-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Fv6PJNaAPtr4iwFmwtoya9LnFzF3zMW2rMy2QPwTvmnOJWly+ECLYJMZpn4l4PQ1 lgQaE7NQPCaQuMi32iWrkw== 0000806176-95-000001.txt : 19950109 0000806176-95-000001.hdr.sgml : 19950109 ACCESSION NUMBER: 0000806176-95-000001 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941031 FILED AS OF DATE: 19950106 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER STATE MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000806176 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04906 FILM NUMBER: 95500491 BUSINESS ADDRESS: STREET 1: 144 GENN CURTISS BLVD CITY: NUIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226805 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER SERIES TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19870224 N-30D 1 SEMI-ANNUAL REPORT LETTER TO SHAREHOLDERS Dear Shareholder: As your Series' semi-annual reporting period ended on October 31, 1994, the net asset value per share for Class A shares was $11.18, a decrease of $.46 per share from $11.64 on April 30, 1994. Tax exempt income dividends of approximately $.35 per share were paid during the 6-month period, representing an annualized distribution rate per share of 5.98%, based on the October 31 closing maximum offering price. For Class B shares during the same period, the closing net asset value per share was $11.18, a decrease of $.45 from $11.63 on April 30, 1994. Tax exempt income dividends of approximately $.32 per share were paid during the period, representing an annualized distribution rate per share of 5.67%, based on the closing net asset value. We are pleased to inform you that all dividends paid from net investment income were fully exempt from Federal and Massachusetts State income taxes.* FIXED-INCOME MARKETS These past 12 months have been disappointing for all fixed-income markets. As an example, long-term U.S. Treasury Bond yields are up over 200 basis points. At the beginning of the calendar year, there was speculation in the municipal bond market that reinvestment would be so great, and bond issuance so sparse, that the prices of municipal bonds would stay firm in spite of any contrary trend in the markets. This might have proven to be true had the trend been for fixed-income products to drift sideways or to trade to the lower end of their trading ranges. However, the world of fixed income experienced a more dramatic correction to which even the positive outlook for municipals could not remain impervious. The interest rate change started with the Federal Reserve Board's 25 basis-point increase in the Federal Funds rate on February 4, and has continued through four additional rate hikes, some as large as 50 basis points. Most analysts think more rate increases are imminent. A DEFENSIVE STRATEGY Since the initial market corrections in the spring, we have taken some defensive portfolio measures. Keeping more cash on hand, selling bonds as they became market discounts and adding some shorter maturity securities have helped limit the Series' volatility. During the market's recent declines, these moves kept the Series' net asset value in a relatively more stable position. THE MASSACHUSETTS TAX EXEMPT MARKET The supply of paper in the State of Massachusetts is lower this year, keeping pace with a drop of almost 50% in general market new issuance. While this creates few portfolio alternatives, it can help support the secondary market, which may be beneficial when the Series' sells bonds. Such strong liquidity has been an important price support mechanism. However, we believe the greatest influence on prices this year has been the overall upward direction of long-term interest rates. OUR OUTLOOK Looking forward, we currently expect the trend in short-term rates to be higher. We think the Federal Reserve is likely to raise rates in this sector until it receives convincing evidence of slower economic growth. Intermediate and long-term interest rates, because they tend to anticipate inflation, have some added complexity. Currently, inflation has only materialized in the early phases of production. Although this threat seems distant, recent higher-than-expected figures for Gross Domestic Product and from the National Association of Purchasing Managers survey confirm our market view that inflation may gain momentum at the consumer level. The result could be rising long-term rates, which encourages us to remain cautious. We have included a current Statement of Investments and recent financial statements for your review. We look forward to serving your investment needs in the future. Very truly yours, (signature logo) Richard J. Moynihan Director, Municipal Portfolio Management The Dreyfus Corporation November 14, 1994 New York, N.Y. * Some income may be subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series STATEMENT OF INVESTMENTS OCTOBER 31, 1994 (UNAUDITED) PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS_100.0% AMOUNT VALUE ------------ ------------ MASSACHUSETTS_90.0% Boston, Revenue, Refunding (Boston City Hospital) 5.75%, 2/15/2023 (Insured; FHA) $ 1,500,000 $ 1,265,370 Boston Industrial Development Financing Authority, Sewer Facility Revenue (Harbor Electric Energy Co. Project) 7.375%, 5/15/2015.................. 2,500,000 2,562,600 Boston Water and Sewer Commission, Revenue: 7.875%, 11/1/1996....................................................... 295,000 318,293 7.875%, 11/1/2013....................................................... 605,000 649,994 7.10%, 11/1/2019 (Insured; MBIA, Prerefunded 11/1/1999) (a)............. 1,000,000 1,089,410 Leominster 7.50%, 4/1/2009 (Insured; MBIA).................................. 1,275,000 1,369,108 Lynn Water and Sewer Commission, General Revenue 7.25%, 12/1/2010 (Insured; MBIA) 1,000,000 1,103,750 Massachusetts Bay Transportation Authority: 7%, 3/1/2021............................................................ 1,000,000 1,018,050 7.004%, 3/1/2021 (b,c).................................................. 2,300,000 1,532,375 Massachusetts College Building Authority, Project Revenue 7.80%, 5/1/2016 (Insured; MBIA)......................................... 1,000,000 1,098,600 Massachusetts Commonwealth: 7.25%, 3/1/2000 (Insured; FGIC)......................................... 650,000 712,257 7.25%, 3/1/2009 (Insured; FGIC, Prerefunded 3/1/2000) (a)............... 350,000 383,184 7%, 8/1/2012............................................................ 1,850,000 1,897,082 Massachusetts Education Loan Authority, Education Loan Revenue 7.75%, 1/1/2008 (Insured; MBIA)......................................... 1,375,000 1,414,229 Massachusetts Health and Educational Facilities Authority, Revenue: (Berkshire Health Systems): 7.50%, 10/1/2008 (Insured; MBIA)...................................... 1,000,000 1,075,810 6.75%, 10/1/2019 (Insured; MBIA)...................................... 1,750,000 1,750,455 (Brigham and Womens Hospital) 6.75%, 7/1/2024........................... 1,000,000 966,370 (Capital Asset Program) 7.30%, 10/1/2018 (Insured; MBIA)................ 3,750,000 4,041,225 (Harvard University) 6.50%, 12/1/2007................................... 750,000 768,885 (Medical Center of Central Massachusetts) 7.10%, 7/1/2021............... 1,000,000 1,011,450 (New England Deaconess Hospital) 6.875%, 4/1/2022....................... 6,000,000 5,692,260 (Refunding - Milton Hospital) 7%, 7/1/2016 (Insured; MBIA).............. 2,050,000 2,094,751 (Salem Hospital) 7.25%, 7/1/2009 (Insured; MBIA)........................ 370,000 383,313 (South Shore Hospital) 7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) (a) 2,000,000 2,221,680 (Tufts Univeristy) 6.99%, 8/15/2018 (Insured; FGIC) (b)................. 2,000,000 1,611,840 (University Hospital) 7.25%, 7/1/2019 (Insured; MBIA)................... 2,750,000 2,859,945 Massachusetts Housing Finance Agency, Housing Revenue: Multi-Family Residential 7.80%, 8/1/2022 (Insured; FHA)................. 1,500,000 1,479,615 PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1994 (UNAUDITED) PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE ------------ ------------ MASSACHUSETTS (CONTINUED) Massachusetts Housing Finance Agency, Housing Revenue (continued): Residential: 6.25%, 11/15/2012 (Collateralized; FNMA).............................. $ 1,600,000 $ 1,518,800 8.50%, 8/1/2020....................................................... 15,000 15,758 8.40%, 8/1/2021....................................................... 260,000 266,825 Single Family: 7.80%, 12/1/2005...................................................... 955,000 969,592 7.90%, 6/1/2014....................................................... 980,000 1,007,950 8.10%, 12/1/2021...................................................... 2,400,000 2,513,664 7.95%, 6/1/2023....................................................... 2,000,000 2,045,340 Massachusetts Industrial Finance Agency, Revenue: (Brandeis University) 6.80%, 10/1/2019 (Insured; MBIA).................. 500,000 502,690 (Brooks School) 5.95%, 7/1/2023......................................... 1,000,000 886,420 (Leonard Morse Hospital) 8%, 10/15/2014 (Prerefunded 10/15/1999) (a).... 1,000,000 1,130,780 (Provider Lease Program) 8.75%, 7/15/2009............................... 695,000 729,277 (Refunding - Harvard Community Health) 8.125%, 10/1/2017................ 750,000 803,332 Massachusetts Municipal Wheelhouse Electric Co., Power Supply Systems Revenue: 8.75%, 7/1/2018......................................................... 3,420,000 3,801,354 6.125%, 7/1/2019........................................................ 1,200,000 1,063,272 Massachusetts Port Authority, Special Project Revenue (Harborside Hyatt) 10%, 3/1/2026........................................ 3,000,000 3,255,000 Massachusetts Water Resources Authority 7.625%, 4/1/2014 (Prerefunded 4/1/2000) (a) 750,000 834,540 New England Education Loan Marketing Corp., Refunding (Student Loan) 5.70%, 7/1/2005.......................................... 1,000,000 945,640 Somerville Housing Development Corp., Multi-Family Revenue, Refunding 7.50%, 1/1/2024 (Collateralized; FNMA).................................. 1,000,000 1,021,480 University of Lowell Building Authority 7.60%, 11/1/2010 (Insured; FSA)..... 750,000 797,723 U. S. RELATED_10.0% Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 1,500,000 1,421,205 Puerto Rico Commonwealth: 6.80%, 7/1/2021 (Prerefunded 7/1/2002) (a).............................. 1,000,000 1,085,980 Refunding 6%, 7/1/2014.................................................. 2,000,000 1,831,680 Puerto Rico Commonwealth Highway and Transportation Authority, Highway Revenue: 6.644%, 7/1/2009 (b).................................................... 1,000,000 777,500 6.744%, 7/1/2010 (b).................................................... 1,000,000 760,000 Puerto Rico Electric Power Authority, Power Revenue 8%, 7/1/2008............ 500,000 558,035 Virgin Islands Public Finance Authority, Revenue, Refunding 7.25%, 10/1/2018 1,000,000 992,080 ---------- TOTAL INVESTMENTS (cost $73,701,409)........................................ $73,907,818 ===========
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series SUMMARY OF ABBREVIATIONS FGIC Financial Guaranty Insurance Company FSA Financial Security Assurance FHA Federal Housing Administration MBIA Municipal Bond Investors Assurance FNMA Federal National Mortgage Association
SUMMARY OF COMBINED RATINGS (UNAUDITED) FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE - --------- -------- ----------------- ----------------- AAA Aaa AAA 47.8% AA Aa AA 10.6 A A A 27.9 BBB Baa BBB 5.4 Not Rated Not Rated Not Rated 8.3 ---- 100.0% ======
NOTES TO STATEMENT OF INVESTMENTS: (a) 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. (b) Inverse floater security - the interest rate is subject to change periodically. (c) Security 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 October 31, 1994, this security amounted to $1,532,375 or 2.0% of net assets. (d) Fitch currently provides creditworthiness information for a limited number of investments. (e) At October 31, 1994, the Fund had $24,285,291 (31.8%) of net assets invested in securities whose payment of principal and interest is dependent upon revenues generated from health care projects. (f) At October 31, 1994, 27.5% of the Fund's net assets are insured by MBIA. See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1994 (UNAUDITED) ASSETS: Investments in securities, at value (cost $73,701,409)_see statement..................................... $73,907,818 Cash.................................................................... 998,082 Interest receivable..................................................... 1,449,519 Receivable for shares of Beneficial Interest subscribed................. 18,044 Prepaid expenses........................................................ 5,374 ----------- 76,378,837 LIABILITIES: Due to The Dreyfus Corporation.......................................... $36,580 Payable for shares of Beneficial Interest redeemed...................... 28,672 Accrued expenses........................................................ 35,807 102,059 ---------- -------- NET ASSETS ................................................................ $76,276,778 =========== REPRESENTED BY: Paid-in capital......................................................... $75,713,410 Accumulated undistributed net realized gain on investments.............. 356,959 Accumulated net unrealized appreciation on investments_Note 3........... 206,409 ----------- NET ASSETS at value......................................................... $76,276,778 =========== Shares of Beneficial Interest outstanding: Class A Shares (unlimited number of $.001 par value shares authorized)............... 6,479,097 =========== Class B Shares (unlimited number of $.001 par value shares authorized)............... 341,582 =========== NET ASSET VALUE per share: Class A Shares ($72,458,811 / 6,479,097 shares)...................................... $11.18 ====== Class B Shares ($3,817,967 / 341,582 shares)......................................... $11.18 ====== See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series STATEMENT OF OPERATIONS SIX MONTHS ENDED OCTOBER 31, 1994 (UNAUDITED) INVESTMENT INCOME: INTEREST INCOME......................................................... $ 2,793,069 EXPENSES: Management fee_Note 2(a)............................................. $ 220,474 Shareholder servicing costs_Note 2(c)................................. 129,709 Distribution fees (Class B shares)_Note 2(b).......................... 9,945 Prospectus and shareholders' reports.................................. 7,157 Professional fees..................................................... 4,555 Custodian fees........................................................ 4,071 Registration fees..................................................... 1,430 Trustees' fees and expenses_Note 2(d)................................. 299 Miscellaneous......................................................... 7,004 ------------- 384,644 Less_reduction in management fee due to undertakings_Note 2(a)............................................ 7,190 ------------- TOTAL EXPENSES.................................................. 377,454 ---------- INVESTMENT INCOME_NET.......................................... 2,415,615 REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS: Net realized gain on investments_Note 3................................ $ 369,923 Net unrealized (depreciation) on investments............................ (3,465,008) ------------- NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (3,095,085) ---------- NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (679,470) ============== See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series STATEMENT OF CHANGES IN NET ASSETS YEAR ENDEDSIX MONTHS ENDED APRIL 30, OCTOBER 31, 1994 1994 (UNAUDITED) ------------- ------------- OPERATIONS: Investment income_net.................................................. $ 4,904,107 $ 2,415,615 Net realized gain on investments........................................ 38,609 369,923 Net unrealized (depreciation) on investments for the period............. (3,301,993) (3,465,008) ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... 1,640,723 (679,470) ------------- ------------- DIVIDENDS TO SHAREHOLDERS: From investment income_net: Class A shares........................................................ (4,768,195) (2,307,044) Class B shares........................................................ (135,912) (108,571) From net realized gain on investments: Class A shares........................................................ (303,176) -- Class B shares........................................................ (11,985) -- In excess of net realized gain on investments: Class A shares........................................................ (12,471) -- Class B shares........................................................ (493) -- ------------- ------------- TOTAL DIVIDENDS................................................... (5,232,232) (2,415,615) ------------- ------------- BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold: Class A shares........................................................ 6,515,438 3,092,268 Class B shares........................................................ 2,835,004 562,591 Dividends reinvested: Class A shares........................................................ 2,622,716 1,217,040 Class B shares........................................................ 68,991 58,447 Cost of shares redeemed: Class A shares........................................................ (8,594,165) (5,781,476) Class B shares........................................................ (56,768) (343,617) ------------- ------------- INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 3,391,216 (1,194,747) ============= ============= TOTAL (DECREASE) IN NET ASSETS.................................. (200,293) (4,289,832) NET ASSETS: Beginning of period..................................................... 80,766,903 80,566,610 ------------- ------------- End of period........................................................... $80,566,610 $76,276,778 ============= =============
SHARES --------------------------------------------------------------------------- CLASS A CLASS B ----------------------------------- -------------------------------- YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED APRIL 30, OCTOBER 31, 1994 APRIL 30, OCTOBER 31, 1994 1994 (UNAUDITED) 1994 (UNAUDITED) ------------ --------------- -------- ------------- CAPITAL SHARE TRANSACTIONS: Shares sold........................... 531,050 267,709 229,412 48,526 Shares issued for dividends reinvested 214,378 105,534 5,666 5,068 Shares redeemed....................... (710,422) (499,468) (4,659) (30,309) ------------ --------------- -------- ------------- NET INCREASE (DECREASE) IN SHARES OUTSTANDING......... 35,006 (126,225) 230,419 23,285 ========== ============= ========== ============== See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from the Series' financial statements. CLASS A SHARES CLASS B SHARES ------------------------------------------------------ -------------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED APRIL 30, OCTOBER 31, 1994 APRIL 30, OCTOBER 31, 1994 ------------------------------------------- ---------------- -------------- PER SHARE DATA: 1990 1991 1992 1993 1994 (UNAUDITED) 1993(1) 1994 (UNAUDITED) ----- ----- ----- ------ ----- --------- ----- ----- ---------- Net asset value, beginning of period... $10.92 $10.69 $11.05 $11.41 $12.13 $11.64 $11.79 $12.13 $11.63 ----- ----- ----- ------ ----- --------- ----- ----- ---------- INVESTMENT OPERATIONS: Investment income_net... .82 .79 .75 .73 .71 .35 .19 .64 .32 Net realized and unrealized gain (loss) on investments (.23) .37 .36 .73 (.44) (.46) .34 (.45) (.45) ----- ----- ----- ------ ----- --------- ----- ----- ---------- TOTAL FROM INVESTMENT OPERATIONS........ .59 1.16 1.11 1.46 .27 (.11) .53 .19 (.13) ----- ----- ----- ------ ----- --------- ----- ----- ---------- DISTRIBUTIONS: Dividends from investment income_net............ (.82) (.79) (.75) (.73) (.71) (.35) (.19) (.64) (.32) Dividends from net realized gain on investments... -- (.01) . -- (.01) (.05) -- -- (.05) -- Dividends in excess of net realized gain on investments -- -- -- -- -- -- -- -- -- ----- ----- ----- ------ ----- --------- ----- ----- ---------- TOTAL DISTRIBUTIONS... (.82) (.80) (.75) (.74) (.76) (.35) (.19) (.69) (.32) ----- ----- ----- ------ ----- --------- ----- ----- ---------- Net asset value, end of period $10.69 $11.05 $11.41 $12.13 $11.64 $11.18 $12.13 $11.63 $11.18 ==== ===== ====== ====== ====== ====== ====== ====== ===== TOTAL INVESTMENT RETURN(2).. 5.49% 11.23% 10.32% 13.14% 2.08% (1.92%)(3) 15.56%(3) 1.44% (2.34%)(3) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets............ -- .19% .55% .69% .82% .91%(3) 1.15%(3) 1.36% 1.43%(3) Ratio of net investment income to average net assets. 7.40% 7.21% 6.65% 6.16% 5.80% 6.06%(3) 4.92%(3) 5.18% 5.46%(3) Decrease reflected in above expense ratios due to undertakings by the Manager 1.11% .78% .41% .24% .11% .02%(3) .13%(3) .10% .02%(3) Portfolio Turnover Rate. 28.44% 47.07% 24.75% 11.36% 12.04% -- 11.36% 12.04% -- Net Assets, end of period (000's Omitted)....... $43,375 $57,328 $66,873 $79,701 $76,865 $72,459 $1,066 $3,702 $3,818 (1) From January 15, 1993 (commencement of initial offering) to April 30, 1993. (2) Exclusive of sales load. (3) Annualized. See independent accountants' review report and notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series NOTES TO FINANCIAL STATEMENTS (UNAUDITED) NOTE 1_SIGNIFICANT ACCOUNTING POLICIES: Premier State Municipal Bond Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as a non-diversified open-end management investment company and operates as a series company currently offering fifteen series including the Massachusetts Series (the "Series"). Dreyfus Service Corporation, until August 24, 1994, acted as the distributor of the Fund's shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager became a direct subsidiary of Mellon Bank, N.A. On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor") was engaged as the Fund's distributor. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of Institutional Administration Services, Inc., a provider of mutual fund administration services, the parent company of which is Boston Institutional Group, Inc. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. The Series offers both Class A and Class B shares. Class A shares are subject to a sales charge imposed at the time of purchase and Class B shares are subject to a contingent deferred sales charge imposed at the time of redemption on redemptions made within five years of purchase. Other differences between the two Classes include the services offered to and the expenses borne by each Class and certain voting rights. (A) PORTFOLIO VALUATION: The Series' investments (excluding options and financial futures on municipal and U.S. treasury securities) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. 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 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 each business day. Investments not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. (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 premiums and original issue discounts 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 Series follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the Series. PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, if any, it is the policy of the Series not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Series 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, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all Federal income and excise taxes. NOTE 2_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to a management agreement ("Agreement") with the Manager, the management fee is computed at the annual rate of .55 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement provides for an expense reimbursement from the Manager should the Series' aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series for any full fiscal year. However, the Manager had undertaken from May 1, 1994 through June 30, 1994 to waive receipt of the management fee payable to it by the Series in excess of an annual rate of .50 of 1% (excluding certain expenses as described above) of the Series' average daily net assets and thereafter, had undertaken from July 1, 1994 through July 7, 1994 to reduce the management fee paid by the Series, to the extent that the Series' aggregate expenses (excluding certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The reduction in management fee, pursuant to the undertakings, amounted to $7,190 for the six months ended October 31, 1994. Dreyfus Service Corporation retained $5,160 during the six months ended October 31, 1994 from commissions earned on sales of the Series' Class A shares. Prior to August 24, 1994, Dreyfus Service Corporation retained $620 from contingent deferred sales charges imposed upon redemptions of the Series' Class B shares. (B) On August 3, 1994, Series' shareholders approved a revised Distribution Plan with respect to Class B shares only (the "Class B Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Class B Distribution Plan, effective August 24, 1994, the Fund pays the Distributor for distributing the Series' Class B shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B shares. Prior to August 24, the Distribution Plan ("prior Class B Distribution Plan") provided that the Series pay Dreyfus Service Corporation at an annual rate of .50 of 1% of the value of the Series' Class B shares average daily net assets, for the costs and expenses in connection with advertising, marketing and distributing the Series' Class B shares. Dreyfus Service Corporation made payments to one or more Service Agents based on the value of the Series' Class B shares owned by clients of the Service Agent. During the six months ended October 31, 1994, $3,830 was charged to the Series pursuant to the Class B Distribution Plan and $6,115 was charged to the Series pursuant to the prior Class B Distribution Plan. PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED) (C) Under the Shareholder Services Plan, the Series pays the Distributor, at an annual rate of .25 of 1% of the value of the average daily net assets of Class A and Class B shares for servicing shareholder accounts. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Series and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents in respect of these services. The Distributor determines the amounts to be paid to Service Agents. From May 1, 1994 through August 23, 1994, $60,131 and $3,058 were charged to Class A and Class B shares, respectively, by Dreyfus Service Corporation. From August 24, 1994 through October 31, 1994, $35,111 and $1,915 were charged to Class A and Class B shares, respectively, by the Distributor pursuant to the Shareholder Services Plan. (D) Prior to August 24, 1994 certain officers and trustees of the Fund were "affiliated persons," as defined in the Act, of the Manager and/or Dreyfus Service Corporation. Each trustee who is not an "affiliated person" receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. NOTE 3_SECURITIES TRANSACTIONS: The aggregate amount of sales of securities amounted to $5,944,672 for the six months ended October 31, 1994, and consisted entirely of long-term municipal investments. At October 31, 1994, accumulated net unrealized appreciation on investments was $206,409, consisting of $3,029,627 gross unrealized appreciation and $2,823,218 gross unrealized depreciation. At October 31, 1994, 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). PREMIER STATE MUNICIPAL BOND FUND, Massachusetts Series REVIEW REPORT OF ERNST & YOUNG LLP, INDEPENDENT ACCOUNTANTS SHAREHOLDERS AND BOARD OF TRUSTEES PREMIER STATE MUNICIPAL BOND FUND, MASSACHUSETTS SERIES We have reviewed the accompanying statement of assets and liabilities, including the statement of investments, of Premier State Municipal Bond Fund, Massachusetts Series (one of the series constituting the Premier State Municipal Bond Fund) as of October 31, 1994, and the related statements of operations and changes in net assets and financial highlights for the six month period ended October 31, 1994. These financial statements and financial highlights are the responsibility of the Fund's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements and financial highlights taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the interim financial statements and financial highlights referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the statement of changes in net assets for the year ended April 30, 1994 and financial highlights for each of the five years in the period ended April 30, 1994 and in our report dated June 7, 1994, we expressed an unqualified opinion on such statement of changes in net assets and financial highlights. (Ernst & Young LLP Signature Logo) New York, New York December 6, 1994 Premier State Municipal Bond Fund, Massachusetts Series 144 Glenn Curtiss Boulevard Uniondale, NY 11556 Manager The Dreyfus Corporation 200 Park Avenue New York, NY 10166 Custodian The Bank of New York 90 Washington Street New York, NY 10286 Transfer Agent & Dividend Disbursing Agent The Shareholder Services Group, Inc. P.O. Box 9671 Providence, RI 02940 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 063/622SA9410BKR Semi-Annual Report Premier State Municipal Bond Fund Massachusetts Series October 31, 1994 -----END PRIVACY-ENHANCED MESSAGE-----