Fitch Ratings has affirmed the ratings assigned to the following
Variable Rate MuniTerm Preferred Shares (VMTP Shares) issued by Dreyfus
Municipal Bond Infrastructure Fund, Inc. (NYSE: DMB), a closed-end fund
managed by The Dreyfus Corporation (Dreyfus) and sub-advised by Standish
Mellon Asset Management Company LLC (Standish):
--$75,000,000 of Series W-7 VMTP Shares with a term redemption date of
July 27, 2018 at 'AAA'.
KEY RATING DRIVERS
The affirmation of the 'AAA' rating assigned to the VMTP Shares reflects:
--Sufficient asset coverage provided to the notes as calculated per
Fitch's asset coverage tests and published rating criteria;
--The structural protections afforded by mandatory collateral
maintenance and de-leveraging provisions in the event of asset coverage
declines;
--The legal and regulatory parameters that govern the Fund's operations;
--The capabilities of Dreyfus and Standish as fund advisers.
FUND PROFILE
DMB is a non-diversified, closed-end management company. The fund's
investment objective is 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 seeks to achieve its investment
objective through investment of at least 80% of assets in municipal
bonds issued to finance infrastructure sectors and projects in the
United States. Infrastructure sectors and projects in which the Fund may
invest include transportation (toll roads), energy & utilities
(wastewater treatment), social infrastructure (schools), and water &
environmental (drinking water).
LEVERAGE
As of Aug. 31, 2014, DMB's total assets were approximately $360 million
supporting $75 million of VMTP Shares and $37 million of floating-rate
securities of tender option bonds. The fund's leverage ratio is
approximately 31%.
ASSET COVERAGE
As of Aug. 31, 2014, DMB's asset coverage ratio, as calculated in
accordance with the Fitch total and net overcollateralization tests
(Fitch OC Tests) per the 'AAA' rating guidelines outlined in Fitch's
applicable criteria, were in excess of 100%. The fund's governing
documents require that asset coverage for the VMTP Shares, as calculated
in accordance with the Fitch OC tests, be maintained in excess of 100%.
As of the same date, the fund's asset coverage ratio for the VMTP
Shares, as calculated in accordance with the Investment Company Act of
1940, was in excess of the minimum asset coverage threshold of 225%
required by the fund's governing documents (Preferred Asset Coverage
Ratio).
Additionally, the fund has also covenanted to maintain the Effective
Leverage Ratio for both VMTP Shares and floating-rate certificates of
tender option bonds below 50% of total assets. The fund's Effective
Leverage Ratio is currently below 50%.
STRUCTURAL PROTECTIONS
Should the asset coverage tests decline below their minimum threshold
amounts, under the terms of the VMTP Shares the fund is required to cure
the breach by altering the composition of the portfolio toward assets
with lower discount factors (for Fitch OC Tests breaches), or by
reducing leverage in a sufficient amount (for all test breaches) within
a pre-specified time period of 60 calendar days.
THE ADVISERS
The fund is managed by Dreyfus and is sub-advised by Standish, a BNY
Mellon Company. Standish is responsible for the implementation and
execution of the investment strategy on a day-to-day basis. Standish is
an SEC registered and regulated investment advisor with $164 billion in
assets under management, $28 billion of which is municipal bond assets,
including $12 billion in municipal mutual fund assets as of Sept. 30,
2014.
RATINGS SENSITIVITY
A material adverse deviation from Fitch guidelines for any key rating
driver could cause the ratings to be lowered by Fitch. The ratings may
also be sensitive to material changes in the credit quality or market
risk profile of the fund.
For additional information about Fitch closed-end fund ratings
guidelines, please review the criteria referenced below, which can be
found on Fitch's website.
Additional information is available at www.fitchratings.com.
The sources of information used to assess this rating were the public
domain, Dreyfus and Standish.
Opt-in to receive Fitch's forthcoming research on closed-end funds:
http://pages.fitchemail.fitchratings.com/FAMCEFBlankOptin/
Applicable Criteria and Related Research:
--'Rating Closed-End Fund Debt and Preferred Stock' (Sept. 04, 2014);
--'Closed-End Fund Issuance of Debt and Preferred Stock (Oct. 15, 2014).
Applicable Criteria and Related Research:
Closed-End Fund Issuance of Debt and Preferred Stock
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=795288
Rating Closed-End Fund Debt and Preferred Stock
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=765528
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=913314
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