-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TqVrdRBQHMjmU3xNqrkhSTuuQF/IrpdoHIZzmZ38Cn/g9VRurQmMKNEid0GFlFFL dM8YScsPL7pkVzv/Q3+csw== 0000806176-97-000016.txt : 19970709 0000806176-97-000016.hdr.sgml : 19970709 ACCESSION NUMBER: 0000806176-97-000016 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970708 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DREYFUS PREMIER STATE MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000806176 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04906 FILM NUMBER: 97637486 BUSINESS ADDRESS: STREET 1: 144 GENN CURTISS BLVD CITY: NUIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226805 MAIL ADDRESS: STREET 1: 144 GENN CURTISS BLVD CITY: NUIONDALE STATE: NY ZIP: 11556 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER STATE MUNICIPAL BOND FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER SERIES TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19870224 N-30D 1 ANNUAL REPORT DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES LETTER TO SHAREHOLDERS Dear Shareholder: We are pleased to report the performance of the Dreyfus Premier State Municipal Bond Fund _ Connecticut Series for its fiscal year ended April 30, 1997 as shown in the following table: TOTAL RETURN* DISTRIBUTION RATE** ______________ ____________________ Class A.................. 6.84% 5.04% Class B.................. 6.28% 4.75% Class C.................. 5.93% 4.51% Economic Review The U.S. economy just kept rolling ahead over the reporting period. Inflation remained subdued. The unemployment rate fell to its lowest level in 24 years, and a surge in tax revenues meant good news for the Administration's budget reduction program. Overall, the economic news has been stellar. The economy grew at a robust 5.6% annual rate during the first quarter, the best quarter in nine years. Aided by falling energy prices, and with no sign of shortages of raw materials, inflation remained in check. On the consumer level, the Consumer Price Index (CPI) remained below 3%. Excluding volatile food and energy prices, the CPI is slowing down so far this year, running at an annual rate of 2.5%. Inflation has been further restrained by the strong dollar which has moderated the price of imports and eased potential strains on domestic production capacity. The strong economy has put an increasing number of people to work. This tightening of the labor market has been a key factor in the implementation of monetary policy by the Federal Reserve Board's Open Market Committee (FOMC). The unemployment rate has been less than 5.5% since June 1996, the lowest sustained rate since the late 1980s. The rate fell to 4.9% in April of this year, its lowest level in 24 years. So far, neither strong economic growth nor wage increases have resulted in any price pressure at the consumer level. Through the first quarter (the latest available data), total employment costs (including wages and benefits) rose about the same as inflation. Renewed confidence, spurred by increasing job security and low inflation, has resulted in a surge in consumer spending. In the first quarter of the year, spending rose 6.4%, almost double the rate of the previous year's fourth quarter. The combined six-month performance was the largest increase in consumer spending over the past ten years. Retail sales have spurted in the early part of this year as well; first quarter results were sharply higher than in the last quarter of 1996. Not surprisingly, industrial production has been building momentum over the reporting period. The latest report on capacity utilization indicated the highest level in two years. So far, while the potential exists for production bottlenecks, prices for raw materials and worker wage demands have remained modest. Continued economic growth and the resulting rise in tax revenues have slashed further the Federal budget deficit. Administration officials estimate that this fiscal year's deficit will be about $75 billion, its lowest level in 23 years. Such good news on the deficit could make it easier to negotiate the Administration's bipartisan plan to balance the budget by 2002. While we seem to be enjoying the best of all possible economic worlds, the potential for future inflation is what concerns the Fed. Such concern resulted in the March decision by the FOMC, the policy-making arm of the Federal Reserve, to raise the Federal Funds rate one quarter of a percentage point to 5.50%. (The Federal Funds rate is the rate of interest banks charge each other for overnight loans.) The traditional assumption that strong economic growth and low unemployment will eventually result in rising inflation still drives the Fed's monetary policy initiatives. There is little reason to suspect that the Fed will soon change this policy. Market Environment Despite the assumption of a twenty-five basis point rate hike incorporated into most long-term securities in advance of the Federal Reserve meeting on March 25, prices of those securities actually fell an additional twenty-five basis points after the announcement, reaching a 7.17% yield on the thirty-year Treasury bellwether bond on April 17. Due to good inflation data, the market later recovered to the 6.85% level, and then retreated to a 7.00% yield, after the FOMC, at its meeting on May 20, decided to hold short-term rates steady. This action normally would have encouraged higher prices, but has instead generated some price erosion. The volatility in the general fixed income market belies the remarkable stability of the municipal bond market. Since February 15, the thirty-year Treasury bond has corrected by nearly forty basis points. By comparison, municipal bond futures are off only one and three-quarters points and cash securities (the bonds themselves) are flat to off one point. This substantial outperformance by municipals has led to municipal/Treasury yield ratios which are as low as have been seen in over two years. Portfolio Overview Your portfolio is made up of securities that are indicative of the relative stability of municipals compared to their taxable counterparts. Many new issue purchases and existing holdings are slightly shorter than the traditional maturity range to enable the Fund to maintain a competitive yield while reducing potential volatility should interest rates change. Over the reporting period the Fund was comprised of many securities with 6% or greater coupons for added stability and income, as well as some 5% to 5-1/4% coupon securities for potential price performance. These barbell strategy-oriented securities provide balance and liquidity, and are in especially high demand by retail and institutional investors. This strategy continues to be utilized due to its success over the past year. While there are many strategies at work in the Fund, one of the central themes continues to be emphasizing income. Since August, the Bond Buyer Revenue Bond Index has varied only 15 basis points above or below 5.95%. This narrow range indicator and the expectation of its continuation provide little impetus to make changes to that theme. However, we continue to evaluate the potentially changing financial landscape and stand ready to adjust our positions accordingly. Enclosed please find a copy of the recent portfolio holdings for your review. Very truly yours, [Richard J. Moynihan signature logo] Richard J. Moynihan Director, Municipal Portfolio Management The Dreyfus Corporation May 16, 1997 New York, N.Y. * Total return includes reinvestment of dividends and any capital gains paid, and does not take into consideration the maximum initial sales charge in the case of Class A shares or the contingent deferred sales charge imposed on redemptions in the case of Class B and Class C shares. ** Distribution rate per share is based upon dividends per share paid from net investment income during the period, divided by the maximum offering price at the end of the period in the case of Class A shares, or the net asset value per share in the case of Class B and Class C shares, adjusted for capital gain distributions. Some income may be subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES APRIL 30, 1997 [Exhibit A] COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX $22,014 Lehman Brothers Municipal Bond Index* Dollars $19,778 Dreyfus Premier State Municipal Bond Fund, Connecticut Series (Class A Shares) *Source: Lehman Brothers [Exhibit A]
AVERAGE ANNUAL TOTAL RETURNS CLASS A SHARES CLASS B SHARES __________________________________________________________________ __________________________________________________________ % Return Reflecting % Return Applicable Contingent Reflecting % Return Deferred Sales % Return Without Maximum Initial Assuming No Charge Upon PERIOD ENDED 4/30/97 Sales Charge Sales Charge (4.5%) PERIOD ENDED 4/30/97 Redemption Redemption* __________ ________________ __________________ _______________ ____________ __________________ 1 Year 6.84% 2.04% 1 Year 6.28% 2.31% 5 Year 6.87 5.89 From Inception (1/15/93) 5.46 5.06 From Inception (5/28/87) 7.61 7.11 CLASS C SHARES __________________________________________________________________ % Return Reflecting Applicable Contingent % Return Deferred Sales Assuming Charge Upon PERIOD ENDED 4/30/97 No Redemption Redemption** _________ _______________ ____________________ 1 Year 5.93% 4.94% From Inception (8/15/95) 5.70 5.70 Past performance is not predictive of future performance. The above graph compares a $10,000 investment made in Class A shares of Dreyfus Premier State Municipal Bond Fund, Connecticut Series on 5/28/87 (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 5/31/87 is used as the beginning value on 5/28/87. All dividends and capital gain distributions are reinvested. Performance for Class B and Class C shares will vary from the performance of Class A shares shown above due to differences in charges and expenses. The Series invests primarily in Connecticut 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 municipal market overall. The Index does not take into account charges, fees and other expenses and is not limited to investments principally in Connecticut municipal obligations. These factors can contribute to the Index potentially outperforming the Series. Further information relating to Series performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the Prospectus and elsewhere in this report. * The maximum contingent deferred sales charge for Class B shares is 4% and is reduced to 0% after six years. **The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the date of purchase. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF INVESTMENTS APRIL 30, 1997 Principal Long-Term Municipal Investments_100.0% Amount Value __________ __________ Connecticut_81.9% Bridgeport 5.25%, 3/1/2017 (Insured; AMBAC)................................. $ 4,800,000 $ 4,553,136 Connecticut: 5.50%, 3/15/2010.......................................................... 3,000,000 3,053,880 6.875%, 7/15/2010 (Prerefunded 7/15/2000) (a)............................. 7,100,000 7,684,330 6.75%, 3/1/2011 (Prerefunded 3/1/2001) (a)................................ 3,000,000 3,260,790 5.50%, 5/15/2014.......................................................... 2,000,000 1,979,240 5.375%, 10/1/2014......................................................... 6,500,000 6,348,875 5.50%, 5/15/2015.......................................................... 3,000,000 2,961,090 5.25%, 3/1/2016........................................................... 5,000,000 4,783,500 Special Tax Obligation Revenue (Transportation Infrastructure): Refunding 5.375%, 9/1/2008.............................................. 2,500,000 2,546,575 7.125%, 6/1/2010........................................................ 8,400,000 9,828,840 6.75%, 6/1/2011 (Prerefunded 6/1/2003) (a).............................. 8,500,000 9,320,760 5.65%, 4/1/2013 (Insured; FGIC)......................................... 1,500,000 1,502,940 Connecticut Clean Water Fund, Revenue 7%, 1/1/2011 (Prerefunded 1/1/2001) (a)................................... 6,700,000 7,298,980 5.125%, 5/1/2018.......................................................... 7,000,000 6,514,760 Connecticut Development Authority, Revenue: First Mortgage Gross (Elim Park Baptist Home Inc. Project) 9%, 12/1/2020..................... 3,565,000 3,823,035 Health Care: (Jerome Home Project) 8%, 11/1/2019..................................... 1,910,000 1,992,722 (Masonic Charity Foundation of Connecticut) 6.50%, 8/1/2020 (Insured; AMBAC) 4,400,000 4,613,356 Life Care Facilities (Seabury Project): Refunding 8.75%, 9/1/2006............................................... 1,625,000 1,639,219 10%, 9/1/2021........................................................... 11,175,000 11,857,346 Water Facilities (Bridgeport Hydraulic) 6.15%, 4/1/2035................... 2,750,000 2,754,428 Connecticut Health and Educational Facilities Authority, Revenue: (Bridgeport Hospital) 6.625%, 7/1/2018 (Insured; MBIA).................... 700,000 746,669 (Bridgeport Hospital) 5.375%, 7/1/2025 (Insured; Connie Lee).............. 2,125,000 1,987,661 (Danbury Hospital) 6.50%, 7/1/2014 (Insured; MBIA)........................ 3,500,000 3,730,895 (Day Kimball Hospital) 5.375%, 7/1/2026 (Insured; FSA).................... 2,000,000 1,895,700 (Greenwich Academy) 5.75%, 3/1/2026 (Insured; FSA)........................ 3,130,000 3,130,970 (Greewich Hospital) 5.80%, 7/1/2026 (Insured; MBIA)....................... 9,365,000 9,331,473 (Hartford University): 6.75%, 7/1/2012......................................................... 3,500,000 3,514,315 6.80%, 7/1/2022......................................................... 8,500,000 8,534,765 (Johnson Evergreen Corp.) 8.50%, 7/1/2022................................. 4,500,000 4,772,385 (Loomis Chaffee School Project): 6%, 7/1/2015 (Insured; MBIA)............................................ 715,000 735,485 6%, 7/1/2025 (Insured; MBIA)............................................ 1,000,000 1,016,260 (Middlesex Hospital) 6.25%, 7/1/2022 (Insured; MBIA)...................... 3,500,000 3,637,725 (New Britian General Hospital) 6.125%, 7/1/2014 (Insured; AMBAC).......... 1,000,000 1,036,070 (New Britain Memorial Hospital) 7.75%, 7/1/2022........................... 16,000,000 17,137,760 (Norwalk Hospital) 6.25%, 7/1/2022 (Insured; MBIA)........................ 3,860,000 4,011,891 (Quinnipiac College) 6%, 7/1/2013......................................... 6,545,000 6,402,057 DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1997 Principal Long-Term Municipal Investments (continued) Amount Value ___________ ___________ Connecticut (continued) Connecticut Health and Educational Facilities Authority, Revenue (continued): (Refunding-Nursing Home Program_3030 Park Fairfield Health Center Project) 6.25%, 11/1/2021........................................................ $ 2,500,000 $ 2,575,475 (Sacred Heart University): 6.50%, 7/1/2016......................................................... 2,000,000 2,051,680 6.125%, 7/1/2017........................................................ 1,000,000 996,460 6.625%, 7/1/2026........................................................ 3,000,000 3,107,460 (Trinity College) 5.875%, 7/1/2026 (Insured; MBIA)........................ 2,500,000 2,520,125 (University of New Haven): 6.625%, 7/1/2016........................................................ 4,050,000 4,143,515 6.70%, 7/1/2026......................................................... 8,605,000 8,820,211 (Veterans Memorial Medical Center) 5.50%, 7/1/2026 (Insured; MBIA)........ 9,000,000 8,652,060 (William W. Backus Hospital) 5.75%, 7/1/2027 (Insured; AMBAC)............. 2,500,000 2,466,275 (Windham Community Memorial Hospital): 5.75%, 7/1/2011......................................................... 1,000,000 965,450 6%, 7/1/2020............................................................ 1,000,000 963,940 (Yale, New Haven Hospital) 5.70%, 7/1/2025 (Insured; MBIA)................ 5,820,000 5,735,203 Connecticut Housing Finance Authority (Housing Mortgage Finance Program): 7.20%, 11/15/2008......................................................... 7,300,000 7,576,378 6.20%, 5/15/2012 (Insured; MBIA).......................................... 1,000,000 1,031,210 6.40%, 5/15/2015 (Insured; MBIA).......................................... 1,000,000 1,038,870 6.125%, 5/15/2018 (Insured; MBIA)......................................... 1,655,000 1,691,658 6.45%, 5/15/2022.......................................................... 6,000,000 6,137,640 6.70%, 11/15/2022......................................................... 22,035,000 22,770,088 6.75%, 11/15/2023......................................................... 5,260,000 5,444,784 6.30%, 5/15/2024 (Insured; MBIA).......................................... 1,000,000 1,026,570 6%, 11/15/2027............................................................ 5,000,000 4,937,750 Connecticut Municipal Electric Energy Cooperative, Power Supply System Revenue, Refunding: 5%, 1/1/2011 (Insured; MBIA).............................................. 4,660,000 4,444,242 5%, 1/1/2012 (Insured; MBIA).............................................. 2,000,000 1,901,020 5%, 1/1/2013 (Insured; MBIA).............................................. 2,000,000 1,886,700 Eastern Connecticut Resource Recovery Authority, Solid Waste Revenue (Wheelabrator Lisbon Project): 5.50%, 1/1/2014......................................................... 10,000,000 9,454,700 5.50%, 1/1/2020......................................................... 7,250,000 6,609,608 New Haven 7.40%, 8/15/2011 (Prerefunded 8/15/2001) (a)...................... 1,500,000 1,673,655 South Central 5.375%, 8/1/2016 (Insured; FGIC).............................. 2,000,000 1,930,080 Stamford 6.60%, 1/15/2010................................................... 2,750,000 3,086,765 University of Connecticut 5%, 2/1/2015 (Insured; FGIC)...................... 1,250,000 1,164,213 U. S. Related_18.1% Commonwealth of Puerto Rico: 5.40%, 7/1/2025........................................................... 10,750,000 10,049,960 (Public Improvement) 6.80%, 7/1/2021 (Prerefunded 7/1/2002) (a)........... 6,000,000 6,641,160 DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1997 Principal Long-Term Municipal Investments (continued) Amount Value __________ __________ U. S. Related (continued) Puerto Rico Aqueduct and Sewer Authority, Revenue: 6%, 7/1/2009.............................................................. $ 7,250,000 $ 7,594,158 Refunding 5%, 7/1/2019.................................................... 2,500,000 2,233,450 Puerto Rico Electric Power Authority, Power Revenue 7%, 7/1/2021 (Prerefunded 7/1/2001) (a)................................... 6,775,000 7,495,656 Puerto Rico Highway and Transportation Authority, Highway Revenue: 6.578%, 7/1/2010 (b)...................................................... 3,200,000 2,996,000 6.625%, 7/1/2018 (Prerefunded 7/1/2002) (a)............................... 5,000,000 5,494,550 5.50%, 7/1/2026........................................................... 3,000,000 2,827,680 5.50%, 7/1/2036........................................................... 5,000,000 4,713,450 Puerto Rico Industrial Medical and Environmental Pollution Control Facilities Financing Authority, Revenue (Motorola Inc. Project) 6.75%, 1/1/2014........ 2,000,000 2,152,219 Puerto Rico Ports Authority, Special Facilities Revenue (American Airlines): 6.30%, 6/1/2023........................................................... 2,000,000 2,021,420 6.25%, 6/1/2026........................................................... 3,250,000 3,288,902 University of Puerto Rico, University Revenue 5.50%, 6/1/2015 (Insured; MBIA)........................................... 5,000,000 4,962,950 5.25%, 6/1/2025 (Insured; MBIA)........................................... 3,400,000 3,207,185 _____________ TOTAL INVESTMENTS (cost $350,546,309)....................................... $362,422,408 ============== Summary of Abbreviations AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance Insurance Corporation Summary of Combined Ratings (Unaudited) Fitch (c) or Moody's or Standard & Poor's Percentage of Value ____ ______ _________________ ____________________ AAA Aaa AAA 35.0% AA Aa AA 25.7 A A A 15.3 BBB Baa BBB 17.0 Not Rated (d) Not Rated (d) Not Rated (d) 7.0 ________ 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) Fitch currently provides creditworthiness information for a limited number of investments. (d) 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. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1997 Cost Value _______________ _______________ ASSETS: Investments in securities_See Statement of Investments $350,546,309 $362,422,408 Interest receivable........................ 7,633,292 Receivable for shares of Beneficial Interest subscribed 659,287 Prepaid expenses........................... 8,731 _______________ 370,723,718 _______________ LIABILITIES: Due to The Dreyfus Corporation and affiliates 166,245 Due to Distributor......................... 98,751 Cash overdraft due to Custodian............ 280,279 Payable for shares of Beneficial Interest redeemed 245,858 Accrued expenses........................... 100,245 _______________ 891,378 _______________ NET ASSETS.................................................................. $369,832,340 =============== REPRESENTED BY: Paid-in capital............................ $357,908,967 Accumulated net realized gain (loss) on investments 47,274 Accumulated net unrealized appreciation (depreciation) .......on investments_Note 4 11,876,099 _______________ NET ASSETS.................................................................. $369,832,340 =============== NET ASSET VALUE PER SHARE ___________________________ Class A Class B Class C _____________ _____________ _____________ Net Assets............................................. $313,881,215 $54,661,269 $1,289,856 Shares Outstanding..................................... 26,585,426 4,632,250 109,399 NET ASSET VALUE PER SHARE.......................... $11.81 $11.80 $11.79 ====== ======= ======= SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1997 INVESTMENT INCOME INCOME Interest Income............................ $22,402,248 EXPENSES: Management fee_Note 3(a)................... $1,972,181 Shareholder servicing costs_Note 3(c)...... 1,095,192 Distribution fees_Note 3(b)................ 219,526 Professional fees.......................... 50,373 Custodian fees............................. 38,790 Prospectus and shareholders' reports....... 26,459 Registration fees.......................... 8,056 Trustees' fees and expenses_Note 3(d)...... 5,088 Loan commitment fees_Note 2................ 2,155 Miscellaneous.............................. 141,372 _______________ Total Expenses....................... 3,559,192 _____________ INVESTMENT INCOME_NET....................................................... 18,843,056 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 4: Net realized gain (loss) on investments.... $3,951,803 Net unrealized appreciation (depreciation) on investments 1,565,956 _______________ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 5,517,759 _____________ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $24,360,815 ============= SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF CHANGES IN NET ASSETS Year Ended Year Ended April 30, 1997 April 30, 1996 _______________ ________________ OPERATIONS: Investment income_net.......................................... $ 18,843,056 $ 20,116,214 Net realized gain (loss) on investments................................. 3,951,803 5,701,419 Net unrealized appreciation (depreciation) on investments............ 1,565,956 (1,150,970) _______________ ________________ Net Increase (Decrease) in Net Assets Resulting from Operations...... 24,360,815 24,666,663 _______________ ________________ DIVIDENDS TO SHAREHOLDERS FROM: Investment income_net: Class A shares......................................................... (16,770,226) (18,231,897) Class B shares......................................................... (2,025,054) (1,877,253) Class C shares......................................................... (47,776) (7,064) Net realized gain on investments: Class A shares......................................................... (6,524,313) ___ Class B shares......................................................... (881,137) ___ Class C shares......................................................... (21,981) ___ _______________ ________________ Total Dividends...................................................... (26,270,487) (20,116,214) _______________ ________________ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold: Class A shares......................................................... 14,824,400 14,645,030 Class B shares......................................................... 6,357,304 5,468,178 Class C shares......................................................... 578,813 1,023,317 Dividends reinvested: Class A shares......................................................... 13,821,357 10,502,564 Class B shares......................................................... 2,091,292 1,298,271 Class C shares......................................................... 60,960 6,163 Cost of shares redeemed: Class A shares......................................................... (43,665,745) (43,749,996) Class B shares......................................................... (6,145,158) (3,727,309) Class C shares......................................................... (593,525) (1,996) Net assets received in connection with reorganization_Note 1............. 23,008,697 ___ _______________ ________________ Increase (Decrease) in Net Assets from Beneficial Interest Transactions 10,338,395 (14,535,778) _______________ ________________ Total Increase (Decrease) in Net Assets.......................... 8,428,723 (9,985,329) NET ASSETS: Beginning of Period..................................................... 361,403,617 371,388,946 _______________ ________________ End of Period............................................................ $369,832,340 $361,403,617 ============== ================ SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) Shares _____________________________________ Year Ended Year Ended April 30, 1997 April 30, 1996 ______________ ______________ CAPITAL SHARE TRANSACTIONS: Class A ________ Shares sold............................................................ 1,270,249 1,212,141 Shares issued in connection with reorganization_Note 1................. 797,831 ___ Shares issued for dividends reinvested................................. 1,154,938 869,313 Shares redeemed........................................................ (3,661,035) (3,626,051) ______________ ______________ Net Increase (Decrease) in Shares Outstanding (438,017) (1,544,597) ============= =============== Class B ________ Shares sold............................................................ 568,724 453,771 Shares issued in connection with reorganization_Note 1................. 1,140,308 ___ Shares issued for dividends reinvested................................ 174,856 107,482 Shares redeemed........................................................ (517,010) (309,036) ______________ ______________ Net Increase (Decrease) in Shares Outstanding 1,366,878 252,217 ============= =============== Class C* _________ Shares sold............................................................ 48,510 84,387 Shares issued in connection with reorganization_Note 1................. 21,055 ___ Shares issued for dividends reinvested................................. 5,100 515 Shares redeemed........................................................ (50,000) (168) ______________ ______________ Net Increase (Decrease) in Shares Outstanding 24,665 84,734 ============= =============== *From August 15, 1995 (commencement of initial offering) to April 30, 1996. SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT 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 Fund's financial statements. CLASS A SHARES _____________________________________________________________ YEAR ENDED APRIL 30, _____________________________________________________________ PER SHARE DATA: 1997 1996 1995 1994 1993 ______ ______ ______ ______ ______ Net asset value, beginning of period......... $11.90 $11.76 $11.81 $12.26 $11.45 ______ ______ ______ ______ ______ Investment Operations: Investment income_net........................ .64 .66 .67 .68 .71 Net realized and unrealized gain (loss) on investments............................. .16 .14 (.05) (.42) .81 ______ ______ ______ ______ ______ Total from Investment Operations............. .80 .80 .62 .26 1.52 ______ ______ ______ ______ ______ Distributions: Dividends from investment income_net......... (.64) (.66) (.67) (.68) (.71) Dividends from net realized gain on investments (.25) __ __ (.03) __ ______ ______ ______ ______ ______ Total Distributions.......................... (.89) (.66) (.67) (.71) (.71) ______ ______ ______ ______ ______ Net asset value, end of period............... $11.81 $11.90 $11.76 $11.81 $12.26 ======== ======= ======= ====== ======= TOTAL INVESTMENT RETURN*........................ 6.84% 6.85% 5.47% 1.92% 13.62% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... .93% .92% .89% .80% .69% Ratio of net investment income to average net assets...................... 5.32% 5.45% 5.77% 5.44% 5.93% Decrease reflected in above expense ratios due to undertakings by the Manager......... __ __ .01% .09% .21% Portfolio Turnover Rate...................... 30.66% 28.83% 10.48% 10.83% 24.22% Net Assets, end of period (000's Omitted).... $313,881 $321,559 $335,964 $364,182 $ 360,020 *Exclusive of sales load. SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES FINANCIAL HIGHLIGHTS (CONTINUED) 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 Fund's financial statements. CLASS B SHARES _____________________________________________________________ YEAR ENDED APRIL 30, _____________________________________________________________ PER SHARE DATA: 1997 1996 1995 1994 1993(1) ______ ______ ______ ______ ______ Net asset value, beginning of period......... $11.89 $11.76 $11.80 $12.26 $11.89 ______ ______ ______ ______ ______ Investment Operations: Investment income_net........................ .57 .60 .61 .61 .18 Net realized and unrealized gain (loss) on investments............................. .16 .13 (.04) (.43) .37 ______ ______ ______ ______ ______ Total from Investment Operations............. .73 .73 .57 .18 .55 ______ ______ ______ ______ ______ Distributions: Dividends from investment income_net......... (.57) (.60) (.61) (.61) (.18) Dividends from net realized gain on investments (.25) __ __ (.03) __ ______ ______ ______ ______ ______ Total Distributions.......................... (.82) (.60) (.61) (.64) (.18) ______ ______ ______ ______ ______ Net asset value, end of period............... $11.80 $11.89 $11.76 $11.80 $12.26 ======== ======= ======= ====== ======= TOTAL INVESTMENT RETURN(2)....................... 6.28% 6.20% 4.99% 1.26% 16.08%(3) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets...... 1.45% 1.44% 1.41% 1.36% 1.12%(3) Ratio of net investment income to average net assets................... 4.79% 4.92% 5.21% 4.78% 4.57%(3) Decrease reflected in above expense ratios due to undertakings by the Manager......... __ __ .01% .08% .12%(3) Portfolio Turnover Rate...................... 30.66% 28.83% 10.48% 10.83% 24.22% Net Assets, end of period (000's Omitted).... $54,661 $38,838 $35,425 $32,246 $9,492 (1) From January 15, 1993 (commencement of initial offering) to April 30, 1993. (2) Exclusive of sales load. (3) Annualized. SEE NOTES TO FINANCIAL STATEMENTS. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES FINANCIAL HIGHLIGHTS (CONTINUED) 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 Fund's financial statements. CLASS C SHARES ______________________________ YEAR ENDED APRIL 30, ______________________________ PER SHARE DATA: 1997 1996(1) ________ ________ Net asset value, beginning of period.................................... $11.89 $11.84 ________ ________ Investment Operations: Investment income_net................................................... .54 .40 Net realized and unrealized gain (loss) on investments........................................................ .15 .05 ________ ________ Total from Investment Operations........................................ .69 .45 ________ ________ Distributions: Dividends from investment income_net.................................... (.54) (.40) Dividends from net realized gain on investments......................... (.25) __ ________ ________ Total Distributions..................................................... (.79) (.40) ________ ________ Net asset value, end of period.......................................... $11.79 $11.89 ======== ========= TOTAL INVESTMENT RETURN(2).................................................. 5.93% 5.31%(3) RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets................................. 1.70% 1.64%(3) Ratio of net investment income to average net assets................................................. 4.56% 4.31%(3) Portfolio Turnover Rate................................................. 30.66% 28.83% Net Assets, end of period (000's Omitted)............................... $1,290 $1,007 (1) From August 15, 1995 (commencement of initial offering) to April 30, 1996. (2) Exclusive of sales load. (3) Annualized. SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES NOTES TO FINANCIAL STATEMENTS NOTE 1_SIGNIFICANT ACCOUNTING POLICIES: Dreyfus Premier State Municipal Bond Fund (the "Trust") 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 thirteen series including the Connecticut Series (the "Fund"). The Fund's investment objective is to maximize current income exempt from Federal and, where applicable, from State income taxes, without undue risk. The Dreyfus Corporation (the "Manager") serves as the Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A. On October 31, 1996, the Board of Trustees approved, subject to approval by the shareholders of the Connecticut Series of the Dreyfus Premier Insured Municipal Bond Fund ("DPIMBF-Connecticut Series"), an Agreement and Plan of Reorganization providing for the transfer of all or substantially all of the DPIMBF-Connecticut Series' assets and liabilities to the Fund in a tax free exchange for shares of beneficial interest of the Fund at net asset value and the assumption of stated liabilities (the "Exchange"). The Exchange was approved by the shareholders of DPIMBF-Connecticut Series on March 25, 1997, and was consummated after the close of business on April 1, 1997 at which time 724,521 Class A shares valued at $12.94 per share, 1,033,959 Class B shares valued at $12.95 per share, and 19,088 Class C shares valued at $12.94, representing combined net assets of $23,008,697, (including $762,086 net unrealized appreciation on investments) were exchanged by DPIMBF-Connecticut Series for the respective number of Class A, Class B and Class C shares of the Fund. On January 8, 1997, the Trust's Trustees approved a change to the Trust's name from "Premier State Municipal Bond Fund" to "Dreyfus Premier State Municipal Bond Fund" which change became effective March 31, 1997. Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the Fund's shares. The Fund is authorized to issue an unlimited number of $.001 par value shares in the following classes of shares: Class A, Class B and Class C shares. Class A shares are subject to a sales charge imposed at the time of purchase, Class B shares are subject to a contingent deferred sales charge ("CDSC") imposed on Class B share redemptions made within six years of purchase (five years for shareholders beneficially owning Class B shares on November 30, 1996) and Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Other differences between the three Classes include the services offered to and the expenses borne by each Class and certain voting rights. The Trust accounts separately for the assets, liabilities and operations of each fund. Expenses directly attributable to each fund are charged to that fund's operations; expenses which are applicable to all funds are allocated among them on a pro rata basis. The Fund's financial statements are prepared in accordance with generally accepted accounting principles which may require the use of management estimates and assumptions. Actual results could differ from those estimates. (A) PORTFOLIO VALUATION: Investments in securities (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 DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) 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 Fund 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 Fund. (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund 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 Fund 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 Fund not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Internal Revenue Code, 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_BANK LINE OF CREDIT: The Fund participates with other Dreyfus-managed funds in a $600 million redemption credit facility ("Facility") to be utilized for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the Fund has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the Fund at rates based on prevailing market rates in effect at the time of borrowings. For the period ended April 30, 1997, the Fund did not borrow under the Facility. NOTE 3_MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .55 of 1% of the value of the Funds' average daily net assets and is payable monthly. Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained $14,680 during the period ended April 30, 1997 from commissions earned on sales of the Fund's shares. (B) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the Fund pays the Distributor for distributing the Fund's Class B and Class C shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B shares and .75 of 1% of the value of the average daily net assets of Class C shares. During the period ended April 30, 1997, $211,666 was charged to the Fund for the Class B shares and $7,860 was charged to the Fund for the Class C shares. (C) Under the Shareholder Services Plan, the Fund pays the Distributor at an annual rate of .25 of 1% of the value of the average daily net assets of Class A, Class B and Class C shares for the provision of certain services. The services DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended April 30, 1997, $787,993, $105,833 and $2,620 were charged to Class A, Class B and Class C shares, respectively, by the Distributor pursuant to the Shareholder Services Plan. The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $138,641 during the period ended April 30, 1997. (D) Each trustee who is not an "affiliated person" as defined in the Act receives from the Trust 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 4_SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended April 30, 1997 amounted to $108,805,054 and $122,602,672, respectively. At April 30, 1997, accumulated net unrealized appreciation on investments was $11,876,099, consisting of $13,605,154 gross unrealized appreciation and $1,729,055 gross unrealized depreciation. At April 30, 1997, 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). DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Premier State Municipal Bond Fund, Connecticut Series (one of the Funds constituting the Dreyfus Premier State Municipal Bond Fund) as of April 30, 1997, 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 and financial highlights. Our procedures included confirmation of securities owned as of April 30, 1997 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 Dreyfus Premier State Municipal Bond Fund, Connecticut Series at April 30, 1997, 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 LLP signature logo] New York, New York June 5, 1997 DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES IMPORTANT TAX INFORMATION (UNAUDITED) In accordance with Federal tax law, the Fund hereby makes the following designations regarding its fiscal year ended April 30, 1997: _ all the dividends paid from investment income-net are "exempt-interest dividends" (not subject to regular Federal and, for individuals who are Connecticut residents, Connecticut personal income taxes), and _ the Fund hereby designates $.2498 per share as a long-term capital gain distribution of the $.2505 per share paid on December 5, 1996. As required by Federal tax law rules, shareholders will receive notification of their portion of the Fund's taxable ordinary dividends (if any) and capital gain distributions (if any) paid for the 1997 calendar year on Form 1099-DIV which will be mailed by January 31, 1998. DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT 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 Dreyfus Transfer, Inc. P.O. Box 9671 Providence, RI 02940 Printed in U.S.A. 064/623AR974 [lion2 hres logo] Registration Mark Annual Report Dreyfus Premier State Municipal Bond Fund Connecticut Series April 30, 1997 EX-99 2 GRAPH IN PRESIDENT'S LETTER OF THE ANNUAL REPORT COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER STATE MUNICIPAL BOND FUND, CONNECTICUT SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX DREYFUS PREMIER STATE PERIOD LEHMAN BROTHERS MUNICIPAL BOND FUND, MUNICIPAL CONNECTICUT SERIES BOND INDEX * (CLASS A SHARES) 5/28/87 10,000 9,549 4/30/88 10,929 9,991 4/30/89 11,905 11,145 4/30/90 12,762 11,806 4/30/91 14,229 13,117 4/30/92 15,581 14,185 4/30/93 17,553 16,117 4/30/94 17,932 16,426 4/30/95 19,124 17,325 4/30/96 20,644 18,512 4/30/97 22,014 19,778 *Source: Lehman Brothers -----END PRIVACY-ENHANCED MESSAGE-----