Dreyfus
Strategic Municipal
Bond Fund, Inc.
SEMIANNUAL REPORT May 31, 2002
DREYFUS STRATEGIC MUNICIPAL BOND FUND
PROTECTING YOUR PRIVACY
OUR PLEDGE TO YOU
THE FUND IS COMMITTED TO YOUR PRIVACY. On this page, you will find the Fund's
policies and practices for collecting, disclosing, and safeguarding "nonpublic
personal information," which may include financial or other customer
information. These policies apply to individuals who purchase Fund shares for
personal, family, or household purposes, or have done so in the past. This
notification replaces all previous statements of the Fund's consumer privacy
policy, and may be amended at any time. We'll keep you informed of changes as
required by law.
YOUR ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The Fund maintains physical,
electronic and procedural safeguards that comply with federal regulations to
guard nonpublic personal information. The Fund's agents and service providers
have limited access to customer information based on their role in servicing
your account.
THE FUND COLLECTS INFORMATION IN ORDER TO SERVICE AND ADMINISTER YOUR ACCOUNT.
The Fund collects a variety of nonpublic personal information, which may
include:
*Information we receive from you, such as your name, address, and social
security number.
* Information about your transactions with us, such as the purchase or sale of
Fund shares.
*Information we receive from agents and service providers, such as proxy
voting information.
THE FUND DOES NOT SHARE NONPUBLIC PERSONAL INFORMATION WITH ANYONE, EXCEPT AS
PERMITTED BY LAW.
THANK YOU FOR THIS OPPORTUNITY TO SERVE YOU.
The views expressed in this report reflect those of the portfolio manager only
through the end of the period covered and do not necessarily represent the views
of Dreyfus or any other person in the Dreyfus organization. Any such views are
subject to change at any time based upon market or other conditions and Dreyfus
disclaims any responsibility to update such views. These views may not be relied
on as investment advice and, because investment decisions for a Dreyfus fund are
based on numerous factors, may not be relied on as an indication of trading
intent on behalf of any Dreyfus fund.
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the Chairman
3 Discussion of Fund Performance
6 Statement of Investments
15 Statement of Assets and Liabilities
16 Statement of Operations
17 Statement of Changes in Net Assets
18 Financial Highlights
20 Notes to Financial Statements
26 Proxy Results
29 Officers and Directors
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Strategic Municipal Bond Fund, Inc.
LETTER FROM THE CHAIRMAN
Dear Shareholder:
We present this semiannual report for Dreyfus Strategic Municipal Bond Fund,
Inc., covering the six-month period from December 1, 2001 through May 31, 2002.
Inside, you' ll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager,
James Welch.
We have recently seen signs of economic recovery, which may signal an end to the
U.S. economic recession. As the economy has gained strength, however, prices of
stocks and many bonds have fluctuated widely. The war on terror, instability in
the Middle East and South Asia, and new disclosures of questionable accounting
and management practices among U.S. corporations have buffeted the financial
markets, making the short-term movements of stocks and bonds particularly
volatile.
Indeed, the markets' directions become clearer only when viewed from a
perspective measured in years rather than weeks or months. Although you may
become excited about the opportunities or worried about the challenges presented
for growth or income under current market conditions, we encourage you to think
first of your long-term goals and attitudes toward risk. As always, we urge you
to talk with a professional financial advisor who can help you navigate the
right course to financial security for yourself and your family. For our part,
and as we have for more than 50 years, we at The Dreyfus Corporation are ready
to serve you with a full range of investment alternatives and experienced teams
of portfolio managers.
Thank you for your continued confidence and support.
Sincerely,
Stephen E. Canter
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 17, 2002
DISCUSSION OF FUND PERFORMANCE
James Welch, Portfolio Manager
How did Dreyfus Strategic Municipal Bond Fund, Inc. perform during the period?
For the six-month period ended May 31, 2002, the fund achieved a total return of
3.00% .(1) During the same period, the fund produced aggregate income dividends
of $0.2802 per share, which is equal to an annualized distribution rate of 6.66%
.. (2)
We are generally pleased with the fund' s performance during the reporting
period. Declining short-term interest rates early in the reporting period
generally supported prices of long-term municipal bonds. The fund's focus on
credit quality also benefited its performance throughout the reporting period.
What is the fund's investment approach?
The fund seeks high current income exempt from federal income tax by investing
in long-term, tax-exempt municipal bonds.
In so doing, we look for bonds that we believe can provide high current income.
We strive to find such opportunities through analysis of individual bonds'
structures. Within the context of our bond structure analyses, we pay
particularly close attention to each bond' s maturity and early redemption
features.
Over time, many of the fund's older, higher yielding bonds have matured or were
redeemed by their issuers. We have generally attempted to replace those bonds
with new securities that offered currently higher than average income payments.
We have also sought to upgrade the fund with newly issued bonds that, in our
opinion, have better structural or income characteristics than existing
holdings. When such opportunities arise, we usually sell bonds that are close to
their optimal redemption date or maturity. In addition, we conduct credit
analysis of our holdings in an attempt to avoid potential defaults on interest
and principal payments.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund benefited from lower interest rates and a weakening economy during the
reporting period. Because the September 11 terrorist attacks pushed the economy
into recession, the Federal Reserve Board (the "Fed") continued to reduce
short-term interest rates through the end of 2001, driving the federal funds
rate to its lowest level in 40 years. As a result, yields on municipal bonds
continued to fall, and their prices generally rose. Municipal bond prices were
also supported by robust investor demand, particularly from individuals seeking
stable alternatives to a volatile stock market.
When the reporting period began, we had already begun to move to a relatively
defensive posture in the belief that the Fed's work was nearly done. After bond
prices had risen in a declining interest-rate environment, we locked in profits
on securities with relatively low yields and high sensitivity to interest-rate
changes. We replaced these bonds with more defensive securities that have
historically held their value when the economy improves and interest rates rise
In addition, we attempted to reduce the amount of volatility in the fund's
portfolio by intensifying our focus on high quality securities. As part of that
effort, we reduced the fund' s exposure to the steel and airline industries,
which were hit hard by the weak economy and September 11 terrorist attacks. Our
security selection strategy was also designed to reduce the fund's exposure to
bonds whose income may be subject to the federal Alternative Minimum Tax.
Finally, we locked in low prevailing interest rates on the fund's auction-rate
preferred shares, which were first issued several years ago. By extending the
maturities of the fund's auction-rate preferred shares to as long as one year,
we have effectively locked in today's historically low borrowing costs.
What is the fund's current strategy?
We have generally maintained the fund's conservative security selection strategy
in anticipation of a rising interest-rate environment, which we believe may
begin later this year. At the same time, we have continued to focus on the long
end of the maturity spectrum, where income opportunities have tended to be
greatest.
We have also continued to upgrade the fund's overall credit quality. Because the
yield differences among high quality and lower quality securities were
relatively small at times during the reporting period, we were able to improve
the fund' s credit quality without sacrificing income. In addition, we have
attempted to improve the fund' s level of diversification by reducing its
industrial and corporate-backed holdings in favor of income-oriented bonds
backed by revenues generated by public facilities. Of course, we are prepared to
change our strategy and the portfolio's composition as market conditions evolve
June 17, 2002
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
BASED UPON NET ASSET VALUE PER SHARE. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES, AND SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS.
CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) DISTRIBUTION RATE PER SHARE IS BASED UPON DIVIDENDS PER SHARE PAID FROM NET
INVESTMENT INCOME DURING THE PERIOD ANNUALIZED, DIVIDED BY THE MARKET PRICE PER
SHARE AT THE END OF THE PERIOD.
The Fund
STATEMENT OF INVESTMENTS
May 31, 2002 (Unaudited)
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--142.9% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
ALASKA--5.0%
Alaska Housing Finance Corporation:
6.25%, 6/1/2035 (Insured; MBIA) 7,825,000 8,234,326
6.05%, 6/1/2039 (Insured; MBIA) 12,185,000 12,628,047
ARIZONA--1.9%
Apache County Industrial Development Authority, PCR
(Tuscon Electric Power Co.) 5.85%, 3/1/2028 8,500,000 7,887,575
ARKANSAS--1.3%
Arkansas Development Finance Authority, SFMR
6.25%, 1/1/2032 5,000,000 5,225,200
CALIFORNIA--3.2%
California Health Facilities Financing Authority,
Health Facility Financing Revenue
(Cedars-Sinai Medical Center) 6.25%, 12/1/2034 3,750,000 3,958,725
California Pollution Control Financing Authority, PCR
(Southern California Edison Company)
7%, 2/28/2008 5,000,000 5,104,250
Los Angeles Regional Airports
Improvement Corporation, LR:
(International Airport--Delta) 6.35%, 11/1/2025 2,750,000 2,568,115
(Terminal Four Project) 7.50%, 12/1/2024 2,000,000 1,951,300
COLORADO--.9%
Colorado Health Facilities Authority, Revenue
(American Housing Foundation 1, Inc.)
10.25%, 12/1/2020 5,600,000 (a) 1,888,712
Northwest Parkway Public Highway Authority,
Revenue (First Tier Subordinated)
7.125%, 6/15/2041 2,000,000 2,049,040
CONNECTICUT--2.7%
Connecticut Development Authority, PCR
(Connecticut Light and Power) 5.95%, 9/1/2028 11,000,000 11,190,080
DELAWARE--1.4%
Delaware Health Facilities Authority, Revenue
(Beebe Medical Center) 6.80%, 6/1/2024 5,905,000 6,009,459
DISTRICT OF COLUMBIA--3.3%
District of Columbia Tobacco Settlement
Financing Authority 6.75%, 5/15/2040 7,000,000 7,191,030
Metropolitan Washington Airports Authority,
Special Facilities Revenue
(Caterair International Corp.) 10.125%, 9/1/2011 6,520,000 6,498,354
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
FLORIDA--7.3%
Florida Housing Finance Corporation, Housing Revenue
(Seminole Ridge Apartments)
6%, 4/1/2041 (Collateralized; GNMA) 6,415,000 6,613,095
Florida Board of Education, Capital Outlay
10.90%, 6/1/2019 15,000,000 (b,c) 15,300,000
Orange County Health Facilities Authority, Revenue
(Orlando Regional Healthcare System)
6%, 10/1/2026 3,500,000 3,576,125
South Lake County Hospital District, Revenue
(South Lake Hospital, Inc.) 5.80%, 10/1/2034 5,250,000 5,250,525
GEORGIA--2.3%
Private Colleges and Universities Facilities
Authority, Revenue (Clark Atlanta University)
8.25%, 1/1/2015 (Prerefunded 1/1/2003) 8,900,000 (d) 9,672,787
IDAHO--1.3%
Idaho Housing & Finance Association, SFMR
6.35%, 1/1/2030 (Collateralized; FNMA) 2,500,000 2,609,400
Power County Industrial Development Corporation,
SWDR (FMC Corporation Project) 6.45%, 8/1/2032 3,000,000 2,897,400
ILLINOIS--5.2%
Illinois Development Finance Authority, Revenue:
(Community Rehabilitation Providers Facilities
Acquisition Program) 6.05%, 7/1/2019 5,290,000 5,127,756
HR (Adventist Health Systems / Sunbelt)
5.50%, 11/15/2029
Illinois Health Facilities Authority, Revenue:
(OSF Healthcare Systems) 6.25%, 11/15/2029 12,000,000 12,384,000
(Advocate Network Health Care)
6.125%, 11/15/2022 4,000,000 4,157,520
INDIANA--4.7%
Burns Harbor Industrial Solid Waste Disposal Facilities,
Revenue (Bethlehem Steel Corp.) 8%, 4/1/2024 6,000,000 (a) 468,000
Franklin Township School Building Corporporation
6.125%, 1/15/2022 (Prerefunded 7/15/2010) 6,000,000 (d) 6,974,820
Indianapolis Airport Authority, Revenue
(United Air Lines) 6.50%, 11/15/2031 12,005,000 8,047,792
Jasper County, EDR (Georgia Pacific Corp.)
5.60%, 4/1/2029 5,000,000 4,100,450
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA--6.0%
Lake Charles Harbor and Terminal,
District Port Facilities Revenue
(Trunkline LNG Co.) 7.75%, 8/15/2022 15,000,000 15,600,900
Parish of De Soto, Environmental Improvement
Revenue (International Paper Co.)
6.55%, 4/1/2019 2,900,000 2,969,281
West Feliciana Parish, PCR:
(Entergy Gulf States) 6.60%, 9/1/2028 4,000,000 4,035,480
(Gulf States) 5.80%, 12/1/2015 2,500,000 2,432,800
MARYLAND--.7%
Baltimore County, PCR (Bethlehem Steel Corp.)
7.50%, 6/1/2015 5,000,000 (a) 390,000
Maryland Industrial Development Financing
Authority, EDR (Medical Waste Associates
Limited Partnership) 8.75%, 11/15/2010 4,135,000 2,703,256
MASSACHUSETTS--1.0%
Massachusetts Health and Educational Facilities
Authority, Revenue (Beth Israel Hospital)
10.28%, 7/1/2025 (Insured; AMBAC) 3,250,000 (b) 3,388,385
Pittsfield, SWDR (Vicon Recovery Associates)
7.95%, 11/1/2004 865,000 867,638
MICHIGAN--2.3%
Michigan Hospital Finance Authority, HR
(Genesys Health System Obligated Group)
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 5,000,000 (d) 5,933,450
Michigan Strategic Fund, SWDR
(Genesee Power Station) 7.50%, 1/1/2021 4,000,000 3,893,560
MISSISSIPPI--3.1%
Lowndes County SWDR and PCR
(Weyerhaeuser Company Project) 6.70%, 4/1/2022 2,000,000 2,192,800
Mississippi Business Finance Corporation, PCR
(Systems Energy Resources, Inc.) 5.90%, 5/1/2022 11,070,000 10,661,849
MISSOURI--2.3%
Jackson County Industrial Development Authority,
Health Facilities Revenue
(Carondelet Health Corp.) 9%, 7/1/2020 6,485,000 6,500,434
Saint Louis Industrial Development Authority
(Saint Louis Convention) 7.25%, 12/15/2035 3,250,000 3,269,078
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
NEBRASKA--.9%
Nebraska Investment Finance Authority, SFMR
10.149%, 3/1/2026 3,500,000 (b,c) 3,976,875
NEVADA--3.4%
Clark County, IDR
(Southwest Gas Corporation) 6.50%, 12/1/2033 5,000,000 5,010,800
Washoe County (Reno-Sparks Convention) 6.40%,
7/1/2029 (Insured; FSA, Prerefunded 1/1/2010) 8,000,000 (d) 9,259,120
NEW HAMPSHIRE--3.5%
New Hampshire Business Finance Authority, PCR
(Public Service Co.):
6%, Series D 5/1/2021 (Insured; MBIA) 2,690,000 2,838,676
6%, Series E 5/1/2021 (Insured; MBIA) 6,000,000 6,356,880
New Hampshire Industrial Development Authority, PCR
(Connecticut Light) 5.90%, 11/1/2016 5,400,000 5,510,052
NEW JERSEY--4.4%
New Jersey Economic Development Authority:
First Mortgage Revenue (The Evergreens)
9.25%, 10/1/2022 (Prerefunded 10/1/2002) 4,925,000 (d) 5,140,469
Special Facilities Revenue (Continental Airlines, Inc.):
6.40%, 9/15/2023 7,000,000 6,268,150
7.20%, 11/15/2030 7,000,000 6,956,880
NEW YORK--1.2%
New York State Dormitory Authority, Revenue:
Judicial Facility Lease (Suffolk County)
9.50%, 4/15/2014 605,000 693,959
(Marymount Manhattan College) 6.25%, 7/1/2029 4,000,000 4,339,360
NORTH CAROLINA--.6%
North Carolina Eastern Municipal Power Agency,
Power Systems Revenue 6.70%, 1/1/2019 2,500,000 2,666,825
OHIO--4.0%
Cuyahoga County, HR (Metrohealth Systems)
6.15%, 2/15/2029 10,000,000 10,243,100
Ohio Air Quality Development Authority, PCR
6.10%, 8/1/2020 2,400,000 2,393,232
Ohio Water Development Authority, PCR
(Cleveland Electric) 6.10%, 8/1/2020 4,000,000 4,004,880
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------
OKLAHOMA--3.5%
Oklahoma Development Finance Authority, Revenue
(St. John Health System) 6%, 2/15/2029 9,000,000 9,442,800
Oklahoma Industries Authority,
Health System Revenue (Obligation Group)
5.75%, 8/15/2029 (Insured; MBIA) 5,000,000 5,167,300
OREGON--1.3%
Oregon Department of Transportation
Highway User Tax Revenue 5.50%, 11/15/2021 5,080,000 5,333,289
PENNSYLVANIA--5.4%
Allegheny County Port Authority, Special Transportation
Revenue 6.125%, 3/1/2029 (Insured; MBIA,
Prerefunded 3/1/2009) 4,750,000 (d) 5,440,128
Beaver County Industrial Development Authority, PCR
(Cleveland Electric) 7.625%, 5/1/2025 8,800,000 9,433,688
Pennsylvania Economic Development
Financing Authority RRR (Northhampton
Generating Project) 6.60%, 1/1/2019 4,200,000 4,260,354
Pennsylvania Housing Finance Agency,
Multi-Family Development Revenue
8.25%, 12/15/2019 283,000 286,894
Sayre Health Care Facilities Authority, Revenue
(Guthrie Health ) 6.25%, 12/1/2018 3,000,000 3,135,060
RHODE ISLAND--1.5%
Rhode Island Health & Educational Building
Corporation Higher Educational Facilities
(University of Rhode Island)
5.875%, 9/15/2029 (Insured; MBIA) 5,910,000 6,242,969
SOUTH CAROLINA--3.9%
South Carolina Medical Facilities, Hospital Facilities
Revenue 6%, 7/1/2019 5,000,000 5,225,750
Tobacco Settlement Revenue Management Authority,
Tobbacco Settlement Revenue 6.375%, 5/15/2028 11,095,000 11,122,848
TENNESSEE--3.9%
Memphis Center City Revenue Finance Corp.
Sports Facility Revenue
(Memphis Redbirds) 6.50%, 9/1/2028 6,000,000 5,973,780
Tennessee Housing Development Agency
(Homeownership Program):
6%, 1/1/2028 5,215,000 5,362,897
6.40%, 7/1/2031 4,810,000 5,099,033
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
----------------------------------------------------------------------------------------------------------------------------
TEXAS--19.4%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project)
7.50%, 12/1/2029 2,500,000 2,324,050
Austin (Convent Station) 6.70%, 1/1/2032 4,250,000 4,291,608
Gregg County Health Facilities Development
Corporation, HR (Good Shepherd Medical Center)
6.375%, 10/1/2025 2,500,000 2,701,250
Harris County Health Facilities Development
Corporation, HR:
(Memorial Hermann Healthcare)
6.375%, 6/1/2029 7,000,000 7,304,920
(St. Luke's Episcopal Hospital)
5.375%, 2/15/2026 5,000,000 4,862,500
Houston Airport System, Special Facilities Revenue
(Airport Improvement Continental Airlines)
6.125%, 7/15/2017 6,075,000 5,286,830
Katy Independent School District
6.125%, 2/15/2032 11,360,000 12,108,851
Sabine River Authority, PCR (TXU Electric):
6.45%, 6/1/2021 3,000,000 3,048,030
5.50%, 5/1/2022 6,000,000 6,043,080
Springhill Courtland Heights
Public Facility Corp. MFHR
5.85%, 12/1/2028 6,030,000 6,017,940
Texas:
(Veterans ) 6.00%, 12/1/2030 3,935,000 4,095,627
(Veterans Housing Assistance Program)
6.10%, 6/1/2031 8,510,000 8,864,356
Texas Department of Housing and Community Affairs,
Collateralized Home Mortgage Revenue
11.995%, 7/2/2024 6,000,000 (b) 6,757,500
Tomball Hospital Authority, Revenue
6.125%, 7/1/2023 2,250,000 2,219,738
Tyler Health Facilities Development Corp., HR
(East Texas Medical Center Regional
Health Care System) 6.75%, 11/1/2025 5,850,000 5,411,075
UTAH--1.3%
Carbon County, SWDR (Sunnyside Cogeneration):
7.10%, 8/15/2023 4,775,000 4,866,489
Zero Coupon 8/15/2024 1,545,000 418,695
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
VIRGINIA--6.6%
Henrico County Industrial Development Authority,
Revenue (Bon Secours Health Care System)
10.174%, 8/23/2027 7,500,000 (b) 8,704,425
Virginia Housing Development Authority:
MFHR 7.05%, 5/1/2018 9,650,000 9,855,449
Rental Housing 6.20%, 8/1/2024 8,520,000 8,976,076
WASHINGTON--6.6%
Energy Northwest, Revenue:
Electric 9.67%, 7/1/2017 10,000,000 (b,c) 11,628,500
(Wind Project) 6%, 7/1/2023 3,500,000 3,438,225
Port Seattle Special Facilities Revenue
(Northwest Airlines Project) 7.25%, 4/1/2030 2,300,000 2,139,598
Washington Higher Education Facilities Authority,
Revenue (Whitman College) 5.875%, 10/1/2029 10,000,000 10,354,000
WISCONSIN--11.7%
Badger TOB Asset Securitization Corp.
TOB Settlement Revenue 7%, 6/1/2028 13,500,000 14,035,950
Wisconsin Health and Educational Facilities Authority,
Revenue (Aurora Health Care, Inc.)
5.60%, 2/15/2029 12,175,000 11,144,873
Wisconsin Housing and Economic Development
Authority Homeownership Revenue:
11.148%, 7/1/2025 10,600,000 (b,c) 11,138,162
6.25%, 9/1/2027 12,340,000 12,742,407
WYOMING--3.9%
Sweetwater County, SWDR (FMC Corp.):
7%, 6/1/2024 3,305,000 3,325,524
6.90%, 9/1/2024 2,465,000 2,474,070
Wyoming Student Loan Corporation,
Student Loan Revenue
6.20%, 6/1/2024 5,000,000 5,220,600
6.25%, 6/1/2029 5,000,000 5,212,950
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $605,088,449) 598,602,190
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------
LOUISIANA--.2%
East Baton Rouge Parish, PCR, VRDN
(Exxon Project) 1.60% 800,000 (e) 800,000
WYOMING--.0%
Uinta County, PCR, VRDN
(Amoco Project) 1.55% 100,000 (e) 100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $900,000) 900,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $605,988,449) 143.1% 599,502,190
CASH AND RECEIVABLES (NET) 1.3% 5,347,027
PREFERRED STOCK, AT REDEMPTION VALUE (44.4%) (186,000,000)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 100.0% 418,849,217
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
EDR Economic Development Revenue
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
GNMA Government National Mortgage
Association
HR Hospital Revenue
IDR Industrial Development Revenue
LR Lease Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 21.4
AA Aa AA 23.4
A A A 22.2
BBB Baa BBB 17.8
BB Ba BB 7.8
B B B 2.2
F-1+, F-1 VMIG1,MIG1,P1 SP1,A1 .2
Not Rated (f) Not Rated (f) Not Rated (f) 5.0
100.0
(A) NON-INCOME PRODUCING SECURITY, INTEREST PAYMENTS IN DEFAULT.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE PERIODICALLY.
(C) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT MAY 31, 2002, THESE SECURITIES
AMOUNTED TO $42,043,537 OR 10.0% OF NET ASSETS.
(D) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT SECURITIES
WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST ON THE
MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING DATE.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S,
HAVE BEEN DETERMINED BY THE INVESTMENT ADVISOR TO BE OF COMPARABLE QUALITY TO
THOSE RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2002 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 605,988,449 599,502,190
Cash 62,675
Interest receivable 11,184,027
Prepaid expenses 231,305
610,980,197
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 383,911
Payable for investment securities purchased 5,240,223
Dividends payable to preferred shareholders 239,217
Commissions payable 66,650
Accrued expenses 200,979
6,130,980
--------------------------------------------------------------------------------
AUCTION PREFERRED STOCK, Series A, B and C, par value $.001 per share (7,440
shares issued and outstanding
at $25,000 per share liquidation)--Note 1 186,000,000
--------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS ($) 418,849,217
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Common Stock, par value, $.001 per share
(48,031,336 shares issued and outstanding) 48,031
Paid-in capital 447,817,858
Accumulated undistributed investment income--net 5,159,064
Accumulated net realized gain (loss) on investments (27,689,477)
Accumulated net unrealized appreciation (depreciation)
on investments (6,486,259)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS 418,849,217
--------------------------------------------------------------------------------
COMMON SHARES OUTSTANDING
(110 million shares of $.001 par value Common Stock authorized) 48,031,336
NET ASSET VALUE PER SHARE OF COMMON STOCK ($) 8.72
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2002 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 19,886,066
EXPENSES:
Management fee--Note 3(a) 1,499,836
Commission fees--Note 1 749,918
Administration fee--Note 3(a) 244,607
Professional fees 36,430
Shareholders' reports 33,218
Directors' fees and expenses--Note 3(b) 29,077
Shareholder servicing costs 21,440
Registration fees 17,434
Custodian fees 1,194
Miscellaneous 18,404
TOTAL EXPENSES 2,651,558
INVESTMENT INCOME--NET 17,234,508
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (3,736,678)
Net unrealized appreciation (depreciation) on investments 124,820
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (3,611,858)
DIVIDENDS ON PREFERRED STOCK (1,666,485)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 11,956,165
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
May 31, 2002 Year Ended
(Unaudited) November 30, 2001(a)
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 17,234,508 34,489,807
Net realized gain (loss) on investments (3,736,678) (634,617)
Net unrealized appreciation (depreciation)
on investments 124,820 5,593,035
Dividends on Preferred Stock (1,666,485) (5,551,745)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 11,956,165 33,896,480
--------------------------------------------------------------------------------
DIVIDENDS TO COMMON SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (13,452,906) (26,833,810)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
DIVIDENDS REINVESTED--NOTE 1(C) 337,170 1,865,059
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,159,571) 8,927,729
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 420,008,788 411,081,059
END OF PERIOD 418,849,217 420,008,788
Undistributed investment income--net 5,159,064 2,887,833
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (COMMON SHARES):
INCREASE IN COMMON SHARES OUTSTANDING
AS A RESULT OF DIVIDENDS REINVESTED 39,069 208,342
(A) RESTATED TO CONFORM TO CURRENT YEAR'S PRESENTATION.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements and market price data for the fund's shares.
Six Months Ended
May 31, 2002 Year Ended November 30,
-----------------------------------------------------------------
(Unaudited)(a) 2001 2000 1999 1998 1997
--------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 8.75 8.60 8.56 9.52 9.49 9.54
Investment Operations:
Investment income--net .36(b) .72 .70 .58 .60 .62
Net realized and unrealized
gain (loss) on investments (.08) .11 .06 (.90) .05 (.01)
Dividends on Preferred Stock
from net investment income (.03) (.12) (.16) (.02) -- --
Total from Investment Operations .25 .71 .60 (.34) .65 .61
Distributions to
Common Shareholders:
Dividends from investment
income--net (.28) (.56) (.56) (.58) (.62) (.66)
Capital Stock transactions--
net effect of Preferred
Stock offering -- -- (.00)(c) (.04) -- --
Net asset value, end of period 8.72 8.75 8.60 8.56 9.52 9.49
Market value, end of period 8.41 8.45 8 1_8 7 11_16 10 3_16 10 5_8
--------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)(D) 2.86(e) 10.72 13.30 (19.36) 2.23 16.60
Six Months Ended
May 31, 2002 Year Ended November 30,
-------------------------------------------------------------------
(Unaudited)(a) 2001 2000 1999 1998 1997
--------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets applicable
to Comon Stock 1.28(f,g,h) 1.27(f,g) 1.34(f,g) .91(f,g) .81 .81
Ratio of net investment income
to average net assets
applicable to Common Stock 8.32(f,g,h) 8.10(f,g) 8.25(f,g) 6.64(f,g) 6.26 6.55
Portfolio Turnover Rate 17.01(e) 13.36 27.58 32.58 6.33 2.95
Asset coverage of Preferred
Stock, end of period 325 326 321 320 -- --
--------------------------------------------------------------------------------------------------------------------------------
Net Assets, net of Preferred
Stock, end of period
($ x 1,000) 418,849 420,009 411,081 408,958 453,893 446,152
Preferred Stock outstanding,
end of period ($ x 1,000)(i) 186,000 186,000 186,000 186,000 -- --
(A) AS REQUIRED, EFFECTIVE DECEMBER 1, 2001, THE FUND HAS ADOPTED THE PROVISIONS
OF THE AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES AND BEGAN
AMORTIZING DISCOUNT OR PREMIUM ON A SCIENTIFIC BASIS FOR DEBT SECURITIES ON A
DAILY BASIS. THE EFFECT OF THIS CHANGE FOR THE PERIOD ENDED MAY 31, 2002 WAS TO
INCREASE NET INVESTMENT INCOME PER SHARE AND DECREASE NET REALIZED AND
UNREALIZED GAIN (LOSS) ON INVESTMENTS PER SHARE BY LESS THAN $.01 AND INCREASE
THE RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS FROM 8.29% TO 8.32%.
PER SHARE DATA AND RATIOS/SUPPLEMENTAL DATA FOR PERIODS PRIOR TO DECEMBER 1,
2001 HAVE NOT BEEN RESTATED TO REFLECT THIS CHANGE IN PRESENTATION.
(B) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTHS END.
(C) AMOUNT REPRESENTS LESS THAN $.01 PER SHARE.
(D) CALCULATED BASED ON MARKET VALUE.
(E) NOT ANNUALIZED.
(F) DOES NOT REFLECT THE EFFECT OF DIVIDENDS TO PREFERRED STOCK SHAREHOLDERS.
(G) THE RATIO OF EXPENSES TO TOTAL AVERAGE NET ASSETS AND THE RATIO OF NET
INVESTMENT INCOME TO TOTAL AVERAGE NET ASSETS WERE .88% AND 5.75%, RESPECTIVELY,
FOR THE SIX MONTHS ENDED MAY 31, 2002, .89% AND 5.64%, RESPECTIVELY, FOR THE
YEAR ENDED NOVEMBER 30, 2001, .92% AND 5.64%, RESPECTIVELY, FOR THE YEAR ENDED
NOVEMBER 30, 2000 AND .84% AND 6.13%, RESPECTIVELY, FOR THE YEAR ENDED NOVEMBER
30, 1999.
(H) ANNUALIZED.
(I) PREFERRED SHARES WERE ISSUED ON SPTEMBER 22, 1999.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Strategic Municipal Bond Fund, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
closed-end management investment company. The fund's investment objective is to
maximize current income exempt from federal income tax to the extent believed by
the fund's investment adviser to be consistent with the preservation of capital.
The Dreyfus Corporation ("Dreyfus") serves as the fund's investment adviser and
administrator. Dreyfus is a direct subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Financial Corporation ("Mellon"). Boston Safe
Deposit and Trust Company (the "Custodian") acts as the fund's custodian. The
Custodian is a wholly-owned subsidiary of Mellon. PFPC Global Fund Services
("PFPC"), a subsidiary of PNC Bank ("PNC"), serves as the fund's transfer agent,
dividend-paying agent, registrar and plan agent. The fund's Common Stock trades
on the New York Stock Exchange under the ticker symbol DSM.
The fund has outstanding 2,480 shares of each of Series A, Series B and Series C
for a total of 7,440 shares of Auction Preferred Stock ("APS"), with a
liquidation preference of $25,000 per share (plus an amount equal to accumulated
but unpaid dividends upon liquidation) . APS dividend rates are determined
pursuant to periodic auctions. Banker's Trust, as Auction Agent, receives a fee
from the fund for its services in connection with such auctions. The fund also
compensates broker-dealers generally at an annual rate of .25% of the purchase
price of the shares of APS placed by the broker-dealer in an auction.
The fund is subject to certain restrictions relating to the APS. Failure to
comply with these restrictions could preclude the fund from declaring any
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of APS at liquidation value.
The holders of the APS, voting as a separate class, have the right to elect at
least two directors. The holders of the APS vote as a separat
class on certain other matters, as required by law. The fund has designated
Robin A. Pringle and John E. Zuccotti to represent holders of APS on the fund's
Board of Directors.
The fund' s financial statements are prepared in accordance with accounting
principles generally accepted in the United States, which may require the use of
management estimates and assumptions. Actual results could differ from those
estimates.
(a) Portfolio valuation: Investments in municipal debt securities (excluding
options and financial futures on municipal and U.S. Treasury securities) are
valued on the last business day of each week and month by an independent pricing
service (" Service" ) approved by the Board of Directors. Investments for which
quoted bid prices are readily available and are representative of the bid side
of the market in the judgment of the Service are valued at the mean between the
quoted bid prices (as obtained by the Service from dealers in such securities)
and asked prices (as calculated by the Service based upon its evaluation of the
market for such securities). Other investments (which constitute a majority of
the portfolio securities) are carried at fair value as determined by the
Service, based on methods which include consideration of: yields or prices of
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal securities and U.S. Treasury securities are
valued at the last sales price on the securities exchange on which such
securities are primarily traded or at the last sales price on the national
securities market on the last business day of each week and month.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of discounts and premiums on investments, is earned
from settlement date and recognized on the accrual basis. Securities purchased
or sold on a when-issued or delayed-delivery basis may be settled a month or
more after the trade date.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(c) Dividends to shareholders of Common Stock (" Common Shareholder(s)"):
Dividends are recorded on the ex-dividend date. Dividends from investment
income-net are declared and paid monthly. Dividends from net realized capital
gain, if any, are normally declared and paid at least annually. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the fund not to distribute such gain.
For Common Shareholders who elect to receive their distributions in additional
shares of the fund, in lieu of cash, such distributions will be reinvested at
the lower of the market price or net asset value per share (but not less than
95% of the market price) based on the record date's respective prices. If the
net asset value per share on the record date is lower than the market price per
share, shares will be issued by the fund at the record date's net asset value on
the payable date of the distribution. If net asset value per share is less than
95% of the market value, shares will be issued by the fund at 95% of the market
value. If the market price is lower than the net assets value per share on the
record date, PFPC will purchase fund shares in the open market commencing on the
payable date and reinvest those shares accordingly. As a result of purchasing
fund shares in the open market, fund shares outstanding will not be affected by
this form of reinvestment.
On May 30, 2002, the Board of Directors declared a cash dividend to Common
Shareholders of $.0467 per share from investment income-net, payable on June 27,
2002 to Common Shareholders of record as of the close of business on June 13,
2002.
(d) Dividends to Shareholders of APS: For APS, dividends are currently reset
annually for Series A and B and every 7 days for Series C. The dividend rate in
effect at May 31, 2002 were as follows: Series A -2.07%, Series B -2.25% and
Series C -1.50% .
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the
Internal Revenue Code of 1986 as amended, and to make distributions of income
and net realized capital gain sufficient to relieve it from substantially all
federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $23,760,000
available for federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to November 30, 2001. If not
applied, $4,499,000 of the carryover expires in fiscal 2002, $9,312,000 expires
in fiscal 2003, $3,964,000 expires in fiscal 2007, $5,543,000 expires in fiscal
2008 and $442,000 expires in fiscal 2009.
The tax character of distributions paid to Common shareholders during the fiscal
year ended November 30, 2001 was as follows: tax exempt income $26,833,810. The
tax character of current year distributions will be determined at the end of the
current fiscal year.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund based on prevailing market rates in effect at the time of borrowings.
During the period ended May 31, 2002, the fund did not borrow under the line of
credit.
NOTE 3--Investment Advisory Fee, Administration Fee and Other Transactions With
Affiliates:
(a) The fee payable by the fund, pursuant to the provisions of an Investment
Advisory Agreement with Dreyfus, is payable monthly based on an annual rate of
..50 of 1% of the value of the fund's average daily net assets. The fund also has
an Administration Agreement with Dreyfus, a Custody Agreement with the Custodian
and a Transfer Agency and Registrar Agreement with PFPC. The fund pays in the
aggregate for administration, custody and transfer agency services a The Fun
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
monthly fee based on an annual rate of .25 of 1% of the value of the fund's
average daily net assets; out-of pocket transfer agency and custody expenses are
paid separately by the fund.
(b) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation and the Director Emeritus receives 50% of such compensation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended May 31, 2002, amounted to
$114,860,835 and $100,386,821, respectively.
At May 31, 2002, accumulated net unrealized depreciation on investments was
$6,486,259, consisting of $22,317,014 gross unrealized appreciation and
$28,803,273 gross unrealized depreciation.
At May 31, 2002, the cost of investments for federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 5--Change in Accounting Principle:
(a) As required, effective December 1, 2001, the fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing discount or premium on a scientific basis for debt securities on a
daily basis. Prior to December 1, 2001, the fund amortized premiums on debt
securities on a scientific basis but recognized market discount upon
disposition. The cumulative effect of this accounting change had no impact on
total net assets of the fund, but resulted in a $156,114 increase in accumulated
undistributed investment income-net and a corresponding $156,114 decrease in
accumulated net unrealized appreciation (depreciation), based on securities held
by the fund on November 30, 2001.
The effect of this change for the period ended May 31, 2002 was to increase net
investment income by $51,786, decrease net unrealized appreciation
(depreciation) by $9,028 and decrease net realized gains (losses) by $42,758.
The statement of changes in net assets and financial highlights for the prior
periods have not been restated to reflect this change in presentation.
(b) Effective December 1, 2000, the fund adopted the classification requirement
of EITF D-98, Classification and Measurement of Redeemable Securities, EITF D-98
requires that preferred stock for which its redemption is outside of the fund's
control should be presented outside of net assets in the statement of assets and
liabilities. The redemption of the fund's preferred stock is outside of the
control of the fund because of provisions in the fund's Articles Supplementary
Creating Three Series of Auction Preferred Stock relating to compliance with
rating agency guidelines. In adopting EITF D-98, the fund's net assets as of
December 1, 2000 in the statement of changes in net assets is restated by
excluding preferred stock valued at $186,000,000 at that date. The adoption also
resulted in dividends on preferred stock being reclassified from distributions
on the statement of changes in net assets to a separate line item within the
statement of operations. This resulted in a decrease of $1,666,485 and
$5,551,745 to net assets from operations for the periods ended May 31, 2002 and
November 30, 2001, respectively. As part of the adoption, per share
distributions of dividends on preferred stock was reclassified from
distributions to amounts from investment operations for each period presented in
the financial highlights.
The Fund
PROXY RESULTS (Unaudited)
During the period ended May 31, 2002, shareholders of common stock and Auction
Preferred Stock, voted together as a single class (except as noted) on the
following proposals presented at the annual shareholders' meeting held May 10,
2002. The description of each proposal and the number of shares voted are as
follows:
Shares
-------------------------------------
For Authority Withheld
-------------------------------------
To elect three Class III Directors:((+))
David W. Burke 42,828,211 736,910
Hans C. Mautner 42,831,817 733,304
John E. Zuccotti((+)(+)) 6,488 9
((+)) THE TERMS OF THESE CLASS III DIRECTORS EXPIRE IN 2005.
((+)(+)) ELECTED SOLELY BY APS HOLDERS.
NOTES
OFFICERS AND DIRECTORS
Dreyfus Strategic Municipal Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
DIRECTORS
Joseph S. DiMartino
David W. Burke
Hodding Carter, III
Ehud Houminer
Richard C. Leone
Hans C. Mautner
Robin A. Pringle ((+))
John E. Zuccotti ((+)
((+)) AUCTION PREFERRED STOCK DIRECTORS
OFFICERS
President
Stephen E. Canter
Treasurer
James Windels
Executive Vice President
Paul Disdier
Vice President
Mark N. Jacobs
Secretary
John B. Hammalian
Assistant Secretary
Steven F. Newman
Assistant Secretary
Michael A. Rosenberg
Assistant Treasurer
Gregory S. Gruber
Kenneth J. Sandgren
PORTFOLIO MANAGERS
Joseph P. Darcy
A. Paul Disdier
Douglas J. Gaylor
Joseph A. Irace
PORTFOLIO MANAGERS (CONTINUED)
Colleen A. Meehan
Richard J. Moynihan
W. Michael Petty
Scott Sprauer
Samuel J. Weinstock
Monica S. Wieboldt
INVESTMENT ADVISER AND ADMINISTRATOR
The Dreyfus Corporation
CUSTODIAN
Boston Safe Deposit and Trust Company
COUNSEL
Stroock & Stroock & Lavan LLP
TRANSFER AGENT, DIVIDEND-PAYING AGENT, REGISTRAR AND PLAN AGENT
PFPC Global Fund Services
(Common Stock)
Bankers Trust (Auction Preferred Stock)
AUCTION AGENT
Bankers Trust (Auction Preferred Stock)
STOCK EXCHANGE LISTING
NYSE Symbol: DSM
INITIAL SEC EFFECTIVE DATE
11/22/89
THE NET ASSET VALUE APPEARS IN THE FOLLOWING PUBLICATIONS: BARRON'S, CLOSED-END
BOND FUNDS SECTION UNDER THE HEADING "MUNICIPAL BOND FUNDS" EVERY MONDAY; WALL
STREET JOURNAL, MUTUAL FUNDS SECTION UNDER THE HEADING "CLOSED-END FUNDS" EVERY
MONDAY; NEW YORK TIMES, BUSINESS SECTION UNDER THE HEADING "CLOSED-END BOND
FUNDS--MUNICIPAL BOND FUNDS" EVERY MONDAY.
NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED, THAT THE FUND MAY PURCHASE SHARES OF ITS COMMON
STOCK IN THE OPEN MARKET WHEN IT CAN DO SO AT PRICES BELOW THE THEN CURRENT NET
ASSET VALUE PER SHARE.
The Fund
For More Information
Dreyfus Strategic Municipal
Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Boston Safe Deposit and Trust Company
One Boston Place
Boston, MA 02108
Transfer Agent &
Dividend-Paying Agent,
Registrar and Disbursing Agent
PFPC Global Fund Services
(Common Stock)
101 Federal Street
Boston, MA 02110
(c) 2002 Dreyfus Service Corporation 852SA0502