Dreyfus Municipal Bond Infrastructure Fund heralds $254.25 million IPO

By Toni Weeks

San Luis Obispo, Calif., April 26 - The Dreyfus Municipal Bond Infrastructure Fund, Inc. is offering $254.25 million of shares in its initial public offering, according to a 497 filing with the Securities and Exchange Commission. Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and BofA Merrill Lynch are the lead underwriters for the offering.

The newly organized, non-diversified, closed-end management investment company seeks to provide as high a level of current income exempt from regular federal income tax as is consistent with the preservation of capital.

The fund will invest at least 80% of its managed assets in municipal bonds, the income from which is exempt from regular federal income tax, that have been issued to finance the development, support or improvement of infrastructure in the United States. At least 50% of the fund's managed assets will be invested in municipal bonds rated investment grade at the time of investment. Managed assets are the total assets of the fund, including any assets attributable to effective leverage, minus the fund's accrued liabilities other than liabilities or obligations attributable to effective leverage obtained through indebtedness of any type, the issuance of preferred stock or similar preference securities or the reinvestment of collateral received for loaned securities.

The fund will seek to maintain a levered effective duration of up to 14 years.

The portfolio managers are Christine L. Todd, Jeffrey Burger, Daniel Rabasco and Thomas Casey.

The fund has registered 16.95 million shares at $15.00 each for maximum proceeds of $254.25 million. There is a 45-day greenshoe option for an additional 2,537,469 shares, which would increase proceeds by $38,062,035. The offering is expected to settle May 1.

The fund's shares began trading on the New York Stock Exchange under the symbol "DMB" on Friday, according to a notice by NYSE Euronext.

The sales load is 4.5%, or $0.675 per share. Total annual fund operating expenses are expected to be 1.72%, which includes a 1% management fee.

New York-based Dreyfus Corp. is the investment adviser. Standish Mellon Asset Management Co. LLC is the subadviser.

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