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<IMS-DOCUMENT>0000806176-95-000024.txt : 19950703<IMS-HEADER>0000806176-95-000024.hdr.sgml : 19950703
ACCESSION NUMBER: 0000806176-95-000024
CONFORMED SUBMISSION TYPE: N-30D
PUBLIC DOCUMENT COUNT: 2
<REFERENCE-462B>
CONFORMED PERIOD OF REPORT: 19950430
FILED AS OF DATE: 19950630
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: 95551630
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
</IMS-HEADER>
<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<DESCRIPTION>ANNUAL REPORT
<TEXT>
LETTER TO SHAREHOLDERS
Dear Shareholder:
As your Series' annual reporting period ended on April 30, 1995, the net
asset value per share for Class A shares was $12.72. Income dividends of
approximately $.704 per share were paid during the period, representing a
distribution rate per share of 5.29% based on the April 30 closing maximum
offering price. The net asset value for Class B shares was $12.71. Income
dividends of approximately $.636 per share were paid, equating to a 5.00%
distribution rate per share based on the April 30 closing net asset value. We
are pleased to inform you that all dividends paid from net investment income
were fully exempt from Federal and North Carolina State personal income
taxes.*
The last six months have seen a dramatic change in the behavior of bond
market prices. Last November marked the bottom of a severe downtrend. The
bellwether 30-year Treasury bond reached a high yield of 8.16% on November 7,
after reaching yields as low as 6.17% in January of 1994. These yield
adjustments were caused by a series of rate hikes by the Federal Reserve
Board. The Fed took these measures to subdue an economy that seemed to be
growing at an inflationary pace. As 1994 drew to a close, the bond market
continued to exhibit volatility. Economic indicators showed the overall
capacity utilization rate at 85.4%, a 15-year high, and consumer confidence
near its five-year high. Both represented strong signs of growth to which the
bond market reacted adversely.
However, during the first quarter of 1995 signs of a slowdown started to
take hold as the effect of higher interest rates set in. Existing home sales,
new construction and auto sales weakened. More important, jobless claims rose
along with inventories, indicating slowing sales. Many forecasters started to
revise their expectations for economic growth, and a solid market rally took
hold as the threat of inflation began to subside. By the end of the first
calendar quarter of 1995, both the bond market and your Series had regained
much of the ground lost in 1994. Since then, the first quarter Gross Domestic
Product (GDP) report of 2.8% showed a significant drop from the fourth
quarter level of 5.1%, and April nonfarm employment declined by 9,000
workers, which clearly turned some bond market skeptics into believers. This
follow-through has seen the 30-year U.S. Treasury Bond dip below the 7% yield
level to 6.90% as of May 16. There is now speculation in some market sectors
about a possible Federal Reserve lowering of interest rates to avoid
recession. Countering this theory are those who claim that these new lower
interest-rate levels could actually stimulate the economy during the second
half of 1995.
The unexpected municipal market turnaround was largely fueled by a
shortage of securities. This technical phenomenon, which exists in the equity
market also, is pronounced in the tax exempt market where new bond issuance
is off nearly 50%, and yields on existing municipals have achieved a
historically rich status relative to Treasuries. Recent municipal bond
trading and spread relations have corrected, a correction that is
attributable mostly to the prospect of a Federal flat tax proposal. Such a
proposal, if passed, could diminish the tax advantage municipal bonds enjoy
by providing more, or total, tax exemption to other investments. A proposal
of this kind is at the embryonic stage, and could go through many changes due
to the political climate. As a result, we expect the final resolution of any
change in our present tax structure to be many months away. The more
immediate concern of investors seems to be the scarce municipal supply that
is expected to continue. Currently, the estimated net supply of municipal
debt in 1995 (estimated new issuance minus bond redemptions and coupon
payments) is a negative $50 billion.
The response of investors to unexpected domestic economic weakness
ultimately supported the bond market and your Series;
initial mixed signals, however, and continuous doubts about the dollar caused
us to adopt and maintain a cautious market approach with the Series this
year. This means that the Series' income orientation was emphasized, which
was accomplished by holding, when possible, bonds that have coupons higher
than what the current market offers. Additionally, any recent portfolio
changes reflected what we believe were the best income opportunities and
credit risk improvements available to us. As a balance to our defensive
strategy, some non-callable bonds were added which have greater sensitivity
to market moves. Our efforts to provide more tax-free income and lower
volatility diminished, to some extent, the capital appreciation your Series
might otherwise have been able to achieve during the market spike in the
first quarter of 1995.
We have included a current Statement of Investments and recent financial
statements for your review, and look forward to serving your investment needs
in the future.
Sincerely,
(Richard J. Moynihan Signature Logo)
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
May 17, 1995
New York, N.Y.
* Some income may be subject to the Federal Alternative Minimum Tax (AMT)
for certain shareholders.
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES APRIL 30, 1995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER STATE
MUNICIPAL BOND FUND, NORTH CAROLINA SERIES CLASS A SHARES AND THE LEHMAN
BROTHERS MUNICIPAL BOND INDEX
(Exhibit A)
In Dollars
$13,175
Lehman Brothers Municipal Bond
Index*
$12,626
Premier State Municipal Bond Fund, North Carolina Series
(Class A Shares)
*Source: Lehman Brothers
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A CLASS B
- ------------------------------------------------------------ ----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Periods ended 4/30/95 Sales Charge Sales Charge (4.5%) Periods ended 4/30/95 Redemption Redemption*
- --------------------- ---------------- ------------------- --------------------- ----------- ----------------------
<S> <C> <C> <C> <C>
1 Year 5.70% .94% 1 Year 5.12% 2.12%
From Inception (8/1/91) 7.74 6.42 From Inception (1/15/93) 4.45 3.63
</TABLE>
Past performance is not predictive of future performance. Share price and
investment return fluctuate and share price may be more or less than original
cost upon redemption.
The above graph compares a $10,000 investment made in Class A shares of
Premier State Municipal Bond Fund, North Carolina Series on 8/1/91 (Inception
Date) to a $10,000 investment made in the Lehman Brothers Municipal Bond
Index on that date. For comparative purposes the value of the Index on
7/31/91 is used as the beginning value on 8/1/91. All dividends and capital
gain distributions are reinvested. Performance for Class B shares will differ
from the results shown above due to difference in charges and expenses
charged to that class.
The Series invests primarily in North Carolina municipal securities and its
performance shown in the line graph takes into account the maximum initial
sales charge on Class A shares and all other applicable fees and expenses.
Unlike the Series, the Lehman Brothers Municipal Bond Index is an unmanaged
total return performance benchmark for the long-term, investment grade,
geographically unrestricted tax exempt bond market, calculated by using
municipal bonds selected to be representative of the market. The Index does
not take into account charges, fees and other expenses. Also, unlike the Fund
which principally limits investments to North Carolina municipal obligations,
the Index is not state-specific. Further information relating to Series
performance, including expense reimbursements, if applicable, is contained in
the Condensed Financial Information section of the Prospectus and elsewhere
in this report.
*Maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF INVESTMENTS APRIL 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS-99.4% AMOUNT VALUE
------------ ------------
<S> <C> <C>
NORTH CAROLINA-73.2%
Asheville, COP, Refunding 6.50%, 2/1/2008................................... $ 500,000 $ 527,575
Board of Governors of the University of North Carolina, Revenue
(University of North Carolina Hospital - Chapel Hill) 6%, 2/15/2024..... 3,000,000 2,823,990
Buncombe County Metropolitan Sewage District, Sewage System Revenue:
6.75%, 7/1/2022 (Prerefunded; 7/1/2002) (a)............................. 500,000 556,610
Refunding 5.50%, 7/1/2022 (Insured; FGIC)............................... 1,125,000 1,047,105
Charlotte, COP (Convention Facility Project):
6.75%, 12/1/2021 (Prerefunded; 12/1/2001) (Insured; AMBAC) (a)......... 1,000,000 1,111,620
Refunding 5.25%, 12/1/2020 (Insured; AMBAC)............................. 4,000,000 3,581,120
Charlotte-Mecklenberg Hospital Authority, Health Care System Revenue:
5.75%, 1/1/2012......................................................... 1,285,000 1,256,602
6.25%, 1/1/2020......................................................... 500,000 503,935
Cleveland County, Sanitary District, Water 6.75%, 3/1/2015 (Insured; FGIC).. 290,000 308,351
Coastal Regional Solid Waste Management Authority, Solid Waste Disposal
System Revenue 6.50%, 6/1/2008.......................................... 1,000,000 1,046,690
Craven County Industrial Facilities and Pollution Control Financing
Authority, PCR
Refunding (Weyerhaeuser Co. Project) 6.35%, 1/1/2010.................... 2,000,000 2,022,800
Dare County, COP 6.60%, 5/1/2006 (Insured; MBIA)............................ 400,000 431,256
Durham County, COP (Jail Facilities and Computer Equipment Project)
6.625%, 5/1/2014........................................................ 850,000 876,580
Fayetteville Public Works Commission, Revenue, Refunding
6.50%, 3/1/2014 (Prerefunded; 3/1/2000) (Insured; FGIC) (a)............ 350,000 378,595
Forsyth County, COP (1991 Allied Health Technologies Building Project)
6.50%, 6/1/2012......................................................... 300,000 312,798
Greensboro, COP (1991 Greensboro Coliseum Arena Expansion Project)
6.25%, 12/1/2011........................................................ 500,000 515,705
Haywood County, Industrial Facilities and PCR, Refunding
(Champion International Corp. Project) 6.85%, 5/1/2014.................. 500,000 512,025
Martin County Industrial Facilities and Pollution Control Financing
Authority, Revenue
(Solid Waste Disposal - Weyerhaeuser Project):
7.25%, 9/1/2014....................................................... 400,000 420,424
6.80%, 5/1/2024....................................................... 2,000,000 2,059,300
New Hanover County Industrial Facilities and Pollution Control Financing
Authority,
Solid Waste Disposal Revenue (Occidental Petroleum) 6.50%, 8/1/2014..... 1,000,000 984,770
North Carolina Eastern Municipal Power Agency, Power System Revenue
5.75%, 12/1/2016........................................................ 1,865,000 1,666,098
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
NORTH CAROLINA (CONTINUED)
North Carolina Eastern Municipal Power Agency, Power System Revenue
(continued):
Refunding:
5.875%, 1/1/2013...................................................... $ 5,000,000 $ 4,604,950
6%, 1/1/2013.......................................................... 2,500,000 2,349,525
6.50%, 1/1/2017....................................................... 1,000,000 985,040
North Carolina Educational Facilities Finance Agency, Revenue
(Duke University Project) 6.75%, 10/1/2021.............................. 500,000 521,800
North Carolina Housing Finance Agency:
Multi-Family Revenue, Refunding 6.90%, 7/1/2024 (Insured: FHA).......... 485,000 496,839
Single Family Revenue:
7.05%, 9/1/2020....................................................... 1,465,000 1,513,389
6.10%, 9/1/2025 (Insured; FHA)........................................ 4,000,000 4,081,640
6.70%, 9/1/2026....................................................... 2,250,000 2,272,162
North Carolina Medical Care Commission, HR:
(Annie Penn Memorial Hospital Project) 7.50%, 8/15/2021................. 4,500,000 4,565,655
(Duke University Hospital Project) 7%, 6/1/2021 (Prerefunded; 6/1/2001) (a) 3,000,000 3,349,260
(Presbyterian Hospital Project) 7.375%, 10/1/2020 (Prerefunded; 10/1/2000) (a) 250,000 282,100
Refunding:
(Carolina Medicorp Project) 5.50%, 5/1/2015........................... 500,000 465,595
(Mercy Hospital Project) 6.50%, 8/1/2015.............................. 1,000,000 996,520
(North Carolina Baptist Hospital Project) 6%, 6/1/2022................ 1,000,000 981,560
(Southeastern General Hospital Project) Zero Coupon, 6/1/2006 (Insured; FSA) 1,000,000 541,940
North Carolina Municipal Power Agency, Number 1 Catawba Electric Revenue:
7%, 1/1/1996............................................................ 200,000 205,372
5%, 1/1/2015............................................................ 1,000,000 834,690
5.75%, 1/1/2015......................................................... 6,250,000 5,733,000
5.75%, 1/1/2020 (Insured; MBIA)......................................... 2,000,000 1,903,760
Pitt County, Revenue (Pitt County Memorial Hospital) 6.90%, 12/1/2021....... 540,000 566,676
Surry County Northern Hospital District, Health Care Facilities Revenue,
Refunding
7.875%, 10/1/2021....................................................... 1,000,000 1,032,450
Wake County, Hospital System Revenue, Refunding:
Zero Coupon, 10/1/2010 (Insured; MBIA).................................. 2,200,000 885,192
5.125%, 10/1/2026 (Insured; MBIA)....................................... 3,250,000 2,821,130
Wake County Industrial Facilities and Pollution Control Financing Authority,
Revenue
(Carolina Power and Light) 6.90%, 4/1/2009.............................. 2,000,000 2,088,980
U.S. RELATED-26.2%
Guam Airport Authority, Revenue 6.70%, 10/1/2023............................ 2,000,000 2,025,280
Guam Government 5.40%, 11/15/2018........................................... 2,000,000 1,698,240
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995
PRINCIPAL
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- -------------
U.S. RELATED (CONTINUED)
Commonwealth of Puerto Rico:
Public Improvement:
7.70%, 7/1/2020 (Prerefunded; 7/1/2000) (a)........................... $ 1,000,000 $ 1,143,080
6.80%, 7/1/2021 (Prerefunded; 7/1/2002) (a)........................... 600,000 667,626
Refunding 5.50%, 7/1/2013............................................... 2,000,000 1,852,540
Puerto Rico Highway Authority, Revenue, Refunding
8%, 7/1/2003 (Prerefunded; 7/1/1998) (a)................................ 2,000,000 2,229,380
Puerto Rico Highway and Transportation Authority, Highway Revenue
6.625%, 7/1/2018 (Prerefunded 7/1/2002) (a)............................. 3,600,000 3,968,280
Puerto Rico Port Authority, Special Facilities Revenue
(American Airlines, Inc. Project) 6.30%, 6/1/2023....................... 1,500,000 1,418,970
Puerto Rico Public Buildings Authority, Guaranteed Public Education and
Health
Facilities, Refunding:
6%, 7/1/2012.......................................................... 850,000 832,974
5.75%, 7/1/2015....................................................... 7,000,000 6,616,330
Virgin Islands Public Finance Authority, Revenue, Refunding,
Matching Fund Loan Notes 7.25%, 10/1/2018............................... 1,500,000 1,550,505
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $92,201,710)...................................................... $91,026,379
=============
SHORT-TERM MUNICIPAL INVESTMENT-.6%
NORTH CAROLINA;
North Carolina Educational Facilities Finance Agency , Revenue, VRDN
(Bowman Grey School Medical Project) 4.60% (LOC; Wachovia Bank) (b,c)
(cost $500,000)......................................................... $ 500,000 $ 500,000
=============
TOTAL INVESTMENTS-100.0%
(cost $92,701,710)...................................................... $91,526,379
=============
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration PCR Pollution Control Revenue
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
HR Hospital Revenue
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (D) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- -------- -------- ------------------ -------------------
<S> <C> <S> <C>
AAA Aaa AAA 27.8%
AA Aa AA 18.8
A A A 37.8
BBB Baa BBB 13.4
F1 MIG1 SP1 .5
Not Rated (e) Not Rated (e) Not Rated (e) 1.7
-------
100.0%
=======
</TABLE>
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) Secured by letters of credit.
(c) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's or Standard and
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.
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $92,701,710)-see statement...................................... $91,526,379
Interest receivable..................................................... 1,687,856
Receivable for shares of Beneficial Interest subscribed................. 54,021
Prepaid expenses........................................................ 7,108
-----------
93,275,364
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 22,973
Due to Distributor...................................................... 36,898
Due to Custodian........................................................ 589,674
Payable for shares of Beneficial Interest redeemed...................... 63,957
Accrued expenses........................................................ 47,104 760,606
---------- -----------
NET ASSETS ................................................................ $92,514,758
===========
REPRESENTED BY:
Paid-in capital......................................................... $96,294,013
Accumulated net realized (loss) on investments.......................... (2,603,924)
Accumulated net unrealized (depreciation) on investments-Note 3(b)...... (1,175,331)
-----------
NET ASSETS at value......................................................... $92,514,758
===========
Shares of Beneficial Interest outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)............... 3,945,385
===========
Class B Shares
(unlimited number of $.001 par value shares authorized)............... 3,327,642
===========
NET ASSET VALUE per share:
Class A Shares
($50,204,678 / 3,945,385 shares)...................................... $12.72
======
Class B Shares
($42,310,080 / 3,327,642 shares)...................................... $12.71
======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1995
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $ 6,103,845
EXPENSES:
Management fee-Note 2(a).............................................. $ 535,236
Shareholder servicing costs-Note 2(c)................................. 319,198
Distribution fees (Class B shares)-Note 2(b).......................... 199,899
Custodian fees........................................................ 14,145
Professional fees..................................................... 13,948
Prospectus and shareholders' reports.................................. 12,560
Registration fees..................................................... 961
Trustees' fees and expenses-Note 2(d)................................. 826
Miscellaneous......................................................... 45,664
-----------
1,142,437
Less-reduction in management fee due to
undertakings-Note 2(a)............................................ 297,996
-----------
TOTAL EXPENSES.................................................. 844,441
-----------
INVESTMENT INCOME-NET........................................... 5,259,404
-----------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized (loss) on investments (including options transactions)-Note 3(a) $(2,391,318)
Net realized gain on financial futures-Note 3(a)........................ 48,742
-----------
NET REALIZED (LOSS)................................................... (2,342,576)
Net unrealized appreciation on investments.............................. 2,019,925
-----------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS............... (322,651)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 4,936,753
===========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED APRIL 30,
--------------------------------
1994 1995
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................... $ 5,023,340 $ 5,259,404
Net realized (loss) on investments...................................... (259,519) (2,342,576)
Net unrealized appreciation (depreciation) on investments for the year.. (6,321,383) 2,019,925
-------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (1,557,562) 4,936,753
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares........................................................ (3,507,400) (3,229,769)
Class B shares........................................................ (1,515,940) (2,029,635)
-------------- --------------
TOTAL DIVIDENDS................................................... (5,023,340) (5,259,404)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 23,248,700 3,792,421
Class B shares........................................................ 28,953,805 5,258,725
Dividends reinvested:
Class A shares........................................................ 1,920,032 1,700,541
Class B shares........................................................ 941,663 1,251,870
Cost of shares redeemed:
Class A shares........................................................ (9,403,883) (23,036,441)
Class B shares........................................................ (1,465,324) (3,172,359)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS................................ 44,194,993 (14,205,243)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 37,614,091 (14,527,894)
NET ASSETS:
Beginning of year....................................................... 69,428,561 107,042,652
-------------- --------------
End of year............................................................. $107,042,652 $ 92,514,758
============== ==============
</TABLE>
<TABLE>
<CAPTION>
SHARES
---------------------------------------------------------------------
CLASS A CLASS B
--------------------------------- --------------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
--------------------------------- --------------------------------
1994 1995 1994 1995
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 1,697,042 302,337 2,120,383 420,696
Shares issued for dividends reinvested. 141,385 135,607 69,404 100,207
Shares redeemed........................ (691,793) (1,840,173) (108,062) (256,909)
--------------- -------------- -------------- --------------
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING.......... 1,146,634 (1,402,229) 2,081,725 263,994
=============== ============== ============== ==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA 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 year indicated. This
information has been derived from the Series' financial statements.
CLASS A SHARES CLASS B SHARES
------------------------------------ --------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
------------------------------------ --------------------------
PER SHARE DATA: 1992(1) 1993 1994 1995 1993(2) 1994 1995
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........ $12.00 $12.39 $13.40 $12.73 $12.90 $13.39 $12.72
------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net..................... .62 .78 .74 .70 .20 .66 .64
Net realized and unrealized gain (loss)
on investments.......................... .39 1.02 (.67) (.01) .49 (.67) (.01)
------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS........ 1.01 1.80 .07 .69 .69 (.01) .63
------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net...... (.62) (.78) (.74) (.70) (.20) (.66) (.64)
Dividends from net realized gain on investments - (.01) - - - - -
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS..................... (.62) (.79) (.74) (.70) (.20) (.66) (.64)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year.............. $12.39 $13.40 $12.73 $12.72 $13.39 $12.72 $12.71
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN (3)................... 11.36%(4) 14.97% .29% 5.70% 18.53%(4) (.27%) 5.12%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... - .29% .44% .65% .79%(4) 1.00% 1.18%
Ratio of net investment income to
average net assets...................... 6.35%(4) 5.94% 5.38% 5.63% 4.47%(4) 4.78% 5.08%
Decrease reflected in above expense ratios
due to undertakings by the Manager...... 1.14%(4) .76% .50% .31% .56%(4) .48% .30%
Portfolio Turnover Rate................... 15.01%(5) 5.76% 11.62% 12.02% 5.76% 11.62% 12.02%
Net Assets, end of year (000's Omitted)... $26,387 $56,284 $68,074 $50,205 $13,145 $38,968 $42,310
(1) From August 1, 1991 (commencement of operations) to April 30, 1992.
(2) From January 15, 1993 (commencement of initial offering) to April 30, 1993.
(3) Exclusive of sales load.
(4) Annualized.
(5) Not annualized.
See notes to financial statements.
</TABLE>
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
NOTES TO FINANCIAL STATEMENTS
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 North Carolina 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 FDI Distribution Services, Inc., a provider of mutual fund
administration services, which in turn is a wholly-owned subsidiary of FDI
Holdings, Inc., 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 issued 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, NORTH CAROLINA SERIES
NOTES TO FINANCIAL STATEMENTS (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, if any, 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, 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.
The Fund has an unused capital loss carryover of approximately $1,533,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1995. The
carryover does not include net realized securities losses from November 1,
1994 through April 30, 1995 which are treated, for Federal income tax
purposes, as arising in fiscal 1996. If not applied, $225,000 of the
carryover expires in fiscal 2002 and $1,308,000 of the carryover expires in
fiscal 2003.
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 .20
of 1% (excluding certain expenses as described above) of the Series' average
daily net assets and thereafter, had undertaken through April 30, 1995 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
$297,996 for the year ended April 30, 1995.
Dreyfus Service Corporation retained $5,095 during the year ended April
30, 1995 from commissions earned on sales of the Series' Class A shares.
Prior to August 24, 1994, Dreyfus Service Corporation retained $13,979
during the year ended April 30, 1995 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, 1994, the Distribution Plan ("prior Class B
Distribution Plan") provided that the Series pays 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 Agents.
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
During the year ended April 30, 1995, $136,431 was charged to the Series
pursuant to the Class B Distribution Plan and $63,468 was charged to the
Series pursuant to the prior Class B Distribution Plan.
(C) Under the Shareholder Service 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 service
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, $52,956 and $31,456 were
charged to Class A and Class B shares, respectively, by Dreyfus Service Corpor
ation. From August 24, 1994 through April 30, 1995, $90,383 and $68,494 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. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 3-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment securities,
excluding options transactions, amounted to $20,683,385 and $31,587,918,
respectively, for the year ended April 30, 1995, and consisted entirely of
long-term and short-term municipal investments.
In addition, the following table summarizes the Series' call/put options
written transactions for the year ended April 30, 1995:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
--------------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST GAIN
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding April 30, 1994........ - -
Contracts written........................... 250 $ 172,627
----------- -----------
250 172,627
Contracts Terminated;
Expired................................... 250 172,627 - $172,627
----------- ----------- ----------- -----------
Total contracts terminated................ 250 $ 172,627 $172,627
----------- ----------- ----------- -----------
Contracts outstanding April 30, 1995........ - -
=========== ===========
</TABLE>
As a writer of call options, the Series receives a premium at the outset
and then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. Generally, the Series
would incur a gain, to the extent of the premium, if the price of the
underlying financial instrument decreases between the date the option is
written and the date on which the option is terminated.
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Generally, the Series would realize a loss, if the price of the financial
instrument increases between those dates. At April 30, 1995, there were no
call options written outstanding.
As a writer of put options, the Series receives a premium at the outset
and then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. Generally, the Series would incur
a gain, to the extent of the premium, if the price of the underlying
financial instrument increases between the date the option is written and the
date on which the option is terminated. Generally, the Series would realize a
loss, if the price of the financial instrument declines between those dates.
At April 30, 1995, there were no put options written outstanding.
The Series engages in trading financial futures contracts. The Series is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the Series to
"mark to market" on a daily basis, which reflects the change in the market
value of the contract at the close of each day's trading. Accordingly,
variation margin payments are received to reflect daily unrealized gains or
losses. When the contracts are closed, the Series recognizes a realized gain
or loss. These investments require initial margin deposits with a custodian,
which consist of cash or cash equivalents, up to approximately 10% of the
contract amount. The amount of these deposits is determined by the exchange
or Board of Trade on which the contract is traded and is subject to change.
At April 30, 1995, there were no financial futures contracts outstanding.
(B) At April 30, 1995, accumulated net unrealized depreciation on
investments was $1,175,331, consisting of $1,842,605 gross unrealized
appreciation and $3,017,936 gross unrealized depreciation.
At April 30, 1995, 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, NORTH CAROLINA SERIES
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Premier State Municipal Bond Fund,
North Carolina Series (one of the Series constituting the Premier State
Municipal Bond Fund) as of April 30, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1995 by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier State Municipal Bond Fund, North Carolina Series at April
30, 1995, the results of its operations for the year then ended, the changes
in its net assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
(Ernst & Young Signature Logo)
New York, New York
June 6, 1995
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Series hereby designates all the
dividends paid from investment income-net during the fiscal year ended April
30, 1995 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are North Carolina residents, North Carolina personal
income taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Series' taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1995 calendar year
on Form 1099-DIV which will be mailed by January 31, 1996.
PREMIER STATE MUNICIPAL
BOND FUND, NORTH CAROLINA SERIES
200 Park Avenue
New York, NY 10166
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. 065/624AR954
Annual Report
PREMIER STATE
MUNICIPAL BOND FUND
NORTH CAROLINA SERIES
April 30, 1995
(Dreyfus Logo)
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<DESCRIPTION>TABLE FOR GRAPH IN PRESIDENT'S LETTER
<TEXT>
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER STATE MUNICIPAL BOND FUND, NORTH CAROLINA SERIES
CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
____________________________________________________
| | | PREMIER STATE |
| | LEHMAN BROTHERS |MUNICIPAL BOND FUND, |
| PERIOD | MUNICIPAL |NORTH CAROLINA SERIES|
| | BOND INDEX * | (CLASS A SHARES) |
|-----------|-----------------|---------------------|
| 8/1/91 | 10,000 | 9,547 |
| 4/30/92 | 10,734 | 10,360 |
| 4/30/93 | 12,092 | 11,911 |
| 4/30/94 | 12,353 | 11,945 |
| 4/30/95 | 13,175 | 12,626 |
|---------------------------------------------------|
*Source: Lehman Brothers
</TEXT>
</DOCUMENT>
</IMS-DOCUMENT>
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