,185,825)
- --------------------------------------------------------------------------------
Net unrealized depreciation $(10,406,133)
================================================================================
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.
===================================== 21 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited) (continued)
- --------------------------------------------------------------------------------
6. 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 August 31, 1999, the Fund had no open futures contracts.
===================================== 22 =====================================
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
For a share of capital stock outstanding throughout each year ended May 31,
except where noted:
<TABLE>
<CAPTION>
1999(1) 1999 1998 1997 1996 1995(2)
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $11.43 $11.78 $11.59 $12.19 $12.84 $12.00
- ------------------------------------------------------------------------------------------------------------------------
Income (Loss) From
Operations:
Net investment
income (3) 0.15 0.55 0.50 0.66 0.66 0.63
Net realized and
unrealized gain (loss) (0.65) (0.33) 0.66 (0.26) (0.42) 0.77
- ------------------------------------------------------------------------------------------------------------------------
Total Income (Loss)
From Operations (0.50) 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 (0.14) (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 (0.14) (0.57) (0.97) (1.00) (0.89) (0.54)
- ------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period $10.79 $11.43 $11.78 $11.59 $12.19 $12.84
- ------------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Market Value (4) 5.79%++ 1.07% (0.20)% 8.97% 5.52% 1.65%++
- ------------------------------------------------------------------------------------------------------------------------
Total Return, Based on
Net Asset Value (4) (4.33)%++ 2.37% 10.53% 3.61% 2.40% 12.28%++
- ------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (millions) $215 $227 $234 $228 $238 $251
- ------------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets:
Expenses (3) 0.42%+ 0.56% 1.00% 1.03% 1.06% 1.05%+
Net investment income 5.58+ 4.65 4.25 5.57 5.17 5.63+
- ------------------------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 12% 24% 85% 115% 42% 115%
- ------------------------------------------------------------------------------------------------------------------------
Market Value,
End of Period $10.438 $10.000 $10.438 $11.375 $11.375 $11.625
========================================================================================================================
</TABLE>
(1) For the three months ended August 31, 1999 (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 period ended
August 31, 1999 and the year ended May 31, 1999. If such fees were not
waived, the per share decrease on the net investment income would have
been $0.02 and $0.05, respectively. In addition, the annualized ratio of
expenses to average net assets would have been 1.06% and 1.01%,
respectively.
(4) 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>
8/31/97 $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)
8/31/99 3,313,658 0.17 3,081,122 0.15 (13,026,757) (0.65) (9,945,635) (0.50)
===========================================================================================
</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
================================================================================
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
6/22/99 6/25/99 10.500 11.09 0.047 10.62
7/27/99 7/30/99 10.625 11.09 0.047 10.54
8/24/99 8/27/99 10.125 10.74 0.047 10.34
================================================================================
* 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 9699, Providence, RI 02940-9699 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
SSB Citi Fund Management LLC
388 Greenwich Street
New York, New York 10013
Transfer Agent
First Data Investor Services
Group, Inc.
P.O. Box 9699
Providence, RI 02940-9699
Custodian
PNC Bank, N.A.
17th and Chestnut Streets
Philadelphia, Pennsylvania 19103
===================================== 29 =====================================
<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.
FD0778 10/99
- --------------------------------------------------------------------------------
