UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER
REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
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Investment Company Act file number |
811-5877 |
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Dreyfus Strategic Municipal Bond Fund, Inc. |
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(Exact name of Registrant as specified in charter) |
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c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
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(Address of principal executive offices) (Zip code) |
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Janette E. Farragher, Esq. 200 Park Avenue New York, New York 10166 |
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(Name and address of agent for service) |
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Registrant's telephone number, including area code: |
(212) 922-6000 |
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Date of fiscal year end:
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11/30 |
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Date of reporting period: |
5/31/12 |
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Contents |
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THE FUND |
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| 2 |
A Letter from the Chairman and CEO |
| 3 |
Discussion of Fund Performance |
| 6 |
Statement of Investments |
| 22 |
Statement of Assets and Liabilities |
| 23 |
Statement of Operations |
| 24 |
Statement of Cash Flows |
| 25 |
Statement of Changes in Net Assets |
| 26 |
Financial Highlights |
| 28 |
Notes to Financial Statements |
| 41 |
Officers and Directors |
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FOR MORE INFORMATION |
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Back Cover |
Dreyfus
Strategic Municipal Bond Fund, Inc.
The Fund
A LETTER FROM THE CHAIRMAN AND CEO
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Strategic Municipal Bond Fund, Inc., covering the six-month period from December 1, 2011, through May 31, 2012. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
Municipal bonds have continued to represent one of the better performing asset classes in U.S. financial markets. Prices have been supported by a number of positive influences, including steady demand for a relatively tight supply of newly issued securities, attractive after-tax current yields compared to government-guaranteed U.S. Treasury securities and improved fiscal conditions for many state and local issuers.
Despite recent weakness in employment data, we believe that U.S. economic trends remain favorable, as evidenced by signs of strength in some of the domestic economy’s more economically sensitive areas. For example, in the automobile industry, new cars offer improved gas mileage, the average age of the auto fleet is old, and credit is widely available at a time when household debt-service ratios have dropped sharply. Even residential construction has moved into a sustainable uptrend, in our opinion, as homebuilders have seen a rise in orders. On the other hand, net exports may prove to be a slight drag on domestic growth since the economy in the United States is stronger than in many of its trading partners. On the whole, we expect near-trend growth in the U.S. economy for the remainder of 2012.
As always, we encourage you to discuss our observations with your financial advisor.
Thank you for your continued confidence and support.
Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
June 15, 2012
2
DISCUSSION OF FUND PERFORMANCE
For the period of December 1, 2011, through May 31, 2012, as provided by Daniel Barton and Steven Harvey, Portfolio Managers
Fund and Market Performance Overview
For the six-month period ended May 31, 2012, Dreyfus Strategic Municipal Bond Fund achieved a total return of 12.56% on a net-asset-value basis.1 Over the same period, the fund provided aggregate income dividends of $0.285 per share, which reflects a distribution rate of 6.26%.2
Falling long-term interest rates and favorable supply-and-demand dynamics fueled strong performance among municipal bonds over the reporting period. The fund’s returns benefited from a longer-than-average duration posture and its holdings of lower rated securities.
The Fund’s Investment Approach
The fund seeks to maximize current income exempt from federal income tax to the extent believed by Dreyfus to be consistent with the preservation of capital. In pursuing this goal, the fund invests at least 80% of its assets in municipal bonds. Under normal market conditions, the weighted average maturity of the fund’s portfolio is expected to exceed 10 years. Under normal market conditions, the fund invests at least 80% of its net assets in municipal bonds considered investment grade or the unrated equivalent as determined by Dreyfus.
The fund also has issued auction-rate preferred stock (ARPS), a percentage of which remains outstanding from its initial public offering, and has invested the proceeds in a manner consistent with its investment objective. This, along with the fund’s participation in secondary inverse floater structures, has the effect of “leveraging” the portfolio, which can magnify gain and loss potential depending on market conditions.
Over time, many of the fund’s older, higher yielding bonds have matured or were redeemed by their issuers.We have attempted to replace those bonds with investments consistent with the fund’s investment policies. We have also sought to upgrade the fund with newly issued bonds that, in our opinion, have better structural or income characteristics than
| The Fund | 3 |
DISCUSSION OF FUND PERFORMANCE (continued)
existing holdings.When such opportunities arise, we usually look to sell bonds that are close to their optional redemption date or maturity.
Municipal Bonds Rallied as Economic Concerns Eased
Most U.S. financial markets were in the midst of a rally at the start of the reporting period, as investors responded positively to improved employment data in a recovering U.S. economy and efforts by European policymakers to address the region’s sovereign debt crisis. Investors grew more tolerant of risks, and they shifted their attention away from traditional safe havens and toward riskier assets. As a result, lower rated municipal bonds that had been punished earlier in 2011 led the market rebound, while higher quality municipal bonds trailed market averages.
However, new developments in the spring of 2012 called the sustainability of these positive macroeconomic influences into question.The U.S. labor market’s recovery slowed as the public sector shed jobs and the private sector’s employment gains proved more anemic than expected, and austerity measures in Europe encountered political resistance, endangering the region’s economic prospects.
Positive supply-and-demand forces also supported municipal bond prices, as political pressure led to reduced borrowing among states and municipalities for capital projects. Meanwhile, demand for tax-exempt securities remained robust from individual and institutional investors seeking competitive after-tax yields in a low interest-rate environment. From a credit quality perspective, the fiscal condition of most states has continued to improve.Tax receipts generally have increased, and many state and local governments have taken steps to rein in spending.
Longer Maturities Buoyed Relative Performance
The search by investors for high current yields led them to focus on municipal bonds with longer maturities, and the fund benefited from this development when a relatively long average duration and our leveraging strategy boosted its exposure to falling long-term yields. In addition, the fund’s focus on revenue-backed municipal bonds buoyed relative results, with particularly strong contributions from securities issued on behalf of hospitals and industrial development projects. The fund also received
4
above-average results from Puerto Rico bonds and bonds backed by the states’ settlement of litigation with U.S. tobacco companies. Finally, overweighted exposure to BBB-rated and high yield bonds fared well when investors’ risk appetites increased early in the reporting period.
The fund achieved less attractive results from its ongoing efforts to upgrade its overall credit quality, which proved counterproductive during the reporting period when lower quality securities continued to rally. Investments in traditionally defensive, high-quality bonds from municipal water and sewer facilities ranked among the fund’s weaker areas.
Prepared for a Changing Market Environment
Municipal bonds ended the reporting period attractively valued compared to U.S.Treasury securities, and most issuers’ fiscal conditions have improved. However, the U.S. economy remains vulnerable to unexpected shocks, and higher yielding and longer maturity bonds have become more richly valued after recent rallies. Consequently, while we have continued to maintain our duration, credit quality and leveraging strategies, we may adjust the fund’s composition as economic conditions, supply-and-demand dynamics and other market forces evolve.
June 15, 2012
| Bond funds are subject generally to interest rate, credit, liquidity and market risks, to varying degrees, | |
| all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, | |
| bond prices are inversely related to interest-rate changes, and rate increases can cause price declines. | |
| High yield bonds are subject to increased credit risk and are considered speculative in terms of the | |
| issuer’s perceived ability to continue making interest payments on a timely basis and to repay | |
| principal upon maturity. | |
| The use of leverage may magnify the fund’s gains or losses. For derivatives with a leveraging | |
| component, adverse changes in the value or level of the underlying asset can result in a loss that is | |
| much greater than the original investment in the derivative. | |
| 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. Return figures provided reflect the | |
| absorption of certain fund expenses by The Dreyfus Corporation pursuant to an undertaking in | |
| effect through November 30, 2012, at which time it may be extended, terminated or modified. | |
| Had these expenses not been absorbed, the fund’s returns would have been lower. | |
| 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, | |
| adjusted for any capital gain distributions. |
| The Fund | 5 |
| STATEMENT OF INVESTMENTS |
| May 31, 2012 (Unaudited) |
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments—143.8% | Rate (%) | Date | Amount ($) | Value ($) | |
| Alabama—.7% | |||||
| Jefferson County, | |||||
| Limited Obligation | |||||
| School Warrants | 5.25 | 1/1/17 | 2,000,000 | 2,003,840 | |
| Jefferson County, | |||||
| Limited Obligation | |||||
| School Warrants | 5.00 | 1/1/24 | 1,000,000 | 967,510 | |
| Alaska—2.2% | |||||
| Northern Tobacco Securitization | |||||
| Corporation of Alaska, Tobacco | |||||
| Settlement Asset-Backed Bonds | 5.00 | 6/1/32 | 2,500,000 | 2,127,525 | |
| Northern Tobacco Securitization | |||||
| Corporation of Alaska, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | 5.00 | 6/1/46 | 9,465,000 | 7,147,873 | |
| Arizona—7.5% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (Salt River Project | |||||
| Agricultural Improvement | |||||
| and Power District, | |||||
| Salt River Project Electric | |||||
| System Revenue) | 5.00 | 1/1/38 | 13,198,367 | a,b | 14,570,705 |
| Glendale Western Loop 101 Public | |||||
| Facilities Corporation, Third | |||||
| Lien Excise Tax Revenue | 7.00 | 7/1/33 | 6,010,000 | 6,517,785 | |
| Pima County Industrial Development | |||||
| Authority, Education Revenue | |||||
| (American Charter Schools | |||||
| Foundation Project) | 5.50 | 7/1/26 | 4,000,000 | 3,764,320 | |
| Pima County Industrial Development | |||||
| Authority, IDR (Tucson | |||||
| Electric Power Company Project) | 5.75 | 9/1/29 | 6,000,000 | 6,382,080 | |
| Salt Verde Financial Corporation, | |||||
| Senior Gas Revenue | 5.00 | 12/1/37 | 1,000,000 | 1,023,310 | |
| California—16.0% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (Los Angeles | |||||
| Department of Airports, Senior | |||||
| Revenue (Los Angeles | |||||
| International Airport)) | 5.00 | 5/15/31 | 5,247,500 | a,b,c | 5,963,416 |
| California, | |||||
| GO (Various Purpose) | 5.75 | 4/1/31 | 7,800,000 | 9,113,442 |
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| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| California (continued) | |||||
| California, | |||||
| GO (Various Purpose) | 6.00 | 3/1/33 | 2,250,000 | 2,714,423 | |
| California, | |||||
| GO (Various Purpose) | 6.50 | 4/1/33 | 5,000,000 | 6,089,250 | |
| California, | |||||
| GO (Various Purpose) | 6.00 | 11/1/35 | 5,000,000 | 5,948,550 | |
| California State Public Works | |||||
| Board, LR (The Regents of the | |||||
| University of California) | |||||
| (Various University of | |||||
| California Projects) | 5.00 | 4/1/34 | 3,000,000 | 3,277,920 | |
| California Statewide Communities | |||||
| Development Authority, Revenue | |||||
| (Front Porch Communities and | |||||
| Services Project) | 5.13 | 4/1/37 | 4,975,000 | b | 5,045,844 |
| Golden State Tobacco | |||||
| Securitization Corporation, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | 4.50 | 6/1/27 | 2,000,000 | 1,646,820 | |
| Los Angeles Department of Water | |||||
| and Power, Power System Revenue | 5.00 | 7/1/34 | 2,885,000 | 3,206,360 | |
| Los Angeles Department of Water | |||||
| and Power, Water System Revenue | 5.00 | 7/1/43 | 5,000,000 | 5,616,650 | |
| Sacramento City Unified School | |||||
| District, GO (Insured; Assured | |||||
| Guaranty Municipal Corp.) | 0.00 | 7/1/24 | 5,220,000 | d | 3,164,625 |
| Sacramento County, | |||||
| Airport System Subordinate and | |||||
| Passenger Facility Charges | |||||
| Grant Revenue | 6.00 | 7/1/35 | 4,000,000 | c | 4,594,280 |
| San Buenaventura, | |||||
| Revenue (Community Memorial | |||||
| Health System) | 7.50 | 12/1/41 | 1,500,000 | 1,782,105 | |
| San Diego Public Facilities | |||||
| Financing Authority, Senior | |||||
| Sewer Revenue | 5.25 | 5/15/34 | 2,500,000 | 2,849,875 | |
| Santa Margarita/Dana Point | |||||
| Authority, Revenue (Santa | |||||
| Margarita Water District | |||||
| Improvement Districts | |||||
| Numbers 2,3 and 4) | 5.13 | 8/1/38 | 5,000,000 | 5,471,600 |
| The Fund | 7 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| California (continued) | |||||
| Tuolumne Wind Project Authority, | |||||
| Revenue (Tuolumne | |||||
| Company Project) | 5.88 | 1/1/29 | 2,000,000 | 2,370,660 | |
| Colorado—.2% | |||||
| Colorado Housing and Finance | |||||
| Authority, Single Family | |||||
| Program Senior and Subordinate | |||||
| Bonds (Collateralized; FHA) | 6.60 | 8/1/32 | 830,000 | 891,022 | |
| Connecticut—1.2% | |||||
| Connecticut Resources Recovery | |||||
| Authority, Special Obligation | |||||
| Revenue (American REF-FUEL | |||||
| Company of Southeastern | |||||
| Connecticut Project) | 6.45 | 11/15/22 | 4,985,000 | 4,992,328 | |
| Florida—4.6% | |||||
| Mid-Bay Bridge Authority, | |||||
| Springing Lien Revenue | 7.25 | 10/1/34 | 5,000,000 | c | 5,904,150 |
| Palm Beach County Health | |||||
| Facilities Authority, | |||||
| Retirement Community Revenue | |||||
| (Adult Communities Total | |||||
| Services, Inc. Retirement— | |||||
| Life Communities, Inc. | |||||
| Obligated Group) | 5.50 | 11/15/33 | 6,825,000 | 7,327,730 | |
| Saint Johns County Industrial | |||||
| Development Authority, Revenue | |||||
| (Presbyterian Retirement | |||||
| Communities Project) | 6.00 | 8/1/45 | 3,500,000 | 3,836,455 | |
| South Lake County Hospital | |||||
| District, Revenue (South Lake | |||||
| Hospital, Inc.) | 6.25 | 4/1/39 | 2,500,000 | 2,740,100 | |
| Georgia—3.7% | |||||
| Atlanta, | |||||
| Airport General Revenue | 5.00 | 1/1/26 | 3,500,000 | c | 3,868,480 |
| Atlanta, | |||||
| Water and Wastewater Revenue | 6.00 | 11/1/28 | 4,865,000 | 5,809,248 | |
| Atlanta, | |||||
| Water and Wastewater Revenue | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 5.25 | 11/1/34 | 1,000,000 | 1,129,790 |
8
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Georgia (continued) | |||||
| Augusta, | |||||
| Airport Revenue | 5.45 | 1/1/31 | 2,500,000 | c | 2,441,950 |
| Savannah Economic Development | |||||
| Authority, EIR (International | |||||
| Paper Company Project) | 6.20 | 8/1/27 | 2,670,000 | 2,794,796 | |
| Hawaii—1.2% | |||||
| Hawaii Department of Budget and | |||||
| Finance, Special Purpose | |||||
| Revenue (Hawai’i Pacific | |||||
| Health Obligated Group) | 5.63 | 7/1/30 | 2,500,000 | 2,742,850 | |
| Hawaii Department of Budget and | |||||
| Finance, Special Purpose | |||||
| Revenue (Hawaiian Electric | |||||
| Company, Inc. and | |||||
| Subsidiary Projects) | 6.50 | 7/1/39 | 2,000,000 | 2,321,740 | |
| Idaho—.0% | |||||
| Idaho Housing and Finance | |||||
| Association, SFMR | |||||
| (Collateralized; FNMA) | 6.35 | 1/1/30 | 185,000 | 185,335 | |
| Illinois—2.4% | |||||
| Chicago, | |||||
| General Airport Third Lien | |||||
| Revenue (Chicago O’Hare | |||||
| International Airport) | 5.63 | 1/1/35 | 3,000,000 | c | 3,482,310 |
| Illinois Finance Authority, | |||||
| Recovery Zone Facility Revenue | |||||
| (Navistar International | |||||
| Corporation Project) | 6.50 | 10/15/40 | 2,000,000 | 2,212,120 | |
| Illinois Finance Authority, | |||||
| Revenue (Sherman | |||||
| Health Systems) | 5.50 | 8/1/37 | 1,020,000 | 1,054,853 | |
| Railsplitter Tobacco Settlement | |||||
| Authority, Tobacco | |||||
| Settlement Revenue | 6.00 | 6/1/28 | 3,000,000 | 3,448,530 | |
| Indiana—.7% | |||||
| Indianapolis Local Public | |||||
| Improvement Bond Bank, | |||||
| Revenue (Indianapolis | |||||
| Airport Authority Project) | |||||
| (Insured; AMBAC) | 5.00 | 1/1/36 | 3,000,000 | c | 3,111,330 |
| The Fund | 9 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Iowa—.4% | |||||
| Tobacco Settlement Authority of | |||||
| Iowa, Tobacco Settlement | |||||
| Asset-Backed Bonds | 5.60 | 6/1/34 | 2,000,000 | 1,782,320 | |
| Kentucky—.3% | |||||
| Louisville/Jefferson County Metro | |||||
| Government, Health Facilities | |||||
| Revenue (Jewish Hospital and | |||||
| Saint Mary’s HealthCare, Inc. | |||||
| Project) (Prerefunded) | 6.13 | 2/1/18 | 1,000,000 | e | 1,272,530 |
| Louisiana—1.9% | |||||
| Lakeshore Villages Master | |||||
| Community Development | |||||
| District, Special | |||||
| Assessment Revenue | 5.25 | 7/1/17 | 1,987,000 | f | 795,038 |
| Louisiana Local Government | |||||
| Environmental Facilities and | |||||
| Community Development | |||||
| Authority, Revenue (Westlake | |||||
| Chemical Corporation Projects) | 6.75 | 11/1/32 | 4,000,000 | 4,452,760 | |
| Louisiana Public Facilities | |||||
| Authority, Revenue (Belle | |||||
| Chasse Educational | |||||
| Foundation Project) | 6.50 | 5/1/31 | 2,750,000 | 3,098,508 | |
| Maine—.6% | |||||
| Maine Health and Higher | |||||
| Educational Facilities | |||||
| Authority, Revenue | |||||
| (MaineGeneral Medical | |||||
| Center Issue) | 7.50 | 7/1/32 | 2,000,000 | 2,431,540 | |
| Maryland—.4% | |||||
| Maryland Economic Development | |||||
| Corporation, Senior Student | |||||
| Housing Revenue (University of | |||||
| Maryland, Baltimore Project) | 5.75 | 10/1/33 | 2,550,000 | 1,723,188 | |
| Massachusetts—12.2% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (Massachusetts Health | |||||
| and Educational Facilities | |||||
| Authority, Revenue | |||||
| (Massachusetts Institute of | |||||
| Technology Issue)) | 5.00 | 7/1/38 | 10,200,000 | a,b | 11,669,208 |
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| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Massachusetts (continued) | |||||
| JPMorgan Chase Putters/Drivers | |||||
| Trust (Massachusetts, | |||||
| Consolidated Loan) | 5.00 | 4/1/19 | 6,400,000 | a,b | 7,629,056 |
| JPMorgan Chase Putters/Drivers | |||||
| Trust (Massachusetts Development | |||||
| Finance Agency, Revenue | |||||
| (Harvard University Issue)) | 5.25 | 2/1/34 | 10,000,000 | a,b | 12,039,800 |
| Massachusetts Development Finance | |||||
| Agency, Revenue (Tufts Medical | |||||
| Center Issue) | 7.25 | 1/1/32 | 2,500,000 | 3,031,575 | |
| Massachusetts Health and | |||||
| Educational Facilities | |||||
| Authority, Revenue (Civic | |||||
| Investments Issue) | |||||
| (Prerefunded) | 9.00 | 12/15/12 | 1,300,000 | e | 1,378,559 |
| Massachusetts Health and | |||||
| Educational Facilities | |||||
| Authority, Revenue (Suffolk | |||||
| University Issue) | 6.25 | 7/1/30 | 5,000,000 | 5,759,350 | |
| Massachusetts Housing Finance | |||||
| Agency, Housing Revenue | 7.00 | 12/1/38 | 4,575,000 | 5,235,584 | |
| Massachusetts Housing Finance | |||||
| Agency, SFHR | 5.00 | 12/1/31 | 5,575,000 | 5,728,814 | |
| Michigan—8.5% | |||||
| Detroit, | |||||
| Sewage Disposal System | |||||
| Senior Lien Revenue | |||||
| (Insured; Assured | |||||
| Guaranty Municipal Corp.) | 7.50 | 7/1/33 | 3,500,000 | 4,420,360 | |
| Detroit, | |||||
| Water Supply System Senior | |||||
| Lien Revenue | 5.00 | 7/1/31 | 3,780,000 | 3,915,211 | |
| Detroit, | |||||
| Water Supply System Senior | |||||
| Lien Revenue | 5.00 | 7/1/36 | 3,290,000 | 3,329,381 | |
| Kent Hospital Finance Authority, | |||||
| Revenue (Metropolitan | |||||
| Hospital Project) | 6.00 | 7/1/35 | 2,000,000 | 2,063,300 | |
| Michigan Finance Authority, | |||||
| Clean Water Revolving | |||||
| Fund Revenue | 5.00 | 10/1/31 | 2,000,000 | 2,371,640 |
| The Fund | 11 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Michigan (continued) | |||||
| Michigan Strategic Fund, | |||||
| LOR (State of Michigan | |||||
| Cadillac Place Office | |||||
| Building Project) | 5.25 | 10/15/31 | 4,500,000 | 5,030,955 | |
| Michigan Strategic Fund, | |||||
| SWDR (Genesee Power | |||||
| Station Project) | 7.50 | 1/1/21 | 6,620,000 | 6,561,810 | |
| Royal Oak Hospital Finance | |||||
| Authority, HR (William | |||||
| Beaumont Hospital | |||||
| Obligated Group) | 8.00 | 9/1/29 | 5,000,000 | 6,390,150 | |
| Wayne County Airport Authority, | |||||
| Airport Revenue (Detroit | |||||
| Metropolitan Wayne County | |||||
| Airport) (Insured; National | |||||
| Public Finance Guarantee Corp.) | 5.00 | 12/1/34 | 2,450,000 | c | 2,473,863 |
| Minnesota—.6% | |||||
| Tobacco Securitization Authority | |||||
| of Minnesota, Tobacco | |||||
| Settlement Revenue Bonds | 5.25 | 3/1/31 | 2,500,000 | 2,789,675 | |
| Nevada—1.3% | |||||
| Clark County, | |||||
| Passenger Facility Charge | |||||
| Revenue (Las Vegas-McCarran | |||||
| International Airport) | 5.00 | 7/1/30 | 5,000,000 | c | 5,466,000 |
| New Hampshire—1.3% | |||||
| New Hampshire Industrial | |||||
| Development Authority, PCR | |||||
| (Connecticut Light and Power | |||||
| Company Project) | 5.90 | 11/1/16 | 5,400,000 | 5,416,470 | |
| New Jersey—5.1% | |||||
| New Jersey Economic Development | |||||
| Authority, School Facilities | |||||
| Construction Revenue | 5.50 | 12/15/29 | 5,000,000 | 5,680,800 | |
| New Jersey Economic Development | |||||
| Authority, Water Facilities | |||||
| Revenue (New Jersey— | |||||
| American Water | |||||
| Company, Inc. Project) | 5.70 | 10/1/39 | 3,000,000 | 3,322,590 |
12
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| New Jersey (continued) | |||||
| Tobacco Settlement Financing | |||||
| Corporation of New Jersey, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | 4.50 | 6/1/23 | 1,500,000 | 1,412,880 | |
| Tobacco Settlement Financing | |||||
| Corporation of New Jersey, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | 5.00 | 6/1/41 | 1,000,000 | 779,600 | |
| Tobacco Settlement Financing | |||||
| Corporation of New Jersey, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | |||||
| (Prerefunded) | 7.00 | 6/1/13 | 10,095,000 | e | 10,775,706 |
| New Mexico—1.3% | |||||
| Farmington, | |||||
| PCR (Public Service | |||||
| Company of New Mexico | |||||
| San Juan Project) | 5.90 | 6/1/40 | 5,000,000 | 5,453,650 | |
| New York—14.2% | |||||
| Austin Trust | |||||
| (Port Authority of New York | |||||
| and New Jersey, Consolidated | |||||
| Bonds, 151st Series) | 6.00 | 9/15/28 | 10,000,000 | a,b,c | 12,017,100 |
| Barclays Capital Municipal Trust | |||||
| Receipts (New York City | |||||
| Transitional Finance Authority, | |||||
| Future Tax Secured Revenue) | 5.00 | 5/1/30 | 4,488,203 | a,b | 5,103,580 |
| Barclays Capital Municipal Trust | |||||
| Receipts (New York City | |||||
| Transitional Finance | |||||
| Authority, Future Tax Secured | |||||
| Subordinate Revenue) | 5.50 | 11/1/27 | 5,000,000 | a,b | 6,129,950 |
| JPMorgan Chase Putters/Drivers | |||||
| Trust (New York City | |||||
| Transitional Finance Authority, | |||||
| Future Tax Secured | |||||
| Subordinate Revenue) | 5.25 | 11/1/18 | 5,000,000 | a,b | 6,076,250 |
| Long Island Power Authority, | |||||
| Electric System General Revenue | 6.25 | 4/1/33 | 3,000,000 | 3,631,200 |
| The Fund | 13 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| New York (continued) | |||||
| Metropolitan Transportation | |||||
| Authority, Transportation | |||||
| Revenue | 6.25 | 11/15/23 | 9,425,000 | c | 12,016,404 |
| Metropolitan Transportation | |||||
| Authority, Transportation | |||||
| Revenue | 5.00 | 11/1/28 | 1,500,000 | c | 1,733,940 |
| New York City Educational | |||||
| Construction Fund, Revenue | 6.50 | 4/1/28 | 2,785,000 | 3,515,338 | |
| New York City Industrial | |||||
| Development Agency, Special | |||||
| Facility Revenue (American | |||||
| Airlines, Inc. John F. Kennedy | |||||
| International Airport Project) | 7.75 | 8/1/31 | 5,000,000 | c,f | 5,145,950 |
| New York State Dormitory | |||||
| Authority, Revenue (Suffolk | |||||
| County Judicial Facility) | 9.50 | 4/15/14 | 605,000 | 666,147 | |
| Port Authority of New York and New | |||||
| Jersey, Special Project Bonds | |||||
| (JFK International Air | |||||
| Terminal LLC Project) | 6.00 | 12/1/36 | 4,710,000 | c | 5,294,699 |
| North Carolina—2.5% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (North Carolina | |||||
| Medical Care Commission, | |||||
| Health Care Facilities | |||||
| Revenue (Duke University | |||||
| Health System)) | 5.00 | 6/1/42 | 10,000,000 | a,b | 10,918,500 |
| Ohio—5.4% | |||||
| Buckeye Tobacco Settlement | |||||
| Financing Authority, Tobacco | |||||
| Settlement Asset-Backed Bonds | 5.88 | 6/1/47 | 2,500,000 | 1,911,150 | |
| Butler County, | |||||
| Hospital Facilities Revenue | |||||
| (UC Health) | 5.50 | 11/1/40 | 3,000,000 | 3,220,080 | |
| Cleveland, | |||||
| Airport System Revenue | 5.00 | 1/1/30 | 2,000,000 | c | 2,160,320 |
| Ohio Air Quality Development | |||||
| Authority, Air Quality Revenue | |||||
| (Ohio Valley Electric | |||||
| Corporation Project) | 5.63 | 10/1/19 | 4,200,000 | 4,851,924 |
14
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Ohio (continued) | |||||
| Port of Greater Cincinnati | |||||
| Development Authority, | |||||
| Tax Increment Development | |||||
| Revenue (Fairfax | |||||
| Village Red Bank | |||||
| Infrastructure Project) | 5.63 | 2/1/36 | 2,530,000 | b | 2,080,040 |
| Toledo-Lucas County Port | |||||
| Authority, Special Assessment | |||||
| Revenue (Crocker Park Public | |||||
| Improvement Project) | 5.38 | 12/1/35 | 3,000,000 | 3,074,370 | |
| University of Akron, | |||||
| General Receipts Bonds | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 5.00 | 1/1/22 | 5,000,000 | 5,924,900 | |
| Oregon—.4% | |||||
| Warm Springs Reservation | |||||
| Confederated Tribes, | |||||
| Hydroelectric Revenue (Pelton | |||||
| Round Butte Project) | 6.38 | 11/1/33 | 1,500,000 | 1,573,485 | |
| Pennsylvania—2.1% | |||||
| JPMorgan Chase Putters/Drivers | |||||
| Trust (Geisinger Authority, | |||||
| Health System Revenue | |||||
| (Geisinger Health System)) | 5.13 | 6/1/35 | 3,000,000 | a,b | 3,301,800 |
| Philadelphia, | |||||
| GO | 6.50 | 8/1/41 | 4,700,000 | 5,673,370 | |
| Rhode Island—1.4% | |||||
| Rhode Island Health and | |||||
| Educational Building | |||||
| Corporation, Hospital | |||||
| Financing Revenue (Lifespan | |||||
| Obligated Group Issue) | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 7.00 | 5/15/39 | 5,000,000 | 5,983,650 | |
| Tennessee—1.5% | |||||
| Metropolitan Government of | |||||
| Nashville and Davidson County | |||||
| Health and Educational | |||||
| Facilities Board, Revenue | |||||
| (The Vanderbilt University) | 5.50 | 10/1/29 | 2,500,000 | 3,007,950 |
| The Fund | 15 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Tennessee (continued) | |||||
| Metropolitan Government of | |||||
| Nashville and Davidson County | |||||
| Health and Educational | |||||
| Facilities Board, Revenue (The | |||||
| Vanderbilt University) | 5.50 | 10/1/34 | 3,000,000 | 3,541,140 | |
| Texas—20.1% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (Leander Independent | |||||
| School District, Unlimited Tax | |||||
| School Building Bonds | |||||
| (Permanent School Fund | |||||
| Guarantee Program)) | 5.00 | 8/15/40 | 9,997,299 | a,b | 11,122,849 |
| Barclays Capital Municipal Trust | |||||
| Receipts (Texas A&M University | |||||
| System Board of Regents, | |||||
| Financing System Revenue) | 5.00 | 5/15/39 | 13,160,000 | a,b | 14,777,627 |
| Dallas-Fort Worth International | |||||
| Airport Facility Improvement | |||||
| Corporation, Revenue | |||||
| (Learjet Inc. Project) | 6.15 | 1/1/16 | 3,000,000 | c | 3,004,800 |
| Harris County Health Facilities | |||||
| Development Corporation, HR | |||||
| (Memorial Hermann | |||||
| Healthcare System) | 7.25 | 12/1/35 | 9,290,000 | 11,176,985 | |
| Harris County Health Facilities | |||||
| Development Corporation, | |||||
| Revenue (CHRISTUS Health) | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 5.00 | 7/1/15 | 1,500,000 | 1,664,070 | |
| Houston, | |||||
| Combined Utility System First | |||||
| Lien Revenue (Insured; Assured | |||||
| Guaranty Municipal Corp.) | 6.00 | 11/15/36 | 5,000,000 | 6,031,100 | |
| Matagorda County Navigation | |||||
| District Number One, Revenue | |||||
| (Houston Lighting and | |||||
| Power Company Project) | |||||
| (Insured; AMBAC) | 5.13 | 11/1/28 | 4,295,000 | 4,806,148 | |
| North Texas Tollway Authority, | |||||
| First Tier System Revenue | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 5.75 | 1/1/40 | 14,705,000 | c | 16,773,258 |
16
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| Texas (continued) | |||||
| North Texas Tollway Authority, | |||||
| Second Tier System Revenue | 5.75 | 1/1/38 | 6,650,000 | c | 7,239,057 |
| Texas Department of Housing and | |||||
| Community Affairs, Home | |||||
| Mortgage Revenue | |||||
| (Collateralized: FHLMC, | |||||
| FNMA and GNMA) | 13.30 | 7/2/24 | 650,000 | g | 696,280 |
| Texas Department of Housing | |||||
| and Community Affairs, | |||||
| Residential Mortgage Revenue | |||||
| (Collateralized: FHLMC, | |||||
| FNMA and GNMA) | 5.35 | 7/1/33 | 4,300,000 | 4,304,042 | |
| Texas Turnpike Authority, | |||||
| Central Texas Turnpike System | |||||
| Revenue (Insured; AMBAC) | 5.25 | 8/15/42 | 5,375,000 | c | 5,383,170 |
| Virginia—4.8% | |||||
| Henrico County Industrial | |||||
| Development Authority, Revenue | |||||
| (Bon Secours Health System) | |||||
| (Insured; Assured Guaranty | |||||
| Municipal Corp.) | 11.15 | 8/23/27 | 7,200,000 | g | 9,425,376 |
| Virginia Housing Development | |||||
| Authority, Commonwealth | |||||
| Mortgage Revenue | 6.25 | 7/1/31 | 5,140,000 | 5,847,932 | |
| Virginia Small Business Financing | |||||
| Authority, Senior Lien Revenue | |||||
| (Elizabeth River Crossing | |||||
| Opco, LLC Project) | 5.50 | 1/1/42 | 1,500,000 | c | 1,576,965 |
| Washington County Industrial | |||||
| Development Authority, | |||||
| HR (Mountain States | |||||
| Health Alliance) | 7.75 | 7/1/38 | 3,000,000 | 3,699,090 | |
| Washington—3.9% | |||||
| Barclays Capital Municipal Trust | |||||
| Receipts (King County, | |||||
| Sewer Revenue) | 5.00 | 1/1/29 | 8,577,246 | a,b | 10,068,622 |
| Washington Health Care | |||||
| Facilities Authority, | |||||
| Mortgage Revenue | |||||
| (Highline Medical Center) | |||||
| (Collateralized; FHA) | 6.25 | 8/1/36 | 5,975,000 | 6,949,104 |
| The Fund | 17 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Long-Term Municipal | Coupon | Maturity | Principal | ||
| Investments (continued) | Rate (%) | Date | Amount ($) | Value ($) | |
| West Virginia—1.9% | |||||
| The County Commission of Harrison | |||||
| County, SWDR (Allegheny Energy | |||||
| Supply Company, LLC Harrison | |||||
| Station Project) | 5.50 | 10/15/37 | 7,920,000 | 8,186,904 | |
| Wisconsin—5.2% | |||||
| Badger Tobacco Asset | |||||
| Securitization Corporation, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | |||||
| (Prerefunded) | 6.13 | 6/1/12 | 3,865,000 | e | 3,865,000 |
| Badger Tobacco Asset | |||||
| Securitization Corporation, | |||||
| Tobacco Settlement | |||||
| Asset-Backed Bonds | |||||
| (Prerefunded) | 7.00 | 6/1/12 | 14,570,000 | e | 14,570,000 |
| Wisconsin Health and Educational | |||||
| Facilities Authority, Revenue | |||||
| (Aurora Health Care, Inc.) | 6.40 | 4/15/33 | 4,000,000 | 4,092,160 | |
| U.S. Related—6.1% | |||||
| Puerto Rico Aqueduct and Sewer | |||||
| Authority, Senior Lien Revenue | 5.13 | 7/1/37 | 5,000,000 | 5,023,250 | |
| Puerto Rico Commonwealth, | |||||
| Public Improvement GO | 5.50 | 7/1/32 | 1,500,000 | 1,614,930 | |
| Puerto Rico Commonwealth, | |||||
| Public Improvement GO | 6.00 | 7/1/39 | 1,610,000 | 1,750,440 | |
| Puerto Rico Commonwealth, | |||||
| Public Improvement GO | 6.50 | 7/1/40 | 2,390,000 | 2,775,005 | |
| Puerto Rico Sales Tax Financing | |||||
| Corporation, Sales Tax Revenue | |||||
| (First Subordinate Series) | 5.38 | 8/1/39 | 2,500,000 | 2,678,000 | |
| Puerto Rico Sales Tax Financing | |||||
| Corporation, Sales Tax Revenue | |||||
| (First Subordinate Series) | 6.00 | 8/1/42 | 10,000,000 | 11,278,000 | |
| Virgin Islands Public Finance | |||||
| Authority, Revenue (Virgin Islands | |||||
| Matching Fund Loan Notes) | |||||
| (Senior Lien/Capital Projects) | 5.00 | 10/1/39 | 1,250,000 | 1,288,200 | |
| Total Long-Term Municipal Investments | |||||
| (cost $558,041,090) | 619,559,357 | ||||
18
| Short-Term Municipal | Coupon | Maturity | Principal | |||
| Investments–1.5% | Rate (%) | Date | Amount ($) | Value ($) | ||
| California—.5% | ||||||
| California, | ||||||
| GO Notes | ||||||
| (Kindergarten-University) | ||||||
| (LOC: California State | ||||||
| Teachers Retirement System | ||||||
| and Citibank NA) | 0.16 | 6/1/12 | 2,200,000 | h | 2,200,000 | |
| New York—1.0% | ||||||
| New York City, | ||||||
| GO Notes (LOC; JPMorgan | ||||||
| Chase Bank) | 0.19 | 6/1/12 | 1,100,000 | h | 1,100,000 | |
| New York City, | ||||||
| GO Notes (LOC; JPMorgan | ||||||
| Chase Bank) | 0.19 | 6/1/12 | 2,100,000 | h | 2,100,000 | |
| New York City, | ||||||
| GO Notes (LOC; JPMorgan | ||||||
| Chase Bank) | 0.19 | 6/1/12 | 1,100,000 | h | 1,100,000 | |
| Total Short-Term Municipal Investments | ||||||
| (cost $6,500,000) | 6,500,000 | |||||
| Total Investments (cost $564,541,090) | 145.3% | 626,059,357 | ||||
| Liabilities, Less Cash and Receivables | (12.9%) | (55,572,777) | ||||
| Preferred Stock, at redemption value | (32.4%) | (139,500,000) | ||||
| Net Assets Applicable to Common Shareholders | 100.0% | 430,986,580 | ||||
| a Collateral for floating rate borrowings. |
| b Securities exempt from registration pursuant to 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, 2012, these |
| securities were valued at $138,514,347 or 32.1% of net assets applicable to Common Shareholders. |
| c At May 31, 2012, the fund had $109,651,442 or 25.4% of net assets applicable to Common Shareholders invested |
| in securities whose payment of principal and interest is dependent upon revenues generated from transportation. |
| d Security issued with a zero coupon. Income is recognized through the accretion of discount. |
| e These securities are prerefunded; the date shown represents the prerefunded date. 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. |
| f Non-income producing—security in default. |
| g Inverse floater security—the interest rate is subject to change periodically. Rate shown is the interest rate in effect at |
| May 31, 2012. |
| h Variable rate demand note—rate shown is the interest rate in effect at May 31, 2012. Maturity date represents the |
| next demand date, or the ultimate maturity date if earlier. |
| The Fund | 19 |
STATEMENT OF INVESTMENTS (Unaudited) (continued)
| Summary of Abbreviations | |||
| ABAG | Association of Bay Area | ACA | American Capital Access |
| Governments | |||
| AGC | ACE Guaranty Corporation | AGIC | Asset Guaranty Insurance Company |
| AMBAC | American Municipal Bond | ARRN | Adjustable Rate |
| Assurance Corporation | Receipt Notes | ||
| BAN | Bond Anticipation Notes | BPA | Bond Purchase Agreement |
| CIFG | CDC Ixis Financial Guaranty | COP | Certificate of Participation |
| CP | Commercial Paper | DRIVERS | Derivative Inverse |
| Tax-Exempt Receipts | |||
| EDR | Economic Development | EIR | Environmental Improvement |
| Revenue | Revenue | ||
| FGIC | Financial Guaranty | FHA | Federal Housing |
| Insurance Company | Administration | ||
| FHLB | Federal Home | FHLMC | Federal Home Loan Mortgage |
| Loan Bank | Corporation | ||
| FNMA | Federal National | GAN | Grant Anticipation Notes |
| Mortgage Association | |||
| GIC | Guaranteed Investment | GNMA | Government National Mortgage |
| Contract | Association | ||
| GO | General Obligation | HR | Hospital Revenue |
| IDB | Industrial Development Board | IDC | Industrial Development Corporation |
| IDR | Industrial Development | LIFERS | Long Inverse Floating |
| Revenue | Exempt Receipts | ||
| LOC | Letter of Credit | LOR | Limited Obligation Revenue |
| LR | Lease Revenue | MERLOTS | Municipal Exempt Receipt |
| Liquidity Option Tender | |||
| MFHR | Multi-Family Housing Revenue | MFMR | Multi-Family Mortgage Revenue |
| PCR | Pollution Control Revenue | PILOT | Payment in Lieu of Taxes |
| P-FLOATS | Puttable Floating Option | PUTTERS | Puttable Tax-Exempt Receipts |
| Tax-Exempt Receipts | |||
| RAC | Revenue Anticipation Certificates | RAN | Revenue Anticipation Notes |
| RAW | Revenue Anticipation Warrants | ROCS | Reset Options Certificates |
| RRR | Resources Recovery Revenue | SAAN | State Aid Anticipation Notes |
| SBPA | Standby Bond Purchase Agreement | SFHR | Single Family Housing Revenue |
| SFMR | Single Family Mortgage Revenue | SONYMA | State of New York Mortgage Agency |
| SPEARS | Short Puttable Exempt | SWDR | Solid Waste Disposal Revenue |
| Adjustable Receipts | |||
| TAN | Tax Anticipation Notes | TAW | Tax Anticipation Warrants |
| TRAN | Tax and Revenue Anticipation Notes | XLCA | XL Capital Assurance |
20
| Summary of Combined Ratings (Unaudited) | |||||
| Fitch | or | Moody’s | or | Standard & Poor’s | Value (%)† |
| AAA | Aaa | AAA | 12.0 | ||
| AA | Aa | AA | 27.5 | ||
| A | A | A | 31.7 | ||
| BBB | Baa | BBB | 19.7 | ||
| BB | Ba | BB | 3.4 | ||
| B | B | B | 1.5 | ||
| F1 | MIG1/P1 | SP1/A1 | .6 | ||
| Not Ratedi | Not Ratedi | Not Ratedi | 3.6 | ||
| 100.0 | |||||
| † | Based on total investments. |
| i | Securities which, while not rated by Fitch, Moody’s and Standard & Poor’s, have been determined by the Manager to |
| be of comparable quality to those rated securities in which the fund may invest. | |
| See notes to financial statements. | |
| The Fund | 21 |
| STATEMENT OF ASSETS AND LIABILITIES |
| May 31, 2012 (Unaudited) |
| Cost | Value | ||
| Assets ($): | |||
| Investments in securities—See Statement of Investments | 564,541,090 | 626,059,357 | |
| Interest receivable | 9,775,068 | ||
| Prepaid expenses | 39,393 | ||
| 635,873,818 | |||
| Liabilities ($): | |||
| Due to The Dreyfus Corporation and affiliates—Note 2(a) | 305,972 | ||
| Cash overdraft due to Custodian | 2,093,055 | ||
| Payable for floating rate notes issued—Note 3 | 57,128,615 | ||
| Payable for investment securities purchased | 5,595,700 | ||
| Interest and expense payable related | |||
| to floating rate notes issued—Note 3 | 109,450 | ||
| Commissions payable | 13,850 | ||
| Dividends payable to Preferred Shareholders | 2,817 | ||
| Accrued expenses | 137,779 | ||
| 65,387,238 | |||
| Auction Preferred Stock, Series A, B and C, par value | |||
| $.001 per share (5,580 shares issued and outstanding | |||
| at $25,000 per share liquidation value)—Note 1 | 139,500,000 | ||
| Net Assets Applicable to Common Shareholders ($) | 430,986,580 | ||
| Composition of Net Assets ($): | |||
| Common Stock, par value, $.001 per share | |||
| (48,883,799 shares issued and outstanding) | 48,884 | ||
| Paid-in capital | 424,618,459 | ||
| Accumulated undistributed investment income—net | 8,491,468 | ||
| Accumulated net realized gain (loss) on investments | (63,690,498) | ||
| Accumulated net unrealized appreciation | |||
| (depreciation) on investments | 61,518,267 | ||
| Net Assets Applicable to Common Shareholders ($) | 430,986,580 | ||
| Shares Outstanding | |||
| (110 million shares of $.001 par value Common Stock authorized) | 48,883,799 | ||
| Net Asset Value, per share of Common Stock ($) | 8.82 | ||
| See notes to financial statements. | |||
22
| STATEMENT OF OPERATIONS |
| Six Months Ended May 31, 2012 (Unaudited) |
| Investment Income ($): | ||
| Interest Income | 15,894,419 | |
| Expenses: | ||
| Investment advisory fee—Note 2(a) | 1,394,088 | |
| Administration fee—Note 2(a) | 697,044 | |
| Interest and expense related to floating rate notes issued—Note 3 | 193,892 | |
| Commission fees—Note 1 | 117,290 | |
| Directors’ fees and expenses—Note 2(b) | 51,443 | |
| Professional fees | 49,236 | |
| Shareholders’ reports | 43,420 | |
| Registration fees | 25,288 | |
| Shareholder servicing costs | 12,605 | |
| Custodian fees—Note 2(a) | 1,004 | |
| Miscellaneous | 27,390 | |
| Total Expenses | 2,612,700 | |
| Less—reduction in investment advisory fee | ||
| due to undertaking—Note 2(a) | (278,818) | |
| Less—reduction in administration fee—Note 2(a) | (63,501) | |
| Net Expenses | 2,270,381 | |
| Investment Income—Net | 13,624,038 | |
| Realized and Unrealized Gain (Loss) on Investments—Note 3 ($): | ||
| Net realized gain (loss) on investments | 1,088,125 | |
| Net unrealized appreciation (depreciation) on investments | 34,266,324 | |
| Net Realized and Unrealized Gain (Loss) on Investments | 35,354,449 | |
| Dividends to Preferred Shareholders | (166,994) | |
| Net Increase in Net Assets Applicable to | ||
| Common Shareholders Resulting from Operations | 48,811,493 | |
| See notes to financial statements. | ||
| The Fund | 23 |
| STATEMENT OF CASH FLOWS |
| May 31, 2012 (Unaudited) |
| Cash Flows from Operating Activities ($): | ||||
| Interest received | 16,144,482 | |||
| Operating expenses paid | (2,101,079 | ) | ||
| Dividends paid to Preferred Shareholders | (167,343 | ) | ||
| Purchases of portfolio securities | (39,256,297 | ) | ||
| Net purchases of short-term portfolio securities | (1,200,000 | ) | ||
| Proceeds from sales of portfolio securities | 39,530,161 | |||
| 12,949,924 | ||||
| Cash Flows from Financing Activities ($): | ||||
| Dividends paid to Common Shareholders | (12,780,323 | ) | ||
| Interest and expense related to | ||||
| floating rate notes issued paid | (199,772 | ) | (12,980,095) | |
| Decrease in cash | (30,171) | |||
| Cash overdraft at beginning of period | (2,062,884) | |||
| Cash overdraft at end of period | (2,093,055) | |||
| Reconciliation of Net Increase in Net Assets Applicable to | ||||
| Common Shareholders Resulting from Operations to | ||||
| Net Cash Provided by Operating Activities ($): | ||||
| Net Increase in Net Assets Applicable to Common | ||||
| Shareholders Resulting From Operations | 48,811,493 | |||
| Adjustments to reconcile net increase in net assets applicable to | ||||
| Common Shareholders resulting from operations to | ||||
| net cash provided by operating activities ($): | ||||
| Increase in investments in securities, at cost | (6,692,242) | |||
| Increase in payable for investment securities purchased | 4,679,728 | |||
| Increase in interest receivable | (32,454) | |||
| Decrease in commissions payable and accrued expenses | (14,747) | |||
| Increase in prepaid expenses | (24,173) | |||
| Increase in Due to The Dreyfus Corporation and affiliates | 13,603 | |||
| Decrease in dividends payable to Preferred Shareholders | (351) | |||
| Interest and expense related to floating rate notes issued | 193,892 | |||
| Net unrealized appreciation on investments | (34,266,324) | |||
| Net amortization of premiums on investments | 281,499 | |||
| Net Cash Provided by Operating Activities | 12,949,924 | |||
| Supplemental disclosure cash flow information ($): | ||||
| Non-cash financing activities: | ||||
| Reinvestment of dividends | 1,129,938 | |||
| See notes to financial statements. | ||||
24
STATEMENT OF CHANGES IN NET ASSETS
| Six Months Ended | ||||
| May 31, 2012 | Year Ended | |||
| (Unaudited) | November 30, 2011 | |||
| Operations ($): | ||||
| Investment income—net | 13,624,038 | 27,805,189 | ||
| Net realized gain (loss) on investments | 1,088,125 | (21,888,260) | ||
| Net unrealized appreciation | ||||
| (depreciation) on investments | 34,266,324 | 33,481,801 | ||
| Dividends to Preferred Shareholders | (166,994) | (436,571) | ||
| Net Increase in Net Assets Applicable | ||||
| to Common Shareholders | ||||
| Resulting from Operations | 48,811,493 | 38,962,159 | ||
| Dividends to Common Shareholders from ($): | ||||
| Investment income—net | (13,910,261) | (27,730,629) | ||
| Capital Stock Transactions ($): | ||||
| Dividends reinvested | 1,129,938 | 1,430,458 | ||
| Total Increase (Decrease) in Net Assets | ||||
| Applicable to Common Shareholders | 36,031,170 | 12,661,988 | ||
| Net Assets Applicable to | ||||
| Common Shareholders ($): | ||||
| Beginning of Period | 394,955,410 | 382,293,422 | ||
| End of Period | 430,986,580 | 394,955,410 | ||
| Undistributed investment income—net | 8,491,468 | 8,944,685 | ||
| Capital Share Transactions (Shares): | ||||
| Increase in Common Shares Outstanding | ||||
| as a Result of Dividends Reinvested | 131,976 | 185,781 | ||
| See notes to financial statements. | ||||
| The Fund | 25 |
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and dis-tributions.These figures have been derived from the fund’s financial statements, and with respect to common stock, market price data for the fund’s common shares.
| Six Months Ended | ||||||||||||
| May 31, 2012 | Year Ended November 30, | |||||||||||
| (Unaudited) | 2011 | 2010 | 2009 | 2008 | 2007 | |||||||
| Per Share Data ($): | ||||||||||||
| Net asset value, | ||||||||||||
| beginning of period | 8.10 | 7.87 | 7.93 | 6.76 | 8.60 | 9.21 | ||||||
| Investment Operations: | ||||||||||||
| Investment income—neta | .28 | .57 | .59 | .64 | .63 | .62 | ||||||
| Net realized and unrealized | ||||||||||||
| gain (loss) on investments | .74 | .24 | (.10) | 1.02 | (1.86) | (.59) | ||||||
| Dividends to Preferred | ||||||||||||
| Shareholders from | ||||||||||||
| investment income—net | (.01) | (.01) | (.01) | (.03) | (.14) | (.14) | ||||||
| Total from | ||||||||||||
| Investment Operations | 1.01 | .80 | .48 | 1.63 | (1.37) | (.11) | ||||||
| Distributions to | ||||||||||||
| Common Shareholders: | ||||||||||||
| Dividends from | ||||||||||||
| investment income—net | (.29) | (.57) | (.54) | (.46) | (.47) | (.50) | ||||||
| Net asset value, end of period | 8.82 | 8.10 | 7.87 | 7.93 | 6.76 | 8.60 | ||||||
| Market value, end of period | 9.10 | 8.39 | 7.94 | 7.58 | 5.53 | 7.77 | ||||||
| Total Return (%)b | 12.12c | 13.67 | 11.95 | 46.74 | (24.12) | (1.17) | ||||||
26
| Six Months Ended | |||||||
| May 31, 2012 | Year Ended November 30, | ||||||
| (Unaudited) | 2011 | 2010 | 2009 | 2008 | 2007 | ||
| Ratios/Supplemental Data (%): | |||||||
| Ratio of total expenses | |||||||
| to average net assets | |||||||
| applicable to Common Stockd | 1.25 | e | 1.30 | 1.30 | 1.37 | 1.44 | 1.43 |
| Ratio of net expenses | |||||||
| to average net assets | |||||||
| applicable to Common Stockd | 1.09 | e | 1.16 | 1.16 | 1.21 | 1.30 | 1.28 |
| Ratio of interest and expense | |||||||
| related to floating rate notes | |||||||
| issued to average net assets | |||||||
| applicable to Common Stockd | .09 | e | .10 | .07 | .01 | .12 | .17 |
| Ratio of net investment income | |||||||
| to average net assets | |||||||
| applicable to Common Stockd | 6.52 | e | 7.36 | 7.30 | 8.65 | 7.89 | 7.01 |
| Ratio of total expenses | |||||||
| to total average net assets | .94 | e | .95 | .91 | .90 | .98 | 1.00 |
| Ratio of net expenses | |||||||
| to total average net assets | .81 | e | .85 | .81 | .80 | .88 | .90 |
| Ratio of interest and expense | |||||||
| related to floating rate notes | |||||||
| issued to total average net assets . 07 | e | .07 | .05 | .01 | .08 | .12 | |
| Ratio of net investment income | |||||||
| to total average net assets | 4.89 | e | 5.36 | 5.11 | 5.68 | 5.34 | 4.90 |
| Portfolio Turnover Rate | 7.22 | c | 20.50 | 25.94 | 31.59 | 53.01 | 55.89 |
| Asset coverage of Preferred Stock, | |||||||
| end of period | 409 | 383 | 356 | 307 | 276 | 324 | |
| Net Assets, net of Preferred Stock, | |||||||
| end of period ($ x 1,000) | 430,987 | 394,955 | 382,293 | 384,457 | 327,879 | 417,177 | |
| Preferred Stock outstanding, | |||||||
| end of period ($ x 1,000) | 139,500 | 139,500 | 149,475 | 186,000 | 186,000 | 186,000 | |
| a | Based on average common shares outstanding at each month end. |
| b | Calculated based on market value. |
| c | Not annualized. |
| d | Does not reflect the effect of dividends to Preferred Shareholders. |
| e | Annualized. |
| See notes to financial statements. | |
| The Fund | 27 |
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 consistent with the preservation of capital.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. The fund’s Common Stock trades on the New York Stock Exchange Amex (the “NYSE”) under the ticker symbol DSM.
The fund has outstanding 1,860 shares of Series A, Series B and Series C, for a total of 5,580 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 or by reference to a market rate. Deutsche Bank Trust Company America, 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 .15%-.25% of the purchase price of the shares of APS.
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.Thus, redemptions of APS may be deemed to be outside of the control of the fund.
The holders of the APS, voting as a separate class, have the right to elect at least two directors. The holders of the APS will vote as a separate class on certain other matters, as required by law.The fund has
28
designated Robin A. Melvin and John E. Zuccotti as directors to be elected by the holders of APS.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions.Actual results could differ from those estimates.
The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown.The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
| The Fund | 29 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements.These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued each business day by an independent pricing service (the “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. All of the preceding securities are categorized within Level 2 of the fair value hierarchy.
The Service’s procedures are received by Dreyfus under the general supervision of the Board of Directors.
30
When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of May 31, 2012 in valuing the fund’s investments:
| Level 2—Other | Level 3— | |||
| Level 1— | Significant | Significant | ||
| Unadjusted | Observable | Unobservable | ||
| Quoted Prices | Inputs | Inputs | Total | |
| Assets ($) | ||||
| Investments in Securities: | ||||
| Municipal Bonds | — | 626,059,357 | — | 626,059,357 |
In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04 “Amendments to Achieve Common FairValue Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”)” (“ASU 2011-04”). ASU 2011-04 includes common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value
| The Fund | 31 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.
(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Interest income, adjusted for accretion of discount and amortization of premium 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.
(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 gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”).To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
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
32
(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 asset value per share on the record date, Computershare Shareowner Services LLC, the fund’s transfer agent, 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, 2012, the Board of Directors declared a cash dividend of $0.0475 per share from investment income net, payable on June 29, 2012 to Common Shareholders of record as of the close of business on June 13, 2012.
(d) Dividends to Shareholders of APS: Dividends, which are cumulative, are generally reset every 7 days for each Series of APS pursuant to a process specified in related fund charter documents. Dividend rates as of May 31, 2012, for each Series of APS were as follows: Series A-0.320%, Series B-0.289% and Series C-0.320%.These rates reflect the “maximum rates” under the governing instruments as a result of “failed auctions” in which sufficient clearing bids are not received.The average dividend rates for the period ended May 31, 2012 for each Series of APS were as follows: Series A-0.243%, Series B-0.238% and Series C-0.237%.
(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 Code 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 | 33 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
As of and during the period ended May 31, 2012, the fund did not have any liabilities for any uncertain tax positions.The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period, the fund did not incur any interest or penalties.
Each of the tax years in the three-year period ended November 30, 2011 remains subject to examination by the Internal Revenue Service and state taxing authorities.
Under the Regulated Investment Company Modernization Act of 2010 (the “2010 Act”), the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) for an unlimited period. Furthermore, post-enactment capital loss carryovers retain their character as either short-term or long-term capital losses rather than short-term as they were under previous statute.The 2010 Act requires post-enactment losses to be utilized before the utilization of losses incurred in taxable years prior to the effective date of the 2010 Act (“pre-enactment losses”).As a result of this ordering rule, pre-enactment losses may be more likely to expire unused.
The fund has an unused capital loss carryover of $65,116,962 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to November 30, 2011. If not applied, $10,957,023 of the carryover expires in fiscal 2012, $1,427,978 expires in fiscal 2015, $5,522,685 expires in fiscal 2016, $20,261,695 expires in fiscal 2017, $5,075,623 expires in fiscal 2018 and $21,871,958 expires in fiscal 2019.
The tax character of distributions paid to shareholders during the fiscal year ended November 30, 2011 was as follows: tax exempt income $28,038,726 and ordinary income $128,474.The tax character of current year distributions will be determined at the end of the current fiscal year.
34
NOTE 2—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 the value of the fund’s average weekly net assets (including net assets representing APS outstanding).The fund also has an Administration Agreement with Dreyfus, a Custody Agreement with the Custodian and a Transfer Agency and Registrar Agreement with Computershare Shareowner Services LLC. The fund pays in the aggregate for administration, custody and transfer agency services a monthly fee based on an annual rate of .25% of the value of the fund’s average weekly net assets (including net assets representing APS outstanding). All out of pocket transfer agency and custody expenses, including custody transaction expenses, are paid separately by the fund.
Dreyfus has agreed, until November 30, 2012, to waive receipt of a portion of the fund’s investment advisory fee, in the amount of .10% of the value of the fund’s average weekly net assets (including net assets representing APS outstanding). The reduction in investment advisory fee, pursuant to the undertaking, amounted to $278,818 during the period ended May 31, 2012.
Dreyfus has also agreed, until November 30, 2012, to waive a receipt of a portion of the fund’s administration fee.The reduction in administration fee, pursuant to the undertaking, amounted to $63,501 during the period ended May 31, 2012.
The fund has an arrangement with the custodian bank whereby the fund receives earnings credits from the Custodian when positive cash balances are maintained, which are used to offset custody fees. For financial reporting purposes, the fund includes net earnings credits, as an expense offset in the Statement of Operations.
| The Fund | 35 |
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The fund compensates The Bank of NewYork Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a custody agreement for providing custodial services for the fund. During the period ended May 31, 2012, the fund was charged $1,004 for out-of-pocket and custody transaction expenses, pursuant to the custody agreement.
During the period ended May 31, 2012, the fund was charged $3,183 for services performed by the Chief Compliance Officer and his staff.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: investment advisory fees $240,908, administration fees $120,454, custodian fees $897 and chief compliance officer fees $2,652, which are offset against an expense reimbursement currently in effect in the amount of $58,939.
(b) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 3—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended May 31, 2012, amounted to $43,936,025 and $39,530,161, respectively.
Inverse Floater Securities: The fund participates in secondary inverse floater structures in which fixed-rate, tax-exempt municipal bonds are transferred to a trust.The trust subsequently issues two or more variable rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds. One or more of these variable rate securities pays interest based on a short-term floating rate set by a remarketing agent at predetermined intervals.A residual interest tax-exempt security is also created by the trust, which is transferred to the fund, and is paid interest based on the remaining cash flow of the trust, after payment of interest on the other securities and various expenses of the trust.
36
The fund accounts for the transfer of bonds to the trust as secured borrowings, with the securities transferred remaining in the fund’s investments, and the related floating rate certificate securities reflected as fund liabilities in the Statement of Assets and Liabilities.
The average amount of borrowings outstanding under the inverse floater structure during the period ended May 31, 2012, was approximately $57,128,600, with a related weighted average annualized interest rate of .68%.
At May 31, 2012, accumulated net unrealized appreciation on investments was $61,518,267, consisting of $64,406,545 gross unrealized appreciation and $2,888,278 gross unrealized depreciation.
At May 31, 2012, 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).
| The Fund | 37 |
NOTES
38
TheFund
39
NOTES
40
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable. [CLOSED END FUNDS ONLY]
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dreyfus Strategic Municipal Bond Fund, Inc.
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By: /s/ Bradley J. Skapyak |
|
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Bradley J. Skapyak, President
|
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|
Date: |
July 24, 2012 |
|
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. |
|
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By: /s/ Bradley J. Skapyak |
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Bradley J. Skapyak, President
|
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Date: |
July 24, 2012 |
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|
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By: /s/ James Windels |
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James Windels, Treasurer
|
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Date: |
July 24, 2012 |
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EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)